As filed with the Securities and Exchange Commission on November 19, 2020.
No. 333-249067
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 4
to
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Spring Valley Acquisition Corp.
(Exact name of registrant as specified in its charter)
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Cayman Islands
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6770
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85-2715384
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(State or other jurisdiction of
incorporation or organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification Number)
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2100 McKinney Ave., Suite 1675
Dallas, TX 75201
(214) 308-5230
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(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Christopher Sorrells
Chief Executive Officer
2100 McKinney Ave., Suite 1675
Dallas, TX 75201
(214) 308-5230
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies:
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Matthew Pacey, P.C.
Kirkland & Ellis LLP
609 Main Street
Houston, Texas 77002
Tel: (713) 836-3600
Fax: (713) 836-3601
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Christian O. Nagler
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
Tel: (212) 446-4800
Fax: (212) 446-4900
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Ilir Mujalovic
Shearman & Sterling LLP
599 Lexington Avenue
New York, NY 10022
Tel: (212) 848-4000
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William B. Nelson
Shearman & Sterling LLP
Bank of America Tower
800 Capitol Street, Suite 2200
Houston, Texas 77002
Tel: (713) 354-4900
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Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
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Title of Each Class of
Security Being Registered
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Amount
Being
Registered
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Proposed
Maximum
Offering Price
per Security(1)
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Proposed
Maximum
Aggregate
Offering Price(1)
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Amount of
Registration Fee
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Units, each consisting of one Class A ordinary share, $0.0001 par value, and one-half of one redeemable warrant(2)
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23,000,000 units
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$10.00
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$230,000,000
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$25,093
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Class A ordinary shares included as part of the units(3)
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23,000,000 shares
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—
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—
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—(4)
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Redeemable warrants included as part of the units(3)
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11,500,000 warrants
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—
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—
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—(4)
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Total
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$230,000,000
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$25,093(5)
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(1)
Estimated solely for the purpose of calculating the registration fee.
(2)
Includes 3,000,000 units, consisting of 3,000,000 Class A ordinary shares and 1,500,000 redeemable warrants, which may be issued upon exercise of a 45-day option granted to the underwriters to cover over-allotments, if any.
(3)
Pursuant to Rule 416(a), there are also being registered an indeterminable number of additional securities as may be offered or issued to prevent dilution resulting from share sub-division, share dividends, or similar transactions.
(4)
No fee pursuant to Rule 457(g).
(5)
Previously paid.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION, Dated November 19, 2020
Spring Valley Acquisition Corp.
$200,000,000
20,000,000 Units
Spring Valley Acquisition Corp. is a blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities, which we refer to as our initial business combination. We have not selected any potential business combination target and we have not, nor has anyone on our behalf, had any substantive discussions, directly or indirectly, with any potential business combination target. While we will not be limited to a particular industry or geographic region in our identification and acquisition of a target company, we intend to focus our search for a target operating in an alternative energy industry, including clean energy and storage, smart grid/efficiency, environmental services and recycling, mobility, water and wastewater management, advanced materials and technology enabled services.
This is an initial public offering of our securities. Each unit has an offering price of $10.00 and consists of one Class A ordinary share and one-half of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment, terms and limitations as described herein. The underwriters have a 45-day option from the date of this prospectus to purchase up to 3,000,000 additional units to cover over-allotments, if any.
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination, subject to the limitations as described herein. If we have not consummated an initial business combination within 18 months from the closing of this offering, which is extendable at our sponsor's option up to six months, as described herein, we will redeem 100% of the public shares for cash, subject to applicable law and certain conditions as described herein.
Our sponsor, Spring Valley Acquisition Sponsor, LLC, has agreed to purchase 8,000,000 warrants (or 8,900,000 warrants if the underwriters’ over-allotment option is exercised in full), each exercisable to purchase one Class A ordinary share at $11.50 per share, subject to adjustment, at a price of $1.00 per warrant, in a private placement to occur concurrently with the closing of this offering. Our sponsor or its affiliates or permitted designees also has an option to purchase additional private placement warrants in order to extend the period of time to complete an initial business combination one time, by an additional six months. Our initial shareholders currently own 5,750,000 Class B ordinary shares, up to 750,000 of which are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised. The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of our initial business combination or earlier at the option of the holders thereof as described herein. Prior to our initial business combination, only holders of our Class B ordinary shares will be entitled to vote on the appointment of directors.
Up to five qualified institutional buyers or institutional accredited investors, who are not affiliated with any member of our management, who we refer to as the anchor investors, have expressed to us an interest to purchase up to 1,980,000 units each in this offering and we have agreed to direct the underwriters to sell to the anchor investors such number of units. There can be no assurance that the anchor investors will acquire any units in this offering, or as to the amount of such units the anchor investors will retain, if any, prior to or upon the consummation of our initial business combination. For a discussion of certain additional arrangements with our anchor investors, see “Summary—The Offering—Expressions of Interest.”
Currently, there is no public market for our securities. We intend to apply to have our units listed on The Nasdaq Capital Market, or the Nasdaq, under the symbol “SVSVU.” We expect that the Class A ordinary shares and warrants comprising the units will begin separate trading on the Nasdaq under the symbols “SV” and “SVSVW,” respectively, on the 52nd day following the date of this prospectus unless the underwriters permit earlier separate trading and we have satisfied certain conditions.
We are an “emerging growth company” under applicable federal securities laws and will be subject to reduced public company reporting requirements.
Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page
38 for a discussion of information that should be considered in connection with an investment in our securities. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings.
Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
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Per Unit
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Total
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10.00 |
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200,000,000 |
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| Underwriting discounts and commissions(1) |
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0.55 |
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11,000,000 |
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| Proceeds, before expenses, to us |
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$ |
9.45 |
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$ |
189,000,000 |
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(1)
Includes $0.35 per unit, or $7,000,000 in the aggregate (or $8,050,000 in the aggregate if the underwriters’ over-allotment option is exercised in full), payable to certain of the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States as described herein and released to the underwriters only upon the consummation of an initial business combination. See also “Underwriting” for a description of compensation and other items of value payable to the underwriters.
Of the proceeds we receive from this offering and the sale of the private placement warrants described in this prospectus, $202,000,000, or $232,300,000 if the underwriters’ over-allotment option is exercised in full ($10.10 per unit in either case), will be deposited into a U.S. based trust account at J.P. Morgan Chase Bank N.A., (or at another U.S.-chartered commercial bank with consolidated assets of $100 billion or more) with Continental Stock Transfer & Trust Company acting as trustee. Except with respect to interest or other income earned on the funds held in the trust account that may be released to us to pay our income taxes, if any, our amended and restated memorandum and articles of association, as discussed herein and subject to the requirements of law and regulation, will provide that the proceeds from this offering and the sale of the private placement warrants held in the trust account will not be released from the trust account (1) to us, until the completion of our initial business combination, or (2) to our public shareholders, until the earliest of (a) the completion of our initial business combination, and then only in connection with those Class A ordinary shares that such shareholders properly elected to redeem, subject to the limitations described herein, (b) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering, unless extended at our sponsor's option, as provided for herein or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, and (c) the redemption of our public shares if we have not consummated our business combination within 18 months from the closing of this offering, unless extended at our sponsor's option, as provided for herein, subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public shareholders.
The underwriters are offering the units for sale on a firm commitment basis. The underwriters expect to deliver the units to the purchasers on or about , 2020.
Book-Running Managers
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Cowen |
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Wells Fargo Securities
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Co-Managers
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Drexel Hamilton |
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Siebert Williams Shank
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The date of this prospectus is , 2020
We are responsible for the information contained in this prospectus. We have not authorized anyone to provide you with different information, and neither we nor the underwriters take any responsibility for any other information others may give to you. We are not, and the underwriters are not, making an offer to sell securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.
TABLE OF CONTENTS
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Page
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1
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37
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38
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74
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75
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79
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80
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82
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83
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88
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120
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130
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133
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136
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159
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170
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178
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178
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178
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F-1
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Until , 2020, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to unsold allotments or subscriptions.
SUMMARY
This summary only highlights the more detailed information appearing elsewhere in this prospectus. You should read this entire prospectus carefully, including the information under “Risk Factors” and our financial statements and the related notes included elsewhere in this prospectus, before investing.
Unless otherwise stated in this prospectus or the context otherwise requires, references to:
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“amended and restated memorandum and article of association” are to the amended and restated memorandum and articles of association that the company will adopt prior to the consummation of this offering;
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“anchor investors” are to certain qualified institutional buyers or institutional accredited investors, each of which will purchase founder shares or become a member of holdco upon the consummation of this offering and has expressed to us an interest to purchase up to 1,980,000 units in this offering, as further described herein;
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“Companies Law” are to the Companies Law (2020 Revision) of the Cayman Islands as the same may be amended from time to time;
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“Contractual Redemption Date” are to the date which our sponsor may at its option extend the period of time for us to consummate a business combination (one time, by an additional six months), subject to the sponsor purchasing additional private placement warrants;
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“founder shares” are to our Class B ordinary shares initially issued to our sponsor in a private placement prior to this offering and the Class A ordinary shares that will be issued upon the automatic conversion of the Class B ordinary shares at the time of our initial business combination or earlier at the option of the holders thereof (for the avoidance of doubt, such Class A ordinary shares will not be “public shares”); our sponsor has agreed to transfer all of the founder shares held by it to holdco prior to the consummation of this offering;
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“holdco” are to SV Acquisition Sponsor Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of our sponsor; certain of the anchor investors will also be members of holdco upon the consummation of this offering;
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“management” or our “management team” are to our executive officers and directors (including our directors nominees that will become directors in connection with the consummation of this offering);
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“ordinary shares” are to our Class A ordinary shares and our Class B ordinary shares;
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“private placement warrants” are to the warrants to be issued to our sponsor in a private placement simultaneously with the closing of this offering and upon conversion of working capital loans, if any, as well as warrants to be issued to our sponsor, its affiliates or permitted designees at our sponsor's option upon extension of our initial time period to complete our initial business combination;
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“public shares” are to our Class A ordinary shares sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market) and for the avoidance of doubt, do not include the Class A ordinary shares that will be issued upon the automatic conversion of the Class B ordinary shares;
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“public shareholders” are to the holders of our public shares, including our sponsor and management team to the extent our sponsor and/or members of our management team purchase public shares, provided that our sponsor’s and each member of our management team’s status as a “public shareholder” will only exist with respect to such public shares;
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“sponsor” are to Spring Valley Acquisition Sponsor, LLC, a Delaware limited liability company; and
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“we,” “us,” “our,” “company” or “our company” are to Spring Valley Acquisition Corp., a Cayman Islands exempted company.
Any forfeiture of shares described in this prospectus will take effect as a surrender of shares for no consideration of such shares as a matter of Cayman Islands law. Any conversion of the Class B ordinary shares described in this prospectus will take effect as a compulsory redemption of Class B ordinary shares and an issuance of Class A ordinary shares as a matter of Cayman Islands law. Any share dividends described in this prospectus will take effect as share capitalizations as a matter of Cayman Islands law.
Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option.
General
We are a newly incorporated blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities, which we refer to as our initial business combination. We have not selected any potential business combination target and we have not, nor has anyone on our behalf, had any substantive discussions, directly or indirectly, with any potential business combination target.
We will seek to capitalize on the significant experience and vast network of our management team (including our board of directors) and Pearl Energy Investment Management, LLC (our “Team”) to complete our initial business combination. Although we may pursue our initial business combination in any business, industry or geographic location, we currently intend to focus on opportunities that capitalize on the expertise and ability of our Team, particularly our executive officers, to identify, acquire and operate a business in the broadly-defined sustainability industry. This industry includes, but is not limited to, energy and power (with a focus on renewable energy, biofuels and energy storage), resource management (including energy efficiency, smart grid and green / smart buildings), transportation (including mobility and fueling / charging infrastructure), environmental services (including waste management, pollution control and recycling), water, agriculture / food and advanced materials / chemicals (collectively, “Sustainability”) in the United States and other developed countries. We believe our Team’s collective background and the favorable macroeconomic and social trends disrupting the Sustainability industry will provide an opportunity to execute a potentially transformational business combination.
We believe that there are significant attractive investment opportunities focused on improving the planet that are centered around a core sustainability theme. Growth in the Sustainability industry is driven by a series of macroeconomic and social trends. Macroeconomic trends contributing to growth in the Sustainability industry include urbanization, population growth, increased government spending and increased regulatory requirements at the federal, state and local level. In addition, various social trends, such as the increased focus on Environmental, Social and Governance (“ESG”) practices and business models as well as ESG increasingly becoming a core mandate for fund managers, are leading to an increased global focus on sustainability. As a result, we believe the Sustainability industry has the potential to undergo profound changes similar to other industries in the past, such as the transportation industry with airline deregulation in the 1970s and telecom industry following the emergence of wireless technology in the 1990s.
We believe that we are well-positioned to identify attractive businesses in the Sustainability industry that would benefit from access to the public markets and the diverse skill set of our management team. We intend to focus on evaluating established companies with leading competitive positions, experienced management teams, attractive financial profiles and robust long-term potential for growth and profitability. We believe many businesses in the Sustainability industry could benefit from access to the public markets but have been unable to do so due to a number of factors, including the time it takes to conduct a traditional initial public offering, market volatility and pricing uncertainty. Our objective is to consummate our initial business combination with such a business and enhance stakeholder value by identifying and recruiting management, pursuing additional acquisitions, implementing operational improvements and expanding its product offerings and geographic footprint. We intend to utilize our Team’s experience, reputation and contacts across the industry to achieve this objective.
Our Team
Christopher Sorrells serves as our Chief Executive Officer and as a member of our board of directors. Mr. Sorrells has been an investor, operator, advisor and board member in the Sustainability industry for over 20 years. Mr. Sorrells currently serves as Lead Director and Chairman of the
Compensation Committee for Renewable Energy Group, Inc. (Nasdaq: REGI), having previously served as Vice Chairman of its board. Previously, Mr. Sorrells served as a Managing Director and then as an Operating Partner of NGP Energy Technology Partners (“NGP ETP”), an affiliate of Natural Gas Partners (“NGP”), a leading energy private equity fund with $20 billion of assets under management, which he helped grow into one of the most successful Sustainability-focused private equity funds. Mr. Sorrells and/or his former firms including NGP ETP have invested in a broad range of companies across the Sustainability industry, including Renewable Energy Group, Inc. (Nasdaq: REGI), Power-One, Inc. (formerly Nasdaq: PWER), Caminus Corporation (formerly Nasdaq: CAMZ), Waste Resource Management, Inc., TPI Composites, Inc. (Nasdaq: TPIC) and others. In addition to leading investments, Mr. Sorrells has held a number of board positions for numerous public and private firms, including groSolar (which was later sold to EDF Renewables Inc.), GSE Systems, Inc. (Nasdaq: GVP) and Living Earth (which was later sold to Bain Capital Double Impact). As an operator, Mr. Sorrells has held a variety of senior executive leadership roles at Sustainability-focused companies including serving as Chief Operating Officer and Director of GSE Systems, Inc. Mr. Sorrells started his career in the energy, power and Sustainability industries as an investment banker at Salomon Smith Barney in 1996 and later at Banc of America Securities LLC where he created one of the first Sustainability-focused investment banking teams in 2000. Mr. Sorrells received his Master of Accounting from University of Southern California, an M.B.A. from The College of William and Mary and a B.A. from Washington and Lee University.
William Quinn serves as the Chairman of our Board of Directors. Mr. Quinn has over 25 years of private equity investment experience and has been involved in transactions totaling in the multi-billion dollars in aggregate value. Currently, Mr. Quinn is the Managing Partner of Pearl Energy Investment Management, LLC (“Pearl”), an investment firm with $1.2 billion of committed capital under management that he founded in 2015. Prior to founding Pearl, Mr. Quinn served as a Co-Managing Partner of Natural Gas Partners. During his time at NGP, the firm raised funds totaling over $10 billion in cumulative committed capital, made multiple investments in the upstream, midstream and oilfield service and created a dedicated sustainable technology investment platform, NGP Energy Technology Partners. Mr. Quinn was a key contributor to the formation of NGP ETP in 2005 and served on its investment committee until 2013, during which time he oversaw their investments in the Sustainability, oil and gas, power, environmental, energy efficiency and clean energy subsectors, including Renewable Energy Group, Inc. (Nasdaq: REGI) and TPI Composites, Inc. (Nasdaq: TPIC), a global leader in wind blade manufacturing. Prior to joining NGP, Mr. Quinn worked at Rainwater, Inc. and Hicks, Muse, Tate and Furst, Inc. and worked as an analyst in the investment banking divisions of Bear Stearns & Co. and BT Securities Corporation. Mr. Quinn has served on the board of directors of numerous public and private companies, including Resolute Energy Corporation (NYSE: REN), which was taken public via Hicks Acquisition Company I in 2009 and subsequently sold to Cimarex Energy Co. (NYSE: XEC) in early 2019, and Eagle Rock Energy Partners, L.P. (Nasdaq: EROC). In addition to his investing activities, Mr. Quinn serves on the Board of Overseers of the Wharton School of the University of Pennsylvania and serves as a guest lecturer on private equity investing at Stanford University’s Graduate School of Business and the Wharton School of the University of Pennsylvania. Mr. Quinn received a B.S.E. in Finance from the Wharton School of the University of Pennsylvania, and an M.B.A. from the Stanford University Graduate School of Business.
Jeffrey Schramm serves as our Chief Financial Officer. Mr. Schramm has over 20 years of leadership, finance and operations experience in advanced materials and specialty chemical organizations with a deep understanding of the Sustainability industry having worked with some of the leading venture capital and private equity funds such as Kleiner Perkins, Index Ventures and NGP Energy Technology Partners. Previously, Mr. Schramm served as Chief Financial Officer at Lehigh Technologies, Inc. (“Lehigh”) from 2009 until 2019 where he was responsible for raising both debt and equity, as well as financial and administrative functions. Mr. Schramm was instrumental in Lehigh’s sale to a publicly traded company and largest tire manufacturer in Europe, Michelin, as the key part of its sustainability initiative. Prior to that, Mr. Schramm served as Vice President of Finance for Euramax International, Inc. (now OmniMax International, Inc.) in the Exterior Products & Fabral (fabrication) divisions from 2007 until 2009 where he managed a large multilocation team supporting revenues close to $1 billion annually. From 2000 to 2007, Mr. Schramm was with Kemira Chemicals, Inc. (formerly Vulcan Performance Chemicals) as head of Financial Planning & Analysis and North American CFO
over the Pulp & Paper and Water Treatment specialty chemical businesses. During his time at Kemira Chemicals, Inc., he was a key member of the acquisition team acquiring the Pulp & Paper chemicals business from Lanxess (LXS.DE) and the Pulp & Paper business from FinnChem USA. In 1993 to 2000, Mr. Schramm began his career at Milliken & Company in various roles starting in Accounting, Controllership and later served as Financial Planning & Analysis Manager in Procurement. Mr. Schramm earned a B.S. in Corporate Finance and Investment Management from the University of Alabama, and an M.B.A from LaGrange College.
Robert Kaplan serves as our Vice President of Business Development. Mr. Kaplan has over 20 years of investment banking experience in the Sustainability industry. Mr. Kaplan has been involved in over 60 transactions totaling approximately $6 billion in transaction value. Mr. Kaplan was most recently Managing Director of Clean Technologies / Renewables at Stifel Financial Corp. (“Stifel”). In this role, Mr. Kaplan was responsible for the firm’s capital markets and advisory services in various sustainability subsectors, including, clean energy, biofuels, energy storage, energy efficiency, mobility and environmental technologies. He joined Stifel in 2010 in connection with Stifel’s acquisition of Thomas Weisel Partners Group, Inc. (“TWP”) in 2010. Mr. Kaplan joined TWP in 2007 as a Vice President in the Technology investment banking group with a focus on sustainable technologies. Prior to joining TWP, Mr. Kaplan started his investment banking career at First Albany where he was a founding member of one of the first Sustainability focused banking franchise on Wall Street. During his tenure at First Albany, he completed many of the industry’s first public offerings in various sustainability subsectors, such as solar, alternative fuels, mobility, fuel cells and the smart grid. Mr. Kaplan serves on the board of directors of TWO NIL, LLC. Mr. Kaplan received a B.S. in Finance from Lehigh University and an M.B.A. from the NYU Stern School of Business.
Debora Frodl will serve as a board member upon the closing of this offering. Ms. Frodl has over 30 years of international business experience with General Electric Company. From 2012 to 2017, Ms. Frodl served as the Global Executive Director of Ecomagination. Ms. Frodl repositioned this sustainable technology strategy into one of multi-faceted innovation and expansive global growth. During Ms. Frodl’s tenure from 2012 to 2017, GE Ecomagination’s revenues exceeded $125 billion. From 2010 to 2012, Ms. Frodl served as GE’s Chief Strategy Officer and Global Alternative Fuels Leader where she pioneered the business strategy to decarbonize the commercial fleet industry through alternative fuel vehicles and infrastructure technologies. From 2005 to 2010, Ms. Frodl served as Chief Commercial Officer of GE Capital Fleet Services, from 2004 to 2005, as Chief Marketing Officer of GE Capital Commercial Equipment Finance and from 2002 to 2004, as Chief Executive Officer of GE Capital Dealer Finance. From 1999 to 2004, Ms. Frodl served as Chief Executive Officer of GE Capital Public Finance. Currently Ms. Frodl serves on the board of directors for Renewable Energy Group, Inc. and ITC Holdings Corp. and Chair of the board for XL Hybrids, a leader in smart vehicle electrification for commercial fleets. Ms. Frodl has been recognized by Green Building & Design as 2017 “Woman in Sustainability Leadership,” Women’s Council on Energy and the Environment as 2014 “Woman of the Year,” Connected World Magazine as 2013 “Top Women in M2M.” She holds an M.B.A. from the University of St. Thomas and BSBA from Minnesota State University.
Richard Thompson will serve as a board member upon the closing of this offering. Mr. Thompson has over 35 years of international business experience in renewable energy, power electronics and semiconductors, including several billion-dollar public exits in the Sustainability industry. Currently, Mr. Thompson is a strategic adviser to Sumeru Equity Partners, a technology-focused private equity firm. From 2014 to 2016, he was Executive Chairman of AVI-SPL, an approximately $580 million privately held, global leader in video communications. From 2008 to October 2013, Mr. Thompson was President, Chief Executive Officer and a Director of Power-One, Inc. (formerly Nasdaq: PWER), a leading provider of renewable energy and power conversion solutions. During his tenure, he successfully led the company through restructuring to become one of the largest renewable energy inverter suppliers worldwide, generating over $1 billion in sales in 2012, along with its sale to ABB (NYSE: ABB) for over $1 billion in equity value. Prior to joining Power-One, Inc., Mr. Thompson was Chief Financial Officer of American Power Conversion Corporation (Nasdaq: APCC) from 2005 to 2007, which was acquired in March 2007 by a French competitor, Schneider Electric SA (Paris: SU.PA), in an auction for approximately $6 billion in enterprise value. From 1997 to 2005, Mr. Thompson was Chief Financial Officer of Artesyn Technologies (Nasdaq: ATSN) and was instrumental in creating one of the leading
power component companies in the industry which was later sold to Emerson (NYSE: EMR) for $500 million. In addition to his role at Artesyn, he was also General Manager of Spider Software and led the company’s merger with Zytec Inc. that created a robust power component and computer board business.
Patrick Wood, III will serve as a board member upon the closing of this offering. Mr. Wood has over 25 years of experience in the development, financing, regulation, and the legal and policy issues of energy infrastructure. Currently, Mr. Wood serves as CEO of the Hunt Energy Network, a distributed energy platform company, since February 2019. Known for his role in setting up competitive energy markets in Texas and across the country, Mr. Wood served as Chairman of both the Public Utility Commission of Texas from 1995 to 2001 and the Federal Energy Regulatory Commission from 2001 to 2005. Since leaving public service, he has focused on developing energy infrastructure projects and companies. He currently serves as a director of SunPower (Nasdaq: SPWR) and of Quanta Services, Inc. (NYSE: PWR), including his recent appointment to Luma Energy, overseeing the Quanta-ATCO joint venture to operate the Puerto Rico utility system. Mr. Wood served as board chairman of independent power producer Dynegy from its emergence from bankruptcy in 2012 through its merger with Vistra Energy in 2018 for $1.7 billion in an all stock deal, creating a $10 billion publicly traded equity valued company upon closing. He was a strategic advisor to Natural Gas Partners from 2005 to 2014, when he became an independent director of Memorial Resources Development (Nasdaq: MRD) upon its IPO in 2014. MRD was subsequently sold to Range Resources in 2016 for $4.2 billion in enterprise value. Mr. Wood was also a past director of TPI Composites, Inc. (Nasdaq: TPIC) and has prior affiliations with InfraREIT (NYSE: HIFR), Airtricity, First Wind, Texas Genco, The Texas A&M Smart Grid Council, the American Council on Renewable Energy, and remains a member of the National Petroleum Council.
We will be supported by Pearl, a Dallas, Texas-based investment firm with $1.2 billion of committed capital under management as of June 30, 2020. Pearl was founded by William Quinn in 2015 and focuses on partnering with best-in-class management teams to invest in the North American energy industry, typically targeting opportunities requiring $25 million to $100 million of equity capital. Over the course of their careers, the principals at Pearl have executed on billions of dollars of aggregate transaction value through direct investment, financing and acquisitions, with experience spanning venture to late stage buyout and across all parts of the business cycle.
We will further be supported by our team of advisors from leading global companies with experience in a wide range of subsectors and functional areas. This support is intended to provide us with access to their expertise and extensive industry networks from which we plan to source and evaluate targets as well as devise plans to optimize any business that we acquire.
Business Strategy
Our acquisition and value creation strategy is to identify and complete our initial business combination with a Sustainability-focused company that builds upon the vast industry experience and expertise of our Team.
We expect to develop our pipeline of opportunities for a potential business combination through our management team’s 175 cumulative years of experience, deep relationships and extensive network of corporate executives, board members, venture capital and private equity firms, family offices, investment bankers, lawyers, investors and other service providers to the Sustainability industry. We have an extensive history of launching successful investment platforms through proactive and highly selective sourcing of potential targets by analyzing the entire value chain to determine the best balance of risk and reward segment. Utilizing this approach, we have helped build large public and private platforms in the global sustainability and energy markets.
Our selection process will leverage our Team’s broad and deep relationship network, unique industry experiences and extensive deal-sourcing capabilities to access a broad spectrum of differentiated opportunities. We expect to develop this network through our Team’s broad experience, with demonstrated success in both investing in and operating businesses across a variety of industries
and at numerous stages of these companies’ life cycles. We have developed a distinctive combination of capabilities, which includes:
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an established record of building industry-leading companies and strong ability to deliver shareholder value over an extended time period;
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experience using acquisitions to grow companies during periods of both economic growth and decline by using extensive deal-sourcing and differentiated transaction execution/structuring capabilities;
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experience deploying value creation strategies, including recruiting talented personnel, implementing system upgrades with the back-office systems, and delivering operating efficiency by implementing an analytical based approached to business metrics; and
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extensive capital markets experience across various business cycles, including financing businesses and assisting companies with transition to public ownership.
We intend to focus our efforts on opportunities where our Team’s strategic vision, operating expertise, deep relationships and capital markets experience can be catalysts to enhance the growth, competitive position and financial upside in an initial business combination. We intend to identify and execute an initial business combination within the Sustainability industry in the United States or other developed countries, although we may pursue targets in any business, industry, sector, or geographical location. Our Team has an established history in identifying and capitalizing on key trends that have shaped the global sustainability and energy markets and has helped build leading platforms to scale within the marketplace.
Our Competitive Strengths
Our intent is to identify and complete our initial business combination with a company that complements the experience of our Team and can benefit from our unique combination of skills in investing, financing, advising and operating. Our Team has a substantial deal-making skillset developed throughout their collective careers and has created significant shareholder value across several high-profile transactions, including:
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As lead investor in 2006, Mr. Sorrells brought together a combination of strategic and financial partners to lead investment in Renewable Energy Group, Inc. (Nasdaq: REGI), one of the largest global biodiesel/renewable diesel companies. At the time, this investment was noted as one of the largest investments in biodiesel in North America and helped transform an emerging industry into a growing and vibrant sector. Renewable Energy Group, Inc.’s revenues have grown from approximately $85 million in 2008 to approximately $2.6 billion in 2019 via organic growth and an aggressive acquisition strategy. In addition, the stock price for Renewable Energy Group, Inc. has appreciated significantly since going public in January 2012.
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As an investor in 2002, Mr. Quinn, made an investment in Energy Transfer Equity, L.P. (“Energy Transfer”) in connection with the creation of a new private company to acquire a $265 million package of midstream assets from Aquila, Inc. (now Black Hills Energy). Through a combination with Heritage Propane Partners, several major acquisitions and numerous organic growth projects, as well as an initial public offering in 2006, Energy Transfer grew from a small private company into one of the largest publicly traded midstream corporations.
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From 2008 to 2012, as Chief Executive Officer and director, Mr. Thompson successfully led Power-One, Inc. through restructuring, and helped the company increase its revenue from approximately $537.5 million in 2008 to approximately $1 billion in 2012 and become one of the largest renewable energy inverter suppliers worldwide. In July 2013, Mr. Thompson successfully completed the sale of Power-One, Inc. to ABB (NYSE: ABB) for over $1 billion in equity value. In 2007, as Chief Financial Officer of American Power Conversion Corporation (Nasdaq: APCC), Mr. Thompson helped negotiate the sale of the company to Schneider Electric SA (Paris: SU.PA) for approximately $6 billion in enterprise value.
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As former Global Executive Director of Ecomagination at General Electric Company, Ms. Frodl repositioned the company’s sustainable technology strategy into a multi-faceted platform for innovation and global growth. During Ms. Frodl’s tenure from 2012 to 2017, GE Ecomagination’s
revenues exceeded $125 billion. In 2017, the Ecomagination portfolio was comprised of 74 Ecomagination qualified products and solutions, including onshore and offshore wind, gas engines, gas turbines, hybrid gas turbine, GEnx and LEAP engines, LEDs, Hydropower, solar, solar inverters, EV charging infrastructure, Tier 4 locomotives and battery storage.
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As one of the key architects of the nation’s competitive power markets, Mr. Wood has been on the forefront of the transformation of the power sector. His regulatory leadership at the Public Utility Commission of Texas and at the Federal Energy Regulatory Commission during the transition to a cleaner, more flexible power system created an attractive investment climate for innovative companies and technologies across the United States. As chairman of independent power producer (“IPP”) Dynegy, Mr. Wood led the board of a small company emerging from bankruptcy in 2012 through four significant mergers (including two simultaneous ones with Energy Capital Partners and Duke Energy). Dynegy’s fifth merger, in 2018 with Vistra Energy (NYSE: VST), created the nation’s largest IPP with an equity value of $10 billion at the time of closing.
Among these transactions, we have helped pioneer business models/technologies and have deployed assets that have changed the way we produce or transport energy and power while contributing to the significant growth in clean energy and power. We expect to draw upon this vast set of experiences with a goal of affecting a business combination and build a market-leading business.
With respect to the above, past performance of our Team is not a guarantee of either (i) success with respect to a business combination that may be consummated or (ii) the ability to successfully identify and execute a transaction. You should not rely on the historical record of our Team or their respective affiliates as indicative of future performance. See “Risk Factors—Past performance by our Team, including investments and transactions in which they have participated and businesses with which they have been associated, may not be indicative of future performance of an investment in us, and we may be unable to provide positive returns to shareholders.” For a list of our executive officers and entities for which a conflict of interest may or does exist between such officers and the company, please refer to “Management—Conflicts of Interest.”
Industry Opportunity
We believe our Team’s extensive and diversified experience in Sustainability will help us to effectively evaluate targets across the Sustainability industry. We believe Sustainability is attractive for a number of reasons:
Large Target Market. According to estimates from the International Renewable Energy Agency, between 2016 and 2050, global cumulative investments in renewables could total approximately $13 trillion, while cumulative investments in energy efficiency could total approximately $29 trillion. We believe this growth is driven by continued innovation that has reduced capital costs versus incumbent processes as well as a global acceleration in electrification. For instance, in the clean energy industry, the cost of large-scale and residential photovoltaic solar power has decreased 82% and between 47% to 80% (depending on the region), respectively, since 2010, according to the International Renewable Energy Agency. This cost reduction in large-scale photovoltaic installations makes it less expensive to build and operate a solar installation than a coal fired power plant in many parts of the world. In addition, according to industry sources, the trend towards electrification in mobility has pushed passenger electric vehicle sales from 450,000 cars in 2015 to 2.1 million in 2019 and is expected to account for 54 million cars, or approximately 58%, of new car sales by 2040.
Favorable Trends. The Sustainability industry is defined by significant growth in a set of dynamic and changing industries. We believe the significant growth in Sustainability is driven by a series of macroeconomic and social trends. Macroeconomic trends contributing to growth in the Sustainability industry include urbanization, population growth, increased government spending and increased regulatory requirements at the federal, state and local level. In addition, various social trends, such as the increased focus on ESG practices and business models as well as ESG increasingly becoming a core mandate for fund managers, are leading to an increased global focus on Sustainability, climate change and a reduced carbon footprint. We believe an ESG focus is becoming engrained in the fabric
of socially conscious corporations, and that ESG standards are becoming an increasingly common benchmarking criteria for prospective employees.
Broad Universe of Targets. We intend to focus our investment effort across the broad Sustainability industry. We believe the anticipated growth in the industry and the related sectors will present a substantial number of actionable opportunities with the required scale that fit our acquisition criteria. According to industry source Pitchbook, there were over 14,600 companies operating in the Sustainability industry as of August 2020.
High Barriers to Entry. Success in Sustainability is driven by a myriad of global regulations, government spending and technological breakthroughs. We believe our Team’s experience in the Sustainability industry over the past 25 years provides a significant amount of proprietary domain expertise and know-how in evaluating investment opportunities in a difficult-to-navigate industry. Further, our Team has spent considerable time navigating the complex regulatory environment inherent in the Sustainability industry, and its familiarity with the nuances of the regulatory aspect of the industry provides a differentiated competitive advantage.
Investment Approach
Upon completion of this offering, our Team plans to commence an extensive outreach program to its network and industry relationships to articulate the parameters for our search for a target company and a potential business combination and begin the process of pursuing and reviewing potential opportunities. We intend to capitalize on the following competitive advantages in our pursuit of a target company:
Proactive and Proprietary Transaction Sourcing. We believe that our management team’s 175 cumulative years of deal experience, history of building leading platforms, proactive approach to sourcing transactions, and extensive network of relationships will provide the potential to access numerous investment opportunities. We believe our Team’s deep industry expertise across Sustainability industries and throughout the capital structure makes a business combination with us an attractive option for Sustainability companies seeking capital solutions.
Data Driven Analysis of Potential Opportunities. We believe that our Team has an established record of generating investment opportunities. Within targeted subsectors, we expect to employ an initial review of the entire value chain to determine the best risk / reward profiles of the subsector. In addition, we expect to analyze current trends, develop investment theses and create strategies for originating and evaluating investment opportunities. This research-oriented, data-intensive process would allow us to proactively identify trends, find opportunities and execute transactions ahead of potential competitors.
Execution and Structuring Capability. We believe that our Team’s transaction experience and reputation allow it to source and complete transactions requiring complex problem-solving skills and insight. Our Team has helped create several multi-billion dollar public and private companies that required these skills and deep industry insights. These types of transactions are typically complex and require creativity, industry knowledge and expertise, rigorous due diligence and extensive negotiation and documentation. Our Team has experience investing in many Sustainability-focused industries and has developed operational expertise at companies at varying stages of their life cycles. We plan to utilize this experience to help us generate investment opportunities with attractive risk / reward profiles based on their valuations, structural characteristics and relatively low levels of financial leverage.
Significant Value-Add Capability. We believe the industry expertise and broad network of relationships of our Team will allow it to add significant value and therefore be a key selling point to attract high caliber acquisition targets. We plan to market our Team to potential target companies in a number of capacities, including: (i) assisting in setting strategic direction and priorities; (ii) designing specific performance-improvement projects; (iii) helping to identify and recruit managers; (iv) advising on acquisition and financing transactions; (v) contributing market information; (vi) positioning the company products and services with customers and various stakeholders; and (vii) developing a targeted
investor relations program. Furthermore, our Team is also experienced in navigating complex regulatory issues that impact many companies that are part of certain subsectors within the Sustainability industry. Our Team believes that its ability to identify and implement value creation initiatives has been an essential driver of past performance and will remain central to our acquisition strategy.
Broad and Extensive Experience in Both Public and Private Markets. Our Team has decades of combined operating, investing and financing experience across both public and private markets. We have created some of the leading Sustainability companies both in the public and private sector with significant revenue growth in target industries. We believe that this versatility of experience and complementary skills will help us to identify companies that could make successful public market candidates and prepare them to make the transition to robust publicly traded companies.
Business Combination Criteria
Consistent with our strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses and, in evaluating a prospective target business, we expect to conduct a thorough due diligence review that will encompass, among other things, meetings with incumbent management and employees, document reviews and inspection of facilities, as applicable, as well as a review of financial and other information that will be made available to us.
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Sustainability Focus. We intend to focus on sustainable businesses positioned to benefit from macroeconomic and social trends impacting the economy.
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Established Businesses and Recognized Market Leaders. We expect to target businesses that are market leaders in their respective subsectors within the Sustainability industry, and may be better positioned to endure economic downturns, changes in the industry landscape and evolving customer, supplier and competitor preferences.
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Benefit from Being a Public Company. We intend to acquire one or more businesses that will benefit from being publicly traded and can effectively utilize the broader access to capital and the public profile that are associated with being a publicly traded company.
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Experienced Management Team. We will seek to partner with an experienced target team that can benefit from the unique investment, advisory, operational experience, and contacts of our Team in the Sustainability industry.
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Attractive Financial Profile. We will seek to acquire a business that has strong recurring revenues, a margin profile with high steady-state margins or high incremental margins, and / or compelling long-term growth prospects.
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Leader in Technology Driven Transformation. We will seek to acquire a business or entity with a technological advantage that provides a high barrier to entry for new entrants, a defensible position in intellectual property and presents a low or manageable risk of technological obsolescence.
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Middle Market Businesses. We believe targeting businesses or entities in the middle market will provide the greatest number of opportunities for investment and will maximize the network, contacts and experience of our Team. It may also provide the optimal platform for further consolidation.
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Strong Free Cash Flow Generation or Near-Term Potential. We will seek to acquire a business or entity that already generates, or has the potential to generate, consistent and stable free cash flow.
We plan to utilize our Team’s extensive network of contacts, which provides access to differentiated deal flow and significant deal-sourcing capabilities, and use these criteria and guidelines to evaluate acquisition opportunities. However, we may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines.
These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that from time to time our management may deem relevant.
In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria, we will disclose that the target business does not meet the above criteria in our shareholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of proxy solicitation or tender offer materials that we would file with the SEC.
Our Acquisition Process
In evaluating a prospective target business, we expect to conduct an extensive due diligence review which may encompass, as applicable and among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities and a review of financial and other information about the target and its industry. We will also utilize our management team’s operational and capital planning experience.
Each of our directors and officers will, directly or indirectly, own founder shares and/or private placement warrants following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, such officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.
Certain of our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity subject to his or her fiduciary duties. As a result, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, then, subject to such officer’s and director’s fiduciary duties under Cayman Islands law, he or she will need to honor such fiduciary or contractual obligations to present such business combination opportunity to such entity, before we can pursue such opportunity. If these other entities decide to pursue any such opportunity, we may be precluded from pursuing the same. However, we do not expect these duties to materially affect our ability to complete our initial business combination. Our amended and restated memorandum and articles of association provide that we renounce our interest in any business combination opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is an opportunity that we are able to complete on a reasonable basis.
Initial Business Combination
We will initially have up to 18 months from the closing of this offering to consummate an initial business combination. However, if we anticipate that we may not be able to consummate our initial business combination within 18 months, we may, by resolution of our board of directors if requested by our sponsor, extend the initial period of time to consummate an initial business combination one time, by an additional six months, subject to the sponsor, its affiliates or permitted designees purchasing additional private placement warrants as set out below. Our shareholders will not be entitled to vote or redeem their public shares in connection with any such extension. Pursuant to the terms of our amended and restated memorandum and articles of association, in order to extend the initial period of time to consummate an initial business combination for such six-month period, our sponsor, its affiliates or permitted designees, upon no less than five days’ advance notice to us prior to expiration of the initial 18-month deadline, must purchase an additional 2,000,000 (or up to 2,300,000 if the underwriters’ over-allotment option is exercised in full) private placement warrants at $1.00 per warrant and deposit the $2,000,000 (or up to $2,300,000 if the underwriters’ over-allotment option is exercised in full) in proceeds into the trust account on or prior to the date of the expiration of the initial 18-month deadline. In the event that we receive such notice from our sponsor, its affiliates or permitted designees five days prior to the initial 18-month deadline of a request for us to effect an extension, we intend to issue a press release announcing such extension at least three days prior to the initial 18-month deadline.
In addition, we intend to issue a press release the day after the initial 18-month deadline announcing whether or not the funds had been timely deposited. Our sponsor, its affiliates or permitted designees are not obligated to purchase additional private placement warrants to extend the time for us to complete our initial business combination.
If we have not consummated an initial business combination within such applicable time period, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest and other income earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
So long as our securities are then listed on the Nasdaq, our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding any deferred underwriting commissions and taxes payable on the income earned on the trust account) at the time of the agreement to enter into our initial business combination. We refer to this as the 80% of net assets test. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm or an independent valuation or appraisal firm with respect to the satisfaction of such criteria. While we consider it unlikely that our board will not be able to make an independent determination of the fair market value of a target business or businesses, it may be unable to do so if the board is less familiar or experienced with the target company’s business, there is a significant amount of uncertainty as to the value of the company’s assets or prospects, including if such company is at an early stage of development, operations or growth, or if the anticipated transaction involves a complex financial analysis or other specialized skills and the board determines that outside expertise would be helpful or necessary in conducting such analysis. Since any opinion, if obtained, would merely state that the fair market value of the target business meets the 80% of net assets threshold, unless such opinion includes material information regarding the valuation of a target business or the consideration to be provided, it is not anticipated that copies of such opinion would be distributed to our shareholders. However, if required under applicable law, any proxy statement that we deliver to shareholders and file with the SEC in connection with a proposed transaction will include such opinion.
We anticipate structuring our initial business combination so that the post-business combination company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-business combination company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such 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, or the Investment Company Act. Even if the post-business combination company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets
of a target business or businesses are owned or acquired by the post-business combination company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses. In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor. If our securities are not then listed on the Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% of net assets test.
To the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.
Other Considerations
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor or any of our officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that such initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
We currently do not have any specific business combination under consideration. Our officers and directors have neither individually selected nor considered a target business nor have they had any substantive discussions regarding possible target businesses among themselves or with our underwriters or other advisors. Our management team is regularly made aware of potential business opportunities, one or more of which we may desire to pursue for a business combination, but we have not (nor has anyone on our behalf) contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to a business combination transaction with our company. Additionally, we have not, nor has anyone on our behalf, taken any substantive measure, directly or indirectly, to identify or locate any suitable acquisition candidate for us, nor have we engaged or retained any agent or other representative to identify or locate any such acquisition candidate.
In addition, certain of our officers and directors presently have, and any of them in the future may have additional, fiduciary and contractual duties to other entities. As a result, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, then, subject to their fiduciary duties under Cayman Islands law, he or she will need to honor such fiduciary or contractual obligations to present such business combination opportunity to such entity, before we can pursue such opportunity. If these other entities decide to pursue any such opportunity, we may be precluded from pursuing the same. However, we do not expect these duties to materially affect our ability to complete our initial business combination. Our amended and restated memorandum and articles of association provide that we renounce our interest in any business combination opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is an opportunity that we are able to complete on a reasonable basis.
Our sponsor, officers and directors may sponsor, form or participate in other blank check companies similar to ours during the period in which we are seeking an initial business combination. Any such
companies may present additional conflicts of interest in pursuing an acquisition target, particularly in the event there is overlap among investment mandates. However, we do not currently expect that any such other blank check company would materially affect our ability to complete our initial business combination. In addition, our sponsor, officers and directors, are not required to commit any specified amount of time to our affairs, and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence.
Corporate Information
Our executive offices are located at 2100 McKinney Ave, Suite 1675, Dallas, TX 75201, and our telephone number is (214) 308-5230. We maintain a corporate website at www.sv-ac.com. The information contained on or accessible through our corporate website or any other website that we may maintain is not part of this prospectus or the registration statement of which this prospectus is a part.
We are a Cayman Islands exempted company. Exempted companies are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Law. As an exempted company, we have applied for and expect to receive, after the effectiveness of the registration statement of which this prospectus forms a part, a tax exemption undertaking from the Cayman Islands government that, in accordance with Section 6 of the Tax Concessions Law (2020 Revision) of the Cayman Islands, for a period of 30 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations will apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i) on or in respect of our shares, debentures or other obligations or (ii) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us.
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion (as adjusted for inflation pursuant to SEC rules from time to time), or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that are held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of any fiscal year for so long as either (1) the market value of our
ordinary shares held by non-affiliates does not equal or exceed $250.0 million as of the prior June 30th, or (2) our annual revenues did not equal or exceed $100.0 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates did not equal or exceed $700.0 million as of the prior June 30th. To the extent we take advantage of any reduced disclosure obligations, it may also make comparison or our financial statements with other public companies difficult or impossible.
The Offering
In deciding whether to invest in our securities, you should take into account not only the backgrounds of the members of our management team, but also the special risks we face as a blank check company and the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. You will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. You should carefully consider these and the other risks set forth in the section below entitled “Risk Factors” of this prospectus.
20,000,000 units (or 23,000,000 units if the underwriters’ over-allotment option is exercised in full), at $10.00 per unit, each unit consisting of:
•
one Class A ordinary share; and
•
one-half of one redeemable warrant.
Units: “SVSVU”
Class A ordinary shares: “SV”
Warrants: “SVSVW”
Trading commencement and separation of Class A ordinary shares and warrants
The units are expected to begin trading on or promptly after the date of this prospectus. The Class A ordinary shares and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus unless Cowen and Company, LLC and Wells Fargo Securities, LLC inform us of their decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. Once the Class A ordinary shares and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into Class A ordinary shares and warrants. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least two units, you will not be able to receive or trade a whole warrant.
Additionally, the units will automatically separate into their component parts and will not be traded after completion of our initial business combination.
Separate trading of the Class A ordinary shares and warrants is prohibited until we have filed a Current Report on Form 8-K
In no event will the Class A ordinary shares and warrants be traded separately until we have filed with the SEC a Current Report on Form 8-K that includes an audited balance sheet reflecting our receipt of the gross proceeds at the closing of this offering and the sale of the private placement warrants. We will file the Current Report on Form 8-K which includes this audited balance sheet promptly after the closing of this offering. If the underwriters’ over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second
or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriters’ over-allotment option.
Units:
Number outstanding before this offering
0
Number outstanding after this offering
20,000,000(1)
Ordinary shares:
Number outstanding before this offering
5,750,000(2)(3)
Number outstanding after this offering
25,000,000(1)(2)(4)
Warrants:
Number of private placement warrants to be sold in a private placement simultaneously with this offering
8,000,000(1)
Number of warrants to be outstanding after this offering and the sale of private placement warrants
18,000,000(1)
(1)
Assumes no exercise of the underwriters’ over-allotment option.
(2)
Founder shares are currently classified as Class B ordinary shares, which shares will automatically convert into Class A ordinary shares at the time of our initial business combination or earlier at the option of the holders thereof as described below adjacent to the caption “Founder shares conversion and anti-dilution rights” and in our amended and restated memorandum and articles of association. Such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions from the trust account if we do not consummate an initial business combination.
(3)
Includes 750,000 founder shares that are subject to forfeiture.
(4)
Includes 20,000,000 public shares and 5,000,000 founder shares, assuming 750,000 founder shares have been forfeited.
Each whole warrant is exercisable to purchase one Class A ordinary share, subject to adjustment as described herein. Only whole warrants are exercisable.
We structured each unit to contain one-half of one redeemable warrant, with each whole warrant exercisable for one Class A ordinary share, as compared to units issued by some other similar blank check companies which contain whole warrants exercisable for one whole share, in order to reduce the dilutive effect of the warrants upon completion of our initial business combination as compared to units that each contain a whole warrant to purchase one whole share, thus making us, we believe, a more attractive business combination partner for target businesses.
$11.50 per whole share, subject to adjustments as described herein. In addition, if (x) we issue additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our sponsor or its affiliates, without taking into account any founder shares held by our sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (z) the volume weighted average trading price of our Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price described adjacent to “Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00” and “Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described adjacent to the caption “Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
The warrants will become exercisable on the later of:
•
30 days after the completion of our initial business combination; and
•
twelve months from the closing of this offering;
provided in each case that we have an effective registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement, including as a result of a notice of redemption described below under “Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00”). If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
We are not registering the Class A ordinary shares issuable upon exercise of the warrants at this time. However, we have agreed that as soon as practicable, but in no event later than 20 business days after the closing of our initial business combination, we will use our commercially reasonable efforts to file with the SEC a registration
statement covering the Class A ordinary shares issuable upon exercise of the warrants, and we will use our commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of our initial business combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement provided that if our Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th 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 we 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, but we will use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
The warrants will expire at 5:00 p.m., New York City time, five years after the completion of our initial business combination or earlier upon redemption or liquidation. On the exercise of any warrant, the warrant exercise price will be paid directly to us and not placed in the trust account.
Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00
Once the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private placement warrants):
•
in whole and not in part;
•
at a price of $0.01 per warrant;
•
upon a minimum of 30 days’ prior written notice of redemption to each warrant holder, which we refer to as the “30-day redemption period”; and
•
if, and only if, the last reported sale price (the “closing price”) of our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Warrants—Public Shareholders’ Warrants—Anti-Dilution Adjustments”) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders.
We will not redeem the warrants as described above unless an effective registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants is then effective and a current prospectus relating to those Class A ordinary shares is available throughout the 30-day redemption period. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Except as set forth below, none of the private placement warrants will be redeemable by us so long as they are held by our sponsor or its permitted transferees.
Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00
Once the warrants become exercisable, we may redeem the outstanding warrants:
•
in whole and not in part;
•
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table set forth under “Description of Securities—Warrants—Public Shareholders’ Warrants” based on the redemption date and the “fair market value” of our Class A ordinary shares (as defined below) except as otherwise described in “Description of Securities—Warrants—Public Shareholders’ Warrants”;
•
if, and only if, the closing price of our Class A ordinary shares equals or exceeds $10.00 per public share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Warrants—Public Shareholders’ Warrants—Anti-dilution Adjustments”) for any 20 trading days within the 30-trading day period ending three trading days before we send the notice of redemption to the warrant holders; and
•
if the closing price of the Class A ordinary shares for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Warrants—Public Shareholders’ Warrants—Anti-dilution Adjustments”), the private placement warrants must also be concurrently called for redemption on the same terms as the outstanding public warrants, as described above.
The “fair market value” of our Class A ordinary shares for the above purpose shall mean the volume weighted average price of our Class A ordinary shares during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of
warrants. This redemption feature differs from the typical warrant redemption features used in other blank check offerings. We will provide our warrant holders with the final fair market value no later than one business day after the 10 trading day period described above ends. In no event will the warrants be exercisable on a cashless basis in connection with this redemption feature for more than 0.361 Class A ordinary shares per warrant (subject to adjustment).
No fractional Class A ordinary shares will be issued upon redemption. If, upon redemption, a holder would be entitled to receive a fractional interest in a share, we will round down to the nearest whole number of the number of Class A ordinary shares to be issued to the holder. Please see the section entitled “Description of Securities—Warrants—Public Shareholders’ Warrants” for additional information.
On August 21, 2020, our sponsor paid $25,000, or approximately $0.003 per share, to cover certain expenses on our behalf in consideration of 7,187,500 Class B ordinary shares, par value $0.0001. In September 2020, our sponsor transferred 40,000 Class B ordinary shares to each of our director nominees. On October 22, 2020, our sponsor effected a surrender of 1,437,500 Class B ordinary shares to the company for no consideration, resulting in a decrease in the number of Class B ordinary shares outstanding from 7,187,500 to 5,750,000, such that the total number of founder shares would represent 20% of the total number of ordinary shares outstanding upon completion of this offering (of which 750,000 Class B ordinary shares are subject to forfeiture if the underwriters do not exercise their overallotment option). Our sponsor has agreed to transfer all of the founder shares held by it to holdco prior to the consummation of this offering. The per share price of the founder shares was determined by dividing the amount contributed to the company by the number of founder shares issued. If we increase or decrease the size of this offering, we will effect a share capitalization or a share surrender or redemption or other appropriate mechanism, as applicable, with respect to our Class B ordinary shares immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares, on an as-converted basis, at 20% of our issued and outstanding ordinary shares upon the consummation of this offering. Up to 750,000 founder shares are subject to forfeiture by the sponsor, depending on the extent to which the underwriters’ over-allotment option is exercised.
The founder shares are identical to the Class A ordinary shares included in the units being sold in this offering, and holders of founder shares have the same shareholder rights as public shareholders, except that:
•
prior to our initial business combination, only holders of the founder shares have the right to vote on the appointment of directors and holders of a majority of our founder shares may remove a member of the board of directors for any reason;
•
the founder shares are subject to certain transfer restrictions contained in a letter agreement that our sponsor, directors, executive officers and certain of the anchor investors have entered or will enter into with us, as described in more detail below;
•
pursuant to such letter agreement, our sponsor and each member of our management team have agreed to (i) waive their redemption rights with respect to their founder shares; (ii) waive their redemption rights with respect to their founder shares and public shares in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering (or up to 24 months from the closing of this offering at our sponsor’s option to extend the period of time to consummate a business combination up to one time, by an additional six months as described herein) or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares and (iii) waive their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to consummate an initial business combination within 18 months from the closing of this offering, by the Contractual Redemption Date, if extended by our sponsor at its option or during any extended time that we have to consummate a business combination beyond 24 months as a result of a shareholder vote to amend our amended and restated memorandum and articles of association (an “Extension Period”) (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame). If we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. In such case, our sponsor and each member of our management team have agreed to vote their founder shares and public shares in favor of our initial business combination. As a result, in addition to our initial shareholders’ founder shares, we would need 7,500,001, or 37.5% (assuming all issued and outstanding shares are voted and the over-allotment option is not exercised), of the 20,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved;
•
the founder shares will automatically convert into our Class A ordinary shares at the time of our initial business combination or earlier at the option of the holders thereof as described below adjacent to the caption “Founder shares conversion and anti-dilution rights” and in our amended and restated memorandum and articles of association; and
•
the founder shares are entitled to registration rights.
Transfer restrictions on founder shares
Except as described herein, pursuant to a letter agreement with us, our sponsor and our directors and executive officers have agreed, and certain of the anchor investors will agree, not to transfer, assign or sell any of their founder shares until the earliest of (A) one year after
the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property. Any permitted transferees would be subject to the same restrictions and other agreements of our sponsor and our directors and executive officers with respect to any founder shares.
Founder shares conversion and anti-dilution rights
The founder shares are designated as Class B ordinary shares and will automatically convert into Class A ordinary shares, which such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions from the trust account if we do not consummate an initial business combination, at the time of our initial business combination or earlier at the option of the holders thereof at a ratio such that the number of Class A ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of this offering, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities (as defined herein) or rights issued or deemed issued, by the company in connection with or in relation to the consummation of the initial business combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to our sponsor, its affiliates or any member of our management team upon conversion of working capital loans. Any conversion of Class B ordinary shares described herein will take effect as a compulsory redemption of Class B ordinary shares and an issuance of Class A ordinary shares as a matter of Cayman Islands law. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one.
The term “equity-linked securities” refers to any debt or equity securities that are convertible, exercisable or exchangeable for our Class A ordinary shares issued in a financing transaction in connection with our initial business combination, including but not limited to a private placement of equity or debt.
Appointment of directors; Voting rights
Prior to our initial business combination, only holders of our founder shares will have the right to vote on the appointment of directors. Holders of our public shares will not be entitled to vote on the appointment of directors during such time. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. These provisions of our amended and restated memorandum and articles of association may only be amended by a
special resolution passed by not less than two-thirds of our ordinary shares who attend and vote at our general meeting which shall include the affirmative vote of a simple majority of our Class B ordinary shares. With respect to any other matter submitted to a vote of our shareholders, including any vote in connection with our initial business combination, except as required by law, holders of our founder shares and holders of our public shares will vote together as a single class, with each share entitling the holder to one vote.
Private placement warrants
Our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 8,000,000 private placement warrants (or 8,900,000 private placement warrants if the underwriters’ over-allotment option is exercised in full), each exercisable to purchase one Class A ordinary share at $11.50 per share, subject to adjustment, at a price of $1.00 per warrant ($8,000,000 in the aggregate or $8,900,000 if the underwriters’ over-allotment option is exercised in full), in a private placement that will close simultaneously with the closing of this offering. If we do not complete our initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, the proceeds from the sale of the private placement warrants held in the trust account will be used to fund the redemption of our public shares (subject to the requirements of applicable law) and the private placement warrants will expire worthless. The private placement warrants will be non-redeemable by us (except as set forth under “Description of Securities—Warrants—Public Shareholders’ Warrants—Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00”) and exercisable on a cashless basis so long as they are held by our sponsor or its permitted transferees (see “Description of Securities—Warrants—Private Placement Warrants”). If the private placement warrants are held by holders other than our sponsor or its permitted transferees, the private placement warrants will be redeemable by us in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering.
Transfer restrictions on private placement
warrants
The private placement warrants (including the Class A 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, except as described herein under “Principal Shareholders—Transfers of Founder Shares and Private Placement Warrants.”
Cashless exercise of private placement warrants
If holders of private placement warrants elect to exercise them on a cashless basis, except as described under “Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00,” they would pay the exercise price by surrendering their warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “Sponsor fair market value” (defined below) over the exercise price of the warrants by (y) the Sponsor fair market value. The “Sponsor fair market value” shall mean the average reported closing price of the Class A ordinary shares for the 10 trading days ending on the third trading day prior
to the date on which the notice of warrant exercise is sent to the warrant agent. The reason that we have agreed that these warrants will be exercisable on a cashless basis so long as they are held by the sponsor or its permitted transferees is because it is not known at this time whether they will be affiliated with us following a business combination. If they remain affiliated with us, their ability to sell our securities in the open market will be significantly limited. We expect to have policies in place that restrict insiders from selling our securities except during specific periods.
Up to five qualified institutional buyers or institutional accredited investors, who are not affiliated with any member of our management, who we refer to as the anchor investors, have expressed to us an interest to purchase up to 1,980,000 units each in this offering and we have agreed to direct the underwriters to sell to the anchor investors such number of units. Further, each of the anchor investors will enter into a separate agreement with our sponsor pursuant to which each such investor will agree to purchase 142,187 founder shares or membership interests in holdco representing an indirect beneficial interest in 142,187 founder shares, in each case for $494.56, or approximately $0.003 per share. Neither the membership interests in holdco nor the founder shares to be directly or indirectly owned by such investors will be subject to forfeiture without their consent. The founder shares to be owned directly by such investors will be subject to the additional restrictions agreed to by our sponsor in connection with our initial business combination. See “Description of Securities—Founder Shares" for a description of such restrictions. Futhermore, the anchor investors will be restricted from selling any units purchased in this offering until the earlier of (i) 30 days from the closing of this offering and (ii) the separation of the units into shares of Class A ordinary shares and warrants. The founder shares to be directly or indirectly owned by such investors will be otherwise identical to the founder shares beneficially owned by our sponsor. Our discussions with each anchor investor were separate and our arrangements with them are not contingent on each other. Further, to our knowledge, the anchor investors are not affiliated with each other and are not acting together with regards to our company.
Pursuant to certain subscription agreements with our sponsor, the anchor investors party thereto will not be granted any material additional stockholder or other rights, and will only be issued membership interests in holdco with no right to control holdco or vote or dispose of any founder shares (which will continue to be held by holdco until following our initial business combination). Further, the anchor investors are not required to: (i) other than as described above, hold any units, Class A ordinary shares or warrants they may purchase in this offering or thereafter for any amount time, (ii) vote any Class A ordinary shares they may own at the applicable time in favor of our initial business combination or (iii) refrain from exercising their right to redeem their public shares at the time of our initial business combination.
There can be no assurance that the anchor investors will acquire any units in this offering, or as to the amount of such units the anchor investors will retain, if any, prior to or upon the consummation of our initial business combination. In the event that the anchor investors purchase such units (either in this offering or after) and vote in favor of our initial business combination, a smaller portion of affirmative
votes from other public shareholders would be required to approve our initial business combination.
Proceeds to be held in trust account
Of the proceeds we will receive from this offering and the sale of the private placement warrants described in this prospectus, $202,000,000, or $232,300,000 if the underwriters’ over-allotment option is exercised in full ($10.10 per unit in either case), will be deposited into a segregated trust account located in the United States at J.P. Morgan Chase Bank N.A., (or at another U.S.-chartered commercial bank with consolidated assets of $100 billion or more) with Continental Stock Transfer & Trust Company acting as trustee. The proceeds to be placed in the trust account include $7,000,000 (or $8,050,000 if the underwriters’ over-allotment option is exercised in full) in deferred underwriting commissions.
Except with respect to interest or other income earned on the funds held in the trust account that may be released to us to pay our income taxes, if any, our amended and restated memorandum and articles of association, as discussed below and subject to the requirements of law and regulation, will provide that the proceeds from this offering and the sale of the private placement warrants held in the trust account will not be released from the trust account (1) to us, until the completion of our initial business combination, or (2) to our public shareholders, until the earliest of (a) the completion of our initial business combination, and then only in connection with those Class A ordinary shares that such shareholders properly elected to redeem, subject to the limitations described herein, (b) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or prior to the Contractual Redemption Date, if any, or during any Extension Period or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, and (c) the redemption of our public shares if we have not consummated our business combination within 18 months from the closing of this offering or prior to the Contractual Redemption Date, if any, or during any Extension Period, subject to applicable law. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (b) in the preceding sentence shall not be entitled to funds from the trust account upon the subsequent completion of an initial business combination or liquidation if we have not consummated an initial business combination within 18 months from the closing of this offering or prior to the Contractual Redemption Date, if any, or during any Extension Period, with respect to such Class A ordinary shares so redeemed. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public shareholders.
Anticipated expenses and funding sources
Except as described above with respect to the payment of income taxes, unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use. The
proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Assuming an interest rate of 0.1% per year, we estimate the interest earned on the trust account will be approximately $200,000 per year; however, we can provide no assurances regarding this amount. Unless and until we complete our initial business combination, we may pay our expenses only from:
•
the net proceeds of this offering and the sale of the private placement warrants not held in the trust account, which will be approximately $1,000,000 in working capital after the payment of approximately $1,000,000 in non-reimbursed expenses relating to this offering; and
•
any loans or additional investments from our sponsor or an affiliate of our sponsor or certain of our officers and directors, although they are under no obligation to advance funds to us in such circumstances, and provided any such loans will not have any claim on the proceeds held in the trust account unless such proceeds are released to us upon completion of our initial business combination.
Conditions to completing our initial business combination
So long as our securities are then listed on the Nasdaq, our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding any deferred underwriting commissions and taxes payable on the income earned on the trust account) at the time of the agreement to enter into our initial business combination. We refer to this as the 80% of net assets test. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. Our shareholders may not be provided with a copy of such opinion nor will they be able to rely on such opinion. If our securities are not then listed on the Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% of net assets test.
We will complete our initial business combination only if the post-business combination company in which our public shareholders own shares will own or acquire 50% or more of the outstanding voting securities of the target or is otherwise not required to register as an investment company under the Investment Company Act. Even if the post-business combination company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to our initial business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination transaction. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-business combination company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets
test, provided that in the event that the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking shareholder approval, as applicable.
Permitted purchases and other transactions with respect to our securities
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. Additionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), our sponsor, directors, executive officers, advisors or their affiliates may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds held in the trust account will be used to purchase public shares or warrants in such transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. See “Proposed Business—Permitted Purchases and Other Transactions with Respect to Our Securities” for a description of how our sponsor, directors, executive officers, advisors or their affiliates will select which shareholders to purchase securities from in any private transaction.
The purpose of any such transaction could be to (1) vote in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination, (2) reduce the number of public warrants outstanding or vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination or (3) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise
have been possible. In addition, if such purchases are made, the public “float” of our Class A ordinary shares or public warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Redemption rights for public shareholders upon completion of our initial business combination
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest and other income earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of then-outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.10 per public share and such amount will be increased by $0.10 for the six-month extension of our time to consummate a business combination, as described herein. The per share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Further, subject to the provisions of our amended and restated memorandum and articles of association (as further described below adjacent to “Redemption of public shares and distribution and liquidation if no initial business combination”), we will not proceed with redeeming our public shares, even if a public shareholder has properly elected to redeem its shares, if a business combination does not close. Our sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or prior to the Contractual Redemption Date if extended at our sponsor's option or during any Extension Period, or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares.
Limitations on redemptions
Our amended and restated memorandum and articles of association will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules). However, a greater net tangible asset or cash
requirement may be contained in the agreement relating to our initial business combination. For example, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. Furthermore, although we will not redeem shares in an amount that would cause our net tangible assets to fall below $5,000,001, we do not have a maximum redemption threshold based on the percentage of shares sold in this offering, as many blank check companies do. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all Class A ordinary shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
Manner of conducting redemptions
We will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either (i) in connection with a general meeting called to approve the business combination or (ii) by means of a tender offer. The decision as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under applicable law or stock exchange listing requirement or whether we were deemed to be a foreign private issuer (which would require a tender offer rather than seeking shareholder approval under SEC rules). Asset acquisitions and share purchases would not typically require shareholder approval, while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our issued and outstanding ordinary shares or seek to amend our amended and restated memorandum and articles of association would typically require shareholder approval. We currently intend to conduct redemptions in connection with a shareholder vote unless shareholder approval is not required by applicable law or stock exchange listing requirement or we choose to conduct redemptions pursuant to the tender offer rules of the SEC for business or other reasons.
If we hold a shareholder vote to approve our initial business combination, we will:
•
conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and
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file proxy materials with the SEC.
If we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution
under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. In such case, our sponsor and each member of our management team have agreed to vote their founder shares and public shares in favor of our initial business combination. As a result, in addition to our initial shareholders’ founder shares, we would need 7,500,001, or 37.5% (assuming all issued and outstanding shares are voted and the over-allotment option is not exercised), of the 20,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved. In the event that each of our anchor investors purchases 1,980,000 units (either in this offering or after) and votes in favor of an initial business combination, we would not need any additional public shares sold in this offering to be voted in favor of our initial business combination to have our initial business combination approved. We intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any such meeting, if required, at which a vote shall be taken to approve our initial business combination. These quorum and voting thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate our initial business combination. Each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction or vote at all. Our amended and restated memorandum and articles of association will require that at least five days’ notice will be given of any such general meeting.
If we conduct redemptions pursuant to the tender offer rules of the SEC, we will, pursuant to our amended and restated memorandum and articles of association:
•
conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and
•
file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we and our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase our Class A ordinary shares in the open market, in order to comply with Rule 14e-5 under the Exchange Act.
In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public shareholders not tendering more than the number of public shares we are permitted to redeem. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination.
Limitation on redemption rights of shareholders holding more than 15% of the shares sold in this offering if we hold shareholder vote
Notwithstanding the foregoing redemption rights, if we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in this offering, without our prior consent. We believe the restriction described above will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to redeem their shares as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public shareholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights against a business combination if such holder’s shares are not purchased by us, our sponsor or our management at a premium to the then-current market price or on other undesirable terms. By limiting our shareholders’ ability to redeem to no more than 15% of the shares sold in this offering, we believe we will limit the ability of a small group of shareholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our shareholders’ ability to vote all of their shares (including all shares held by those shareholders that hold more than 15% of the shares sold in this offering) for or against our initial business combination.
Release of funds in trust account on closing of our initial business combination
On the completion of our initial business combination, the funds held in the trust account will be disbursed directly by the trustee to pay amounts due to any public shareholders who properly exercise their redemption rights as described above adjacent to the caption “Redemption rights for public shareholders upon completion of our initial business combination,” to pay the underwriters their deferred underwriting commission, to pay all or a portion of the consideration payable to the target or owners of the target of our initial business combination and to pay other expenses associated with our initial business combination. If our initial business combination is paid for using equity or debt or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or the redemption of our public shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of post-transaction businesses, the
payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
Redemption of public shares and distribution and liquidation if no initial business combination
Our amended and restated memorandum and articles of association will provide that we will have only 18 months from the closing of this offering to consummate our initial business combination unless extended at the option of our sponsor as described herein. If we have not consummated an initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest and other income earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to consummate an initial business combination within 18 months from the closing of this offering, unless extended at our sponsor’s option, as provided for herein.
Our sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to consummate an initial business combination within 18 months from the closing of this offering, prior to the Contractual RedemptionDate if extended at our sponsor’s option or during any Extension Period, (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame).
The underwriters have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not consummate an initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares.
Our sponsor, executive officers, directors and director nominees have agreed, pursuant to a written agreement with us, that they will not
propose any amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering, prior to the Contractual RedemptionDate if extended at our sponsor’s option or during any Extension Period, or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares; unless we provide our public shareholders with the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest and other income earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitations described above adjacent to the caption “Limitations on redemptions.” For example, our board of directors may propose such an amendment if it determines that additional time is necessary to complete our initial business combination. In such event, we will conduct a proxy solicitation and distribute proxy materials pursuant to Regulation 14A of the Exchange Act seeking shareholder approval of such proposal and, in connection therewith, provide our public shareholders with the redemption rights described above upon shareholder approval of such amendment. This redemption right shall apply in the event of the approval of any such amendment, whether proposed by our sponsor, any executive officer, director or director nominee, or any other person.
Our amended and restated memorandum and articles of association will provide that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.
Limited payments to
insiders
There will be no finder’s fees, reimbursements or cash payments made by the company to our sponsor, officers or directors, or their affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination, other than the following payments, none of which will be made from the proceeds of this offering and the sale of the private placement warrants held in the trust account prior to the completion of our initial business combination:
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Repayment of up to an aggregate of $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses;
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Reimbursement for office space, secretarial and administrative services provided to us by an affiliate of our sponsor, in the amount of $10,000 per month;
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Reimbursement for any out-of-pocket expenses related to identifying, investigating, negotiating and completing an initial business combination; and
•
Repayment of loans which may be made by our sponsor or an
affiliate of our sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial business combination. Up to $1,500,000 of such loans may be convertible into warrants of the post-business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants. Except for the foregoing, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans.
Any such payments will be made either (i) prior to our initial business combination using proceeds of this offering and the sale of the private placement warrants held outside the trust account or from loans made to us by our sponsor or an affiliate of our sponsor or certain of our officers and directors or (ii) in connection with or after the consummation of our initial business combination.
We will establish and maintain an audit committee, which will be composed entirely of independent directors. Among its responsibilities, the audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers or directors, or their affiliates and monitor compliance with the other terms relating to this offering. If any noncompliance is identified, then the audit committee will be charged with the responsibility to promptly take all action necessary to rectify such noncompliance or otherwise to cause compliance with the terms of this offering. For more information, see the section entitled “Management—Committees of the Board of Directors—Audit Committee.”
Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third-party for services rendered or products sold to us (other than our independent registered public accounting firm), or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.10 per public share and (ii) the actual amount per share held in the trust account as of the date of the liquidation of the trust account if less than $10.10 per share due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our income tax obligations. This liability will not apply with respect to any claims by a third-party or prospective target business that executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, then our sponsor will not be responsible to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such obligations. None of our officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Risks
Summary of Risk Factors
An investment in our securities involves a high degree of risk. The occurrence of one or more of the events or circumstances described in the section titled “Risk Factors,” alone or in combination with other events or circumstances, may materially adversely affect our business, financial condition and operating results. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. Such risks include, but are not limited to:
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We are a recently incorporated company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
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Past performance by our Team or their respective affiliates may not be indicative of future performance of an investment in us.
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Our expectations regarding changes in the Sustainability industry may not materialize to the extent we expect, or at all.
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Our shareholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our shareholders do not support such a combination.
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Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.
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If we seek shareholder approval of our initial business combination, our sponsor and members of our management team have agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote.
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The ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.
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The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.
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The requirement that we consummate an initial business combination within 18 months after the closing of this offering, or prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our shareholders.
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Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus (COVID-19) outbreak and the status of debt and equity markets.
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If we seek shareholder approval of our initial business combination, our sponsor, directors, executive officers, advisors and their affiliates may elect to purchase public shares or warrants, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A ordinary shares or public warrants.
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If a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
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You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
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The Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
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You will not be entitled to protections normally afforded to investors of many other blank check companies.
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Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we have not consummated our initial business combination within the required time period, our public shareholders may receive only approximately $10.10 per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
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If the net proceeds of this offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for the 18 months following the closing of this offering, until the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, it could limit the amount available to fund our search for a target business or businesses and our ability to complete our initial business combination, and we will depend on loans from our sponsor, its affiliates or members of our management team to fund our search and to complete our initial business combination.
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Holders of Class A ordinary shares will not be entitled to vote on any appointment of directors we hold prior to our initial business combination.
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The warrants may become exercisable and redeemable for a security other than the Class A ordinary shares, and you will not have any information regarding such other security at this time.
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Unlike some other similarly structured blank check companies, our sponsor will receive additional Class A ordinary shares if we issue shares to consummate an initial business combination.
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We may reincorporate in another jurisdiction in connection with our initial business combination, and the laws of such jurisdiction may govern some or all of our future material agreements and we may not be able to enforce our legal rights.
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After our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue may be derived from our operations in any such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political and social conditions and government policies, developments and conditions in the country in which we operate.
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Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited.
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Provisions in our amended and restated memorandum and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A ordinary shares and could entrench management.
SUMMARY FINANCIAL DATA
The following table summarizes the relevant financial data for our business and should be read with our financial statements, which are included in this prospectus. We have not had any significant operations to date, as a result, only balance sheet data is presented.
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|
|
August 21, 2020
|
|
| Balance Sheet Data: |
|
|
|
|
|
|
|
|
Working capital (deficiency)
|
|
|
|
$ |
(64,559) |
|
|
|
Total assets
|
|
|
|
$ |
84,559 |
|
|
|
Total liabilities
|
|
|
|
$ |
64,559 |
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|
|
Shareholder’s equity
|
|
|
|
$ |
20,000 |
|
|
We will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and a majority of the outstanding ordinary shares of voted are voted in favor of the business combination (if a vote is required or being obtained).
RISK FACTORS
An investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in this prospectus, before making a decision to invest in our units. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment.
We are a recently incorporated company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a recently incorporated company, incorporated under the laws of the Cayman Islands with no operating results, and we will not commence operations until obtaining funding through this offering. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target businesses. We have no plans, arrangements or understandings with any prospective target business concerning a business combination and may be unable to complete our initial business combination. If we fail to complete our initial business combination, we will never generate any operating revenues.
Past performance by our Team or their respective affiliates may not be indicative of future performance of an investment in us.
Information regarding performance is presented for informational purposes only. Any past experience or performance of our Team and their respective affiliates is not a guarantee of either (i) our ability to successfully identify and execute a transaction or (ii) success with respect to any business combination that we may consummate. You should not rely on the historical record of our Team or their respective affiliates as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. Our management has no experience in operating special purpose acquisition companies.
Our expectations regarding changes in the Sustainability industry may not materialize to the extent we expect, or at all.
We expect favorable changes and growth in the Sustainability industry based on certain macroeconomic and social trends as well as certain assumptions. These macroeconomic and social trends and assumptions relate to, among other things, population growth, increased government spending in the Sustainability industry, increased regulatory requirements at the federal, state and local level and increased focus on ESG practices and business models. No assurance can be given that these trends and assumptions, or that our expectations surrounding the Sustainability industry, will be accurate. Further, unanticipated events and circumstances may occur and change the outlook surrounding the Sustainability industry in material ways. Accordingly, our expectations of growth in the Sustainability industry may occur to a different extent or at a different time, or may not occur at all. If our expectations surrounding certain favorable changes in the Sustainability industry do not occur to the degree that we expect, or at all, our ability to find a suitable initial business combination target and consummate an initial business combination may be hindered or delayed.
Our shareholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our shareholders do not support such a combination.
We may choose not to hold a shareholder vote before we complete our initial business combination if the business combination would not require shareholder approval under applicable law or stock exchange listing requirements. For instance, if we were seeking to acquire a target business where the consideration we were paying in the transaction was all cash, we would typically not be required to seek shareholder approval to complete such a transaction. Except as required by applicable law or stock exchange listing requirements, the decision as to whether we will seek shareholder approval of a proposed business combination or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval. Accordingly, we may complete our initial business combination even if holders of a majority of our issued and outstanding ordinary shares do not approve of the business combination we complete.
Please see the section entitled “Proposed Business—Shareholders May Not Have the Ability to Approve Our Initial Business Combination” for additional information.
Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.
At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of any target businesses. If our board of directors determines to complete a business combination without seeking shareholder approval, your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public shareholders in which we describe our initial business combination.
If we seek shareholder approval of our initial business combination, our sponsor and members of our management team have agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote.
Our sponsor will beneficially own, on an as-converted basis, approximately 19.5% of our outstanding ordinary shares immediately following the completion of this offering. Our sponsor and members of our management team also may from time to time purchase Class A ordinary shares prior to our initial business combination. Our amended and restated memorandum and articles of association will provide that, if we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. As a result, in addition to our initial shareholders’ founder shares, we would need 7,500,001, or 37.5% (assuming all issued and outstanding shares are voted and the over-allotment option is not exercised), of the 20,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved. Accordingly, if we seek shareholder approval of our initial business combination, the agreement by our sponsor and each member of our management team to vote in favor of our initial business combination will increase the likelihood that we will receive the requisite shareholder approval for such initial business combination.
The ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.
We may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public shareholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules). Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.
The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.
At the time we enter into an agreement for our initial business combination, we will not know how many shareholders may exercise their redemption rights, and therefore will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If a large number of shares are submitted for redemption, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for additional third-party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital structure. The amount of the deferred underwriting commission payable to the underwriters will not be adjusted for any shares
that are redeemed in connection with an initial business combination. The per-share amount we will distribute to shareholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and after such redemptions, the amount held in trust will continue to reflect our obligation to pay the entire deferred underwriting commissions.
The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful is increased. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the funds in the trust account until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your shares in the open market.
The requirement that we consummate an initial business combination within 18 months after the closing of this offering, or prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our shareholders.
Any potential target business with which we enter into negotiations concerning a business combination will be aware that we must consummate an initial business combination within 18 months from the closing of this offering, or prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period. Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the time frame described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus (COVID-19) outbreak and the status of debt and equity markets.
The COVID-19 outbreak has resulted in, and a significant outbreak of other infectious diseases could result in, a widespread health crisis that has, and in the future could, adversely affected the economies and financial markets worldwide, and the business of any potential target business with which we consummate a business combination could be materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 continues to restrict travel, limit the ability to have meetings with potential investors, limit the ability to conduct due diligence, or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of and perceptions to COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.
In addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events, including as a result of increased market volatility, decreased market liquidity in third-party financing being unavailable on terms acceptable to us or at all.
Finally, the outbreak of COVID-19 or other infectious diseases may also have the effect of heightening many of the other risks described in this “Risk Factors” section, such as those related to the market for our securities.
We may not be able to consummate an initial business combination within 18 months after the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public shareholders may receive only $10.10 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.
We may not be able to find a suitable target business and consummate an initial business combination within 18 months after the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period. Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein, including as a result of terrorist attacks, natural disasters or a significant outbreak of infectious diseases. For example, the outbreak of COVID-19 continues both in the U.S. and globally and, while the extent of the impact of the outbreak on us will depend on future developments, it could limit our ability to complete our initial business combination, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all. Additionally, the outbreak of COVID-19 and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) may negatively impact businesses we may seek to acquire.
If we have not consummated an initial business combination within such applicable time period, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest and other income earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. Our amended and restated memorandum and articles of association will provide that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law. In either such case, our public shareholders may receive only $10.10 per public share, or less than $10.10 per public share, on the redemption of their shares, and our warrants will expire worthless. See “—If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.10 per public share” and other risk factors herein.
If we seek shareholder approval of our initial business combination, our sponsor, directors, executive officers, advisors and their affiliates may elect to purchase public shares or warrants, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A ordinary shares or public warrants.
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation to do so. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase public shares or warrants in such transactions.
In the event that our sponsor, directors, executive officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. The purpose of any such transaction could be to (1) vote in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination, (2) reduce the number of public warrants outstanding or vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination or (3) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our Class A ordinary shares or public warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. See “Proposed Business—Permitted Purchases and Other Transactions with Respect to Our Securities” for a description of how our sponsor, directors, executive officers, advisors or their affiliates will select which shareholders to purchase securities from in any private transaction.
If a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
We will comply with the proxy rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these rules, if a shareholder fails to receive our proxy solicitation or tender offer materials, as applicable, such shareholder may not become aware of the opportunity to redeem its shares. In addition, the proxy solicitation or tender offer materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly redeem or tender public shares. In the event that a shareholder fails to comply with these procedures, its shares may not be redeemed. See “Proposed Business—Business Strategy—Effecting Our Initial Business Combination—Tendering Share Certificates in Connection with a Tender Offer or Redemption Rights.”
You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
Our public shareholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (i) our completion of an initial business combination, and then only in connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, and (iii) the redemption of our public shares if we have not consummated an initial business within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, subject to applicable law and as further described herein. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the trust account upon the subsequent completion of an initial business combination or liquidation if we have not consummated an initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period with respect to such Class A ordinary shares so redeemed. In no other circumstances will a public shareholder have any right or interest of any kind in
the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
The Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
We intend to apply to have our units listed on the Nasdaq on the date of this prospectus and our Class A ordinary shares and warrants on or promptly after their date of separation. Although after giving effect to this offering we expect to meet, on a pro forma basis, the minimum initial listing standards set forth in the Nasdaq listing standards, we cannot assure you that our securities will be, or will continue to be, listed on the Nasdaq in the future or prior to our initial business combination. In order to continue listing our securities on the Nasdaq prior to our initial business combination, we must maintain certain financial, distribution and share price levels. Generally, we must maintain a minimum amount in stockholders’ equity (generally $2,500,000) and a minimum number of holders of our securities (generally 300 public holders).
Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with the Nasdaq initial listing requirements, which are more rigorous than the Nasdaq continued listing requirements, in order to continue to maintain the listing of our securities on the Nasdaq. For instance, our stock price would generally be required to be at least $4.00 per share, our stockholders’ equity would generally be required to be at least $5.0 million and we would be required to have a minimum of 300 round lot holders of our securities. We cannot assure you that we will be able to meet those listing requirements at that time.
If the Nasdaq delists any of our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect such securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
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a limited availability of market quotations for our securities;
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reduced liquidity for our securities;
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a determination that our Class A ordinary shares are a “penny stock” which will require brokers trading in our Class A ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
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a limited amount of news and analyst coverage; and
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a decreased ability to issue additional securities or obtain additional financing in the future.
The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because we expect that our units and eventually our Class A ordinary shares and warrants will be listed on the Nasdaq, our units, Class A ordinary shares and warrants will qualify as covered securities under the statute. Although the states are preempted from regulating the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on the Nasdaq, our securities would not qualify as covered securities under the statute and we would be subject to regulation in each state in which we offer our securities.
You will not be entitled to protections normally afforded to investors of many other blank check companies.
Since the net proceeds of this offering and the sale of the private placement warrants are intended to be used to complete an initial business combination with a target business that has not been selected, we may be deemed to be a “blank check” company under the United States securities laws. However, because we will have net tangible assets in excess of $5,000,000 upon the completion of this offering
and the sale of the private placement warrants and will file a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means our units will be immediately tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, if this offering were subject to Rule 419, that rule would prohibit the release of any interest and other income earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial business combination. For a more detailed comparison of our offering to offerings that comply with Rule 419, please see “Proposed Business—Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.”
If we seek shareholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders are deemed to hold in excess of 15% of our Class A ordinary shares, you will lose the ability to redeem all such shares in excess of 15% of our Class A ordinary shares.
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in this offering, which we refer to as the “Excess Shares,” without our prior consent. However, we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And as a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially at a loss.
Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we have not consummated our initial business combination within the required time period, our public shareholders may receive only approximately $10.10 per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
We expect to encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds of this offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are obligated to offer holders of our public shares the right to redeem their shares for cash at the time of our initial business combination in conjunction with a shareholder vote or via a tender offer. Target companies will be aware that this may reduce the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination. If we have not consummated our initial business combination within the required time period, our public shareholders may receive only approximately $10.10 per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless. See “—If third parties bring claims against us, the proceeds held in the
trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.10 per public share” and other risk factors herein.
If the net proceeds of this offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for the 18 months following the closing of this offering, until the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, it could limit the amount available to fund our search for a target business or businesses and our ability to complete our initial business combination, and we will depend on loans from our sponsor, its affiliates or members of our management team to fund our search and to complete our initial business combination.
Of the net proceeds of this offering and the sale of the private placement warrants, only approximately $1,000,000 will be available to us initially outside the trust account to fund our working capital requirements. We believe that, upon the closing of this offering, the funds available to us outside of the trust account, together with funds available from loans from our sponsor, its affiliates or members of our management team will be sufficient to allow us to operate for at least the 18 months following the closing of this offering, until the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period; however, we cannot assure you that our estimate is accurate, and our sponsor, its affiliates or members of our management team are under no obligation to advance funds to us in such circumstances. Of the funds available to us, we may use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.
In the event that our offering expenses exceed our estimate of $1,000,000, we may fund such excess with funds not to be held in the trust account. In such case, unless funded by the proceeds of loans available from our sponsor, its affiliates or members of our management team, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $1,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. The amount held in the trust account will not be impacted as a result of such increase or decrease. If we are required to seek additional capital, we would need to borrow funds from our sponsor, its affiliates, members of our management team or other third parties to operate or may be forced to liquidate. Neither our sponsor, members of our management team nor their affiliates is under any obligation to us in such circumstances. Any such advances may be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. Up to $1,500,000 of such loans may be convertible into warrants of the post-business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor, its affiliates or members of our management team as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account. If we have not consummated our initial business combination within the required time period because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently, our public shareholders may only receive an estimated $10.10 per public share, or possibly less, on our redemption of our public shares, and our warrants will expire worthless. See “—If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.10 per public share” and other risk factors herein.
Subsequent to our completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you to lose some or all of your investment.
Even if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will identify all material issues with a particular target business,
that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly, any holders who choose to retain their securities following the business combination could suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy for such reduction in value.
If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.10 per public share.
Our placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, such parties may not execute such agreements, or even if they execute such agreements, they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third-party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third-party that has not executed a waiver if management believes that such third-party’s engagement would be significantly more beneficial to us than any alternative.
Examples of possible instances where we may engage a third-party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we have not consummated an initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the ten years following redemption. Accordingly, due to claims of such creditors, the per-share redemption amount received by public shareholders could be less than the $10.10 per public share initially held in the trust account. Pursuant to the letter agreement the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third-party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i) $10.10 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.10 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our income tax obligations, provided that such liability will not apply to any claims by a third-party or prospective target business that executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an
executed waiver is deemed to be unenforceable against a third-party, our sponsor will not be responsible to the extent of any liability for such third-party claims.
However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.10 per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Our directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public shareholders.
In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.10 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.10 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our income tax obligations, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public shareholders may be reduced below $10.10 per public share.
We may not have sufficient funds to satisfy indemnification claims of our directors and executive officers.
We have agreed to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account and to not seek recourse against the trust account for any reason whatsoever (except to the extent they are entitled to funds from the trust account due to their ownership of public shares). Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination. Our obligation to indemnify our officers and directors may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
If, after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.
If, after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy or insolvency court could seek to recover some or all amounts received by our shareholders. In addition, our board of directors may be viewed as having breached
its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors.
If, before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
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restrictions on the nature of our investments; and
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restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial business combination.
In addition, we may have imposed upon us burdensome requirements, including:
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registration as an investment company with the SEC;
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adoption of a specific form of corporate structure; and
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reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject to.
In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business will be to identify and complete a business combination and thereafter to operate the post-transaction business or assets for the long term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act. This offering is not intended for persons who are seeking a return on investments in government securities or investment securities. The trust account is intended as a holding place for funds pending the earliest to occur of either: (i) the completion of our initial business combination; (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business
combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares; or (iii) absent our completing an initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, our return of the funds held in the trust account to our public shareholders as part of our redemption of the public shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete a business combination. If we have not consummated our initial business combination within the required time period, our public shareholders may receive only approximately $10.10 per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination, and results of operations.
We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial business combination, and results of operations.
If we have not consummated an initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, our public shareholders may be forced to wait beyond such period before redemption from our trust account.
If we have not consummated an initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, the proceeds then on deposit in the trust account, including interest and other income earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein. Any redemption of public shareholders from the trust account will be effected automatically by function of our amended and restated memorandum and articles of association prior to any voluntary winding up. If we are required to wind up, liquidate the trust account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies Law. In that case, investors may be forced to wait beyond 18 months from the closing of this offering, until the Contractual Redemption Date or the expiration of any Extension Period before the redemption proceeds of our trust account become available to them, and they receive the return of their pro rata portion of the proceeds from our trust account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless, prior thereto, we consummate our initial business combination or amend certain provisions of our amended and restated memorandum and articles of association, and only then in cases where investors have sought to redeem their Class A ordinary shares. Only upon our redemption or any liquidation will public shareholders be entitled to distributions if we do not complete our initial business combination and do not amend certain provisions of our amended and restated memorandum and articles of association. Our amended and restated memorandum and articles of association will provide that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.
Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
If we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover some or all amounts received by our shareholders. Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, thereby exposing themselves and our company to claims, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons. We and our directors and officers who knowingly and willfully authorized or permitted any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable for a fine of $18,292.68 and imprisonment for five years in the Cayman Islands.
We may not hold an annual general meeting until after the consummation of our initial business combination.
In accordance with the Nasdaq corporate governance requirements, we are required to hold an annual general meeting no later than one year after our first fiscal year end following our listing on the Nasdaq. There is no requirement under the Companies Law for us to hold annual or extraordinary general meetings to elect directors. Until we hold an annual general meeting, public shareholders may not be afforded the opportunity to elect directors and to discuss company affairs with management. Our board of directors is divided into three classes with only one class of directors being elected in each year and each class (except for those directors appointed prior to our first annual general meeting) serving a three-year term.
Holders of Class A ordinary shares will not be entitled to vote on any appointment of directors we hold prior to our initial business combination.
Prior to our initial business combination, only holders of our founder shares will have the right to vote on the appointment of directors. Holders of our public shares will not be entitled to vote on the appointment of directors during such time. In addition, prior to our initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. Accordingly, you may not have any say in the management of our company prior to the consummation of an initial business combination.
We are not registering the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants except on a cashless basis and potentially causing such warrants to expire worthless.
We are not registering the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of the warrant agreement, we have agreed that, as soon as practicable, but in no event later than 20 business days after the closing of our initial business combination, we will use our commercially reasonable efforts to file with the SEC a registration statement covering the issuance of such shares, and we will use our commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of our initial business combination and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current, complete or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the above requirements, we will be required to permit holders to exercise their warrants on a cashless basis, in which case, the number of Class A ordinary shares that you will receive upon cashless exercise will be based on a formula subject to a maximum amount of shares equal to 0.361 Class A ordinary shares per warrant (subject to adjustment). However, no warrant will be exercisable for cash or on a cashless basis, and we
will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. Notwithstanding the above, if our Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. Exercising the warrants on a cashless basis could have the effect of reducing the potential “upside” of the holder’s investment in our company because the warrant holder will hold a smaller number of Class A ordinary shares upon a cashless exercise of the warrants they hold. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under applicable state securities laws and no exemption is available. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the Class A ordinary shares included in the units. There may be a circumstance where an exemption from registration exists for holders of our private placement warrants to exercise their warrants while a corresponding exemption does not exist for holders of the public warrants included as part of units sold in this offering. In such an instance, our sponsor and its permitted transferees (which may include our directors and executive officers) would be able to exercise their warrants and sell the ordinary shares underlying their warrants while holders of our public warrants would not be able to exercise their warrants and sell the underlying ordinary shares. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying Class A ordinary shares for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise their warrants.
The warrants may become exercisable and redeemable for a security other than the Class A ordinary shares, and you will not have any information regarding such other security at this time.
In certain situations, including if we are not the surviving entity in our initial business combination, the warrants may become exercisable for a security other than the Class A ordinary shares. As a result, if the surviving company redeems your warrants for securities pursuant to the warrant agreement, you may receive a security in a company of which you do not have information at this time. Pursuant to the warrant agreement, the surviving company will be required to use commercially reasonable efforts to register the issuance of the security underlying the warrants within 20 business days of the closing of an initial business combination.
The grant of registration rights to our sponsor may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our Class A ordinary shares.
Pursuant to an agreement to be entered into on or prior to the closing of this offering, our sponsor and its permitted transferees can demand that we register the resale of the Class A ordinary shares into which founder shares are convertible, the private placement warrants and the Class A ordinary shares issuable upon exercise of the private placement warrants, and warrants that may be issued upon conversion of working capital loans and the Class A ordinary shares issuable upon conversion of such warrants. We will bear the cost of registering these securities. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our Class A ordinary shares. In addition, the existence of the registration rights may make our initial business combination more costly or difficult to conclude. This is because the shareholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our securities that is expected when the securities beneficially owned by our sponsor or its permitted transferees are registered for resale.
Because we are neither limited to evaluating a target business in a particular industry sector nor have we selected any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.
We may pursue business combination opportunities in any sector, except that we will not, under our amended and restated memorandum and articles of association, be permitted to effectuate our initial business combination solely with another blank check company or similar company with nominal operations. Because we have not yet selected or approached any specific target business with respect to a business combination, there is no basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any holders who choose to retain their securities following the business combination could suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy for such reduction in value.
We may seek acquisition opportunities in industries or sectors which may or may not be outside of our management’s area of expertise.
We will consider a business combination outside of our management’s area of expertise if a business combination target is presented to us and we determine that such candidate offers an attractive acquisition opportunity for our company. Although our management will endeavor to evaluate the risks inherent in any particular business combination target, we cannot assure you that we will adequately ascertain or assess all of the significant risk factors. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors in this offering than a direct investment, if an opportunity were available, in a business combination target. In the event we elect to pursue an acquisition outside of the areas of our management’s expertise, our management’s expertise may not be directly applicable to its evaluation or operation, and the information contained in this prospectus regarding the areas of our management’s expertise would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all of the significant risk factors. Accordingly, any holders who choose to retain their securities following the business combination could suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy for such reduction in value.
Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not have all of these positive attributes. If we complete our initial business combination with a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of shareholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if shareholder approval of the transaction is required by applicable law or stock exchange listing requirements, or we decide to obtain shareholder approval for business or other reasons, it may be more difficult for us to attain shareholder approval of our
initial business combination if the target business does not meet our general criteria and guidelines. If we have not consummated our initial business combination within the required time period, our public shareholders may receive only approximately $10.10 per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
We are not required to obtain an opinion from an independent accounting or investment banking firm, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our shareholders from a financial point of view.
Unless we complete our initial business combination with an affiliated entity, we are not required to obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that the price we are paying is fair to our shareholders from a financial point of view. If no opinion is obtained, our shareholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our proxy solicitation or tender offer materials, as applicable, related to our initial business combination.
We may issue additional Class A ordinary shares or preference shares to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue Class A ordinary shares upon the conversion of the founder shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated memorandum and articles of association. Any such issuances would dilute the interest of our shareholders and likely present other risks.
Our amended and restated memorandum and articles of association will authorize the issuance of up to 300,000,000 Class A ordinary shares, par value $0.0001 per share, 30,000,000 Class B ordinary shares, par value $0.0001 per share, and 1,000,000 preference shares, par value $0.0001 per share. Immediately after this offering, there will be 280,000,000 and 25,000,000 (assuming in each case that the underwriters have not exercised their over-allotment option) authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the Class B ordinary shares, if any. The Class B ordinary shares will automatically convert into Class A ordinary shares (which such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions from the trust account if we fail to consummate an initial business combination) at the time of our initial business combination or earlier at the option of the holders thereof as described herein and in our amended and restated memorandum and articles of association. Immediately after this offering, there will be no preference shares issued and outstanding.
We may issue a substantial number of additional Class A ordinary shares or preference shares to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue Class A ordinary shares in connection with our redeeming the warrants as described in “Description of Securities—Warrants—Public Shareholders’ Warrants” or upon conversion of the Class B ordinary shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions as set forth herein. However, our amended and restated memorandum and articles of association will provide, among other things, that prior to or in connection with our initial business combination, we may not issue additional shares that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business combination or on any other proposal presented to shareholders prior to or in connection with the completion of an initial business combination. These provisions of our amended and restated memorandum and articles of association, like all provisions of our amended and restated memorandum and articles of association, may be amended with a shareholder vote. The issuance of additional ordinary or preference shares:
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may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;
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may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares;
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could cause a change in control if a substantial number of Class A ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
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may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us;
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may adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants; and
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may not result in adjustment to the exercise price of our warrants.
Unlike some other similarly structured blank check companies, our sponsor will receive additional Class A ordinary shares if we issue shares to consummate an initial business combination.
The founder shares will automatically convert into Class A ordinary shares (which such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions from the trust account if we fail to consummate an initial business combination) at the time of our initial business combination or earlier at the option of the holders thereof at a ratio such that the number of Class A ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of this offering, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the company in connection with or in relation to the consummation of the initial business combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to our sponsor, any of its affiliates or any members of our management team upon conversion of working capital loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one. This is different than some other similarly structured blank check companies in which the initial shareholders will only be issued an aggregate of 20% of the total number of shares to be outstanding prior to the initial business combination.
Resources could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we have not consummated our initial business combination within the required time period, our public shareholders may receive only their pro rata portion of the funds in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless.
We anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we have not consummated our initial business combination within the required time period, our public shareholders may receive only their pro rata portion of the funds in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless.
We may be a passive foreign investment company, or “PFIC,” which could result in adverse U.S. federal income tax consequences to U.S. investors.
If we are a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder (as defined in the section of this prospectus captioned “Taxation—Material United States
Federal Income Tax Considerations—General”) of our Class A ordinary shares or warrants, the U.S. Holder may be subject to adverse U.S. federal income tax consequences and may be subject to additional reporting requirements. Our PFIC status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up exception (see the section of this prospectus captioned “Taxation—Material United States Federal Income Tax Considerations—U.S. Holders—Passive Foreign Investment Company Rules”). Depending on the particular circumstances, the application of the start-up exception may be subject to uncertainty, and there cannot be any assurance that we will qualify for the start-up exception. Accordingly, there can be no assurances with respect to our status as a PFIC for our current taxable year or any subsequent taxable year. Our actual PFIC status for any taxable year, however, will not be determinable until after the end of such taxable year (and, in the case of the start-up exception, potentially not until after the two taxable years following our current taxable year). Moreover, if we determine we are a PFIC for any taxable year, upon written request by a U.S. Holder, we will endeavor to provide to a U.S. Holder such information as the Internal Revenue Service (“IRS”) may require, including a PFIC Annual Information Statement, in order to enable the U.S. Holder to make and maintain a “qualified electing fund” election, but there can be no assurance that we will timely provide such required information, and such election would be unavailable with respect to our warrants in all cases. We urge U.S. investors to consult their tax advisors regarding the possible application of the PFIC rules. For a more detailed discussion of the material tax consequences of PFIC classification to U.S. Holders, see the section of this prospectus captioned “Taxation—Material United States Federal Income Tax Considerations—U.S. Holders—Passive Foreign Investment Company Rules.”
We may reincorporate in another jurisdiction in connection with our initial business combination and such reincorporation may result in taxes imposed on shareholders or warrant holders.
We may, in connection with our initial business combination and subject to requisite shareholder approval under the Companies Law, reincorporate in the jurisdiction in which the target company or business is located or in another jurisdiction. The transaction may require a shareholder or warrant holder to recognize taxable income, or otherwise subject it to adverse tax consequences, in the jurisdiction in which the shareholder or warrant holder is a tax resident or in which its members are resident if it is a tax transparent entity. We do not intend to make any cash distributions to shareholders or warrant holders to pay such taxes. Shareholders or warrant holders may be subject to withholding taxes or other taxes, or other adverse tax consequences, with respect to their ownership of us after the reincorporation.
We may reincorporate in another jurisdiction in connection with our initial business combination, and the laws of such jurisdiction may govern some or all of our future material agreements and we may not be able to enforce our legal rights.
In connection with our initial business combination, we may relocate the home jurisdiction of our business from the Cayman Islands to another jurisdiction. If we determine to do this, the laws of such jurisdiction may govern some or all of our future material agreements. The system of laws and the enforcement of existing laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital.
After our initial business combination, it is possible that a majority of our directors and officers will live outside the United States and all of our assets will be located outside the United States; therefore investors may not be able to enforce federal securities laws or their other legal rights.
It is possible that after our initial business combination, a majority of our directors and officers will reside outside of the United States and all of our assets will be located outside of the United States. As a result, it may be difficult, or in some cases not possible, for investors in the United States to enforce their legal rights, to effect service of process upon all of our directors or officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties on our directors and officers under United States laws.
We are dependent upon our executive officers and directors and their loss could adversely affect our ability to operate.
Our operations are dependent upon a relatively small group of individuals and, in particular, our executive officers and directors. We believe that our success depends on the continued service of our officers and directors, at least until we have completed our initial business combination. In addition, our
executive officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating their time among various business activities, including identifying potential business combinations and monitoring the related due diligence. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or executive officers. The unexpected loss of the services of one or more of our directors or executive officers could have a detrimental effect on us.
Our ability to successfully effect our initial business combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination business.
Our ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management, director or advisory positions following our initial business combination, it is likely that some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct and such management may not possess the skills, qualifications or abilities necessary to manage a public company. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination, and a particular business combination may be conditioned on the retention or resignation of such key personnel. These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.
Our key personnel may remain with our company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the business combination. Such negotiations also could make such key personnel’s retention or resignation a condition to any such agreement. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business. In addition, pursuant to an agreement to be entered into on or prior to the closing of this offering, our sponsor, upon and following consummation of an initial business combination, will be entitled to nominate three individuals for appointment to our board of directors, as long as the sponsor holds any securities covered by the registration and shareholder rights agreement, which is described under the section of this prospectus entitled “Description of Securities—Registration and Shareholder Rights.”
We may have a limited ability to assess the management of a prospective target business and, as a result, may affect our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target business’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target business’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any holders who choose to retain their securities following the business combination could suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy for such reduction in value.
The officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The loss of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business.
The role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of an
acquisition candidate’s management team will remain associated with the acquisition candidate following our initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
Our executive officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs. Our independent directors also serve as officers and board members for other entities. If our executive officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination. For a complete discussion of our executive officers’ and directors’ other business affairs, please see “Management—Officers, Directors and Director Nominees.”
Our officers and directors presently have, and any of them in the future may have, additional, fiduciary or contractual obligations to other entities, including another blank check company, and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
Following the completion of this offering and until we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses or entities. Each of our officers and directors presently has, and any of them in the future may have, additional fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity, subject to his or her fiduciary duties under Cayman Islands law. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us, subject to their fiduciary duties under Cayman Islands law.
In addition, our sponsor, officers and directors may in the future become affiliated with other blank check companies that may have acquisition objectives that are similar to ours. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to such other blank check companies prior to its presentation to us, subject to our officers’ and directors’ fiduciary duties under Cayman Islands law. Our amended and restated memorandum and articles of association will provide that we renounce our interest in any business combination opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and it is an opportunity that we are able to complete on a reasonable basis.
For a complete discussion of our executive officers’ and directors’ business affiliations and the potential conflicts of interest that you should be aware of, please see “Management—Officers, Directors and Director Nominees,” “Management—Conflicts of Interest” and “Certain Relationships and Related Party Transactions.”
Our executive officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits our directors, executive officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or executive officers, although we do not intend to do so. We also do not have a policy that
expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.
The personal and financial interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination. Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in our shareholders’ best interest. If this were the case, it would be a breach of their fiduciary duties to us as a matter of Cayman Islands law and we or our shareholders might have a claim against such individuals for infringing on our shareholders’ rights. See the section titled “Description of Securities—Certain Differences in Corporate Law—Shareholders’ Suits” for further information on the ability to bring such claims. However, we might not ultimately be successful in any claim we may make against them for such reason.
We may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, executive officers, directors, initial shareholders or other affiliates which may raise potential conflicts of interest.
In light of the involvement of our sponsor, executive officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, executive officers, directors, initial shareholders or other affiliates. Our directors also serve as officers and board members for other entities, including, without limitation, those described under “Management—Conflicts of Interest.” Our sponsor, officers and directors may sponsor, form or participate in other blank check companies similar to ours during the period in which we are seeking an initial business combination. Such entities may compete with us for business combination opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with which they are affiliated, and there have been no substantive discussions concerning a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria and guidelines for a business combination as set forth in “Proposed Business—Effecting Our Initial Business Combination—Evaluation of a Target Business and Structuring of Our Initial Business Combination” and such transaction was approved by a majority of our independent and disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our sponsor, executive officers, directors, initial shareholders or other affiliates, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public shareholders as they would be absent any conflicts of interest.
Since our sponsor, executive officers, directors and other affiliates will lose their entire investment in us if our initial business combination is not completed (other than with respect to public shares they may acquire during or after this offering), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
On August 21, 2020, our sponsor paid $25,000, or approximately $0.003 per share, to cover certain expenses on our behalf in consideration of 7,187,500 Class B ordinary shares, par value $0.0001. In September 2020, our sponsor transferred 40,000 Class B ordinary shares to each of our director nominees. These 120,000 shares will not be subject to forfeiture in the event the underwriters’ over-allotment option is not exercised. On October 22, 2020, our sponsor effected a surrender of 1,437,500 founder shares to the company for no consideration, resulting in a decrease in the number of Class B ordinary shares outstanding from 7,187,500 to 5,750,000, such that the total number of founder shares would represent 20% of the total number of ordinary shares outstanding upon completion of this offering (of which 750,000 Class B ordinary shares are subject to forfeiture if the underwriters do not exercise their overallotment option). Our sponsor has agreed to transfer all of the founder shares held by it to holdco prior to the consummation of this offering. Prior to the initial investment in the company of $25,000 by the sponsor, the company had no assets, tangible or intangible. The per share
price of the founder shares was determined by dividing the amount contributed to the company by the number of founder shares issued. If we increase or decrease the size of this offering, we will effect a share capitalization or a share surrender or redemption or other appropriate mechanism, as applicable, with respect to our Class B ordinary shares immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares, on an as-converted basis, at 20% of our issued and outstanding ordinary shares upon the consummation of this offering. The founder shares will be worthless if we do not complete an initial business combination. In addition, our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 8,000,000 private placement warrants (or 8,900,000 private placement warrants if the underwriters’ over-allotment option is exercised in full), each exercisable to purchase one Class A ordinary share at $11.50 per share, subject to adjustment, at a price of $1.00 per warrant ($8,000,000 in the aggregate or $8,900,000 if the underwriters’ over-allotment option is exercised in full), in a private placement that will close simultaneously with the closing of this offering. If we do not consummate an initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, the private placement warrants will expire worthless. While we do not expect our board of directors to approve any amendment to or waiver of the letter agreement or registration and shareholder rights agreement prior to our initial business combination, it may be possible that our board of directors, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to or waivers of such agreements in connection with the consummation of our initial business combination. Any such amendments or waivers would not require approval from our shareholders, may result in the completion of our initial business combination that may not otherwise have been possible, and may have an adverse effect on the value of an investment in our securities. The personal and financial interests of our executive officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following the initial business combination. This risk may become more acute as the 18-month anniversary of the closing of this offering, the Contractual Redemption Date if extended at our sponsor’s option or the end of any Extension Period nears, which is the deadline for our consummation of an initial business combination.
We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our shareholders’ investment in us.
Although we have no commitments as of the date of this prospectus to issue any notes or other debt securities, or to otherwise incur outstanding debt following this offering, we may choose to incur substantial debt to complete our initial business combination. We and our officers have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no issuance of debt will affect the per-share amount available for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:
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default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
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acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
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our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
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our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;
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our inability to pay dividends on our Class A ordinary shares;
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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
We may only be able to complete one business combination with the proceeds of this offering and the sale of the private placement warrants, which will cause us to be solely dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively impact our operations and profitability.
The net proceeds from this offering and the sale of the private placement warrants will initially provide us with up to $195,000,000 (or $224,250,000 if the underwriters’ over-allotment option is exercised in full) that we may use to complete our initial business combination (after taking into account the $7,000,000, or $8,050,000 if the underwriters’ over-allotment option is exercised in full, of deferred underwriting commissions being held in the trust account and the estimated non-reimbursed expenses of this offering).
We may effectuate our initial business combination with a single-target business or multiple-target businesses simultaneously or within a short period of time. However, we may not be able to effectuate our initial business combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success may be:
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solely dependent upon the performance of a single business, property or asset; or
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dependent upon the development or market acceptance of a single or limited number of products, processes or services.
This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
We may attempt to complete our initial business combination with a private or early stage company, a financially unstable business or an entity lacking an established record of revenue or earnings about which little information is available, which may result in a business combination with a company that is not as profitable as we suspected, if at all.
In pursuing our acquisition strategy, we may seek to effectuate our initial business combination with a privately held company, an early stage company, a financially unstable business or an entity lacking an established record of sales or earnings. As a result, we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks include investing in a
business without a proven business model and with limited historical financial data, volatile revenues or earnings, intense competition and difficulties in obtaining and retaining key personnel. Although our directors and officers will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business with which we pursue a business combination. Additionally, very little public information generally exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information, which may result in a business combination with a company that is not as profitable as we suspected, if at all.
Our management may not be able to maintain control of a target business after our initial business combination. Upon the loss of control of a target business, new management may not possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure our initial business combination so that the post-business combination company in which our public shareholders own shares will own less than 100% of the equity interests or assets of a target business, but we will only complete such 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 business sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-business combination company owns 50% or more of the voting securities of the target, our shareholders prior to our initial business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial number of new Class A ordinary shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new Class A ordinary shares, our shareholders immediately prior to such transaction could own less than a majority of our outstanding Class A ordinary shares subsequent to such transaction. In addition, other minority shareholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s shares than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain control of the target business.
We may seek business combination opportunities with a high degree of complexity that require significant operational improvements, which could delay or prevent us from achieving our desired results.
We may seek business combination opportunities with large, highly complex companies that we believe would benefit from operational improvements. While we intend to implement such improvements, to the extent that our efforts are delayed or we are unable to achieve the desired improvements, the business combination may not be as successful as we anticipate.
To the extent we complete our initial business combination with a large complex business or entity with a complex operating structure, we may also be affected by numerous risks inherent in the operations of the business with which we combine, which could delay or prevent us from implementing our strategy. Although our management team will endeavor to evaluate the risks inherent in a particular target business and its operations, we may not be able to properly ascertain or assess all of the significant risk factors until we complete our business combination. If we are not able to achieve our desired operational improvements, or the improvements take longer to implement than anticipated, we may not achieve the gains that we anticipate. Furthermore, some of these risks and complexities may be outside of our control and leave us with no ability to control or reduce the chances that those risks and complexities will adversely impact a target business. Such combination may not be as successful as a combination with a smaller, less complex organization.
We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which a substantial majority of our shareholders do not agree.
Our amended and restated memorandum and articles of association will not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules). As a result, we may be able to complete our initial business combination even though a substantial majority of our public shareholders do not agree with the transaction and have redeemed their shares or, if we seek shareholder approval of our initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or their affiliates. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all Class A ordinary shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
In order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and other governing instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated memorandum and articles of association or governing instruments in a manner that will make it easier for us to complete our initial business combination that our shareholders may not support.
In order to effectuate a business combination, blank check companies have, in the recent past, amended various provisions of their charters and governing instruments, including their warrant agreements. For example, blank check companies have amended the definition of business combination, increased redemption thresholds, extended the time to consummate an initial business combination and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. Amending our amended and restated memorandum and articles of association will require at least a special resolution of our shareholders as a matter of Cayman Islands law, meaning the approval of holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of the company, and amending our warrant agreement will require a vote of holders of at least 65% of the public warrants and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants, 65% of the number of the then outstanding private placement warrants. In addition, our amended and restated memorandum and articles of association will require us to provide our public shareholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares. To the extent any of such amendments would be deemed to fundamentally change the nature of any of the securities offered through this registration statement, we would register, or seek an exemption from registration for, the affected securities.
The provisions of our amended and restated memorandum and articles of association that relate to the rights of holders of our Class A ordinary shares (and corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval of a special resolution which requires the approval of the holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of the company, which is a lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated memorandum and articles of association to facilitate the completion of an initial business combination that some of our shareholders may not support.
Some other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including those which relate to the rights of a company’s shareholders, without approval by a certain percentage of the company’s shareholders. In those companies, amendment of these provisions typically requires approval by between 90% and 100% of the company’s shareholders. Our amended and restated memorandum and articles of association will provide that any of its provisions related to the rights of holders of our Class A ordinary shares (including the requirement to deposit proceeds of this offering and the private placement of warrants into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public shareholders as described herein) may be amended if approved by special resolution, meaning holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of the company, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of at least 65% of our ordinary shares; provided that the provisions of our amended and restated memorandum and articles of association governing the appointment or removal of directors prior to our initial business combination may only be amended by a special resolution passed by not less than two-thirds of our ordinary shares who attend and vote at our general meeting which shall include the affirmative vote of a simple majority of our Class B ordinary shares. Our sponsor and its permitted transferees, if any, who will collectively beneficially own, on an as-converted basis, 20% of our Class A ordinary shares upon the closing of this offering (assuming they do not purchase any units in this offering), will participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated memorandum and articles of association which govern our pre-business combination behavior more easily than some other blank check companies, and this may increase our ability to complete a business combination with which you do not agree. Our shareholders may pursue remedies against us for any breach of our amended and restated memorandum and articles of association.
Our sponsor, executive officers, directors and director nominees have agreed, pursuant to agreements with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, unless we provide our public shareholders with the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest and other income earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares. Our shareholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, executive officers, directors or director nominees for any breach of these agreements. As a result, in the event of a breach, our shareholders would need to pursue a shareholder derivative action, subject to applicable law.
We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination. If we have not consummated our initial business combination within the required time period, our public shareholders may receive only their pro rata portion of the funds in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless.
Although we believe that the net proceeds of this offering and the sale of the private placement warrants will be sufficient to allow us to complete our initial business combination, because we have not yet selected any prospective target business we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of this offering and the sale of the private placement warrants prove to be insufficient, either because of the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number of shares from shareholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the proposed business combination. We cannot assure you that such financing will be available on acceptable terms, if at all. The current economic environment may make it difficult for companies to obtain acquisition financing. To the extent that additional financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. If we have not consummated our initial business combination within the required time period, our public shareholders may receive only their pro rata portion of the funds in the trust account that are available for distribution to public shareholders, and our warrants will expire worthless. In addition, even if we do not need additional financing to complete our initial business combination, we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our officers, directors or shareholders is required to provide any financing to us in connection with or after our initial business combination.
Our sponsor controls a substantial interest in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support.
Upon closing of this offering, our sponsor will beneficially own, on an as-converted basis, approximately 19.5% of our issued and outstanding ordinary shares (assuming it does not purchase any units in this offering). Accordingly, it may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support, including amendments to our amended and restated memorandum and articles of association. If our sponsor purchases any units in this offering or if our sponsor purchases any additional Class A ordinary shares in the aftermarket or in privately negotiated transactions, this would increase its control. Neither our sponsor nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed in this prospectus. Factors that would be considered in making such additional purchases would include consideration of the current trading price of our Class A ordinary shares. In addition, our board of directors, whose members were elected by our sponsor, is and will be divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. We may not hold an annual meeting of shareholders to elect new directors prior to the completion of our initial business combination, in which case all of the current directors will continue in office until at least the completion of the business combination. If there is an annual meeting, as a consequence of our “staggered” board of directors, only a minority of the board of directors will be considered for appointment and our sponsor, because of its ownership position, will control the outcome, as only holders of our Class B ordinary shares will have the right to vote on the appointment of directors and to remove directors prior to our initial business combination. Accordingly, our sponsor will continue to exert control at least until the completion of our initial business combination. In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor.
Our sponsor contributed $25,000, or approximately $0.003 per founder share, and, accordingly, you will experience immediate and substantial dilution from the purchase of our Class A ordinary shares.
The difference between the public offering price per share (allocating all of the unit purchase price to the Class A ordinary share and none to the warrant included in the unit) and the pro forma net tangible book value per Class A ordinary share after this offering constitutes the dilution to you and the other investors in this offering. Our sponsor acquired the founder shares at a relatively low price, significantly contributing to this dilution. Upon closing of this offering, and assuming no value is ascribed to the warrants included in the units, you and the other public shareholders will incur an immediate and substantial dilution of approximately 91.8% (or $9.18 per share, assuming no exercise of the underwriters’ over-allotment option), the difference between the pro forma net tangible book value per share of $0.82 and the initial offering price of $10.00 per unit. This dilution would increase to the extent that the anti-dilution provisions of the founder shares result in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the founder shares at the time of our initial business combination and would become exacerbated to the extent that public shareholders seek redemptions from the trust for their public shares. In addition, because of the anti-dilution protection in the founder shares, any equity or equity-linked securities issued in connection with our initial business combination, other than those issued to any seller would be disproportionately dilutive to our Class A ordinary shares.
We may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 65% of the then-outstanding public warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of our Class A ordinary shares purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity or correct any mistake, including to conform the provisions of the warrant agreement to the description of the terms of the warrants and the warrant agreement set forth in this prospectus, or defective provision (ii) amending the provisions relating to cash dividends on ordinary shares as contemplated by and in accordance with the warrant agreement or (iii) adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of the warrants, provided that the approval by the holders of at least 65% of the then-outstanding public warrants is required to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 65% of the then-outstanding public warrants approve of such amendment and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants, 65% of the number of the then outstanding private placement warrants. Although our ability to amend the terms of the public warrants with the consent of at least 65% of the then-outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash, shorten the exercise period or decrease the number of Class A ordinary shares purchasable upon exercise of a warrant.
Our warrant agreement will designate the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.
Our warrant agreement will provide that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
Notwithstanding the foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented to the forum provisions in our warrant agreement. If any action, the subject matter of which is within the scope the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.
We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Warrants—Public Shareholders’ Warrants—Anti-Dilution Adjustments”) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise the warrants. Redemption of the outstanding warrants could force you to (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, we expect would be substantially less than the market value of your warrants.
In addition, we have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that the closing price of our Class A ordinary shares equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Warrants—Public Shareholders’ Warrants—Anti-Dilution Adjustments”) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met, including that holders will be able to exercise their warrants prior to redemption for a number of Class A ordinary shares determined based on the redemption date and the fair market value of our Class A ordinary shares. Please see “Description of Securities—Warrants—Public Shareholders’ Warrants—Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00.” The value received upon exercise of the warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the warrants, including because the number of ordinary shares received is capped at 0.361 Class A ordinary shares per warrant (subject to adjustment) irrespective of the remaining life of the warrants.
None of the private placement warrants will be redeemable by us as (except as set forth under “Description of Securities—Warrants—Public Shareholders’ Warrants—Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00”) so long as they are held by our sponsor or its permitted transferees.
Our warrants may have an adverse effect on the market price of our Class A ordinary shares and make it more difficult to effectuate our initial business combination.
We will be issuing 10,000,000 warrants to purchase our Class A ordinary shares (or up to 11,500,000 warrants if the underwriters’ over-allotment option is exercised in full) as part of the units offered by this prospectus and, simultaneously with the closing of this offering, we will be issuing in a private placement an aggregate of 8,000,000 private placement warrants (or 8,900,000 private placement warrants if the underwriters’ over-allotment option is exercised in full), each exercisable to purchase one Class A ordinary share at $11.50 per share, subject to adjustment. In addition, if the sponsor, its affiliates or a member of our management team makes any working capital loans, it may convert up to $1,500,000 of such loans into up to an additional 1,000,000 private placement warrants, at the price of $1.00 per warrant. We may also issue Class A ordinary shares in connection with our redemption of our warrants.
To the extent we issue ordinary shares for any reason, including to effectuate a business combination, the potential for the issuance of a substantial number of additional Class A ordinary shares upon exercise of these warrants could make us a less attractive acquisition vehicle to a target business. Such warrants, when exercised, will increase the number of issued and outstanding Class A ordinary shares and reduce the value of the Class A ordinary shares issued to complete the business transaction. Therefore, our warrants may make it more difficult to effectuate a business transaction or increase the cost of acquiring the target business.
Because each unit contains one-half of one redeemable warrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.
Each unit contains one-half of one redeemable warrant. Pursuant to the warrant agreement, no fractional warrants will be issued upon separation of the units, and only whole units will trade. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number of Class A ordinary shares to be issued to the warrant holder. This is different from other offerings similar to ours whose units include one ordinary share and one whole warrant to purchase one whole share. We have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants will be exercisable in the aggregate for one-half of the number of shares compared to units that each contain a whole warrant to purchase one whole share, thus making us, we believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if a unit included a warrant to purchase one whole share.
A provision of our warrant agreement may make it more difficult for us to consummate an initial business combination.
Unlike many blank check companies, if (i) we issue additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at a Newly Issued Price of less than $9.20 per ordinary share, (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 our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (iii) the Market Value is below $9.20 per share, then the exercise price of the warrants will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger prices described below under “Description of Securities—Warrants—Public Shareholders’ Warrants—Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00” and “Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described below under “Description of Securities—Warrants—Public Shareholders’ Warrants—Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to
the higher of the Market Value and the Newly Issued Price. This may make it more difficult for us to consummate an initial business combination with a target business.
The determination of the offering price of our units and the size of this offering is more arbitrary than the pricing of securities and size of an offering of an operating company in a particular industry. You may have less assurance, therefore, that the offering price of our units properly reflects the value of such units than you would have in a typical offering of an operating company.
Prior to this offering there has been no public market for any of our securities. In determining the size of this offering, management held customary organizational meetings with the underwriters, both prior to our inception and thereafter, with respect to the state of capital markets, generally, and the amount the underwriters believed they reasonably could raise on our behalf. Factors considered in determining the size of this offering and terms of the units, including the Class A ordinary shares and warrants underlying the units, include:
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the history and prospects of companies whose principal business is the acquisition of other companies;
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prior offerings of those companies;
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our prospects for acquiring an operating business at attractive values;
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a review of debt-to-equity ratios in leveraged transactions;
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our capital structure;
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an assessment of our management and their experience in identifying operating companies;
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general conditions of the securities markets at the time of this offering; and
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other factors as were deemed relevant.
Although these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities of an operating company in a particular industry since we have no historical operations or financial results.
There is currently no market for our securities and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities.
There is currently no market for our securities. Shareholders therefore have no access to information about prior market history on which to base their investment decision. Following this offering, the price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions, including as a result of the COVID-19 outbreak. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained.
Because we must furnish our shareholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses.
The federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or international financial reporting standards as issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame.
We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to “emerging growth companies” or “smaller reporting companies,” this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we 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 our 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. As a result, our shareholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class A ordinary shares held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
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. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of any fiscal year for so long as either (1) the market value of our ordinary shares held by non-affiliates does not equal or exceed $250.0 million as of the prior June 30th, or (2) our annual revenues did not equal or exceed $100.0 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates did not equal or exceed $700.0 million as of the prior June 30th. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.
Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate a business combination, require substantial financial and management resources, and increase the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December 31, 2021. Only in the event we are deemed to be a large accelerated filer or an accelerated filer and no longer qualify as an emerging growth company, will we not be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target
business with which we seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited.
We are an exempted company incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States upon our directors or executive officers, or enforce judgments obtained in the United States courts against our directors or officers.
Our corporate affairs will be governed by our amended and restated memorandum and articles of association, the Companies Law (as the same may be supplemented or amended from time to time) and the common law of the Cayman Islands. We will also be subject to the federal securities laws of the United States. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the United States.
We have been advised by Maples and Calder, our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a United States company.
Provisions in our amended and restated memorandum and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A ordinary shares and could entrench management.
Our amended and restated memorandum and articles of association will contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best interests. These provisions will include a staggered board of directors, the ability of the board of directors to designate the terms of and issue new series of preference shares, and the fact that prior to the
completion of our initial business combination only holders of our Class B ordinary shares, which have been issued to our sponsor, are entitled to vote on the appointment of directors, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
An investment in this offering may result in uncertain or adverse U.S. federal income tax consequences.
An investment in this offering may result in uncertain U.S. federal income tax consequences. For instance, because there are no authorities that directly address instruments similar to the units we are issuing in this offering, the allocation an investor makes with respect to the purchase price of a unit between the Class A ordinary shares and the one-half of a warrant to purchase one Class A ordinary share included in each unit could be challenged by the IRS or courts. Furthermore, the U.S. federal income tax consequences of a cashless exercise of warrants included in the units we are issuing in this offering is unclear under current law. Finally, it is unclear whether the redemption rights with respect to our ordinary shares suspend the running of a U.S. Holder’s (as defined below in “Taxation—Material United States Federal Income Tax Considerations—General”) holding period for purposes of determining whether any gain or loss realized by such holder on the sale or exchange of Class A ordinary shares is long-term capital gain or loss and for determining whether any dividend we pay would be considered “qualified dividends” for U.S. federal income tax purposes. See the section titled “Taxation—Material United States Federal Income Tax Considerations” for a summary of the U.S. federal income tax considerations of an investment in our securities. Prospective investors are urged to consult their tax advisors with respect to these and other tax consequences related to purchasing, holding or disposing of our securities.
Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.
We depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial loss.
Since only holders of our founder shares will have the right to vote on the appointment of directors, upon the listing of our shares on the Nasdaq, the Nasdaq may consider us to be a “controlled company” within the meaning of the Nasdaq rules and, as a result, we may qualify for exemptions from certain corporate governance requirements.
After completion of this offering, only holders of our founder shares will have the right to vote on the appointment of directors. As a result, the Nasdaq may consider us to be a “controlled company” within the meaning of the Nasdaq corporate governance standards. Under the Nasdaq corporate governance standards, a company of which more than 50% of the voting power for the directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirements that:
•
we have a board that includes a majority of “independent directors,” as defined under the rules of the Nasdaq;
•
we have a compensation committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and
•
we have a nominating and corporate governance committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
We do not intend to utilize these exemptions and intend to comply with the corporate governance requirements of the Nasdaq, subject to applicable phase-in rules. However, if we determine in the future to utilize some or all of these exemptions, you will not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq corporate governance requirements.
Risks Associated with Acquiring and Operating a Business in Foreign Countries
If we pursue a target company with operations or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection with investigating, agreeing to and completing such initial business combination, and if we effect such initial business combination, we would be subject to a variety of additional risks that may negatively impact our operations.
If we pursue a target company with operations or opportunities outside of the United States for our initial business combination, we would be subject to risks associated with cross-border business combinations, including in connection with investigating, agreeing to and completing our initial business combination, conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.
If we effect our initial business combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following:
•
costs and difficulties inherent in managing cross-border business operations;
•
rules and regulations regarding currency redemption;
•
complex withholding taxes on individuals;
•
laws governing the manner in which future business combinations may be effected;
•
exchange listing and/or delisting requirements;
•
tariffs and trade barriers;
•
regulations related to customs and import/export matters;
•
local or regional economic policies and market conditions;
•
unexpected changes in regulatory requirements;
•
longer payment cycles;
•
tax issues, such as tax law changes and variations in tax laws as compared to the United States;
•
currency fluctuations and exchange controls;
•
rates of inflation;
•
challenges in collecting accounts receivable;
•
cultural and language differences;
•
employment regulations;
•
underdeveloped or unpredictable legal or regulatory systems;
•
corruption;
•
protection of intellectual property;
•
social unrest, crime, strikes, riots and civil disturbances;
•
regime changes and political upheaval;
•
terrorist attacks, natural disasters and wars; and
•
deterioration of political relations with the United States.
We may not be able to adequately address these additional risks. If we were unable to do so, we may be unable to complete such initial business combination, or, if we complete such combination, our operations might suffer, either of which may adversely impact our business, financial condition and results of operations.
If our management following our initial business combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory issues.
Following our initial business combination, our management may resign from their positions as officers or directors of the company and the management of the target business at the time of the business combination will remain in place. Management of the target business may not be familiar with United States securities laws. If new management is unfamiliar with United States securities laws,
they may have to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.
After our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue may be derived from our operations in any such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political and social conditions and government policies, developments and conditions in the country in which we operate.
The economic, political and social conditions, as well as government policies, of the country in which our operations are located could affect our business. Economic growth could be uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future. If in the future such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our ability to find an attractive target business with which to consummate our initial business combination and if we effect our initial business combination, the ability of that target business to become profitable.
Exchange rate fluctuations and currency policies may cause a target business’ ability to succeed in the international markets to be diminished.
In the event we acquire a non-U.S. target, all revenues and income would likely be received in a foreign currency, and the dollar equivalent of our net assets and distributions, if any, could be adversely affected by reductions in the value of the local currency. The value of the currencies in our target regions fluctuate and are affected by, among other things, changes in political and economic conditions. Any change in the relative value of such currency against our reporting currency may affect the attractiveness of any target business or, following consummation of our initial business combination, our financial condition and results of operations. Additionally, if a currency appreciates in value against the dollar prior to the consummation of our initial business combination, the cost of a target business as measured in dollars will increase, which may make it less likely that we are able to consummate such transaction.
We are subject to changing law and regulations regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance.
We are subject to rules and regulations by various governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from seeking a business combination target.
Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this prospectus may include, for example, statements about:
•
our ability to select an appropriate target business or businesses;
•
our ability to complete our initial business combination;
•
our expectations around the performance of a prospective target business or businesses;
•
our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;
•
our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination;
•
our potential ability to obtain additional financing to complete our initial business combination;
•
our pool of prospective target businesses;
•
our ability to consummate an initial business combination due to the uncertainty resulting from the recent COVID-19 pandemic and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases);
•
the ability of our officers and directors to generate a number of potential business combination opportunities;
•
our public securities’ potential liquidity and trading;
•
the lack of a market for our securities;
•
the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;
•
the trust account not being subject to claims of third parties; or
•
our financial performance following this offering.
The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
USE OF PROCEEDS
We are offering 20,000,000 units at an offering price of $10.00 per unit. We estimate that the net proceeds of this offering, together with the funds we will receive from the sale of the private placement warrants, will be used as set forth in the following table:
| |
|
|
Without Over-
allotment
Option
|
|
|
Over-allotment
Option
Exercised
|
|
| Gross proceeds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross proceeds from units offered to public(1)
|
|
|
|
$ |
200,000,000 |
|
|
|
|
$ |
230,000,000 |
|
|
|
Gross proceeds from private placement warrants offered in the private placement
|
|
|
|
$ |
8,000,000 |
|
|
|
|
$ |
8,900,000 |
|
|
|
Total gross proceeds
|
|
|
|
$ |
208,000,000 |
|
|
|
|
$ |
238,900,000 |
|
|
| Estimated offering expenses(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting commissions (2.0% of gross proceeds from units offered to public, excluding deferred portion)(3)
|
|
|
|
$ |
4,000,000 |
|
|
|
|
$ |
4,600,000 |
|
|
|
Legal fees and expenses
|
|
|
|
|
325,000 |
|
|
|
|
|
325,000 |
|
|
|
Printing and engraving expenses
|
|
|
|
|
40,000 |
|
|
|
|
|
40,000 |
|
|
|
Accounting fees and expenses
|
|
|
|
|
50,000 |
|
|
|
|
|
50,000 |
|
|
|
SEC/FINRA Expenses
|
|
|
|
|
60,093 |
|
|
|
|
|
60,093 |
|
|
|
Travel and road show
|
|
|
|
|
120,000 |
|
|
|
|
|
120,000 |
|
|
|
Nasdaq listing and filing fees
|
|
|
|
|
85,000 |
|
|
|
|
|
85,000 |
|
|
|
Director & Officer liability insurance premiums
|
|
|
|
|
200,000 |
|
|
|
|
|
200,000 |
|
|
|
Miscellaneous expenses(8)
|
|
|
|
|
119,907 |
|
|
|
|
|
119,907 |
|
|
|
Total estimated offering expenses
|
|
|
|
$ |
1,000,000 |
|
|
|
|
$ |
1,000,000 |
|
|
|
Proceeds after estimated reimbursed offering expenses
|
|
|
|
$ |
203,000,000 |
|
|
|
|
$ |
233,300,000 |
|
|
|
Held in trust account(4)
|
|
|
|
$ |
202,000,000 |
|
|
|
|
$ |
232,300,000 |
|
|
|
% of public offering size
|
|
|
|
|
101% |
|
|
|
|
|
101% |
|
|
|
Not held in trust account
|
|
|
|
$ |
1,000,000 |
|
|
|
|
$ |
1,000,000 |
|
|
The following table shows the use of the estimated $1,000,000 of net proceeds not held in the trust account.(5)(6)
| |
|
|
Amount
|
|
|
% of
Total
|
|
|
Legal, accounting, due diligence, travel, and other expenses in connection with any
business combination(7)
|
|
|
|
|
400,000 |
|
|
|
|
|
40.0% |
|
|
|
Legal and accounting fees related to regulatory reporting obligations
|
|
|
|
|
160,000 |
|
|
|
|
|
16.0% |
|
|
|
Payment for office space, administrative and support services
|
|
|
|
|
240,000 |
|
|
|
|
|
24.0% |
|
|
|
Nasdaq continued listing fees
|
|
|
|
|
56,500 |
|
|
|
|
|
5.65% |
|
|
|
Working capital to cover miscellaneous expenses and reserves
|
|
|
|
|
143,500 |
|
|
|
|
|
14.35% |
|
|
|
Total
|
|
|
|
$ |
1,000,000 |
|
|
|
|
|
100.0% |
|
|
(1)
Includes amounts payable to public shareholders who properly redeem their shares in connection with our successful completion of our initial business combination.
(2)
A portion of the offering expenses will be paid from the proceeds of loans from our sponsor of up to $300,000 as described in this prospectus. To date, we have not borrowed any amounts under the
promissory note with our sponsor. These amounts will be repaid upon completion of this offering out of the offering proceeds that has been allocated for the payment of offering expenses (other than underwriting commissions) and not to be held in the trust account. In the event that offering expenses are less than as set forth in this table, any such amounts will be used for post-closing working capital expenses. In the event that the offering expenses are more than as set forth in this table, we may fund such excess with funds not held in the trust account.
(3)
The underwriters have agreed to defer underwriting commissions of 3.5% of the gross proceeds of this offering. Upon and concurrently with the completion of our initial business combination, $7,000,000, which constitutes the underwriters’ deferred commissions (or $8,050,000 if the underwriters’ over-allotment option is exercised in full) will be paid to the underwriters from the funds held in the trust account. See “Underwriting.” The remaining funds, less amounts released to the trustee to pay redeeming shareholders, will be released to us and can be used to pay all or a portion of the purchase price of the business or businesses with which our initial business combination occurs or for general corporate purposes, including payment of principal or interest on indebtedness incurred in connection with our initial business combination, to fund the purchases of other companies or for working capital. The underwriters will not be entitled to any interest accrued on the deferred underwriting discounts and commissions.
(4)
Amount does not account for the increase in the trust account after 18 months, as described herein.
(5)
These expenses are estimates only. Our actual expenditures for some or all of these items may differ from the estimates set forth herein. For example, we may incur greater legal and accounting expenses than our current estimates in connection with negotiating and structuring our initial business combination based upon the level of complexity of such business combination. In the event we identify a business combination target in a specific industry subject to specific regulations, we may incur additional expenses associated with legal due diligence and the engagement of special legal counsel. In addition, our staffing needs may vary and as a result, we may engage a number of consultants to assist with legal and financial due diligence. We do not anticipate any change in our intended use of proceeds, other than fluctuations among the current categories of allocated expenses, which fluctuations, to the extent they exceed current estimates for any specific category of expenses, would not be available for our expenses. The amount in the table above does not include interest available to us from the trust account. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Assuming an interest rate of 0.1% per year, we estimate the interest earned on the trust account will be approximately $200,000 per year; however, we can provide no assurances regarding this amount.
(6)
Assumes no exercise of the underwriters’ over-allotment option.
(7)
Includes estimated amounts that may also be used in connection with our initial business combination to fund a “no shop” provision and commitment fees for financing.
(8)
Includes organizational and administrative expenses and may include amounts related to above-listed expenses in the event actual amounts exceed estimates.
Of the $208,000,000 in proceeds we receive from this offering and the sale of the private placement warrants described in this prospectus, or $238,900,000 if the underwriters’ over-allotment option is exercised in full, $202,000,000 ($10.10 per unit), or $232,300,000 if the underwriters’ over-allotment option is exercised in full ($10.10 per unit), will be deposited into a U.S.-based trust account at J.P. Morgan Chase Bank N.A., (or at another U.S.-chartered commercial bank with consolidated assets of $100 billion or more) with Continental Stock Transfer & Trust Company acting as trustee, including $7,000,000, or $8,050,000 if the underwriters’ over-allotment option is exercised in full, in deferred underwriting compensation. We will not be permitted to withdraw any of the principal or interest held in the trust account, except with respect to interest and other income earned on the funds held in the trust account that may be released to us to pay our income taxes, if any, until the earliest of (i) the
completion of our initial business combination, (ii) the redemption of our public shares if we have not consummated an initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor's option or during any Extension Period, subject to applicable law, or (iii) the redemption of our public shares properly submitted in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor's option or during any Extension Period, or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares. Based on current interest rates, we expect that interest income earned on the trust account (if any) will be sufficient to pay our income taxes.
The net proceeds held in the trust account may be used as consideration to pay the sellers of a target business with which we ultimately complete our initial business combination. If our initial business combination is paid for using equity or debt, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or the redemption of our public shares, we may apply the balance of the cash released from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-business combination company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination.
We believe that amounts not held in trust, together with funds available to us from loans from our sponsor, its affiliates or members of our management team will be sufficient to pay the costs and expenses to which such proceeds are allocated. This belief is based on the fact that while we may begin preliminary due diligence of a target business in connection with an indication of interest, we intend to undertake in-depth due diligence, depending on the circumstances of the relevant prospective acquisition, only after we have negotiated and signed a letter of intent or other preliminary agreement that addresses the terms of a business combination. However, if our estimate of the costs of undertaking in-depth due diligence and negotiating a business combination is less than the actual amount necessary to do so, we may be required to raise additional capital, the amount, availability and cost of which is currently unascertainable. If we are required to seek additional capital, we could seek such additional capital through loans or additional investments from our sponsor or an affiliate of our sponsor or certain of our officers and directors although they are under no obligation to advance funds to us in such circumstances.
We will reimburse an affiliate of our sponsor for office space, secretarial and administrative services provided to members of our management team, in the amount of $10,000 per month. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.
Prior to the closing of this offering, our sponsor has agreed to loan us up to $300,000 to be used for a portion of the expenses of this offering. To date, we have not borrowed any amounts under the promissory note with our sponsor. These loans are non-interest bearing, unsecured and are due at the earlier of December 31, 2020 and the closing of this offering. The loan will be repaid upon the closing of this offering out of the offering proceeds not held in the trust account.
In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans may be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants of the post-business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants
would be identical to the private placement warrants. Except as set forth above, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor, its affiliates or any members of our management team as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
DIVIDEND POLICY
We have not paid any cash dividends on our ordinary shares to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time. If we increase the size of this offering, we will effect a share capitalization or other appropriate mechanism immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares, on an as-converted basis, at 20% of our issued and outstanding ordinary shares upon the consummation of this offering. Further, if we incur any indebtedness in connection with a business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
DILUTION
The difference between the public offering price per Class A ordinary share, assuming no value is attributed to the warrants included in the units we are offering pursuant to this prospectus or the private placement warrants, and the pro forma net tangible book value per Class A ordinary share after this offering constitutes the dilution to investors in this offering. Such calculation does not reflect any dilution associated with the sale and exercise of warrants, including the private placement warrants, which would cause the actual dilution to the public shareholders to be higher, particularly where a cashless exercise is utilized. Net tangible book value per share is determined by dividing our net tangible book value, which is our total tangible assets less total liabilities (including the value of Class A ordinary shares which may be redeemed for cash), by the number of outstanding Class A ordinary shares.
At August 21, 2020, our net tangible book deficit was $64,559, or approximately $(0.01) per ordinary share. After giving effect to the sale of 20,000,000 Class A ordinary shares included in the units we are offering by this prospectus (or 23,000,000 Class A ordinary shares if the underwriters’ over-allotment option is exercised in full), the sale of the private placement warrants and the deduction of underwriting commissions and estimated expenses of this offering, our pro forma net tangible book value at August 21, 2020 would have been $5,000,003 or $0.82 per share (or $5,000,009, or $0.72 per share if the underwriters’ over-allotment option is exercised in full), representing an immediate increase in net tangible book value (as decreased by the value of 18,912,871 Class A ordinary shares that may be redeemed for cash, or 21,808,910 Class A ordinary shares if the underwriters’ over-allotment option is exercised in full) of $0.83 per share (or $0.73 per share if the underwriters’ over-allotment option is exercised in full) to our sponsor as of the date of this prospectus and an immediate dilution to public shareholders from this offering of $10.00 per public share. Total dilution to public shareholders from this offering will be $9.18 per share (or $9.28 if the underwriters’ over-allotment option is exercised in full).
The following table illustrates the dilution to the public shareholders on a per-share basis, assuming no value is attributed to the warrants included in the units or the private placement warrants:
| |
|
|
Without
Over-allotment
|
|
|
With
Over-allotment
|
|
|
Public offering price
|
|
|
|
|
|
|
|
|
|
$ |
10.00 |
|
|
|
|
|
|
|
|
|
|
$ |
10.00 |
|
|
|
Net tangible book deficit before this offering
|
|
|
|
|
(0.01) |
|
|
|
|
|
|
|
|
|
|
|
(0.01) |
|
|
|
|
|
|
|
|
|
Increase attributable to public shareholders
|
|
|
|
|
0.83 |
|
|
|
|
|
|
|
|
|
|
|
0.73 |
|
|
|
|
|
|
|
|
|
Pro forma net tangible book value after this offering and the sale of the private placement warrants
|
|
|
|
|
|
|
|
|
|
|
0.82 |
|
|
|
|
|
|
|
|
|
|
|
0.72 |
|
|
|
Dilution to public shareholders
|
|
|
|
|
|
|
|
|
|
$ |
9.18 |
|
|
|
|
|
|
|
|
|
|
$ |
9.28 |
|
|
|
Percentage of dilution to public shareholders
|
|
|
|
|
|
|
|
|
|
|
91.8% |
|
|
|
|
|
|
|
|
|
|
|
92.8% |
|
|
For purposes of presentation, we have reduced our pro forma net tangible book value after this offering (assuming no exercise of the underwriters’ over-allotment option) by $191,019,997 because holders of up to approximately 94.6% of our public shares may redeem their shares for a pro rata share of the aggregate amount then on deposit in the trust account at a per share redemption price equal to the amount in the trust account as set forth in our tender offer or proxy materials (initially anticipated to be the aggregate amount held in trust two business days prior to the consummation of our initial business combination, including interest and other income earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares).
The following table sets forth information with respect to our sponsor and the public shareholders:
| |
|
|
Shares Purchased
|
|
|
Total Consideration
|
|
|
Average
Price
per Share
|
|
| |
|
|
Number
|
|
|
Percentage
|
|
|
Amount
|
|
|
Percentage
|
|
|
|
|
|
|
|
|
Sponsor(1)
|
|
|
|
|
5,000,000 |
|
|
|
|
|
20.0% |
|
|
|
|
$ |
25,000 |
|
|
|
|
|
0.01% |
|
|
|
|
$ |
0.005 |
|
|
|
Public Shareholders
|
|
|
|
|
20,000,000 |
|
|
|
|
|
80.0% |
|
|
|
|
|
200,000,000 |
|
|
|
|
|
99.99% |
|
|
|
|
$ |
10.00 |
|
|
| |
|
|
|
|
25,000,000 |
|
|
|
|
|
100.0% |
|
|
|
|
$ |
200,025,000 |
|
|
|
|
|
100.0% |
|
|
|
|
|
|
|
|
(1)
Assumes no exercise of the underwriters’ over-allotment option and the corresponding full forfeiture of 750,000 Class B ordinary shares beneficially owned by our sponsor and reflects the surrender of 1,437,500 Class B ordinary shares on October 22, 2020.
The pro forma net tangible book value per share after this offering (assuming that the underwriters do not exercise their over-allotment option) is calculated as follows:
| |
|
|
Without
Over-allotment
|
|
|
With
Over-allotment
|
|
| Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net tangible book deficit before this offering
|
|
|
|
$ |
(64,559) |
|
|
|
|
$ |
(64,559) |
|
|
|
Net proceeds from this offering and sale of the private placement warrants(1)
|
|
|
|
|
203,000,000 |
|
|
|
|
|
233,300,000 |
|
|
|
Plus: Offering costs paid in advance, excluded from tangible book value
|
|
|
|
|
84,559 |
|
|
|
|
|
84,559 |
|
|
|
Less: Deferred underwriting commissions
|
|
|
|
|
(7,000,000) |
|
|
|
|
|
(8,050,000) |
|
|
|
Less: Proceeds held in trust subject to redemption(2)
|
|
|
|
|
(191,019,997) |
|
|
|
|
|
(220,269,991) |
|
|
| |
|
|
|
$ |
5,000,003 |
|
|
|
|
$ |
5,000,009 |
|
|
| Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares outstanding prior to this offering
|
|
|
|
|
5,750,000 |
|
|
|
|
|
5,750,000 |
|
|
|
Ordinary shares forfeited if over-allotment is not exercised
|
|
|
|
|
(750,000) |
|
|
|
|
|
— |
|
|
|
Ordinary shares included in the units offered
|
|
|
|
|
20,000,000 |
|
|
|
|
|
23,000,000 |
|
|
|
Less: Ordinary shares subject to redemption
|
|
|
|
|
(18,912,871) |
|
|
|
|
|
(21,808,910) |
|
|
| |
|
|
|
|
6,087,129 |
|
|
|
|
|
6,941,090 |
|
|
(1)
Expenses applied against gross proceeds include non-reimbursed offering expenses of $1,000,000 and underwriting commissions of $4,000,000 or $4,600,000 if the underwriters exercise their over-allotment option (excluding deferred underwriting fees). See “Use of Proceeds.”
(2)
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. In the event of any such purchases of our shares prior to the completion of our initial business combination, the number of Class A ordinary shares subject to redemption will be reduced by the amount of any such purchases, increasing the pro forma net tangible book value per share. See “Proposed Business Effecting Our Initial Business Combination—Effecting Our Initial Business Combination—Permitted Purchases and Other Transactions with Respect to Our Securities.”
CAPITALIZATION
The following table sets forth our capitalization at August 21, 2020, and as adjusted to give effect to the filing of our amended and restated memorandum and articles of association, the sale of our 20,000,000 units in this offering and the sale of 8,000,000 private placement warrants and the application of the estimated net proceeds derived from the sale of such securities:
| |
|
|
August 21, 2020
|
|
| |
|
|
Actual
|
|
|
As Adjusted(1)
|
|
|
Note payable—related party(2)
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
Deferred underwriting commissions
|
|
|
|
|
— |
|
|
|
|
|
7,000,000 |
|
|
|
Class A ordinary shares, $0.0001 par value, 300,000,000 shares authorized; -0- and 18,912,871 shares subject to possible redemption, actual and as adjusted, respectively
|
|
|
|
|
— |
|
|
|
|
|
191,019,997 |
|
|
|
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding, actual and as adjusted
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Class A ordinary shares, $0.0001 par value, 300,000,000 shares authorized;
-0- and 1,087,129 shares issued and outstanding (excluding -0- and
18,912,871 shares subject to possible redemption), actual and as adjusted,
respectively(3)
|
|
|
|
|
— |
|
|
|
|
|
109 |
|
|
|
Class B ordinary shares, $0.0001 par value, 30,000,000 shares authorized; 5,750,000 and 5,000,000 shares issued and outstanding, actual and as adjusted, respectively(1)
|
|
|
|
|
575 |
|
|
|
|
|
500 |
|
|
|
Additional paid-in capital
|
|
|
|
|
24,425 |
|
|
|
|
|
5,004,394 |
|
|
|
Accumulated deficit
|
|
|
|
|
(5,000) |
|
|
|
|
|
(5,000) |
|
|
|
Total shareholders’ equity
|
|
|
|
$ |
20,000 |
|
|
|
|
$ |
5,000,003 |
|
|
|
Total capitalization
|
|
|
|
$ |
20,000 |
|
|
|
|
$ |
203,020,000 |
|
|
(1)
Assumes no exercise of the underwriters’ over-allotment option and the corresponding full forfeiture of 750,000 Class B ordinary shares beneficially owned by our sponsor and reflects the surrender of 1,437,500 Class B ordinary shares on October 22, 2020.
(2)
Our sponsor has agreed to loan us up to $300,000 to be used for a portion of the expenses of this offering. To date, we have not borrowed any amounts under the promissory note with our sponsor.
(3)
Upon the completion of our initial business combination, we will provide our public shareholders with the opportunity to redeem their public shares for cash at a per share price equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest and other income earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitations described herein whereby redemptions cannot cause our net tangible assets to be less than $5,000,001 and any limitations (including, but not limited to, cash requirements) created by the terms of the proposed business combination.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
We are a newly incorporated blank check company incorporated on August 20, 2020 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. We have not selected any potential business combination target and we have not, nor has anyone on our behalf, had any substantive discussions, directly or indirectly, with any potential business combination target. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the sale of the private placement warrants, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements or backstop agreements we may enter into following the consummation of this offering or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing or other sources.
The issuance of additional shares in a business combination:
•
may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;
•
may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares;
•
could cause a change in control if a substantial number of our Class A ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
•
may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us;
•
may adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants; and
•
may not result in adjustment to the exercise price of our warrants.
Similarly, if we issue debt or otherwise incur significant debt, it could result in:
•
default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
•
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
•
our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
•
our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;
•
our inability to pay dividends on our Class A ordinary shares;
•
using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
•
limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
•
increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
•
limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
As indicated in the accompanying financial statements, as of August 21, 2020, we had no cash and deferred offering costs of $84,559. Further, we expect to incur significant costs in the pursuit of our initial business combination. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful.
Results of Operations and Known Trends or Future Events
We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for this offering. Following this offering, we will not generate any operating revenues until after completion of our initial business combination. We will generate non-operating income in the form of interest income on cash and cash equivalents after this offering. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements. After this offering, we expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially after the closing of this offering.
Liquidity and Capital Resources
Our liquidity needs have been satisfied prior to the completion of this offering through (i) $25,000 paid by our sponsor to cover certain of our offering costs in exchange for the issuance of the founder shares to our sponsor and (ii) the receipt of loans to us of up to $300,000 by our sponsor under an unsecured promissory note. To date, we have not borrowed any amounts under the unsecured promissory note. We estimate that the net proceeds from (i) the sale of the units in this offering, after deducting estimated non-reimbursed offering expenses of $1,000,000, underwriting commissions of $4,000,000, or $4,600,000 if the underwriters’ over-allotment option is exercised in full (excluding deferred underwriting commissions of $7,000,000, or $8,050,000 if the underwriters’ over-allotment option is exercised in full), and (ii) the sale of the private placement warrants for a purchase price of $8,000,000 (or $8,900,000 if the underwriters’ over-allotment option is exercised in full) will be $203,000,000 (or $233,300,000 if the underwriters’ over-allotment option is exercised in full). Of this amount, $202,000,000 (or $232,300,000 if the underwriters’ over-allotment option is exercised in full) will be held in the trust account, which includes the deferred underwriting commissions described above. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. The remaining $1,000,000 will not be held in the trust account. In the event that our offering expenses exceed our estimate of $1,000,000, we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $1,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. Our sponsor also has an option to purchase 2,000,000 additional private placement warrants (or up to 2,300,000 additional private placement warrants if the underwriters’ over-allotment option is exercised in full) in order to extend the initial period of time to consummate an initial business combination.
We intend to use substantially all of the funds held in the trust account, including any amounts representing interest and other income earned on the trust account (less income taxes payable and deferred underwriting commissions), to complete our initial business combination. We may withdraw interest income (if any) to pay income taxes, if any. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. We expect the interest income earned on the amount in the trust account (if any) will be sufficient to pay our income taxes. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
Prior to the completion of our initial business combination, we will have available to us the $1,000,000 of proceeds held outside the trust account, as well as certain funds from loans from our
sponsor, its affiliates or members of our management team. We will use these funds to primarily identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a business combination.
We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business prior to our initial business combination, other than funds available from loans from our sponsor, its affiliates or members of our management team. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants of the post-business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor, its affiliates or our management team as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
We expect our primary liquidity requirements during that period to include approximately $400,000 for legal, accounting, due diligence, travel and other expenses associated with structuring, negotiating and documenting successful business combinations; $160,000 for legal and accounting fees related to regulatory reporting obligations; $240,000 for office space, administrative and support services; $56,500 for Nasdaq continued listing fees; and $143,500 for general working capital that will be used for miscellaneous expenses and reserves.
These amounts are estimates and may differ materially from our actual expenses. In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a “no-shop” provision (a provision designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into an agreement where we paid for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a “no-shop” provision would be determined based on the terms of the specific business combination and the amount of our available funds at the time. Our forfeiture of such funds (whether as a result of our breach or otherwise) could result in our not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses.
Moreover, we may need to obtain additional financing to complete our initial business combination, either because the transaction requires more cash than is available from the proceeds held in our trust account, or because we become obligated to redeem a significant number of our public shares upon completion of the business combination, in which case we may issue additional securities or incur debt in connection with such business combination. If we have not consummated our initial business combination within the required time period because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account.
Controls and Procedures
We are not currently required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act. We will be required to comply with the internal control reporting
requirements of the Sarbanes-Oxley Act for the fiscal year ending December 31, 2021. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer and no longer qualify as an emerging growth company would we be required to comply with the independent registered public accounting firm attestation requirement on internal control over financial reporting. Further, for as long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirement.
Prior to the closing of this offering, we have not completed an assessment, nor have our auditors tested our systems, of our internal controls. We expect to assess the internal controls of our target business or businesses prior to the completion of our initial business combination and, if necessary, to implement and test additional controls as we may determine are necessary in order to state that we maintain an effective system of internal controls. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding the adequacy of internal controls. Many small and mid-sized target businesses we may consider for our initial business combination may have internal controls that need improvement in areas such as:
•
staffing for financial, accounting and external reporting areas, including segregation of duties;
•
reconciliation of accounts;
•
proper recording of expenses and liabilities in the period to which they relate;
•
evidence of internal review and approval of accounting transactions;
•
documentation of processes, assumptions and conclusions underlying significant estimates; and
•
documentation of accounting policies and procedures.
Because it will take time, management involvement and perhaps outside resources to determine what internal control improvements are necessary for us to meet regulatory requirements and market expectations for our operation of a target business, we may incur significant expenses in meeting our public reporting responsibilities, particularly in the areas of designing, enhancing, or remediating internal and disclosure controls. Doing so effectively may also take longer than we expect, thus increasing our exposure to financial fraud or erroneous financing reporting.
Once our management’s report on internal controls is complete, we will retain our independent auditors to audit and render an opinion on such report when required by Section 404 of the Sarbanes-Oxley Act. The independent auditors may identify additional issues concerning a target business’s internal controls while performing their audit of internal control over financial reporting.
Quantitative and Qualitative Disclosures about Market Risk
The net proceeds of this offering and the sale of the private placement warrants held in the trust account will be invested in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.
Off-balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results
As of August 21, 2020, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations. No unaudited quarterly operating data is included in this prospectus as we have not conducted any operations to date.
JOBS Act
The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised
accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the principal executive officer’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.
PROPOSED BUSINESS
General
We are a newly incorporated blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities, which we refer to as our initial business combination. We have not selected any potential business combination target and we have not, nor has anyone on our behalf, had any substantive discussions, directly or indirectly, with any potential business combination target.
We will seek to capitalize on the significant experience and vast network of our Team to complete our initial business combination. Although we may pursue our initial business combination in any business, industry or geographic location, we currently intend to focus on opportunities that capitalize on the expertise and ability of our Team, particularly our executive officers, to identify, acquire and operate a business in the broadly-defined sustainability industry. This industry includes, but is not limited to, the Sustainability industry in the United States and other developed countries. We believe our Team’s collective background and the favorable macroeconomic and social trends disrupting the Sustainability industry will provide an opportunity to execute a potentially transformational business combination.
We believe that there are significant attractive investment opportunities focused on improving the planet that are centered around a core sustainability theme. Growth in the Sustainability industry is driven by a series of macroeconomic and social trends. Macroeconomic trends contributing to growth in the Sustainability industry include urbanization, population growth, increased government spending and increased regulatory requirements at the federal, state and local level. In addition, various social trends, such as the increased focus on ESG practices and business models as well as ESG increasingly becoming a core mandate for fund managers, are leading to an increased global focus on sustainability. As a result, we believe the Sustainability industry has the potential to undergo profound changes similar to other industries in the past, such as the transportation industry with airline deregulation in the 1970s and telecom industry following the emergence of wireless technology in the 1990s.
We believe that we are well-positioned to identify attractive businesses in the Sustainability industry that would benefit from access to the public markets and the diverse skill set of our management team. We intend to focus on evaluating established companies with leading competitive positions, experienced management teams, attractive financial profiles and robust long-term potential for growth and profitability. We believe many businesses in the Sustainability industry could benefit from access to the public markets but have been unable to do so due to a number of factors, including the time it takes to conduct a traditional initial public offering, market volatility and pricing uncertainty. Our objective is to consummate our initial business combination with such a business and enhance stakeholder value by identifying and recruiting management, pursuing additional acquisitions, implementing operational improvements and expanding its product offerings and geographic footprint. We intend to utilize our Team’s experience, reputation and contacts across the industry to achieve this objective.
Our Team
Christopher Sorrells serves as our Chief Executive Officer and as a member of our board of directors. Mr. Sorrells has been an investor, operator, advisor and board member in the Sustainability industry for over 20 years. Mr. Sorrells currently serves as Lead Director and Chairman of the Compensation Committee for Renewable Energy Group, Inc. (Nasdaq: REGI), having previously served as Vice Chairman of its board. Previously, Mr. Sorrells served as a Managing Director and then as an Operating Partner of NGP ETP, an affiliate of NGP, a leading energy private equity fund with $20 billion of assets under management, which he helped grow into one of the most successful Sustainability-focused private equity funds. Mr. Sorrells and/or his former firms including NGP ETP have invested in a broad range of companies across the Sustainability industry, including Renewable Energy Group, Inc. (Nasdaq: REGI), Power-One, Inc. (formerly Nasdaq: PWER), Caminus Corporation (formerly Nasdaq: CAMZ), Waste Resource Management, Inc., TPI Composites, Inc. (Nasdaq: TPIC) and others. In addition to leading investments, Mr. Sorrells has held a number of board positions for
numerous public and private firms, including groSolar (which was later sold to EDF Renewables Inc.), GSE Systems, Inc. (Nasdaq: GVP) and Living Earth (which was later sold to Bain Capital Double Impact). As an operator, Mr. Sorrells has held a variety of senior executive leadership roles at Sustainability-focused companies including serving as Chief Operating Officer and Director of GSE Systems, Inc. Mr. Sorrells started his career in the energy, power and Sustainability industries as an investment banker at Salomon Smith Barney in 1996 and later at Banc of America Securities LLC where he created one of the first Sustainability-focused investment banking teams in 2000. Mr. Sorrells received his Master of Accounting from University of Southern California, an M.B.A. from The College of William and Mary and a B.A. from Washington and Lee University.
William Quinn serves as the Chairman of our Board of Directors. Mr. Quinn has over 25 years of private equity investment experience and has been involved in transactions totaling in the multi-billion dollars in aggregate value. Currently, Mr. Quinn is the Managing Partner of Pearl, an investment firm with $1.2 billion of committed capital under management that he founded in 2015. Prior to founding Pearl, Mr. Quinn served as a Co-Managing Partner of Natural Gas Partners. During his time at NGP, the firm raised funds totaling over $10 billion in cumulative committed capital, made multiple investments in the upstream, midstream and oilfield service and created a dedicated sustainable technology investment platform, NGP Energy Technology Partners. Mr. Quinn was a key contributor to the formation of NGP ETP in 2005 and served on its investment committee until 2013, during which time he oversaw their investments in the Sustainability, oil and gas, power, environmental, energy efficiency and clean energy subsectors, including Renewable Energy Group, Inc. (Nasdaq: REGI) and TPI Composites, Inc. (Nasdaq: TPIC), a global leader in wind blade manufacturing. Prior to joining NGP, Mr. Quinn worked at Rainwater, Inc. and Hicks, Muse, Tate and Furst, Inc. and worked as an analyst in the investment banking divisions of Bear Stearns & Co. and BT Securities Corporation. Mr. Quinn has served on the board of directors of numerous public and private companies, including Resolute Energy Corporation (NYSE: REN), which was taken public via Hicks Acquisition Company I in 2009 and subsequently sold to Cimarex Energy Co. (NYSE: XEC) in early 2019, and Eagle Rock Energy Partners, L.P. (Nasdaq: EROC). In addition to his investing activities, Mr. Quinn serves on the Board of Overseers of the Wharton School of the University of Pennsylvania and serves as a guest lecturer on private equity investing at Stanford University’s Graduate School of Business and the Wharton School of the University of Pennsylvania. Mr. Quinn received a B.S.E. in Finance from the Wharton School of the University of Pennsylvania, and an M.B.A. from the Stanford University Graduate School of Business.
Jeffrey Schramm serves as our Chief Financial Officer. Mr. Schramm has over 20 years of leadership, finance and operations experience in advanced materials and specialty chemical organizations with a deep understanding of the Sustainability industry having worked with some of the leading venture capital and private equity funds such as Kleiner Perkins, Index Ventures and NGP Energy Technology Partners. Previously, Mr. Schramm served as Chief Financial Officer at Lehigh from 2009 until 2019 where he was responsible for raising both debt and equity, as well as financial and administrative functions. Mr. Schramm was instrumental in Lehigh’s sale to a publicly traded company and largest tire manufacturer in Europe, Michelin, as the key part of its sustainability initiative. Prior to that, Mr. Schramm served as Vice President of Finance for Euramax International, Inc. (now OmniMax International, Inc.) in the Exterior Products & Fabral (fabrication) divisions from 2007 until 2009 where he managed a large multilocation team supporting revenues close to $1 billion annually. From 2000 to 2007, Mr. Schramm was with Kemira Chemicals, Inc. (formerly Vulcan Performance Chemicals) as head of Financial Planning & Analysis and North American CFO over the Pulp & Paper and Water Treatment specialty chemical businesses. During his time at Kemira Chemicals, Inc., he was a key member of the acquisition team acquiring the Pulp & Paper chemicals business from Lanxess (LXS.DE) and the Pulp & Paper business from FinnChem USA. In 1993 to 2000, Mr. Schramm began his career at Milliken & Company in various roles starting in Accounting, Controllership and later served as Financial Planning & Analysis Manager in Procurement. Mr. Schramm earned a B.S. in Corporate Finance and Investment Management from the University of Alabama, and an M.B.A from LaGrange College.
Robert Kaplan serves as our Vice President of Business Development. Mr. Kaplan has over 20 years of investment banking experience in the Sustainability industry. Mr. Kaplan has been involved in over 60 transactions totaling approximately $6 billion in transaction value. Mr. Kaplan was most recently Managing Director of Clean Technologies / Renewables at Stifel. In this role, Mr. Kaplan was responsible
for the firm’s capital markets and advisory services in various sustainability subsectors, including, clean energy, biofuels, energy storage, energy efficiency, mobility and environmental technologies. He joined Stifel in 2010 in connection with Stifel’s acquisition of TWP in 2010. Mr. Kaplan joined TWP in 2007 as a Vice President in the Technology investment banking group with a focus on sustainable technologies. Prior to joining TWP, Mr. Kaplan started his investment banking career at First Albany where he was a founding member of one of the first Sustainability focused banking franchise on Wall Street. During his tenure at First Albany, he completed many of the industry’s first public offerings in various sustainability subsectors, such as solar, alternative fuels, mobility, fuel cells and the smart grid. Mr. Kaplan serves on the board of directors of TWO NIL, LLC. Mr. Kaplan received a B.S. in Finance from Lehigh University and an M.B.A. from the NYU Stern School of Business.
Debora Frodl will serve as a board member upon the closing of this offering. Ms. Frodl has over 30 years of international business experience with General Electric Company. From 2012 to 2017, Ms. Frodl served as the Global Executive Director of Ecomagination. Ms. Frodl repositioned this sustainable technology strategy into one of multi-faceted innovation and expansive global growth. During Ms. Frodl’s tenure from 2012 to 2017, GE Ecomagination’s revenues exceeded $125 billion. From 2010 to 2012, Ms. Frodl served as GE’s Chief Strategy Officer and Global Alternative Fuels Leader where she pioneered the business strategy to decarbonize the commercial fleet industry through alternative fuel vehicles and infrastructure technologies. From 2005 to 2010, Ms. Frodl served as Chief Commercial Officer of GE Capital Fleet Services, from 2004 to 2005, as Chief Marketing Officer of GE Capital Commercial Equipment Finance and from 2002 to 2004, as Chief Executive Officer of GE Capital Dealer Finance. From 1999 to 2004, Ms. Frodl served as Chief Executive Officer of GE Capital Public Finance. Currently Ms. Frodl serves on the board of directors for Renewable Energy Group, Inc. and ITC Holdings Corp. and Chair of the board for XL Hybrids, a leader in smart vehicle electrification for commercial fleets. Ms. Frodl has been recognized by Green Building & Design as 2017 “Woman in Sustainability Leadership,” Women’s Council on Energy and the Environment as 2014 “Woman of the Year,” Connected World Magazine as 2013 “Top Women in M2M.” She holds an M.B.A. from the University of St. Thomas and BSBA from Minnesota State University.
Richard Thompson will serve as a board member upon the closing of this offering. Mr. Thompson has over 35 years of international business experience in renewable energy, power electronics and semiconductors, including several billion-dollar public exits in the Sustainability industry. Currently, Mr. Thompson is a strategic adviser to Sumeru Equity Partners, a technology-focused private equity firm. From 2014 to 2016, he was Executive Chairman of AVI-SPL, an approximately $580 million privately held, global leader in video communications. From 2008 to October 2013, Mr. Thompson was President, Chief Executive Officer and a Director of Power-One, Inc. (formerly Nasdaq: PWER), a leading provider of renewable energy and power conversion solutions. During his tenure, he successfully led the company through restructuring to become one of the largest renewable energy inverter suppliers worldwide, generating over $1 billion in sales in 2012, along with its sale to ABB (NYSE: ABB) for over $1 billion in equity value. Prior to joining Power-One, Inc., Mr. Thompson was Chief Financial Officer of American Power Conversion Corporation (Nasdaq: APCC) from 2005 to 2007, which was acquired in March 2007 by a French competitor, Schneider Electric SA (Paris: SU.PA), in an auction for approximately $6 billion in enterprise value. From 1997 to 2005, Mr. Thompson was Chief Financial Officer of Artesyn Technologies (Nasdaq: ATSN) and was instrumental in creating one of the leading power component companies in the industry which was later sold to Emerson (NYSE: EMR) for $500 million. In addition to his role at Artesyn, he was also General Manager of Spider Software and led the company’s merger with Zytec Inc. that created a robust power component and computer board business.
Pat Wood III will serve as a board member upon the closing of this offering. Mr. Wood has over 25 years of experience in the development, financing, regulation, and the legal and policy issues of energy infrastructure. Currently, Mr. Wood serves as CEO of the Hunt Energy Network, a distributed energy platform company, since February 2019. Known for his role in setting up competitive energy markets in Texas and across the country, Mr. Wood served as Chairman of both the Public Utility Commission of Texas from 1995 to 2001 and the Federal Energy Regulatory Commission from 2001 to 2005. Since leaving public service, he has focused on developing energy infrastructure projects and companies. He currently serves as a director of SunPower (Nasdaq: SPWR) and of Quanta Services,
Inc. (NYSE: PWR), including his recent appointment to Luma Energy, overseeing the Quanta-ATCO joint venture to operate the Puerto Rico utility system. Mr. Wood served as board chairman of independent power producer Dynegy from its emergence from bankruptcy in 2012 through its merger with Vistra Energy in 2018 for $1.7 billion in an all stock deal, creating a $10 billion publicly traded equity valued company upon closing. He was a strategic advisor to Natural Gas Partners from 2005 to 2014, when he became an independent director of Memorial Resources Development (Nasdaq: MRD) upon its IPO in 2014. MRD was subsequently sold to Range Resources in 2016 for $4.2 billion in enterprise value. Mr. Wood was also a past director of TPI Composites, Inc. (Nasdaq: TPIC) and has prior affiliations with InfraREIT (NYSE: HIFR), Airtricity, First Wind, Texas Genco, The Texas A&M Smart Grid Council, the American Council on Renewable Energy, and remains a member of the National Petroleum Council.
We will be supported by Pearl, a Dallas, Texas-based investment firm with $1.2 billion of committed capital under management as of June 30, 2020. Pearl was founded by William Quinn in 2015 and focuses on partnering with best-in-class management teams to invest in the North American energy industry, typically targeting opportunities requiring $25 million to $100 million of equity capital. Over the course of their careers, the principals at Pearl have executed on billions of dollars of aggregate transaction value through direct investment, financing and acquisitions, with experience spanning venture to late stage buyout and across all parts of the business cycle.
We will further be supported by our team of advisors from leading global companies with experience in a wide range of subsectors and functional areas. This support is intended to provide us with access to their expertise and extensive industry networks from which we plan to source and evaluate targets as well as devise plans to optimize any business that we acquire.
Business Strategy
Our acquisition and value creation strategy is to identify and complete our initial business combination with a Sustainability-focused company that builds upon the vast industry experience and expertise of our Team.
We expect to develop our pipeline of opportunities for a potential business combination through our management team’s 175 cumulative years of experience, deep relationships and extensive network of corporate executives, board members, venture capital and private equity firms, family offices, investment bankers, lawyers, investors and other service providers to the Sustainability industry. We have an extensive history of launching successful investment platforms through proactive and highly selective sourcing of potential targets by analyzing the entire value chain to determine the best balance of risk and reward segment. Utilizing this approach, we have helped build large public and private platforms in the global sustainability and energy markets.
Our selection process will leverage our Team’s broad and deep relationship network, unique industry experiences and extensive deal-sourcing capabilities to access a broad spectrum of differentiated opportunities. We expect to develop this network through our Team’s broad experience, with demonstrated success in both investing in and operating businesses across a variety of industries and at numerous stages of these companies’ life cycles. We have developed a distinctive combination of capabilities, which includes:
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an established record of building industry-leading companies and strong ability to deliver shareholder value over an extended time period;
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experience using acquisitions to grow companies during periods of both economic growth and decline by using extensive deal-sourcing and differentiated transaction execution/structuring capabilities;
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experience deploying value creation strategies, including recruiting talented personnel, implementing system upgrades with the back-office systems, and delivering operating efficiency by implementing an analytical based approached to business metrics; and
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extensive capital markets experience across various business cycles, including financing businesses and assisting companies with transition to public ownership.
We intend to focus our efforts on opportunities where our Team’s strategic vision, operating expertise, deep relationships and capital markets experience can be catalysts to enhance the growth,
competitive position and financial upside in an initial business combination. We intend to identify and execute an initial business combination within the Sustainability industry in the United States or other developed countries, although we may pursue targets in any business, industry, sector, or geographical location. Our Team has an established history in identifying and capitalizing on key trends that have shaped the global sustainability and energy markets and has helped build leading platforms to scale within the marketplace.
Our Competitive Strengths
Our intent is to identify and complete our initial business combination with a company that complements the experience of our Team and can benefit from our unique combination of skills in investing, financing, advising and operating. Our Team has a substantial deal-making skillset developed throughout their collective careers and has created significant shareholder value across several high-profile transactions, including:
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As lead investor in 2006, Mr. Sorrells brought together a combination of strategic and financial partners to lead investment in Renewable Energy Group, Inc. (Nasdaq: REGI), one of the largest global biodiesel/renewable diesel companies. At the time, this investment was noted as one of the largest investments in biodiesel in North America and helped transform an emerging industry into a growing and vibrant sector. Renewable Energy Group, Inc.’s revenues have grown from approximately $85 million in 2008 to approximately $2.6 billion in 2019 via organic growth and an aggressive acquisition strategy. In addition, the stock price for Renewable Energy Group, Inc. has appreciated significantly since going public in January 2012.
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As an investor in 2002, Mr. Quinn, made an investment in Energy Transfer in connection with the creation of a new private company to acquire a $265 million package of midstream assets from Aquila, Inc. (now Black Hills Energy). Through a combination with Heritage Propane Partners, several major acquisitions and numerous organic growth projects, as well as an initial public offering in 2006, Energy Transfer grew from a small private company into one of the largest publicly traded midstream corporations.
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From 2008 to 2012, as Chief Executive Officer and director, Mr. Thompson successfully led Power-One, Inc. through restructuring, and helped the company increase its revenue from approximately $537.5 million in 2008 to approximately $1 billion in 2012 and become one of the largest renewable energy inverter suppliers worldwide. In July 2013, Mr. Thompson successfully completed the sale of Power-One, Inc. to ABB (NYSE: ABB) for over $1 billion in equity value. In 2007, as Chief Financial Officer of American Power Conversion Corporation (Nasdaq: APCC), Mr. Thompson helped negotiate the sale of the company to Schneider Electric SA (Paris: SU.PA) for approximately $6 billion in enterprise value.
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As former Global Executive Director of Ecomagination at General Electric Company, Ms. Frodl repositioned the company’s sustainable technology strategy into a multi-faceted platform for innovation and global growth. During Ms. Frodl’s tenure from 2012 to 2017, GE Ecomagination’s revenues exceeded $125 billion. In 2017, the Ecomagination portfolio was comprised of 74 Ecomagination qualified products and solutions, including onshore and offshore wind, gas engines, gas turbines, hybrid gas turbine, GEnx and LEAP engines, LEDs, Hydropower, solar, solar inverters, EV charging infrastructure, Tier 4 locomotives and battery storage.
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As one of the key architects of the nation’s competitive power markets, Mr. Wood has been on the forefront of the transformation of the power sector. His regulatory leadership at the Public Utility Commission of Texas and at the Federal Energy Regulatory Commission during the transition to a cleaner, more flexible power system created an attractive investment climate for innovative companies and technologies across the United States. As chairman of IPP Dynegy, Mr. Wood led the board of a small company emerging from bankruptcy in 2012 through four significant mergers (including two simultaneous ones with Energy Capital Partners and Duke Energy). Dynegy’s fifth merger, in 2018 with Vistra Energy (NYSE: VST), created the nation’s largest IPP with an equity value of $10 billion at the time of closing.
Among these transactions, we have helped pioneer business models/technologies and have deployed assets that have changed the way we produce or transport energy and power while contributing
to the significant growth in clean energy and power. We expect to draw upon this vast set of experiences with a goal of affecting a business combination and build a market-leading business.
With respect to the above, past performance of our Team is not a guarantee of either (i) success with respect to a business combination that may be consummated or (ii) the ability to successfully identify and execute a transaction. You should not rely on the historical record of our Team or their respective affiliates as indicative of future performance. See “Risk Factors—Past performance by our Team, including investments and transactions in which they have participated and businesses with which they have been associated, may not be indicative of future performance of an investment in us, and we may be unable to provide positive returns to shareholders.” For a list of our executive officers and entities for which a conflict of interest may or does exist between such officers and the company, please refer to “Management—Conflicts of Interest.”
Industry Opportunity
We believe our Team’s extensive and diversified experience in Sustainability will help us to effectively evaluate targets across the Sustainability industry. We believe Sustainability is attractive for a number of reasons:
Large Target Market. According to estimates from the International Renewable Energy Agency, between 2016 and 2050, global cumulative investments in renewables could total approximately $13 trillion, while cumulative investments in energy efficiency could total approximately $29 trillion. We believe this growth is driven by continued innovation that has reduced capital costs versus incumbent processes as well as a global acceleration in electrification. For instance, in the clean energy industry, the cost of large-scale and residential photovoltaic solar power has decreased 82% and between 47% to 80% (depending on the region), respectively, since 2010, according to the International Renewable Energy Agency. This cost reduction in large-scale photovoltaic installations makes it less expensive to build and operate a solar installation than a coal fired power plant in many parts of the world. In addition, according to industry sources, the trend towards electrification in mobility has pushed passenger electric vehicle sales from 450,000 cars in 2015 to 2.1 million in 2019 and is expected to account for 54 million cars, or approximately 58%, of new car sales by 2040.
Favorable Trends. The Sustainability industry is defined by significant growth in a set of dynamic and changing industries. We believe the significant growth in Sustainability is driven by a series of macroeconomic and social trends. Macroeconomic trends contributing to growth in the Sustainability industry include urbanization, population growth, increased government spending and increased regulatory requirements at the federal, state and local level. In addition, various social trends, such as the increased focus on ESG practices and business models as well as ESG increasingly becoming a core mandate for fund managers, are leading to an increased global focus on Sustainability, climate change and a reduced carbon footprint. We believe an ESG focus is becoming engrained in the fabric of socially conscious corporations, and that ESG standards are becoming an increasingly common benchmarking criteria for prospective employees.
Broad Universe of Targets. We intend to focus our investment effort across the broad Sustainability industry. We believe the anticipated growth in the industry and the related sectors will present a substantial number of actionable opportunities with the required scale that fit our acquisition criteria. According to industry source Pitchbook, there were over 14,600 companies operating in the Sustainability industry as of August 2020.
High Barriers to Entry. Success in Sustainability is driven by a myriad of global regulations, government spending and technological breakthroughs. We believe our Team’s experience in the Sustainability industry over the past 25 years provides a significant amount of proprietary domain expertise and know-how in evaluating investment opportunities in a difficult-to-navigate industry. Further, our Team has spent considerable time navigating the complex regulatory environment inherent in the Sustainability industry, and its familiarity with the nuances of the regulatory aspect of the industry provides a differentiated competitive advantage.
Investment Approach
Upon completion of this offering, our Team plans to commence an extensive outreach program to its network and industry relationships to articulate the parameters for our search for a target company and a potential business combination and begin the process of pursuing and reviewing potential opportunities. We intend to capitalize on the following competitive advantages in our pursuit of a target company:
Proactive and Proprietary Transaction Sourcing. We believe that our management team’s 175 cumulative years of deal experience, history of building leading platforms, proactive approach to sourcing transactions, and extensive network of relationships will provide the potential to access numerous investment opportunities. We believe our Team’s deep industry expertise across Sustainability industries and throughout the capital structure makes a business combination with us an attractive option for Sustainability companies seeking capital solutions.
Data Driven Analysis of Potential Opportunities. We believe that our Team has an established record of generating investment opportunities. Within targeted subsectors, we expect to employ an initial review of the entire value chain to determine the best risk / reward profiles of the subsector. In addition, we expect to analyze current trends, develop investment theses and create strategies for originating and evaluating investment opportunities. This research-oriented, data-intensive process would allow us to proactively identify trends, find opportunities and execute transactions ahead of potential competitors.
Execution and Structuring Capability. We believe that our Team’s transaction experience and reputation allow it to source and complete transactions requiring complex problem-solving skills and insight. Our Team has helped create several multi-billion dollar public and private companies that required these skills and deep industry insights. These types of transactions are typically complex and require creativity, industry knowledge and expertise, rigorous due diligence and extensive negotiation and documentation. Our Team has experience investing in many Sustainability-focused industries and has developed operational expertise at companies at varying stages of their life cycles. We plan to utilize this experience to help us generate investment opportunities with attractive risk / reward profiles based on their valuations, structural characteristics and relatively low levels of financial leverage.
Significant Value-Add Capability. We believe the industry expertise and broad network of relationships of our Team will allow it to add significant value and therefore be a key selling point to attract high caliber acquisition targets. We plan to market our Team to potential target companies in a number of capacities, including: (i) assisting in setting strategic direction and priorities; (ii) designing specific performance-improvement projects; (iii) helping to identify and recruit managers; (iv) advising on acquisition and financing transactions; (v) contributing market information; (vi) positioning the company products and services with customers and various stakeholders; and (vii) developing a targeted investor relations program. Furthermore, our Team is also experienced in navigating complex regulatory issues that impact many companies that are part of certain subsectors within the Sustainability industry. Our Team believes that its ability to identify and implement value creation initiatives has been an essential driver of past performance and will remain central to our acquisition strategy.
Broad and Extensive Experience in Both Public and Private Markets. Our Team has decades of combined operating, investing and financing experience across both public and private markets. We have created some of the leading Sustainability companies both in the public and private sector with significant revenue growth in target industries. We believe that this versatility of experience and complementary skills will help us to identify companies that could make successful public market candidates and prepare them to make the transition to robust publicly traded companies.
Business Combination Criteria
Consistent with our strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses and, in evaluating a prospective target business, we expect to conduct a thorough due diligence review that will encompass, among other things, meetings with incumbent management and employees, document reviews and inspection of facilities, as applicable, as well as a review of financial and other information that will be made available to us.
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Sustainability Focus. We intend to focus on sustainable businesses positioned to benefit from macroeconomic and social trends impacting the economy.
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Established Businesses and Recognized Market Leaders. We expect to target businesses that are market leaders in their respective subsectors within the Sustainability industry, and may be better positioned to endure economic downturns, changes in the industry landscape and evolving customer, supplier and competitor preferences.
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Benefit from Being a Public Company. We intend to acquire one or more businesses that will benefit from being publicly traded and can effectively utilize the broader access to capital and the public profile that are associated with being a publicly traded company.
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Experienced Management Team. We will seek to partner with an experienced target team that can benefit from the unique investment, advisory, operational experience, and contacts of our Team in the Sustainability industry.
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Attractive Financial Profile. We will seek to acquire a business that has strong recurring revenues, a margin profile with high steady-state margins or high incremental margins, and / or compelling long-term growth prospects.
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Leader in Technology Driven Transformation. We will seek to acquire a business or entity with a technological advantage that provides a high barrier to entry for new entrants, a defensible position in intellectual property and presents a low or manageable risk of technological obsolescence.
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Middle Market Businesses. We believe targeting businesses or entities in the middle market will provide the greatest number of opportunities for investment and will maximize the network, contacts and experience of our Team. It may also provide the optimal platform for further consolidation.
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Strong Free Cash Flow Generation or Near-Term Potential. We will seek to acquire a business or entity that already generates, or has the potential to generate, consistent and stable free cash flow.
We plan to utilize our Team’s extensive network of contacts, which provides access to differentiated deal flow and significant deal-sourcing capabilities, and use these criteria and guidelines to evaluate acquisition opportunities. However, we may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines.
These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that from time to time our management may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria, we will disclose that the target business does not meet the above criteria in our shareholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of proxy solicitation or tender offer materials that we would file with the SEC.
Our Acquisition Process
In evaluating a prospective target business, we expect to conduct an extensive due diligence review which may encompass, as applicable and among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities and a review of financial and other information about the target and its industry. We will also utilize our management team’s operational and capital planning experience.
Each of our directors and officers will, directly or indirectly, own founder shares and/or private placement warrants following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, such officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.
Certain of our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity subject to his or her fiduciary duties. As a result, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, then, subject to such officer’s and director’s fiduciary duties under Cayman Islands law, he or she will need to honor such fiduciary or contractual obligations to present such business combination opportunity to such entity, before we can pursue such opportunity. If these other entities decide to pursue any such opportunity, we may be precluded from pursuing the same. However, we do not expect these duties to materially affect our ability to complete our initial business combination. Our amended and restated memorandum and articles of association provide that we renounce our interest in any business combination opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is an opportunity that we are able to complete on a reasonable basis.
Initial Business Combination
We will initially have up to 18 months from the closing of this offering to consummate an initial business combination. However, if we anticipate that we may not be able to consummate our initial business combination within 18 months, we may, by resolution of our board of directors if requested by our sponsor, extend the initial period of time to consummate an initial business combination one time, by an additional 6 months, subject to the sponsor, its affiliates or permitted designees purchasing additional private placement warrants as set out below. Our shareholders will not be entitled to vote or redeem their public shares in connection with any such extension. Pursuant to the terms of our amended and restated memorandum and articles of association, in order to extend the initial period of time to consummate an initial business combination for such six-month period, our sponsor, its affiliates or permitted designees, upon no less than five days’ advance notice to us prior to expiration of the initial 18-month deadline, must purchase an additional 2,000,000 (or up to 2,300,000 if the underwriters’ over-allotment option is exercised in full) private placement warrants at $1.00 per warrant and deposit the $2,000,000 (or up to $2,300,000 if the underwriters’ over-allotment option is exercised in full) in proceeds into the trust account on or prior to the date of the expiration of the initial 18-month deadline. In the event that we receive such notice from our sponsor, its affiliates or permitted designees five days prior to the initial 18-month deadline of a request for us to effect an extension, we intend to issue a press release announcing such extension at least three days prior to the initial 18-month deadline. In addition, we intend to issue a press release the day after the initial 18-month deadline announcing whether or not the funds had been timely deposited. Our sponsor, its affiliates or permitted designees are not obligated to purchase additional private placement warrants to extend the time for us to complete our initial business combination.
If we have not consummated an initial business combination within such applicable time period, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest and other income earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
So long as our securities are then listed on the Nasdaq, our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding any deferred underwriting commissions and taxes payable on the income earned on the trust account) at the time of the agreement to enter into our initial business combination. We refer to this as the 80% of net assets test. If our
board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. While we consider it unlikely that our board will not be able to make an independent determination of the fair market value of a target business or businesses, it may be unable to do so if the board is less familiar or experienced with the target company’s business, there is a significant amount of uncertainty as to the value of the company’s assets or prospects, including if such company is at an early stage of development, operations or growth, or if the anticipated transaction involves a complex financial analysis or other specialized skills and the board determines that outside expertise would be helpful or necessary in conducting such analysis. Since any opinion, if obtained, would merely state that the fair market value of the target business meets the 80% of net assets threshold, unless such opinion includes material information regarding the valuation of a target business or the consideration to be provided, it is not anticipated that copies of such opinion would be distributed to our shareholders. However, if required under applicable law, any proxy statement that we deliver to shareholders and file with the SEC in connection with a proposed transaction will include such opinion. If our securities are not then listed on the Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% of net assets test.
We anticipate structuring our initial business combination so that the post-business combination company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-business combination company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such 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. Even if the post-business combination company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-business combination company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses. In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor.
To the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.
Other Considerations
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business
combination with a company that is affiliated with our sponsor or any of our officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that such initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
We currently do not have any specific business combination under consideration. Our officers and directors have neither individually selected nor considered a target business nor have they had any substantive discussions regarding possible target businesses among themselves or with our underwriters or other advisors. Our management team is regularly made aware of potential business opportunities, one or more of which we may desire to pursue for a business combination, but we have not (nor has anyone on our behalf) contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to a business combination transaction with our company. Additionally, we have not, nor has anyone on our behalf, taken any substantive measure, directly or indirectly, to identify or locate any suitable acquisition candidate for us, nor have we engaged or retained any agent or other representative to identify or locate any such acquisition candidate.
In addition, certain of our officers and directors presently have, and any of them in the future may have additional, fiduciary and contractual duties to other entities. As a result, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, then, subject to their fiduciary duties under Cayman Islands law, he or she will need to honor such fiduciary or contractual obligations to present such business combination opportunity to such entity, before we can pursue such opportunity. If these other entities decide to pursue any such opportunity, we may be precluded from pursuing the same. However, we do not expect these duties to materially affect our ability to complete our initial business combination. Our amended and restated memorandum and articles of association provide that we renounce our interest in any business combination opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is an opportunity that we are able to complete on a reasonable basis.
Our sponsor, officers and directors may sponsor, form or participate in other blank check companies similar to ours during the period in which we are seeking an initial business combination. Any such companies may present additional conflicts of interest in pursuing an acquisition target, particularly in the event there is overlap among investment mandates. However, we do not currently expect that any such other blank check company would materially affect our ability to complete our initial business combination. In addition, our sponsor, officers and directors, are not required to commit any specified amount of time to our affairs, and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence.
Status as a Public Company
We believe our structure will make us an attractive business combination partner to target businesses. As an existing public company, we offer a target business an alternative to the traditional initial public offering through a merger or other business combination with us. In a business combination transaction with us, the owners of the target business may, for example, exchange their shares of stock in the target business for our Class A ordinary shares (or shares of a new holding company) or for a combination of our Class A ordinary shares and cash, allowing us to tailor the consideration to the specific needs of the sellers. We believe target businesses will find this method a more expeditious and cost effective method to becoming a public company than the typical initial public offering. The typical initial public offering process takes a significantly longer period of time than the typical business combination transaction process, and there are significant expenses in the initial public offering process, including underwriting discounts and commissions, that may not be present to the same extent in connection with a business combination with us.
Furthermore, once a proposed business combination is completed, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could delay or prevent the
offering from occurring or have negative valuation consequences. Once public, we believe the target business would then have greater access to capital, an additional means of providing management incentives consistent with shareholders’ interests and the ability to use its shares as currency for acquisitions. Being a public company can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.
While we believe that our structure and our management team’s backgrounds will make us an attractive business partner, some potential target businesses may view our status as a blank check company, such as our lack of an operating history and our ability to seek shareholder approval of any proposed initial business combination, negatively.
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved, If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion (as adjusted for inflation pursuant to SEC rules from time to time), or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that are held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of any fiscal year for so long as either (1) the market value of our ordinary shares held by non-affiliates does not equal or exceed $250.0 million as of the prior June 30th, or (2) our annual revenues did not equal or exceed $100.0 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates did not equal or exceed $700.0 million as of the prior June 30th. To the extent we take advantage of any reduced disclosure obligations, it may also make comparison or our financial statements with other public companies difficult or impossible.
Financial Position
With funds available for a business combination initially in the amount of $195,000,000, after payment of the estimated non-reimbursed expenses of this offering and $7,000,000 of deferred underwriting fees (or $224,250,000 after payment of the estimated expenses of this offering and $8,050,000 of deferred underwriting fees if the underwriters’ over-allotment option is exercised in full), we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit
its needs and desires. However, we have not taken any steps to secure third-party financing and there can be no assurance it will be available to us.
Effecting Our Initial Business Combination
General
We are not presently engaged in, and we will not engage in, any operations for an indefinite period of time following this offering. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the sale of the private placement warrants, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements or backstop agreements we may enter into following the consummation of this offering or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing or other sources. We may seek to complete our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If our initial business combination is paid for using equity or debt, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemptions of our Class A ordinary shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-business combination company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
We have not selected any potential business combination target and we have not, nor has anyone on our behalf, had any substantive discussions, directly or indirectly, with any potential business combination target. Additionally, we have not engaged or retained any agent or other representative to identify or locate any suitable acquisition candidate, to conduct any research or take any measures, directly or indirectly, to locate or contact a target business, other than our officers and directors. Accordingly, there is no current basis for investors in this offering to evaluate the possible merits or risks of the target business with which we may ultimately complete our initial business combination. Although our management will assess the risks inherent in a particular target business with which we may combine, we cannot assure you that this assessment will result in our identifying all risks that a target business may encounter. Furthermore, some of those risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that those risks will adversely affect a target business.
We may need to obtain additional financing to complete our initial business combination, either because the transaction requires more cash than is available from the proceeds held in our trust account, or because we become obligated to redeem a significant number of our public shares upon completion of the business combination, in which case we may issue additional securities or incur debt in connection with such business combination. There are no prohibitions on our ability to issue securities or incur debt in connection with our initial business combination. Other than the potential availability of the backstop arrangement with our sponsor, we are not currently a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities, the incurrence of debt or otherwise.
Sources of Target Businesses
We anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment market participants, private equity groups, investment banking firms, consultants, accounting firms and large business enterprises. Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us through calls or mailings. These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since some of these sources will have read this prospectus and know what types of businesses we are targeting. Our officers and directors, as well as their affiliates, may also bring to our attention target business candidates that they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending
trade shows or conventions. In addition, we expect to receive a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a result of the business relationships of our officers and directors. While we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. We will engage a finder only to the extent our management determines that the use of a finder may bring opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our best interest to pursue. Payment of finder’s fees is customarily tied to completion of a transaction, in which case any such fee will be paid out of the funds held in the trust account. In no event, however, will our sponsor or any of our existing officers or directors, or their respective affiliates paid by us any finder’s fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the completion of our initial business combination (regardless of the type of transaction that it is). We have agreed to pay an affiliate of our sponsor a total of $10,000 per month for office space, secretarial and administrative support and to reimburse our sponsor for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination. Some of our officers and directors may enter into employment or consulting agreements with the post-business combination company following our initial business combination. The presence or absence of any such fees or arrangements will not be used as a criterion in our selection process of an acquisition candidate.
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor or any of our officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that such initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
Each of our officers and directors presently has, and any of them in the future may have, additional, fiduciary or contractual obligations to other entities, including entities that are affiliates of our sponsor, pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, subject to their fiduciary duties under Cayman Islands law. See “Management—Conflicts of Interest.”
Evaluation of a Target Business and Structuring of Our Initial Business Combination
In evaluating a prospective target business, we expect to conduct an extensive due diligence review which may encompass, as applicable and among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities and a review of financial and other information about the target and its industry. We will also utilize our management team’s operational and capital planning experience. If we determine to move forward with a particular target, we will proceed to structure and negotiate the terms of the business combination transaction.
The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of, and negotiation with, a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination. The company will not pay any consulting fees to members of our management team, or their respective affiliates, for services rendered to or in connection with our initial business combination. In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor.
Lack of Business Diversification
For an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. By completing our initial business combination with only a single entity, our lack of diversification may:
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subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination; and
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cause us to depend on the marketing and sale of a single product or limited number of products or services.
Limited Ability to Evaluate the Target’s Management Team
Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial business combination with that business, our assessment of the target business’s management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated with any certainty. The determination as to whether any of the members of our management team will remain with the combined company will be made at the time of our initial business combination. While it is possible that one or more of our directors will remain associated in some capacity with us following our initial business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial business combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations of the particular target business.
We cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination.
Following a business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Shareholders May Not Have the Ability to Approve Our Initial Business Combination
We may conduct redemptions without a shareholder vote pursuant to the tender offer rules of the SEC subject to the provisions of our amended and restated memorandum and articles of association. However, we will seek shareholder approval if it is required by applicable law or stock exchange listing requirement, or we may decide to seek shareholder approval for business or other reasons.
Under the Nasdaq’s listing rules, shareholder approval would typically be required for our initial business combination if, for example:
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We issue ordinary shares that will be equal to or in excess of 20% of the number of our ordinary shares then-outstanding (other than in a public offering for cash);
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Any of our directors, officers or substantial security holder (as defined by the Nasdaq rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or in the consideration to be paid in the transaction and the present or potential issuance of ordinary shares, or securities convertible into or exercisable for ordinary shares, could result in an increase in issued and outstanding ordinary shares or voting power of 5% or more; or
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The issuance or potential issuance of ordinary shares will result in our undergoing a change of control.
The decision as to whether we will seek shareholder approval of a proposed business combination in those instances in which shareholder approval is not required by law will be made by us, solely in our discretion, and will be based on business and reasons, which include a variety of factors, including, but not limited to:
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the timing of the transaction, including in the event we determine shareholder approval would require additional time and there is either not enough time to seek shareholder approval or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company;
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the expected cost of holding a shareholder vote;
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the risk that the shareholders would fail to approve the proposed business combination;
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other time and budget constraints of the company; and
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additional legal complexities of a proposed business combination that would be time-consuming and burdensome to present to shareholders.
Permitted Purchases and Other Transactions with Respect to Our Securities
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. Additionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), our sponsor, directors, executive officers, advisors or their affiliates may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase public shares or warrants in such transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act.
In the event that our sponsor, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights or submitted a proxy to vote against our initial business combination, such selling shareholders would be required to revoke their prior elections to redeem their shares and any proxy to vote against our initial business combination. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will be required to comply with such rules.
The purpose of any such transaction could be to (i) vote in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination, (ii) reduce the number of public warrants outstanding or vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination or (iii) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public “float” of our Class A ordinary shares or public warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Our sponsor, officers, directors and/or their affiliates anticipate that they may identify the shareholders with whom our sponsor, officers, directors or their affiliates may pursue privately negotiated transactions by either the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders (in the case of Class A ordinary shares) following our mailing of tender offer or proxy materials in connection with our initial business combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter into a private transaction, they would identify and contact only potential selling or redeeming shareholders who have expressed their election to redeem
their shares for a pro rata share of the trust account or vote against our initial business combination, whether or not such shareholder has already submitted a proxy with respect to our initial business combination but only if such shares have not already been voted at the general meeting related to our initial business combination. Our sponsor, executive officers, directors, advisors or their affiliates will select which shareholders to purchase shares from based on the negotiated price and number of shares and any other factors that they may deem relevant, and will be restricted from purchasing shares if such purchases do not comply with Regulation M under the Exchange Act and the other federal securities laws.
Our sponsor, officers, directors and/or their affiliates will be restricted from making purchases of shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. We expect any such purchases would be reported by such person pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.
Redemption Rights for Public Shareholders upon Completion of Our Initial Business Combination
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest and other income earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of then-outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.10 per public share and such amount will be increased by $0.10 for the six-month extension of our time to consummate a business combination, as described herein. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commission we will pay to the underwriters. The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Further, subject to the provisions of our amended and restated memorandum and articles of association (as further described under “Proposed Business—Effecting Our Initial Business Combination—Redemption of Public Shares and Liquidation If No Initial Business Combination”), we will not proceed with redeeming our public shares, even if a public shareholder has properly elected to redeem its shares, if a business combination does not close. Our sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares.
Limitations on Redemptions
Our amended and restated memorandum and articles of association will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules). However, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all Class A ordinary shares submitted for redemption will be returned to the holders thereof.
Manner of Conducting Redemptions
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination either (i) in connection with a general meeting called to approve the business combination or (ii) by means of a tender offer. The decision as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under applicable law or stock exchange listing requirement or whether we were deemed to be a foreign private issuer (which would require a tender offer rather than seeking shareholder approval under SEC rules). Asset acquisitions and share purchases would not typically require shareholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our issued and outstanding ordinary shares or seek to amend our amended and restated memorandum and articles of association would typically require shareholder approval. We currently intend to conduct redemptions in connection with a shareholder vote unless shareholder approval is not required by applicable law or stock exchange listing requirement or we choose to conduct redemptions pursuant to the tender offer rules of the SEC for business or other reasons. So long as we obtain and maintain a listing for our securities on the Nasdaq, we will be required to comply with the Nasdaq rules.
If we held a shareholder vote to approve our initial business combination, we will, pursuant to our amended and restated memorandum and articles of association:
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conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and
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file proxy materials with the SEC.
In the event that we seek shareholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public shareholders with the redemption rights described above upon completion of the initial business combination.
If we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. In such case, our sponsor and each member of our management team have agreed to vote their founder shares and public shares in favor of our initial business combination. As a result, in addition to our initial purchaser’s founder shares, we would need 7,500,001, or 37.5% (assuming all issued and outstanding shares are voted and the over-allotment option is not exercised), of the 20,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved. In the event that each of our anchor investors purchases 1,980,000 units (either in this offering or after) and votes in favor of an initial business combination, we would not need any additional public shares sold in this offering to be voted in favor of our initial business combination to have our initial business combination approved. We intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any such meeting, if required, at which a vote shall be taken to approve our initial business combination. These quorum and voting thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate our initial business combination. Each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction or vote at all. In addition, our sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with (i) the completion of a business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares.
If we conduct redemptions pursuant to the tender offer rules of the SEC, we will, pursuant to our amended and restated memorandum and articles of association:
•
conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and
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file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we and our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase Class A ordinary shares in the open market, in order to comply with Rule 14e-5 under the Exchange Act.
In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public shareholders not tendering more than the number of public shares we are permitted to redeem. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination.
Limitation on Redemption upon Completion of Our Initial Business Combination If We Seek Shareholder Approval
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in this offering, which we refer to as “Excess Shares,” without our prior consent. We believe this restriction will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public shareholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights if such holder’s shares are not purchased by us, our sponsor or our management at a premium to the then-current market price or on other undesirable terms. By limiting our shareholders’ ability to redeem no more than 15% of the shares sold in this offering without our prior consent, we believe we will limit the ability of a small group of shareholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash.
However, we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
Tendering Share Certificates in Connection with a Tender Offer or Redemption Rights
Public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” will be required to either tender their certificates (if any) to our transfer agent prior to the date set forth in the proxy solicitation or tender offer materials, as applicable, mailed to such holders, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/ Withdrawal At Custodian) System, at the holder’s option, in each case up to two business days prior to the initially scheduled vote to approve the business combination. The proxy solicitation or tender offer materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate the applicable delivery requirements, which will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. Accordingly, a public shareholder would have from the time we send
out our tender offer materials until the close of the tender offer period, or up to two business days prior to the initially scheduled vote on the proposal to approve the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short period in which to exercise redemption rights, it is advisable for shareholders to use electronic delivery of their public shares.
There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker a fee of approximately $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.
The foregoing is different from the procedures used by many blank check companies. In order to perfect redemption rights in connection with their business combinations, many blank check companies would distribute proxy materials for the shareholders’ vote on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his or her redemption rights. After the business combination was approved, the company would contact such shareholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the shareholder then had an “option window” after the completion of the business combination during which he or she could monitor the price of the company’s shares in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open market before actually delivering his or her shares to the company for cancellation. As a result, the redemption rights, to which shareholders were aware they needed to commit before the general meeting, would become “option” rights surviving past the completion of the business combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming shareholder’s election to redeem is irrevocable once the business combination is approved.
Any request to redeem such shares, once made, may be withdrawn at any time up to two business days prior to the initially scheduled vote on the proposal to approve the business combination, unless otherwise agreed to by us. Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly after the completion of our initial business combination.
If our initial business combination is not approved or completed for any reason, then our public shareholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.
If our initial proposed business combination is not completed, we may continue to try to complete a business combination with a different target until 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period.
Redemption of Public Shares and Liquidation If No Initial Business Combination
Our amended and restated memorandum and articles of association will provide that we will have only 18 months from the closing of this offering, until the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period to consummate an initial business combination. If we have not consummated an initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest and other income earned on the funds held in the trust account and not previously
released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to consummate an initial business combination within 18 months from the closing of this offering and our sponsor does not exercise its option to extend the time period. Our amended and restated memorandum and articles of association will provide that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.
Our sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to consummate an initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame).
Our sponsor, executive officers, directors and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, unless we provide our public shareholders with the opportunity to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest and other income earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules). If this optional redemption right is exercised with respect to an excessive number of public shares such that we cannot satisfy the net tangible asset requirement, we would not proceed with the amendment or the related redemption of our public shares at such time. This redemption right shall apply in the event of the approval of any such amendment, whether proposed by our sponsor, any executive officer, director or director nominee, or any other person.
We expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the $1,000,000 held outside the trust account plus up to $100,000 of funds from the trust account available to us to pay dissolution expenses, although we cannot assure you that there will be sufficient funds for such purpose.
If we were to expend all of the net proceeds of this offering and the sale of the private placement warrants, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption amount received by shareholders upon our dissolution would be $10.10. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public shareholders. We cannot assure you that the actual per-share redemption amount received by shareholders will not be less than $10.10. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.
Although we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including, but not limited, to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third-party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third-party that has not executed a waiver if management believes that such third-party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third-party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Cowen and Company, LLC and Wells Fargo Securities, LLC will not execute an agreement with us waiving such claims to the monies held in the trust account. In order to protect the amounts held in the trust account, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third-party for services rendered or products sold to us (other than our independent registered public accounting firm), or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i) $10.10 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.10 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our income tax obligations, provided that such liability will not apply to any claims by a third-party or prospective target business that executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third-party, our sponsor will not be responsible to the extent of any liability for such third-party claims. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.10 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.10 per public share due to reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay our income tax obligations, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less than $10.10 per public share.
We will seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies
held in the trust account. Our sponsor will also not be liable as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. We will have access to up to $1,000,000 following this offering and the sale of the private placement warrants with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, shareholders who received funds from our trust account could be liable for claims made by creditors, however such liability will not be greater than the amount of funds from our trust account received by any such shareholder. In the event that our offering expenses exceed our estimate of $1,000,000, we may fund such excess with funds from the funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $1,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.
If we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return $10.10 per public share to our public shareholders. Additionally, if we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our shareholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our public shareholders will be entitled to receive funds from the trust account only (i) in the event of the redemption of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, (ii) in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, or (iii) if they redeem their respective shares for cash upon the completion of the initial business combination. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the trust account upon the subsequent completion of an initial business combination or liquidation if we have not consummated an initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor's option or during any Extension Period, with respect to such Class A ordinary shares so redeemed. In no other circumstances will a shareholder have any right or interest of any kind to or in the trust account. In the event we seek shareholder approval in connection with our initial business combination, a shareholder’s voting in connection with the business combination alone will not result in a shareholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such shareholder must have also exercised its redemption rights described above. These provisions of our amended and restated memorandum and articles of association, like all provisions of our amended and restated memorandum and articles of association, may be amended with a shareholder vote.
Comparison of Redemption or Purchase Prices in Connection with Our Initial Business Combination and If We Fail to Complete Our Initial Business Combination.
The following table compares the redemptions and other permitted purchases of public shares that may take place in connection with the completion of our initial business combination and if we
have not consummated an initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period:
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Redemptions in
Connection
with Our Initial Business
Combination
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Other Permitted Purchases
of Public
Shares by Our Affiliates
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Redemptions if We Fail
to Complete an Initial
Business Combination
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Calculation of redemption price
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Redemptions at the time of our initial business combination may be made pursuant to a tender offer or in connection with a shareholder vote. The redemption price will be the same whether we conduct redemptions pursuant to a tender offer or in connection with a shareholder vote. In either case, our public shareholders may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination (which is initially anticipated to be $10.10 per public share and such amount will be increased by $0.10 for the six-month extension of our time to consummate a business combination, as described herein), including interest and other income earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitation that no redemptions will take place if all of the |
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If we seek shareholder approval of our initial business combination, our sponsor, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following completion of our initial business combination. There is no limit to the prices that our sponsor, directors, officers, advisors or their affiliates may pay in these transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject |
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If we have not consummated an initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor's option or during any Extension Period, we will redeem all public shares at a per-share price, payable in cash, equal to the aggregate amount, then on deposit in the trust account (which is initially anticipated to be $10.10 per public share and such amount will be increased by $0.10 for the six-month extension of our time to consummate a business combination, as described herein), including interest and other income earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding public shares. |
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Redemptions in
Connection
with Our Initial Business
Combination
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Other Permitted Purchases
of Public
Shares by Our Affiliates
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Redemptions if We Fail
to Complete an Initial
Business Combination
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redemptions would cause our net tangible assets to be less than $5,000,001 and any limitations (including, but not limited, to cash requirements) agreed to in connection with the negotiation of terms of a proposed business combination. |
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to such rules, the purchasers will be required to comply with such rules. |
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Impact to remaining shareholders
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The redemptions in connection with our initial business combination will reduce the book value per share for our remaining shareholders, who will bear the burden of the deferred underwriting commissions and income taxes payable. |
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If the permitted purchases described above are made, there would be no impact to our remaining shareholders because the purchase price would not be paid by us. |
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The redemption of our public shares if we fail to complete our initial business combination will reduce the book value per share for the shares held by holdco, who will be our only remaining shareholder after such redemptions. |
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Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419
The following table compares the terms of this offering to the terms of an offering by a blank check company subject to the provisions of Rule 419. This comparison assumes that the gross proceeds, underwriting commissions and underwriting expenses of our offering would be identical to those of an offering undertaken by a company subject to Rule 419, and that the underwriters will not exercise their over-allotment option. None of the provisions of Rule 419 apply to our offering.
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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Escrow of offering proceeds
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$202,000,000 of the net proceeds of this offering and the sale of the private placement warrants will be deposited into a U.S.-based trust account at J.P. Morgan Chase Bank N.A., (or at another U.S.-chartered commercial bank with consolidated assets of $100 billion or more) with Continental Stock Transfer & Trust Company acting as trustee. |
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$170,100,000 of the offering proceeds, would be required to be deposited into either an escrow account with an insured depositary institution or in a separate bank account established by a broker-dealer in which the broker- dealer acts as trustee for persons having the beneficial interests in the account. |
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Investment of net proceeds
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$202,000,000 of the net proceeds of this offering and the sale of the private placement warrants held in trust will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or |
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Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act or in securities that are direct obligations of, or obligations guaranteed as to |
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. |
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principal or interest by, the United States. |
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Receipt of interest on escrowed funds
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Interest income (if any) on proceeds from the trust account to be paid to shareholders is reduced by (i) any income taxes paid or payable and (ii) in the event of our liquidation for failure to complete our initial business combination within the allotted time, up to $100,000 of net interest that may be released to us should we have no or insufficient working capital to fund the costs and expenses of our dissolution and liquidation. |
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Interest income on funds in escrow account would be held for the sole benefit of investors, unless and only after the funds held in escrow were released to us in connection with our completion of a business combination. |
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Limitation on fair value or net assets of target business
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The Nasdaq rules require that our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding any deferred underwriting commissions and taxes payable on the income earned on the trust account) at the time of the agreement to enter into our initial business combination. If our securities are not then listed on the Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% of net assets test. |
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The fair value or net assets of a target business must represent at least 80% of the maximum offering proceeds. |
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Trading of securities issued
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The units are expected to begin trading on or promptly after the date of this prospectus. The Class A ordinary shares and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus unless Cowen and Company, LLC and Wells Fargo Securities, LLC inform us of their decision to allow earlier separate trading, subject to our |
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No trading of the units or the underlying Class A ordinary shares and warrants would be permitted until the completion of a business combination. During this period, the securities would be held in the escrow or trust account. |
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. We will file the Current Report on Form 8-K promptly after the closing of this offering. If the underwriters’ over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the over-allotment option.
The units will automatically separate into their component parts and will not be traded after completion of our initial business combination.
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Exercise of the warrants
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The warrants cannot be exercised until the later of 30 days after the completion of our initial business combination and twelve months from the closing of this offering. |
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The warrants could be exercised prior to the completion of a business combination, but securities received and cash paid in connection with the exercise would be deposited in the escrow or trust account. |
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Election to remain an investor
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We will provide our public shareholders with the opportunity to redeem their public shares for cash at a per share price equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business combination, including interest and other income earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares, upon the completion of our initial business combination, subject to the limitations described herein. We may not be required by applicable law or stock exchange listing |
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A prospectus containing information pertaining to the business combination required by the SEC would be sent to each investor. Each investor would be given the opportunity to notify the company in writing, within a period of no less than 20 business days and no more than 45 business days from the effective date of a post- effective amendment to the company’s registration statement, to decide if he or she elects to remain a shareholder of the company or require the return of his, her or its investment. If the company has not received the notification by the end of the 45th business day, funds and interest or dividends, if any, held in the trust or escrow account are automatically returned to the |
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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requirement to hold a shareholder vote. If we are not required by applicable law or stock exchange listing requirement and do not otherwise decide to hold a shareholder vote, we will, pursuant to our amended and restated memorandum and articles of association, conduct the redemptions pursuant to the tender offer rules of the SEC and file tender offer documents with the SEC which will contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, we hold a shareholder vote, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. Additionally, each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction or vote at all. Our amended and restated memorandum and articles of association will require that at least five days’ notice will be given of any such general meeting. |
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shareholder. Unless a sufficient number of investors elect to remain investors, all funds on deposit in the escrow account must be returned to all of the investors and none of the securities are issued. |
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Business combination deadline
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If we have not consummated an initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption |
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If an acquisition has not been completed within 18 months after the effective date of the company’s registration statement, funds held in the |
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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Date if extended at our sponsor’s option or during any Extension Period, we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest and other income earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. |
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trust or escrow account are returned to investors. |
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Release of funds
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Except for the withdrawal of interest income (if any) to pay our income taxes, if any, none of the funds held in trust will be released from the trust account until the earliest of:
(i) the completion of our initial business combination,
(ii) the redemption of our public shares if we have not consummated an initial business combination within 18 months from the closing of this offering,
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The proceeds held in the escrow account are not released until the earlier of the completion of a business combination or the failure to effect a business combination within the allotted time. |
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, subject to applicable law, and
(iii) the redemption of our public shares properly submitted in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor’s option or during any Extension Period, or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares.
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Competition
In identifying, evaluating and selecting a target business for our initial business combination, we may encounter intense competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, public companies and operating businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than us. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay cash in connection with our public shareholders who exercise their redemption rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business combination.
Indemnity
Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third-party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i) $10.10 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.10 per public share due to reductions in the value of the trust assets, in each case net of the interest
that may be withdrawn to pay our income tax obligations, provided that such liability will not apply to any claims by a third-party or prospective target business that executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third-party, our sponsor will not be responsible to the extent of any liability for such third-party claims. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our sponsor’s only assets are securities of our company.
Facilities
We currently maintain our executive offices at 2100 McKinney Ave, Suite 1675, Dallas, TX 75201. The cost for our use of this space is included in the $10,000 per month fee we will pay to an affiliate of our sponsor for office space, administrative and support services. We consider our current office space adequate for our current operations.
Employees
We currently have two executive officers. These individuals are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time they will devote in any time period will vary based on whether a target business has been selected for our initial business combination and the stage of the business combination process we are in. We do not intend to have any full time employees prior to the completion of our initial business combination.
Periodic Reporting and Financial Information
We will register our units, Class A ordinary shares and warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports will contain financial statements audited and reported on by our independent registered public accountants.
We will provide shareholders with audited financial statements of the prospective target business as part of the proxy solicitation or tender offer materials, as applicable, sent to shareholders. These financial statements may be required to be prepared in accordance with, or reconciled to, GAAP, or IFRS, depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame. We cannot assure you that any particular target business identified by us as a potential acquisition candidate will have financial statements prepared in accordance with the requirements outlined above, or that the potential target business will be able to prepare its financial statements in accordance with the requirements outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential acquisition candidates, we do not believe that this limitation will be material.
We will be required to evaluate our internal control procedures for the fiscal year ending December 31, 2021 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer and no longer qualify as an emerging growth company, will we not be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
Prior to the effectiveness of the registration statement of which this prospectus forms a part, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under
Section 12 of the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
We are a Cayman Islands exempted company. Exempted companies are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Law. As an exempted company, we have applied for and expect to receive, after the effectiveness of the registration statement of which this prospectus forms a part, a tax exemption undertaking from the Cayman Islands government that, in accordance with Section 6 of the Tax Concessions Law (2020 Revision) of the Cayman Islands, for a period of 30 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations will apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i) on or in respect of our shares, debentures or other obligations or (ii) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us.
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion (as adjusted for inflation pursuant to SEC rules from time to time), or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that are held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of any fiscal year for so long as either (1) the market value of our ordinary shares held by non-affiliates does not equal or exceed $250.0 million as of the prior June 30th, or (2) our annual revenues did not equal or exceed $100.0 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates did not equal or exceed $700.0 million as of the prior June 30th. To the extent we take advantage of any reduced disclosure obligations, it may also make comparison or our financial statements with other public companies difficult or impossible.
Legal Proceedings
There is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such.
MANAGEMENT
Officers, Directors and Director Nominees
Our officers, directors and director nominees are as follows:
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Name
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Age
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Position
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Christopher Sorrells
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52 |
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Chief Executive Officer and Director |
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Jeffrey Schramm
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50 |
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Chief Financial Officer |
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Robert Kaplan
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47 |
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Vice President of Business Development
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William Quinn
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49 |
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Chairman and Director |
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Debora Frodl
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55 |
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Director Nominee |
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Richard Thompson
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71 |
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Director Nominee |
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Patrick Wood, III
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58 |
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Director Nominee |
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Christopher Sorrells serves as our Chief Executive Officer and as a member of our board of directors. Mr. Sorrells has been an investor, operator, advisor and board member in the Sustainability industry for over 20 years. Mr. Sorrells currently serves as Lead Director and Chairman of the Compensation Committee for Renewable Energy Group, Inc. (Nasdaq: REGI), having previously served as Vice Chairman of its board. Previously, Mr. Sorrells served as a Managing Director and then as an Operating Partner of NGP ETP, an affiliate of NGP, a leading energy private equity fund with $20 billion of assets under management, which he helped grow into one of the most successful Sustainability-focused private equity funds. Mr. Sorrells and/or his former firms including NGP ETP have invested in a broad range of companies across the Sustainability industry, including Renewable Energy Group, Inc. (Nasdaq: REGI), Power-One, Inc. (formerly Nasdaq: PWER), Caminus Corporation (formerly Nasdaq: CAMZ), Waste Resource Management, Inc., TPI Composites, Inc. (Nasdaq: TPIC) and others. In addition to leading investments, Mr. Sorrells has held a number of board positions for numerous public and private firms, including groSolar (which was later sold to EDF Renewables Inc.), GSE Systems, Inc. (Nasdaq: GVP) and Living Earth (which was later sold to Bain Capital Double Impact). As an operator, Mr. Sorrells has held a variety of senior executive leadership roles at Sustainability-focused companies including serving as Chief Operating Officer and Director of GSE Systems, Inc. Mr. Sorrells started his career in the energy, power and Sustainability industries as an investment banker at Salomon Smith Barney in 1996 and later at Banc of America Securities LLC where he created one of the first Sustainability-focused investment banking teams in 2000. Mr. Sorrells received his Master of Accounting from University of Southern California, an M.B.A. from The College of William and Mary and a B.A. from Washington and Lee University. We believe Mr. Sorrells’s significant experience in the Sustainability industry in both private and public companies as well as in various related investment roles makes him well qualified to serve as a member of our board of directors.
William Quinn serves as the Chairman of our Board of Directors. Mr. Quinn has over 25 years of private equity investment experience and has been involved in transactions totaling in the multi-billion dollars in aggregate value. Currently, Mr. Quinn is the Managing Partner of Pearl, an investment firm with $1.2 billion of committed capital under management that he founded in 2015. Prior to founding Pearl, Mr. Quinn served as a Co-Managing Partner of Natural Gas Partners. During his time at NGP, the firm raised funds totaling over $10 billion in cumulative committed capital, made multiple investments in the upstream, midstream and oilfield service and created a dedicated sustainable technology investment platform, NGP Energy Technology Partners. Mr. Quinn was a key contributor to the formation of NGP ETP in 2005 and served on its investment committee until 2013, during which time he oversaw their investments in the Sustainability, oil and gas, power, environmental, energy efficiency and clean energy subsectors, including Renewable Energy Group, Inc. (Nasdaq: REGI) and TPI Composites, Inc. (Nasdaq: TPIC), a global leader in wind blade manufacturing. Prior to joining NGP, Mr. Quinn worked at Rainwater, Inc. and Hicks, Muse, Tate and Furst, Inc. and worked as an analyst in the investment banking divisions of Bear Stearns & Co. and BT Securities Corporation. Mr. Quinn has served on the board of directors of numerous public and private companies, including Resolute Energy Corporation (NYSE: REN), which was taken public via Hicks Acquisition Company I in 2009 and subsequently sold to Cimarex Energy Co. (NYSE: XEC) in early 2019, and Eagle Rock Energy Partners, L.P. (Nasdaq:
EROC). In addition to his investing activities, Mr. Quinn serves on the Board of Overseers of the Wharton School of the University of Pennsylvania and serves as a guest lecturer on private equity investing at Stanford University’s Graduate School of Business and the Wharton School of the University of Pennsylvania. Mr. Quinn received a B.S.E. in Finance from the Wharton School of the University of Pennsylvania, and an M.B.A. from the Stanford University Graduate School of Business. We believe Mr. Quinn’s significant experience in the Sustainability industry in both private and public companies as well as in various related investment roles makes him well qualified to serve as Chairman of our board of directors.
Jeffrey Schramm serves as our Chief Financial Officer. Mr. Schramm has over 20 years of leadership, finance and operations experience in advanced materials and specialty chemical organizations with a deep understanding of the Sustainability industry having worked with some of the leading venture capital and private equity funds such as Kleiner Perkins, Index Ventures and NGP Energy Technology Partners. Previously, Mr. Schramm served as Chief Financial Officer at Lehigh from 2009 until 2019 where he was responsible for raising both debt and equity, as well as financial and administrative functions. Mr. Schramm was instrumental in Lehigh’s sale to a publicly traded company and largest tire manufacturer in Europe, Michelin, as the key part of its sustainability initiative. Prior to that, Mr. Schramm served as Vice President of Finance for Euramax International, Inc. (now OmniMax International, Inc.) in the Exterior Products & Fabral (fabrication) divisions from 2007 until 2009 where he managed a large multilocation team supporting revenues close to $1 billion annually. From 2000 to 2007, Mr. Schramm was with Kemira Chemicals, Inc. (formerly Vulcan Performance Chemicals) as head of Financial Planning & Analysis and North American CFO over the Pulp & Paper and Water Treatment specialty chemical businesses. During his time at Kemira Chemicals, Inc., he was a key member of the acquisition team acquiring the Pulp & Paper chemicals business from Lanxess (LXS.DE) and the Pulp & Paper business from FinnChem USA. In 1993 to 2000, Mr. Schramm began his career at Milliken & Company in various roles starting in Accounting, Controllership and later served as Financial Planning & Analysis Manager in Procurement. Mr. Schramm earned a B.S. in Corporate Finance and Investment Management from the University of Alabama, and an M.B.A from LaGrange College.
Robert Kaplan serves as our Vice President of Business Development. Mr. Kaplan has over 20 years of investment banking experience in the Sustainability industry. Mr. Kaplan has been involved in over 60 transactions totaling approximately $6 billion in transaction value. Mr. Kaplan was most recently Managing Director of Clean Technologies / Renewables at Stifel. In this role, Mr. Kaplan was responsible for the firm’s capital markets and advisory services in various sustainability subsectors, including, clean energy, biofuels, energy storage, energy efficiency, mobility and environmental technologies. He joined Stifel in 2010 in connection with Stifel’s acquisition of TWP in 2010. Mr. Kaplan joined TWP in 2007 as a Vice President in the Technology investment banking group with a focus on sustainable technologies. Prior to joining TWP, Mr. Kaplan started his investment banking career at First Albany where he was a founding member of one of the first Sustainability focused banking franchise on Wall Street. During his tenure at First Albany, he completed many of the industry’s first public offerings in various sustainability subsectors, such as solar, alternative fuels, mobility, fuel cells and the smart grid. Mr. Kaplan serves on the board of directors of TWO NIL, LLC. Mr. Kaplan received a B.S. in Finance from Lehigh University and an M.B.A. from the NYU Stern School of Business.
Debora Frodl will serve as a board member upon the closing of this offering. Ms. Frodl has over 30 years of international business experience with General Electric Company. From 2012 to 2017, Ms. Frodl served as the Global Executive Director of Ecomagination. Ms. Frodl repositioned this sustainable technology strategy into one of multi-faceted innovation and expansive global growth. During Ms. Frodl’s tenure from 2012 to 2017, GE Ecomagination’s revenues exceeded $125 billion. From 2010 to 2012, Ms. Frodl served as GE’s Chief Strategy Officer and Global Alternative Fuels Leader where she pioneered the business strategy to decarbonize the commercial fleet industry through alternative fuel vehicles and infrastructure technologies. From 2005 to 2010, Ms. Frodl served as Chief Commercial Officer of GE Capital Fleet Services, from 2004 to 2005, as Chief Marketing Officer of GE Capital Commercial Equipment Finance and from 2002 to 2004, as Chief Executive Officer of GE Capital Dealer Finance. From 1999 to 2004, Ms. Frodl served as Chief Executive Officer of GE Capital Public Finance. Currently Ms. Frodl serves on the board of directors for Renewable Energy Group, Inc. and ITC Holdings Corp. and Chair of the board for XL Hybrids, a leader in smart vehicle electrification
for commercial fleets. Ms. Frodl has been recognized by Green Building & Design as 2017 “Woman in Sustainability Leadership,” Women’s Council on Energy and the Environment as 2014 “Woman of the Year,” Connected World Magazine as 2013 “Top Women in M2M.” She holds an M.B.A. from the University of St. Thomas and BSBA from Minnesota State University. We believe Ms. Frodl’s significant experience in the Sustainability industry in several public company roles makes her well qualified to serve as a member of our board of directors.
Richard Thompson will serve as a board member upon the closing of this offering. Mr. Thompson has over 35 years of international business experience in renewable energy, power electronics and semiconductors, including several billion-dollar public exits in the Sustainability industry. Currently, Mr. Thompson is a strategic adviser to Sumeru Equity Partners, a technology-focused private equity firm. From 2014 to 2016, he was Executive Chairman of AVI-SPL, an approximately $580 million privately held, global leader in video communications. From 2008 to October 2013, Mr. Thompson was President, Chief Executive Officer and a Director of Power-One, Inc. (formerly Nasdaq: PWER), a leading provider of renewable energy and power conversion solutions. During his tenure, he successfully led the company through restructuring to become one of the largest renewable energy inverter suppliers worldwide, generating over $1 billion in sales in 2012, along with its sale to ABB (NYSE: ABB) for over $1 billion in equity value. Prior to joining Power-One, Inc., Mr. Thompson was Chief Financial Officer of American Power Conversion Corporation (Nasdaq: APCC) from 2005 to 2007, which was acquired in March 2007 by a French competitor, Schneider Electric SA (Paris: SU.PA), in an auction for approximately $6 billion in enterprise value. From 1997 to 2005, Mr. Thompson was Chief Financial Officer of Artesyn Technologies (Nasdaq: ATSN) and was instrumental in creating one of the leading power component companies in the industry which was later sold to Emerson (NYSE: EMR) for $500 million. In addition to his role at Artesyn, he was also General Manager of Spider Software and led the company’s merger with Zytec Inc. that created a robust power component and computer board business. We believe Mr. Thompson’s significant experience in the Sustainability industry in both private and public companies makes him well qualified to serve as a member of our board of directors.
Patrick Wood, III will serve as a board member upon the closing of this offering. Mr. Wood has over 25 years of experience in the development, financing, regulation, and the legal and policy issues of energy infrastructure. Currently, Mr. Wood serves as CEO of the Hunt Energy Network, a distributed energy platform company, since February 2019. Known for his role in setting up competitive energy markets in Texas and across the country, Mr. Wood served as Chairman of both the Public Utility Commission of Texas from 1995 to 2001 and the Federal Energy Regulatory Commission from 2001 to 2005. Since leaving public service, he has focused on developing energy infrastructure projects and companies. He currently serves as a director of SunPower (Nasdaq: SPWR) and of Quanta Services, Inc. (NYSE: PWR), including his recent appointment to Luma Energy, overseeing the Quanta-ATCO joint venture to operate the Puerto Rico utility system. Mr. Wood served as board chairman of independent power producer Dynegy from its emergence from bankruptcy in 2012 through its merger with Vistra Energy in 2018 for $1.7 billion in an all stock deal, creating a $10 billion publicly traded equity valued company upon closing. He was a strategic advisor to Natural Gas Partners from 2005 to 2014, when he became an independent director of Memorial Resources Development (Nasdaq: MRD) upon its IPO in 2014. MRD was subsequently sold to Range Resources in 2016 for $4.2 billion in enterprise value. Mr. Wood was also a past director of TPI Composites, Inc. (Nasdaq: TPIC) and has prior affiliations with InfraREIT (NYSE: HIFR), Airtricity, First Wind, Texas Genco, The Texas A&M Smart Grid Council, the American Council on Renewable Energy, and remains a member of the National Petroleum Council. We believe Mr. Wood’s significant experience in the Sustainability industry in both corporate and government positions makes him well qualified to serve as a member of our board of directors.
Number and Terms of Office of Officers and Directors
Our board of directors is divided into three classes, with only one class of directors being appointed in each year, and with each class (except for those directors appointed prior to our first annual general meeting) serving a three-year term. In accordance with the Nasdaq corporate governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following our listing on the Nasdaq. The term of office of the first class of directors, consisting of Mr. Thompson and Mr. Wood, will expire at our first annual meeting of shareholders. The term of office of the second
class of directors, consisting of Ms. Frodl, will expire at our second annual meeting of shareholders. The term of office of the third class of directors, consisting of Mr. Sorrells and Mr. Quinn, will expire at our third annual meeting of shareholders.
Prior to the completion of an initial business combination, any vacancy on the board of directors may be filled by a nominee chosen by holders of a majority of our founder shares. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason.
Pursuant to an agreement to be entered into on or prior to the closing of this offering, our sponsor, upon and following consummation of an initial business combination, will be entitled to nominate three individuals for appointment to our board of directors, as long as the sponsor holds any securities covered by the registration and shareholder rights agreement.
Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our amended and restated memorandum and articles of association as it deems appropriate. Our amended and restated memorandum and articles of association will provide that our officers may consist of one or more chairman of the board, chief executive officer, president, chief financial officer, vice presidents, secretary, treasurer and such other offices as may be determined by the board of directors.
Director Independence
Nasdaq listing standards require that a majority of our board of directors be independent. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors has determined that Ms. Frodl, Mr. Thompson and Mr. Wood are “independent directors” as defined in the Nasdaq listing standards. Our independent directors will have regularly scheduled meetings at which only independent directors are present.
Executive Officer and Director Compensation
None of our executive officers or directors have received any cash compensation for services rendered to us. Commencing on the date that our securities are first listed on the Nasdaq through the earlier of consummation of our initial business combination and our liquidation, we will reimburse an affiliate of our sponsor for office space, secretarial and administrative services provided to us in the amount of $10,000 per month. In addition, our sponsor, executive officers and directors, or their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, executive officers or directors, or their affiliates. Any such payments prior to an initial business combination will be made using funds held outside the trust account. Other than quarterly audit committee review of such reimbursements, we do not expect to have any additional controls in place governing our reimbursement payments to our directors and executive officers for their out-of-pocket expenses incurred in connection with our activities on our behalf in connection with identifying and consummating an initial business combination. Other than these payments and reimbursements, no compensation of any kind, including finder’s and consulting fees, will be paid by the company to our sponsor, executive officers and directors, or their respective affiliates, prior to completion of our initial business combination. In September 2020, our sponsor transferred 40,000 Class B ordinary shares to each of our director nominees. These 120,000 shares will not be subject to forfeiture in the event the underwriters’ over-allotment option is not exercised.
After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting or management fees from the combined company. All of these fees will be fully disclosed to shareholders, to the extent then known, in the proxy solicitation materials or tender offer materials furnished to our shareholders in connection with a proposed business
combination. We have not established any limit on the amount of such fees that may be paid by the combined company to our directors or members of management. It is unlikely the amount of such compensation will be known at the time of the proposed business combination, because the directors of the post-combination business will be responsible for determining executive officer and director compensation. Any compensation to be paid to our executive officers will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our board of directors.
We do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation of our initial business combination, although it is possible that some or all of our executive officers and directors may negotiate employment or consulting arrangements to remain with us after our initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions with us may influence our management’s motivation in identifying or selecting a target business but we do not believe that the ability of our management to remain with us after the consummation of our initial business combination will be a determining factor in our decision to proceed with any potential business combination. We are not party to any agreements with our executive officers and directors that provide for benefits upon termination of employment.
Committees of the Board of Directors
Upon the effectiveness of the registration statement of which this prospectus forms a part, our board of directors will have three standing committees: an audit committee, a nominating committee and a compensation committee. Subject to phase-in rules and a limited exception, the rules of the Nasdaq and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors. Subject to phase-in rules and a limited exception, the rules of the Nasdaq require that the compensation committee and the nominating committee of a listed company be comprised solely of independent directors.
Audit Committee
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish an audit committee of the board of directors. Ms. Frodl, Mr. Thompson and Mr. Wood will serve as members of our audit committee. Our board of directors has determined that each of Ms. Frodl, Mr. Thompson and Mr. Wood are independent under the Nasdaq listing standards and applicable SEC rules. Mr. Thompson will serve as the Chairman of the audit committee. Under the Nasdaq listing standards and applicable SEC rules, all the directors on the audit committee must be independent. Each member of the audit committee is financially literate and our board of directors has determined that Mr. Thompson qualifies as an “audit committee financial expert” as defined in applicable SEC rules.
The audit committee is responsible for:
•
meeting with our independent registered public accounting firm regarding, among other issues, audits, and adequacy of our accounting and control systems;
•
monitoring the independence of the independent registered public accounting firm;
•
verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law;
•
inquiring and discussing with management our compliance with applicable laws and regulations;
•
pre-approving all audit services and permitted non-audit services to be performed by our independent registered public accounting firm, including the fees and terms of the services to be performed;
•
appointing or replacing the independent registered public accounting firm;
•
determining the compensation and oversight of the work of the independent registered public accounting firm (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work;
•
establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies;
•
monitoring compliance on a quarterly basis with the terms of this offering and, if any noncompliance is identified, immediately taking all action necessary to rectify such noncompliance or otherwise causing compliance with the terms of this offering; and
•
reviewing and approving all payments made to our existing shareholders, executive officers or directors and their respective affiliates. Any payments made to members of our audit committee will be reviewed and approved by our board of directors, with the interested director or directors abstaining from such review and approval.
Nominating Committee
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish a nominating committee of our board of directors. The members of our nominating committee will be Ms. Frodl, Mr. Thompson and Mr. Wood, and Ms. Frodl will serve as chairman of the nominating committee. Under the Nasdaq listing standards, we are required to have a nominating committee composed entirely of independent directors. Our board of directors has determined that each of Ms. Frodl, Mr. Thompson and Mr. Wood are independent.
The nominating committee is responsible for overseeing the selection of persons to be nominated to serve on our board of directors. The nominating committee considers persons identified by its members, management, shareholders, investment bankers and others.
Guidelines for Selecting Director Nominees
The guidelines for selecting nominees, which will be specified in a charter to be adopted by us, generally will provide that persons to be nominated:
•
should have demonstrated notable or significant achievements in business, education or public service;
•
should possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and
•
should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the shareholders.
The nominating committee will consider a number of qualifications relating to management and leadership experience, background and integrity and professionalism in evaluating a person’s candidacy for membership on the board of directors. The nominating committee may require certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members. The nominating committee does not distinguish among nominees recommended by shareholders and other persons.
Compensation Committee
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish a compensation committee of our board of directors. The members of our compensation committee will be Ms. Frodl, Mr. Thompson and Mr. Wood, and Mr. Wood will serve as chairman of the compensation committee.
Under the Nasdaq listing standards, we are required to have a compensation committee composed entirely of independent directors. Our board of directors has determined that each of Ms. Frodl, Mr. Thompson and Mr. Wood are independent. We will adopt a compensation committee charter, which will detail the principal functions of the compensation committee, including:
•
reviewing and approving on an annual basis the corporate goals and objectives relevant to our President’s, Chief Financial Officer’s and Chief Operating Officer’s, evaluating our President’s, Chief Financial Officer’s and Chief Operating Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our President, Chief Financial Officer and Chief Operating Officer based on such evaluation;
•
reviewing and approving the compensation of all of our other Section 16 executive officers;
•
reviewing our executive compensation policies and plans;
•
implementing and administering our incentive compensation equity-based remuneration plans;
•
assisting management in complying with our proxy statement and annual report disclosure requirements;
•
approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees;
•
producing a report on executive compensation to be included in our annual proxy statement; and
•
reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
The charter will also provide that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by the Nasdaq and the SEC.
Compensation Committee Interlocks and Insider Participation
None of our executive officers currently serves, and in the past year has not served, as a member of the compensation committee of any entity that has one or more executive officers serving on our board of directors.
Code of Ethics
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will have adopted a Code of Ethics applicable to our directors, officers and employees. A copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.
Conflicts of Interest
Under Cayman Islands law, directors and officers owe the following fiduciary duties:
•
duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole;
•
duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose;
•
directors should not improperly fetter the exercise of future discretion;
•
duty to exercise powers fairly as between different sections of shareholders;
•
duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests; and
•
duty to exercise independent judgment.
In addition to the above, directors also owe a duty of care which is not fiduciary in nature. This duty has been defined as a requirement to act as a reasonably diligent person having both the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and the general knowledge skill and experience of that director.
As set out above, directors have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of their position. However, in some instances what would otherwise be a breach of this duty can be forgiven and/or authorized in advance by the shareholders provided that there is full disclosure by the directors. This can be done by way of permission granted in the amended and restated memorandum and articles of association or alternatively by shareholder approval at general meetings.
Certain of our officers and directors presently have, and any of them in the future may have additional, fiduciary and contractual duties to other entities. As a result, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, then, subject to their fiduciary duties under Cayman Islands law, he or she will need to honor such fiduciary or contractual obligations to present such business combination opportunity to such entity, before we can pursue such opportunity. If these other entities decide to pursue any such opportunity, we may be precluded from pursuing the same. However, we do not expect these duties to materially affect our ability to complete our initial business combination. Our amended and restated memorandum and articles of association provide that we renounce our interest in any business combination opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is an opportunity that we are able to complete on a reasonable basis.
Below is a table summarizing the entities to which our executive officers and directors currently have fiduciary duties, contractual obligations or other material management relationships:
|
Individual
|
|
|
Entity
|
|
|
Entity’s Business
|
|
|
Affiliation
|
|
|
Christopher Sorrells
|
|
|
Renewable Energy Group, Inc. |
|
|
Energy |
|
|
Lead Director and Chairman of the Compensation Committee |
|
|
Jeffrey Schramm
|
|
|
Finstat LLC |
|
|
Consulting |
|
|
Founder |
|
|
Robert Kaplan
|
|
|
Two Nil, LLC |
|
|
Marketing |
|
|
Director |
|
| |
|
|
RK Management, Inc. |
|
|
Management /Consulting
|
|
|
Founder |
|
|
William Quinn
|
|
|
Pearl Energy Investment Management, LLC(1) |
|
|
Private Equity |
|
|
Managing Partner |
|
| |
|
|
Board of Overseers of the Wharton School of the University of Pennsylvania |
|
|
Education |
|
|
Director |
|
|
Debora Frodl
|
|
|
Renewable Energy Group, Inc. |
|
|
Energy |
|
|
Director |
|
| |
|
|
XL Hybrids |
|
|
Energy / Automotive |
|
|
Chairman |
|
| |
|
|
ITC Holdings Corp. |
|
|
Energy |
|
|
Director |
|
|
Richard Thompson
|
|
|
Sumeru Equity Partners |
|
|
Private Equity |
|
|
Strategic Advisor |
|
|
Patrick Wood, III
|
|
|
Hunt Energy Network
Wood3 Resources
SunPower Corporation
Quanta Services, Inc.
|
|
|
Energy
Energy
Energy
Energy
|
|
|
President
Principal
Director
Director
|
|
(1)
Includes certain of its funds and other affiliates.
Potential investors should also be aware of the following other potential conflicts of interest:
•
Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs.
•
Our sponsor subscribed for founder shares prior to the date of this prospectus and will purchase private placement warrants in a transaction that will close simultaneously with the closing of this offering.
•
Our sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor's option or during any Extension Period, or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares. Additionally, our sponsor has agreed to waive its rights to liquidating distributions from the trust account with respect to its founder shares if we fail to complete our initial business combination within the prescribed time frame. If we do not complete our initial business combination within the prescribed time frame, the private placement warrants will expire worthless. Except as described herein, our sponsor and our directors and executive officers have agreed, and certain of the anchor investors will agree, not to transfer, assign or sell any of their founder shares until the earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property. Except as described herein, the private placement warrants will not be transferable until 30 days following the completion of our initial business combination. Because each of our executive officers and director nominees will own ordinary shares or warrants directly or indirectly, they may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination.
•
Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors is included by a target business as a condition to any agreement with respect to our initial business combination. In addition, our sponsor, officers and directors may sponsor, form or participate in other blank check companies similar to ours during the period in which we are seeking an initial business combination. Any such companies may present additional conflicts of interest in pursuing an acquisition target, particularly in the event there is overlap among investment mandates.
We cannot assure you that any of the above mentioned conflicts will be resolved in our favor.
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor or any of our officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that such initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
Furthermore, in no event will our sponsor or any of our existing officers or directors, or their respective affiliates, be paid by us any finder’s fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the completion of our initial business combination. Further, commencing on the date our securities are first listed on the Nasdaq, we will also reimburse an
affiliate of our sponsor for office space, secretarial and administrative services provided to us in the amount of $10,000 per month.
If we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. In such case, our sponsor and each member of our management team have agreed to vote their founder shares and public shares in favor of our initial business combination.
Limitation on Liability and Indemnification of Officers and Directors
Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against willful default, willful neglect, civil fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association will provide for indemnification of our officers and directors to the maximum extent permitted by law, including for any liability incurred in their capacities as such, except through their own actual fraud, willful default or willful neglect. We will enter into agreements with our directors and officers to provide contractual indemnification in addition to the indemnification provided for in our amended and restated memorandum and articles of association. We expect to purchase a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.
Our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account, and have agreed to waive any right, title, interest or claim of any kind they may have in the future as a result of, or arising out of, any services provided to us and will not seek recourse against the trust account for any reason whatsoever (except to the extent they are entitled to funds from the trust account due to their ownership of public shares). Accordingly, any indemnification provided will only be able to be satisfied by us if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination.
Our indemnification obligations may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
We believe that these provisions, the insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.
PRINCIPAL SHAREHOLDERS
The following table sets forth information regarding the beneficial ownership of our ordinary shares as of the date of this prospectus, and as adjusted to reflect the sale of our Class A ordinary shares included in the units offered by this prospectus, and assuming no purchase of units in this offering, by:
•
each person known by us to be the beneficial owner of more than 5% of our issued and outstanding ordinary shares;
•
each of our executive officers, directors and director nominees that beneficially owns ordinary shares; and
•
all our executive officers and directors as a group.
Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all of our ordinary shares beneficially owned by them. The following table does not reflect record or beneficial ownership of the private placement warrants as these warrants are not exercisable within 60 days of the date of this prospectus.
On August 21, 2020, our sponsor paid $25,000, or approximately $0.003 per share, to cover certain expenses on our behalf in consideration of 7,187,500 Class B ordinary shares, par value $0.0001. In September 2020, our sponsor transferred 40,000 Class B ordinary shares to each of our director nominees. These 120,000 shares will not be subject to forfeiture in the event the underwriters’ over-allotment option is not exercised. On October 22, 2020, our sponsor effected a surrender of 1,437,500 founder shares to the company for no consideration, resulting in a decrease in the number of Class B ordinary shares outstanding from 7,187,500 to 5,750,000, such that the total number of founder shares would represent 20% of the total number of ordinary shares outstanding upon completion of this offering (of which 750,000 Class B ordinary shares are subject to forfeiture if the underwriters do not exercise their overallotment option). Our sponsor has agreed to transfer all of the founder shares held by it to holdco prior to the consummation of this offering. Prior to the initial investment in the company of $25,000 by the sponsor, the company had no assets, tangible or intangible. The per share price of the founder shares was determined by dividing the amount contributed to the company by the number of founder shares issued. The post-offering percentages in the following table assume that the underwriters do not exercise their over-allotment option, do not reflect the 142,187 founder shares or indirect beneficial interest in 142,187 founder shares that each of the anchor investors will agree to purchase from our sponsor and that there are 25,000,000 ordinary shares issued and outstanding after this offering.
|
Name and Address of Beneficial Owner(1)
|
|
|
Number of
Shares
Beneficially
Owned(2)
|
|
|
Approximate Percentage of
Issued and Outstanding
Ordinary Shares
|
|
| |
Before
Offering
|
|
|
After
Offering
|
|
|
SV Acquisition Sponsor Sub, LLC (holdco)
|
|
|
|
|
5,630,000(3)(4) |
|
|
|
|
|
97.9% |
|
|
|
|
|
19.5% |
|
|
|
Spring Valley Acquisition Sponsor, LLC (our sponsor)
|
|
|
|
|
5,630,000(3)(4) |
|
|
|
|
|
97.9% |
|
|
|
|
|
19.5% |
|
|
|
William Quinn
|
|
|
|
|
5,630,000(3)(4) |
|
|
|
|
|
97.9% |
|
|
|
|
|
19.5% |
|
|
|
Christopher Sorrells
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Jeffrey Schramm
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Robert Kaplan
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Debora Frodl
|
|
|
|
|
40,000 |
|
|
|
|
|
* |
|
|
|
|
|
* |
|
|
|
Richard Thompson
|
|
|
|
|
40,000 |
|
|
|
|
|
* |
|
|
|
|
|
* |
|
|
|
Patrick Wood, III
|
|
|
|
|
40,000 |
|
|
|
|
|
* |
|
|
|
|
|
* |
|
|
|
All officers, directors and director nominees as a group
(seven individuals)
|
|
|
|
|
5,750,000 |
|
|
|
|
|
100.0% |
|
|
|
|
|
20.0% |
|
|
*
Less than one percent.
(1)
Unless otherwise noted, the business address of each of our shareholders is 2100 McKinney Ave, Suite 1675, Dallas, TX 75201.
(2)
Interests shown consist solely of founder shares, classified as Class B ordinary shares. Such shares will automatically convert into Class A ordinary shares at the time of our initial business combination or earlier at the option of the holders thereof as described in the section entitled “Description of Securities.”
(3)
The shares reported above are held in the name of our sponsor and will, prior to the consummation of this offering, be held in the name of holdco, which is controlled by our sponsor. Our sponsor is controlled by Pearl Energy Investment II, L.P., which is controlled by Mr. Quinn.
(4)
Includes up to 750,000 founder shares that will be surrendered to us for no consideration by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised and reflects the surrender of 1,437,500 Class B ordinary shares on October 22, 2020.
Immediately after this offering, our sponsor will beneficially own approximately 19.5% of the then issued and outstanding ordinary shares (assuming they do not purchase any units in this offering) and will have the right to elect all of our directors prior to our initial business combination. Holders of our public shares will not have the right to elect any directors to our board of directors prior to our initial business combination. Because of this ownership block, our sponsor may be able to effectively influence the outcome of all other matters requiring approval by our shareholders, including amendments to our amended and restated memorandum and articles of association and approval of significant corporate transactions including our initial business combination. If we increase or decrease the size of this offering, we will effect a share capitalization or a share surrender or redemption or other appropriate mechanism, as applicable, with respect to our Class B ordinary shares immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares, on an as-converted basis, at 20% of our issued and outstanding ordinary shares upon the consummation of this offering.
Up to five anchor investors have expressed to us an interest to purchase up to 1,980,000 units each in this offering and we have agreed to direct the underwriters to sell to the anchor investor such number of units. Further, each of the anchor investors will enter into a separate agreement with our sponsor pursuant to which each such investor will agree to purchase 142,187 founder shares or membership interests in holdco representing an indirect beneficial interest in 142,187 founder shares, in each case for $494.56, or approximately $0.003 per share. Neither the membership interests in holdco nor the founder shares to be directly or indirectly owned by such investors will be subject to forfeiture without their consent. The founder shares to be owned directly by such investors will be subject to the additional restrictions agreed to by our sponsor in connection with our initial business combination. See “Description of Securities—Founder Shares" for a description of such restrictions. Furthermore, the anchor investors will be restricted from selling any units purchased in this offering until the earlier of (i) 30 days from the closing of this offering and (ii) the separation of the units into shares of Class A ordinary shares and warrants. The founder shares to be directly or indirectly owned by such investors will be otherwise identical to the founder shares beneficially owned by our sponsor. Our discussions with each anchor investor were separate and our arrangements with them are not contingent on each other. Further, to our knowledge, the anchor investors are not affiliated with each other and are not acting together with regards to our company.
Pursuant to certain subscription agreements with our sponsor, the anchor investors party thereto will not be granted any material additional stockholder or other rights, and will only be issued membership interests in holdco with no right to control holdco or vote or dispose of any founder shares (which will continue to be held by holdco until following our initial business combination). Further, the anchor investors are not required to: (i) other as described above, hold any units, Class A ordinary shares or warrants they may purchase in this offering or thereafter for any amount time, (ii) vote any Class A ordinary shares they may own at the applicable time in favor of our initial business combination or (iii) refrain from exercising their right to redeem their public shares at the time of our initial business combination.
There can be no assurance that the anchor investors will acquire any units in this offering, or as to the amount of such units the anchor investors will retain, if any, prior to or upon the consummation of
our initial business combination. In the event that the anchor investors purchase such units (either in this offering or after) and vote in favor of our initial business combination, a smaller portion of affirmative votes from other public shareholders would be required to approve our initial business combination.
Our sponsor has agreed (a) to vote any founder shares and public shares held by it in favor of any proposed business combination and (b) not to redeem any founder shares or public shares held by it in connection with a shareholder vote to approve a proposed initial business combination.
Our sponsor is deemed to be our “promoter” as such term is defined under the federal securities laws.
Transfers of Founder Shares and Private Placement Warrants
The founder shares, private placement warrants and any Class A ordinary shares issued upon conversion or exercise thereof are each subject to transfer restrictions pursuant to lock-up provisions in the agreement entered into by our sponsor and management team. Our sponsor and each member of our management team have agreed, and certain of the anchor investors will agree, not to transfer, assign or sell any of their founder shares until the earliest of (a) one year after the completion of our initial business combination and (b) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination or (y) the date on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our public shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property. The private placement warrants and the respective Class A ordinary shares underlying such warrants are not transferable or salable until 30 days after the completion of our initial business combination. The foregoing restrictions are not applicable to transfers (a) to our officers or directors, any affiliates or family members of any of our officers or directors, any members or partners of our sponsor or their affiliates, any affiliates of our sponsor, or any employees of such affiliates; (b) in the case of an individual, by gift to a member of one of the individual’s immediate family or to a trust, the beneficiary of which is a member of the individual’s immediate family, an affiliate of such person or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with any forward purchase agreement or similar arrangement or in connection with the consummation of a business combination at prices no greater than the price at which the founder shares, private placement warrants or Class A ordinary shares, as applicable, were originally purchased; (f) by virtue of our sponsor’s organizational documents upon liquidation or dissolution of our sponsor; (g) to the company for no value for cancellation in connection with the consummation of our initial business combination; (h) in the event of our liquidation prior to the completion of our initial business combination; or (i) in the event of our completion of a liquidation, merger, share exchange or other similar transaction which results in all of our public shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property subsequent to our completion of our initial business combination; provided, however, that in the case of clauses (a) through (f) these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions and the other restrictions contained in the letter agreement.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
On August 21, 2020, our sponsor paid $25,000, or approximately $0.003 per share, to cover certain expenses on our behalf in consideration of 7,187,500 Class B ordinary shares, par value $0.0001. In September 2020, our sponsor transferred 40,000 Class B ordinary shares to each of our director nominees. These 120,000 shares will not be subject to forfeiture in the event the underwriters’ over-allotment option is not exercised. On October 22, 2020, our sponsor effected a surrender of 1,437,500 founder shares to the company for no consideration, resulting in a decrease in the number of Class B ordinary shares outstanding from 7,187,500 to 5,750,000, such that the total number of founder shares would represent 20% of the total number of ordinary shares outstanding upon completion of this offering (of which 750,000 Class B ordinary shares are subject to forfeiture if the underwriters do not exercise their overallotment option). Our sponsor has agreed to transfer all of the founder shares held by it to holdco prior to the consummation of this offering. The number of founder shares issued was determined based on the expectation that such founder shares would represent 20% of the issued and outstanding shares upon completion of this offering. If we increase or decrease the size of this offering, we will effect a share capitalization or a share surrender or redemption or other appropriate mechanism, as applicable, with respect to our Class B ordinary shares immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares, on an as-converted basis, at 20% of the issued and outstanding ordinary shares upon the consummation of this offering. Up to 750,000 founder shares are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised. The founder shares (including the Class A ordinary shares issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder.
Our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 8,000,000 private placement warrants (or 8,900,000 private placement warrants if the underwriters’ over-allotment option is exercised in full) for a purchase price of $1.00 per whole warrant in a private placement that will occur simultaneously with the closing of this offering. As such, our sponsor’s interest in this transaction is valued at between $8,000,000 and $8,900,000, depending on the number of private placement warrants purchased. Each private placement warrant entitles the holder to purchase one Class A ordinary share at $11.50 per share, subject to adjustment. The private placement warrants (including the Class A ordinary shares issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder until 30 days after the completion of our initial business combination.
Holdco is controlled by our sponsor, which is controlled by Pearl Energy Investment II, L.P. NGP Pearl Holdings II, L.L.C., an affiliate of an investment fund managed by NGP Energy Capital Management, LLC, has a passive minority interest in our sponsor.
Up to five anchor investors have expressed to us an interest to purchase up to 1,980,000 units each in this offering and we have agreed to direct the underwriters to sell to the anchor investor such number of units. Further, each of the anchor investors will enter into a separate agreement with our sponsor pursuant to which each such investor will agree to purchase 142,187 founder shares or membership interests in holdco representing an indirect beneficial interest in 142,187 founder shares, in each case for $494.56, or approximately $0.003 per share. Neither the membership interests in holdco nor the founder shares to be directly or indirectly owned by such investors will be subject to forfeiture without their consent. The founder shares to be owned directly by such investors will be subject to the additional restrictions agreed to by our sponsor in connection with our initial business combination See “Description of Securities—Founder Shares’’ for a description of such restrictions. Furthermore, the anchor investors will be restricted from selling any units purchased in this offering until the earlier of (i) 30 days from the closing of this offering and (ii) the separation of the units into shares of Class A ordinary shares and warrants. The founder shares to be directly or indirectly owned by such investors will be otherwise identical to the founder shares beneficially owned by our sponsor. Our discussions with each anchor investor were separate and our arrangements with them are not contingent on each other. Further, to our knowledge, the anchor investors are not affiliated with each other and are not acting together with regards to our company.
Pursuant to certain subscription agreements with our sponsor, the anchor investors party thereto will not be granted any material additional stockholder or other rights, and will only be issued membership interests in holdco with no right to control holdco or vote or dispose of any founder shares (which will continue to be held by holdco until following our initial business combination). Further, the anchor investors are not required to: (i) other as described above, hold any units, Class A ordinary shares or warrants they may purchase in this offering or thereafter for any amount time, (ii) vote any Class A ordinary shares they may own at the applicable time in favor of our initial business combination or (iii) refrain from exercising their right to redeem their public shares at the time of our initial business combination.
There can be no assurance that the anchor investors will acquire any units in this offering, or as to the amount of such units the anchor investors will retain, if any, prior to or upon the consummation of our initial business combination. In the event that the anchor investors purchase such units (either in this offering or after) and vote in favor of our initial business combination, a smaller portion of affirmative votes from other public shareholders would be required to approve our initial business combination.
As more fully discussed in the section of this prospectus entitled “Management—Conflicts of Interest,” if any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity. Our officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.
We currently maintain our executive offices at 2100 McKinney Ave, Suite 1675, Dallas, TX 75201. The cost for our use of this space is included in the $10,000 per month fee we will pay to an affiliate of our sponsor for office space, administrative and support services, commencing on the date that our securities are first listed on the Nasdaq. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.
No compensation of any kind, including finder’s and consulting fees, will be paid to our sponsor, officers and directors, or their respective affiliates, for services rendered prior to or in connection with the completion of an initial business combination. However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers, directors or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
Prior to the consummation of this offering, our sponsor has agreed to loan us up to $300,000 to be used for a portion of the expenses of this offering. These loans are non-interest bearing, unsecured and are due at the earlier of December 31, 2020 and the closing of this offering. The loan will be repaid upon the closing of this offering out of the offering proceeds not held in the trust account.
In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete an initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. In the event that the initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor, its affiliates or our management team as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
After our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts
being fully disclosed to our shareholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our shareholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a general meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation.
We will enter into a registration and shareholder rights agreement pursuant to which our sponsor will be entitled to certain registration rights with respect to the private placement warrants, the warrants issuable upon conversion of working capital loans (if any) and the Class A ordinary shares issuable upon exercise of the foregoing and upon conversion of the founder shares, and, upon consummation of our initial business combination, to nominate three individuals for appointment to our board of directors, as long as the sponsor holds any securities covered by the registration and shareholder rights agreement, which is described under the section of this prospectus entitled “Description of Securities—Registration and Shareholder Rights.”
Policy for Approval of Related Party Transactions
The audit committee of our board of directors will adopt a charter, providing for the review, approval and/or ratification of “related party transactions,” which are those transactions required to be disclosed pursuant to Item 404 of Regulation S-K as promulgated by the SEC, by the audit committee. At its meetings, the audit committee shall be provided with the details of each new, existing, or proposed related party transaction, including the terms of the transaction, any contractual restrictions that the company has already committed to, the business purpose of the transaction, and the benefits of the transaction to the company and to the relevant related party. Any member of the committee who has an interest in the related party transaction under review by the committee shall abstain from voting on the approval of the related party transaction, but may, if so requested by the chairman of the committee, participate in some or all of the committee’s discussions of the related party transaction. Upon completion of its review of the related party transaction, the committee may determine to permit or to prohibit the related party transaction.
DESCRIPTION OF SECURITIES
We are a Cayman Islands exempted company and our affairs will be governed by our amended and restated memorandum and articles of association, the Companies Law and the common law of the Cayman Islands. Pursuant to our amended and restated memorandum and articles of association, which will be adopted prior to the consummation of this offering, we will be authorized to issue 330,000,000 ordinary shares, including 300,000,000 Class A ordinary shares and 30,000,000 Class B ordinary shares, as well as 1,000,000 preference shares, $0.0001 par value each. The following description summarizes the material terms of our shares as set out more particularly in our amended and restated memorandum and articles of association. Because it is only a summary, it may not contain all the information that is important to you.
Units
Each unit has an offering price of $10.00 and consists of one Class A ordinary share and one-half of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment as described in this prospectus. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of the company’s Class A ordinary shares. This means only a whole warrant may be exercised at any given time by a warrant holder.
The Class A ordinary shares and warrants comprising the units are expected to begin separate trading on the 52nd day following the date of this prospectus unless Cowen and Company, LLC and Wells Fargo Securities, LLC inform us of their decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. Once the Class A ordinary shares and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into Class A ordinary shares and warrants. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least two units, you will not be able to receive or trade a whole warrant.
In no event will the Class A ordinary shares and warrants be traded separately until we have filed with the SEC a Current Report on Form 8-K which includes an audited balance sheet reflecting our receipt of the gross proceeds at the closing of this offering and the sale of the private placement warrants. We will file a Current Report on Form 8-K which includes this audited balance sheet promptly after the completion of this offering. If the underwriters’ over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriters’ over-allotment option.
Additionally, the units will automatically separate into their component parts and will not be traded after completion of our initial business combination.
Ordinary Shares
Prior to the date of this prospectus, there were 5,750,000 Class B ordinary shares issued and outstanding, all of which were held of record by our initial shareholders. Upon the closing of this offering, 25,000,000 of our ordinary shares will be outstanding (assuming no exercise of the underwriters’ over-allotment option) including:
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20,000,000 Class A ordinary shares underlying the units issued as part of this offering; and
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5,000,000 Class B ordinary shares held by our initial shareholders.
If we increase or decrease the size of this offering, we will effect a share capitalization or a compulsory redemption or redemption or other appropriate mechanism, as applicable, with respect to our Class B ordinary shares immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares, on an as-converted basis, at 20% of our issued and outstanding ordinary shares upon the consummation of this offering.
Ordinary shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders. Except as described below, holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of our shareholders except as required by law. Unless specified in our amended and restated memorandum and articles of association, or as required by applicable provisions of the Companies Law or applicable stock exchange rules, the affirmative vote of a majority of our ordinary shares that are voted is required to approve any such matter voted on by our shareholders. Approval of certain actions will require a special resolution under Cayman Islands law, being the affirmative vote of at least two-thirds of our ordinary shares that are voted, and pursuant to our amended and restated memorandum and articles of association; such actions include amending our amended and restated memorandum and articles of association and approving a statutory merger or consolidation with another company. Our board of directors is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. There is no cumulative voting with respect to the appointment of directors, with the result that the holders of more than 50% of the shares voted for the appointment of directors can elect all of the directors. Our shareholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor. Prior to our initial business combination, only holders of our founder shares will have the right to vote on the appointment of directors. Holders of our public shares will not be entitled to vote on the election of directors during such time. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. The provisions of our amended and restated memorandum and articles of association governing the appointment or removal of directors prior to our initial business combination may only be amended by a special resolution passed by not less than two-thirds of our ordinary shares who attend and vote at our general meeting which shall include the affirmative vote of a simple majority of our Class B ordinary shares.
Because our amended and restated memorandum and articles of association will authorize the issuance of up to 300,000,000 Class A ordinary shares, if we were to enter into a business combination, we may (depending on the terms of such a business combination) be required to increase the number of Class A ordinary shares which we will be authorized to issue at the same time as our shareholders vote on the business combination to the extent we seek shareholder approval in connection with our initial business combination.
Our board of directors is divided into three classes with only one class of directors being elected in each year and each class (except for those directors appointed prior to our first annual meeting of shareholders) serving a three-year term. In accordance with the Nasdaq corporate governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following our listing on the Nasdaq. There is no requirement under the Companies Law for us to hold annual or general meetings to elect directors. We may not hold an annual meeting of shareholders to elect new directors prior to the consummation of our initial business combination. Prior to the completion of an initial business combination, any vacancy on the board of directors may be filled by a nominee chosen by holders of a majority of our founder shares. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason.
We will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business combination, including interest and other income earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.10 per public share and such amount will be increased by $0.10 for the six-month extension of our time to consummate a business combination, as described herein. The per share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commission we will pay to the underwriters. The redemption rights will include the requirement that a beneficial owner must identify itself in order to valid redeem its shares. Our sponsor and each member of our
management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor's option or during any Extension Period, or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares. Unlike many blank check companies that hold shareholder votes and conduct proxy solicitations in conjunction with their initial business combinations and provide for related redemptions of public shares for cash upon completion of such initial business combinations even when a vote is not required by law, if a shareholder vote is not required by applicable law or stock exchange listing requirements, if a shareholder vote is not required by applicable law or stock exchange listing requirements and we do not decide to hold a shareholder vote for business or other reasons, we will, pursuant to our amended and restated memorandum and articles of association, conduct the redemptions pursuant to the tender offer rules of the SEC, and file tender offer documents with the SEC prior to completing our initial business combination. Our amended and restated memorandum and articles of association will require these tender offer documents to contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, a shareholder approval of the transaction is required by applicable law or stock exchange listing requirements, or we decide to obtain shareholder approval for business or other reasons, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. However, the participation of our sponsor, officers, directors, advisors or their affiliates in privately-negotiated transactions (as described in this prospectus), if any, could result in the approval of our initial business combination even if a majority of our public shareholders vote, or indicate their intention to vote, against such initial business combination. For purposes of seeking approval of the majority of our issued and outstanding ordinary shares, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. Our amended and restated memorandum and articles of association will require that at least five days’ notice will be given of any general meeting.
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to Excess Shares, without our prior consent. However, we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Our shareholders’ inability to redeem the Excess Shares will reduce their influence over our ability to complete our initial business combination, and such shareholders could suffer a material loss in their investment if they sell such Excess Shares on the open market. Additionally, such shareholders will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And, as a result, such shareholders will continue to hold that number of shares exceeding 15% and, in order to dispose such shares would be required to sell their shares in open market transactions, potentially at a loss.
If we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. In such case, our sponsor and each member of our management team have agreed to vote their founder shares and public shares in favor of our initial business combination. As a result, in addition to our initial shareholders’ founder shares, we would need 7,500,001, or 37.5% (assuming all issued and outstanding shares are voted and the over-allotment option is not exercised), of the 20,000,000 public
shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved. In the event that each of our anchor investors purchases 1,980,000 units (either in this offering or after) and votes in favor of an initial business combination, we would not need any additional public shares sold in this offering to be voted in favor of our initial business combination to have our initial business combination approved. Additionally, each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction or vote at all.
Pursuant to our amended and restated memorandum and articles of association, prior to the Contractual Redemption Date if extended at our sponsor's option or during any Extension Period, if we have not consummated an initial business combination within 18 months from the closing of this offering, we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest and other income earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. Our sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to consummate an initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor's option or during any Extension Period, (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame). Our amended and restated memorandum and articles of association will provide that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.
In the event of a liquidation, dissolution or winding up of the company after a business combination, our shareholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of shares, if any, having preference over the ordinary shares. Our shareholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the ordinary shares, except that we will provide our public shareholders with the opportunity to redeem their public shares for cash at a per share price equal to the aggregate amount then on deposit in the trust account, including interest and other income earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares, upon the completion of our initial business combination, subject to the limitations described herein.
Founder Shares
The founder shares are designated as Class B ordinary shares and, except as described below, are identical to the Class A ordinary shares included in the units being sold in this offering, and holders of founder shares have the same shareholder rights as public shareholders, except that: (a) prior to our initial business combination, only holders of the founder shares have the right to vote on the appointment of directors and holders of a majority of our founder shares may remove a member of the board of directors for any reason; (b) the founder shares are subject to certain transfer restrictions contained in a letter agreement that our sponsor, directors, executive officers and certain of the anchor investors have entered or will enter into with us, as described in more detail below; (c) pursuant to such letter agreement, our sponsor and each member of our management team have agreed, and certain of the anchor investors will agree, to (i) waive their redemption rights with respect to their founder
shares (ii) to waive their redemption rights with respect to their founder shares and public shares in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor's option or during any Extension Period, or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares; and (iii) waive their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to consummate an initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor's option or during any Extension Period (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame); (d) the founder shares will automatically convert into our Class A ordinary shares at the time of our initial business combination or earlier at the option of the holders thereof as described herein; and (e) the founder shares are entitled to registration rights. If we seek shareholder approval, we will complete our initial business combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. In such case, our sponsor and each member of our management team have agreed to vote their founder shares and public shares in favor of our initial business combination.
The founder shares are designated as Class B ordinary shares and will automatically convert into Class A ordinary shares (which such Class A ordinary shares delivered upon conversion will not have redemption rights or be entitled to liquidating distributions from the trust account if we do not consummate an initial business combination) at the time of our initial business combination or earlier at the option of the holders thereof at a ratio such that the number of Class A ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of this offering, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the company in connection with or in relation to the consummation of the initial business combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to our sponsor, its affiliates or any member of our management team upon conversion of working capital loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one.
Except as described herein, pursuant to a letter agreement that our sponsor, directors, executive officers and certain of the anchor investors have entered or will enter into with us, our sponsor and our directors and executive officers have agreed, and certain of the anchor investors will agree, not to transfer, assign or sell any of their founder shares until earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property. We refer to such transfer restrictions throughout this prospectus as the lock-up. Any permitted transferees would be subject to the same restrictions and other agreements of our sponsor and our directors and executive officers with respect to any founder shares.
Prior to our initial business combination, only holders of our founder shares will have the right to vote on the appointment of directors. Holders of our public shares will not be entitled to vote on the appointment of directors during such time. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors
for any reason. These provisions of our amended and restated memorandum and articles of association may only be amended by a special resolution passed by not less than two-thirds of our ordinary shares who attend and vote at a general meeting which shall include the affirmative vote of a simple majority of our Class B ordinary shares. With respect to any other matter submitted to a vote of our shareholders, including any vote in connection with our initial business combination, except as required by law, holders of our founder shares and holders of our public shares will vote together as a single class, with each share entitling the holder to one vote.
Register of Members
Under Cayman Islands law, we must keep a register of members and there will be entered therein:
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the names and addresses of the members, a statement of the shares held by each member, and of the amount paid or agreed to be considered as paid, on the shares of each member and the voting rights of shares of each member;
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whether voting rights are attached to the share in issue;
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the date on which the name of any person was entered on the register as a member; and
•
the date on which any person ceased to be a member.
Under Cayman Islands law, the register of members of our company is prima facie evidence of the matters set out therein (i.e., the register of members will raise a presumption of fact on the matters referred to above unless rebutted) and a member registered in the register of members will be deemed as a matter of Cayman Islands law to have legal title to the shares as set against its name in the register of members. Upon the closing of this public offering, the register of members will be immediately updated to reflect the issue of shares by us. Once our register of members has been updated, the shareholders recorded in the register of members will be deemed to have legal title to the shares set against their name. However, there are certain limited circumstances where an application may be made to a Cayman Islands court for a determination on whether the register of members reflects the correct legal position. Further, the Cayman Islands court has the power to order that the register of members maintained by a company should be rectified where it considers that the register of members does not reflect the correct legal position. If an application for an order for rectification of the register of members were made in respect of our ordinary shares, then the validity of such shares may be subject to re-examination by a Cayman Islands court.
Preference Shares
Our amended and restated memorandum and articles of association will authorize 1,000,000 preference shares and provide that preference shares may be issued from time to time in one or more series. Our board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. Our board of directors will be able to, without shareholder approval, issue preference shares with voting and other rights that could adversely affect the voting power and other rights of the holders of the ordinary shares and could have anti-takeover effects. The ability of our board of directors to issue preference shares without shareholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of existing management. We have no preference shares issued and outstanding at the date hereof. Although we do not currently intend to issue any preference shares, we cannot assure you that we will not do so in the future. No preference shares are being issued or registered in this offering.
Warrants
Public Shareholders’ Warrants
Each whole warrant entitles the registered holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing on the later of one year from the closing of this offering and 30 days after the completion of our initial business combination, except as discussed in the immediately succeeding paragraph. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of Class A ordinary shares. This means only a whole warrant may be exercised at a given time by a warrant holder. No
fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least two units, you will not be able to receive or trade a whole warrant. The warrants will expire five years after the completion of our initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
We will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares underlying the warrants is then effective and a prospectus relating thereto is current, subject to our satisfying our obligations described below with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue a Class A ordinary share upon exercise of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will we be required to net cash settle any warrant. In the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the Class A ordinary share underlying such unit.
We have agreed that as soon as practicable, but in no event later than 20 business days after the closing of our initial business combination, we will use our commercially reasonable efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants, and we will use our commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of our initial business combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement; provided that if our Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th 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 we 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, but we will use our commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In the case of a cashless exercise, each holder would pay the exercise price by surrendering the warrants for that number of Class A ordinary shares equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair market value” (defined below) less the exercise price of the warrants by (y) the fair market value and (B) 0.361 Class A ordinary shares per whole warrant. The “fair market value” as used in this paragraph shall mean the volume weighted average price of the Class A ordinary shares for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent.
Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00. Once the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private placement warrants):
•
in whole and not in part;
•
at a price of $0.01 per warrant;
•
upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and
•
if, and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the
exercise price of a warrant as described under the heading “—Warrants—Public Shareholders’ Warrants—Anti-Dilution Adjustments”) for any 20 trading days within a 30-trading day period ending three trading days before we send the notice of redemption to the warrant holders.
We will not redeem the warrants as described above unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants is then effective and a current prospectus relating to those Class A ordinary shares is available throughout the 30-day redemption period. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
We have established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and we issue a notice of redemption of the warrants, each warrant holder will be entitled to exercise his, her or its warrant prior to the scheduled redemption date. However, the price of the Class A ordinary shares may fall below the $18.00 redemption trigger price (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “—Warrants—Public Shareholders’ Warrants—Anti-dilution Adjustments”) as well as the $11.50 (for whole shares) warrant exercise price after the redemption notice is issued.
Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00. Once the warrants become exercisable, we may redeem the outstanding warrants:
•
in whole and not in part;
•
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table below, based on the redemption date and the “fair market value” of our Class A ordinary shares (as defined below) except as otherwise described below;
•
if, and only if, the closing price of our Class A ordinary shares equals or exceeds $10.00 per public share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “—Warrants—Public Shareholders’ Warrants—Anti-Dilution Adjustments”) for any 20 trading days within the 30-trading day period ending three trading days before we send the notice of redemption to the warrant holders; and
•
if the closing price of the Class A ordinary shares for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “—Warrants—Public Shareholders’ Warrants—Anti-dilution Adjustments”), the private placement warrants must also be concurrently called for redemption on the same terms as the outstanding public warrants, as described above.
Beginning on the date the notice of redemption is given until the warrants are redeemed or exercised, holders may elect to exercise their warrants on a cashless basis. The numbers in the table below represent the number of Class A ordinary shares that a warrant holder will receive upon such cashless exercise in connection with a redemption by us pursuant to this redemption feature, based on the “fair market value” of our Class A ordinary shares on the corresponding redemption date (assuming holders elect to exercise their warrants and such warrants are not redeemed for $0.10 per warrant), determined for these purposes based on volume weighted average price of our Class A ordinary shares during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants, and the number of months that the corresponding redemption date precedes the expiration date of the warrants, each as set forth in the table below. We will provide our warrant holders with the final fair market value no later than one business day after the 10-trading day period described above ends.
Pursuant to the warrant agreement, references above to Class A ordinary shares shall include a security other than Class A ordinary shares into which the Class A ordinary shares have been converted or exchanged for in the event we are not the surviving company in our initial business combination. The numbers in the table below will not be adjusted when determining the number of Class A ordinary shares to be issued upon exercise of the warrants if we are not the surviving entity following our initial business combination.
The share prices set forth in the column headings of the table below will be adjusted as of any date on which the number of shares issuable upon exercise of a warrant or the exercise price of a warrant is adjusted as set forth under the heading “—Anti-dilution Adjustments” below. If the number of shares issuable upon exercise of a warrant is adjusted, the adjusted share prices in the column headings will equal the share prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the number of shares deliverable upon exercise of a warrant immediately prior to such adjustment and the denominator of which is the number of shares deliverable upon exercise of a warrant as so adjusted. The number of shares in the table below shall be adjusted in the same manner and at the same time as the number of shares issuable upon exercise of a warrant. If the exercise price of a warrant is adjusted, (a) in the case of an adjustment pursuant to the fifth paragraph under the heading “— Anti-dilution Adjustments” below, the adjusted share prices in the column headings will equal the unadjusted share price multiplied by a fraction, the numerator of which is the higher of the Market Value and the Newly Issued Price as set forth under the heading “— Anti-dilution Adjustments” and the denominator of which is $10.00 and (b) in the case of an adjustment pursuant to the second paragraph under the heading “— Anti-dilution Adjustments” below, the adjusted share prices in the column headings will equal the unadjusted share price less the decrease in the exercise price of a warrant pursuant to such exercise price adjustment.
|
Redemption Date
(period to expiration of warrants)
|
|
|
Fair Market Value of Class A Ordinary Shares
|
|
| |
≤$10.00
|
|
|
11.00
|
|
|
12.00
|
|
|
13.00
|
|
|
14.00
|
|
|
15.00
|
|
|
16.00
|
|
|
17.00
|
|
|
≥18.00
|
|
|
60 months
|
|
|
|
|
0.261 |
|
|
|
|
|
0.281 |
|
|
|
|
|
0.297 |
|
|
|
|
|
0.311 |
|
|
|
|
|
0.324 |
|
|
|
|
|
0.337 |
|
|
|
|
|
0.348 |
|
|
|
|
|
0.358 |
|
|
|
|
|
0.361 |
|
|
|
57 months
|
|
|
|
|
0.257 |
|
|
|
|
|
0.277 |
|
|
|
|
|
0.294 |
|
|
|
|
|
0.310 |
|
|
|
|
|
0.324 |
|
|
|
|
|
0.337 |
|
|
|
|
|
0.348 |
|
|
|
|
|
0.358 |
|
|
|
|
|
0.361 |
|
|
|
54 months
|
|
|
|
|
0.252 |
|
|
|
|
|
0.272 |
|
|
|
|
|
0.291 |
|
|
|
|
|
0.307 |
|
|
|
|
|
0.322 |
|
|
|
|
|
0.335 |
|
|
|
|
|
0.347 |
|
|
|
|
|
0.357 |
|
|
|
|
|
0.361 |
|
|
|
51 months
|
|
|
|
|
0.246 |
|
|
|
|
|
0.268 |
|
|
|
|
|
0.287 |
|
|
|
|
|
0.304 |
|
|
|
|
|
0.320 |
|
|
|
|
|
0.333 |
|
|
|
|
|
0.346 |
|
|
|
|
|
0.357 |
|
|
|
|
|
0.361 |
|
|
|
48 months
|
|
|
|
|
0.241 |
|
|
|
|
|
0.263 |
|
|
|
|
|
0.283 |
|
|
|
|
|
0.301 |
|
|
|
|
|
0.317 |
|
|
|
|
|
0.332 |
|
|
|
|
|
0.344 |
|
|
|
|
|
0.356 |
|
|
|
|
|
0.361 |
|
|
|
45 months
|
|
|
|
|
0.235 |
|
|
|
|
|
0.258 |
|
|
|
|
|
0.279 |
|
|
|
|
|
0.298 |
|
|
|
|
|
0.315 |
|
|
|
|
|
0.330 |
|
|
|
|
|
0.343 |
|
|
|
|
|
0.356 |
|
|
|
|
|
0.361 |
|
|
|
42 months
|
|
|
|
|
0.228 |
|
|
|
|
|
0.252 |
|
|
|
|
|
0.274 |
|
|
|
|
|
0.294 |
|
|
|
|
|
0.312 |
|
|
|
|
|
0.328 |
|
|
|
|
|
0.342 |
|
|
|
|
|
0.355 |
|
|
|
|
|
0.361 |
|
|
|
39 months
|
|
|
|
|
0.221 |
|
|
|
|
|
0.246 |
|
|
|
|
|
0.269 |
|
|
|
|
|
0.290 |
|
|
|
|
|
0.309 |
|
|
|
|
|
0.325 |
|
|
|
|
|
0.340 |
|
|
|
|
|
0.354 |
|
|
|
|
|
0.361 |
|
|
|
36 months
|
|
|
|
|
0.213 |
|
|
|
|
|
0.239 |
|
|
|
|
|
0.263 |
|
|
|
|
|
0.285 |
|
|
|
|
|
0.305 |
|
|
|
|
|
0.323 |
|
|
|
|
|
0.339 |
|
|
|
|
|
0.353 |
|
|
|
|
|
0.361 |
|
|
|
33 months
|
|
|
|
|
0.205 |
|
|
|
|
|
0.232 |
|
|
|
|
|
0.257 |
|
|
|
|
|
0.280 |
|
|
|
|
|
0.301 |
|
|
|
|
|
0.320 |
|
|
|
|
|
0.337 |
|
|
|
|
|
0.352 |
|
|
|
|
|
0.361 |
|
|
|
30 months
|
|
|
|
|
0.196 |
|
|
|
|
|
0.224 |
|
|
|
|
|
0.250 |
|
|
|
|
|
0.274 |
|
|
|
|
|
0.297 |
|
|
|
|
|
0.316 |
|
|
|
|
|
0.335 |
|
|
|
|
|
0.351 |
|
|
|
|
|
0.361 |
|
|
|
27 months
|
|
|
|
|
0.185 |
|
|
|
|
|
0.214 |
|
|
|
|
|
0.242 |
|
|
|
|
|
0.268 |
|
|
|
|
|
0.291 |
|
|
|
|
|
0.313 |
|
|
|
|
|
0.332 |
|
|
|
|
|
0.350 |
|
|
|
|
|
0.361 |
|
|
|
24 months
|
|
|
|
|
0.173 |
|
|
|
|
|
0.204 |
|
|
|
|
|
0.233 |
|
|
|
|
|
0.260 |
|
|
|
|
|
0.285 |
|
|
|
|
|
0.308 |
|
|
|
|
|
0.329 |
|
|
|
|
|
0.348 |
|
|
|
|
|
0.361 |
|
|
|
21 months
|
|
|
|
|
0.161 |
|
|
|
|
|
0.193 |
|
|
|
|
|
0.223 |
|
|
|
|
|
0.252 |
|
|
|
|
|
0.279 |
|
|
|
|
|
0.304 |
|
|
|
|
|
0.326 |
|
|
|
|
|
0.347 |
|
|
|
|
|
0.361 |
|
|
|
18 months
|
|
|
|
|
0.146 |
|
|
|
|
|
0.179 |
|
|
|
|
|
0.211 |
|
|
|
|
|
0.242 |
|
|
|
|
|
0.271 |
|
|
|
|
|
0.298 |
|
|
|
|
|
0.322 |
|
|
|
|
|
0.345 |
|
|
|
|
|
0.361 |
|
|
|
15 months
|
|
|
|
|
0.130 |
|
|
|
|
|
0.164 |
|
|
|
|
|
0.197 |
|
|
|
|
|
0.230 |
|
|
|
|
|
0.262 |
|
|
|
|
|
0.291 |
|
|
|
|
|
0.317 |
|
|
|
|
|
0.342 |
|
|
|
|
|
0.361 |
|
|
|
12 months
|
|
|
|
|
0.111 |
|
|
|
|
|
0.146 |
|
|
|
|
|
0.181 |
|
|
|
|
|
0.216 |
|
|
|
|
|
0.250 |
|
|
|
|
|
0.282 |
|
|
|
|
|
0.312 |
|
|
|
|
|
0.339 |
|
|
|
|
|
0.361 |
|
|
|
9 months
|
|
|
|
|
0.090 |
|
|
|
|
|
0.125 |
|
|
|
|
|
0.162 |
|
|
|
|
|
0.199 |
|
|
|
|
|
0.237 |
|
|
|
|
|
0.272 |
|
|
|
|
|
0.305 |
|
|
|
|
|
0.336 |
|
|
|
|
|
0.361 |
|
|
|
6 months
|
|
|
|
|
0.065 |
|
|
|
|
|
0.099 |
|
|
|
|
|
0.137 |
|
|
|
|
|
0.178 |
|
|
|
|
|
0.219 |
|
|
|
|
|
0.259 |
|
|
|
|
|
0.296 |
|
|
|
|
|
0.331 |
|
|
|
|
|
0.361 |
|
|
|
3 months
|
|
|
|
|
0.034 |
|
|
|
|
|
0.065 |
|
|
|
|
|
0.104 |
|
|
|
|
|
0.150 |
|
|
|
|
|
0.197 |
|
|
|
|
|
0.243 |
|
|
|
|
|
0.286 |
|
|
|
|
|
0.326 |
|
|
|
|
|
0.361 |
|
|
|
0 months
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
0.042 |
|
|
|
|
|
0.115 |
|
|
|
|
|
0.179 |
|
|
|
|
|
0.233 |
|
|
|
|
|
0.281 |
|
|
|
|
|
0.323 |
|
|
|
|
|
0.361 |
|
|
The exact fair market value and redemption date may not be set forth in the table above, in which case, if the fair market value is between two values in the table or the redemption date is between two
redemption dates in the table, the number of Class A ordinary shares to be issued for each warrant exercised will be determined by a straight-line interpolation between the number of shares set forth for the higher and lower fair market values and the earlier and later redemption dates, as applicable, based on a 365 or 366-day year, as applicable. For example, if the volume weighted average price of our Class A ordinary shares during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of the warrants is $11.00 per share, and at such time there are 57 months until the expiration of the warrants, holders may choose to, in connection with this redemption feature, exercise their warrants for 0.277 Class A ordinary shares for each whole warrant. For an example where the exact fair market value and redemption date are not as set forth in the table above, if the volume weighted average price of our Class A ordinary shares during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of the warrants is $13.50 per share, and at such time there are 38 months until the expiration of the warrants, holders may choose to, in connection with this redemption feature, exercise their warrants for 0.298 Class A ordinary shares for each whole warrant. In no event will the warrants be exercisable on a cashless basis in connection with this redemption feature for more than 0.361 Class A ordinary shares per warrant (subject to adjustment). Finally, as reflected in the table above, if the warrants are out of the money and about to expire, they cannot be exercised on a cashless basis in connection with a redemption by us pursuant to this redemption feature, since they will not be exercisable for any Class A ordinary shares.
This redemption feature differs from the typical warrant redemption features used in many other blank check offerings, which typically only provide for a redemption of warrants for cash (other than the private placement warrants) when the trading price for the Class A ordinary shares exceeds $18.00 per share for a specified period of time. This redemption feature is structured to allow for all of the outstanding warrants to be redeemed when the Class A ordinary shares are trading at or above $10.00 per public share, which may be at a time when the trading price of our Class A ordinary shares is below the exercise price of the warrants. We have established this redemption feature to provide us with the flexibility to redeem the warrants without the warrants having to reach the $18.00 per share threshold set forth above under “—Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00.” Holders choosing to exercise their warrants in connection with a redemption pursuant to this feature will, in effect, receive a number of shares for their warrants based on an option pricing model with a fixed volatility input as of the date of this prospectus. This redemption right provides us with an additional mechanism by which to redeem all of the outstanding warrants, and therefore have certainty as to our capital structure as the warrants would no longer be outstanding and would have been exercised or redeemed. We will be required to pay the applicable redemption price to warrant holders if we choose to exercise this redemption right and it will allow us to quickly proceed with a redemption of the warrants if we determine it is in our best interest to do so. As such, we would redeem the warrants in this manner when we believe it is in our best interest to update our capital structure to remove the warrants and pay the redemption price to the warrant holders.
As stated above, we can redeem the warrants when the Class A ordinary shares are trading at a price starting at $10.00, which is below the exercise price of $11.50, because it will provide certainty with respect to our capital structure and cash position while providing warrant holders with the opportunity to exercise their warrants on a cashless basis for the applicable number of shares. If we choose to redeem the warrants when the Class A ordinary shares are trading at a price below the exercise price of the warrants, this could result in the warrant holders receiving fewer Class A ordinary shares than they would have received if they had chosen to wait to exercise their warrants for Class A ordinary shares if and when such Class A ordinary shares were trading at a price higher than the exercise price of $11.50.
No fractional Class A ordinary shares will be issued upon exercise. If, upon exercise, a holder would be entitled to receive a fractional interest in a share, we will round down to the nearest whole number of the number of Class A ordinary shares to be issued to the holder. If, at the time of redemption, the warrants are exercisable for a security other than the Class A ordinary shares pursuant to the warrant agreement (for instance, if we are not the surviving company in our initial business combination), the warrants may be exercised for such security. At such time as the warrants become exercisable for a security other than the Class A ordinary shares, the company (or surviving company) will use its commercially reasonable efforts to register under the Securities Act the security issuable upon the exercise of the warrants.
Redemption Procedures. A holder of a warrant may notify us in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the warrant agent’s actual knowledge, would beneficially own in excess of 9.8% (or such other amount as a holder may specify) of the Class A ordinary shares issued and outstanding immediately after giving effect to such exercise.
Anti-dilution Adjustments. If the number of outstanding Class A ordinary shares is increased by a capitalization or share dividend payable in Class A ordinary shares, or by a split-up of ordinary shares or other similar event, then, on the effective date of such capitalization or share dividend, split-up or similar event, the number of Class A ordinary shares issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding ordinary shares. A rights offering made to all or substantially all holders of ordinary shares entitling holders to purchase Class A ordinary shares at a price less than the “historical fair market value” (as defined below) will be deemed a share dividend of a number of Class A ordinary shares equal to the product of (i) the number of Class A ordinary shares actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for Class A ordinary shares) and (ii) one minus the quotient of (x) the price per Class A ordinary share paid in such rights offering and (y) the historical fair market value. For these purposes, (i) if the rights offering is for securities convertible into or exercisable for Class A ordinary shares, in determining the price payable for Class A ordinary shares, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) “historical fair market value” means the volume weighted average price of Class A ordinary shares as reported during the 10 trading day period ending on the trading day prior to the first date on which the Class A ordinary shares trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
In addition, if we, at any time while the warrants are outstanding and unexpired, pay a dividend or make a distribution in cash, securities or other assets to all or substantially all of the holders of the Class A ordinary shares on account of such Class A ordinary shares (or other securities into which the warrants are convertible), other than (a) as described above, (b) any cash dividends or cash distributions which, when combined on a per share basis with all other cash dividends and cash distributions paid on the Class A ordinary shares during the 365-day period ending on the date of declaration of such dividend or distribution does not exceed $0.50 (as adjusted to appropriately reflect any other adjustments and excluding cash dividends or cash distributions that resulted in an adjustment to the exercise price or to the number of Class A ordinary shares issuable on exercise of each warrant) but only with respect to the amount of the aggregate cash dividends or cash distributions equal to or less than $0.50 per share, (c) to satisfy the redemption rights of the holders of Class A ordinary shares in connection with a proposed initial business combination, (d) to satisfy the redemption rights of the holders of Class A ordinary shares in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor's option or during any Extension Period, or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, or (e) in connection with the redemption of our public shares upon our failure to complete our initial business combination, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each Class A ordinary share in respect of such event.
If the number of outstanding Class A ordinary shares is decreased by a consolidation, combination, reverse share sub-division or reclassification of Class A ordinary shares or other similar event, then, on the effective date of such consolidation, combination, reverse share sub-division, reclassification or similar event, the number of Class A ordinary shares issuable on exercise of each warrant will be decreased in proportion to such decrease in outstanding Class A ordinary shares.
Whenever the number of Class A ordinary shares purchasable upon the exercise of the warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant
exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of Class A ordinary shares purchasable upon the exercise of the warrants immediately prior to such adjustment and (y) the denominator of which will be the number of Class A ordinary shares so purchasable immediately thereafter.
In addition, if (x) we issue additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our sponsor or its affiliates, without taking into account any founder shares held by our sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (z) the volume weighted average trading price of our Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price described above under “—Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00” and “—Redemption of warrants when the price per Class A ordinary shares equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described above under “—Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
In case of any reclassification or reorganization of the outstanding Class A ordinary shares (other than those described above or that solely affects the par value of such Class A ordinary shares), or in the case of any merger or consolidation of us with or into another corporation (other than a consolidation or merger in which we are the continuing corporation and that does not result in any reclassification or reorganization of our outstanding Class A ordinary shares), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially as an entirety in connection with which we are dissolved, the holders of the warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the warrants and in lieu of the Class A ordinary shares immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of Class A ordinary shares or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the warrants would have received if such holder had exercised their warrants immediately prior to such event. However, if such holders were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets for which each warrant will become exercisable will be deemed to be the weighted average of the kind and amount received per share by such holders in such consolidation or merger that affirmatively make such election, and if a tender, exchange or redemption offer has been made to and accepted by such holders (other than a tender, exchange or redemption offer made by the company in connection with redemption rights held by shareholders of the company as provided for in the company’s amended and restated memorandum and articles of association or as a result of the redemption of Class A ordinary shares by the company if a proposed initial business combination is presented to the shareholders of the company for approval) under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the issued and outstanding Class A ordinary shares, the holder of a warrant will be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a shareholder if such warrant holder had exercised the warrant prior to the expiration of such tender or
exchange offer, accepted such offer and all of the Class A ordinary shares held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustment (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in the warrant agreement. If less than 70% of the consideration receivable by the holders of Class A ordinary shares in such a transaction is payable in the form of Class A ordinary shares in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the warrant properly exercises the warrant within thirty days following public disclosure of such transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the Black-Scholes value (as defined in the warrant agreement) of the warrant. The purpose of such exercise price reduction is to provide additional value to holders of the warrants when an extraordinary transaction occurs during the exercise period of the warrants pursuant to which the holders of the warrants otherwise do not receive the full potential value of the warrants. The purpose of such exercise price reduction is to provide additional value to holders of the warrants when an extraordinary transaction occurs during the exercise period of the warrants pursuant to which the holders of the warrants otherwise do not receive the full potential value of the warrants.
The warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity or correct any mistake, including to conform the provisions of the warrant agreement to the description of the terms of the warrants and the warrant agreement set forth in this prospectus, or defective provision (ii) amending the provisions relating to cash dividends on ordinary shares as contemplated by and in accordance with the warrant agreement or (iii) adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of the warrants, provided that the approval by the holders of at least 65% of the then-outstanding public warrants is required to make any change that adversely affects the interests of the registered holders. You should review a copy of the warrant agreement, which will be filed as an exhibit to the registration statement of which this prospectus is a part, for a complete description of the terms and conditions applicable to the warrants.
The warrant holders do not have the rights or privileges of holders of ordinary shares and any voting rights until they exercise their warrants and receive Class A ordinary shares. After the issuance of Class A ordinary shares upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by shareholders.
No fractional warrants will be issued upon separation of the units and only whole warrants will trade. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number of Class A ordinary shares to be issued to the warrant holder.
We have agreed that, subject to applicable law, any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and we irrevocably submit to such jurisdiction, which jurisdiction will be the exclusive forum for any such action, proceeding or claim. See “Risk Factors—Our warrant agreement will designate the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.” This provision applies to claims under the Securities Act but does not apply to claims under the Exchange Act or any claim for which the federal district courts of the United States of America are the sole and exclusive forum.
Private Placement Warrants
Except as described below, the private placement warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in this offering. The private placement warrants (including the Class A 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 (except pursuant to limited exceptions as described under “Principal Shareholders—Transfers of Founder Shares and Private Placement Warrants,” to our officers and directors and other persons or entities affiliated with the initial purchasers of the private placement warrants) and they will not be redeemable by us (except as described under “—Warrants—Public Shareholders’ Warrants—Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00”) so long as they are held by our sponsor or its permitted transferees (except as otherwise set forth herein). Our sponsor, or its permitted transferees, has the option to exercise the private placement warrants on a cashless basis. If the private placement warrants are held by holders other than our sponsor or its permitted transferees, the private placement warrants will be redeemable by us in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering. Any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants will require a vote of holders of at least 65% of the number of the then outstanding private placement warrants.
Except as described above under “—Public Shareholders’ Warrants—Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00,” if holders of the private placement warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering his, her or its warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “Sponsor fair market value” (defined below) over the exercise price of the warrants by (y) the Sponsor fair market value. For these purposes, the “Sponsor fair market value” shall mean the average reported closing price of the Class A ordinary shares for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent. The reason that we have agreed that these warrants will be exercisable on a cashless basis so long as they are held by our sponsor and its permitted transferees is because it is not known at this time whether they will be affiliated with us following a business combination. If they remain affiliated with us, their ability to sell our securities in the open market will be significantly limited. We expect to have policies in place that restrict insiders from selling our securities except during specific periods of time. Even during such periods of time when insiders will be permitted to sell our securities, an insider cannot trade in our securities if he or she is in possession of material non-public information. Accordingly, unlike public shareholders who could exercise their warrants and sell the Class A ordinary shares received upon such exercise freely in the open market in order to recoup the cost of such exercise, the insiders could be significantly restricted from selling such securities. As a result, we believe that allowing the holders to exercise such warrants on a cashless basis is appropriate.
In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. Up to $1,500,000 of such loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants.
Dividends
We have not paid any cash dividends on our ordinary shares to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time. If we increase the size of this offering, we will effect a share capitalization or other appropriate mechanism immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares, on an as-converted basis, at 20% of our issued and outstanding ordinary shares upon the consummation of this offering. Further, if we incur any indebtedness in connection with a business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
Our Transfer Agent and Warrant Agent
The transfer agent for our ordinary shares and warrant agent for our warrants is Continental Stock Transfer & Trust Company. We have agreed to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent and warrant agent, its agents and each of its shareholders, directors, officers and employees against all claims and losses that may arise out of acts performed or omitted for its activities in that capacity, except for any claims and losses due to any gross negligence or intentional misconduct of the indemnified person or entity.
Certain Differences in Corporate Law
Cayman Islands companies are governed by the Companies Law. The Companies Law is modeled on English Law but does not follow recent English Law statutory enactments, and differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of the material differences between the provisions of the Companies Law applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.
Mergers and Similar Arrangements. In certain circumstances, the Companies Law allows for mergers or consolidations between two Cayman Islands companies, or between a Cayman Islands exempted company and a company incorporated in another jurisdiction (provided that is facilitated by the laws of that other jurisdiction).
Where the merger or consolidation is between two Cayman Islands companies, the directors of each company must approve a written plan of merger or consolidation containing certain prescribed information. That plan or merger or consolidation must then be authorized by either (a) a special resolution (usually a majority of two-thirds in value of the voting shares voted at a general meeting) of the shareholders of each company; or (b) such other authorization, if any, as may be specified in such constituent company’s articles of association. No shareholder resolution is required for a merger between a parent company (i.e., a company that owns at least 90% of the issued shares of each class in a subsidiary company) and its subsidiary company. The consent of each holder of a fixed or floating security interest of a constituent company must be obtained, unless the court waives such requirement. If the Cayman Islands Registrar of Companies is satisfied that the requirements of the Companies Law (which includes certain other formalities) have been complied with, the Registrar of Companies will register the plan of merger or consolidation.
Where the merger or consolidation involves a foreign company, the procedure is similar, save that with respect to the foreign company, the directors of the Cayman Islands exempted company are required to make a declaration to the effect that, having made due enquiry, they are of the opinion that the requirements set out below have been met: (i) that the merger or consolidation is permitted or not prohibited by the constitutional documents of the foreign company and by the laws of the jurisdiction in which the foreign company is incorporated, and that those laws and any requirements of those constitutional documents have been or will be complied with; (ii) that no petition or other similar proceeding has been filed and remains outstanding or order made or resolution adopted to wind up or liquidate the foreign company in any jurisdictions; (iii) that no receiver, trustee, administrator or other similar person has been appointed in any jurisdiction and is acting in respect of the foreign company, its affairs or its property or any part thereof; and (iv) that no scheme, order, compromise or other similar arrangement has been entered into or made in any jurisdiction whereby the rights of creditors of the foreign company are and continue to be suspended or restricted.
Where the surviving company is the Cayman Islands exempted company, the directors of the Cayman Islands exempted company are further required to make a declaration to the effect that, having made due enquiry, they are of the opinion that the requirements set out below have been met: (i) that the foreign company is able to pay its debts as they fall due and that the merger or consolidated is bona fide and not intended to defraud unsecured creditors of the foreign company; (ii) that in respect of the transfer of any security interest granted by the foreign company to the surviving or consolidated company (a) consent or approval to the transfer has been obtained, released or waived; (b) the transfer is permitted by and has been approved in accordance with the constitutional documents of the foreign company; and (c) the laws of the jurisdiction of the foreign company with respect to the transfer have been or will be complied with; (iii) that the foreign company will, upon the merger or
consolidation becoming effective, cease to be incorporated, registered or exist under the laws of the relevant foreign jurisdiction; and (iv) that there is no other reason why it would be against the public interest to permit the merger or consolidation.
Where the above procedures are adopted, the Companies Law provides for a right of dissenting shareholders to be paid a payment of the fair value of his shares upon their dissenting to the merger or consolidation if they follow a prescribed procedure. In essence, that procedure is as follows: (a) the shareholder must give his written objection to the merger or consolidation to the constituent company before the vote on the merger or consolidation, including a statement that the shareholder proposes to demand payment for his shares if the merger or consolidation is authorized by the vote; (b) within 20 days following the date on which the merger or consolidation is approved by the shareholders, the constituent company must give written notice to each shareholder who made a written objection; (c) a shareholder must within 20 days following receipt of such notice from the constituent company, give the constituent company a written notice of his intention to dissent including, among other details, a demand for payment of the fair value of his shares; (d) within seven days following the date of the expiration of the period set out in paragraph (b) above or seven days following the date on which the plan of merger or consolidation is filed, whichever is later, the constituent company, the surviving company or the consolidated company must make a written offer to each dissenting shareholder to purchase his shares at a price that the company determines is the fair value and if the company and the shareholder agree the price within 30 days following the date on which the offer was made, the company must pay the shareholder such amount; and (e) if the company and the shareholder fail to agree a price within such 30 day period, within 20 days following the date on which such 30 day period expires, the company (and any dissenting shareholder) must file a petition with the Cayman Islands Grand Court to determine the fair value and such petition must be accompanied by a list of the names and addresses of the dissenting shareholders with whom agreements as to the fair value of their shares have not been reached by the company. At the hearing of that petition, the court has the power to determine the fair value of the shares together with a fair rate of interest, if any, to be paid by the company upon the amount determined to be the fair value. Any dissenting shareholder whose name appears on the list filed by the company may participate fully in all proceedings until the determination of fair value is reached. These rights of a dissenting shareholder are not available in certain circumstances, for example, to dissenters holding shares of any class in respect of which an open market exists on a recognized stock exchange or recognized interdealer quotation system at the relevant date or where the consideration for such shares to be contributed are shares of any company listed on a national securities exchange or shares of the surviving or consolidated company.
Moreover, Cayman Islands law has separate statutory provisions that facilitate the reconstruction or amalgamation of companies in certain circumstances, schemes of arrangement will generally be more suited for complex mergers or other transactions involving widely held companies, commonly referred to in the Cayman Islands as a “scheme of arrangement” which may be tantamount to a merger. In the event that a merger was sought pursuant to a scheme of arrangement (the procedures for which are more rigorous and take longer to complete than the procedures typically required to consummate a merger in the United States), the arrangement in question must be approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made and who must in addition represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meeting summoned for that purpose. The convening of the meetings and subsequently the terms of the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder would have the right to express to the court the view that the transaction should not be approved, the court can be expected to approve the arrangement if it satisfies itself that:
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we are not proposing to act illegally or beyond the scope of our corporate authority and the statutory provisions as to majority vote have been complied with;
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the shareholders have been fairly represented at the meeting in question;
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the arrangement is such as a businessman would reasonably approve; and
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the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Law or that would amount to a “fraud on the minority.”
If a scheme of arrangement or takeover offer (as described below) is approved, any dissenting shareholder would have no rights comparable to appraisal rights (providing rights to receive payment in cash for the judicially determined value of the shares), which would otherwise ordinarily be available to dissenting shareholders of United States corporations.
Squeeze-out Provisions. When a takeover offer is made and accepted by holders of 90% of the shares to whom the offer relates within four months, the offeror may, within a two-month period, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands, but this is unlikely to succeed unless there is evidence of fraud, bad faith, collusion or inequitable treatment of the shareholders.
Further, transactions similar to a merger, reconstruction and/or an amalgamation may in some circumstances be achieved through means other than these statutory provisions, such as a share capital exchange, asset acquisition or control, or through contractual arrangements of an operating business.
Shareholders’ Suits. Maples and Calder, our Cayman Islands counsel, is not aware of any reported class action having been brought in a Cayman Islands court. Derivative actions have been brought in the Cayman Islands courts, and the Cayman Islands courts have confirmed the availability for such actions. In most cases, we will be the proper plaintiff in any claim based on a breach of duty owed to us, and a claim against (for example) our officers or directors usually may not be brought by a shareholder. However, based both on Cayman Islands authorities and on English authorities, which would in all likelihood be of persuasive authority and be applied by a court in the Cayman Islands, exceptions to the foregoing principle apply in circumstances in which:
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a company is acting, or proposing to act, illegally or beyond the scope of its authority;
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the act complained of, although not beyond the scope of the authority, could be effected if duly authorized by more than the number of votes which have actually been obtained; or
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those who control the company are perpetrating a “fraud on the minority.”
A shareholder may have a direct right of action against us where the individual rights of that shareholder have been infringed or are about to be infringed.
Enforcement of Civil Liabilities. The Cayman Islands has a different body of securities laws as compared to the United States and provides less protection to investors. Additionally, Cayman Islands companies may not have standing to sue before the Federal courts of the United States.
We have been advised by Maples and Calder, our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, and or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
Special Considerations for Exempted Companies. We are an exempted company with limited liability under the Companies Law. The Companies Law distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but
conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except for the exemptions and privileges listed below:
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an exempted company does not have to file an annual return of its shareholders with the Registrar of Companies;
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an exempted company’s register of members is not open to inspection;
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an exempted company does not have to hold an annual general meeting;
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an exempted company may issue shares with no par value;
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an exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 30 years in the first instance);
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an exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;
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an exempted company may register as a limited duration company; and
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an exempted company may register as a segregated portfolio company.
“Limited liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).
Amended and Restated Memorandum and Articles of Association
Our amended and restated memorandum and articles of association will contain provisions designed to provide certain rights and protections relating to this offering that will apply to us until the completion of our initial business combination. These provisions cannot be amended without a special resolution under Cayman Islands law. As a matter of Cayman Islands law, a resolution is deemed to be a special resolution where it has been approved by either (i) the affirmative vote of at least two-thirds (or any higher threshold specified in a company’s articles of association) of a company’s shareholders entitled to vote and so voting at a general meeting for which notice specifying the intention to propose the resolution as a special resolution has been given; or (ii) if so authorized by a company’s articles of association, by a unanimous written resolution of all of the company’s shareholders. Other than as described above, our amended and restated memorandum and articles of association will provide that special resolutions must be approved either by at least two-thirds of our shareholders who attend and vote at a general meeting of the company (i.e., the lowest threshold permissible under Cayman Islands law), or by a unanimous written resolution of all of our shareholders.
Our sponsor and its permitted transferees, if any, who will collectively beneficially own 20% of our ordinary shares upon the closing of this offering (assuming they do not purchase any units in this offering), will participate in any vote to amend our amended and restated memorandum and articles of association and will have the discretion to vote in any manner they choose. Specifically, our amended and restated memorandum and articles of association will provide, among other things, that:
•
If we have not consummated an initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor's option or during any Extension Period, we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest and other income earned on the funds held in the trust account and not previously released to us to pay our income taxes that were paid by us or are payable by us, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law;
•
Prior to or in connection with our initial business combination, we may not issue additional securities that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote as a class with our public shares (a) on our initial business combination or on any other proposal presented to shareholders prior to or in connection with the completion of an initial business combination or (b) to approve an amendment to our amended and restated memorandum and articles of association to (x) extend the time we have to consummate a business combination beyond 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor's option or during any Extension Period, or (y) amend the foregoing provisions;
•
If a shareholder vote on our initial business combination is not required by applicable law or stock exchange listing requirements and we do not decide to hold a shareholder vote for business or other reasons, we will offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, and will file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act;
•
So long as our securities are then listed on the Nasdaq, our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the trust account (excluding any deferred underwriting commissions and taxes payable on the income earned on the trust account) at the time of the agreement to enter into our initial business combination;
•
Our sponsor may extend the initial period of time to consummate an initial business combination one time by an additional six months, subject to the sponsor purchasing an additional 2,000,000 private placement warrants (or up to 2,300,000 private placement warrants if the underwriters’ over-allotment option is exercised in full) at $1.00 per warrant and deposit the $2,000,000 (or up to $2,300,000 if the underwriters’ over-allotment option is exercised in full) in proceeds into the trust account on or prior to the date of the initial 18-month deadline, for such six-month extension. Our shareholders will not be entitled to vote or redeem their shares in connection with any such extension.
•
If our shareholders approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor's option or during any Extension Period, or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, we will provide our public shareholders with the opportunity to redeem all or a portion of their ordinary shares upon such approval at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest and other income earned on the funds held in the trust account and not previously released to us to pay our income taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitations described herein; and
•
We will not effectuate our initial business combination solely with another blank check company or a similar company with nominal operations.
In addition, our amended and restated memorandum and articles of association will provide that under no circumstances will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001.
The Companies Law permits a company incorporated in the Cayman Islands to amend its memorandum and articles of association with the approval of a special resolution which requires the approval of the holders of at least two-thirds of such company’s issued and outstanding ordinary shares who attend and vote at a general meeting or by way of unanimous written resolution. A company’s articles of association may specify that the approval of a higher majority is required but, provided the approval of the required majority is obtained, any Cayman Islands exempted company may amend its
memorandum and articles of association regardless of whether its memorandum and articles of association provide otherwise. Accordingly, although we could amend any of the provisions relating to our proposed offering, structure and business plan which are contained in our amended and restated memorandum and articles of association, we view all of these provisions as binding obligations to our shareholders and neither we, nor our officers or directors, will take any action to amend or waive any of these provisions unless we provide dissenting public shareholders with the opportunity to redeem their public shares.
Anti-Money Laundering, Counter-Terrorism Financing, Prevention of Proliferation Financing and Financial Sanctions Compliance—Cayman Islands
If any person in the Cayman Islands knows or suspects or has reasonable grounds for knowing or suspecting that another person is engaged in criminal conduct or money laundering or is involved with terrorism or terrorist financing and property and the information for that knowledge or suspicion came to their attention in the course of business in the regulated sector, or other trade, profession, business or employment, the person will be required to report such knowledge or suspicion to (i) the Financial Reporting Authority of the Cayman Islands, pursuant to the Proceeds of Crime Law (2020 Revision) of the Cayman Islands if the disclosure relates to criminal conduct or money laundering, or (ii) a police officer of the rank of constable or higher, or the Financial Reporting Authority, pursuant to the Terrorism Law (2018 Revision) of the Cayman Islands, if the disclosure relates to involvement with terrorism or terrorist financing and property. Such a report shall not be treated as a breach of confidence or of any restriction upon the disclosure of information imposed by any enactment or otherwise.
Data Protection—Cayman Islands
We have certain duties under the Data Protection Law, 2017 of the Cayman Islands (the “DPL”) based on internationally accepted principles of data privacy.
Privacy Notice
Introduction
This privacy notice puts our shareholders on notice that through your investment in the company you will provide us with certain personal information which constitutes personal data within the meaning of the DPL (“personal data”). In the following discussion, the “company” refers to us and our affiliates and/or delegates, except where the context requires otherwise.
Investor Data
We will collect, use, disclose, retain and secure personal data to the extent reasonably required only and within the parameters that could be reasonably expected during the normal course of business. We will only process, disclose, transfer or retain personal data to the extent legitimately required to conduct our activities of on an ongoing basis or to comply with legal and regulatory obligations to which we are subject. We will only transfer personal data in accordance with the requirements of the DPL, and will apply appropriate technical and organizational information security measures designed to protect against unauthorized or unlawful processing of the personal data and against the accidental loss, destruction or damage to the personal data.
In our use of this personal data, we will be characterized as a “data controller” for the purposes of the DPL, while our affiliates and service providers who may receive this personal data from us in the conduct of our activities may either act as our “data processors” for the purposes of the DPL or may process personal information for their own lawful purposes in connection with services provided to us.
We may also obtain personal data from other public sources. Personal data includes, without limitation, the following information relating to a shareholder and/or any individuals connected with a shareholder as an investor: name, residential address, email address, contact details, corporate contact information, signature, nationality, place of birth, date of birth, tax identification, credit history, correspondence records, passport number, bank account details, source of funds details and details relating to the shareholder’s investment activity.
Who this Affects
If you are a natural person, this will affect you directly. If you are a corporate investor (including, for these purposes, legal arrangements such as trusts or exempted limited partnerships) that provides
us with personal data on individuals connected to you for any reason in relation your investment in the company, this will be relevant for those individuals and you should transmit the content of this Privacy Notice to such individuals or otherwise advise them of its content.
How the Company May Use a Shareholder’s Personal Data
The company, as the data controller, may collect, store and use personal data for lawful purposes, including, in particular:
(a) where this is necessary for the performance of our rights and obligations under any purchase agreements;
(b) where this is necessary for compliance with a legal and regulatory obligation to which we are subject (such as compliance with anti-money laundering, counter-terrorist financing, prevention of proliferation financing, financing sanctions and FATCA/CRS requirements); and/or
(c) where this is necessary for the purposes of our legitimate interests and such interests are not overridden by your interests, fundamental rights or freedoms.
Should we wish to use personal data for other specific purposes (including, if applicable, any purpose that requires your consent), we will contact you.
Why We May Transfer Your Personal Data
In certain circumstances we may be legally obliged to share personal data and other information with respect to your shareholding with the relevant regulatory authorities such as the Cayman Islands Monetary Authority or the Tax Information Authority. They, in turn, may exchange this information with foreign authorities, including tax authorities.
We anticipate disclosing personal data to persons who provide services to us and their respective affiliates (which may include certain entities located outside the United States, the Cayman Islands or the European Economic Area), who will process your personal data on our behalf.
The Data Protection Measures We Take
Any transfer of personal data by us or our duly authorized affiliates and/or delegates outside of the Cayman Islands shall be in accordance with the requirements of the DPL.
We and our duly authorized affiliates and/or delegates shall apply appropriate technical and organizational information security measures designed to protect against unauthorized or unlawful processing of personal data, and against accidental loss or destruction of, or damage to, personal data.
We shall notify you of any personal data breach that is reasonably likely to result in a risk to your interests, fundamental rights or freedoms or those data subjects to whom the relevant personal data relates.
Rights of Individual Data Subjects
Individual data subjects have certain data protection rights, including the right to:
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be informed about the purposes for which your personal data are processed;
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access your personal data;
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stop direct marketing;
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restrict the processing of your personal data;
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have incomplete or inaccurate personal data corrected;
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ask us to stop processing your personal data;
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be informed of a personal data breach (unless the breach is unlikely to be prejudicial to you);
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complain to the Data Protection Ombudsman; and
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require us to delete your personal data in some limited circumstances.
Certain Anti-takeover Provisions of our Amended and Restated Memorandum and Articles of Association
Our amended and restated memorandum and articles of association will provide that our board of directors will be classified into three classes of directors. As a result, in most circumstances, a person can gain control of our board only by successfully engaging in a proxy contest at two or more annual general meetings.
Our authorized but unissued Class A ordinary shares and preference shares will be available for future issuances without shareholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved Class A ordinary shares and preference shares could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
Securities Eligible for Future Sale
Immediately after this offering, we will have 25,000,000 ordinary shares (or 28,750,000 ordinary shares if the underwriters’ over-allotment option is exercised in full) issued and outstanding on an as-converted basis. Of these shares, the Class A ordinary shares sold in this offering (20,000,000 Class A ordinary shares if the underwriters’ over-allotment option is not exercised and 23,000,000 Class A ordinary shares if the underwriters’ over-allotment option is exercised in full) will be freely tradable without restriction or further registration under the Securities Act, except for any Class A ordinary shares purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act. All of the outstanding founder shares (5,000,000 founder shares if the underwriters’ over-allotment option is not exercised and 5,750,000 founder shares if the underwriters’ over-allotment option is exercised in full) and all of the outstanding private placement warrants (8,000,000 private placement warrants if the underwriters’ over-allotment option is not exercised and 8,900,000 private placement warrants if the underwriters’ over-allotment option is exercised in full) will be restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering. Upon the closing and sale of the additional private placement warrants, pursuant to our sponsor’s option to purchase 2,000,000 (or up to 2,300,000 if the underwriters’ over-allotment option is exercised in full) additional private placement warrants in order to extend the initial period of time for us to consummate an initial business combination, such private placement warrants will also be restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering.
Rule 144
Pursuant to Rule 144, a person who has beneficially owned restricted shares or warrants for at least six months would be entitled to sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the twelve months (or such shorter period as we were required to file reports) preceding the sale.
Persons who have beneficially owned restricted shares or warrants for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:
•
1% of the total number of ordinary shares then-outstanding, which will equal 250,000 shares immediately after this offering (or 287,500 shares if the underwriters exercises their over-allotment option in full); or
•
the average weekly reported trading volume of the Class A ordinary shares during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.
Sales by our affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.
Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies
Rule 144 is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:
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the issuer of the securities that was formerly a shell company has ceased to be a shell company;
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the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
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the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding twelve months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
As a result, our sponsor will be able to sell its founder shares and private placement warrants, as applicable, pursuant to Rule 144 without registration one year after we have completed our initial business combination.
Registration and Shareholder Rights
The holders of the founder shares, private placement warrants and any warrants that may be issued upon conversion of working capital loans (and any Class A ordinary shares issuable upon the exercise of the private placement warrants and warrants that may be issued upon conversion of working capital loans) will be entitled to registration rights pursuant to a registration and shareholder rights agreement to be signed prior to or on the effective date of this offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our initial business combination. However, the registration and shareholder rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lockup period, which occurs (i) in the case of the founder shares, as described in the following paragraph, and (ii) in the case of the private placement warrants and the respective Class A ordinary shares underlying such warrants, 30 days after the completion of our initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.
Except as described herein, pursuant to a letter agreement that our sponsor, directors, executive officers and certain of the anchor investors have entered or will enter into with us, our sponsor and our directors and executive officers have agreed, and certain of the anchor investors will agree, not to transfer, assign or sell their founder shares until the earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our public 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 sponsor with respect to any founder shares. We refer to such transfer restrictions throughout this prospectus as the lock-up.
In addition, pursuant to the registration and shareholder rights agreement, our sponsor, upon and following consummation of an initial business combination, will be entitled to nominate three individuals for appointment to our board of directors, as long as the sponsor holds any securities covered by the registration and shareholder rights agreement.
Listing of Securities
We intend to apply to have our units listed on the Nasdaq under the symbol “SVSVU.” Once the securities comprising the units begin separate trading, we expect that the Class A ordinary shares and warrants will be listed on the Nasdaq under the symbols “SV” and “SVSVW,” respectively. The units will automatically separate into their component parts and will not be traded following the completion of our initial business combination.
TAXATION
The following summary of certain Cayman Islands and material U.S. federal income tax consequences of an investment in our units, each consisting of one Class A ordinary share and one-half of one redeemable warrant, which we refer to collectively as our securities, is based upon laws and relevant interpretations thereof in effect as of the date of this prospectus, all of which are subject to change. This summary does not deal with all possible tax consequences relating to an investment in our Class A ordinary shares and warrants, such as the tax consequences under state, local and other tax laws.
Prospective investors should consult their advisors on the possible tax consequences of investing in our securities under the laws of their country of citizenship, residence or domicile.
Cayman Islands Tax Considerations
The following is a discussion on certain Cayman Islands income tax consequences of an investment in the securities of the company. The discussion is a general summary of present law, which is subject to prospective and retroactive change. It is not intended as tax advice, does not consider any investor’s particular circumstances, and does not consider tax consequences other than those arising under Cayman Islands law.
Under Existing Cayman Islands Laws
Payments of dividends and capital in respect of our securities will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of the securities nor will gains derived from the disposal of the securities be subject to Cayman Islands income or corporate tax. The Cayman Islands currently has no income, corporate or capital gains tax and no estate duty, inheritance tax or gift tax.
No stamp duty is payable in respect of the issue of the warrants. An instrument of transfer in respect of a warrant is stampable if executed in or brought into the Cayman Islands.
No stamp duty is payable in respect of the issue of our Class A ordinary shares or on an instrument of transfer in respect of such shares.
The Company has been incorporated under the laws of the Cayman Islands as an exempted company with limited liability and, as such, has applied for and received an undertaking from the Financial Secretary of the Cayman Islands in the following form:
The Tax Concessions Law
(2018 Revision)
Undertaking as to Tax Concessions
In accordance with the provision of Section 6 of The Tax Concessions Law (2020 Revision), the Financial Secretary undertakes with Spring Valley Acquisition Corp. (the “Company”):
1.
That no law which is hereafter enacted in the Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to the Company or its operations; and
2.
In addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable:
2.1
On or in respect of the shares, debentures or other obligations of the Company; or
2.2
by way of the withholding in whole or part, of any relevant payment as defined in Section 6(3) of the Tax Concessions Law (2018 Revision).
These concessions shall be for a period of 30 years from the date hereof.
Material United States Federal Income Tax Considerations
General
The following discussion summarizes certain material U.S. federal income tax considerations generally applicable to the acquisition, ownership and disposition of our units (each consisting of one Class A ordinary share and one-half of one redeemable warrant) that are purchased in this offering by U.S. Holders (as defined below) and Non-U.S. Holders (as defined below). Because the components of a unit are generally separable at the option of the holder, the holder of a unit generally should be treated, for U.S. federal income tax purposes, as the owner of both the underlying Class A ordinary share and warrant components of the unit. As a result, the discussion below with respect to holders of Class A ordinary shares and warrants should also apply to holders of units (as the deemed owners of the underlying Class A ordinary shares and warrants that constitute the units).
This discussion is limited to certain material U.S. federal income tax considerations to beneficial owners of our securities who are initial purchasers of a unit pursuant to this offering and hold the unit and each component of the unit as a capital asset within the meaning of Section 1221 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) (generally, property held for investment). This discussion assumes that the Class A ordinary shares and warrants will trade separately and that any distributions made (or deemed made) by us on our Class A ordinary shares and any consideration received (or deemed received) by a holder in consideration for the sale or other disposition of our securities will be in U.S. dollars. This discussion is a summary only and does not consider all aspects of U.S. federal income taxation that may be relevant to the acquisition, ownership and disposition of a unit by a prospective investor in light of its particular circumstances, including:
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our sponsor, officers or directors or other holders of our Class B ordinary shares or private placement warrants;
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persons subject to the alternative minimum tax;
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banks, financial institutions or financial services entities;
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broker-dealers;
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taxpayers that are subject to the mark-to-market accounting rules;
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tax-exempt entities;
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S-corporations;
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governments or agencies or instrumentalities thereof;
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insurance companies;
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regulated investment companies;
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real estate investment trusts;
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expatriates or former long-term residents of the United States;
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persons that actually or constructively own five percent or more of our shares;
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persons that acquired our securities pursuant to an exercise of employee share options, in connection with employee share incentive plans or otherwise as compensation or in connection with services;
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persons that hold our securities as part of a straddle, constructive sale, hedging, conversion or other integrated or similar transaction;
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persons required to accelerate the recognition of any item of gross income with respect to Class A ordinary shares or warrants as a result of such income being recognized on an applicable financial statement;
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“controlled foreign corporations,” “passive foreign investment companies” and corporations that accumulate earnings to avoid U.S. federal income tax;
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“qualified foreign pension funds” as defined in Section 897(l)(2) of the Code and entities all of the interests of which are held by qualified foreign pension funds;
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tax qualified retirement plans; or
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U.S. Holders (as defined below) whose functional currency is not the U.S. dollar.
Moreover, the discussion below is based upon the provisions of the Code, the Treasury regulations promulgated thereunder and administrative and judicial interpretations thereof, all as of the date hereof.
Those authorities may be repealed, revoked, modified or subject to differing interpretations, possibly on a retroactive basis, so as to result in U.S. federal income tax consequences different from those discussed below. Furthermore, this discussion does not address any aspect of U.S. federal non-income tax laws, such as gift, estate or Medicare contribution tax laws, or state, local or non-U.S. tax laws.
We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree with the discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulations, administrative rulings or court decisions will not adversely affect the accuracy of the statements in this discussion.
This discussion does not consider the tax treatment of partnerships or other pass-through entities or persons who hold our securities through such entities. If a partnership (or other entity or arrangement classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of our securities, the U.S. federal income tax treatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partner and the partnership. If you are a partner of a partnership holding our securities, we urge you to consult your own tax advisor.
THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY, IS ONLY A SUMMARY OF CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS ASSOCIATED WITH THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES, AND IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING. THE U.S. FEDERAL INCOME TAX TREATMENT OF A PROSPECTIVE INVESTOR IN OUR SECURITIES MAY BE AFFECTED BY MATTERS NOT DISCUSSED HEREIN AND DEPENDS IN SOME INSTANCES ON DETERMINATIONS OF FACT AND INTERPRETATIONS OF COMPLEX PROVISIONS OF U.S. FEDERAL INCOME TAX LAW FOR WHICH NO CLEAR PRECEDENT OR AUTHORITY MAY BE AVAILABLE. EACH PROSPECTIVE INVESTOR IN OUR SECURITIES IS URGED TO CONSULT ITS TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO SUCH INVESTOR OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF U.S. FEDERAL, STATE, LOCAL, AND NON-U.S. TAX LAWS, AS WELL AS UNDER ANY APPLICABLE TAX TREATY.
Allocation of Purchase Price and Characterization of a Unit
No statutory, administrative or judicial authority directly addresses the treatment of a unit or instruments similar to a unit for U.S. federal income tax purposes, and therefore, that treatment is not entirely clear. The acquisition of a unit should be treated for U.S. federal income tax purposes as the acquisition of one Class A ordinary share and one-half of one redeemable warrant, a whole one of which is exercisable to acquire one Class A ordinary share. We intend to treat the acquisition of a unit in this manner and, by purchasing a unit, you must adopt such treatment for applicable tax purposes. For U.S. federal income tax purposes, each holder of a unit will agree to allocate the purchase price paid by such holder for such unit between the one Class A ordinary share and the one-half of one redeemable warrant based on the relative fair market value of each at the time of issuance. Under U.S. federal income tax law, each investor must make his or her own determination of such value based on all the relevant facts and circumstances. Therefore, we strongly urge each investor to consult his or her tax advisor regarding the determination of value for these purposes. The price allocated to each Class A ordinary share and one-half of one redeemable warrant should constitute the holder’s initial tax basis in such Class A ordinary share and warrant. Any disposition of a unit should be treated for U.S. federal income tax purposes as a disposition of the Class A ordinary share and one-half of one redeemable warrant comprising the unit, and the amount realized on the disposition should be allocated between the Class A ordinary share and one-half of one redeemable warrant based on their respective fair market values at the time of disposition (as determined by each such unit holder based on all relevant facts and circumstances). Neither the separation of the Class A ordinary share and the one-half of one redeemable warrant constituting a unit nor the combination of halves of warrants into a single warrant should be a taxable event for U.S. federal income tax purposes.
The foregoing treatment of the units, the Class A ordinary shares and warrants and a holder’s purchase price allocation are not binding on the IRS or the courts. Because there are no authorities that directly address instruments that are similar to the units, no assurance can be given that the IRS
or the courts will agree with the characterization described above or the discussion below. Accordingly, each prospective investor is urged to consult its tax advisor regarding the tax consequences of an investment in a unit (including alternative characterizations of a unit). The balance of this discussion assumes that the characterization of the units described above is respected for U.S. federal income tax purposes.
U.S. Holders
This section applies to you if you are a “U.S. Holder.” As used herein, the term “U.S. Holder” means a beneficial owner of units, Class A ordinary shares or warrants that is for U.S. federal income tax purposes:
•
an individual citizen or resident of the United States;
•
a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) that is created or organized (or treated as created or organized) in or under the laws of the United States, any state thereof or the District of Columbia;
•
an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
•
a trust if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (B) it has in effect under applicable U.S. Treasury regulations a valid election to be treated as a U.S. person.
Taxation of Distributions
Subject to the passive foreign investment company (“PFIC”) rules discussed below, a U.S. Holder generally will be required to include in gross income as dividends the amount of any distribution paid on our Class A ordinary shares to the extent the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Distributions in excess of such earnings and profits generally will be applied against and reduce the U.S. Holder’s basis in its Class A ordinary shares (but not below zero) and, to the extent in excess of such basis, will be treated as gain from the sale or exchange of such Class A ordinary shares (see “—Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Ordinary Shares and Warrants” below).
Dividends paid by us will be taxable to a corporate U.S. Holder at regular rates and will not be eligible for the dividends-received deduction generally allowed to domestic corporations in respect of dividends received from other domestic corporations (except to the extent paid out of accumulated earnings and profits of a predecessor corporation that were accumulated by such predecessor corporation while it was taxable as a domestic corporation). With respect to non-corporate U.S. Holders, under tax laws currently in effect and subject to certain exceptions (including, but not limited to, dividends treated as investment income for purposes of investment interest deduction limitations), dividends generally will be taxed at the lower applicable long-term capital gains rate (see “—Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Ordinary Shares and Warrants” below) only if our Class A ordinary shares are readily tradable on an established securities market in the United States (which they will be if our Class A Ordinary Shares are traded on the Nasdaq), the Company is not treated as a PFIC at the time the dividend was paid or in the preceding year and certain holding period requirements are met. It is unclear, however, whether certain redemption rights described in this prospectus may suspend the running of the applicable holding period for this purpose. U.S. Holders should consult their tax advisors regarding the availability of such lower rate for any dividends paid with respect to our Class A ordinary shares.
Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Ordinary Shares and Warrants
Subject to the PFIC rules discussed below, a U.S. Holder generally will recognize capital gain or loss on the sale or other taxable disposition of our Class A ordinary shares or warrants (including on our dissolution and liquidation if we do not complete our initial business combination within the required time period). Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. Holder’s holding period for such Class A ordinary shares or warrants exceeds one year. Long-term capital gains recognized by non-corporate U.S. Holders are generally subject to U.S. federal income tax at a
reduced rate of tax. It is unclear, however, whether certain redemption rights described in this prospectus may suspend the running of the applicable holding period for this purpose.
The amount of gain or loss recognized on a sale or other taxable disposition generally will be equal to the difference between (i) the sum of the amount of cash and the fair market value of any property received in such disposition (or, if the Class A ordinary shares or warrants are transferred together, the portion of the amount realized on such disposition that is allocable to the Class A ordinary shares or warrants based upon their then relative fair market values) and (ii) the U.S. Holder’s adjusted tax basis in such Class A ordinary shares and/or warrants. A U.S. Holder’s adjusted tax basis in its Class A ordinary shares and warrants generally will equal the U.S. Holder’s acquisition cost (that is, the portion of the purchase price of a unit allocated to a Class A ordinary share or one-half of one redeemable warrant, as described above under “—Allocation of Purchase Price and Characterization of a Unit”) reduced, in the case of any Class A ordinary shares, by any prior distributions treated as a return of capital. See “—Exercise, Lapse or Redemption of a Warrant” below for a discussion regarding a U.S. Holder’s tax basis in the Class A ordinary share acquired pursuant to the exercise of a warrant. The deduction of capital losses is subject to certain limitations.
Redemption of Class A Ordinary Shares
Subject to the PFIC rules discussed below, in the event that a U.S. Holder’s Class A ordinary shares are redeemed pursuant to the redemption provisions described in this prospectus under “Description of Securities—Ordinary Shares” or if we purchase a U.S. Holder’s Class A ordinary shares in an open market transaction (referred to herein as a “redemption”), the treatment of the redemption for U.S. federal income tax purposes will depend on whether it qualifies as a sale of the Class A ordinary shares under Section 302 of the Code. If the redemption qualifies as a sale of Class A ordinary shares, the U.S. Holder will be treated as described under “—Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Ordinary Shares and Warrants” above. Whether a redemption qualifies for sale treatment will depend largely on the total number of our shares treated as held by the U.S. Holder (including any shares constructively owned by the U.S. Holder as described in the following paragraph) relative to all of our shares outstanding both before and after such redemption. The redemption of Class A ordinary shares generally will be treated as a sale of the Class A ordinary shares (rather than as a corporate distribution) if such redemption (i) is “substantially disproportionate” with respect to the U.S. Holder, (ii) results in a “complete termination” of the U.S. Holder’s interest in us or (iii) is “not essentially equivalent to a dividend” with respect to the U.S. Holder. These tests are explained more fully below.
In determining whether any of the foregoing tests are satisfied, a U.S. Holder takes into account not only our Class A ordinary shares actually owned by the U.S. Holder, but also our shares that such holder constructively owns. A U.S. Holder may constructively own, in addition to shares owned directly, shares owned by certain related individuals and entities in which the U.S. Holder has an interest or that have an interest in such U.S. Holder, as well as any shares the U.S. Holder has a right to acquire by exercise of an option, which would generally include Class A ordinary shares which could be acquired pursuant to the exercise of the warrants. In order to meet the substantially disproportionate test, the percentage of our outstanding voting shares actually and constructively owned by the U.S. Holder immediately following the redemption of Class A ordinary shares must, among other requirements, be less than 80 percent of the percentage of our outstanding voting shares actually and constructively owned by the U.S. Holder immediately before the redemption. Prior to our initial business combination, the Class A ordinary shares may not be treated as voting shares for this purpose and, consequently, this substantially disproportionate test may not be applicable. There will be a complete termination of a U.S. Holder’s interest if either (i) all of our shares actually and constructively owned by the U.S. Holder are redeemed or (ii) all of our shares actually owned by the U.S. Holder are redeemed, and the U.S. Holder is eligible to waive, and effectively waives in accordance with specific rules, the attribution of shares owned by certain family members, and the U.S. Holder does not constructively own any other shares of ours. The redemption of the Class A ordinary shares will not be essentially equivalent to a dividend with respect to a U.S. Holder if it results in a “meaningful reduction” of the U.S. Holder’s proportionate interest in us. Whether the redemption will result in a meaningful reduction in a U.S. Holder’s proportionate interest in us will depend on the particular facts and circumstances. However, the IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a
small minority shareholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a “meaningful reduction.” A U.S. Holder should consult with its tax advisors as to the tax consequences of a redemption.
If none of the foregoing tests are satisfied, then the redemption will be treated as a corporate distribution and the tax effects will be as described under “—Taxation of Distributions” above. After the application of those rules, any remaining tax basis of the U.S. Holder in the redeemed Class A ordinary shares will be added to the U.S. Holder’s adjusted tax basis in its remaining shares, or, if it has none, to the U.S. Holder’s adjusted tax basis in its warrants or possibly in other shares constructively owned by it.
Exercise, Lapse or Redemption of Warrants
Subject to the PFIC rules discussed below and except as discussed below with respect to the cashless exercise of a warrant, a U.S. Holder generally will not recognize gain or loss upon the acquisition of Class A ordinary shares on the exercise of warrants for cash. A U.S. Holder’s initial tax basis in Class A ordinary shares received upon exercise of warrants generally will equal the sum of the U.S. Holder’s initial investment in the warrants exchanged therefor (that is, the portion of the U.S. Holder’s purchase price for the units that is allocated to such warrants, as described above under “—Allocation of Purchase Price and Characterization of a Unit”) and the exercise price. It is unclear whether a U.S. Holder’s holding period for the Class A ordinary shares will commence on the date of exercise of the warrants or the day following the date of exercise of the warrants; in either case, the holding period will not include the period during which the U.S. Holder held the warrants. If any warrants are allowed to lapse unexercised, a U.S. Holder generally will recognize a capital loss equal to such holder’s tax basis in such lapsed warrants.
The tax consequences of a cashless exercise of warrants are not clear under current law. Subject to the PFIC rules discussed below, a cashless exercise may not be taxable, either because the exercise is not a realization event or because the exercise is treated as a “recapitalization” for U.S. federal income tax purposes. In either situation, a U.S. Holder’s tax basis in the Class A ordinary shares received generally would equal the U.S. Holder’s tax basis in the warrants. If the cashless exercise was not a realization event, it is unclear whether a U.S. Holder’s holding period for the Class A ordinary shares will commence on the date of exercise of the warrants or the day following the date of exercise of the warrants. If the cashless exercise were treated as a recapitalization, the holding period of the Class A ordinary shares would include the holding period of the warrants.
It is also possible that a cashless exercise may be treated as a taxable exchange in which gain or loss would be recognized. In such event, a U.S. Holder may be deemed to have surrendered a number of warrants having a value equal to the exercise price for the total number of warrants to be exercised. Subject to the PFIC rules discussed below, the U.S. Holder would recognize capital gain or loss in an amount equal to the difference between the fair market value of the warrants deemed surrendered and the U.S. Holder’s tax basis in such warrants. In this case, a U.S. Holder’s tax basis in the Class A ordinary shares received would equal the sum of the U.S. Holder’s initial investment in the warrants exercised (i.e., the portion of the U.S. Holder’s purchase price for the units that is allocated to such warrants, as described above under “—Allocation of Purchase Price and Characterization of a Unit”) and the exercise price of such warrants. It is unclear whether a U.S. Holder’s holding period for the Class A ordinary shares would commence on the date of exercise of the warrants or the day following the date of exercise of the warrants; in either case, the holding period will not include the period during which the U.S. holder held the warrants.
Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise, there can be no assurance which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, a U.S. Holder should consult its tax advisor regarding the tax consequences of a cashless exercise.
While not free from doubt, a redemption of warrants for Class A ordinary shares described in the section of this prospectus entitled “Description of Securities—Warrants—Public Shareholders’ Warrants—Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00” should be treated as a “recapitalization” for U.S. federal income tax purposes. Accordingly,
subject to the PFIC rules described below, a U.S. Holder should not recognize any gain or loss on the redemption of warrants for Class A ordinary shares. In such event, a U.S. Holder’s aggregate tax basis in the Class A ordinary shares received in the redemption generally should equal the U.S. Holder’s aggregate tax basis in the warrants redeemed and the holding period for the Class A ordinary shares received should include the U.S. Holder’s holding period for the surrendered warrants. However, there is some uncertainty regarding this tax treatment, and it is possible such a redemption could be treated in part as a taxable exchange in which gain or loss would be recognized in a manner similar to that discussed above for a cashless exercise of warrants. Accordingly, a U.S. Holder is urged to consult its tax advisor regarding the tax consequences of a redemption of warrants for Class A ordinary shares.
Subject to the PFIC rules described below, if we redeem warrants for cash pursuant to the redemption provisions described in the section of this prospectus entitled “ Description of Securities—Warrants—Public Shareholders’ Warrants” or if we purchase warrants in an open market transaction, such redemption or purchase generally will be treated as a taxable disposition to the U.S. Holder, taxed as described above under “—Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Ordinary Shares and Warrants.”
Possible Constructive Distributions
The terms of each warrant provide for an adjustment to the number of Class A ordinary shares for which the warrant may be exercised or to the exercise price of the warrant in certain events, as discussed in the section of this prospectus captioned “Description of Securities—Warrants—Public Shareholders’ Warrants.” An adjustment which has the effect of preventing dilution generally is not taxable. The U.S. Holders of the warrants would, however, be treated as receiving a constructive distribution from us if, for example, the adjustment increases such U.S. Holders’ proportionate interest in our assets or earnings and profits (e.g., through an increase in the number of Class A ordinary shares that would be obtained upon exercise or through a decrease to the exercise price, including, for example, the decrease to the exercise price of the warrants where additional Class A ordinary shares or equity-linked securities are issued in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per ordinary share, as described under “Description of Securities—Warrants—Anti-Dilution Adjustments”) as a result of a distribution of cash or other property to the holders of our Class A ordinary shares which is taxable to the U.S. Holders of such Class A ordinary shares as described under “—Taxation of Distributions” above. Such constructive distribution would be subject to tax as described under that section in the same manner as if the U.S. Holders of the warrants received a cash distribution from us equal to the fair market value of such increased interest.
Passive Foreign Investment Company Rules
A non-U.S. corporation will be classified as a PFIC for U.S. federal income tax purposes if either (i) at least 75% of its gross income in a taxable year, including its pro rata share of the gross income of any corporation in which it is considered to own at least 25% of the shares by value, is passive income or (ii) at least 50% of its assets in a taxable year (ordinarily determined based on fair market value and averaged quarterly over the year), including its pro rata share of the assets of any corporation in which it is considered to own at least 25% of the shares by value, are held for the production of, or produce, passive income. Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets.
Because we are a blank check company, with no current active business, we believe that it is likely that we will meet the PFIC asset or income test for our current taxable year. However, pursuant to a start-up exception, a corporation will not be a PFIC for the first taxable year the corporation has gross income (the “start-up year”), if (1) no predecessor of the corporation was a PFIC; (2) the corporation satisfies the IRS that it will not be a PFIC for either of the two taxable years following the start-up year; and (3) the corporation is not in fact a PFIC for either of those subsequent years. The applicability of the start-up exception to us is uncertain and will not be known until after the close of our current taxable year (or possibly not until after the close of the first two taxable years following our start-up year). After the acquisition of a company or assets in a business combination, we may still meet one of the PFIC tests depending on the timing of the acquisition and the amount of our passive income and assets as well as the passive income and assets of the acquired business, in each case, in the applicable taxable years. If the company that we acquire in a business combination is a PFIC (or we do not complete
a business acquisition by the end of the first taxable year after the start-up year), then we will likely not qualify for the start-up exception and will be a PFIC for our current taxable year. Our actual PFIC status for our current taxable year or any subsequent taxable year, however, will not be determinable until after the end of such taxable year (or possibly not until after the close of the first two taxable years following our start-up year). Accordingly, there can be no assurance with respect to our status as a PFIC for our current taxable year or any future taxable year.
Although our PFIC status is determined annually, an initial determination that our company is a PFIC will generally apply for subsequent years to a U.S. Holder who held Class A ordinary shares or warrants while we were a PFIC, whether or not we meet the test for PFIC status in those subsequent years. If we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of our Class A ordinary shares or warrants and, in the case of our Class A ordinary shares, the U.S. Holder did not make either a qualified electing fund (“QEF”) election for our first taxable year as a PFIC in which the U.S. Holder held (or was deemed to hold) Class A ordinary shares, a QEF election along with a purging election, or a mark-to-market election, each as described below, such U.S. Holder generally will be subject to special rules with respect to (i) any gain recognized by the U.S. Holder on the sale or other disposition of its Class A ordinary shares or warrants and (ii) any “excess distribution” made to the U.S. Holder (generally, any distributions to such U.S. Holder during a taxable year of the U.S. Holder that are greater than 125% of the average annual distributions received by such U.S. Holder in respect of the Class A ordinary shares during the three preceding taxable years of such U.S. Holder or, if shorter, such U.S. Holder’s holding period for the Class A ordinary shares).
Under these rules:
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the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the Class A ordinary shares or warrants;
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the amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received the excess distribution, or to the period in the U.S. Holder’s holding period before the first day of our first taxable year in which we are a PFIC, will be taxed as ordinary income;
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the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder; and
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an additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed on the U.S. Holder with respect to the tax attributable to each such other taxable year of the U.S. Holder.
In general, if we are determined to be a PFIC, a U.S. Holder may avoid the PFIC tax consequences described above in respect of our Class A ordinary shares (but not our warrants) by making a timely and valid QEF election (if eligible to do so) to include in income its pro rata share of our net capital gains (as long-term capital gain) and other earnings and profits (as ordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends. A U.S. Holder generally may make a separate election to defer the payment of taxes on undistributed income inclusions under the QEF rules, but if deferred, any such taxes will be subject to an interest charge.
A U.S. Holder may not make a QEF election with respect to its warrants to acquire our Class A ordinary shares. As a result, if a U.S. Holder sells or otherwise disposes of such warrants (other than upon exercise of such warrants) and we were a PFIC at any time during the U.S. Holder’s holding period of such warrants, any gain recognized generally will be treated as an excess distribution, taxed as described above. If a U.S. Holder that exercises such warrants properly makes and maintains a QEF election with respect to the newly acquired Class A ordinary shares (or has previously made and maintained a QEF election with respect to our Class A ordinary shares), the QEF election will apply to the newly acquired Class A ordinary shares. Notwithstanding such QEF election, the adverse tax consequences relating to PFIC shares, adjusted to take into account the current income inclusions resulting from the QEF election, will continue to apply with respect to such newly acquired Class A ordinary shares (which generally will be deemed to have a holding period for purposes of the PFIC rules
that includes the period the U.S. Holder held the warrants), unless the U.S. Holder makes a purging election under the PFIC rules. Under one type of purging election, the U.S. Holder will be deemed to have sold such shares at their fair market value and any gain recognized on such deemed sale will be treated as an excess distribution, as described above. Under another type of purging election, an electing U.S. Holder will be treated as having received as an excess distribution its ratable share of our earnings and profits determined for U.S. federal income tax purposes. In order for a U.S. Holder to make the second election, we must also be a “controlled foreign corporation” as defined in the Code, and there are no assurances that we will so qualify. As a result of either purging election, the U.S. Holder will have a new basis and holding period in the Class A ordinary shares acquired upon the exercise of the warrants for purposes of the PFIC rules.
The QEF election is made on a shareholder-by-shareholder basis and, once made, can be revoked only with the consent of the IRS. A U.S. Holder generally makes a QEF election by attaching a completed IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund), including the information provided in a PFIC Annual Information Statement, to a timely filed U.S. federal income tax return for the tax year to which the election relates. Retroactive QEF elections generally may be made only by filing a protective statement with such return and if certain other conditions are met or with the consent of the IRS. U.S. Holders should consult their tax advisors regarding the availability and tax consequences of a retroactive QEF election under their particular circumstances.
In order to comply with the requirements of a QEF election, a U.S. Holder must receive a PFIC Annual Information Statement from us. If we determine we are a PFIC for any taxable year, upon written request, we will endeavor to provide to a U.S. Holder such information as the IRS may require, including a PFIC Annual Information Statement, in order to enable the U.S. Holder to make and maintain a QEF election, but there is no assurance that we will timely provide such required information. There is also no assurance that we will have timely knowledge of our status as a PFIC in the future or of the required information to be provided.
If a U.S. Holder has made a QEF election with respect to our Class A ordinary shares, and the excess distribution rules discussed above do not apply to such shares (because of a timely QEF election for our first taxable year as a PFIC in which the U.S. Holder holds (or is deemed to hold) such shares or a purge of the PFIC taint pursuant to a purging election, as described above), any gain recognized on the sale of our Class A ordinary shares generally will be taxable as capital gain and no additional tax or interest charge will be imposed under the PFIC rules. As discussed above, if we are a PFIC for any taxable year, a U.S. Holder of our Class A ordinary shares that has made a QEF election will be currently taxed on its pro rata share of our earnings and profits, whether or not distributed for such year. A subsequent distribution of such earnings and profits that were previously included in income generally should not be taxable when distributed to such U.S. Holder. The tax basis of a U.S. Holder’s shares in a QEF will be increased by amounts that are included in income, and decreased by amounts distributed but not taxed as dividends, under the above rules. In addition, if we are not a PFIC for any taxable year, such U.S. Holder will not be subject to the QEF inclusion regime with respect to our Class A ordinary shares for such taxable year.
Alternatively, if we are a PFIC and our Class A ordinary shares constitute “marketable stock,” a U.S. Holder may avoid the adverse PFIC tax consequences discussed above if such U.S. Holder, at the close of the first taxable year in which it holds (or is deemed to hold) our Class A ordinary shares, makes a mark-to-market election with respect to such shares for such taxable year. Such U.S. Holder generally will include for each of its taxable years as ordinary income the excess, if any, of the fair market value of its Class A ordinary shares at the end of such year over its adjusted basis in its Class A ordinary shares. The U.S. Holder also will recognize an ordinary loss in respect of the excess, if any, of its adjusted basis of its Class A ordinary shares over the fair market value of its Class A ordinary shares at the end of its taxable year (but only to the extent of the net amount of previously included income as a result of the mark-to-market election). The U.S. Holder’s basis in its Class A ordinary shares will be adjusted to reflect any such income or loss amounts, and any further gain recognized on a sale or other taxable disposition of its Class A ordinary shares will be treated as ordinary income. Currently, a mark-to-market election may not be made with respect to warrants.
The mark-to-market election is available only for “marketable stock,” generally, stock that is regularly traded on a national securities exchange that is registered with the Securities and Exchange Commission, including the Nasdaq (on which we intend to list the Class A ordinary shares), or on a foreign exchange or market that the IRS determines has rules sufficient to ensure that the market price represents a legitimate and sound fair market value. If made, a mark-to-market election would be effective for the taxable year for which the election was made and for all subsequent taxable years unless the Class A ordinary shares ceased to qualify as “marketable stock” for purposes of the PFIC rules or the IRS consented to the revocation of the election. U.S. Holders should consult their tax advisors regarding the availability and tax consequences of a mark-to-market election with respect to our Class A ordinary shares under their particular circumstances.
If we are a PFIC and, at any time, have a foreign subsidiary that is classified as a PFIC, U.S. Holders generally would be deemed to own a portion of the shares of such lower-tier PFIC, and generally could incur liability for the deferred tax and interest charge described above if we receive a distribution from, or dispose of all or part of our interest in, the lower-tier PFIC or the U.S. Holders otherwise were deemed to have disposed of an interest in the lower-tier PFIC. Upon written request, we will endeavor to cause any lower-tier PFIC to provide to a U.S. Holder the information that may be required to make or maintain a QEF election with respect to the lower-tier PFIC. There can be no assurance that we will have timely knowledge of the status of any such lower-tier PFIC. In addition, we may not hold a controlling interest in any such lower-tier PFIC and thus there can be no assurance we will be able to cause the lower-tier PFIC to provide such required information. U.S. Holders are urged to consult their tax advisors regarding the tax issues raised by lower-tier PFICs.
A U.S. Holder that owns (or is deemed to own) shares in a PFIC during any taxable year of the U.S. Holder, may have to file an IRS Form 8621 (whether or not a QEF or mark-to-market election is made) and such other information as may be required by the U.S. Treasury Department. Failure to do so, if required, will extend the statute of limitations until such required information is furnished to the IRS.
The rules dealing with PFICs and with the QEF and mark-to-market elections are very complex and are affected by various factors in addition to those described above. Accordingly, U.S. Holders of our Class A ordinary shares and warrants should consult their own tax advisors concerning the application of the PFIC rules to our securities under their particular circumstances.
Tax Reporting
Certain U.S. Holders may be required to file an IRS Form 926 (Return by a U.S. Transferor of Property to a Foreign Corporation) to report a transfer of property (including cash) to us. Substantial penalties may be imposed on a U.S. Holder that fails to comply with this reporting requirement and the period of limitations on assessment and collection of U.S. federal income taxes will be extended in the event of a failure to comply. Furthermore, certain U.S. Holders who are individuals and certain entities will be required to report information with respect to such U.S. Holder’s investment in “specified foreign financial assets” on IRS Form 8938 (Statement of Specified Foreign Financial Assets), subject to certain exceptions. An interest in the Company generally constitutes a specified foreign financial asset for these purposes. Persons who are required to report specified foreign financial assets and fail to do so may be subject to substantial penalties and the period of limitations on assessment and collection of U.S. federal income taxes will be extended in the event of a failure to comply. Potential investors are urged to consult their tax advisors regarding the foreign financial asset and other reporting obligations and their application to an investment in our Class A ordinary shares and warrants.
Non-U.S. Holders
This section applies to you if you are a “Non-U.S. Holder.” As used herein, the term “Non-U.S. Holder” means a beneficial owner of our units, Class A ordinary shares or warrants (other than a partnership or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) who or that is for U.S. federal income tax purposes:
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a non-resident alien individual;
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a foreign corporation; or
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an estate or trust that is not a U.S. Holder; but generally does not include an individual who is present in the United States for 183 days or more in the taxable year of disposition. If you are
such an individual, you should consult your tax advisor regarding the U.S. federal income tax consequences of the sale or other disposition of our securities.
Dividends (including constructive dividends) paid or deemed paid to a Non-U.S. Holder in respect of our Class A ordinary shares generally will not be subject to U.S. federal income tax, unless the dividends are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base that such holder maintains in the United States). In addition, a Non-U.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other taxable disposition of our Class A ordinary shares or warrants unless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base that such holder maintains in the United States).
Dividends (including constructive dividends) and gains that are effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to U.S. federal income tax at the same regular U.S. federal income tax rates applicable to a comparable U.S. Holder and, in the case of a Non-U.S. Holder that is a corporation for U.S. federal income tax purposes, also may be subject to an additional branch profits tax at a 30% rate or a lower applicable tax treaty rate.
The characterization for U.S. federal income tax purposes of the redemption or purchase by us of a Non-U.S. Holder’s Class A ordinary shares will generally correspond to the U.S. federal income tax characterization of such a redemption or purchase by us of a U.S. Holder’s Class A ordinary shares, as described under “U.S. Holders—Redemption of Class A Ordinary Shares” above, and the consequences of the redemption or purchase by us to the Non-U.S. Holder will be as described in the preceding paragraphs above. The characterization for U.S. federal income tax purposes of a Non-U.S. Holder’s exercise of a warrant, or the lapse of a warrant held by a Non-U.S. Holder, generally will correspond to the U.S. federal income tax characterization of the exercise or lapse of a warrant by a U.S. Holder, as described under “—U.S. Holders—Exercise, Lapse or Redemption of a Warrant,” above, although to the extent a cashless exercise results in a taxable exchange, the consequences would be similar to those described in the preceding paragraphs above for a Non-U.S. Holder’s gain on the sale or other disposition of our Class A ordinary shares and warrants.
Information Reporting and Backup Withholding
Dividend payments with respect to our Class A ordinary shares and proceeds from the sale, exchange or redemption of our Class A ordinary shares may be subject to information reporting to the IRS and possible U.S. backup withholding. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes other required certifications, or who is otherwise exempt from backup withholding and establishes such exempt status. A Non-U.S. Holder generally will eliminate the requirement for information reporting and backup withholding by providing certification of its foreign status, under penalties of perjury, on a duly executed applicable IRS Form W-8 or by otherwise establishing an exemption.
Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a holder’s U.S. federal income tax liability, and a holder generally may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for refund with the IRS and furnishing any required information.
The U.S. federal income tax discussion set forth above is included for general information only and may not be applicable depending upon a holder’s particular situation. Holders are urged to consult their tax advisors with respect to the tax consequences to them of the acquisition, ownership and disposition of our Class A ordinary shares and warrants, including the tax consequences under U.S. federal, state, local, estate, foreign and other tax laws and tax treaties and the possible effects of changes in U.S. or other tax laws.
UNDERWRITING
Under the terms and subject to the conditions contained in an underwriting agreement dated the date of this prospectus, we have agreed to sell to the underwriters named below, for whom Cowen and Company, LLC and Wells Fargo Securities, LLC are acting as representatives, the following respective number of units:
|
Underwriters
|
|
|
Number
of Units
|
|
|
Cowen and Company, LLC
|
|
|
|
|
|
|
|
|
Wells Fargo Securities, LLC
|
|
|
|
|
|
|
|
|
Drexel Hamilton, LLC
|
|
|
|
|
|
|
|
|
Siebert Williams Shank & Co., LLC
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
20,000,000 |
|
|
The underwriting agreement provides that the underwriters are obligated to purchase all the units in this offering if any are purchased, other than those units covered by the over-allotment option described below.
We have granted to the underwriters a 45-day option to purchase on a pro rata basis up to 3,000,000 additional units at the initial public offering price, less the underwriting discounts and commissions. The option may be exercised only to cover any over-allotments of units.
The underwriters propose to offer the units initially at the public offering price on the cover page of this prospectus and to selling group members at that price less a selling concession of $ per unit.
The following table shows the underwriting discount and commission that we are to pay to the underwriters in connection with this offering. These amounts are shown assuming both no exercise and full exercise of the underwriters’ over-allotment option. $0.35 per unit, or $7,000,000 (or $8,050,000 if the underwriters’ over-allotment option is exercised in full), of deferred underwriting commission will be paid to certain of the underwriters upon the completion of our initial business combination.
| |
|
|
Paid By Spring Valley
Acquisition Corp.
|
|
| |
|
|
No Exercise
|
|
|
Full Exercise
|
|
|
Per Unit(1)
|
|
|
|
$ |
0.55 |
|
|
|
|
$ |
0.55 |
|
|
|
Total(1)
|
|
|
|
$ |
11,000,000 |
|
|
|
|
$ |
12,650,000 |
|
|
(1)
Includes $0.35 per unit, or $7,000,000 in the aggregate (or $8,050,000 in the aggregate if the underwriters’ over-allotment option is exercised in full), payable to certain of the underwriters for deferred underwriting commission to be placed in a trust account located in the United States as described herein and released to the underwriters only upon the consummation of an initial business combination.
We estimate that our non-reimbursed out-of-pocket expenses for this offering will be approximately $1,000,000. We have agreed to pay for the FINRA-related fees and expenses of the underwriters’ legal counsel, not to exceed $25,000. The underwriters have agreed to reimburse us for certain fees, costs and expenses in connection with this offering. If and when we consummate an initial business combination, we have agreed to repay such amounts to the underwriters.
The representatives have informed us that the underwriters do not intend to make sales to discretionary accounts.
We, our sponsor and our officers and directors have agreed that we and they will not, subject to certain exceptions, for a period of 180 days after the date of this prospectus, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, or file with, or submit to, the SEC a registration statement under the Securities Act relating to any units, shares of common stock, founder shares, warrants or any securities convertible into, or exercisable, or exchangeable for, any units, common stock, founder shares, or warrants, (ii) enter into any swap or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of any units, shares of common stock, founder shares, or warrants or any such other securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of units or such other securities, in cash or otherwise or (iii) or publicly disclose the intention to undertake any of the foregoing, without the prior written consent of Cowen and Company, LLC; provided, however, that we may (1) issue and sell the private placement warrants; (2) issue and sell the additional units to cover our underwriters’ over-allotment option (if any); (3) register with the SEC pursuant to an agreement to be entered into on or prior to the closing of this offering, the resale of the private placement warrants and the ordinary shares issuable upon exercise of the warrants and the founder shares; and (4) issue securities in connection with our initial business combination. However, the foregoing shall not apply to the forfeiture of any founder shares pursuant to their terms or any transfer of founder shares to any current or future independent director of the company (as long as such current or future independent director transferee is subject to the terms of the letter agreement, filed herewith, at the time of such transfer; and as long as, to the extent any Section 16 reporting obligation is triggered as a result of such transfer, any related Section 16 filing includes a practical explanation as to the nature of the transfer). Cowen and Company, LLC in its sole discretion may release any of the securities subject to these lock-up agreements at any time without notice.
Pursuant to a letter agreement with us, our sponsor, directors and executive officers have agreed, and certain of the anchor investors will agree, not to transfer, assign or sell any of their founder shares until the earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property (except pursuant to limited exceptions as described under “Principal Shareholders—Transfers of Founder Shares and Private Placement Warrants”). Any permitted transferees would be subject to the same restrictions and other agreements of our sponsor and our directors and executive officers with respect to any founder shares.
The private placement warrants (including the Class A 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 (except pursuant to limited exceptions as described under “Principal Shareholders—Transfers of Founder Shares and Private Placement Warrants”).
We have agreed to indemnify the underwriters against certain liabilities under the Securities Act, or contribute to payments that the underwriters may be required to make in that respect.
We intend to apply to have our units listed on the Nasdaq under the symbol “SVSVU.” Once the securities comprising the units begin separate trading, we expect that the Class A ordinary shares and warrants will be listed on the Nasdaq under the symbols “SV” and “SVSVW,” respectively.
Prior to this offering, there has been no public market for our securities. The determination of our per unit offering price was more arbitrary than would typically be the case if we were an operating company. We cannot assure you that the price at which the units, Class A ordinary shares or warrants will sell in the public market after this offering will not be lower than the initial public offering price or that an active trading market in our units, Class A ordinary shares or warrants will develop and continue after this offering.
The underwriters have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not consummate an initial business combination within 18 months from the closing of this offering, prior to the Contractual Redemption Date if extended at our sponsor's option or during any Extension Period and, in such event, such amounts will be included with the
funds held in the trust account that will be available to fund the redemption of our public shares.
In connection with this offering, the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate covering transactions and penalty bids in accordance with Regulation M under the Exchange Act.
•
Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.
•
Over-allotment involves sales by the underwriters of units in excess of the number of units the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of units over-allotted by the underwriters is not greater than the number of units that it may purchase in the over-allotment option. In a naked short position, the number of units involved is greater than the number of units in the over-allotment option. The underwriters may close out any covered short position by either exercising their over-allotment option and/or purchasing units in the open market.
•
Syndicate covering transactions involve purchases of the units in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of units to close out the short position, the underwriters will consider, among other things, the price of units available for purchase in the open market as compared to the price at which they may purchase units through the over-allotment option. If the underwriters sell more units than could be covered by the over-allotment option, a naked short position, the position can only be closed out by buying units in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the units in the open market after pricing that could adversely affect investors who purchase in this offering.
•
Penalty bids permit the representative to reclaim a selling concession from a syndicate member when the units originally sold by the syndicate member are purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.
These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our units or preventing or retarding a decline in the market price of the units. As a result, the price of our units may be higher than the price that might otherwise exist in the open market. These transactions may be effected on the Nasdaq or otherwise and, if commenced, may be discontinued at any time.
We are not under any contractual obligation to engage the underwriters to provide any services for us after this offering and have no present intent to do so. However, the underwriters may introduce us to potential target businesses or assist us in raising additional capital in the future. If the underwriters provide services to us after this offering, we may pay the underwriters fair and reasonable fees that would be determined at that time in an arm’s length negotiation; provided that no agreement will be entered into with the underwriters and no fees for such services will be paid to the underwriters prior to the date that is 90 days from the date of this prospectus, unless FINRA determines that such payment would not be deemed underwriters’ compensation in connection with this offering, and we may pay the underwriters of this offering or any entity with which they are affiliated, a finder’s fee or other compensation for services rendered to us in connection with the completion of a business combination.
The underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us or our affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions.
In addition, in the ordinary course of their business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
A prospectus in electronic format may be made available on the websites maintained by the underwriters, or selling group members, if any, participating in this offering and the underwriters participating in this offering may distribute prospectuses electronically. The representatives may allocate a number of units to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the underwriters and selling group members that will make internet distributions on the same basis as other allocations.
The units are offered for sale in the United States and other jurisdictions where it is lawful to make such offers.
The underwriters have represented and agreed that they have not offered, sold or delivered and will not offer, sell or deliver any of the units directly or indirectly, or distribute this prospectus or any other offering material relating to the units, in or from any jurisdiction except under circumstances that will result in compliance with the applicable laws and regulations thereof and that it will not impose any obligations on us except as set forth in the underwriting agreement.
European Economic Area and United Kingdom
This prospectus has been prepared on the basis that any offer of units in any Member State of the European Economic Area or the United Kingdom (a “Relevant State”) will be made pursuant to an exemption under the Prospectus Regulation from the requirement to publish a prospectus for offers of units. Accordingly any person making or intending to make an offer in that Relevant State of units which are the subject of the offering contemplated in this prospectus may only do so in circumstances in which no obligation arises for the company or any of the underwriters to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation, in each case in relation to such offer. Neither the company nor the Underwriters have authorized, nor do they authorize, the making of any offer of units in circumstances in which an obligation arises for the company or the underwriters to publish or supplement a prospectus for such offer. Neither the company nor the underwriters have authorized, nor do they authorize, the making of any offer of units through any financial intermediary, other than offers made by the underwriters, which constitute the final placement of the units contemplated in this prospectus.
In relation to each Relevant State an offer to the public of our common shares may not be made in that Relevant State, except that an offer to the public in that Relevant State of our common shares may be made:
(a)
to any legal entity which is a qualified investor as defined in the Prospectus Regulation;
(b)
to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Regulation), subject to obtaining the prior consent of the Representative for any such offer; or
(c)
in any other circumstances falling within Article 1(4) of the Prospectus Regulation, provided that no such offer of shares of our common stock shall require the company or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.
For the purposes of this provision, the expression an “offer to the public” in relation to our common shares in any Relevant State means the communication in any form and by any means of sufficient information on the terms of the offer and our common shares to be offered so as to enable an investor to decide to purchase our common shares and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129 (as amended or superseded). References to Regulations or Directives include, in relation to the UK, those Regulations or Directives as they form part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 or have been implemented in UK domestic law, as appropriate.
This European Economic Area and United Kingdom selling restriction is in addition to any other selling restrictions set out below.
Notice to Investors in the United Kingdom
Each of the underwriters severally represents, warrants and agrees as follows:
(a)
it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 (“FSMA”) received by it in connection with the issue or sale of the units in circumstances in which section 21(1) of FSMA does not apply to the company; and
(b)
it has complied and will comply, with all applicable provisions of FSMA with respect to anything done by it in relation to the units in, from or otherwise involving the United Kingdom.
This document is for distribution only to persons who (i) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Financial Promotion Order”), (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc.”) of the Financial Promotion Order, (iii) are outside the United Kingdom, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). This document is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons.
Notice to Residents of Japan
The underwriters will not offer or sell any of our units directly or indirectly in Japan or to, or for the benefit of any Japanese person or to others, for re-offering or re-sale directly or indirectly in Japan or to any Japanese person, except in each case pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Securities and Exchange Law of Japan and any other applicable laws and regulations of Japan. For purposes of this paragraph, “Japanese person” means any person resident in Japan, including any corporation or other entity organized under the laws of Japan.
Notice to Residents of Hong Kong
The underwriters and each of their affiliates have not (1) offered or sold, and will not offer or sell, in Hong Kong, by means of any document, our units other than (A) to “professional investors” as defined in the Securities and Futures Ordinance (Cap.571) of Hong Kong and any rules made under that Ordinance or (B) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance (Cap. 32 of Hong Kong) or which do not constitute an offer to the public within the meaning of that Ordinance or (2) issued or had in its possession for the purposes of issue, and will not issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere any advertisement, invitation or document relating to our units which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to our securities which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the Securities and Futures Ordinance and any rules made under that Ordinance. The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice.
Notice to Residents of Singapore
This prospectus or any other offering material relating to our units has not been and will not be registered as a prospectus with the Monetary Authority of Singapore, and the units will be offered in Singapore pursuant to exemptions under Section 274 and Section 275 of the Securities and Futures Act, Chapter 289 of Singapore (the “Securities and Futures Act”). Accordingly our units may not be offered or sold, or be the subject of an invitation for subscription or purchase, nor may this prospectus or any other offering material relating to our units be circulated or distributed, whether directly or indirectly, to
the public or any member of the public in Singapore other than (a) to an institutional investor or other person specified in Section 274 of the Securities and Futures Act, (b) to a sophisticated investor, and in accordance with the conditions specified in Section 275 of the Securities and Futures Act or (c) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the Securities and Futures Act.
Notice to Residents of Germany
Each person who is in possession of this prospectus is aware that no German sales prospectus (Verkaufsprospekt) within the meaning of the Securities Sales Prospectus Act (Wertpapier-Verkaufsprospektgesetz, the “Act”) of the Federal Republic of Germany has been or will be published with respect to our units. In particular, the underwriters have represented that they have not engaged and has agreed that it will not engage in a public offering (offentliches Angebot) within the meaning of the Act with respect to any of our units otherwise then in accordance with the Act and all other applicable legal and regulatory requirements.
Notice to Residents of France
The units are being issued and sold outside the Republic of France and that, in connection with their initial distribution, it has not offered or sold and will not offer or sell, directly or indirectly, any units to the public in the Republic of France, and that it has not distributed and will not distribute or cause to be distributed to the public in the Republic of France this prospectus or any other offering material relating to the units, and that such offers, sales and distributions have been and will be made in the Republic of France only to qualified investors (investisseurs qualifiés) in accordance with Article L.411-2 of the Monetary and Financial Code and decrét no. 98-880 dated October 1, 1998.
Notice to Residents of the Netherlands
Our units may not be offered, sold, transferred or delivered in or from the Netherlands as part of their initial distribution or at any time thereafter, directly or indirectly, other than to, individuals or legal entities situated in The Netherlands who or which trade or invest in securities in the conduct of a business or profession (which includes banks, securities intermediaries (including dealers and brokers), insurance companies, pension funds, collective investment institution, central governments, large international and supranational organizations, other institutional investors and other parties, including treasury departments of commercial enterprises, which as an ancillary activity regularly invest in securities; hereinafter, “Professional Investors”); provided that in the offer, prospectus and in any other documents or advertisements in which a forthcoming offering of our units is publicly announced (whether electronically or otherwise) in The Netherlands it is stated that such offer is and will be exclusively made to such Professional Investors. Individual or legal entities who are not Professional Investors may not participate in the offering of our units, and this prospectus or any other offering material relating to our units may not be considered an offer or the prospect of an offer to sell or exchange our units.
Notice to Prospective Investors in the Cayman Islands
No offer or invitation, whether directly or indirectly, may be made to the public in the Cayman Islands to subscribe for our securities.
Notice to Canadian Residents
Resale Restrictions
The distribution of units in Canada is being made on a private placement basis exempt from the requirement that we prepare and file a prospectus with the securities regulatory authorities in each province where trades of these securities are made. Any resale of the units in Canada must be made under applicable securities laws which may vary depending on the relevant jurisdiction, and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers are advised to seek legal advice prior to any resale of the securities.
Representations of Canadian Purchasers
By purchasing units in Canada and accepting delivery of a purchase confirmation, a purchaser is representing to us and the dealer from whom the purchase confirmation is received that:
•
the purchaser is entitled under applicable provincial securities laws to purchase the units without the benefit of a prospectus qualified under those securities laws as it is an “accredited investor” as defined under National Instrument 45-106—Prospectus Exemptions or Section 73.3 of the Securities Act (Ontario), as applicable;
•
the purchaser is a “permitted client” as defined in National Instrument 31-103—Registration Requirements, Exemptions and Ongoing Registrant Obligations;
•
where required by law, the purchaser is purchasing as principal and not as agent; and
•
the purchaser has reviewed the text above under Resale Restrictions.
Conflicts of Interest
Canadian purchasers are hereby notified that each of Cowen and Company, LLC and Wells Fargo Securities, LLC is relying on the exemption set out in section 3A.3 or 3A.4, if applicable, of National Instrument 33-105—Underwriting Conflicts from having to provide certain conflict of interest disclosure in this document.
Statutory Rights of Action
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if the prospectus (including any amendment thereto) such as this document contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser of these securities in Canada should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.
Enforcement of Legal Rights
All of our directors and officers as well as the experts named herein may be located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All or a substantial portion of our assets and the assets of those persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons outside of Canada.
Taxation and Eligibility for Investment
Canadian purchasers of units should consult their own legal and tax advisors with respect to the tax consequences of an investment in the units in their particular circumstances and about the eligibility of the units for investment by the purchaser under relevant Canadian legislation.
LEGAL MATTERS
Kirkland & Ellis LLP, New York, New York will pass upon the validity of the securities offered in this prospectus with respect to units and warrants. Maples and Calder will pass upon the validity of the securities offered in this prospectus with respect to the ordinary shares and matters of Cayman Islands law. In connection with this offering, Shearman & Sterling LLP, New York, New York advised the underwriters in connection with the offering of the securities.
EXPERTS
The financial statements of Spring Valley Acquisition Corp. as of August 21, 2020 and for the period from August 20, 2020 (inception) through August 21, 2020 appearing in this prospectus have been audited by WithumSmith+Brown, PC, independent registered public accounting firm, as set forth in their report thereon, appearing elsewhere in this prospectus, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the securities we are offering by this prospectus. This prospectus does not contain all of the information included in the registration statement. For further information about us and our securities, you should refer to the registration statement and the exhibits and schedules filed with the registration statement. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are materially complete but may not include a description of all aspects of such contracts, agreements or other documents, and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document.
Upon completion of this offering, we will be subject to the information requirements of the Exchange Act and will file annual, quarterly and current event reports, proxy statements and other information with the SEC. You can read our SEC filings, including the registration statement, over the Internet at the SEC’s website at www.sec.gov.
INDEX TO FINANCIAL STATEMENTS
Audited Financial Statements for Spring Valley Acquisition Corp.:
| |
|
|
Page
|
|
|
|
|
|
|
|
F-2
|
|
|
|
|
|
|
|
|
F-3
|
|
|
|
|
|
|
|
|
F-4
|
|
|
|
|
|
|
|
|
F-5
|
|
|
|
|
|
|
|
|
F-6
|
|
|
|
|
|
|
|
|
F-7
|
|
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholder and the Board of Directors of
Spring Valley Acquisition Corp.
Opinion on the Financial Statements
We have audited the accompanying balance sheet of Spring Valley Acquisition Corp. (the “Company”) as of August 21, 2020 and the related statements of operations, changes in shareholder’s equity and cash flows for the period from August 20, 2020 (inception) through August 21, 2020 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of August 21, 2020 and the results of its operations and its cash flows for the period from August 20, 2020 (inception) through August 21, 2020, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (the “PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ WithumSmith+Brown, PC
We have served as the Company’s auditor since 2020.
New York, New York
October 23, 2020
SPRING VALLEY ACQUISITION CORP.
BALANCE SHEET
AUGUST 21 2020
| |
ASSETS |
|
|
|
|
|
|
|
| |
Deferred offering costs
|
|
|
|
$ |
84,559 |
|
|
| |
TOTAL ASSETS
|
|
|
|
$ |
84,559 |
|
|
| |
LIABILITIES AND SHAREHOLDER’S EQUITY |
|
|
|
|
|
|
|
| |
Current Liabilities |
|
|
|
|
|
|
|
| |
Accrued offering costs
|
|
|
|
$ |
64,559 |
|
|
| |
Total Current Liabilities
|
|
|
|
|
64,559 |
|
|
| |
Commitments and Contingencies |
|
|
|
|
|
|
|
| |
Shareholder’s Equity |
|
|
|
|
|
|
|
| |
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
|
|
|
|
|
— |
|
|
| |
Class A ordinary shares, $0.0001 par value; 300,000,000 shares authorized; no shares issued
and outstanding
|
|
|
|
|
— |
|
|
| |
Class B ordinary shares, $0.0001 par value; 30,000,000 shares authorized; 5,750,000 shares
issued and outstanding(1)(2)
|
|
|
|
|
575 |
|
|
| |
Additional paid-in capital
|
|
|
|
|
24,425 |
|
|
| |
Accumulated deficit
|
|
|
|
|
(5,000) |
|
|
| |
Total Shareholder’s Equity
|
|
|
|
|
20,000 |
|
|
| |
TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY
|
|
|
|
$ |
84,559 |
|
|
(1)
Includes an aggregate of up to 750,000 Class B ordinary shares that are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised (see Note 5).
(2)
The shares and the associated amounts have been retroactively restated to reflect the surrender of 1,437,500 shares of the Company’s Class B ordinary shares on October 22, 2020, resulting in an aggregate of 5,750,000 Class B ordinary shares outstanding (see Note 5).
The accompanying notes are an integral part of these financial statements.
SPRING VALLEY ACQUISITION CORP.
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM AUGUST 20, 2020 (INCEPTION) THROUGH AUGUST 21, 2020
| |
Formation and operating costs
|
|
|
|
$ |
5,000 |
|
|
| |
Net loss
|
|
|
|
$ |
(5,000) |
|
|
| |
Weighted average shares outstanding, basic and diluted(1)(2)
|
|
|
|
|
5,000,000 |
|
|
| |
Basic and diluted net loss per ordinary share
|
|
|
|
$ |
(0.00) |
|
|
(1)
Excludes an aggregate of up to 750,000 Class B ordinary shares that are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised (see Note 5).
(2)
The shares and the associated amounts have been retroactively restated to reflect the surrender of 1,437,500 shares of the Company’s Class B ordinary shares on October 22, 2020, resulting in an aggregate of 5,750,000 Class B ordinary shares outstanding (see Note 5).
The accompanying notes are an integral part of these financial statements.
SPRING VALLEY ACQUISITION CORP.
STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY
FOR THE PERIOD FROM AUGUST 20, 2020 (INCEPTION) THROUGH AUGUST 21, 2020
| |
|
|
Class B
Ordinary Shares
|
|
|
Additional
Paid-in
Capital
|
|
|
Accumulated
Deficit
|
|
|
Total
Shareholder’s
Equity
|
|
| |
|
|
Shares
|
|
|
Amount
|
|
|
Balance – August 20, 2020
(inception)
|
|
|
|
|
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
Issuance of Class B ordinary shares to Sponsor(1)(2)
|
|
|
|
|
5,750,000 |
|
|
|
|
|
575 |
|
|
|
|
|
24,425 |
|
|
|
|
|
— |
|
|
|
|
|
25,000 |
|
|
|
Net loss
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
(5,000) |
|
|
|
|
|
(5,000) |
|
|
|
Balance – August 21, 2020
|
|
|
|
|
5,750,000 |
|
|
|
|
$ |
575 |
|
|
|
|
$ |
24,425 |
|
|
|
|
$ |
(5,000) |
|
|
|
|
$ |
20,000 |
|
|
(1)
Includes an aggregate of up to 750,000 Class B ordinary shares that are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised (see Note 5).
(2)
The shares and the associated amounts have been retroactively restated to reflect the surrender of 1,437,500 shares of the Company’s Class B ordinary shares on October 22, 2020, resulting in an aggregate of 5,750,000 Class B ordinary shares outstanding (see Note 5).
The accompanying notes are an integral part of these financial statements.
SPRING VALLEY ACQUISITION CORP.
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM AUGUST 20, 2020 (INCEPTION) THROUGH AUGUST 21, 2020
| |
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
| |
Net loss
|
|
|
|
$ |
(5,000) |
|
|
| |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
| |
Payment of formation costs through issuance of Class B ordinary shares
|
|
|
|
|
5,000 |
|
|
| |
Net cash used in operating activities
|
|
|
|
|
— |
|
|
| |
Net Change in Cash
|
|
|
|
|
— |
|
|
| |
Cash – Beginning of period
|
|
|
|
|
— |
|
|
| |
Cash – End of period
|
|
|
|
$
|
—
|
|
|
| |
Non-cash investing and financing activities: |
|
|
|
|
|
|
|
| |
Deferred offering costs included in accrued offering costs
|
|
|
|
$ |
64,559 |
|
|
| |
Deferred offering costs paid by Sponsor in exchange for the issuance of Class B ordinary shares
|
|
|
|
$ |
20,000 |
|
|
The accompanying notes are an integral part of these financial statements.
Note 1—Organization and Plan of Business Operations
Spring Valley Acquisition Corp. (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on August 20, 2020. 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 or entities (a “Business Combination”).
The Company is not limited to a particular industry or sector for purposes of consummating a Business Combination. 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 August 21, 2020, the Company had not commenced any operations. All activity for the period from August 20, 2020 (inception) through August 21, 2020 relates to the Company’s formation and the proposed initial public offering (“Proposed Public Offering”), which is described below. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Proposed Public Offering. The Company has selected December 31 as its fiscal year end.
The Company’s ability to commence operations is contingent upon obtaining adequate financial resources through a Proposed Public Offering of 20,000,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units being offered, the “Public Shares”) at $10.00 per Unit (or 23,000,000 Units if the underwriters’ over-allotment option is exercised in full), which is discussed in Note 3, and the sale of 8,000,000 warrants (or 8,900,000 warrants if the underwriters’ over-allotment option is exercised in full) (the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to Spring Valley Acquisition Sponsor, LLC (the “Sponsor”), that will close simultaneously with the Proposed Public Offering.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Proposed Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The stock exchange listing rules require that the Business Combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the assets held in the Trust Account (as defined below) (excluding the amount of any deferred underwriting commission and taxes payable on the income earned on the Trust Account). The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business 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 Proposed Public Offering, management has agreed that $10.10 per Unit sold in the Proposed Public Offering, including proceeds of the sale of the Private Placement Warrants, will be held in a trust account (“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 185 days or less, or in any open-ended investment company that holds itself out as a money market fund investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earliest of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below.
The Company will provide the holders of the public shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their public shares upon the completion of the Business Combination, either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether 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, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two business days prior to
Note 1—Organization and Plan of Business Operations (Continued)
the consummation of the Business Combination (initially anticipated to be $10.10 per Public Share), including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, subject to certain limitations as described in the prospectus. The per-share amount to be distributed to the Public Shareholders who properly redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 6). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Class A ordinary shares will be recorded at redemption value and classified as temporary equity upon the completion of the Proposed Public Offering, in accordance with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”
The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 and, if the Company seeks shareholder approval, it receives an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the Company. If a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Proposed Public Offering in favor of approving a Business Combination. Additionally, each Public Shareholder may elect to redeem their Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination.
Notwithstanding the foregoing, if the Company seeks shareholder approval of the Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the Public Shares without the Company’s prior written consent.
The Sponsor has agreed (a) to waive its redemption rights with respect to any Founder Shares and Public Shares held by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Memorandum and Articles of Association (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless the Company provides the Public Shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest and other income earned on the Trust account and not previously released to pay taxes, divided by the number of then issued and outstanding Public Shares.
The Company will initially have up to 18 months from the closing of this offering to consummate an initial business combination. However, if the Company anticipates that it may not be able to consummate an initial business combination within 18 months, they may, by resolution of the board of directors if requested by the Sponsor, extend the initial period of time to consummate an initial business combination one time, by an additional 6 months, subject to the Sponsor, its affiliates or permitted designees purchasing additional private placement warrants as set out below. The shareholders will not be entitled to vote or redeem their public shares in connection with any such extension. Pursuant to the terms of the amended and restated memorandum and articles of association, in order to extend the initial period of time to consummate an initial business combination for such six-month period, the Sponsor, its
Note 1—Organization and Plan of Business Operations (Continued)
affiliates or permitted designees, upon no less than five days’ advance notice to us prior to expiration of the initial 18-month deadline, must purchase an additional 2,000,000 (or up to 2,300,000 if the underwriters’ overallotment option is exercised in full) private placement warrants at $1.00 per warrant and deposit the $2,000,000 (or up to $2,300,000 if the underwriters’ over-allotment option is exercised in full) in proceeds into the Trust Account on or prior to the date of the expiration of the initial 18-month deadline. The Sponsor, its affiliates or permitted designees are not obligated to purchase additional private placement warrants to extend the time for the Company to complete the initial business combination.
The Company will have until 18 months from the closing of the Proposed Public Offering to consummate a Business Combination, which is extendable at the Sponsor's option up to six months, as described above (the “Combination Period”). However, if the Company has not completed a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned and other income and not previously released to us to pay its taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding Public Shares, which redemption will completely extinguish the rights of the Public Shareholders as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining Public Shareholders and its Board of Directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.
The Sponsor has agreed to waive its rights to liquidating distributions from the Trust Account with respect to the Founder Shares it will receive if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor or any of its respective affiliates acquire Public Shares, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period, and in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the per share value deposited into the Trust Account ($10.10).
In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (1) $10.10 per Public Share and (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.10 per Public Share, due to reductions in the value of trust assets, in each case net of the interest that may be withdrawn to pay taxes. This liability will not apply to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and as to any claims under the Company’s indemnity of the underwriters of the Proposed Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other
Note 1—Organization and Plan of Business Operations (Continued)
than the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Note 2—Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.
The Company does not have sufficient liquidity to meet its anticipated obligations over the next year from the date of issuance of these financial statements. In connection with the Company’s assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the Company has access to funds from the Sponsor that are sufficient to fund the working capital needs of the Company until the earlier of the consummation of the Proposed Public Offering and one year from the date of issuance of these financial statements.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, 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 accounting 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 expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Note 2—Significant Accounting Policies (Continued)
Deferred Offering Costs
Deferred offering costs consist of legal, accounting and other expenses incurred through the balance sheet date that are directly related to the Proposed Public Offering and that will be charged to shareholder’s equity upon the completion of the Proposed Public Offering. Should the Proposed Public Offering prove to be unsuccessful, these deferred costs, as well as additional expenses incurred, will be charged to operations.
Income Taxes
The Company accounts for income taxes under ASC Topic 740, “Income Taxes,” which 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 major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of August 21, 2020, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the period presented.
Net Loss Per Ordinary Share
Net loss per share is computed by dividing net loss by the weighted average number of ordinary shares issued and outstanding during the period, excluding ordinary shares subject to forfeiture. Weighted average shares were reduced for the effect of an aggregate of 750,000 Class B ordinary shares that are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised (see Note 7). At August 21, 2020, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the period presented.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such accounts.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
Note 3—Proposed Public Offering
Pursuant to the Proposed Public Offering, the Company will offer for sale up to 20,000,000 Units (or 23,000,000 Units if the underwriters’ over-allotment option is exercised in full) at a purchase price of $10.00 per Unit. Each Unit will consist of one Class A ordinary share and one-half of one redeemable warrant (“Public Warrant”). Each whole Public Warrant will entitle the holder to purchase one Class A ordinary share at an exercise price of $11.50 per whole share (see Note 7).
Note 4—Private Placement
The Sponsor has committed to purchase an aggregate of 8,000,000 Private Placement Warrants (or 8,900,000 Private Placement Warrants if the underwriters’ over-allotment option is exercised in full) at a price of $1.00 per Private Placement Warrant, for an aggregate purchase price of $8,000,000 (or $8,900,000 if the underwriters’ over-allotment option is exercised in full), in a private placement that will occur simultaneously with the closing of the Proposed Public Offering. The Sponsor has also committed to purchase an aggregate of 2,000,000 Private Placement Warrants (or 2,300,000 Private Placement Warrants if the underwriters’ over-allotment option is exercised in full) at a price of $1.00 per Private Placement Warrant, for an aggregate purchase price of $2,000,000 (or $2,300,000 if the underwriters’ over-allotment option is exercised in full) in connection with any extension of the Combination Period from 18 months to 24 months. Each Private Placement Warrant is exercisable to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 7). A portion of the proceeds from the Private Placement Warrants will be added to the proceeds from the Proposed Public Offering to be held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.
Note 5—Related Party Transactions Founder Shares
On August 21, 2020, the Sponsor paid $25,000 to cover certain offering and formation costs of the Company in consideration for 7,187,500 Class B ordinary shares (the “Founder Shares”). On October 22, 2020, the Sponsor effected a surrender of 1,437,500 Founder Shares to the Company for no consideration, resulting in a decrease in the number of Class B ordinary shares outstanding from 7,187,500 to 5,750,000, such that the total number of founder shares would represent 20% of the total number of ordinary shares outstanding upon completion of this offering (of which 750,000 Class B ordinary shares are subject to forfeiture if the underwriters do not exercise their overallotment option). All share and per-share amounts have been retroactively restated to reflect the share surrender. The Sponsor has agreed to transfer all of the Founder Shares owned by the Sponsor to SV Acquisition Sponsor Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Sponsor (“Holdco”), prior to the closing of the Proposed Public Offering. The Founder Shares include an aggregate of up to 750,000 shares that are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised, so that the number of Founder Shares will equal, on an as-converted basis, approximately 20% of the Company’s issued and outstanding ordinary shares after the Proposed Public Offering.
The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earliest of: (A) one year after the completion of a Business Combination and (B) subsequent to a Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the Public Shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.
Promissory Note—Related Party
On August 21, 2020, the Company issued an unsecured promissory note (the “Promissory Note”) to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $300,000. The Promissory Note is non-interest bearing and payable on the earlier of (i) December 31, 2020 and (ii) the completion of the Proposed Public Offering. As of August 21, 2020, there were no borrowings outstanding under the Promissory Note.
Administrative Services Agreement
Commencing on the date that the Company securities are first listed on the stock exchange, the Company will enter into an agreement pursuant to which it will pay an affiliate of the Sponsor up to
Note 5—Related Party Transactions Founder Shares (Continued)
$10,000 per month for office space, secretarial and administrative services. Upon completion of a Business Combination or its liquidation, the Company will cease paying these monthly fees.
Related Party Loans
In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants. As of August 21, 2020, there were no Working Capital Loans outstanding.
Note 6—Commitments and Contingencies
Risks and Uncertainties
Management is currently evaluating the impact of the COVID-19 global pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, close of the Proposed Public Offering and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Registration and Shareholders Rights The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of the Working Capital Loans) will be entitled to registration rights pursuant to a registration and shareholder rights agreement to be signed prior to or on the effective date of the Proposed Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to completion of a Business Combination. However, the registration and shareholder rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lockup period. The registration and shareholder rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company will grant the underwriters a 45-day option to purchase up to 3,000,000 additional Units to cover over-allotments at the Proposed Public Offering price, less the underwriting discounts and commissions.
The underwriters will be entitled to a cash underwriting discount of $0.20 per Unit, or $4,000,000 in the aggregate (or $4,600,000 if the underwriters’ over-allotment option is exercised in full), payable upon the closing of the Proposed Public Offering. In addition, the underwriters will be entitled to a deferred fee of $0.35 per Unit, or $7,000,000 in the aggregate (or $8,050,000 in the aggregate if the
Note 6—Commitments and Contingencies (Continued)
underwriters’ over-allotment option is exercised in full). The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
Anchor Investments
Certain qualified institutional buyers or institutional accredited investors not affiliated with any member of the Company’s management (the “anchor investors”) have expressed an interest to purchase up to 1,980,000 Units each in the Proposed Public Offering and the Company has agreed to direct the underwriters to sell to the anchor investors such number of Units. Further, each of the anchor investors will enter into a separate agreement with the Sponsor pursuant to which each such investor will agree to purchase 142,187 founder shares or membership interests in Holdco representing an indirect beneficial interest in 142,187 Founder Shares, in each case upon the closing of the Proposed Public Offering for $494.56, or approximately $0.003 per share. Neither the membership interests in Holdco nor the Founder Shares to be directly or indirectly owned by such investors will be subject to forfeiture without their consent. The founder shares to be owned directly by such investors will be subject to the additional restrictions agreed to by our sponsor in connection with our initial business combination See “Description of Securities—Founder Shares” for a description of such restrictions. Furthermore, the anchor investors will be restricted from selling any units purchased in the Proposed Public Offering until the earlier of (i) 30 days from the closing of the Proposed Public Offering and (iii) the separation of the units into shares of Class A ordinary shares and warrants.
There can be no assurance that the anchor investors will acquire any Units in the Proposed Public Offering, or as to the amount of such Units the anchor investors will retain, if any, prior to or upon the consummation of a Business Combination. In the event that the anchor investors purchase such Units (either in the Proposed Public Offering or after) and vote in favor of a Business Combination, a smaller portion of affirmative votes from other public shareholders would be required to approve a Business Combination.
Note 7—Shareholder’s Equity
Preference Shares—The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At August 21, 2020, there were no preference shares issued or outstanding.
Class A Ordinary Shares—The Company is authorized to issue 300,000,000 Class A ordinary shares, with a par value of $0.0001 per share. Holders of Class A ordinary shares are entitled to one vote for each share. At August 21, 2020, there were no Class A ordinary shares issued or outstanding.
Class B Ordinary Shares—The Company is authorized to issue 30,000,000 Class B ordinary shares, with a par value of $0.0001 per share. Holders of the Class B ordinary shares are entitled to one vote for each share. At August 21, 2020, there were 5,750,000 Class B ordinary shares issued and outstanding. On October 22, 2020, the sponsor effected a surrender of 1,437,500 Founder Shares to the company for no consideration, resulting in a decrease in the number of Class B ordinary shares outstanding from 7,187,500 to 5,750,000, of which an aggregate of up to 750,000 shares are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised, so that the number of Class B ordinary shares will equal 20% of the Company’s issued and outstanding ordinary shares after the Proposed Public Offering.
Holders of Class A ordinary shares and Class B ordinary shares will vote together as a single class on all other matters submitted to a vote of shareholders, except as required by law.
The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of a Business Combination or earlier at the option of the holders thereof at a ratio such that the number
Note 7—Shareholder’s Equity (Continued)
of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of the Proposed Public Offering, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of a Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in a Business Combination and any Private Placement Warrants issued to the Sponsor, its affiliates or any member of the Company’s management team upon conversion of Working Capital Loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one.
Warrants—Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) one year from the closing of the Proposed Public Offering. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation.
The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable and the Company will not be obligated to issue a Class A ordinary share upon exercise of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.
The Company has agreed that as soon as practicable, but in no event later than 20 business days, after the closing of a Business Combination, it will use its commercially reasonable efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of a Business Combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement; provided that if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but it will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th day after the closing of a 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, but the Company will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00. Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described with respect to the Private Placement Warrants):
•
in whole and not in part;
Note 7—Shareholder’s Equity (Continued)
•
at a price of $0.01 per warrant;
•
upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and
•
if, and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders.
If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00. Once the warrants become exercisable, the Company may redeem the outstanding warrants:
•
in whole and not in part;
•
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined based on the redemption date and the fair market value of the Class A ordinary shares;
•
if, and only if, the closing price of the Class A ordinary shares equals or exceeds $10.00 per share (as adjusted) for any 20 trading days within the 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders; and
•
if the closing price of the Class A ordinary shares 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 is less than $18.00 per share (as adjusted), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above.
If the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that wishes to exercise the Public 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 Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. 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 Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.
In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the
Note 7—Shareholder’s Equity (Continued)
$18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
The Private Placement Warrants will be identical to the Public Warrants underlying the Units being sold in the Proposed Public Offering, except that the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, except as described above, so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
Note 8—Subsequent Events
In September 2020, the Sponsor transferred 40,000 Class B ordinary shares to each of the director nominees. These 120,000 shares will not be subject to forfeiture in the event the underwriters’ over-allotment option is not exercised. On October 22, 2020, the Sponsor effected a surrender of 1,437,500 Founder Shares to the Company for no consideration. The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to October 23, 2020, the date that the financial statements were available to be issued. Based upon this review, the Company did not identify any other subsequent events that would have required adjustment or disclosure in the financial statements.
20,000,000 Units
Spring Valley Acquisition Corp.
PRELIMINARY PROSPECTUS
, 2020
Book-Running Managers
| |
Cowen |
|
|
Wells Fargo Securities
|
|
Co-Managers
| |
Drexel Hamilton |
|
|
Siebert Williams Shank
|
|
Until , 2020, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to unsold allotments or subscriptions.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The estimated expenses payable by us in connection with the offering described in this registration statement (other than the underwriting discount and commissions) will be as follows:
| |
SEC expenses
|
|
|
|
$ |
25,093 |
|
|
| |
FINRA expenses
|
|
|
|
|
35,000 |
|
|
| |
Accounting fees and expenses
|
|
|
|
|
50,000 |
|
|
| |
Printing and engraving expenses
|
|
|
|
|
40,000 |
|
|
| |
Travel and road show expenses
|
|
|
|
|
120,000 |
|
|
| |
Legal fees and expenses
|
|
|
|
|
325,000 |
|
|
| |
Nasdaq listing and filing fees
|
|
|
|
|
85,000 |
|
|
| |
Director & Officers liability insurance premiums(1)
|
|
|
|
|
200,000 |
|
|
| |
Miscellaneous
|
|
|
|
|
119,907 |
|
|
| |
Total
|
|
|
|
$ |
1,000,000 |
|
|
(1)
This amount represents the approximate amount of annual director and officer liability insurance premiums the registrant anticipates paying following the completion of its initial public offering and until it completes a business combination.
Item 14. Indemnification of Directors and Officers.
Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against willful default, willful neglect, civil fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association will provide for indemnification of our officers and directors to the maximum extent permitted by law, including for any liability incurred in their capacities as such, except through their own actual fraud, willful default or willful neglect. We will enter into agreements with our directors and officers to provide contractual indemnification in addition to the indemnification provided for in our amended and restated memorandum and articles of association. We expect to purchase a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.
Our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account, and have agreed to waive any right, title, interest or claim of any kind they may have in the future as a result of, or arising out of, any services provided to us and will not seek recourse against the trust account for any reason whatsoever (except to the extent they are entitled to funds from the trust account due to their ownership of public shares). Accordingly, any indemnification provided will only be able to be satisfied by us if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Item 15. Recent Sales of Unregistered Securities.
On August 21, 2020, the sponsor paid $25,000, or approximately $0.003 per share, to cover certain expenses on our behalf in consideration of 7,187,500 Class B ordinary shares, par value $0.0001. In September 2020, our sponsor transferred 40,000 Class B ordinary shares to each of our director nominees. These 120,000 shares will not be subject to forfeiture in the event the underwriters’
over-allotment option is not exercised. Such securities were issued in connection with our organization pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. On October 22, 2020, our sponsor effected a surrender of 1,437,500 Class B ordinary shares to the company for no consideration, resulting in a decrease in the number of Class B ordinary shares outstanding from 7,187,500 to 5,750,000. The total number of Class B ordinary shares outstanding after this offering and the expiration of the underwriters’ option to purchase additional units will equal 20% of the total number of Class A ordinary shares and Class B ordinary shares outstanding at such time. The Class B ordinary shares will automatically convert into Class A ordinary shares concurrently with or immediately following the consummation of our initial business combination, or earlier at the option of the holder thereof, on a one-for-one basis, subject to adjustment, as described in this prospectus. If we increase or decrease the size of this offering, we will effect a share capitalization or a share repurchase or redemption or other appropriate mechanism, as applicable, with respect to our Class B ordinary shares prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of the total number of Class A ordinary shares and Class B ordinary shares outstanding at such time (assuming the underwriters exercise their option to purchase additional units in full).
Our sponsor is an accredited investor for purposes of Rule 501 of Regulation D. Each of the equity holders in our sponsor is an accredited investor under Rule 501 of Regulation D. The sole business of our sponsor is to act as the company’s sponsor in connection with this offering.
Our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 8,000,000 private placement warrants (or 8,900,000 private placement warrants if the underwriters’ over-allotment option is exercised in full), each exercisable to purchase one ordinary share at $11.50 per share, subject to adjustment, at a price of $1.00 per warrant ($8,000,000 in the aggregate or $8,900,000 if the underwriters’ over-allotment option is exercised in full), in a private placement that will close simultaneously with the closing of this offering. This issuance will be made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
No underwriting discounts or commissions were paid with respect to such sales.
Item 16. Exhibits and Financial Statement Schedules.
(a) The Exhibit Index is incorporated herein by reference.
Item 17. Undertakings.
(i) The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.
(ii) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(iii) The undersigned registrant hereby undertakes that:
1.
For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
2.
For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
EXHIBIT INDEX
| |
Exhibit No.
|
|
|
Description
|
|
| |
|
|
1.1 |
|
|
|
Form of Underwriting Agreement.** |
|
| |
|
|
3.1 |
|
|
|
Memorandum and Articles of Association.* |
|
| |
|
|
3.2 |
|
|
|
Form of Amended and Restated Memorandum and Articles of Association.** |
|
| |
|
|
4.1 |
|
|
|
Specimen Unit Certificate.* |
|
| |
|
|
4.2 |
|
|
|
Specimen Class A Ordinary Share Certificate.* |
|
| |
|
|
4.3 |
|
|
|
Specimen Warrant Certificate.*
|
|
| |
|
|
4.4 |
|
|
|
Form of Warrant Agreement between Continental Stock Transfer & Trust Company and the
Registrant.** |
|
| |
|
|
5.1 |
|
|
|
Opinion of Kirkland & Ellis LLP.* |
|
| |
|
|
5.2 |
|
|
|
Opinion of Maples and Calder, Cayman Islands Counsel to the Registrant.* |
|
| |
|
|
10.1 |
|
|
|
Form of Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the Registrant.** |
|
| |
|
|
10.2 |
|
|
|
Form of Registration and Shareholder Rights Agreement among the Registrant, the Sponsor and the Holders signatory thereto.** |
|
| |
|
|
10.3 |
|
|
|
Form of Private Placement Warrants Purchase Agreement between the Registrant and the
Sponsor.** |
|
| |
|
|
10.4 |
|
|
|
Form of Indemnity Agreement.*
|
|
| |
|
|
10.5 |
|
|
|
Form of Administrative Services Agreement between the Registrant and the Sponsor.*
|
|
| |
|
|
10.6 |
|
|
|
Promissory Note, dated as of August 21, 2020, between the Registrant and the Sponsor.*
|
|
| |
|
|
10.7 |
|
|
|
Securities Subscription Agreement, dated August 21, 2020, between the Registrant and the Sponsor.*
|
|
| |
|
|
10.8 |
|
|
|
Form of Letter Agreement among the Registrant, the Sponsor and each director and executive officer of the Registrant.** |
|
| |
|
|
14 |
|
|
|
Form of Code of Ethics.* |
|
| |
|
|
23.1 |
|
|
|
Consent of WithumSmith+Brown, PC.** |
|
| |
|
|
23.2 |
|
|
|
Consent of Kirkland & Ellis LLP (included on Exhibit 5.1).*
|
|
| |
|
|
23.3 |
|
|
|
Consent of Maples and Calder (included on Exhibit 5.2).*
|
|
| |
|
|
24 |
|
|
|
Power of Attorney (included on signature page to the initial filing of this Registration Statement).*
|
|
| |
|
|
99.1 |
|
|
|
Consent of Director Nominee − Debora Frodl.*
|
|
| |
|
|
99.2 |
|
|
|
Consent of Director Nominee − Richard Thompson.*
|
|
| |
|
|
99.3 |
|
|
|
Consent of Director Nominee − Patrick Wood, III.*
|
|
*
Previously filed.
**
Filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, New York, on the 19th day of November 2020.
SPRING VALLEY ACQUISITION CORP.
By:
/s/ Christopher Sorrells
Name: Christopher Sorrells
Title: Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed below by the following persons in the capacities below on November 19, 2020.
| |
Name
|
|
|
Position
|
|
| |
/s/ Christopher Sorrells
Christopher Sorrells
|
|
|
Chief Executive Officer and Director
(Principal Executive Officer)
|
|
| |
/s/ Jeffrey Schramm
Jeffrey Schramm
|
|
|
Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
|
|
| |
*
William Quinn
|
|
|
Chairman and Director
|
|
*By:
/s/ Christopher Sorrells
Christopher Sorrells
Attorney-in-Fact
Exhibit 1.1
Spring
Valley ACQUISITION Corp.
20,000,000 Units
Underwriting Agreement
[•], 2020
Cowen and Company, LLC
Wells Fargo Securities, LLC
As Representatives of the
several Underwriters listed
in Schedule 1 hereto
c/o Cowen and Company, LLC
599 Lexington Avenue
New York, New York 10022
c/o Wells Fargo Securities, LLC
500 West 33rd Street
14th Floor
New York, New York 10001
Ladies and Gentlemen:
Spring Valley Acquisition Corp., a Cayman
Islands exempted company (the “Company”), proposes to issue and sell to the several underwriters listed in Schedule
1 hereto (collectively, the “Underwriters”), for whom you are acting as representatives (collectively, the “Representatives”),
an aggregate of 20,000,000 units of the Company (the “Underwritten Units”) and, at the option of the Underwriters,
up to an additional 3,000,000 units of the Company (the “Option Units”). The Underwritten Units and the Option Units
are herein referred to as the “Units.”
Each Unit consists of one Class A
ordinary share of the Company, par value $0.0001 per share (collectively, the “Ordinary Shares”), and one-half of
one redeemable warrant, where each whole warrant entitles the holder to purchase one Ordinary Share (the
“Warrant(s)”). The Ordinary Shares and the Warrants included in the Units will not trade separately until the
52nd day following the date of the Prospectus (as defined below) (or if such date is not a business day (as defined below),
the following business day) (unless the Representatives inform the Company of their decision to allow earlier separate
trading), subject to (a) the Company’s filing of a Current Report on Form 8-K that includes an audited balance sheet
reflecting the receipt by the Company of the proceeds of the Offering (as defined below) and the sale of the Private
Placement Warrants (as defined below) with the Securities and Exchange Commission (the “Commission”) and (b) the
Company having issued a press release announcing when such separate trading will begin. No fractional Warrants will be issued
upon separation of the Units, and only whole Warrants will trade. Each whole Warrant entitles its holder, upon exercise, to
purchase one Ordinary Share at a price of $11.50 per share, subject to certain adjustments as described in the Warrant
Agreement (as defined below), during the period commencing on the later of thirty days after the completion of the
Company’s initial Business Combination (as defined below) and twelve months from the date of the consummation of the
Offering and terminating on the five-year anniversary of the date of the completion of such initial Business Combination or
earlier upon redemption or Liquidation (as defined below); provided, however, that pursuant to the Warrant
Agreement, a fractional Warrant may not be exercised, so that only a whole Warrant may be exercised at any given time by a
holder thereof. As used herein, the term “Business Combination” (as described more fully in the Prospectus) shall
mean a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or
more businesses or entities involving the Company.
The Company has entered into an
Investment Management Trust Agreement, effective as of the date hereof (the “Trust Agreement”), with Continental
Stock Transfer & Trust Company (“CST”), as trustee (the “Trustee”), in substantially the form
filed as Exhibit 10.1 to the Registration Statement (as defined below), pursuant to which proceeds from the sale of the
Private Placement Warrants from time to time and proceeds of the Offering will be deposited and held in a trust account (the
“Trust Account”) for the benefit of the Company, the Underwriters and the Public Shareholders (as defined
below).
The Company has entered into a Warrant Agreement,
effective as of the date hereof (the “Warrant Agreement”), with respect to the Warrants and the Private Placement Warrants
with CST, as warrant agent, in substantially the form filed as Exhibit 4.4 to the Registration Statement, pursuant to which CST
will act as warrant agent in connection with the issuance, registration, transfer, exchange, redemption, and exercise of the Warrants
and the Private Placement Warrants.
The Company has entered into a
Securities Subscription Agreement, dated as of August 21, 2020 (the “Securities Subscription Agreement”), with
Spring Valley Acquisition Sponsor, LLC, a Delaware limited liability company (the “Sponsor”), pursuant to which
the Sponsor purchased an aggregate of 7,187,500 shares of the Company’s Class B ordinary shares, par value $0.0001 per
share, for an aggregate purchase price of $25,000 (the “Founder Shares”), in substantially the form filed as
Exhibit 10.7 to the Registration Statement. On October 22, 2020, the Sponsor effected a surrender of 1,437,500 Founder Shares
to the Company for no consideration, resulting in a decrease in the number of Founder Shares outstanding from 7,187,500 to
5,750,000. On November [ ], 2020, the Sponsor transferred all of the Founder Shares held by it to SV Acquisition Sponsor Sub,
LLC, a Delaware limited liability company and wholly-owned subsidiary of the Sponsor (“Holdco”). Up to 750,000 Founder Shares
are subject to forfeiture depending on the extent to which the Underwriters’ over-allotment option is exercised. The
Founder Shares are substantially similar to the Ordinary Shares included in the Units, except as described in the
Registration Statement, the Pricing Disclosure Package (as defined below) and the Prospectus.
The Company has entered into a
Private Placement Warrants Purchase Agreement, effective as of the date hereof (the “Private Placement Warrants
Purchase Agreement”), with the Sponsor, in substantially the form filed as Exhibit 10.3 to the Registration Statement,
pursuant to which the Sponsor agreed to (i) initially purchase an aggregate of 8,000,000 warrants (or up to 8,900,000
warrants if the over-allotment option is exercised in full) and (ii) subsequently purchase, at its option, 2,000,000 additional warrants (or up to 2,300,000 additional warrants if the over-allotment
option is exercised in full) in order to extend the initial time period to consummate a Business Combination, each warrant entitling its holder, upon exercise, to purchase
one Ordinary Share (the “Private Placement Warrants”), for $1.00 per Private Placement Warrant. The Private
Placement Warrants are substantially similar to the Warrants included in the Units, except as described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus.
The Company has entered into a Registration
and Shareholder Rights Agreement, dated as of the date hereof (the “Registration and Shareholder Rights Agreement”),
with the Sponsor and the other parties thereto, in substantially the form filed as Exhibit 10.2 to the Registration Statement,
pursuant to which the Company has granted certain registration rights in respect of the Private Placement Warrants and the Ordinary
Shares underlying the Private Placement Warrants, the Founder Shares and certain warrants (which will be substantially similar
to the Private Placement Warrants), if any, that may be issued upon conversion of working capital loans.
The Company has entered into a letter agreement,
dated as of the date hereof, in substantially the form filed as Exhibit 10.8 to the Registration Statement (the “Insider
Letter”), with the Sponsor and each of the Company’s officers, directors and director nominees .
The Company has entered into an Administrative
Services Agreement, dated as of the date hereof (the “Administrative Services Agreement” and, collectively with this
Agreement (as defined below), the Trust Agreement, the Warrant Agreement, the Securities Subscription Agreement, the Private Placement
Warrants Purchase Agreement, the Registration and Shareholder Rights Agreement and the Insider Letter, the “Transaction Documents”),
with the Sponsor, in substantially the form filed as Exhibit 10.5 to the Registration Statement, pursuant to which the Company
will, subject to the terms of the Administrative Services Agreement, pay to an affiliate of the Sponsor, an aggregate monthly fee
of $10,000 for office space, utilities, administrative and support services from the date that the Units are first listed on The
Nasdaq Capital Market (“Nasdaq”) until the earlier of (x) the consummation of an initial Business Combination and (y)
the Liquidation.
The Company hereby confirms its agreement
with the several Underwriters concerning the purchase and sale of the Units, as follows:
1. Registration Statement. The Company has prepared and filed with the Commission under the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder (collectively, the “Securities Act”), a registration
statement (File No. 333-249067), including a prospectus, relating to the Units and the Warrants and Ordinary Shares included
therein. Such registration statement, as amended at the time it became effective, including the information, if any, deemed pursuant
to Rule 430A under the Securities Act to be part of the registration statement at the time of its effectiveness (“Rule 430
Information”), is referred to herein as the “Registration Statement”; and as used herein, the term “Preliminary
Prospectus” means each prospectus included in such registration statement (and any amendments thereto) before effectiveness,
any prospectus filed with the Commission pursuant to Rule 424(a) under the Securities Act and the prospectus included in the Registration
Statement at the time of its effectiveness that omits Rule 430 Information, and the term “Prospectus” means the prospectus
in the form first used (or made available upon request of purchasers pursuant to Rule 173 under the Securities Act) in connection
with confirmation of sales of the Units. If the Company has filed an abbreviated registration statement pursuant to Rule 462(b)
under the Securities Act (the “Rule 462 Registration Statement”), then any reference herein to the term “Registration
Statement” shall be deemed to include such Rule 462 Registration Statement.
At or prior to the Applicable Time (as defined
below), the Company had prepared the following information (collectively with the pricing information set forth on Annex A, the
“Pricing Disclosure Package”): a Preliminary Prospectus dated [•], 2020.
“Applicable Time” means [•]
P.M., New York City time, on [•], 2020.
2. Purchase
of the Units.
(a)
The Company agrees to issue and sell the Underwritten Units to the several Underwriters as provided in this underwriting
agreement (this “Agreement”), and each Underwriter, on the basis of the representations, warranties and agreements
set forth herein and subject to the conditions set forth herein, agrees, severally and not jointly, to purchase at a price per
Unit of $9.80 (the “Purchase Price”) from the Company the respective number of Underwritten Units set forth opposite
such Underwriter’s name in Schedule 1 hereto.
(b)
In addition, the Company agrees to issue and sell the Option Units to the several Underwriters as provided in this Agreement,
and the Underwriters, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions
set forth herein, shall have the option to purchase, severally and not jointly, from the Company the Option Units at a price per
Unit of $9.80 less an amount per unit equal to any dividends or distributions declared by the Company and payable on the Underwritten
Units but not payable on the Option Units.
If any Option Units are to be purchased,
the number of Option Units to be purchased by each Underwriter shall be the number of Option Units which bears the same ratio to
the aggregate number of Option Units being purchased as the number of Underwritten Units set forth opposite the name of such Underwriter
in Schedule 1 hereto (or such number increased as set forth in Section 10 hereof) bears to the aggregate number of Underwritten
Units being purchased from the Company by the several Underwriters, subject, however, to such adjustments to eliminate any fractional
Units as the Representatives in their sole discretion shall make.
The Underwriters may exercise the option
to purchase Option Units at any time in whole, or from time to time in part, on or before the 45th day following the
date of the Prospectus, by written notice from the Representatives to the Company. Such notice shall set forth the aggregate number
of Option Units as to which the option is being exercised and the date and time when the Option Units are to be delivered and paid
for, which may be the same date and time as the Closing Date (as defined below) but shall not be earlier than the Closing Date
nor later than the 10th full business day after the date of such notice (unless such time and date are postponed in
accordance with the provisions of Section 10 hereof). Any such notice shall be given at least two business days prior to the date
and time of delivery specified therein.
(c)
In addition to the discount from the public offering price represented by the Purchase Price, the Company hereby agrees
to pay to the Underwriters a deferred discount of $0.350 per Unit (including both Underwritten Units and Option Units) purchased
hereunder (the “Deferred Discount”). The Deferred Discount will be paid directly to the Representatives, on behalf
of the Underwriters, by the Trustee from amounts on deposit in the Trust Account (without accrued interest) by wire transfer payable
in same-day funds if and when the Company consummates an initial Business Combination. The Underwriters hereby agree that if no
Business Combination is consummated within the time period provided in the Company’s amended and restated memorandum and articles of association (the "Charter"), as such time period may be extended, and the funds held under the Trust Agreement are distributed to the holders
of the Ordinary Shares included in the Units sold pursuant to this Agreement (the “Public Shareholders”), (i) the Underwriters
will forfeit any rights or claims to the Deferred Discount and (ii) the Trustee is authorized to distribute the Deferred Discount
to the Public Shareholders on a pro rata basis.
(d)
The Company understands that the Underwriters intend to make a public offering of the Units (the “Offering”),
and initially to offer the Units on the terms set forth in the Pricing Disclosure Package. The Company acknowledges and agrees
that the Underwriters may offer and sell Units to or through any affiliate of an Underwriter.
(e) Payment
for the Units shall be made by wire transfer in immediately available funds to the account specified by the Company to the
Representatives in the case of the Underwritten Units, at the offices of Shearman & Sterling LLP, 599 Lexington Avenue,
New York, New York 10022 at [•] A.M. New York City time on [•], 2020, or at such other time or place on the same
or such other date, not later than the fifth business day thereafter, as the Representatives and the Company may agree upon
in writing or, in the case of the Option Units, on the date and at the time and place specified by the Representatives in the
written notice of the Underwriters’ election to purchase such Option Units. The Company shall not be obligated to sell
or deliver any of the Underwritten Units, except upon tender of payment by the Representatives for all Underwritten Units.
The time and date of such payment for the Underwritten Units is referred to herein as the “Closing Date,” and the
time and date for such payment for the Option Units, if other than the Closing Date, is herein referred to as the
“Additional Closing Date.”
Payment for the Units to be purchased on
the Closing Date or the Additional Closing Date, as the case may be, shall be made against delivery to the Representatives for
the respective accounts of the several Underwriters of the Units to be purchased on such date in definitive or book-entry form
registered in such names and in such denominations as the Representatives shall request in writing not later than two full business
days prior to the Closing Date or the Additional Closing Date, as the case may be, with any transfer taxes payable in connection
with the sale of such Units duly paid by the Company. Delivery of the Units shall be made through the facilities of The Depository
Trust Company unless the Representatives shall otherwise instruct.
(f)
The Company acknowledges and agrees that the Representatives and the other Underwriters are acting solely in the capacity
of an arm’s length contractual counterparty to the Company with respect to the Offering contemplated hereby (including in
connection with determining the terms of the Offering) and not as a financial advisor or a fiduciary to, or an agent of, the Company
or any other person. Additionally, neither the Representatives nor any other Underwriter is advising the Company or any other person
as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The Company shall consult with its own
advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions
contemplated hereby, and neither the Representatives nor the other Underwriters shall have any responsibility or liability to the
Company with respect thereto. Any review by the Representatives and the other Underwriters of the Company, the transactions contemplated
hereby or other matters relating to such transactions will be performed solely for the benefit of the Underwriters and shall not
be on behalf of the Company.
3.
Representations and Warranties of the Company. The Company represents and warrants to each Underwriter that:
(a) Preliminary
Prospectus. No order preventing or suspending the use of any Preliminary Prospectus has been issued by the Commission,
and each Preliminary Prospectus included in the Pricing Disclosure Package, at the time of filing thereof, complied in all
material respects with the Securities Act, and no Preliminary Prospectus, at the time of filing thereof, contained any untrue
statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided that the Company makes no
representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives
expressly for use in any Preliminary Prospectus, it being understood and agreed that the only such information furnished by
any Underwriter consists of the information described as such in Section 7(b) hereof.
(b)
Pricing Disclosure Package. The Pricing Disclosure Package as of the Applicable Time did not, and as of the Closing
Date and as of the Additional Closing Date, as the case may be, will not, contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that the Company makes no representation or warranty with respect to any statements
or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Representatives expressly for use in such Pricing Disclosure Package, it being understood and agreed
that the only such information furnished by any Underwriter consists of the information described as such in Section 7(b) hereof.
No statement of material fact included in the Prospectus has been omitted from the Pricing Disclosure Package and no statement
of material fact included in the Pricing Disclosure Package that is required to be included in the Prospectus has been omitted
therefrom.
(c)
Issuer Free Writing Prospectus. Other than the Registration Statement, the Preliminary Prospectus and the Prospectus,
the Company (including its agents and representatives, other than the Underwriters in their capacity as such) has not prepared,
made, used, authorized, approved or referred to and will not prepare, make, use, authorize, approve or refer to any “written
communication” (as defined in Rule 405 under the Securities Act) that constitutes an offer to sell or solicitation of an
offer to buy the Units other than any document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities
Act or Rule 134 under the Securities Act.
(d)
Form 8-A. The Company has filed with the Commission a Form 8-A (File No. [•]), including an amendment
thereto, providing for the registration under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
of the Units, the Ordinary Shares and the Warrants, which registration is currently effective on the date hereof. The Units and
the Ordinary Shares and the Warrants included as part of the Units have been authorized for listing, subject to official notice
of issuance and evidence of satisfactory distribution, on Nasdaq, and the Company knows of no reason or set of facts that is likely
to adversely affect such authorization.
(e)
Emerging Growth Company. From the time of the initial confidential submission of the Registration Statement to the
Commission (or, if earlier, the first date on which the Company engaged directly or through any person authorized to act on its
behalf in any Testing-the-Waters Communication) through the date hereof, the Company has been and is an “emerging growth
company,” as defined in Section 2(a) of the Securities Act (an “Emerging Growth Company”). “Testing-the-Waters
Communication” means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of
the Securities Act or Rule 163B under the Securities Act.
(f)
Testing-the-Waters Materials. The Company (i) has not alone engaged in any Testing-the-Waters Communications other
than Testing-the-Waters Communications with the consent of the Representatives with entities that are qualified institutional buyers
within the meaning of Rule 144A under the Securities Act or institutions that are accredited investors within the meaning of Rule
501 under the Securities Act and (ii) has not authorized anyone other than the Underwriters to engage in Testing-the-Waters Communications.
The Company reconfirms that the Underwriters have been authorized to act on its behalf in undertaking Testing-the-Waters Communications.
The Company has not distributed or approved for distribution any Written Testing-the-Waters Communications other than those listed
on Annex B hereto. “Written Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a
written communication within the meaning of Rule 405 under the Securities Act. Any individual Written Testing-the-Waters Communication
does not conflict with the information contained in the Registration Statement or the Pricing Disclosure Package, complied in all
material respects with the Securities Act, and when taken together with the Pricing Disclosure Package as of the Applicable Time,
did not, and as of the Closing Date and as of the Additional Closing Date, as the case may be, will not, contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(g) Registration
Statement and Prospectus. The Registration Statement has been declared effective by the Commission. No order suspending
the effectiveness of the Registration Statement has been issued by the Commission, and no proceeding for that purpose or
pursuant to Section 8A of the Securities Act against the Company or related to the Offering has been initiated or threatened
by the Commission; as of the applicable effective date of the Registration Statement and any post-effective amendment
thereto, the Registration Statement and any such post-effective amendment complied and will comply in all material respects
with the Securities Act, and did not and will not 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 therein not misleading; and as of the date of
the Prospectus and any amendment or supplement thereto and as of the Closing Date and as of the Additional Closing Date, as
the case may be, the Prospectus will comply in all material respects with the Securities Act and will not contain any untrue
statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that the Company makes no representation or
warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in the
Registration Statement and the Prospectus and any amendment or supplement thereto, it being understood and agreed that the
only such information furnished by any Underwriter consists of the information described as such in Section 7(b) hereof.
(h)
Financial Statements. The financial statements (including the related notes thereto) of the Company included in the
Registration Statement, the Pricing Disclosure Package and the Prospectus comply in all material respects with the applicable requirements
of the Securities Act and present fairly the financial position of the Company as of the dates indicated and the results of their
operations and the changes in their cash flows for the periods specified; such financial statements have been prepared in conformity
with generally accepted accounting principles (“GAAP”) in the United States applied on a consistent basis throughout
the periods covered thereby, and any supporting schedules included in the Registration Statement present fairly the information
required to be stated therein;.
(i)
No Material Adverse Change. Since the date of the most recent financial statements of the Company included in the
Registration Statement, the Pricing Disclosure Package and the Prospectus, (i) there has not been any change in the capital stock,
short-term debt or long-term debt of the Company, or any dividend or distribution of any kind declared, set aside for payment,
paid or made by the Company on any class of capital stock, or any material adverse change, or any development involving a prospective
material adverse change, in or affecting the business, properties, management, financial position, shareholders’ equity,
results of operations or prospects of the Company; (ii) the Company has not entered into any transaction or agreement (whether
or not in the ordinary course of business) that is material to the Company or incurred any liability or obligation, direct or contingent,
that is material to the Company; and (iii) the Company has not sustained any loss or interference with its business that is material
to the Company and that is either from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any
labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority,
except in each case as otherwise disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
(j) Organization
and Good Standing. The Company has been duly organized and is validly existing and in good standing under the laws of its
jurisdiction of organization, is duly qualified to do business and is in good standing in each jurisdiction in which its
ownership or lease of property or the conduct of its business requires such qualification, and has all power and authority
necessary to own or hold its properties and to conduct the business in which it is engaged, except where the failure to be so
qualified or in good standing or have such power or authority would not, individually or in the aggregate, have a material
adverse effect on the business, properties, management, financial position, shareholders’ equity, results of operations
or prospects of the Company or on the performance by the Company of its obligations under the Transaction Documents (a
“Material Adverse Effect”).
(k)
Capitalization. The Company has an authorized capitalization as set forth in the Registration Statement, the Pricing
Disclosure Package and the Prospectus under the heading “Capitalization”; all the outstanding shares of capital stock
of the Company have been duly and validly authorized and issued and are fully paid and non-assessable and are not subject to any
pre-emptive or similar rights; except as described in or expressly contemplated by the Registration Statement, the Pricing Disclosure
Package and the Prospectus, there are no outstanding rights (including, without limitation, pre-emptive rights), warrants or options
to acquire, or instruments convertible into or exchangeable for, any shares of capital stock or other equity interest in the Company
or any contract, commitment, agreement, understanding or arrangement of any kind relating to the issuance of any capital stock
of the Company, any such convertible or exchangeable securities or any such rights, warrants or options; the capital stock of the
Company conforms in all material respects to the description thereof contained in the Registration Statement, the Pricing Disclosure
Package and the Prospectus. The offers and sales of the outstanding securities of the Company were at all relevant times either
registered under the Securities Act, the applicable state securities and blue sky laws or, based in part on the representations
and warranties of the purchasers of such securities, exempt from such registration requirements.
(l)
Due Authorization. The Company has full right, power and authority to execute and deliver this Agreement and the
other Transaction Documents and to perform its obligations hereunder and thereunder; and all action required to be taken for the
due and proper authorization, execution and delivery by it of this Agreement and each of the other Transaction Documents and the
consummation by it of the transactions contemplated hereby and thereby has been duly and validly taken.
(m)
Underwriting Agreement. This Agreement has been duly authorized, executed and delivered by the Company.
(n) The
Units. The Units to be issued and sold by the Company hereunder have been duly authorized by the Company and, when issued
and delivered and paid for as provided herein, will be duly and validly issued, will constitute valid and legally binding
obligations of the Company enforceable against the Company in accordance with their terms, except as enforceability may be
limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally
or by equitable principles relating to enforceability (“Enforceability Exceptions”), and will conform to the
descriptions thereof in the Registration Statement, the Pricing Disclosure Package and the Prospectus; and the issuance of
the Units is not subject to any preemptive or similar rights.
(o)
The Unit Shares. The Ordinary Shares included in the Units have been duly authorized by the Company and, when issued
and delivered against payment for the Units by the Underwriters pursuant to this Agreement and the Charter of the Company, will be duly and validly issued and delivered, will be fully paid and nonassessable,
and will conform to the descriptions thereof in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
(p)
The Founder Shares. The Founder Shares have been duly authorized, validly issued and fully paid by the Company and
are nonassessable.
(q)
The Units Warrants. The Warrants included in the Units to be issued and sold by the Company hereunder have been duly
authorized by the Company and, when issued and delivered in the manner set forth in the Warrant Agreement against payment for the
Units by the Underwriters pursuant to this Agreement, will be duly and validly issued and delivered, will constitute valid and
legally binding obligations of the Company enforceable against the Company in accordance with their terms, subject to Enforceability
Exceptions, and will conform to the descriptions thereof in the Registration Statement, the Pricing Disclosure Package and the
Prospectus.
(r)
The Warrant Shares. The Ordinary Shares issuable upon exercise of the Warrants included in the Units and the Private
Placement Warrants (the “Warrant Shares”) have been duly authorized by the Company and, when issued and delivered against
payment therefor pursuant to the Warrants and the Private Placement Warrants, as applicable, the Warrant Agreement and the Charter of the Company, will be duly and validly issued and delivered, will be fully
paid and nonassessable; and such Warrant Shares have been duly authorized by the Company and validly reserved for issuance. The
holders of such Warrant Shares will not be subject to personal liability by reason of being such holders; such Warrant Shares are
not, and at the time such shares are issued, will not be subject to any preemptive or other similar contractual rights granted
by the Company; and all corporate action required to be taken for the authorization, issuance and sale of such Warrant Shares (other
than such delivery at the time of issuance) has been duly and validly taken.
(s)
The Private Placement Warrants. The Private Placement Warrants to be issued and sold by the Company under the Private
Placement Warrants Purchase Agreement have been duly authorized by the Company and, when issued and delivered in the manner set
forth in the Warrant Agreement against payment therefor by the Sponsor pursuant to the Private Placement Warrants Purchase Agreement,
will be duly and validly issued and delivered, will constitute valid and legally binding obligations of the Company enforceable
against the Company in accordance with their terms, subject to Enforceability Exceptions, and will conform to the descriptions
thereof in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
(t)
The Trust Agreement. The Trust Agreement has been duly authorized, executed and delivered by the Company and constitutes
a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms, subject to
Enforceability Exceptions.
(u)
The Warrant Agreement. The Warrant Agreement has been duly authorized, executed and delivered by the Company and
constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms,
subject to Enforceability Exceptions.
(v)
The Securities Subscription Agreement. The Securities Subscription Agreement has been duly authorized, executed and
delivered by the Company and the Sponsor and constitutes a valid and legally binding obligation of the Company and the Sponsor
enforceable against the Company and the Sponsor in accordance with its terms, subject to Enforceability Exceptions.
(w)
The Private Placement Warrants Purchase Agreement. The Private Placement Warrants Purchase Agreement has been duly
authorized, executed and delivered by the Company and the Sponsor and constitutes a valid and legally binding obligation of the
Company and the Sponsor enforceable against the Company and the Sponsor in accordance with its terms, subject to Enforceability
Exceptions.
(x)
The Registration and Shareholder Rights Agreement. The Registration and Shareholder Rights Agreement has been duly
authorized, executed and delivered by the Company and constitutes a valid and legally binding obligation of the Company enforceable
against the Company in accordance with its terms, subject to Enforceability Exceptions.
(y) The
Insider Letter. The Insider Letter has been duly authorized, executed and delivered by the Company, the Sponsor and, to
the Company’s knowledge, each officer, director and director nominee of the Company and constitutes a valid and legally
binding obligation of the Company, the Sponsor and, to the Company’s knowledge, each officer, director and director
nominee of the Company enforceable against the Company, the Sponsor and, to the Company’s knowledge, each officer,
director and director nominee of the Company in accordance with its terms, subject to Enforceability Exceptions.
(z)
The Administrative Services Agreement. The Administrative Services Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding obligation of the Company enforceable against the Company
in accordance with its terms, subject to Enforceability Exceptions.
(aa)
Descriptions of the Transaction Documents. Each Transaction Document conforms in all material respects to the description
thereof contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
(bb)
No Violation or Default. The Company is not (i) in violation of any provision in its charter or by-laws or similar
organizational documents; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the Company is a party or by which the Company is bound or to
which any property or asset of the Company is subject; or (iii) in violation of any law or statute or any judgment, order, rule
or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of clauses (ii) and (iii)
above, for any such default or violation that would not, individually or in the aggregate, have a Material Adverse Effect.
(cc)
No Conflicts. The execution, delivery and performance by the Company of each of the Transaction Documents, the issuance
and sale of the Units and the consummation of the transactions contemplated by the Transaction Documents or the Pricing Disclosure
Package and the Prospectus will not (i) conflict with or result in a breach or violation of any of the terms or provisions of,
or constitute a default under, result in the termination, modification or acceleration of, or result in the creation or imposition
of any lien, charge or encumbrance upon any property, right or asset of the Company pursuant to, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the Company is a party or by which the Company is bound or to
which any property, right or asset of the Company is subject, (ii) result in any violation of the provisions of the charter or
by-laws or similar organizational documents of the Company or (iii) result in the violation of any law or statute or any judgment,
order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of clauses (i)
and (iii) above, for any such conflict, breach, violation, default, lien, charge or encumbrance that would not, individually or
in the aggregate, have a Material Adverse Effect.
(dd)
No Consents Required. No consent, approval, authorization, order, registration or qualification of or with any court
or arbitrator or governmental or regulatory authority is required for the execution, delivery and performance by the Company of
each of the Transaction Documents, the issuance and sale of the Units and the consummation of the transactions contemplated by
the Transaction Documents, except for the registration of the Units and the Ordinary Shares and the Warrants included in the Units
under the Securities Act and such consents, approvals, authorizations, orders and registrations or qualifications as may be required
by the Financial Industry Regulatory Authority, Inc. (“FINRA”) and under applicable state securities laws in connection
with the purchase and distribution of the Units by the Underwriters.
(ee)
Legal Proceedings. There are no legal, governmental or regulatory investigations, actions, demands, claims, suits,
arbitrations, inquiries or proceedings (“Actions”) pending to which the Company is or may be a party or to which any
property of the Company is or may be the subject that, individually or in the aggregate, if determined adversely to the Company,
could reasonably be expected to have a Material Adverse Effect; to the knowledge of the Company, no such Actions are threatened
or contemplated by any governmental or regulatory authority or threatened by others.
(ff)
Independent Accountants. WithumSmith+Brown, PC, who has certified certain financial statements of the Company, is
an independent registered public accounting firm with respect to the Company within the applicable rules and regulations adopted
by the Commission and the Public Company Accounting Oversight Board (United States) and as required by the Securities Act.
(gg)
Disclosure. There is no franchise, contract or other document of a character required to be described in the Registration
Statement or Prospectus, or to be filed as an exhibit thereto, which is not described or filed as required (and the Pricing Disclosure
Package contains in all material respects the same description of the foregoing matters contained in the Prospectus); and the statements
in the Pricing Disclosure Package and the Prospectus under the headings “Principal Shareholders,” “Certain Relationships
and Related Party Transactions,” “Description of Securities,” “Underwriting” and “Taxation”
insofar as such statements summarize legal matters, agreements, documents or proceedings discussed therein, are in all material
respects accurate and fair summaries of such legal matters, agreements, documents or proceedings. There are no business relationships
or related party transactions involving the Company or any other person required by the Securities Act to be described in the Registration
Statement or Prospectus that have not been described as required.
(hh) Investment
Company Act. The Company is not and, after giving effect to the offering and sale of the Units and the application of the
proceeds thereof as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, will not be
required to register as an “investment company” or an entity “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the
Commission thereunder (collectively, the “Investment Company Act”).
(ii)
Taxes. The Company has paid all federal, state, local and foreign taxes and filed all tax returns required to be
paid or filed through the date hereof; and except as otherwise disclosed in each of the Registration Statement, the Pricing Disclosure
Package and the Prospectus, there is no tax deficiency that has been, or could reasonably be expected to be, asserted against the
Company or any of its properties or assets.
(jj)
Licenses and Permits. The Company possesses all licenses, sub-licenses, certificates, permits and other authorizations
issued by, and has made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory
authorities that are necessary for the ownership or lease of its properties or the conduct of its business as described in each
of the Registration Statement, the Pricing Disclosure Package and the Prospectus, except where the failure to possess or make the
same would not, individually or in the aggregate, have a Material Adverse Effect.
(kk)
Disclosure Controls. The Company maintains an effective system of “disclosure controls and procedures”
(as defined in Rule 13a-15(e) of the Exchange Act) that complies with the requirements of the Exchange Act to the extent required
by Rule 13a-15(e) of the Exchange Act.
(ll) Cybersecurity;
Data Protection. The Company’s information technology assets and equipment, computers, systems, networks, hardware,
software, websites, applications, and databases (collectively, “IT Systems”) are adequate for, and operate and
perform in all material respects as required in connection with the operation of the business of the Company as currently
conducted. The Company has implemented and maintained commercially reasonable controls, policies, procedures, and safeguards
(including backup and disaster recovery technology) to maintain and protect its material confidential information and the
integrity, continuous operation, redundancy and security of all IT Systems and data (including all personal, personally
identifiable, sensitive, confidential or regulated data (“Personal Data”)) used in connection with its business,
and there have been no breaches, violations, outages or unauthorized uses of or accesses to same, except for those that have
been remedied without material cost or liability or the duty to notify any other person, nor any incidents under internal
review or investigations relating to the same. The Company is presently in material compliance with all applicable laws or
statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority,
internal policies and contractual obligations relating to the privacy and security of IT Systems and Personal Data and to the
protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification, except where
the failure to be in compliance would not, individually or in the aggregate, have a Material Adverse Effect.
(mm)
No Unlawful Payments. Neither the Company nor any of its directors, director nominees, officers or employees, nor,
to the knowledge of the Company, any agent, affiliate, representative or other person associated with or acting on behalf of the
Company has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating
to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect
unlawful payment or benefit to any foreign or domestic government official or employee, including of any government-owned or controlled
entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing,
or any political party or party official or candidate for political office; (iii) violated or is in violation of any provision
of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or any applicable law or regulation implementing the OECD Convention
on Combating Bribery of Foreign Public Officials in International Business Transactions, or committed an offence under the Bribery
Act 2010 of the United Kingdom or any other applicable anti-bribery or anti-corruption law; or (iv) made, offered, agreed, requested
or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff,
influence payment, kickback or other unlawful or improper payment or benefit. The Company has instituted, maintains and enforces,
and will continue to maintain and enforce policies and procedures designed to promote and ensure compliance with all applicable
anti-bribery and anti-corruption laws.
(nn)
Compliance with Anti-Money Laundering Laws. The operations of the Company are and have been conducted at all times
in compliance with applicable financial recordkeeping and reporting requirements, including those of the U.S. Bank Secrecy Act,
as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (USA PATRIOT Act) and the Currency and Foreign Transactions Reporting Act of 1970, as amended, the applicable
money laundering statutes of all jurisdictions where the Company conducts business, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency (collectively,
the “Anti-Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company with respect to the Anti-Money Laundering Laws is pending or, to the
knowledge of the Company, threatened.
(oo) No
Conflicts with Sanctions Laws. Neither the Company nor any of its directors, director nominees, officers or employees,
nor, to the knowledge of the Company, any agent, affiliate, representative or other person associated with or acting on
behalf of the Company is (i) currently the subject or the target of any sanctions administered or enforced by the U.S.
government, (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or
the U.S. Department of State and including, without limitation, the designation as a “specially designated
national” or “blocked person”), the United Nations Security Council, the European Union, Her
Majesty’s Treasury or other relevant sanctions authority (collectively, “Sanctions”), nor (ii) located,
organized or resident in a country or territory that is the subject or target of Sanctions, including, without limitation,
Crimea, Cuba, Iran, North Korea and Syria (each, a “Sanctioned Country”). The Company will
not, directly or indirectly, use the proceeds of the Offering hereunder, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or
business with any person that, at the time of such funding or facilitation, is the subject or target of Sanctions, (ii) to
fund or facilitate any activities of or business in any Sanctioned Country or (iii) in any other manner that will result in a
violation by any person (including any person participating in the transaction, whether as underwriter, advisor, investor or
otherwise) of Sanctions. For the past five years, the Company has not knowingly engaged in and are not now knowingly engaged
in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the
target of Sanctions or with any Sanctioned Country.
(pp)
No Registration Rights. No person has the right to require the Company to register any securities for sale under
the Securities Act by reason of the filing of the Registration Statement with the Commission or the issuance and sale of the Units.
(qq)
Compliance with Nasdaq Rules. There is and has been no failure on the part of the Company or, to the knowledge of
the Company, any of the Company’s officers, directors or director nominees, in their capacities as such, to comply with (as
and when applicable), and immediately following the initial effective date of the Registration Statement the Company will be in
compliance with, the applicable requirements of Nasdaq Marketplace Rules. Further, there is and has been no failure on the part
of the Company or, to the knowledge of the Company, any of the Company’s officers, directors or director nominees, in their
capacities as such, to comply with (as and when applicable), and immediately following the initial effective date of the Registration
Statement the Company will be in compliance with, the phase-in requirements and all other applicable provisions of Nasdaq corporate
governance requirements set forth in the Nasdaq Marketplace Rules.
(rr) Taxes. There
are no transfer, stamp, issue, registration, documentary or other similar taxes, duties, fees or charges under U.S. federal
law or the laws of any state, or any political subdivision thereof, or under the laws of any non-U.S. jurisdiction, required
to be paid in connection with the execution and delivery of this Agreement or the issuance or sale by the Company of the
Units.
(ss)
Questionnaires. All information contained in the questionnaires
(the “Questionnaires”) completed by the Company and the Sponsor and, to the knowledge of the Company, the Company’s
officers, directors and director nominees and provided to the Underwriters, is true and correct and the Company has not become
aware of any information that would cause the information disclosed in the Questionnaires completed by the Company, the Sponsor
or the Company’s officers, directors and director nominees to become inaccurate and incorrect.
(tt)
Acquisition Target Not Selected. Prior to the date hereof, the Company has not selected any potential Business Combination
target and has not, nor, to its knowledge, has anyone on its behalf, had any substantive discussions, directly or indirectly, with
any potential Business Combination target with respect to a Business Combination with the Company.
(uu)
No Broker’s Fees. Except as described in the Registration Statement, the Pricing Disclosure Package and the
Prospectus, there are no claims, payments, arrangements, contracts, agreements or understandings relating to the payment of a brokerage
commission or finder’s, consulting, origination or similar fee by the Company, the Sponsor or any officer, director or director
nominee of the Company with respect to the sale of the Units hereunder or any other arrangements, agreements or understandings
of the Company, the Sponsor or any such officer, director or director nominee of the Company, or their respective affiliates, that
may affect the Underwriters’ compensation, as determined by the FINRA.
(vv)
No Direct or Indirect Payments. Except as described in the Registration Statement, the Pricing Disclosure Package
and the Prospectus, the Company has not made any direct or indirect payments (in cash, securities or any other type of “underwriting
compensation” as defined in Rule 5110(j)(22 of FINRA’s Conduct Rules): (i) to any person, as a finder’s
fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company
persons who raised or provided capital to the Company; (ii) to any person that, to the Company’s knowledge, has been
accepted by FINRA as a member of FINRA (a “Member”); or (iii) to any person or entity that, to the Company’s
knowledge, has any direct or indirect affiliation or association with any Member, within the twelve months prior to the initial
effective date of the Registration Statement, other than payments to the Underwriters pursuant to this Agreement.
(ww)
No Underwriting Compensation. No Member and/or any person associated or affiliated with a Member has received any
underwriting compensation in connection with a public offering that has not been completed according to the
terms of an agreement entered into by the Company and a participating member.
(xx)
Affiliation with FINRA. Except as disclosed in the Questionnaires provided to the Representatives, to the Company’s
knowledge, no officer, director, director nominee or beneficial owner of 5% or more of any class of the Company’s securities
(whether debt or equity, registered or unregistered, regardless of the time acquired or the source from which derived) (any such
individual or entity, a “Company Affiliate”) is a Member or a person associated or affiliated with a Member.
(yy)
Ownership of FINRA Member Securities. Except as disclosed in the Questionnaires provided to the Representatives,
to the Company’s knowledge, no Company Affiliate is an owner of stock or other securities of any Member (other than securities
purchased on the open market).
(zz)
Subordinated Loans to FINRA Members. To the Company’s knowledge, no Company Affiliate has made a subordinated
loan to any Member.
(aaa)
Non-Compete/Non-Solicitation. Except as described in the Pricing Disclosure Package and the
Prospectus, to the Company’s knowledge, none of the Sponsor, officers, directors or director nominees of the Company is subject
to a non-competition agreement or non-solicitation agreement with any employer, prior employer or other entity that could materially
affect its, his or her ability to be and act in the capacity of shareholder, officer or director of the Company, as applicable.
(bbb)
Related Party Transactions. No relationship, direct or indirect, exists between or among any of the Company or any
affiliate of the Company, on the one hand, and any director, director nominee, officer, shareholder, special advisor, customer
or supplier of the Company or any affiliate of the Company, on the other hand, which is required by the Securities Act or the Exchange
Act to be described in the Registration Statement, Pricing Disclosure Package or the Prospectus that is not described as required.
There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees
of indebtedness by the Company to or for the benefit of any of the officers, directors or director nominees of the Company or any
of their respective family members. The Company has not extended or maintained credit, arranged for the extension of credit, or
renewed an extension of credit, in the form of a personal loan to or for any officer, director or director nominee of the Company.
(ccc)
No Unlawful Influence. The Company has not offered, or caused the Underwriters to offer, the Units to any person
or entity with the intention of unlawfully influencing: (a) a customer or supplier of the Company or any affiliate of the Company
to alter the customer’s or supplier’s level or type of business with the Company or such affiliate or (b) a journalist or publication to write
or publish favorable information about the Company or any such affiliate.
(ddd)
Applicability of Rule 419. Upon delivery and payment for the Units on the Closing Date and each Additional Closing
Date, the Company will not be subject to Rule 419 under the Securities Act and none of the Company’s outstanding securities
will be deemed to be a “penny stock” as defined in Rule 3a51-1 under the Exchange Act.
(eee)
Absence of Manipulation. The Company has not taken, directly or indirectly, any action designed to or that would
constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of the Units.
(fff)
Margin Rules. Neither the issuance, sale and delivery of the Units nor the application of the proceeds thereof by
the Company as described in each of the Registration Statement, the Pricing Disclosure Package and the Prospectus will violate
Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors.
(ggg)
Statistical and Market Data. Nothing has come to the attention of the Company that has caused the Company to believe
that the statistical and market-related data included in each of the Registration Statement, the Pricing Disclosure Package and
the Prospectus, if any, is not based on or derived from sources that are reliable and accurate in all material respects.
(hhh)
Sarbanes-Oxley Act. Solely to the extent that the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations
promulgated by the Commission thereunder (the “Sarbanes-Oxley Act”) have been applicable to the Company, there is and
has been no failure on the part of the Company or any of the Company’s directors or officers, in their capacities as such,
to comply with any provision of the Sarbanes-Oxley Act, including Section 402 related to loans and Sections 302 and 906 related
to certifications.
(iii)
Status under the Securities Act. At the time of filing the Registration Statement and any post-effective amendment
thereto the Company was an “ineligible issuer,” as defined in Rule 405 under the Securities Act solely because of subclause
(B) of clause (ii) of the definition thereof. The Company has paid the registration fee for the Offering pursuant to Rule 456 under
the Securities Act.
(jjj)
No Ratings. There are (and prior to the Closing Date, will be) no debt securities, convertible securities or preferred
stock issued or guaranteed by the Company that are rated by a “nationally recognized statistical
rating organization,” as such term is defined in Section 3(a)(62) under the Exchange Act.
(kkk)
Company Ownership of Other Entities. The Company does not own, and since its incorporation has not owned, an interest
in any corporation, partnership, limited liability company, joint venture, trust or other entity.
(lll)
Payments in Foreign Currency. Except as described in the Registration Statement, the Pricing Disclosure Package,
under current laws and regulations of the Cayman Islands, all dividends and other distributions declared and payable on the Units
may be paid by the Company to the holder thereof in United States dollars or Cayman Islands dollars that may be converted into
foreign currency and freely transferred out of the Cayman Islands and all such payments made to holders thereof or therein who
are non-residents of the Cayman Islands will not be subject to income, withholding or other taxes under laws and regulations of
the Cayman Islands or any taxing authority thereof or therein and will otherwise be free and clear of any other tax, duty, withholding
or deduction in the Cayman Islands or any taxing authority thereof or therein and without the necessity of obtaining any governmental
authorization in the Cayman Islands or any political subdivision thereof or therein.
4.
Further Agreements of the Company. The Company covenants and agrees with each Underwriter that:
(a)
Required Filings. The Company will file the final Prospectus with the Commission within the time periods specified
by Rule 424(b) and Rule 430A under the Securities Act; and the Company will furnish copies of the Prospectus (to the extent not
previously delivered) to the Underwriters in New York City prior to 10:00 A.M., New York City time, on the business day next succeeding
the date of this Agreement in such quantities as the Representatives may reasonably request, unless the Underwriters otherwise
consent to a later date.
(b)
Delivery of Copies. The Company will deliver, upon request, without charge, (i) to the Representatives, signed copies
of the Registration Statement as originally filed and each amendment thereto, in each case including all exhibits and consents
filed therewith; and (ii) to each Underwriter (A) a conformed copy of the Registration Statement as originally filed and each amendment
thereto (without exhibits) and (B) during the Prospectus Delivery Period (as defined below), as many copies of the Prospectus (including
all amendments and supplements thereto) as the Representatives may reasonably request. As used herein, the term “Prospectus
Delivery Period” means such period of time after the first date of the public offering of the Units as in the opinion of
counsel for the Underwriters a prospectus relating to the Units is required by law to be delivered (or required to be delivered but for Rule
172 under the Securities Act) in connection with sales of the Units by any Underwriter or dealer.
(c)
Amendments or Supplements. Before making, preparing, using, authorizing, approving, referring to or filing any amendment
or supplement to the Registration Statement, the Pricing Disclosure Package or the Prospectus, the Company will furnish to the
Representatives and counsel for the Underwriters a copy of the proposed amendment or supplement for review and will not make, prepare,
use, authorize, approve, refer to or file any such proposed amendment or supplement to which the Representatives reasonably object.
(d)
Notice to the Representatives. The Company will advise the Representatives promptly, and confirm such advice in writing,
(i) when the Registration Statement has become effective; (ii) when any amendment to the Registration Statement has been filed
or becomes effective; (iii) when any supplement to the Pricing Disclosure Package, the Prospectus or any Written Testing-the-Waters
Communication or any amendment to the Prospectus has been filed or distributed; (iv) of any request by the Commission for any amendment
to the Registration Statement or any amendment or supplement to the Prospectus or the receipt of any comments from the Commission
relating to the Registration Statement or any other request by the Commission for any additional information, including, but not
limited to, any request for information concerning any Testing-the-Waters Communication; (v) of the issuance by the Commission
or any other governmental or regulatory authority of any order suspending the effectiveness of the Registration Statement or preventing
or suspending the use of any Preliminary Prospectus, any of the Pricing Disclosure Package, the Prospectus or any Written Testing-the-Waters
Communication or the initiation or threatening of any proceeding for that purpose or pursuant to Section 8A of the Securities Act;
(vi) of the occurrence of any event or development within the Prospectus Delivery Period as a result of which the Prospectus, any
of the Pricing Disclosure Package or any Written Testing-the-Waters Communication as then amended or supplemented would include
any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in
the light of the circumstances existing when the Prospectus, the Pricing Disclosure Package or any Written Testing-the-Waters Communication
is delivered to a purchaser, not misleading; and (vii) of the receipt by the Company of any notice with respect to any suspension
of the qualification of the Units for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose; and the Company will use its reasonable best efforts to prevent the issuance of any such order suspending the effectiveness
of the Registration Statement, preventing or suspending the use of any Preliminary Prospectus, any of the Pricing Disclosure Package
or the Prospectus or any Written Testing-the-Waters Communication or suspending any such qualification of the Units and, if any
such order is issued, will obtain as soon as possible the withdrawal thereof.
(e)
Ongoing Compliance. (1) If during the Prospectus Delivery Period (i) any event or development shall occur or condition
shall exist as a result of which the Prospectus as then amended or supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances existing
when the Prospectus is delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the Prospectus to
comply with law, the Company will immediately notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c)
above, file with the Commission and furnish to the Underwriters and to such dealers as the Representatives may designate such amendments
or supplements to the Prospectus as may be necessary so that the statements in the Prospectus as so amended or supplemented will
not, in the light of the circumstances existing when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus
will comply with law and (2) if at any time prior to the Closing Date (i) any event or development shall occur or condition shall
exist as a result of which the Pricing Disclosure Package as then amended or supplemented would include any untrue statement of
a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances
existing when the Pricing Disclosure Package is delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement
the Pricing Disclosure Package to comply with law, the Company will immediately notify the Underwriters thereof and forthwith prepare
and, subject to paragraph (c) above, file with the Commission (to the extent required) and furnish to the Underwriters and to such
dealers as the Representatives may designate such amendments or supplements to the Pricing Disclosure Package as may be necessary
so that the statements in the Pricing Disclosure Package as so amended or supplemented will not, in the light of the circumstances
existing when the Pricing Disclosure Package is delivered to a purchaser, be misleading or so that the Pricing Disclosure Package
will comply with law.
(f)
Blue Sky Compliance. The Company will qualify the Units for offer and sale under the securities or Blue Sky laws
of such jurisdictions as the Representatives shall reasonably request and will continue such qualifications in effect so long as
required for distribution of the Units; provided that the Company shall not be required to (i) qualify as a foreign corporation
or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii)
file any general consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction
if it is not otherwise so subject.
(g)
Earning Statement. The Company will make generally available to its security holders and the Representatives as soon
as practicable an earning statement that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission
promulgated thereunder covering a period of at least twelve months beginning with the first fiscal quarter of the Company
occurring after the “effective date” (as defined in Rule 158) of the Registration Statement.
(h)
Clear Market. For a period of 180 days after the date of the Prospectus, the Company
will not (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, or submit
to, or file with, the Commission a registration statement under the Securities Act relating to, any Units, Ordinary Shares, Founder
Shares, Warrants or any securities convertible into or exercisable or exchangeable for any Units, Ordinary Shares, Founder Shares
or Warrants, (ii) enter into any swap or other arrangement that transfers, in whole or in part, any of the economic consequences
of ownership of any Units, Ordinary Shares, Founder Shares or Warrants or any such other securities, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Units or such other securities, in cash or otherwise or (iii)
publicly disclose the intention to undertake any of the foregoing, without the prior written consent of Cowen and Company, LLC,
except, in each case, that the Company may (a) issue and sell the Private Placement Warrants, (b) issue and sell the
Option Units upon exercise of the option provided for in Section 2(b) hereof, (c) register with the Commission pursuant
to the Registration and Shareholder Rights Agreement, in accordance with the terms of the Registration and Shareholder Rights Agreement,
the resale of the Founder Shares, the Private Placement Warrants and warrants that may be issued upon conversion of working capital
loans (and any Ordinary Shares issued or issuable upon the exercise of any such Private Placement Warrants or warrants issued upon
conversion of the working capital loans and upon conversion of the Founder Shares), and (d) issue securities in connection
with a Business Combination; provided that the foregoing restrictions shall not apply to the forfeiture of any Founder
Shares pursuant to their terms or any transfer of Founder Shares to any current or future independent director of the Company (as
long as such current or future independent director is subject to the terms of the Insider Letter with respect to such Founder
Shares at the time of such transfer; and as long as, to the extent any Section 16 of the Exchange Act reporting obligation is triggered
as a result of such transfer, any related Section 16 of the Exchange Act filing includes a practical explanation of the transfer).
The Company agrees not to amend Section 5 (Lock-up: Transfer Restrictions) of the Insider Letter without written consent of the Representatives.
(i) Use
of Proceeds. The Company will apply the net proceeds from the sale from time to time of the Private Placement Warrants
received by it in a manner materially consistent with the applications described under the caption “Use of
Proceeds” in the Pricing Disclosure Package and the Prospectus.
(j)
No Stabilization. Neither the Company nor its affiliates will take, directly or indirectly, any action designed
to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Units.
(k)
Exchange Listing. The Company will use its reasonable best efforts to list, subject to notice of issuance, the Units,
the Ordinary Shares and the Warrants on the Nasdaq.
(l)
Reports. For a period commencing on the initial effective date of the Registration Statement and ending five years
from the date of the consummation of the Business Combination or until such earlier time at which the Liquidation occurs, the Company
shall, to the extent such information or documents are not otherwise publicly available, upon written request from the Representatives,
furnish to the Representatives copies of such financial statements and other periodic and special reports as the Company from time
to time furnishes generally to holders of any class of securities, and, to the extent such information or documents are not otherwise
publicly available, upon written request from the Representatives, promptly furnish to the Representatives: (i) a copy of
such registration statements, financial statements and periodic and special reports as the Company shall be required to file with
the Commission and from time to time furnishes generally to holders of any such class of its securities in their capacities as
such; and (ii) such additional documents and information with respect to the Company and the affairs of any future subsidiaries
of the Company as the Representatives may from time to time reasonably request, all subject to the execution of a satisfactory
confidentiality agreement. Any registration statements, financial statements, periodic and special reports or other additional
documents referred to in the preceding sentence filed or furnished on the Commission’s EDGAR website and publicly available
will be considered furnished for the purposes of this Section 4(l).
(m)
Filings. The Company will file with the Commission such reports as may be required by Rule 463 under the Securities
Act.
(n)
Emerging Growth Company. The Company will promptly notify the Representatives if the Company ceases to be an Emerging
Growth Company at any time prior to the later of (i) completion of the distribution of Units within the meaning of the Securities
Act and (ii) completion of the 180-day restricted period referred to in Section 4(h) hereof.
(o)
Exchange Act Registration. For a period commencing on the initial effective date of the Registration Statement and
ending five years from the date of the consummation of the Business Combination or until such earlier time at which the Liquidation
occurs, the Company will use commercially reasonable efforts to maintain the registration of the Ordinary Shares (or such other
security into which such Ordinary Share may be exchanged in connection with a Business Combination) under the provisions of the
Exchange Act, except after giving effect to a going private transaction after the completion of an initial Business Combination.
For a period commencing on the initial effective date of the Registration Statement and ending upon the consummation of the Business Combination or until such earlier time
at which the Liquidation occurs, the Company will use commercially reasonable efforts to maintain the registration of the Units
and Warrants under the provisions of the Exchange Act. During such applicable period, the Company will not deregister the
Units, Ordinary Shares or Warrants under the Exchange Act (except in connection with an exchange pursuant to a Business Combination
or a going private transaction after the completion of an initial Business Combination) without the prior written consent of the
Representatives.
(p)
Current Report on Form 8-K. The Company shall, on or before the date hereof, retain its independent registered public
accounting firm to audit the balance sheet of the Company as of the Closing Date (the “Audited Balance Sheet”)
reflecting the receipt by the Company of the proceeds of the Offering on the Closing Date. As soon as the Audited Balance Sheet
becomes available, the Company shall promptly, but not later than four business days after the Closing Date, file a Current Report
on Form 8-K with the Commission, which Current Report shall contain the Company’s Audited Balance Sheet. Additionally,
upon the Company’s receipt of the proceeds from the exercise of all or any portion of the option provided for in Section
2(b) hereof, the Company shall promptly, but not later than four business days after the receipt of such proceeds, file a Current
Report on Form 8-K with the Commission, which report shall disclose the Company’s sale of the Option Units and its receipt
of the proceeds therefrom, unless the receipt of such proceeds are reflected in the Current Report on Form 8-K referenced
in the immediately prior sentence.
(q)
Quarterly Review. For a period commencing on the initial effective date of the Registration Statement and ending
five years from the date of the consummation of the Business Combination or until such earlier time at which the Liquidation occurs
or the Ordinary Shares and Warrants cease to be publicly traded, the Company, at its expense, shall cause its regularly engaged
independent registered public accounting firm to review (but not audit) the Company’s financial statements for each of the
first three fiscal quarters prior to the announcement of quarterly financial information, the filing of the Company’s Form 10-Q
quarterly report and the mailing, if any, of quarterly financial information to shareholders.
(r)
Rule 462(b) Registration Statement. If the Company elects to rely upon Rule 462(b) under the Securities
Act, the Company shall file a Rule 462(b) Registration Statement with the Commission in compliance with Rule 462(b) by
10:00 P.M., Washington, D.C. time, on the date of this Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 111 under the Securities Act.
(s)
Transfer and Warrant Agent. For a period commencing on the initial effective date of the Registration Statement
and ending five years from the date of the consummation of the Business Combination or until such earlier time at which the Liquidation
occurs or the Ordinary Shares and Warrants cease to be publicly traded, the Company shall retain a transfer and warrant agent.
(t)
Initial Business Combination. The Company will not consummate an initial Business Combination with any entity that
is affiliated with the Sponsor or any of the Company’s officers or directors unless it or a committee of independent and
disinterested members of its board of directors obtains an opinion from an independent investment banking firm or from an independent
accounting firm that commonly renders valuation opinions that such initial Business Combination is fair to the Company from a financial
point of view. The Company shall not pay the Sponsor or its affiliates or any of the Company’s officers, directors or any
of their respective affiliates any fees or compensation of any kind for services rendered to the Company prior to, or in connection
with, the consummation of an initial Business Combination; provided, however, that (x) such officers, directors
and affiliates (i) may receive reimbursement for out-of-pocket expenses incurred by them in connection with activities
on the Company’s behalf related to identifying, investigating, negotiating and completing an initial Business Combination
to the extent that such expenses do not exceed the amount of available proceeds not deposited in the Trust Account, and (ii) may
be repaid loans as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus and (y) an affiliate
of the Sponsor may receive up to $10,000 per month pursuant to the Administrative Services Agreement for office space, utilities,
administrative and support services provided to the Company, none of which payments described in (x) or (y) will be made from the
proceeds held in the Trust Account prior to completion of the initial Business Combination.
(u)
FINRA Submissions. For a period of 90 days following the effective date of the Registration Statement, in the event
any person or entity (regardless of any FINRA affiliation or association) is engaged to assist the Company in its search for a
merger candidate or to provide any other merger and acquisition services, or has provided or will provide any investment banking,
financial, advisory and/or consulting services to the Company, the Company agrees that it shall promptly provide to FINRA (via
a FINRA submission), the Representatives and their counsel a notification prior to entering into the agreement or transaction relating
to a potential Business Combination: (i) the identity of the person or entity providing any such services; (ii) complete
details of all such services and copies of all agreements governing such services prior to entering into the agreement or transaction;
and (iii) justification as to why the value received by any person or entity for such services is not underwriting compensation
for the Offering. The Company also agrees that proper disclosure of such arrangement or potential arrangement will be made in the
tender offer materials or proxy statement, as applicable, which the Company may file in connection with the Business Combination for
purposes of offering redemption of shares held by its shareholders or for soliciting shareholder approval, as applicable.
(v)
Affiliates or Associated Persons of Members. The Company shall advise FINRA, the Representatives and their counsel
if it is aware that any 10% or greater shareholder of the Company becomes an affiliate or associated person of a Member participating
in the distribution of the Units.
(w) Trust
Account Investments. The Company shall cause the proceeds of the Offering and the sale from time to time of the Private
Placement Warrants to be held in the Trust Account to be invested only in United States government treasury bills with a
maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment
Company Act as set forth in the Trust Agreement and disclosed in the Pricing Disclosure Package and the Prospectus. The
Company will otherwise conduct its business in a manner so that it will not become subject to the Investment Company Act.
Furthermore, once the Company consummates an initial Business Combination, it will not be required to register as an
investment company under the Investment Company Act.
(x)
Use of Funds in Trust Account. During the period prior to the Company’s initial Business Combination or Liquidation,
the Company may instruct the Trustee to release from the Trust Account, (i) solely from interest or other income earned on
the funds held in the Trust Account, the amounts necessary to pay income taxes, if any, and (ii) to pay Public Shareholders
who properly redeem their Public Shares (as defined below) in connection with a shareholder vote to approve an amendment to the
Company’s Charter (x) to modify the substance or timing of the Company’s
obligation to provide its Public Shareholders the right to have their Public Shares redeemed in connection with its initial Business
Combination or to redeem 100% of the Company’s outstanding Public Shares if the Company has not consummated an initial Business
Combination within the time period required by the Company's Charter or (y) with respect to any other provision relating to the rights
of its Public Shareholders. Otherwise, all funds held in the Trust Account (including any interest income earned on the amounts
held in the Trust Account (net of taxes payable thereon in accordance with the preceding sentence)) will remain in the Trust Account
until the earlier of the consummation of the Company’s initial Business Combination and the Liquidation; provided, however,
that in the event of the Liquidation, up to $100,000 of interest income may be released to the Company if the proceeds of the Offering
held by the Company outside of the Trust Account are not sufficient to cover the costs and expenses associated with implementing
the Company’s plan of dissolution.
(y)
Availability of Authorized but Unissued Securities. The Company will reserve and keep available that maximum number
of its authorized but unissued securities that are issuable upon the exercise of any of the
Warrants and the Private Placement Warrants outstanding from time to time and upon the conversion of the Founder Shares.
(z) No
Additional Issuances prior to the Business Combination. Except as described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, prior to the earlier of the consummation of an initial Business Combination
and the Liquidation, the Company shall not issue (other than in replacement for lost, stolen or mutilated certificates) any
Ordinary Shares, Warrants or any options or other securities convertible into or exercisable or exchangeable for Ordinary
Shares, or any preferred stock, in each case, that (1) receive funds from the Trust Account or (2) vote as a class
with the Public Shares (a) on any initial Business Combination or (b) to approve an amendment to the Company’s Charter to (i) extend the time the Company has to consummate a Business Combination
beyond the time period required by the Company's Charter or (ii) amend the foregoing provisions.
(aa)
Audit Committee Review. Prior to the earlier of the consummation of an initial Business Combination and the Liquidation,
the Company’s audit committee will review on a quarterly basis all payments made by the Company to the Sponsor, to the Company’s
officers or directors, or to the Company’s or any of such other persons’ respective affiliates.
(bb)
Penny Stock. The Company agrees that it will use commercially reasonable efforts to prevent the Company from becoming
subject to Rule 419 under the Securities Act prior to the consummation of any Business Combination, including, but not limited
to, using its best efforts to prevent any of the Company’s outstanding securities from being deemed to be a “penny
stock” as defined in Rule 3a51-1 under the Exchange Act during such period.
(cc)
Internal Controls. To the extent required by Rule 13a-15(e) under the Exchange Act, the Company will maintain
“disclosure controls and procedures” (as defined under Rule 13a-15(e) under the Exchange Act) and a system
of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance
with management’s general or specific authorization, (ii) transactions are recorded as necessary in order to permit
preparation of financial statements in accordance with GAAP and to maintain accountability for assets, (iii) access to assets
is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(dd) Maintenance
of Listing. The Company will use commercially reasonable efforts to effect and maintain the listing of (x) the Units and
Warrants on the Nasdaq (or another national securities exchange) until the consummation of the Business Combination or until such earlier time at which the
Liquidation occurs, and (y) the Ordinary Shares on the Nasdaq (or another national securities exchange) until five years from the
date of the consummation of the Business Combination or until such earlier time at which Liquidation occurs.
(ee)
Sarbanes Oxley. As soon as legally required to do so, the Company and its directors and officers, in their capacities
as such, shall take all actions necessary to comply with any applicable provisions of the Sarbanes-Oxley Act, including Section 402
related to loans and Sections 302 and 906 related to certifications, and to comply with the rules of the Nasdaq.
(ff)
Charter. The Company shall not take any action or omit to take any action that would cause the
Company to be in breach or violation of its Charter.
(gg) Consummate
the Initial Business Combination. The Company, subject to any applicable provision of the Company’s Charter, may
consummate the initial Business Combination and conduct redemptions of Public Shares for cash upon consummation of such
Business Combination without a shareholder vote pursuant to Rule 13e-4 and Regulation 14E under the Exchange Act,
including the filing of tender offer documents with the Commission. Such tender offer documents will contain substantially
the same financial and other information about the initial Business Combination and the redemption rights as is required
under the Commission’s proxy rules and will provide each shareholder of the Company with the opportunity prior to the
consummation of the initial Business Combination to redeem the Ordinary Shares held by such shareholder for an amount of cash
equal to (A) the aggregate amount then on deposit in the Trust Account, calculated as of two business days prior to the
consummation of the initial Business Combination, representing (x) the proceeds held in the Trust Account from the
Offering and the sale from time to time of the Private Placement Warrants and (y) any interest income earned on the
funds held in the Trust Account (which interest shall be net of taxes payable), divided by (B) the total number of
Ordinary Shares sold as part of the Units in the Offering (the “Public Shares”) then outstanding. If,
however, a shareholder vote is required by applicable law or stock exchange listing requirement in connection with the
initial Business Combination, or the Company decides to hold a shareholder vote for business or other reasons, the Company
will submit such Business Combination to the Company’s shareholders for their approval (“Business Combination
Vote”). With respect to the initial Business Combination Vote, if any, each of the Sponsor and the Company’s
directors and officers has agreed to vote all of the Founder Shares and Public Shares it then holds, if any, in favor of the
Company’s initial Business Combination. If the Company seeks shareholder approval of the initial Business Combination,
the Company will offer to each Public Shareholder the right to have its shares redeemed in conjunction with a proxy
solicitation pursuant to the proxy rules of the Commission at a per share redemption price (the “Redemption
Price”) equal to (I) the aggregate amount then on deposit in the Trust Account, calculated as of two business
days prior to the consummation of the initial Business Combination, representing (1) the proceeds held in the Trust Account
from the Offering and the sale from time to time of the Private Placement Warrants and (2) interest income earned on the
funds held in the Trust Account (which interest shall be net of any taxes payable), divided by (II) the total number of
Public Shares then outstanding. If the Company seeks shareholder approval of the initial Business Combination, the Company
may proceed with such Business Combination only if a majority of the outstanding shares voted by the shareholders at a duly
held shareholders meeting are voted to approve such Business Combination. If, after seeking and receiving such shareholder
approval, the Company elects to so proceed, it will redeem shares, at the Redemption Price, from those Public Shareholders
who validly and affirmatively requested such redemption. Only Public Shareholders who properly exercise their redemption
rights, in accordance with the applicable tender offer or proxy materials related to such Business Combination and the
Charter, shall be entitled to receive distributions from the Trust Account in
connection with an initial Business Combination, and the Company shall pay no distributions with respect to any other holders
of shares of capital stock of the Company in connection therewith. In the event that the Company does not effect a Business
Combination by the time period required by the Company's Charter (or such later date as has been approved pursuant to a valid
amendment to the Company’s Charter), the Company will (i) cease all
operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business
days thereafter, redeem 100% of the Company’s outstanding Public Shares, at a per-share price, payable in cash, equal
to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes
payable and less up to $100,000 of such net interest to pay dissolution expenses), divided by the number of then outstanding
Public Shares, which redemption will completely extinguish Public Shareholders’ rights as shareholders (including the
right to receive further liquidation distributions, if any), and (iii) as promptly as reasonably possible following such
redemption, subject to the approval of the Company’s remaining shareholders and the Company’s board of directors,
dissolve and liquidate, subject in each case to the Company’s obligations under Cayman Islands law to provide for
claims of creditors and the requirements of other applicable law. Only Public Shareholders holding Ordinary Shares included
in the Units shall be entitled to receive such redemption amounts and the Company shall pay no such redemption amounts or any
distributions in liquidation with respect to any other shares of capital stock of the Company. The Sponsor and the
Company’s officers and directors have agreed that they will not propose any amendment to the Company’s Charter (A) that would modify the substance or timing of the Company’s obligation to
provide its Public Shareholders the right to have their Public Shares redeemed in connection with its initial Business
Combination or to redeem 100% of the Company’s outstanding Public Shares if the Company has not consummated an initial
Business Combination within the time period required by the Company's Charter or (B) with respect to any other provision relating to
the rights of its Public Shareholders, unless the Company offers to the Public Shareholders the right to redeem their Public
Shares in connection with such amendment, as described in the Pricing Disclosure Package and Prospectus.
(hh)
Business Combination Announcement. In the event that the Company desires or is required by an applicable law or regulation
to cause an announcement (a “Business Combination Announcement”) to be placed in The Wall Street Journal, The
New York Times or any other news or media publication or outlet or to be made via a public filing or submission with the Commission
announcing the consummation of an initial Business Combination that indicates that the Underwriters were the underwriters in the
Offering, the Company shall supply the Representatives with a draft of the Business Combination Announcement and provide the Representatives
with a reasonable advance opportunity to comment thereon, subject to the agreement of the Underwriters to keep confidential such
draft announcement in accordance with the Representatives’ standard policies regarding confidential information.
(ii)
Deferred Discount Payment. Upon the consummation of the initial Business Combination, the Company will direct the
Trustee to pay the Representatives, on behalf of the Underwriters, the Deferred Discount out of the proceeds of the Offering held
in the Trust Account. The Underwriters shall have no claim to payment of any interest earned on the portion of the proceeds held
in the Trust Account
representing the Deferred Discount. If the Company fails to consummate its initial Business Combination within the time
period required by its Charter, the Deferred Discount will not be paid to the Representatives
and will, instead, be included in the Liquidation distribution of the proceeds held in the Trust Account made to the Public Shareholders.
In connection with any such Liquidation, the Underwriters forfeit any rights or claims to the Deferred Discount.
(jj)
Forfeiture. Upon the earlier to occur of the expiration and termination of the Underwriters’ over-allotment
option, the Company shall cancel or otherwise effect the forfeiture of Founder Shares from Holdco, in an aggregate amount
equal to the number of Founder Shares determined by multiplying (a) 750,000 by (b) a fraction, (i) the numerator of
which is 3,000,000 minus the number of Option Units purchased by the Underwriters upon the exercise of their over-allotment option,
and (ii) the denominator of which is 3,000,000. For the avoidance of doubt, if the Underwriters exercise their over-allotment
option in full, the Company shall not cancel or otherwise effect the forfeiture of the Founder Shares pursuant to this Section 4(jj).
(kk) Written
Testing-the-Waters Communication. If at any time following the distribution of any Written Testing-the-Waters
Communication, there occurred or occurs an event or development as a result of which such Written Testing-the-Waters
Communication included or would include any untrue statement of a material fact or omitted or would omit to state any
material fact necessary to make the statements therein in the light of the circumstances existing at that subsequent time,
not misleading, the Company will promptly (i) notify the Representatives so that use of the Written Testing-the-Waters
Communication may cease until it is amended or supplemented; (ii) amend or supplement, at its own expense, such Written
Testing-the-Waters Communication to eliminate or correct such untrue statement or omission; and (iii) supply any
amendment or supplement to the Representatives in such quantities as may be reasonably requested.
(ll) Delivery of Agreements. The Company will deliver to the Representative executed copies of the Trust Agreement, the
Warrant Agreement, the Securities Subscription Agreement, the Private Placement Warrants Purchase Agreement, the Registration and
Shareholder Rights Agreement, the Insider Letter and the Administrative Services Agreement.
(mm) Trust Account Waiver. The Company will seek to have all vendors, service providers (other than its independent registered
public accounting firm), prospective target businesses and other entities with which it does business enter into an agreement waiving
any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of the Public Shareholders.
The Company may forego obtaining such waivers only if the Company’s management shall have determined that such third party’s
engagement would be significantly more beneficial to the Company than any alternative.
(nn) Certification
of Beneficial Ownership. The Company will deliver to each Underwriter (or its agent), on the date of execution of this Agreement,
a properly completed and executed Certification Regarding Beneficial Owners and Key Controllers of Legal Entity Customers, together
with copies of identifying documentation, and the Company undertakes to provide such additional supporting documentation as each
Underwriter may reasonably request in connection with the verification of the foregoing Certification.
5. Certain Agreements of the Underwriters. Each Underwriter hereby represents and agrees, severally and not jointly,
that it is not subject to any pending proceeding under Section 8A of the Securities Act with respect to the Offering (and will
promptly notify the Company if any such proceeding against it is initiated during the Prospectus Delivery Period).
6. Conditions
of Underwriters’ Obligations. The obligation of each Underwriter to purchase the Underwritten Units on the Closing
Date or the Option Units on the Additional Closing Date, as the case may be, as provided herein is subject to the performance
by the Company of its covenants and other obligations hereunder and to the following additional conditions:
(a) Registration
Compliance; No Stop Order. No order suspending the effectiveness of the Registration Statement shall be in effect, and no
proceeding for such purpose or pursuant to Section 8A under the Securities Act shall be pending before or threatened by the Commission;
the Prospectus shall have been timely filed with the Commission under the Securities Act and in accordance with Section 4(a) hereof;
and all requests by the Commission for additional information shall have been complied with to the reasonable satisfaction of
the Representatives.
(b) Representations and Warranties. The representations and warranties of the Company contained herein shall be true
and correct on the date hereof and on and as of the Closing Date or the Additional Closing Date, as the case may be; and the statements
of the Company and its officers made in any certificates delivered pursuant to this Agreement shall be true and correct on and
as of the Closing Date or the Additional Closing Date, as the case may be.
(c) No Material Adverse Change. No event or condition of a type described in Section 3(i) hereof shall have occurred
or shall exist, which event or condition is not described in the Pricing Disclosure Package (excluding any amendment or supplement
thereto) and the Prospectus (excluding any amendment or supplement thereto) and the effect of which in the judgment of the Representatives
makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Units on the Closing Date or the Additional
Closing Date, as the case may be, on the terms and in the manner contemplated by this Agreement, the Pricing Disclosure Package
and the Prospectus.
(d) Officers’ Certificate. The Representatives shall have received on and as of the Closing Date or the Additional
Closing Date, as the case may be, a certificate of the chief financial officer or chief accounting officer of the Company and one
additional senior executive officer of the Company who is satisfactory to the Representatives (i) confirming that such officers
have carefully reviewed the Registration Statement, the Pricing Disclosure Package and the Prospectus and, to the knowledge of
such officers, the representations set forth in Sections 3(b) and 3(c) hereof are true and correct, (ii) confirming that the other
representations and warranties of the Company in this Agreement are true and correct and that the Company has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date or the
Additional Closing Date, as the case may be, and (iii) to the effect set forth in paragraphs (a) and (c) above.
(e) Comfort
Letters. On the date of this Agreement and on the Closing Date or the Additional Closing Date, as the case may be,
WithumSmith+Brown, PC shall have furnished to the Representatives, at the request of the Company, letters, dated the
respective dates of delivery thereof and addressed to the Underwriters, in form and substance reasonably satisfactory to the
Representatives, containing statements and information of the type customarily included in accountants’ “comfort
letters” to underwriters with respect to the financial statements and certain financial information contained in each
of the Registration Statement, the Pricing Disclosure Package and the Prospectus; provided, that the letter delivered
on the Closing Date or the Additional Closing Date, as the case may be, shall use a “cut-off” date no more than
two business days prior to such Closing Date or such Additional Closing Date, as the case may be.
(f) Opinions
and 10b-5 Letter of Counsel for the Company. (i) Kirkland & Ellis LLP, counsel for the Company, shall have furnished to
the Representatives, at the request of the Company, their written opinion and 10b-5 letter, dated the Closing Date or the Additional
Closing Date, as the case may be, and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representatives,
and (ii) Maples and Calder, Cayman Islands counsel for the Company, shall have furnished to the Representatives, at the request
of the Company, their written opinion, dated the Closing Date or the Additional Closing Date, as the case may be, and addressed
to the Underwriters, in form and substance reasonably satisfactory to the Representatives.
(g) Opinion and 10b-5 Letter of Counsel for the Underwriters. The Representatives shall have received on and as of the
Closing Date or the Additional Closing Date, as the case may be, an opinion and 10b-5 letter, addressed to the Underwriters, of
Shearman & Sterling LLP, counsel for the Underwriters, with respect to such matters as the Representatives may reasonably request,
and such counsel shall have received such documents and information as they may reasonably request to enable them to pass upon
such matters.
(h) No Legal Impediment to Issuance and Sale. No action shall have been taken and no statute, rule, regulation or order
shall have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority that would, as
of the Closing Date or the Additional Closing Date, as the case may be, prevent the issuance or sale of the Units; and no injunction
or order of any federal, state or foreign court shall have been issued that would, as of the Closing Date or the Additional Closing
Date, as the case may be, prevent the issuance or sale of the Units.
(i) Good Standing. The Representatives shall have received on and as of the Closing Date or the Additional Closing Date,
as the case may be, satisfactory evidence of the good standing of the Company in its jurisdiction of organization and its good
standing in such other jurisdictions as the Representatives may reasonably request, in each case in writing or any standard form
of telecommunication from the appropriate governmental authorities of such jurisdictions.
(j) Exchange Listing. The Units to be delivered on the Closing Date or the Additional Closing Date, as the case may
be, shall have been approved for listing on the Nasdaq.
(k) Delivery of Transaction Documents. On or prior to the Closing Date, the Company shall have delivered to the Representatives
executed copies of the Trust Agreement, the Warrant Agreement, the Securities Subscription Agreement, the Private Placement Warrants
Purchase Agreement, the Registration and Shareholder Rights Agreement, the Insider Letter and the Administrative Services Agreement,
and each of the Transaction Documents shall be in full force and effect on the Closing Date or the Additional Closing Date, as
the case may be.
(l) Funding
of Private Placement Warrants. At least one business day prior to the Closing Date or the Additional Closing Date, as
applicable, the Company shall have caused proceeds from the sale of the Private Placement Warrants to be deposited into the
Trust Account such that the cumulative amount deposited into the Trust Account as of such Closing Date or Additional Closing
Date, as applicable, shall equal 101% of the product of the number of Units sold in the public offering as of such Closing
Date or Additional Closing Date, as applicable, and the public offering price per Unit as set forth on the cover of the
Prospectus.
(m)
FINRA. FINRA shall not have raised any objection with respect to the fairness or reasonableness of the underwriting
or other arrangements of the transactions contemplated hereby.
(n) Additional Documents. On or prior to the Closing Date or the Additional Closing Date, as the case may be, the Company
shall have furnished to the Representatives such further certificates and documents as the Representatives may reasonably request.
All opinions, letters, certificates and
evidence mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if
they are in form and substance reasonably satisfactory to counsel for the Underwriters.
7. Indemnification
and Contribution.
(a) Indemnification
of the Underwriters. The Company agrees to indemnify and hold harmless each Underwriter, its affiliates, directors,
managers, members, employees, agents, representatives and officers and each person, if any, who controls such Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, legal fees and other expenses incurred in connection
with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that
arise out of, or are based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or caused by any omission or alleged omission to state therein a material fact required to be stated
therein or necessary in order to make the statements therein, not misleading, or (ii) any untrue statement or alleged untrue
statement of a material fact contained in the Prospectus (or any amendment or supplement thereto), any Preliminary
Prospectus, any Written Testing-the-Waters Communication, any road show as defined in Rule 433(h) under the Securities Act (a
“road show”) or any Pricing Disclosure Package (including any Pricing Disclosure Package that has subsequently
been amended), or caused by any omission or alleged omission to state therein a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading, in each case except insofar as
such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with any information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein, it being
understood and agreed that the only such information furnished by any Underwriter consists of the information described as
such in paragraph (b) below.
(b) Indemnification
of the Company. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors,
its officers who signed the Registration Statement and each person, if any, who controls the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above,
but only with respect to any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to such
Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in the Registration
Statement, the Prospectus (or any amendment or supplement thereto), any Preliminary Prospectus, any Written Testing-the-Waters
Communication, any road show or any Pricing Disclosure Package (including any Pricing Disclosure Package that has subsequently
been amended), it being understood and agreed upon that the only such information furnished by any Underwriter consists of the
following information in the Prospectus furnished on behalf of each Underwriter: (y) the concession figure appearing in the fourth
paragraph under the caption “Underwriting” and (z) the sixteenth and seventeenth paragraphs related to stabilization,
over-allotment, syndicate covering transactions and penalty bids under the caption “Underwriting.”
(c) Notice
and Procedures. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand
shall be brought or asserted against any person in respect of which indemnification may be sought pursuant to the preceding
paragraphs of this Section 7, such person (the “Indemnified Person”) shall promptly notify the person against
whom such indemnification may be sought (the “Indemnifying Person”) in writing; provided that the failure
to notify the Indemnifying Person shall not relieve it from any liability that it may have under the preceding paragraphs of
this Section 7 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or
defenses) by such failure; and provided, further, that the failure to notify the Indemnifying Person shall not
relieve it from any liability that it may have to an Indemnified Person otherwise than under the preceding paragraphs of this
Section 7. If any such proceeding shall be brought or asserted against an Indemnified Person and it shall have notified the
Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified Person
(who shall not, without the consent of the Indemnified Person, be counsel to the Indemnifying Person) to represent the
Indemnified Person and any others entitled to indemnification pursuant to this Section that the Indemnifying Person may
designate in such proceeding and shall pay the fees and expenses in such proceeding and shall pay the fees and expenses of
such counsel related to such proceeding, as incurred. In any such proceeding, any Indemnified Person shall have the right to
retain its own counsel (including local counsel), but the fees and expenses of such counsel shall be at the expense of such
Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary;
(ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person; (iii) the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that
are different from or in addition to those available to the Indemnifying Person; or (iv) the named parties in any such
proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and
representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests
between them. It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or
related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be paid or reimbursed as they
are incurred. Any such separate firm for any Underwriter, its affiliates, directors and officers and any control persons of
such Underwriter shall be designated in writing by the Representatives and any such separate firm for the Company, its
directors, its officers who signed the Registration Statement and any control persons of the Company shall be designated in
writing by the Company. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent, the Indemnifying Person agrees to indemnify each Indemnified Person from
and against any loss or liability by reason of such settlement. Notwithstanding the foregoing sentence, if at any time an
Indemnified Person shall have requested that an Indemnifying Person reimburse the Indemnified Person for fees and expenses of
counsel as contemplated by this paragraph, the Indemnifying Person shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by the
Indemnifying Person of such request and (ii) the Indemnifying Person shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement. No Indemnifying Person shall, without the written consent
of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified
Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless
such settlement (x) includes an unconditional release of such Indemnified Person, in form and substance reasonably
satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (y)
does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any
Indemnified Person.
(d) Contribution.
If the indemnification provided for in paragraphs (a) or (b) above is unavailable to an Indemnified Person or insufficient
in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph,
in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Underwriters on the other, from the Offering or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) but also the relative fault of the Company, on the one hand, and the Underwriters on the other,
in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the Company, on the one hand, and the Underwriters on the
other, shall be deemed to be in the same respective proportions as the net proceeds (before deducting expenses) received by the
Company from the sale of the Units and the total underwriting discounts and commissions received by the Underwriters in connection
therewith, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate offering price of the
Units. The relative fault of the Company, on the one hand, and the Underwriters on the other, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or by the Underwriters and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
(e) Limitation
on Liability. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to
paragraph (d) above were determined by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in
paragraph (d) above. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and
liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses incurred by such Indemnified Person in connection with any such action or claim. Notwithstanding the
provisions of paragraphs (d) and (e), in no event shall an Underwriter be required to contribute any amount in excess of the
amount by which the total underwriting discounts and commissions received by such Underwriter with respect to the Offering
exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to paragraphs (d) and (e) are
several in proportion to their respective purchase obligations hereunder and not joint.
(f) Non-Exclusive
Remedies. The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any Indemnified Person at law or in equity.
8. Effectiveness of Agreement. This Agreement shall become effective as of the date first written above.
9. Termination. This Agreement may be terminated in the absolute discretion of the Representatives, by notice to the
Company, if after the execution and delivery of this Agreement and on or prior to the Closing Date or, in the case of the Option
Units, prior to the Additional Closing Date (i) trading generally shall have been suspended or materially limited on or by any
of the New York Stock Exchange or the Nasdaq; (ii) trading of any securities issued or guaranteed by the Company shall have been
suspended on any exchange or in any over-the-counter market; (iii) a general moratorium on commercial banking activities shall
have been declared by federal or New York State authorities; or (iv) there shall have occurred any outbreak or escalation of hostilities
or any change in financial markets or any calamity or crisis, either within or outside the United States, that, in the sole judgment
of the Representatives, is material and adverse and makes it impracticable or inadvisable to proceed with the offering, sale or
delivery of the Units on the Closing Date or the Additional Closing Date, as the case may be, on the terms and in the manner contemplated
by this Agreement, the Pricing Disclosure Package and the Prospectus.
10. Defaulting Underwriter.
(a) If,
on the Closing Date or the Additional Closing Date, as the case may be, any Underwriter defaults on its obligation to
purchase the Units that it has agreed to purchase hereunder on such date, the non-defaulting Underwriters may in their
discretion arrange for the purchase of such Units by other persons satisfactory to the Company on the terms contained in this
Agreement. If, within 36 hours after any such default by any Underwriter, the non-defaulting Underwriters do not arrange for
the purchase of such Units, then the Company shall be entitled to a further period of 36 hours within which to procure other
persons satisfactory to the non-defaulting Underwriters to purchase such Units on such terms. If other persons become
obligated or agree to purchase the Units of a defaulting Underwriter, either the non-defaulting Underwriters or the
Company may postpone the Closing Date or the Additional Closing Date, as the case may be, for up to five full business days
in order to effect any changes that in the opinion of counsel for the Company or counsel for the Underwriters may be
necessary in the Registration Statement and the Prospectus or in any other document or arrangement, and the Company agrees to
promptly prepare any amendment or supplement to the Registration Statement and the Prospectus that effects any such changes.
As used in this Agreement, the term “Underwriter” includes, for all purposes of this Agreement unless the context
otherwise requires, any person not listed in Schedule 1 hereto that, pursuant to this Section 10, purchases Units that a
defaulting Underwriter agreed but failed to purchase.
(b) If,
after giving effect to any arrangements for the purchase of the Units of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters and the Company as provided in paragraph (a) above, the aggregate number of Units that remain unpurchased on the
Closing Date or the Additional Closing Date, as the case may be, does not exceed 10% of the aggregate number of Units to be purchased
on such date, then the Company shall have the right to require each non-defaulting Underwriter to purchase the number of Units
that such Underwriter agreed to purchase hereunder on such date plus such Underwriter’s pro rata share (based on the number
of Units that such Underwriter agreed to purchase on such date) of the Units of such defaulting Underwriter or Underwriters for
which such arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the Units of a defaulting Underwriter or Underwriters by
the non-defaulting Underwriters and the Company as provided in paragraph (a) above, the aggregate number of Units that remain unpurchased
on the Closing Date or the Additional Closing Date, as the case may be, exceeds 10% of the aggregate amount of Units to be purchased
on such date, or if the Company shall not exercise the right described in paragraph (b) above, then this Agreement or, with respect
to any Additional Closing Date, the obligation of the Underwriters to purchase Units on the Additional Closing Date, as the case
may be, shall terminate without liability on the part of the non-defaulting Underwriters. Any termination of this Agreement pursuant
to this Section 10 shall be without liability on the part of the Company, except that the Company will continue to be liable for
the payment of expenses as set forth in Section 11 hereof and except that the provisions of Section 7 hereof shall not terminate
and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of any liability it may have to the Company or any non-defaulting
Underwriter for damages caused by its default.
11. Payment of Expenses.
(a) Whether
or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, the Company will pay
or cause to be paid all costs and expenses incident to the performance of its obligations hereunder, including without
limitation, (i) the costs incident to the authorization, issuance, sale, preparation and delivery of the Units and any
taxes payable in that connection; (ii) the costs incident to the preparation, printing and filing under the Securities
Act of the Registration Statement, the Preliminary Prospectus, any Pricing Disclosure Package and the Prospectus (including
all exhibits, amendments and supplements thereto) and the distribution thereof; (iii) the costs of reproducing and
distributing each of the Transaction Documents; (iv) the fees and expenses of the Company’s counsel and independent
accountants; (v) the fees and expenses incurred in connection with the registration or qualification and determination of
eligibility for investment of the Units under the laws of such jurisdictions as the Representatives may designate and the
preparation, printing and distribution of a Blue Sky Memorandum (including the related fees and expenses of counsel for the
Underwriters); (vi) the cost of preparing stock certificates; (vii) the costs and charges of any transfer agent,
trustee, warrant agent and registrar; (viii) all expenses and application fees incurred in connection with any filing with,
and clearance of the offering by, FINRA (including the reasonable and documented fees and expenses of counsel for the
Underwriters relating to such filings up to $25,000); (ix) transportation and other expenses incurred by the Company and its
executive officers (and not the Underwriters) in connection with any “road show” presentation to potential
investors; and (x) all expenses and application fees related to the listing of the Units on the Nasdaq.
(b) If
(i) this Agreement is terminated pursuant to Section 9 (other than clauses (iii) and (iv)), (ii) the Company for any reason fails
to tender the Units for delivery to the Underwriters or (iii) the Underwriters decline to purchase the Units for any reason permitted
under this Agreement, the Company agrees to reimburse the Underwriters for all reasonable and documented out-of-pocket costs and
expenses (including the reasonable and documented fees and expenses of their counsel) incurred by the Underwriters in connection
with this Agreement and the Offering.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and the officers and directors and any controlling persons referred to herein, and the affiliates
of each Underwriter referred to in Section 7 hereof. Nothing in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. No
purchaser of Units from any Underwriter shall be deemed to be a successor merely by reason of such purchase.
13. Survival. The respective indemnities, rights of contribution, representations, warranties and agreements of the Company
and the Underwriters contained in this Agreement or made by or on behalf of the Company or the Underwriters pursuant to this Agreement
or any certificate delivered pursuant hereto shall survive the delivery of and payment for the Units and shall remain in full force
and effect, regardless of any termination of this Agreement or any investigation made by or on behalf of the Company or the Underwriters
or the directors, officers, controlling persons or affiliates referred to in Section 7 hereof.
14. Certain
Defined Terms. For purposes of this Agreement, (a) except where otherwise expressly provided, the term
“affiliate” has the meaning set forth in Rule 405 under the Securities Act; and (b) the term “business
day” means any day other than a day on which banks are permitted or required to be closed in New York City; and (c) the
term “Liquidation” means the distributions of the Trust Account to the Public Shareholders in connection with the
redemption of the Ordinary Shares held by the Public Shareholders pursuant to the terms of the Company’s Charter, as amended, if the Company fails to consummate a Business Combination with the time
period provided therein.
15. Compliance
with USA Patriot Act. In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)), the Underwriters are required to obtain, verify and record information that identifies their respective
clients, including the Company, which information may include the name and address of their respective clients, as well as other
information that will allow the Underwriters to properly identify their respective clients.
16. Miscellaneous.
(a) Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly
given if mailed or transmitted and confirmed by any standard form of telecommunication.
Notices to the Underwriters shall be given
to the Representatives:
Cowen and Company, LLC
599 Lexington Avenue
New York, New York 10022
Attention: Head of Equity Capital
Markets, with a copy to the General Counsel Investment Banking
Wells Fargo Securities, LLC
500 West 33rd Street
New York, New York 10001
Attention: Equity Syndicate Department (fax no: (212) 214-5918)
with a copy to:
Shearman & Sterling LLP
599 Lexington Avenue
New York, New York 10022
Attention: Ilir Mujalovic and William B. Nelson
Notices to the Company shall be
given to it at
Spring Valley Acquisition Corp.
2100 McKinney Ave, Suite 1675
Dallas, Texas 75201
Attention: Christopher Sorrells
with a copy to:
Kirkland & Ellis LLP
609 Main Street
Houston, Texas 77002
Attention: Matthew R. Pacey, P.C. and Christian O. Nagler
(b) Governing
Law. This Agreement and any claim, controversy or dispute arising under or related to this Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
(c) Submission to Jurisdiction. The Company hereby submits to the exclusive jurisdiction of the U.S. federal and New
York state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby. The Company waives any objection which it may now or hereafter have to the laying
of venue of any such suit or proceeding in such courts. The Company agrees that final judgment in any such suit, action or proceeding
brought in such court shall be conclusive and binding upon the Company and may be enforced in any court to the jurisdiction of
which Company is subject by a suit upon such judgment.
(d) Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY SUIT OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(e) Recognition of the U.S. Special Resolution Regimes.
(i) In the event that any Underwriter
that is a Covered Entity (as defined below) becomes subject to a proceeding under a U.S. Special Resolution Regime (as defined
below), the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will
be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement,
and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
(ii) In the event that any
Underwriter that is a Covered Entity or a BHC Act Affiliate (as defined below) of such Underwriter becomes subject to a
proceeding under a U.S. Special Resolution Regime, Default Rights (as defined below) under this Agreement that may be
exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be
exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a
state of the United States.
As used in this Section 16(e):
“BHC Act Affiliate” has
the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Covered Entity” means
any of the following:
(i) a “covered entity”
as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(ii) a “covered bank”
as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(iii) a “covered FSI”
as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the
meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as
applicable.
“U.S. Special Resolution Regime”
means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank
Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
(f) Counterparts. This Agreement may be signed in counterparts (which may include counterparts delivered by any standard
form of telecommunication), each of which shall be an original and all of which together shall constitute one and the same instrument.
Counterparts may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN
Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com)
or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid
and effective for all purposes.
(g) Amendments or Waivers. No amendment or waiver of any provision of this Agreement, nor any consent or approval to
any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto.
(h) Headings. The headings herein are included for convenience of reference only and are not intended to be part of,
or to affect the meaning or interpretation of, this Agreement.
(i) Integration. This Agreement supersedes all prior agreements and understandings (whether written or oral) between
the Company and the Underwriters, or any of them, with respect to the subject matter hereof.
[Signature Pages Follow]
If the foregoing is in accordance with your
understanding, please indicate your acceptance of this Agreement by signing in the space provided below.
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Very truly
yours, |
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SPRING VALLEY
ACQUISITION CORP. |
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By: |
|
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|
Name: |
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|
Title: |
[Signature Page to Underwriting Agreement]
Accepted: As of the date first written above
COWEN AND COMPANY, LLC
WELLS FARGO SECURITIES, LLC
For itself and on behalf of the
several Underwriters listed
in Schedule 1 hereto.
| COWEN AND COMPANY, LLC |
|
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|
| By: |
|
|
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Authorized Signatory |
|
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|
| WELLS FARGO SECURITIES, LLC |
|
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|
| By: |
|
|
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Authorized Signatory |
|
Schedule 1
| Underwriter | |
Number of Units |
| Cowen and Company, LLC | |
[·] |
| Wells Fargo Securities, LLC | |
[·] |
| Drexel Hamilton, LLC | |
[·] |
| Siebert Williams Shank & Co., LLC | |
[·] |
| Total | |
20,000,000 |
Annex A
Pricing Information Provided by Underwriters
The initial public offering price per Unit
for the Units is $10.00.
The number of Units purchased by the
Underwriters is 20,000,000. The Underwriters have an option to purchase an additional 3,000,000 Units to cover over-allotments,
if any.
Annex B
Written Testing-the-Waters Communications
Reference is made to the materials used in the testing the waters
presentation made to potential investors by the Company, to the extent such materials are deemed to be a “written communication”
within the meaning of Rule 405 under the Securities Act.
Exhibit 3.2
THE COMPANIES LAW (2020 Revision)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
MEMORANDUM AND ARTICLES OF ASSOCIATION
OF
SPRING VALLEY ACQUISITION CORP.
(adopted
by special resolution dated [Date] and effective on [date])
THE COMPANIES LAW (2020 Revision)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
MEMORANDUM OF ASSOCIATION
OF
SPRING VALLEY ACQUISITION CORP.
(adopted
by special resolution dated [Date] and effective on [date])
| 1 | The name of the Company is Spring Valley Acquisition Corp. |
| 2 | The Registered Office of the Company shall be at the offices of Maples Corporate Services Limited,
PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, or at such other place within the Cayman Islands as the Directors
may decide. |
| 3 | The objects for which the Company is established are unrestricted and the Company shall have full
power and authority to carry out any object not prohibited by the laws of the Cayman Islands. |
| 4 | The liability of each Member is limited to the amount unpaid on such Member's shares. |
| 5 | The share capital of the Company is US$33,100 divided into 300,000,000 Class A ordinary shares
of a par value of US$0.0001 each, 30,000,000 Class B ordinary shares of a par value of US$0.0001 each and 1,000,000 preference
shares of a par value of US$0.0001 each. |
| 6 | The Company has power to register by way of continuation as a body corporate limited by shares
under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands. |
| 7 | Capitalised terms that are not defined in this Amended and Restated Memorandum of Association bear
the respective meanings given to them in the Amended and Restated Articles of Association of the Company. |
THE COMPANIES LAW (2020 Revision)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
OF
SPRING VALLEY ACQUISITION
CORP.
(adopted
by special resolution dated [Date] and effective on [date])
| 1.1 | In the Articles Table A in the First Schedule to the Statute does not apply and, unless there is
something in the subject or context inconsistent therewith: |
| "Affiliate" |
in respect of a person, means any other person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such person, and (a) in the case of a natural person, shall include, without limitation, such person’s spouse, parents, children, siblings, mother-in-law and father-in-law and brothers and sisters-in-law, whether by blood, marriage or adoption or anyone residing in such person’s home, a trust for the benefit of any of the foregoing, a company, partnership or any natural person or entity wholly or jointly owned by any of the foregoing and (b) in the case of an entity, shall include a partnership, a corporation or any natural person or entity which directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such entity. |
| |
|
| "Applicable Law" |
means, with respect to any person, all provisions of laws, statutes, ordinances, rules, regulations, permits, certificates, judgments, decisions, decrees or orders of any governmental authority applicable to such person. |
| |
|
| "Articles" |
means these amended and restated articles of association of the Company. |
| |
|
| "Audit Committee" |
means the audit committee of the board of directors of the Company established pursuant to the Articles, or any successor committee. |
| "Auditor" |
means the person for the time being performing the duties of auditor of the Company (if any). |
| |
|
| "Business Combination" |
means a merger,
amalgamation, share exchange, asset acquisition, share purchase, reorganisation or similar business combination involving the
Company, with one or more businesses or entities (the "target business"), which Business Combination:
(a) as long as the securities of the Company are listed on The Nasdaq Capital Market, must occur with one or more target
businesses that together have an aggregate fair market value of at least 80 per cent of the value of the assets held in the
Trust Account (excluding any deferred underwriting commissions and taxes payable on the income earned on the Trust Account)
at the time of the agreement to enter into such Business Combination; and (b) must not be
solely effectuated with another blank cheque company or a similar company with nominal operations. |
| |
|
| "business day" |
means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorised or obligated by law to close in New York City. |
| |
|
| "Clearing House" |
means a clearing house recognised by the laws of the jurisdiction in which the Shares (or depositary receipts therefor) are listed or quoted on a stock exchange or interdealer quotation system in such jurisdiction. |
| |
|
| "Class A Share" |
means a Class A ordinary share of a par value of US$0.0001 in the share capital of the Company. |
| |
|
| "Class B Share" |
means a Class B ordinary share of a par value of US$0.0001 in the share capital of the Company. |
| |
|
| "Company" |
means the above named company. |
| |
|
| "Company’s Website" |
means the website of the Company and/or its web-address or domain name (if any). |
| |
|
| "Compensation Committee" |
means the compensation committee of the board of directors of the Company established pursuant to the Articles, or any successor committee. |
| "Designated Stock Exchange" |
means any United States national securities exchange on which the securities of the Company are listed for trading, including The Nasdaq Capital Market. |
| |
|
| "Directors" |
means the directors for the time being of the Company. |
| |
|
| "Dividend" |
means any dividend (whether interim or final) resolved to be paid on Shares pursuant to the Articles. |
| |
|
| "Electronic Communication" |
means a communication sent by electronic means, including electronic posting to the Company’s Website, transmission to any number, address or internet website (including the website of the Securities and Exchange Commission) or other electronic delivery methods as otherwise decided and approved by the Directors. |
| |
|
| "Electronic Record" |
has the same meaning as in the Electronic Transactions Law. |
| |
|
| "Electronic Transactions Law" |
means the Electronic Transactions Law (2003 Revision) of the Cayman Islands. |
| |
|
| "Equity-linked Securities" |
means any debt or equity securities that are convertible, exercisable or exchangeable for Class A Shares issued in a financing transaction in connection with a Business Combination, including but not limited to a private placement of equity or debt. |
| |
|
| "Exchange Act" |
means the United States Securities Exchange Act of 1934, as amended, or any similar U.S. federal statute and the rules and regulations of the Securities and Exchange Commission thereunder, all as the same shall be in effect at the time. |
| |
|
| "Founders" |
means all Members immediately prior to the consummation of the IPO. |
| |
|
| "Independent Director" |
has the same meaning as in the rules and regulations of the Designated Stock Exchange or in Rule 10A-3 under the Exchange Act, as the case may be. |
| |
|
| "IPO" |
means the Company's initial public offering of securities. |
| |
|
| "Member" |
has the same meaning as in the Statute. |
| |
|
| "Memorandum" |
means the amended and restated memorandum of association of the Company. |
| "Nominating and Corporate Governance Committee" |
means the nominating and corporate governance committee of the board of directors of the Company established pursuant to the Articles, or any successor committee. |
| |
|
| "Officer" |
means a person appointed to hold an office in the Company. |
| |
|
| "Ordinary Resolution" |
means a resolution passed by a simple majority of the Members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting, and includes a unanimous written resolution. In computing the majority when a poll is demanded regard shall be had to the number of votes to which each Member is entitled by the Articles. |
| |
|
| "Over-Allotment Option" |
means the option of the Underwriters to purchase up to an additional 15 per cent of the firm units (as described in the Articles) issued in the IPO at a price equal to US$10 per unit, less underwriting discounts and commissions. |
| |
|
| "Preference Share" |
means a preference share of a par value of US$0.0001 in the share capital of the Company. |
| |
|
| "Public Share" |
means a Class A Share issued as part of the units (as described in the Articles) issued in the IPO. |
| |
|
| "Redemption Notice" |
means a notice in a form approved by the Company by which a holder of Public Shares is entitled to require the Company to redeem its Public Shares, subject to any conditions contained therein. |
| |
|
| "Register of Members" |
means the register of Members maintained in accordance with the Statute and includes (except where otherwise stated) any branch or duplicate register of Members. |
| |
|
| "Registered Office" |
means the registered office for the time being of the Company. |
| |
|
| "Representative" |
means a representative of the Underwriters. |
| |
|
| "Seal" |
means the common seal of the Company and includes every duplicate seal. |
| |
|
| "Securities and Exchange Commission" |
means the United States Securities and Exchange Commission. |
| "Share" |
means a Class A Share, a Class B Share or a Preference Share and includes a fraction of a share in the Company. |
| |
|
| "Special Resolution" |
subject to Article 29.4, has the same meaning as in the Statute, and includes a unanimous written resolution. |
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| "Sponsor" |
means Spring Valley Acquisition Sponsor, LLC, a Delaware limited liability company, and its successors or assigns. |
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| "Statute" |
means the Companies Law (2020 Revision) of the Cayman Islands. |
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| "Treasury Share" |
means a Share held in the name of the Company as a treasury share in accordance with the Statute. |
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|
| "Trust Account" |
means the trust
account established by the Company upon the consummation of its IPO and into which a certain amount of the net proceeds of
the IPO, together with a certain amount of the proceeds of a private placement of warrants simultaneously with the closing
date of the IPO, will be deposited. |
| |
|
| "Underwriter" |
means an underwriter of the IPO from time to time and any successor underwriter. |
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| (a) | words importing the singular number include the plural number and vice versa; |
| (b) | words importing the masculine gender include the feminine gender; |
| (c) | words importing persons include corporations as well as any other legal or natural person; |
| (d) | "written" and "in writing" include all modes of representing or reproducing
words in visible form, including in the form of an Electronic Record; |
| (e) | "shall" shall be construed as imperative and "may" shall be construed as permissive; |
| (f) | references to provisions of any law or regulation shall be construed as references to those provisions
as amended, modified, re-enacted or replaced; |
| (g) | any phrase introduced by the terms "including", "include", "in particular"
or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms; |
| (h) | the term "and/or" is used herein to mean both "and" as well as "or."
The use of "and/or" in certain contexts in no respects qualifies or modifies the use of the terms "and" or
"or" in others. The term "or" shall not be interpreted to be exclusive and the term "and" shall not
be interpreted to require the conjunctive (in each case, unless the context otherwise requires); |
| (i) | headings are inserted for reference only and shall be ignored in construing the Articles; |
| (j) | any requirements as to delivery under the Articles include delivery in the form of an Electronic
Record; |
| (k) | any requirements as to execution or signature under the Articles including the execution of the
Articles themselves can be satisfied in the form of an electronic signature as defined in the Electronic Transactions Law; |
| (l) | sections 8 and 19(3) of the Electronic Transactions Law shall not apply; |
| (m) | the term "clear days" in relation to the period of a notice means that period excluding
the day when the notice is received or deemed to be received and the day for which it is given or on which it is to take effect;
and |
| (n) | the term "holder" in relation to a Share means a person whose name is entered in the
Register of Members as the holder of such Share. |
| 2 | Commencement of Business |
| 2.1 | The business of the Company may be commenced as soon after incorporation of the Company as the
Directors shall see fit. |
| 2.2 | The Directors may pay, out of the capital or any other monies of the Company, all expenses incurred
in or about the formation and establishment of the Company, including the expenses of registration. |
| 3 | Issue of Shares and other Securities |
| 3.1 | Subject to the provisions, if any, in the Memorandum (and to any direction that may be given by
the Company in general meeting) and, where applicable, the rules and regulations of the Designated Stock Exchange, the Securities
and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law, and without prejudice
to any rights attached to any existing Shares, the Directors may allot, issue, grant options over or otherwise dispose of Shares
(including fractions of a Share) with or without preferred, deferred or other rights or restrictions, whether in regard to Dividends
or other distributions, voting, return of capital or otherwise and to such persons, at such times and on such other terms as they
think proper, and may also (subject to the Statute and the Articles) vary such rights, save that the Directors shall not allot,
issue, grant options over or otherwise dispose of Shares (including fractions of a Share) to the extent that it may affect the
ability of the Company to carry out a Class B Share Conversion set out in the Articles. |
| 3.2 | The Company may issue rights, options, warrants or convertible securities or securities of similar
nature conferring the right upon the holders thereof to subscribe for, purchase or receive any class of Shares or other securities
in the Company on such terms as the Directors may from time to time determine. |
| 3.3 | The Company may issue units of securities in the Company, which may be comprised of whole or fractional
Shares, rights, options, warrants or convertible securities or securities of similar nature conferring the right upon the holders
thereof to subscribe for, purchase or receive any class of Shares or other securities in the Company, upon such terms as the Directors
may from time to time determine. The securities comprising any such units which are issued pursuant to the IPO can only be traded
separately from one another on the 52nd day following the date of the prospectus relating to the IPO unless the Representatives determine
that an earlier date is acceptable, subject to the Company having filed a current report on Form 8-K which includes an audited balance sheet reflecting the Company’s receipt of the gross proceeds at the closing of the IPO and the
sale of the private placement warrants with the Securities and
Exchange Commission and a press release announcing when such separate trading will begin. Prior to such date, the units can be
traded, but the securities comprising such units cannot be traded separately from one another. |
| 3.4 | The Company shall not issue Shares to bearer. |
| 4.1 | The Company shall maintain or cause to be maintained the Register of Members in accordance with
the Statute. |
| 4.2 | The Directors may determine that the Company shall maintain one or more branch registers of Members
in accordance with the Statute. The Directors may also determine which register of Members shall constitute the principal register
and which shall constitute the branch register or registers, and to vary such determination from time to time. |
| 5 | Closing Register of Members or Fixing Record Date |
| 5.1 | For the purpose of determining Members entitled to notice of, or to vote at any meeting of Members
or any adjournment thereof, or Members entitled to receive payment of any Dividend or other distribution, or in order to make a
determination of Members for any other purpose, the Directors may, after notice has been given by advertisement in an appointed
newspaper or any other newspaper or by any other means in accordance with the rules and regulations of the Designated Stock
Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable
Law, provide that the Register of Members shall be closed for transfers for a stated period which shall not in any case exceed
forty days. |
| 5.2 | In lieu of, or apart from, closing the Register of Members, the Directors may fix in advance or
arrears a date as the record date for any such determination of Members entitled to notice of, or to vote at any meeting of the
Members or any adjournment thereof, or for the purpose of determining the Members entitled to receive payment of any Dividend or
other distribution, or in order to make a determination of Members for any other purpose. |
| 5.3 | If the Register of Members is not so closed and no record date is fixed for the determination of
Members entitled to notice of, or to vote at, a meeting of Members or Members entitled to receive payment of a Dividend or other
distribution, the date on which notice of the meeting is sent or the date on which the resolution of the Directors resolving to
pay such Dividend or other distribution is passed, as the case may be, shall be the record date for such determination of Members.
When a determination of Members entitled to vote at any meeting of Members has been made as provided in this Article, such determination
shall apply to any adjournment thereof. |
| 6.1 | A Member shall only be entitled to a share certificate if the Directors resolve that share certificates
shall be issued. Share certificates representing Shares, if any, shall be in such form as the Directors may determine. Share certificates
shall be signed by one or more Directors or other person authorised by the Directors. The Directors may authorise certificates
to be issued with the authorised signature(s) affixed by mechanical process. All certificates for Shares shall be consecutively
numbered or otherwise identified and shall specify the Shares to which they relate. All certificates surrendered to the Company
for transfer shall be cancelled and, subject to the Articles, no new certificate shall be issued until the former certificate representing
a like number of relevant Shares shall have been surrendered and cancelled. |
| 6.2 | The Company shall not be bound to issue more than one certificate for Shares held jointly by more
than one person and delivery of a certificate to one joint holder shall be a sufficient delivery to all of them. |
| 6.3 | If a share certificate is defaced, worn out, lost or destroyed, it may be renewed on such terms
(if any) as to evidence and indemnity and on the payment of such expenses reasonably incurred by the Company in investigating evidence,
as the Directors may prescribe, and (in the case of defacement or wearing out) upon delivery of the old certificate. |
| 6.4 | Every share certificate sent in accordance with the Articles will be sent at the risk of the Member
or other person entitled to the certificate. The Company will not be responsible for any share certificate lost or delayed in the
course of delivery. |
| 6.5 | Share certificates shall be issued within the relevant time limit as prescribed by the Statute,
if applicable, or as the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or
any other competent regulatory authority or otherwise under Applicable Law may from time to time determine, whichever is shorter,
after the allotment or, except in the case of a Share transfer which the Company is for the time being entitled to refuse to register
and does not register, after lodgement of a Share transfer with the Company. |
| 7.1 | Subject to the terms of the Articles, any Member may transfer all or any of his Shares by an instrument
of transfer provided that such transfer complies with the rules and regulations of the Designated Stock Exchange, the Securities
and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law. If the Shares in question
were issued in conjunction with rights, options or warrants issued pursuant to the Articles on terms that one cannot be transferred
without the other, the Directors shall refuse to register the transfer of any such Share without evidence satisfactory to them
of the like transfer of such option or warrant. |
| 7.2 | The instrument of transfer of any Share shall be in writing in the usual or common form or in a
form prescribed by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or
any other competent regulatory authority or otherwise under Applicable Law or in any other form approved by the Directors and shall
be executed by or on behalf of the transferor (and if the Directors so require, signed by or on behalf of the transferee) and may
be under hand or, if the transferor or transferee is a Clearing House or its nominee(s), by hand or by machine imprinted signature
or by such other manner of execution as the Directors may approve from time to time. The transferor shall be deemed to remain the
holder of a Share until the name of the transferee is entered in the Register of Members. |
| 8 | Redemption, Repurchase and Surrender of Shares |
| 8.1 | Subject to the provisions of the Statute, and, where applicable, the rules and regulations
of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise
under Applicable Law, the Company may issue Shares that are to be redeemed or are liable to be redeemed at the option of the Member
or the Company. The redemption of such Shares, except Public Shares, shall be effected in such manner and upon such other terms
as the Company may, by Special Resolution, determine before the issue of such Shares. With respect to redeeming or repurchasing
the Shares: |
| (a) | Members who hold Public Shares are entitled to request the redemption of such Shares in the circumstances
described in the Business Combination Article hereof; |
| (b) | Class B Ordinary Shares held by the Sponsor shall be surrendered by the Sponsor for no
consideration to the extent that the Over-Allotment Option is not exercised in full so that the Founders will own 20 per cent
of the Company's issued Shares after the IPO (exclusive of any securities purchased in a private placement simultaneously
with the IPO); and |
| (c) | Public Shares shall be repurchased by way of tender offer in the circumstances set out in the Business
Combination Article hereof. |
| 8.2 | Subject to the provisions of the Statute, and, where applicable, the rules and regulations
of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise
under Applicable Law, the Company may purchase its own Shares (including any redeemable Shares) in such manner and on such other
terms as the Directors may agree with the relevant Member. For the avoidance of doubt, redemptions, repurchases and surrenders
of Shares in the circumstances described in the Article above shall not require further approval of the Members. |
| 8.3 | The Company may make a payment in respect of the redemption or purchase of its own Shares in any
manner permitted by the Statute, including out of capital. |
| 8.4 | The Directors may accept the surrender for no consideration of any fully paid Share. |
| 9.1 | The Directors may, prior to the purchase, redemption or surrender of any Share, determine that
such Share shall be held as a Treasury Share. |
| 9.2 | The Directors may determine to cancel a Treasury Share or transfer a Treasury Share on such terms
as they think proper (including, without limitation, for nil consideration). |
| 10 | Variation of Rights of Shares |
| 10.1 | Subject to Article 3.1, if at any time the share capital of the Company is divided into different
classes of Shares, all or any of the rights attached to any class (unless otherwise provided by the terms of issue of the Shares
of that class) may, whether or not the Company is being wound up, be varied without the consent of the holders of the issued Shares
of that class where such variation is considered by the Directors not to have a material adverse effect upon such rights; otherwise,
any such variation shall be made only with the consent in writing of the holders of not less than two thirds of the issued Shares
of that class (other than with respect to a waiver of the provisions of the Class B Share Conversion Article hereof,
which as stated therein shall only require the consent in writing of the holders of a majority of the issued Shares of that class),
or with the approval of a resolution passed by a majority of not less than two thirds of the votes cast at a separate meeting of
the holders of the Shares of that class. For the avoidance of doubt, the Directors reserve the right, notwithstanding that any
such variation may not have a material adverse effect, to obtain consent from the holders of Shares of the relevant class. To any
such meeting all the provisions of the Articles relating to general meetings shall apply mutatis mutandis, except that the
necessary quorum shall be one person holding or representing by proxy at least one third of the issued Shares of the class and
that any holder of Shares of the class present in person or by proxy may demand a poll. |
| 10.2 | For the purposes of a separate class meeting, the Directors may treat two or more or all the classes
of Shares as forming one class of Shares if the Directors consider that such class of Shares would be affected in the same way
by the proposals under consideration, but in any other case shall treat them as separate classes of Shares. |
| 10.3 | The rights conferred upon the holders of the Shares of any class issued with preferred or other
rights shall not, unless otherwise expressly provided by the terms of issue of the Shares of that class, be deemed to be varied
by the creation or issue of further Shares ranking pari passu therewith or Shares issued with preferred or other rights. |
| 11 | Commission on Sale of Shares |
The Company may, in so far as
the Statute permits, pay a commission to any person in consideration of his subscribing or agreeing to subscribe (whether absolutely
or conditionally) or procuring or agreeing to procure subscriptions (whether absolutely or conditionally) for any Shares. Such
commissions may be satisfied by the payment of cash and/or the issue of fully or partly paid-up Shares. The Company may also on
any issue of Shares pay such brokerage as may be lawful.
| 12 | Non Recognition of Trusts |
The Company shall not be bound
by or compelled to recognise in any way (even when notified) any equitable, contingent, future or partial interest in any Share,
or (except only as is otherwise provided by the Articles or the Statute) any other rights in respect of any Share other than an
absolute right to the entirety thereof in the holder.
| 13.1 | The Company shall have a first and paramount lien on all Shares (whether fully paid-up or not)
registered in the name of a Member (whether solely or jointly with others) for all debts, liabilities or engagements to or with
the Company (whether presently payable or not) by such Member or his estate, either alone or jointly with any other person, whether
a Member or not, but the Directors may at any time declare any Share to be wholly or in part exempt from the provisions of this
Article. The registration of a transfer of any such Share shall operate as a waiver of the Company's lien thereon. The Company's
lien on a Share shall also extend to any amount payable in respect of that Share. |
| 13.2 | The Company may sell, in such manner as the Directors think fit, any Shares on which the Company
has a lien, if a sum in respect of which the lien exists is presently payable, and is not paid within fourteen clear days after
notice has been received or deemed to have been received by the holder of the Shares, or to the person entitled to it in consequence
of the death or bankruptcy of the holder, demanding payment and stating that if the notice is not complied with the Shares may
be sold. |
| 13.3 | To give effect to any such sale the Directors may authorise any person to execute an instrument
of transfer of the Shares sold to, or in accordance with the directions of, the purchaser. The purchaser or his nominee shall be
registered as the holder of the Shares comprised in any such transfer, and he shall not be bound to see to the application of the
purchase money, nor shall his title to the Shares be affected by any irregularity or invalidity in the sale or the exercise of
the Company's power of sale under the Articles. |
| 13.4 | The net proceeds of such sale after payment of costs, shall be applied in payment of such part
of the amount in respect of which the lien exists as is presently payable and any balance shall (subject to a like lien for sums
not presently payable as existed upon the Shares before the sale) be paid to the person entitled to the Shares at the date of the
sale. |
| 14.1 | Subject to the terms of the allotment and issue of any Shares, the Directors may make calls upon
the Members in respect of any monies unpaid on their Shares (whether in respect of par value or premium), and each Member shall
(subject to receiving at least fourteen clear days' notice specifying the time or times of payment) pay to the Company at the time
or times so specified the amount called on the Shares. A call may be revoked or postponed, in whole or in part, as the Directors
may determine. A call may be required to be paid by instalments. A person upon whom a call is made shall remain liable for calls
made upon him notwithstanding the subsequent transfer of the Shares in respect of which the call was made. |
| 14.2 | A call shall be deemed to have been made at the time when the resolution of the Directors authorising
such call was passed. |
| 14.3 | The joint holders of a Share shall be jointly and severally liable to pay all calls in respect
thereof. |
| 14.4 | If a call remains unpaid after it has become due and payable, the person from whom it is due shall
pay interest on the amount unpaid from the day it became due and payable until it is paid at such rate as the Directors may determine
(and in addition all expenses that have been incurred by the Company by reason of such non-payment), but the Directors may waive
payment of the interest or expenses wholly or in part. |
| 14.5 | An amount payable in respect of a Share on issue or allotment or at any fixed date, whether on
account of the par value of the Share or premium or otherwise, shall be deemed to be a call and if it is not paid all the provisions
of the Articles shall apply as if that amount had become due and payable by virtue of a call. |
| 14.6 | The Directors may issue Shares with different terms as to the amount and times of payment of calls,
or the interest to be paid. |
| 14.7 | The Directors may, if they think fit, receive an amount from any Member willing to advance all
or any part of the monies uncalled and unpaid upon any Shares held by him, and may (until the amount would otherwise become payable)
pay interest at such rate as may be agreed upon between the Directors and the Member paying such amount in advance. |
| 14.8 | No such amount paid in advance of calls shall entitle the Member paying such amount to any portion
of a Dividend or other distribution payable in respect of any period prior to the date upon which such amount would, but for such
payment, become payable. |
| 15.1 | If a call or instalment of a call remains unpaid after it has become due and payable the Directors
may give to the person from whom it is due not less than fourteen clear days' notice requiring payment of the amount unpaid together
with any interest which may have accrued and any expenses incurred by the Company by reason of such non-payment. The notice shall
specify where payment is to be made and shall state that if the notice is not complied with the Shares in respect of which the
call was made will be liable to be forfeited. |
| 15.2 | If the notice is not complied with, any Share in respect of which it was given may, before the
payment required by the notice has been made, be forfeited by a resolution of the Directors. Such forfeiture shall include all
Dividends, other distributions or other monies payable in respect of the forfeited Share and not paid before the forfeiture. |
| 15.3 | A forfeited Share may be sold, re-allotted or otherwise disposed of on such terms and in such manner
as the Directors think fit and at any time before a sale, re-allotment or disposition the forfeiture may be cancelled on such terms
as the Directors think fit. Where for the purposes of its disposal a forfeited Share is to be transferred to any person the Directors
may authorise some person to execute an instrument of transfer of the Share in favour of that person. |
| 15.4 | A person any of whose Shares have been forfeited shall cease to be a Member in respect of them
and shall surrender to the Company for cancellation the certificate for the Shares forfeited and shall remain liable to pay to
the Company all monies which at the date of forfeiture were payable by him to the Company in respect of those Shares together with
interest at such rate as the Directors may determine, but his liability shall cease if and when the Company shall have received
payment in full of all monies due and payable by him in respect of those Shares. |
| 15.5 | A certificate in writing under the hand of one Director or Officer that a Share has been forfeited
on a specified date shall be conclusive evidence of the facts stated in it as against all persons claiming to be entitled to the
Share. The certificate shall (subject to the execution of an instrument of transfer) constitute a good title to the Share and the
person to whom the Share is sold or otherwise disposed of shall not be bound to see to the application of the purchase money, if
any, nor shall his title to the Share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture,
sale or disposal of the Share. |
| 15.6 | The provisions of the Articles as to forfeiture shall apply in the case of non payment of any sum
which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the par value of the Share or by
way of premium as if it had been payable by virtue of a call duly made and notified. |
| 16.1 | If a Member dies, the survivor or survivors (where he was a joint holder), or his legal personal
representatives (where he was a sole holder), shall be the only persons recognised by the Company as having any title to his Shares.
The estate of a deceased Member is not thereby released from any liability in respect of any Share, for which he was a joint or
sole holder. |
| 16.2 | Any person becoming entitled to a Share in consequence of the death or bankruptcy or liquidation
or dissolution of a Member (or in any other way than by transfer) may, upon such evidence being produced as may be required by
the Directors, elect, by a notice in writing sent by him to the Company, either to become the holder of such Share or to have some
person nominated by him registered as the holder of such Share. If he elects to have another person registered as the holder of
such Share he shall sign an instrument of transfer of that Share to that person. The Directors shall, in either case, have the
same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the relevant Member
before his death or bankruptcy or liquidation or dissolution, as the case may be. |
| 16.3 | A person becoming entitled to a Share by reason of the death or bankruptcy or liquidation or dissolution
of a Member (or in any other case than by transfer) shall be entitled to the same Dividends, other distributions and other advantages
to which he would be entitled if he were the holder of such Share. However, he shall not, before becoming a Member in respect of
a Share, be entitled in respect of it to exercise any right conferred by membership in relation to general meetings of the Company
and the Directors may at any time give notice requiring any such person to elect either to be registered himself or to have some
person nominated by him be registered as the holder of the Share (but the Directors shall, in either case, have the same right
to decline or suspend registration as they would have had in the case of a transfer of the Share by the relevant Member before
his death or bankruptcy or liquidation or dissolution or any other case than by transfer, as the case may be). If the notice is
not complied with within ninety days of being received or deemed to be received (as determined pursuant to the Articles), the Directors
may thereafter withhold payment of all Dividends, other distributions, bonuses or other monies payable in respect of the Share
until the requirements of the notice have been complied with. |
| 17 | Class B Ordinary Share Conversion |
| 17.1 | The rights attaching to the Class A Shares and Class B Shares shall rank pari passu
in all respects, and the Class A Shares and Class B Shares shall vote together as a single class on all matters (subject
to the Variation of Rights of Shares Article and the Appointment and Removal of Directors Article hereof) with the exception
that the holder of a Class B Share shall have the Conversion Rights referred to in this Article. |
| 17.2 | Class B Shares shall automatically convert into Class A Shares on a one-for-one basis
(the "Initial Conversion Ratio"): (a) at any time and from time to time at the option of the holders thereof;
and (b) automatically on the day of the closing of a Business Combination. |
| 17.3 | Notwithstanding the Initial Conversion Ratio, in the case that additional Class A Shares
or any other Equity-linked Securities, are issued, or deemed issued, by the Company in excess of the amounts offered in the
IPO and related to the closing of a Business Combination, all Class B Shares in issue shall automatically convert into
Class A Shares at the time of the closing of a Business Combination at a ratio for which the Class B Shares shall
convert into Class A Shares will be adjusted (unless the holders of a majority of the Class B Shares in issue agree
to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of
Class A Shares issuable upon conversion of all Class B Shares will equal, on an as-converted basis, in the
aggregate, 20 per cent of the sum of all Class A Shares and Class B Shares in issue upon completion of the IPO plus
all Class A Shares issued or deemed issued or issuable upon conversion or exercise of any Equity-linked Securities or
rights issued or deemed issued, by the Company in connection with or in relation to a Business Combination, excluding any
Class A Shares or Equity-linked Securities issued, deemed issued, or to be issued, to any seller in a Business Combination
and any private placement warrants issued to the Sponsor, its Affiliates or any Directors or Officers of the Company upon
conversion of loans made to the Company. |
| 17.4 | Notwithstanding anything to the contrary contained herein, the foregoing adjustment to the Initial
Conversion Ratio may be waived as to any particular issuance or deemed issuance of additional Class A Shares or Equity-linked
Securities by the written consent or agreement of holders of a majority of the Class B Shares then in issue consenting or
agreeing separately as a separate class in the manner provided in the Variation of Rights of Shares Article hereof. |
| 17.5 | The foregoing conversion ratio shall also be adjusted to account for any subdivision (by share
split, subdivision, exchange, capitalisation, rights issue, reclassification, recapitalisation or otherwise) or combination (by
reverse share split, share consolidation, exchange, reclassification, recapitalisation or otherwise) or similar reclassification
or recapitalisation of the Class A Shares in issue into a greater or lesser number of shares occurring after the original
filing of the Articles without a proportionate and corresponding subdivision, combination or similar reclassification or recapitalisation
of the Class B Shares in issue. |
| 17.6 | Each Class B Share shall convert into its pro rata number of Class A Shares pursuant
to this Article. The pro rata share for each holder of Class B Shares will be determined as follows: each Class B Share
shall convert into such number of Class A Shares as is equal to the product of 1 multiplied by a fraction, the numerator of
which shall be the total number of Class A Shares into which all of the Class B Shares in issue shall be converted pursuant
to this Article and the denominator of which shall be the total number of Class B Shares in issue at the time of conversion. |
| 17.7 | References in this Article to "converted", "conversion"
or "exchange" shall mean the compulsory redemption without notice of Class B Shares of any Member and, on
behalf of such Members, automatic application of such redemption proceeds in paying for such new Class A Shares into which
the Class B Shares have been converted or exchanged at a price per Class B Share necessary to give effect to a conversion
or exchange calculated on the basis that the Class A Shares to be issued as part of the conversion or exchange will be issued
at par. The Class A Shares to be issued on an exchange or conversion shall be registered in the name of such Member or in
such name as the Member may direct. |
| 17.8 | Notwithstanding anything to the contrary in this Article, in no event may any Class B Share
convert into Class A Shares at a ratio that is less than one-for-one. |
| 18 | Amendments of Memorandum and Articles of Association and Alteration of Capital |
| 18.1 | The Company may by Ordinary Resolution: |
| (a) | increase its share capital by such sum as the Ordinary Resolution shall prescribe and with such
rights, priorities and privileges annexed thereto, as the Company in general meeting may determine; |
| (b) | consolidate and divide all or any of its share capital into Shares of larger amount than its existing
Shares; |
| (c) | convert all or any of its paid-up Shares into stock, and reconvert that stock into paid-up Shares
of any denomination; |
| (d) | by subdivision of its existing Shares or any of them divide the whole or any part of its share
capital into Shares of smaller amount than is fixed by the Memorandum or into Shares without par value; and |
| (e) | cancel any Shares that at the date of the passing of the Ordinary Resolution have not been taken
or agreed to be taken by any person and diminish the amount of its share capital by the amount of the Shares so cancelled. |
| 18.2 | All new Shares created in accordance with the provisions of the preceding Article shall be
subject to the same provisions of the Articles with reference to the payment of calls, liens, transfer, transmission, forfeiture
and otherwise as the Shares in the original share capital. |
| 18.3 | Subject to the provisions of the Statute, and the provisions of the Articles as regards the matters
to be dealt with by Ordinary Resolution and Article 29.4, the Company may by Special Resolution: |
| (b) | alter or add to the Articles; |
| (c) | alter or add to the Memorandum with respect to any objects, powers or other matters specified therein;
and |
| (d) | reduce its share capital or any capital redemption reserve fund. |
| 19 | Offices and Places of Business |
Subject to the provisions of
the Statute, the Company may by resolution of the Directors change the location of its Registered Office. The Company may, in addition
to its Registered Office, maintain such other offices or places of business as the Directors determine.
| 20.1 | All general meetings other than annual general meetings shall be called extraordinary general meetings. |
| 20.2 | The Company may, but shall not (unless required by the Statute) be obliged to, in each year hold
a general meeting as its annual general meeting, and shall specify the meeting as such in the notices calling it. Any annual general
meeting shall be held at such time and place as the Directors shall appoint. At these meetings the report of the Directors (if
any) shall be presented. |
| 20.3 | The Directors, the chief executive officer or the chairman of the board of Directors may call general
meetings, and, for the avoidance of doubt, Members shall not have the ability to call general meetings. |
| 20.4 | Members seeking to bring business before the annual general meeting or to nominate candidates for
appointment as Directors at the annual general meeting must deliver notice to the principal executive offices of the Company not
less than 120 calendar days before the date of the Company’s proxy statement released to Members in connection with the previous
year’s annual general meeting or, if the Company did not hold an annual general meeting the previous year, or if the date
of the current year's annual general meeting has been changed by more than 30 days from the date of the previous year’s annual
general meeting, then the deadline shall be set by the board of Directors with such deadline being a reasonable time before the
Company begins to print and send its related proxy materials. |
| 21 | Notice of General Meetings |
| 21.1 | At least five clear days' notice shall be given of any general meeting. Every notice shall specify
the place, the day and the hour of the meeting and the general nature of the business to be conducted at the general meeting and
shall be given in the manner hereinafter mentioned or in such other manner if any as may be prescribed by the Company, provided
that a general meeting of the Company shall, whether or not the notice specified in this Article has been given and whether
or not the provisions of the Articles regarding general meetings have been complied with, be deemed to have been duly convened
if it is so agreed: |
| (a) | in the case of an annual general meeting, by all of the Members entitled to attend and vote thereat;
and |
| (b) | in the case of an extraordinary general meeting, by a majority in number of the Members having
a right to attend and vote at the meeting, together holding not less than ninety-five per cent in par value of the Shares giving
that right. |
| 21.2 | The accidental omission to give notice of a general meeting to, or the non receipt of notice of
a general meeting by, any person entitled to receive such notice shall not invalidate the proceedings of that general meeting. |
| 22 | Proceedings at General Meetings |
| 22.1 | No business shall be transacted at any general meeting unless a quorum is present. The holders
of a majority of the Shares being individuals present in person or by proxy or if a corporation or other non-natural person by
its duly authorised representative or proxy shall be a quorum. |
| 22.2 | A person may participate at a general meeting by conference telephone or other communications equipment
by means of which all the persons participating in the meeting can communicate with each other. Participation by a person in a
general meeting in this manner is treated as presence in person at that meeting. |
| 22.3 | A resolution (including a Special Resolution) in writing (in one or more counterparts) signed by
or on behalf of all of the Members for the time being entitled to receive notice of and to attend and vote at general meetings
(or, being corporations or other non-natural persons, signed by their duly authorised representatives) shall be as valid and effective
as if the resolution had been passed at a general meeting of the Company duly convened and held. |
| 22.4 | If a quorum is not present within half an hour from the time appointed for the meeting to commence,
the meeting shall stand adjourned to the same day in the next week at the same time and/or place or to such other day, time and/or
place as the Directors may determine, and if at the adjourned meeting a quorum is not present within half an hour from the time
appointed for the meeting to commence, the Members present shall be a quorum. |
| 22.5 | The Directors may, at any time prior to the time appointed for the meeting to commence, appoint
any person to act as chairman of a general meeting of the Company or, if the Directors do not make any such appointment, the chairman,
if any, of the board of Directors shall preside as chairman at such general meeting. If there is no such chairman, or if he shall
not be present within fifteen minutes after the time appointed for the meeting to commence, or is unwilling to act, the Directors
present shall elect one of their number to be chairman of the meeting. |
| 22.6 | If no Director is willing to act as chairman or if no Director is present within fifteen minutes
after the time appointed for the meeting to commence, the Members present shall choose one of their number to be chairman of the
meeting. |
| 22.7 | The chairman may, with the consent of a meeting at which a quorum is present (and shall if so directed
by the meeting) adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned
meeting other than the business left unfinished at the meeting from which the adjournment took place. |
| 22.8 | When a general meeting is adjourned for thirty days or more, notice of the adjourned meeting shall
be given as in the case of an original meeting. Otherwise it shall not be necessary to give any such notice of an adjourned meeting. |
| 22.9 | If, prior to a Business Combination, a notice is issued in respect of a general meeting and the
Directors, in their absolute discretion, consider that it is impractical or undesirable for any reason to hold that general meeting
at the place, the day and the hour specified in the notice calling such general meeting, the Directors may postpone the general
meeting to another place, day and/or hour provided that notice of the place, the day and the hour of the rearranged general meeting
is promptly given to all Members. No business shall be transacted at any postponed meeting other than the business specified in
the notice of the original meeting. |
| 22.10 | When a general meeting is postponed for thirty days or more, notice of the postponed meeting shall
be given as in the case of an original meeting. Otherwise it shall not be necessary to give any such notice of a postponed meeting. All
proxy forms submitted for the original general meeting shall remain valid for the postponed meeting. The Directors may postpone
a general meeting which has already been postponed. |
| 22.11 | A resolution put to the vote of the meeting shall be decided on a poll. |
| 22.12 | A poll shall be taken as the chairman directs, and the result of the poll shall be deemed to be
the resolution of the general meeting at which the poll was demanded. |
| 22.13 | A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith.
A poll demanded on any other question shall be taken at such date, time and place as the chairman of the general meeting directs,
and any business other than that upon which a poll has been demanded or is contingent thereon may proceed pending the taking of
the poll. |
| 22.14 | In the case of an equality of votes the chairman shall be entitled to a second or casting vote. |
| 23.1 | Subject to any rights or restrictions attached to any Shares, including as set out at Article 29.4,
every Member present in any such manner shall have one vote for every Share of which he is the holder. |
| 23.2 | In the case of joint holders the vote of the senior holder who tenders a vote, whether in person
or by proxy (or, in the case of a corporation or other non-natural person, by its duly authorised representative or proxy), shall
be accepted to the exclusion of the votes of the other joint holders, and seniority shall be determined by the order in which the
names of the holders stand in the Register of Members. |
| 23.3 | A Member of unsound mind, or in respect of whom an order has been made by any court, having jurisdiction
in lunacy, may vote by his committee, receiver, curator bonis, or other person on such Member's behalf appointed by that court,
and any such committee, receiver, curator bonis or other person may vote by proxy. |
| 23.4 | No person shall be entitled to vote at any general meeting unless he is registered as a Member
on the record date for such meeting nor unless all calls or other monies then payable by him in respect of Shares have been paid. |
| 23.5 | No objection shall be raised as to the qualification of any voter except at the general meeting
or adjourned general meeting at which the vote objected to is given or tendered and every vote not disallowed at the meeting shall
be valid. Any objection made in due time in accordance with this Article shall be referred to the chairman whose decision
shall be final and conclusive. |
| 23.6 | Votes may be cast either personally or by proxy (or in the case of a corporation or other non-natural
person by its duly authorised representative or proxy). A Member may appoint more than one proxy or the same proxy under one or
more instruments to attend and vote at a meeting. Where a Member appoints more than one proxy the instrument of proxy shall specify
the number of Shares in respect of which each proxy is entitled to exercise the related votes. |
| 23.7 | A Member holding more than one Share need not cast the votes in respect of his Shares in the same
way on any resolution and therefore may vote a Share or some or all such Shares either for or against a resolution and/or abstain
from voting a Share or some or all of the Shares and, subject to the terms of the instrument appointing him, a proxy appointed
under one or more instruments may vote a Share or some or all of the Shares in respect of which he is appointed either for or against
a resolution and/or abstain from voting a Share or some or all of the Shares in respect of which he is appointed. |
| 24.1 | The instrument appointing a proxy shall be in writing and shall be executed under the hand of the
appointor or of his attorney duly authorised in writing, or, if the appointor is a corporation or other non natural person, under
the hand of its duly authorised representative. A proxy need not be a Member. |
| 24.2 | The Directors may, in the notice convening any meeting or adjourned meeting, or in an instrument
of proxy sent out by the Company, specify the manner by which the instrument appointing a proxy shall be deposited and the place
and the time (being not later than the time appointed for the commencement of the meeting or adjourned meeting to which the proxy
relates) at which the instrument appointing a proxy shall be deposited. In the absence of any such direction from the Directors
in the notice convening any meeting or adjourned meeting or in an instrument of proxy sent out by the Company, the instrument appointing
a proxy shall be deposited physically at the Registered Office not less than 48 hours before the time appointed for the meeting
or adjourned meeting to commence at which the person named in the instrument proposes to vote. |
| 24.3 | The chairman may in any event at his discretion declare that an instrument of proxy shall be deemed
to have been duly deposited. An instrument of proxy that is not deposited in the manner permitted, or which has not been declared
to have been duly deposited by the chairman, shall be invalid. |
| 24.4 | The instrument appointing a proxy may be in any usual or common form (or such other form as the
Directors may approve) and may be expressed to be for a particular meeting or any adjournment thereof or generally until revoked.
An instrument appointing a proxy shall be deemed to include the power to demand or join or concur in demanding a poll. |
| 24.5 | Votes given in accordance with the terms of an instrument of proxy shall be valid notwithstanding
the previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy was executed,
or the transfer of the Share in respect of which the proxy is given unless notice in writing of such death, insanity, revocation
or transfer was received by the Company at the Registered Office before the commencement of the general meeting, or adjourned meeting
at which it is sought to use the proxy. |
| 25.1 | Any corporation or other non-natural person which is a Member may in accordance with its constitutional
documents, or in the absence of such provision by resolution of its directors or other governing body, authorise such person as
it thinks fit to act as its representative at any meeting of the Company or of any class of Members, and the person so authorised
shall be entitled to exercise the same powers on behalf of the corporation which he represents as the corporation could exercise
if it were an individual Member. |
| 25.2 | If a Clearing House (or its nominee(s)), being a corporation, is a Member, it may authorise such
persons as it sees fit to act as its representative at any meeting of the Company or at any meeting of any class of Members provided
that the authorisation shall specify the number and class of Shares in respect of which each such representative is so authorised.
Each person so authorised under the provisions of this Article shall be deemed to have been duly authorised without further
evidence of the facts and be entitled to exercise the same rights and powers on behalf of the Clearing House (or its nominee(s))
as if such person was the registered holder of such Shares held by the Clearing House (or its nominee(s)). |
| 26 | Shares that May Not be Voted |
Shares in the Company that are
beneficially owned by the Company shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining
the total number of outstanding Shares at any given time.
| 27.1 | There shall be a board of Directors consisting of not less than one person provided however that
the Company may by Ordinary Resolution increase or reduce the limits in the number of Directors. |
| 27.2 | The Directors shall be divided into three classes: Class I, Class II and Class III.
The number of Directors in each class shall be as nearly equal as possible. Upon the adoption of the Articles, the existing Directors
shall by resolution classify themselves as Class I, Class II or Class III Directors. The Class I Directors
shall stand elected for a term expiring at the Company’s first annual general meeting, the Class II Directors shall
stand elected for a term expiring at the Company’s second annual general meeting and the Class III Directors shall stand
elected for a term expiring at the Company’s third annual general meeting. Commencing at the Company’s first annual
general meeting, and at each annual general meeting thereafter, Directors elected to succeed those Directors whose terms expire
shall be elected for a term of office to expire at the third succeeding annual general meeting after their election. Except as
the Statute or other Applicable Law may otherwise require, in the interim between annual general meetings or extraordinary general
meetings called for the election of Directors and/or the removal of one or more Directors and the filling of any vacancy in that
connection, additional Directors and any vacancies in the board of Directors, including unfilled vacancies resulting from the removal
of Directors for cause, may be filled by the vote of a majority of the remaining Directors then in office, although less than a
quorum (as defined in the Articles), or by the sole remaining Director. All Directors shall hold office until the expiration of
their respective terms of office and until their successors shall have been elected and qualified. A Director elected to fill a
vacancy resulting from the death, resignation or removal of a Director shall serve for the remainder of the full term of the Director
whose death, resignation or removal shall have created such vacancy and until his successor shall have been elected and qualified. |
| 28.1 | Subject to the provisions of the Statute, the Memorandum and the Articles and to any directions
given by Special Resolution, the business of the Company shall be managed by the Directors who may exercise all the powers of the
Company. No alteration of the Memorandum or Articles and no such direction shall invalidate any prior act of the Directors which
would have been valid if that alteration had not been made or that direction had not been given. A duly convened meeting of Directors
at which a quorum is present may exercise all powers exercisable by the Directors. |
| 28.2 | All cheques, promissory notes, drafts, bills of exchange and other negotiable or transferable instruments
and all receipts for monies paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed as the case may
be in such manner as the Directors shall determine by resolution. |
| 28.3 | The Directors on behalf of the Company may pay a gratuity or pension or allowance on retirement
to any Director who has held any other salaried office or place of profit with the Company or to his widow or dependants and may
make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance. |
| 28.4 | The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge
its undertaking, property and assets (present and future) and uncalled capital or any part thereof and to issue debentures, debenture
stock, mortgages, bonds and other such securities whether outright or as security for any debt, liability or obligation of the
Company or of any third party. |
| 29 | Appointment and Removal of Directors |
| 29.1 | Prior to the closing of a Business Combination, the Company may by Ordinary Resolution of the holders
of the Class B Shares appoint any person to be a Director or may by Ordinary Resolution of the holders of the Class B
Shares remove any Director. For the avoidance of doubt, prior to the closing of a Business Combination, holders of Class A
Shares shall have no right to vote on the appointment or removal of any Director. |
| 29.2 | The Directors may appoint any person to be a Director, either to fill a vacancy or as an additional
Director provided that the appointment does not cause the number of Directors to exceed any number fixed by or in accordance with
the Articles as the maximum number of Directors. |
| 29.3 | After the closing of a Business Combination, the Company may by Ordinary Resolution appoint any
person to be a Director or may by Ordinary Resolution remove any Director. |
| 29.4 | Prior to the closing of a Business Combination, Article 29.1 may only be amended by a Special
Resolution passed by at least two-thirds of such Members (which shall include a simple majority of the holders of Class B
Shares) as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting of which notice
specifying the intention to propose the resolution as a special resolution has been given, or by way of unanimous written resolution. |
| 30 | Vacation of Office of Director |
The office of a Director shall
be vacated if:
| (a) | the Director gives notice in writing to the Company that he resigns the office of Director; or |
| (b) | the Director absents himself (for the avoidance of doubt, without being represented by proxy) from
three consecutive meetings of the board of Directors without special leave of absence from the Directors, and the Directors pass
a resolution that he has by reason of such absence vacated office; or |
| (c) | the Director dies, becomes bankrupt or makes any arrangement or composition with his creditors
generally; or |
| (d) | the Director is found to be or becomes of unsound mind; or |
| (e) | all of the other Directors (being not less than two in number) determine that he should be removed
as a Director, either by a resolution passed by all of the other Directors at a meeting of the Directors duly convened and held
in accordance with the Articles or by a resolution in writing signed by all of the other Directors. |
| 31 | Proceedings of Directors |
| 31.1 | The quorum for the transaction of the business of the Directors may be fixed by the Directors,
and unless so fixed shall be a majority of the Directors then in office. |
| 31.2 | Subject to the provisions of the Articles, the Directors may regulate their proceedings as they
think fit. Questions arising at any meeting shall be decided by a majority of votes. In the case of an equality of votes, the chairman
shall have a second or casting vote. |
| 31.3 | A person may participate in a meeting of the Directors or any committee of Directors by conference
telephone or other communications equipment by means of which all the persons participating in the meeting can communicate with
each other at the same time. Participation by a person in a meeting in this manner is treated as presence in person at that meeting.
Unless otherwise determined by the Directors, the meeting shall be deemed to be held at the place where the chairman is located
at the start of the meeting. |
| 31.4 | A resolution in writing (in one or more counterparts) signed by all the Directors or all the members
of a committee of the Directors or, in the case of a resolution in writing relating to the removal of any Director or the vacation
of office by any Director, all of the Directors other than the Director who is the subject of such resolution shall be as valid
and effectual as if it had been passed at a meeting of the Directors, or committee of Directors as the case may be, duly convened
and held. |
| 31.5 | A Director may, or other Officer on the direction of a Director shall, call a meeting of the Directors
by at least two days' notice in writing to every Director which notice shall set forth the general nature of the business to be
considered unless notice is waived by all the Directors either at, before or after the meeting is held. To any such notice of a
meeting of the Directors all the provisions of the Articles relating to the giving of notices by the Company to the Members shall
apply mutatis mutandis. |
| 31.6 | The continuing Directors (or a sole continuing Director, as the case may be) may act notwithstanding
any vacancy in their body, but if and so long as their number is reduced below the number fixed by or pursuant to the Articles
as the necessary quorum of Directors the continuing Directors or Director may act for the purpose of increasing the number of Directors
to be equal to such fixed number, or of summoning a general meeting of the Company, but for no other purpose. |
| 31.7 | The Directors may elect a chairman of their board and determine the period for which he is to hold
office; but if no such chairman is elected, or if at any meeting the chairman is not present within five minutes after the time
appointed for the meeting to commence, the Directors present may choose one of their number to be chairman of the meeting. |
| 31.8 | All acts done by any meeting of the Directors or of a committee of the Directors shall, notwithstanding
that it is afterwards discovered that there was some defect in the appointment of any Director, and/or that they or any of them
were disqualified, and/or had vacated their office and/or were not entitled to vote, be as valid as if every such person had been
duly appointed and/or not disqualified to be a Director and/or had not vacated their office and/or had been entitled to vote, as
the case may be. |
| 31.9 | A Director may be represented at any meetings of the board of Directors by a proxy appointed in
writing by him. The proxy shall count towards the quorum and the vote of the proxy shall for all purposes be deemed to be that
of the appointing Director. |
A Director who is present at
a meeting of the board of Directors at which action on any Company matter is taken shall be presumed to have assented to the action
taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent from such action
with the person acting as the chairman or secretary of the meeting before the adjournment thereof or shall forward such dissent
by registered post to such person immediately after the adjournment of the meeting. Such right to dissent shall not apply to a
Director who voted in favour of such action.
| 33.1 | A Director may hold any other office or place of profit under the Company (other than the office
of Auditor) in conjunction with his office of Director for such period and on such terms as to remuneration and otherwise as the
Directors may determine. |
| 33.2 | A Director may act by himself or by, through or on behalf of his firm in a professional capacity
for the Company and he or his firm shall be entitled to remuneration for professional services as if he were not a Director. |
| 33.3 | A Director may be or become a director or other officer of or otherwise interested in any company
promoted by the Company or in which the Company may be interested as a shareholder, a contracting party or otherwise, and no such
Director shall be accountable to the Company for any remuneration or other benefits received by him as a director or officer of,
or from his interest in, such other company. |
| 33.4 | No person shall be disqualified from the office of Director or prevented by such office from contracting
with the Company, either as vendor, purchaser or otherwise, nor shall any such contract or any contract or transaction entered
into by or on behalf of the Company in which any Director shall be in any way interested be or be liable to be avoided, nor shall
any Director so contracting or being so interested be liable to account to the Company for any profit realised by or arising in
connection with any such contract or transaction by reason of such Director holding office or of the fiduciary relationship thereby
established. A Director shall be at liberty to vote in respect of any contract or transaction in which he is interested provided
that the nature of the interest of any Director in any such contract or transaction shall be disclosed by him at or prior to its
consideration and any vote thereon. |
| 33.5 | A general notice that a Director is a shareholder, director, officer or employee of any specified
firm or company and is to be regarded as interested in any transaction with such firm or company shall be sufficient disclosure
for the purposes of voting on a resolution in respect of a contract or transaction in which he has an interest, and after such
general notice it shall not be necessary to give special notice relating to any particular transaction. |
The Directors shall cause minutes
to be made in books kept for the purpose of recording all appointments of Officers made by the Directors, all proceedings at meetings
of the Company or the holders of any class of Shares and of the Directors, and of committees of the Directors, including the names
of the Directors present at each meeting.
| 35 | Delegation of Directors' Powers |
| 35.1 | The Directors may delegate any of their powers, authorities and discretions, including the power
to sub-delegate, to any committee consisting of one or more Directors (including, without limitation, the Audit Committee, the
Compensation Committee and the Nominating and Corporate Governance Committee). Any such delegation may be made subject to any conditions
the Directors may impose and either collaterally with or to the exclusion of their own powers and any such delegation may be revoked
or altered by the Directors. Subject to any such conditions, the proceedings of a committee of Directors shall be governed by the
Articles regulating the proceedings of Directors, so far as they are capable of applying. |
| 35.2 | The Directors may establish any committees, local boards or agencies or appoint any person to be
a manager or agent for managing the affairs of the Company and may appoint any person to be a member of such committees, local
boards or agencies. Any such appointment may be made subject to any conditions the Directors may impose, and either collaterally
with or to the exclusion of their own powers and any such appointment may be revoked or altered by the Directors. Subject to any
such conditions, the proceedings of any such committee, local board or agency shall be governed by the Articles regulating the
proceedings of Directors, so far as they are capable of applying. |
| 35.3 | The Directors may adopt formal written charters for committees and, if so adopted, shall review
and assess the adequacy of such formal written charters on an annual basis. Each of these committees shall be empowered to do all
things necessary to exercise the rights of such committee set forth in the Articles and shall have such powers as the Directors
may delegate pursuant to the Articles and as required by the rules and regulations of the Designated Stock Exchange, the Securities
and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law. Each of the Audit Committee,
the Compensation Committee and the Nominating and Corporate Governance Committee, if established, shall consist of such number
of Directors as the Directors shall from time to time determine (or such minimum number as may be required from time to time by
the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent
regulatory authority or otherwise under Applicable Law). For so long as any class of Shares is listed on the Designated Stock Exchange,
the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee shall be made up of such
number of Independent Directors as is required from time to time by the rules and regulations of the rules and regulations
of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise
under Applicable Law. |
| 35.4 | The Directors may by power of attorney or otherwise appoint any person to be the agent of the Company
on such conditions as the Directors may determine, provided that the delegation is not to the exclusion of their own powers and
may be revoked by the Directors at any time. |
| 35.5 | The Directors may by power of attorney or otherwise appoint any company, firm, person or body of
persons, whether nominated directly or indirectly by the Directors, to be the attorney or authorised signatory of the Company for
such purpose and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under
the Articles) and for such period and subject to such conditions as they may think fit, and any such powers of attorney or other
appointment may contain such provisions for the protection and convenience of persons dealing with any such attorneys or authorised
signatories as the Directors may think fit and may also authorise any such attorney or authorised signatory to delegate all or
any of the powers, authorities and discretions vested in him. |
| 35.6 | The Directors may appoint such Officers as they consider necessary on such terms, at such remuneration
and to perform such duties, and subject to such provisions as to disqualification and removal as the Directors may think fit. Unless
otherwise specified in the terms of his appointment an Officer may be removed by resolution of the Directors or Members. An Officer
may vacate his office at any time if he gives notice in writing to the Company that he resigns his office. |
| 36 | No Minimum Shareholding |
The Company in general meeting
may fix a minimum shareholding required to be held by a Director, but unless and until such a shareholding qualification is fixed
a Director is not required to hold Shares.
| 37 | Remuneration of Directors |
| 37.1 | The remuneration to be paid to the Directors, if any, shall be such remuneration as the Directors
shall determine, provided that no cash remuneration shall be paid to any Director by the Company prior to the consummation of a
Business Combination. The Directors shall also, whether prior to or after the consummation of a Business Combination, be entitled
to be paid all travelling, hotel and other expenses properly incurred by them in connection with their attendance at meetings of
Directors or committees of Directors, or general meetings of the Company, or separate meetings of the holders of any class of Shares
or debentures of the Company, or otherwise in connection with the business of the Company or the discharge of their duties as a
Director, or to receive a fixed allowance in respect thereof as may be determined by the Directors, or a combination partly of
one such method and partly the other. |
| 37.2 | The Directors may by resolution approve additional remuneration to any Director for any services
which in the opinion of the Directors go beyond his ordinary routine work as a Director. Any fees paid to a Director who is also
counsel, attorney or solicitor to the Company, or otherwise serves it in a professional capacity shall be in addition to his remuneration
as a Director. |
| 38.1 | The Company may, if the Directors so determine, have a Seal. The Seal shall only be used by the
authority of the Directors or of a committee of the Directors authorised by the Directors. Every instrument to which the Seal has
been affixed shall be signed by at least one person who shall be either a Director or some Officer or other person appointed by
the Directors for the purpose. |
| 38.2 | The Company may have for use in any place or places outside the Cayman Islands a duplicate Seal
or Seals each of which shall be a facsimile of the common Seal of the Company and, if the Directors so determine, with the addition
on its face of the name of every place where it is to be used. |
| 38.3 | A Director or Officer, representative or attorney of the Company may without further authority
of the Directors affix the Seal over his signature alone to any document of the Company required to be authenticated by him under
seal or to be filed with the Registrar of Companies in the Cayman Islands or elsewhere wheresoever. |
| 39 | Dividends, Distributions and Reserve |
| 39.1 | Subject to the Statute and this Article and except as otherwise provided by the rights attached
to any Shares, the Directors may resolve to pay Dividends and other distributions on Shares in issue and authorise payment of the
Dividends or other distributions out of the funds of the Company lawfully available therefor. A Dividend shall be deemed to be
an interim Dividend unless the terms of the resolution pursuant to which the Directors resolve to pay such Dividend specifically
state that such Dividend shall be a final Dividend. No Dividend or other distribution shall be paid except out of the realised
or unrealised profits of the Company, out of the share premium account or as otherwise permitted by law. |
| 39.2 | Except as otherwise provided by the rights attached to any Shares, all Dividends and other distributions
shall be paid according to the par value of the Shares that a Member holds. If any Share is issued on terms providing that it shall
rank for Dividend as from a particular date, that Share shall rank for Dividend accordingly. |
| 39.3 | The Directors may deduct from any Dividend or other distribution payable to any Member all sums
of money (if any) then payable by him to the Company on account of calls or otherwise. |
| 39.4 | The Directors may resolve that any Dividend or other distribution be paid wholly or partly by the
distribution of specific assets and in particular (but without limitation) by the distribution of shares, debentures, or securities
of any other company or in any one or more of such ways and where any difficulty arises in regard to such distribution, the Directors
may settle the same as they think expedient and in particular may issue fractional Shares and may fix the value for distribution
of such specific assets or any part thereof and may determine that cash payments shall be made to any Members upon the basis of
the value so fixed in order to adjust the rights of all Members and may vest any such specific assets in trustees in such manner
as may seem expedient to the Directors. |
| 39.5 | Except as otherwise provided by the rights attached to any Shares, Dividends and other distributions
may be paid in any currency. The Directors may determine the basis of conversion for any currency conversions that may be required
and how any costs involved are to be met. |
| 39.6 | The Directors may, before resolving to pay any Dividend or other distribution, set aside such sums
as they think proper as a reserve or reserves which shall, at the discretion of the Directors, be applicable for any purpose of
the Company and pending such application may, at the discretion of the Directors, be employed in the business of the Company. |
| 39.7 | Any Dividend, other distribution, interest or other monies payable in cash in respect of Shares
may be paid by wire transfer to the holder or by cheque or warrant sent through the post directed to the registered address of
the holder or, in the case of joint holders, to the registered address of the holder who is first named on the Register of Members
or to such person and to such address as such holder or joint holders may in writing direct. Every such cheque or warrant shall
be made payable to the order of the person to whom it is sent. Any one of two or more joint holders may give effectual receipts
for any Dividends, other distributions, bonuses, or other monies payable in respect of the Share held by them as joint holders. |
| 39.8 | No Dividend or other distribution shall bear interest against the Company. |
| 39.9 | Any Dividend or other distribution which cannot be paid to a Member and/or which remains unclaimed
after six months from the date on which such Dividend or other distribution becomes payable may, in the discretion of the Directors,
be paid into a separate account in the Company's name, provided that the Company shall not be constituted as a trustee in respect
of that account and the Dividend or other distribution shall remain as a debt due to the Member. Any Dividend or other distribution
which remains unclaimed after a period of six years from the date on which such Dividend or other distribution becomes payable
shall be forfeited and shall revert to the Company. |
The Directors may at any time
capitalise any sum standing to the credit of any of the Company's reserve accounts or funds (including the share premium account
and capital redemption reserve fund) or any sum standing to the credit of the profit and loss account or otherwise available for
distribution; appropriate such sum to Members in the proportions in which such sum would have been divisible amongst such Members
had the same been a distribution of profits by way of Dividend or other distribution; and apply such sum on their behalf in paying
up in full unissued Shares for allotment and distribution credited as fully paid-up to and amongst them in the proportion aforesaid.
In such event the Directors shall do all acts and things required to give effect to such capitalisation, with full power given
to the Directors to make such provisions as they think fit in the case of Shares becoming distributable in fractions (including
provisions whereby the benefit of fractional entitlements accrue to the Company rather than to the Members concerned). The Directors
may authorise any person to enter on behalf of all of the Members interested into an agreement with the Company providing for such
capitalisation and matters incidental or relating thereto and any agreement made under such authority shall be effective and binding
on all such Members and the Company.
| 41.1 | The Directors shall cause proper books of account (including, where applicable, material underlying
documentation including contracts and invoices) to be kept with respect to all sums of money received and expended by the Company
and the matters in respect of which the receipt or expenditure takes place, all sales and purchases of goods by the Company and
the assets and liabilities of the Company. Such books of account must be retained for a minimum period of five years from the date
on which they are prepared. Proper books shall not be deemed to be kept if there are not kept such books of account as are necessary
to give a true and fair view of the state of the Company's affairs and to explain its transactions. |
| 41.2 | The Directors shall determine whether and to what extent and at what times and places and under
what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of Members
not being Directors and no Member (not being a Director) shall have any right of inspecting any account or book or document of
the Company except as conferred by Statute or authorised by the Directors or by the Company in general meeting. |
| 41.3 | The Directors may cause to be prepared and to be laid before the Company in general meeting profit
and loss accounts, balance sheets, group accounts (if any) and such other reports and accounts as may be required by law. |
| 42.1 | The Directors may appoint an Auditor of the Company who shall hold office on such terms as the
Directors determine. |
| 42.2 | Without prejudice to the freedom of the Directors to establish any other committee, if the Shares
(or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange, and if required by the rules and
regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority
or otherwise under Applicable Law, the Directors shall establish and maintain an Audit Committee as a committee of the Directors
and shall adopt a formal written Audit Committee charter and review and assess the adequacy of the formal written charter on an
annual basis. The composition and responsibilities of the Audit Committee shall comply with the rules and regulations of the
Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise
under Applicable Law. The Audit Committee shall meet at least once every financial quarter, or more frequently as circumstances
dictate. |
| 42.3 | If the Shares (or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange,
the Company shall conduct an appropriate review of all related party transactions on an ongoing basis and shall utilise the Audit
Committee for the review and approval of potential conflicts of interest. |
| 42.4 | The remuneration of the Auditor shall be fixed by the Audit Committee (if one exists). |
| 42.5 | If the office of Auditor becomes vacant by resignation or death of the Auditor, or by his becoming
incapable of acting by reason of illness or other disability at a time when his services are required, the Directors shall fill
the vacancy and determine the remuneration of such Auditor. |
| 42.6 | Every Auditor of the Company shall have a right of access at all times to the books and accounts
and vouchers of the Company and shall be entitled to require from the Directors and Officers such information and explanation as
may be necessary for the performance of the duties of the Auditor. |
| 42.7 | Auditors shall, if so required by the Directors, make a report on the accounts of the Company during
their tenure of office at the next annual general meeting following their appointment in the case of a company which is registered
with the Registrar of Companies as an ordinary company, and at the next extraordinary general meeting following their appointment
in the case of a company which is registered with the Registrar of Companies as an exempted company, and at any other time during
their term of office, upon request of the Directors or any general meeting of the Members. |
| 42.8 | Any payment made to members of the Audit Committee (if one exists) shall require the review and
approval of the Directors, with any Director interested in such payment abstaining from such review and approval. |
| 42.9 | The Audit Committee shall monitor compliance with the terms of the IPO and, if any non-compliance
is identified, the Audit Committee shall be charged with the responsibility to take all action necessary to rectify such non-compliance
or otherwise cause compliance with the terms of the IPO. |
| 42.10 | At least one member of the Audit Committee shall be an "audit committee financial expert"
as determined by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or
any other competent regulatory authority or otherwise under Applicable Law. The "audit committee financial expert" shall
have such past employment experience in finance or accounting, requisite professional certification in accounting, or any other
comparable experience or background which results in the individual’s financial sophistication. |
| 43.1 | Notices shall be in writing and may be given by the Company to any Member either personally or
by sending it by courier, post, cable, telex, fax or e-mail to him or to his address as shown in the Register of Members (or where
the notice is given by e-mail by sending it to the e-mail address provided by such Member). Notice may also be served by Electronic
Communication in accordance with the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission
and/or any other competent regulatory authority or by placing it on the Company’s Website. |
| 43.2 | Where a notice is sent by: |
| (a) | courier; service of the notice shall be deemed to be effected by delivery of the notice to a courier
company, and shall be deemed to have been received on the third day (not including Saturdays or Sundays or public holidays) following
the day on which the notice was delivered to the courier; |
| (b) | post; service of the notice shall be deemed to be effected by properly addressing, pre paying and
posting a letter containing the notice, and shall be deemed to have been received on the fifth day (not including Saturdays or
Sundays or public holidays in the Cayman Islands) following the day on which the notice was posted; |
| (c) | cable, telex or fax; service of the notice shall be deemed to be effected by properly addressing
and sending such notice and shall be deemed to have been received on the same day that it was transmitted; |
| (d) | e-mail or other Electronic Communication; service of the notice shall be deemed to be effected
by transmitting the e-mail to the e-mail address provided by the intended recipient and shall be deemed to have been received on
the same day that it was sent, and it shall not be necessary for the receipt of the e-mail to be acknowledged by the recipient;
and |
| (e) | placing it on the Company’s Website; service of the notice shall be deemed to have been effected
one hour after the notice or document was placed on the Company’s Website. |
| 43.3 | A notice may be given by the Company to the person or persons which the Company has been advised
are entitled to a Share or Shares in consequence of the death or bankruptcy of a Member in the same manner as other notices which
are required to be given under the Articles and shall be addressed to them by name, or by the title of representatives of the deceased,
or trustee of the bankrupt, or by any like description at the address supplied for that purpose by the persons claiming to be so
entitled, or at the option of the Company by giving the notice in any manner in which the same might have been given if the death
or bankruptcy had not occurred. |
| 43.4 | Notice of every general meeting shall be given in any manner authorised by the Articles to every
holder of Shares carrying an entitlement to receive such notice on the record date for such meeting except that in the case of
joint holders the notice shall be sufficient if given to the joint holder first named in the Register of Members and every person
upon whom the ownership of a Share devolves by reason of his being a legal personal representative or a trustee in bankruptcy of
a Member where the Member but for his death or bankruptcy would be entitled to receive notice of the meeting, and no other person
shall be entitled to receive notices of general meetings. |
| 44.1 | If the Company shall be wound up, the liquidator shall apply the assets of the Company in satisfaction
of creditors' claims in such manner and order as such liquidator thinks fit. Subject to the rights attaching to any Shares, in
a winding up: |
| (a) | if the assets available for distribution amongst the Members shall be insufficient to repay the
whole of the Company's issued share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be
borne by the Members in proportion to the par value of the Shares held by them; or |
| (b) | if the assets available for distribution amongst the Members shall be more than sufficient to repay
the whole of the Company's issued share capital at the commencement of the winding up, the surplus shall be distributed amongst
the Members in proportion to the par value of the Shares held by them at the commencement of the winding up subject to a deduction
from those Shares in respect of which there are monies due, of all monies payable to the Company for unpaid calls or otherwise. |
| 44.2 | If the Company shall be wound up the liquidator may, subject to the rights attaching to any Shares
and with the approval of a Special Resolution of the Company and any other approval required by the Statute, divide amongst the
Members in kind the whole or any part of the assets of the Company (whether such assets shall consist of property of the same kind
or not) and may for that purpose value any assets and determine how the division shall be carried out as between the Members or
different classes of Members. The liquidator may, with the like approval, vest the whole or any part of such assets in trustees
upon such trusts for the benefit of the Members as the liquidator, with the like approval, shall think fit, but so that no Member
shall be compelled to accept any asset upon which there is a liability. |
| 45 | Indemnity and Insurance |
| 45.1 | Every Director and Officer (which for the avoidance of doubt, shall not include auditors of the
Company), together with every former Director and former Officer (each an "Indemnified Person") shall be indemnified
out of the assets of the Company against any liability, action, proceeding, claim, demand, costs, damages or expenses, including
legal expenses, whatsoever which they or any of them may incur as a result of any act or failure to act in carrying out their functions
other than such liability (if any) that they may incur by reason of their own actual fraud, wilful neglect or wilful default. No
Indemnified Person shall be liable to the Company for any loss or damage incurred by the Company as a result (whether direct or
indirect) of the carrying out of their functions unless that liability arises through the actual fraud, wilful neglect or wilful
default of such Indemnified Person. No person shall be found to have committed actual fraud, wilful neglect or wilful default under
this Article unless or until a court of competent jurisdiction shall have made a finding to that effect. |
| 45.2 | The Company shall advance to each Indemnified Person reasonable attorneys' fees and other costs
and expenses incurred in connection with the defence of any action, suit, proceeding or investigation involving such Indemnified
Person for which indemnity will or could be sought. In connection with any advance of any expenses hereunder, the Indemnified Person
shall execute an undertaking to repay the advanced amount to the Company if it shall be determined by final judgment or other final
adjudication that such Indemnified Person was not entitled to indemnification pursuant to this Article. If it shall be determined
by a final judgment or other final adjudication that such Indemnified Person was not entitled to indemnification with respect to
such judgment, costs or expenses, then such party shall not be indemnified with respect to such judgment, costs or expenses and
any advancement shall be returned to the Company (without interest) by the Indemnified Person. |
| 45.3 | The Directors, on behalf of the Company, may purchase and maintain insurance for the benefit of
any Director or Officer against any liability which, by virtue of any rule of law, would otherwise attach to such person in
respect of any negligence, default, breach of duty or breach of trust of which such person may be guilty in relation to the Company. |
Unless the Directors otherwise
prescribe, the financial year of the Company shall end on 31st December in each year and, following the year of incorporation,
shall begin on 1st January in each year.
| 47 | Transfer by Way of Continuation |
If the Company is exempted as
defined in the Statute, it shall, subject to the provisions of the Statute and with the approval of a Special Resolution, have
the power to register by way of continuation as a body corporate under the laws of any jurisdiction outside the Cayman Islands
and to be deregistered in the Cayman Islands.
| 48 | Mergers and Consolidations |
The Company shall have the power
to merge or consolidate with one or more other constituent companies (as defined in the Statute) upon such terms as the Directors
may determine and (to the extent required by the Statute) with the approval of a Special Resolution.
| 49.1 | Notwithstanding any other provision of the Articles, this Article shall apply during the period
commencing upon the adoption of the Articles and terminating upon the first to occur of the consummation of a Business Combination
and the full distribution of the Trust Account pursuant to this Article. In the event of a conflict between this Article and
any other Articles, the provisions of this Article shall prevail. |
| 49.2 | Prior to the consummation of a Business Combination, the Company shall either: |
| (a) | submit such Business Combination to its Members for approval; or |
| (b) | provide Members with the opportunity to have their Shares repurchased by means of a tender offer
for a per-Share repurchase price payable in cash, equal to the aggregate amount then on deposit in the Trust Account, calculated
as of two business days prior to the consummation of such Business Combination, including interest earned on the Trust Account
((net of taxes paid or payable, if any), divided by the number of then issued Public Shares, provided that the Company shall not
repurchase Public Shares in an amount that would cause the Company's net tangible assets to be less than US$5,000,001 following such repurchase. |
| 49.3 | If the Company initiates any tender offer in accordance with Rule 13e-4 and Regulation 14E
of the Exchange Act in connection with a proposed Business Combination, it shall file tender offer documents with the Securities
and Exchange Commission prior to completing such Business Combination which contain substantially the same financial and other
information about such Business Combination and the redemption rights as is required under Regulation 14A of the Exchange Act.
If, alternatively, the Company holds a general meeting to approve a proposed Business Combination, the Company will conduct any
redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, and not pursuant to the tender
offer rules, and file proxy materials with the Securities and Exchange Commission. |
| 49.4 | At a general meeting called for the purposes of approving a Business Combination pursuant to this
Article, in the event that such Business Combination is approved by Ordinary Resolution, the Company shall be authorised to consummate
such Business Combination, provided that the Company shall not consummate such Business Combination unless the Company has net
tangible assets of at least US$5,000,001 immediately prior to, or upon such consummation of, or any greater net tangible asset
or cash requirement that may be contained in the agreement relating to, such Business Combination. |
| 49.5 | Any Member holding Public Shares who is not the Sponsor, a Founder, Officer or Director may,
at least two business days’ prior to any vote on a Business Combination, elect to have their Public Shares redeemed for
cash, in accordance with any applicable requirements provided for in the related proxy materials (the "IPO
Redemption"), provided that no such Member acting together with any Affiliate of his or any other person with whom
he is acting in concert or as a partnership, limited partnership, syndicate, or other group for the purposes of acquiring,
holding, or disposing of Shares may exercise this redemption right with respect to more than 15 per cent of the Public Shares
in the aggregate without the prior consent of the Company and provided further that any beneficial holder of Public Shares on
whose behalf a redemption right is being exercised must identify itself to the Company in connection with any redemption
election in order to validly redeem such Public Shares. If so demanded, the Company shall pay any such redeeming Member,
regardless of whether he is voting for or against (or is voting at all with respect to) such proposed Business Combination, a
per-Share redemption price payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as
of two business days prior to the consummation of the Business Combination, including interest earned on the Trust Account
(such interest shall be net of taxes payable) and not previously released to the Company to pay its taxes, divided by the
number of then issued Public Shares (such redemption price being referred to herein as the "Redemption
Price"), but only in the event that the applicable proposed Business Combination is approved and consummated. The
Company shall not redeem Public Shares that would cause the Company’s net tangible assets to be less than US$5,000,001
following such redemptions (the "Redemption Limitation"). |
| 49.6 | A Member may not withdraw a Redemption Notice once submitted to the Company unless the Directors
determine (in their sole discretion) to permit the withdrawal of such redemption request (which they may do in whole or in part). |
| 49.7 | In the event that the Company does not consummate a Business Combination by 18 months from
the consummation of the IPO, or such later time as the Members may approve in accordance with the Articles, the Company
shall: |
| (a) | cease all operations except for the purpose of winding up; |
| (b) | as promptly as reasonably possible but not more than ten business days thereafter, redeem the
Public Shares, at a per-Share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account,
including interest and other income earned on the funds held in the Trust Account and not previously released to the Company
to pay its income taxes, if any (less up to US$100,000 of interest to pay dissolution expenses), divided by
the number of then Public Shares in issue, which redemption will completely extinguish public Members' rights as Members
(including the right to receive further liquidation distributions, if any); and |
| (c) | as promptly as reasonably possible following such redemption, subject to the approval of the Company's
remaining Members and the Directors, liquidate and dissolve, |
subject in the case of (b) and (c) to its obligations under Cayman Islands law to provide for claims of creditors and other requirements of
Applicable Law.
| 49.8 | Notwithstanding Article 49.7 or any other provision of the Articles, without approval of the
Members, the Directors may, if requested by the Sponsor, its affiliates or designees and upon no less than five days' advance
notice to the Company prior to the initial deadline referred to in Article 49.7, extend the initial period of time to
consummate a Business Combination one time, by an additional six months, subject to the Sponsor, its affiliates or designees
purchasing an additional 2,000,000 private placement warrants (or up to 2,300,000 private placement warrants if the
Over-Allotment Option is exercised in full) at $1.00 per warrant and depositing the US$2,000,00 (or up to US$2,300,000 if the
Over-Allotment Option is exercised in full) in proceeds into the Trust Account on or prior to the date of the expiration of
the initial 18-month deadline.¶ |
| 49.9 | In the event that any amendment is made to this Article: |
| (a) | to modify the substance or timing of the Company's obligation to allow redemption in
connection with a Business Combination or redeem 100 per cent of the Public Shares if the Company does not consummate a
Business Combination within 18 months from the consummation of the IPO or within any extension period as described in Article
49.8; or |
| (b) | with respect to any other provision relating to Members’ rights or pre-Business Combination
activity, |
each holder of Public
Shares who is not the Sponsor, a Founder, Officer or Director shall be provided with the opportunity to redeem their Public
Shares upon the approval or effectiveness of any such amendment at a per-Share price, payable in cash, equal to the aggregate
amount then on deposit in the Trust Account, including interest and other income earned on the funds held in the Trust
Account and not previously released to the Company to pay its taxes, if any, divided by the number of then outstanding Public
Shares. The Company’s ability to provide such redemption in this Article is subject to the Redemption
Limitation.
| 49.9 | A holder of Public Shares shall be entitled to receive distributions from the Trust Account only
in the event of an IPO Redemption, a repurchase of Shares by means of a tender offer pursuant to this Article, or a distribution
of the Trust Account pursuant to this Article. In no other circumstance shall a holder of Public Shares have any right or interest
of any kind in the Trust Account. |
| 49.10 | After the issue of Public Shares, and prior to the consummation of a Business Combination, the
Company shall not issue additional Shares or any other securities that would entitle the holders thereof to: |
| (a) | receive funds from the Trust Account; or |
| (b) | vote as a class with Public Shares on a Business Combination. |
| 49.11 | The uninterested Independent Directors shall approve any transaction or transactions between the
Company and any of the following parties: |
| (a) | any Member owning an interest in the voting power of the Company that gives such Member a significant
influence over the Company; and |
| (b) | any Director or Officer and any Affiliate of such Director or Officer. |
| 49.12 | A Director may vote in respect of a Business Combination in which such Director has a conflict
of interest with respect to the evaluation of such Business Combination. Such Director must disclose such interest or conflict
to the other Directors. |
| 49.13 | As long as the securities of the Company are listed on The Nasdaq Capital Market, the Company
must complete one or more Business Combinations having an aggregate fair market value of at least 80 per cent of the value of
the assets held in the Trust Account (excluding any deferred underwriting commissions and taxes payable on the income earned
on the Trust Account) at the time of the agreement to enter into such Business Combination.
A Business Combination must not be effectuated with another blank cheque company or a similar company with nominal
operations. |
| 49.14 | The Company may enter into a Business Combination with a target business that is Affiliated with
the Sponsor, a Founder, a Director or an Officer. In the event the Company seeks to complete a Business Combination with a target
that is Affiliated with the Sponsor, a Founder, a Director or an Officer, the Company, or a committee of Independent Directors,
will obtain an opinion from an independent investment banking firm or another valuation or appraisal firm that regularly renders
fairness opinions on the type of target business the Company is seeking to acquire that such a Business Combination is fair to the Company from a
financial point of view. |
| 50.1 | To the fullest extent permitted by Applicable Law, no individual serving as a Director or an Officer
("Management") shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging
directly or indirectly in the same or similar business activities or lines of business as the Company. To the fullest extent permitted
by Applicable Law, the Company renounces any interest or expectancy of the Company in, or in being offered an opportunity to participate
in, any potential transaction or matter which may be a corporate opportunity for Management, on the one hand, and the Company,
on the other. Except to the extent expressly assumed by contract, to the fullest extent permitted by Applicable Law, Management
shall have no duty to communicate or offer any such corporate opportunity to the Company and shall not be liable to the Company
or its Members for breach of any fiduciary duty as a Member, Director and/or Officer solely by reason of the fact that such party
pursues or acquires such corporate opportunity for itself, himself or herself, directs such corporate opportunity to another person,
or does not communicate information regarding such corporate opportunity to the Company. |
| 50.2 | Except as provided elsewhere in this Article, the Company hereby renounces any interest or expectancy
of the Company in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate
opportunity for both the Company and Management, about which a Director and/or Officer who is also a member of Management acquires
knowledge. |
| 50.3 | To the extent a court might hold that the conduct of any activity related to a corporate opportunity
that is renounced in this Article to be a breach of duty to the Company or its Members, the Company hereby waives, to the
fullest extent permitted by Applicable Law, any and all claims and causes of action that the Company may have for such activities.
To the fullest extent permitted by Applicable Law, the provisions of this Article apply equally to activities conducted in
the future and that have been conducted in the past. |
Exhibit 4.4
WARRANT
AGREEMENT
SPRING
VALLEY ACQUISITION CORP.
and
CONTINENTAL
STOCK TRANSFER & TRUST COMPANY
Dated
[●], 2020
THIS WARRANT AGREEMENT (this “Agreement”),
dated [●], 2020, is by and between Spring Valley Acquisition Corp., a Cayman Islands exempted company (the “Company”),
and Continental Stock Transfer & Trust Company, a New York limited purpose trust company, as warrant agent (in such capacity,
the “Warrant Agent”).
WHEREAS, it is proposed that the
Company enter into that certain Private Placement Warrants Purchase Agreement, with Spring Valley Acquisition Sponsor, LLC, a
Delaware limited liability company (the “Sponsor”), pursuant to which the Sponsor will purchase an
aggregate of 8,000,000 warrants (or up to 8,900,000 warrants if the underwriters in the Public Offering (defined below)
exercise their Over-allotment Option (as defined below) in full) simultaneously with the closing of the Public Offering (and
the closing of the Over-allotment Option, if applicable), and the Sponsor has an option to purchase 2,000,000 (or up to
2,300,000 if the underwriters' over-allotment option is exercised in full) additional warrants in order to extend the initial
period of time for the Company to consummate a Business Combination (as defined below). Bearing the legend set forth in Exhibit B
hereto (the “Private Placement Warrants”) at a purchase price of $1.00 per Private Placement
Warrant. Each Private Placement Warrant entitles the holder thereof to purchase one Ordinary Share (as defined below) at a
price of $11.50 per share, subject to adjustment as described herein; and
WHEREAS, in order to finance the Company’s
transaction costs in connection with an intended initial merger, share exchange, asset acquisition, share purchase, reorganization
or similar business combination, involving the Company and one or more businesses (a “Business Combination”),
the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated
to, loan the Company funds as the Company may require, of which up to $1,500,000 of such loans may be convertible into up to an
additional 1,500,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant; and
WHEREAS, the Company is engaged in an initial
public offering (the “Public Offering”) of units of the Company’s equity securities, each such
unit comprised of one Ordinary Share and one-half of one Public Warrant (as defined below) (the “Units”)
and, in connection therewith, has determined to issue and deliver up to 11,500,000 redeemable warrants (including up to 1,500,000
redeemable warrants subject to the Over-allotment Option) to public investors in the Public Offering (the “Public Warrants”
and, together with the Private Placement Warrants, the “Warrants”). Each whole Warrant entitles the holder
thereof to purchase one Class A ordinary share of the Company, par value $0.0001 per share (“Ordinary Shares”),
for $11.50 per share, subject to adjustment as described herein. Only whole Warrants are exercisable. A holder of the Public Warrants
will not be able to exercise any fraction of a Warrant; and
WHEREAS, the Company has filed with the
Securities and Exchange Commission (the “Commission”) registration statement on Form S-1, File No. 333-249067,
and a prospectus (the “Prospectus”), for the registration, under the Securities Act of 1933, as amended
(the “Securities Act”), of the Units, the Public Warrants and the Ordinary Shares included in the Units;
and
WHEREAS, the Company desires the Warrant
Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration,
transfer, exchange, redemption and exercise of the Warrants; and
WHEREAS, the Company desires to provide
for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights,
limitation of rights, and immunities of the Company, the Warrant Agent and the holders of the Warrants; and
WHEREAS, all acts and things have been done
and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf
of the Warrant Agent (if a physical certificate is issued), as provided herein, the valid, binding and legal obligations of the
Company, and to authorize the execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the
mutual agreements herein contained, the parties hereto agree as follows:
1.
Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company
for the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms
and conditions set forth in this Agreement.
2.
Warrants.
2.1.
Form of Warrant. Each Warrant shall initially be issued in registered form only.
2.2.
Effect of Countersignature. If a physical certificate is issued, unless and until countersigned by the Warrant
Agent pursuant to this Agreement, a certificated Warrant shall be invalid and of no effect and may not be exercised by the holder
thereof.
2.3.
Registration.
2.3.1.
Warrant Register. The Warrant Agent shall maintain books (the “Warrant Register”),
for the registration of original issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants
in book-entry form, the Warrant Agent shall issue and register the Warrants in the names of the respective holders thereof in such
denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the Company. Ownership of beneficial
interests in the Public Warrants shall be shown on, and the transfer of such ownership shall be effected through, records maintained
by institutions that have accounts with The Depository Trust Company (the “Depositary”) (such institution,
with respect to a Warrant in its account, a “Participant”).
If the Depositary subsequently ceases to
make its book-entry settlement system available for the Public Warrants, the Company may instruct the Warrant Agent regarding making
other arrangements for book-entry settlement. In the event that the Public Warrants are not eligible for, or it is no longer necessary
to have the Public Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the Depositary
to deliver to the Warrant Agent for cancellation each book-entry Public Warrant, and the Company shall instruct the Warrant Agent
to deliver to the Depositary definitive certificates in physical form evidencing such Warrants (“Definitive Warrant
Certificates”) which shall be in the form annexed hereto as Exhibit A.
Physical certificates, if issued, shall
be signed by, or bear the facsimile signature of, the Chairman of the Board, Chief Executive Officer, President, Chief Financial
Officer, Chief Operating Officer, General Counsel, Secretary or other principal officer of the Company. In the event the person
whose facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed
the Warrant before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the
date of issuance.
2.3.2.
Registered Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the
Warrant Agent may deem and treat the person in whose name such Warrant is registered in the Warrant Register (the “Registered
Holder”) as the absolute owner of such Warrant and of each Warrant represented thereby, for the purpose of any exercise
thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
2.4.
Detachability of Warrants. The Ordinary Shares and Public Warrants comprising the Units shall begin separate
trading on the 52nd day following the date of the Prospectus or, if such 52nd day is not on a day, other than a Saturday, Sunday
or federal holiday, on which banks in New York City are generally open for normal business (a “Business Day”),
then on the immediately succeeding Business Day following such date, or earlier (the “Detachment Date”)
with the consent of Cowen and Company, LLC and Wells Fargo Securities, LLC but in no event shall the Ordinary Shares and the Public
Warrants comprising the Units be separately traded until (A) the Company has filed a Current Report on Form 8-K with the Commission
containing an audited balance sheet reflecting the receipt by the Company of the gross proceeds of the Public Offering, including
the proceeds then received by the Company from the exercise by the underwriters of their right to purchase additional Units in
the Public Offering (the “Over-allotment Option”), if the Over-allotment Option is exercised prior to
the filing of the Current Report on Form 8-K, and (B) the Company issues a press release announcing when such separate trading
shall begin.
2.5.
Fractional Warrants. The Company shall not issue fractional Warrants other than as part of the Units, each
of which is comprised of one Ordinary Share and one-half of one whole Public Warrant. If, upon the detachment of Public Warrants
from the Units or otherwise, a holder of Warrants would be entitled to receive a fractional Warrant, the Company shall round down
to the nearest whole number the number of Warrants to be issued to such holder.
2.6.
Private Placement Warrants. The Private Placement Warrants shall be identical to the Public Warrants, except
that so long as they are held by the Sponsor or any of its Permitted Transferees (as defined below) the Private Placement Warrants:
(i) may be exercised for cash or on a “cashless basis,” pursuant to subsection 3.3.1(c) hereof, (ii) including
the Ordinary Shares issuable upon exercise of the Private Placement Warrants, may not be transferred, assigned or sold until thirty
(30) days after the completion by the Company of an initial Business Combination, (iii) shall not be redeemable by the
Company pursuant to Section 6.1 hereof and (iv) shall only be redeemable by the Company pursuant to Section 6.2
if the Reference Value (as defined below) is less than $18.00 per share (subject to adjustment in compliance with Section 4
hereof); provided, however, that in the case of (ii), the Private Placement Warrants and any Ordinary Shares issued upon exercise
of the Private Placement Warrants may be transferred by the holders thereof:
2.6.1.
to the Company’s officers or directors, any affiliates or family members of any of the Company’s officers
or directors, any members or partners of the Sponsor or their affiliates, any affiliates of the Sponsor, or any employees of such
affiliates;
2.6.2.
in the case of an individual, by gift to a member of one of the individual’s immediate family or to a trust,
the beneficiary of which is a member of the individual’s immediate family, an affiliate of such person or to a charitable
organization;
2.6.3.
in the case of an individual, by virtue of laws of descent and distribution upon death of the individual;
2.6.4.
in the case of an individual, pursuant to a qualified domestic relations order;
2.6.5.
by private sales or transfers made in connection with any forward purchase agreement or similar agreement or in connection
with the consummation of the Company’s Business Combination at prices no greater than the price at which the Private Placement
Warrants or Ordinary Shares, as applicable, were originally purchased;
2.6.6.
by virtue of the Sponsor’s organizational documents upon liquidation or dissolution of the Sponsor;
2.6.7.
to the Company for no value for cancellation in connection with the consummation of our initial Business Combination;
2.6.8.
in the event of the Company’s liquidation prior to the completion of its initial Business Combination; or
2.6.9.
in the event of the Company’s completion of a liquidation, merger, share exchange or other similar transaction
which results in all of the public shareholders having the right to exchange their Ordinary Shares for cash, securities or other
property subsequent to the completion of the Company’s initial Business Combination;
2.6.10.
provided, however, that, in the case of sections 2.6.1 through 2.6.6, these permitted transferees
(the “Permitted Transferees”) must enter into a written agreement with the Company agreeing to be bound
by the transfer restrictions in this Agreement.
3.
Terms and Exercise of Warrants.
3.1.
Warrant Price. Each whole Warrant shall entitle the Registered Holder thereof, subject to the provisions of
such Warrant and of this Agreement, to purchase from the Company the number of Ordinary Shares stated therein, at the price of
$11.50 per share, subject to the adjustments provided in Section 4 hereof and in the last sentence of this Section 3.1.
The term “Warrant Price” as used in this Agreement shall mean the price per share (including in cash
or by payment of Warrants pursuant to a “cashless exercise,” to the extent permitted hereunder) described in the prior
sentence at which Ordinary Shares may be purchased at the time a Warrant is exercised. The Company in its sole discretion may lower
the Warrant Price at any time prior to the Expiration Date (as defined below) for a period of not less than fifteen Business Days
(unless otherwise required by the Commission, any national securities exchange on which the Warrants are listed or applicable law);
provided that the Company shall provide at least five days’ prior written notice of such reduction to Registered Holders
of the Warrants; and provided further, that any such reduction shall be identical among all of the Warrants.
3.2.
Duration of Warrants. A Warrant may be exercised only during the period (the “Exercise Period”)
(A) commencing on the later of: (i) the date that is thirty (30) days after the first date on which the Company completes
a Business Combination, and (ii) the date that is twelve (12) months from the date of the closing of the Public Offering,
and (B) terminating at the earliest to occur of (x) 5:00 p.m., New York City time on the date that is five (5) years
after the date on which the Company completes its initial Business Combination, (y) the liquidation of the Company in accordance
with the Company’s amended and restated memorandum and articles of association, as amended from time to time, if the Company
fails to complete a Business Combination, and (z) other than with respect to the Private Placement Warrants then held by the
Sponsor or its Permitted Transferees with respect to a redemption pursuant to Section 6.1 hereof or, if the Reference
Value equals or exceeds $18.00 per share (subject to adjustment in compliance with Section 4 hereof), Section 6.2
hereof, 5:00 p.m., New York City time on the Redemption Date (as defined below) as provided in Section 6.3 hereof (the
“Expiration Date”); provided, however, that the exercise of any Warrant shall be subject to the satisfaction
of any applicable conditions, as set forth in subsection 3.3.2 below, with respect to an effective registration statement
or a valid exemption therefrom being available. Except with respect to the right to receive the Redemption Price (as defined below)
(other than with respect to a Private Placement Warrant then held by the Sponsor or its Permitted Transferees in connection with
a redemption pursuant to Section 6.1 hereof or, if the Reference Value equals or exceeds $18.00 per share (subject
to adjustment in compliance with Section 4 hereof), Section 6.2 hereof) in the event of a redemption (as
set forth in Section 6 hereof), each Warrant (other than a Private Placement Warrant then held by the Sponsor or its
Permitted Transferees in the event of a redemption pursuant to Section 6.1 hereof or, if the Reference Value equals
or exceeds $18.00 per share (subject to adjustment in compliance with Section 4 hereof), Section 6.2 hereof)
not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under
this Agreement shall cease at 5:00 p.m. New York City time on the Expiration Date. The Company in its sole discretion may extend
the duration of the Warrants by delaying the Expiration Date; provided that the Company shall provide at least twenty (20) days
prior written notice of any such extension to Registered Holders of the Warrants and, provided further that any such extension
shall be identical in duration among all the Warrants.
3.3.
Exercise of Warrants.
3.3.1.
Payment. Subject to the provisions of the Warrant and this Agreement, a Warrant may be exercised by the Registered
Holder thereof by delivering to the Warrant Agent at its corporate trust department (i) the Definitive Warrant Certificate
evidencing the Warrants to be exercised, or, in the case of a Warrant represented by a book-entry, the Warrants to be exercised
(the “Book-Entry Warrants”) on the records of the Depositary to an account of the Warrant Agent at the
Depositary designated for such purposes in writing by the Warrant Agent to the Depositary from time to time, (ii) an election
to purchase (“Election to Purchase”) any Ordinary Shares pursuant to the exercise of a Warrant, properly
completed and executed by the Registered Holder on the reverse of the Definitive Warrant Certificate or, in the case of a Book-Entry
Warrant, properly delivered by the Participant in accordance with the Depositary’s procedures, and (iii) the payment
in full of the Warrant Price for each Ordinary Share as to which the Warrant is exercised and any and all applicable taxes due
in connection with the exercise of the Warrant, the exchange of the Warrant for the Ordinary Shares and the issuance of such Ordinary
Shares, as follows:
(a)
in lawful money of the United States, in good certified check or good bank draft payable to the order of the Warrant
Agent;
(b)
[Reserved];
(c)
with respect to any Private Placement Warrant, so long as such Private Placement Warrant is held by the Sponsor or
a Permitted Transferee, by surrendering the Warrants for that number of Ordinary Shares equal to (i) if in connection with
a redemption of Private Placement Warrants pursuant to Section 6.2 hereof, as provided in Section 6.2 hereof
with respect to a Make-Whole Exercise (as defined below) and (ii) in all other scenarios the quotient obtained by dividing
(x) the product of the number of Ordinary Shares underlying the Warrants, multiplied by the excess of the “Sponsor
Exercise Fair Market Value” (as defined in this subsection 3.3.1(c)) less the Warrant Price by (y) the
Sponsor Exercise Fair Market Value. Solely for purposes of this subsection 3.3.1(c), the “Sponsor Fair
Market Value” shall mean the average last reported sale price of the Ordinary Shares for the ten (10) trading
days ending on the third (3rd) trading day prior to the date on which notice of exercise of the Private Placement Warrant
is sent to the Warrant Agent;
(d)
as provided in Section 6.2 hereof with respect to a Make-Whole Exercise; or
(e)
as provided in Section 7.4 hereof.
3.3.2.
Issuance of Ordinary Shares on Exercise. As soon as practicable after the exercise of any Warrant and the
clearance of the funds in payment of the Warrant Price (if payment is pursuant to subsection 3.3.1(a)), the Company
shall issue to the Registered Holder of such Warrant a book-entry position or certificate, as applicable, for the number of Ordinary
Shares to which he, she or it is entitled, registered in such name or names as may be directed by him, her or it on the register
of members of the Company, and if such Warrant shall not have been exercised in full, a new book-entry position or countersigned
Warrant, as applicable, for the number of shares as to which such Warrant shall not have been exercised. Notwithstanding the foregoing,
the Company shall not be obligated to deliver any Ordinary Shares pursuant to the exercise of a Warrant and shall have no obligation
to settle such Warrant exercise unless a registration statement under the Securities Act with respect to the Ordinary Shares underlying
the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company’s satisfying its
obligations under Section 7.4 or a valid exemption from registration is available. No Warrant shall be exercisable
and the Company shall not be obligated to issue Ordinary Shares upon exercise of a Warrant unless the Ordinary Shares issuable
upon such Warrant exercise have been registered, qualified or deemed to be exempt from registration or qualification under the
securities laws of the state of residence of the Registered Holder of the Warrants. Subject to Section 4.6 of this
Agreement, a Registered Holder of Warrants may exercise its Warrants only for a whole number of Ordinary Shares. The Company may
require holders of Public Warrants to settle the Warrant on a “cashless basis” pursuant to Section 7.4.
If, by reason of any exercise of Warrants on a “cashless basis”, the holder of any Warrant would be entitled,
upon the exercise of such Warrant, to receive a fractional interest in an Ordinary Share, the Company shall round down to the nearest
whole number, the number of Ordinary Shares to be issued to such holder.
3.3.3.
Valid Issuance. All Ordinary Shares issued upon the proper exercise of a Warrant in conformity with this Agreement
shall be validly issued, fully paid and nonassessable.
3.3.4.
Date of Issuance. Each person in whose name any book-entry position or certificate, as applicable, for Ordinary
Shares is issued and who is registered in the register of members of the Company shall for all purposes be deemed to have become
the holder of record of such Ordinary Shares on the date on which the Warrant, or book-entry position representing such Warrant,
was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such certificate in the case
of a certificated Warrant, except that, if the date of such surrender and payment is a date when the register of members of the
Company or book-entry system of the Warrant Agent are closed, such person shall be deemed to have become the holder of such shares
at the close of business on the next succeeding date on which the share transfer books or book-entry system are open.
3.3.5.
Maximum Percentage. A holder of a Warrant may notify the Company in writing in the event it elects to be subject
to the provisions contained in this subsection 3.3.5; however, no holder of a Warrant shall be subject to this
subsection 3.3.5 unless he, she or it makes such election. If the election is made by a holder, the Warrant Agent shall
not effect the exercise of the holder’s Warrant, and such holder shall not have the right to exercise such Warrant, to the
extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the Warrant Agent’s
actual knowledge, would beneficially own in excess of 9.8% (the “Maximum Percentage”) of the Ordinary
Shares outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number
of Ordinary Shares beneficially owned by such person and its affiliates shall include the number of Ordinary Shares issuable upon
exercise of the Warrant with respect to which the determination of such sentence is being made, but shall exclude Ordinary Shares
that would be issuable upon (x) exercise of the remaining, unexercised portion of the Warrant beneficially owned by such person
and its affiliates and (y) exercise or conversion of the unexercised or unconverted portion of any other securities of the
Company beneficially owned by such person and its affiliates (including, without limitation, any convertible notes or convertible
preferred shares or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except
as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance
with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). For
purposes of the Warrant, in determining the number of outstanding Ordinary Shares, the holder may rely on the number of outstanding
Ordinary Shares as reflected in (1) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q,
Current Report on Form 8-K or other public filing with the Commission as the case may be, (2) a more recent public announcement
by the Company or (3) any other notice by the Company or Continental Stock Transfer & Trust Company, as transfer
agent (in such capacity, the “Transfer Agent”), setting forth the number of Ordinary Shares outstanding.
For any reason at any time, upon the written request of the holder of the Warrant, the Company shall, within two (2) Business
Days, confirm orally and in writing to such holder the number of Ordinary Shares then outstanding. In any case, the number of issued
and outstanding Ordinary Shares shall be determined after giving effect to the conversion or exercise of equity securities of the
Company by the holder and its affiliates since the date as of which such number of issued and outstanding Ordinary Shares was reported.
By written notice to the Company, the holder of a Warrant may from time to time increase or decrease the Maximum Percentage applicable
to such holder to any other percentage specified in such notice; provided, however, that any such increase shall
not be effective until the sixty-first (61st) day after such notice is delivered to the Company.
4.
Adjustments.
4.1.
Share Capitalizations.
4.1.1.
Sub-Divisions. If after the date hereof, and subject to the provisions of Section 4.6 below, the
number of issued and outstanding Ordinary Shares is increased by a capitalization or share dividend of Ordinary Shares, or by a
sub-division of Ordinary Shares or other similar event, then, on the effective date of such share capitalization, sub-division
or similar event, the number of Ordinary Shares issuable on exercise of each Warrant shall be increased in proportion to such increase
in the issued and outstanding Ordinary Shares. A rights offering made to all or substantially all holders of Ordinary Shares entitling
holders to purchase Ordinary Shares at a price less than the “Historical Fair Market Value” (as defined below) shall
be deemed a capitalization of a number of Ordinary Shares equal to the product of (i) the number of Ordinary Shares actually
sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into
or exercisable for the Ordinary Shares) multiplied by (ii) one (1) minus the quotient of (x) the price per Ordinary Share
paid in such rights offering divided by (y) the Historical Fair Market Value. For purposes of this subsection 4.1.1,
(i) if the rights offering is for securities convertible into or exercisable for Ordinary Shares, in determining the price payable
for Ordinary Shares, there shall be taken into account any consideration received for such rights, as well as any additional amount
payable upon exercise or conversion and (ii) “Historical Fair Market Value” means the volume weighted
average price of the Ordinary Shares during the ten (10) trading day period ending on the trading day prior to the first date
on which the Ordinary Shares trade on the applicable exchange or in the applicable market, regular way, without the right to receive
such rights. No Ordinary Shares shall be issued at less than their par value.
4.1.2.
Extraordinary Dividends. If the Company, at any time while the Warrants are outstanding and unexpired, pays
to all or substantially all of the holders of the Ordinary Shares a dividend or make a distribution in cash, securities or other
assets on account of such Ordinary Shares (or other shares into which the Warrants are convertible), other than (a) as described
in subsection 4.1.1 above, (b) Ordinary Cash Dividends (as defined below), (c) to satisfy the redemption rights
of the holders of the Ordinary Shares in connection with a proposed initial Business Combination, (d) to satisfy the redemption
rights of the holders of the Ordinary Shares in connection with a shareholder vote to amend the Company’s amended and restated
memorandum and articles of association (i) to modify the substance or timing of the Company’s obligation to provide
holders of Ordinary Shares the right to have their shares redeemed in connection with the Company’s initial Business Combination
or to redeem 100% of the Company’s public shares if it does not complete its initial Business Combination within the time
period required by the Company’s Amended and Restated Memorandum and Articles of Association, as amended from time to time,
or (ii) with respect to any other provision relating to the rights of holders of Ordinary Shares,or (e) in connection with
the redemption of public shares upon the failure of the Company to complete its initial Business Combination and any subsequent
distribution of its assets upon its liquidation (any such non-excluded event being referred to herein as an “Extraordinary
Dividend”), then the Warrant Price shall be decreased, effective immediately after the effective date of such Extraordinary
Dividend, by the amount of cash and/or the fair market value (as determined by the Company’s board of directors (the “Board”),
in good faith) of any securities or other assets paid on each Ordinary Share in respect of such Extraordinary Dividend. For purposes
of this subsection 4.1.2, “Ordinary Cash Dividends” means any cash dividend or cash distribution
which, when combined on a per share basis, with the per share amounts of all other cash dividends and cash distributions paid on
the Ordinary Shares during the 365-day period ending on the date of declaration of such dividend or distribution to the extent
it does not exceed $0.50 (which amount shall be adjusted to appropriately reflect any of the events referred to in other subsections
of this Section 4 and excluding cash dividends or cash distributions that resulted in an adjustment to the Warrant
Price or to the number of Ordinary Shares issuable on exercise of each Warrant).
4.2.
Aggregation of Shares. If after the date hereof, and subject to the provisions of Section 4.6
hereof, the number of issued and outstanding Ordinary Shares is decreased by a consolidation, combination, reverse share split
or reclassification of Ordinary Shares or other similar event, then, on the effective date of such consolidation, combination,
reverse share split, reclassification or similar event, the number of Ordinary Shares issuable on exercise of each Warrant shall
be decreased in proportion to such decrease in issued and outstanding Ordinary Shares.
4.3.
Adjustments in Exercise Price. Whenever the number of Ordinary Shares purchasable upon the exercise of the
Warrants is adjusted, as provided in subsection 4.1.1 or Section 4.2 above, the Warrant Price shall be
adjusted (to the nearest cent) by multiplying such Warrant Price immediately prior to such adjustment by a fraction (x) the
numerator of which shall be the number of Ordinary Shares purchasable upon the exercise of the Warrants immediately prior to such
adjustment, and (y) the denominator of which shall be the number of Ordinary Shares so purchasable immediately thereafter.
4.4.
Raising of the Capital in Connection with the Initial Business Combination. If (x) the Company issues
additional Ordinary Shares or equity-linked securities 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 Share (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 Class B ordinary shares, par value $0.0001 per share, of the Company held by the Sponsor or
such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) 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 Company’s initial Business Combination on the date of the completion of the Company’s initial Business
Combination (net of redemptions), and (z) the volume-weighted average trading price of Ordinary Shares during the twenty (20) trading
day period starting on the trading day prior to the day on which the Company consummates its 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 higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger
price described in Section 6.1 and Section 6.2 shall be adjusted (to the nearest cent) to be equal to 180%
of the higher of the Market Value and the Newly Issued Price and the $10.00 per share redemption trigger price described in Section 6.2
shall be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
4.5.
Replacement of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the
issued and outstanding Ordinary Shares (other than a change under Section 4.1 or Section 4.2 hereof or
that solely affects the par value of such Ordinary Shares), or in the case of any merger or consolidation of the Company with or
into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and that does
not result in any reclassification or reorganization of the issued and outstanding Ordinary Shares), or in the case of any sale
or conveyance to another corporation or entity of the assets or other property of the Company as an entirety or substantially as
an entirety in connection with which the Company is dissolved, the holders of the Warrants shall thereafter have the right to purchase
and receive, upon the basis and upon the terms and conditions specified in the Warrants and in lieu of the Ordinary Shares of the
Company immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount
of shares or stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger
or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the Warrants would have received
if such holder had exercised his, her or its Warrant(s) immediately prior to such event (the “Alternative Issuance”);
provided, however, that (i) if the holders of the Ordinary Shares were entitled to exercise a right of election as to the
kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities,
cash or other assets constituting the Alternative Issuance for which each Warrant shall become exercisable shall be deemed to be
the weighted average of the kind and amount received per share by the holders of the Ordinary Shares in such consolidation or merger
that affirmatively make such election, and (ii) if a tender, exchange or redemption offer shall have been made to and accepted
by the holders of the Ordinary Shares (other than a tender, exchange or redemption offer made by the Company in connection with
redemption rights held by shareholders of the Company as provided for in the Company’s amended and restated memorandum and
articles of association or as a result of the redemption of Ordinary Shares by the Company if a proposed initial Business Combination
is presented to the shareholders of the Company for approval) under circumstances in which, upon completion of such tender or exchange
offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of
which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under
the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within
the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the issued and outstanding Ordinary Shares, the holder of a
Warrant shall be entitled to receive as the Alternative Issuance, the highest amount of cash, securities or other property to which
such holder would actually have been entitled as a shareholder if such Warrant holder had exercised the Warrant prior to the expiration
of such tender or exchange offer, accepted such offer and all of the Ordinary Shares held by such holder had been purchased pursuant
to such tender or exchange offer, subject to adjustments (from and after the consummation of such tender or exchange offer) as
nearly equivalent as possible to the adjustments provided for in this Section 4; provided further that if less
than 70% of the consideration receivable by the holders of the Ordinary Shares in the applicable event is payable in the form of
shares in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter
market, or is to be so listed for trading or quoted immediately following such event, and if the Registered Holder properly exercises
the Warrant within thirty (30) days following the public disclosure of the consummation of such applicable event by the Company
pursuant to a Current Report on Form 8-K filed with the Commission, the Warrant Price shall be reduced by an amount (in dollars)
equal to the difference of (i) the Warrant Price in effect prior to such reduction minus (ii) (A) the Per Share Consideration
(as defined below) (but in no event less than zero) minus (B) the Black-Scholes Warrant Value (as defined below). The “Black-Scholes
Warrant Value” means the value of a Warrant immediately prior to the consummation of the applicable event based on
the Black-Scholes Warrant Model for a Capped American Call on Bloomberg Financial Markets (assuming zero dividends) (“Bloomberg”).
For purposes of calculating such amount, (i) Section 6 of this Agreement shall be taken into account, (ii) the
price of each Ordinary Share shall be the volume weighted average price of the Ordinary Shares during the ten (10) trading
day period ending on the trading day prior to the effective date of the applicable event, (iii) the assumed volatility shall
be the 90 day volatility obtained from the HVT function on Bloomberg determined as of the trading day immediately prior to the
day of the announcement of the applicable event and (iv) the assumed risk-free interest rate shall correspond to the U.S.
Treasury rate for a period equal to the remaining term of the Warrant. “Per Share Consideration” means
(i) if the consideration paid to holders of the Ordinary Shares consists exclusively of cash, the amount of such cash per
Ordinary Share, and (ii) in all other cases, the volume weighted average price of the Ordinary Shares during the ten (10) trading
day period ending on the trading day prior to the effective date of the applicable event. If any reclassification or reorganization
also results in a change in Ordinary Shares covered by subsection 4.1.1, then such adjustment shall be made pursuant
to subsection 4.1.1 or Sections 4.2, 4.3 and this Section 4.4. The provisions of this
Section 4.4 shall similarly apply to successive reclassifications, reorganizations, mergers or consolidations, sales
or other transfers. In no event shall the Warrant Price be reduced to less than the par value per share issuable upon exercise
of such Warrant.
4.6.
Notices of Changes in Warrant. Upon every adjustment of the Warrant Price or the number of shares issuable
upon exercise of a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant
Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon
the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation
is based. Upon the occurrence of any event specified in Sections 4.1, 4.2, 4.3, 4.4 or 4.5,
the Company shall give written notice of the occurrence of such event to each holder of a Warrant, at the last address set forth
for such holder in the Warrant Register, of the record date or the effective date of the event. Failure to give such notice, or
any defect therein, shall not affect the legality or validity of such event.
4.7.
No Fractional Shares. Notwithstanding any provision contained in this Agreement to the contrary, the Company
shall not issue fractional shares upon the exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4,
the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the
Company shall, upon such exercise, round down to the nearest whole number the number of Ordinary Shares to be issued to such holder.
4.8.
Form of Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4,
and Warrants issued after such adjustment may state the same Warrant Price and the same number of shares as is stated in the Warrants
initially issued pursuant to this Agreement; provided, however, that the Company may at any time in its sole discretion make any
change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant
thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the
form as so changed.
4.9.
Other Events. In case any event shall occur affecting the Company as to which none of the provisions of the preceding subsections
of this Section 4 are strictly applicable, but which would require an adjustment to the terms of the Warrants in order to (i)
avoid an adverse impact on the Warrants and (ii) effectuate the intent and purpose of this Section 4, then, in each such case,
the Company shall appoint a firm of independent registered public accountants, investment banking or other appraisal firm of recognized
national standing, which shall give its opinion as to whether or not any adjustment to the rights represented by the Warrants
is necessary to effectuate the intent and purpose of this Section 4 and, if they determine that an adjustment is necessary, the
terms of such adjustment; provided, however, that under no circumstances shall the Warrants be adjusted pursuant to this Section
4.9 as a result of any issuance of securities in connection with a Business Combination. The Company shall adjust the terms of
the Warrants in a manner that is consistent with any adjustment recommended in such opinion.
5.
Transfer and Exchange of Warrants.
5.1.
Registration of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding
Warrant upon the Warrant Register, upon surrender of such Warrant for transfer, properly endorsed with signatures properly guaranteed
and accompanied by appropriate instructions for transfer. Upon any such transfer, a new Warrant representing an equal aggregate
number of Warrants shall be issued and the old Warrant shall be cancelled by the Warrant Agent. In the case of certificated Warrants,
the Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon request.
5.2.
Procedure for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written
request for exchange or transfer, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as
requested by the Registered Holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided,
however, that except as otherwise provided herein or with respect to any Book-Entry Warrant, each Book-Entry Warrant may be transferred
only in whole and only to the Depositary, to another nominee of the Depositary, to a successor depository, or to a nominee of a
successor depository; provided further, however that in the event that a Warrant surrendered for transfer bears a
restrictive legend (as in the case of the Private Placement Warrants), the Warrant Agent shall not cancel such Warrant and issue
new Warrants in exchange thereof until the Warrant Agent has received an opinion of counsel for the Company stating that such transfer
may be made and indicating whether the new Warrants must also bear a restrictive legend.
5.3.
Fractional Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange
which shall result in the issuance of a warrant certificate or book-entry position for a fraction of a warrant, except as part
of the Units.
5.4.
Service Charges. No service charge shall be made for any exchange or registration of transfer of Warrants.
5.5.
Warrant Execution and Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver,
in accordance with the terms of this Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5,
and the Company, whenever required by the Warrant Agent, shall supply the Warrant Agent with Warrants duly executed on behalf of
the Company for such purpose.
5.6.
Transfer of Warrants. Prior to the Detachment Date, the Public Warrants may be transferred or exchanged only
together with the Unit in which such Warrant is included, and only for the purpose of effecting, or in conjunction with, a transfer
or exchange of such Unit. Furthermore, each transfer of a Unit on the register relating to such Units shall operate also to transfer
the Warrants included in such Unit. Notwithstanding the foregoing, the provisions of this Section 5.6 shall have no
effect on any transfer of Warrants on and after the Detachment Date.
6.
Redemption.
6.1.
Redemption of Warrants for Cash. Subject to Section 6.5 hereof, not less than all of the outstanding
Warrants may be redeemed, at the option of the Company, at any time during the Exercise Period, at the office of the Warrant Agent,
upon notice to the Registered Holders of the Warrants, as described in Section 6.3 below, at a Redemption Price of
$0.01 per Warrant, provided that (a) the Reference Value equals or exceeds $18.00 per share (subject to adjustment in compliance
with Section 4 hereof) and (b) there is an effective registration statement covering the issuance of the Ordinary
Shares issuable upon exercise of the Warrants, and a current prospectus relating thereto, available throughout the 30-day Redemption
Period (as defined in Section 6.3 below).
6.2.
Redemption of Warrants for Ordinary Shares. Subject to Section 6.5 hereof, not less than all of
the outstanding Warrants may be redeemed, at the option of the Company, at any time during the Exercise Period, at the office of
the Warrant Agent, upon notice to the Registered Holders of the Warrants, as described in Section 6.3 below, at a Redemption
Price of $0.10 per Warrant, provided that (i) the Reference Value equals or exceeds $10.00 per share (subject to adjustment
in compliance with Section 4 hereof) and (ii) if the Reference Value is less than $18.00 per share (subject to
adjustment in compliance with Section 4 hereof), the Private Placement Warrants are also concurrently called for redemption
on the same terms as the outstanding Public Warrants. During the 30-day Redemption Period in connection with a redemption pursuant
to this Section 6.2, Registered Holders of the Warrants may elect to exercise their Warrants on a “cashless basis”
pursuant to subsection 3.3.1 and receive a number of Ordinary Shares determined by reference to the table below, based
on the Redemption Date (calculated for purposes of the table as the period to expiration of the Warrants) and the “Redemption
Fair Market Value” (as such term is defined in this Section 6.2) (a “Make-Whole Exercise”).
Solely for purposes of this Section 6.2, the “Redemption Fair Market Value” shall mean the
volume weighted average price of the Ordinary Shares for the ten (10) trading days immediately following the date on which
notice of redemption pursuant to this Section 6.2 is sent to the Registered Holders. In connection with any redemption
pursuant to this Section 6.2, the Company shall provide the Registered Holders with the Redemption Fair Market Value
no later than one (1) Business Day after the ten (10) trading day period described above ends.
| | |
Redemption Fair Market Value of Ordinary Shares
(period to expiration of warrants) | |
| Redemption Date | |
≤ 10.00 | | |
11.00 | | |
12.00 | | |
13.00 | | |
14.00 | | |
15.00 | | |
16.00 | | |
17.00 | | |
≥18.00 | |
| 60 months | |
| 0.261 | | |
| 0.281 | | |
| 0.297 | | |
| 0.311 | | |
| 0.324 | | |
| 0.337 | | |
| 0.348 | | |
| 0.358 | | |
| 0.361 | |
| 57 months | |
| 0.257 | | |
| 0.277 | | |
| 0.294 | | |
| 0.310 | | |
| 0.324 | | |
| 0.337 | | |
| 0.348 | | |
| 0.358 | | |
| 0.361 | |
| 54 months | |
| 0.252 | | |
| 0.272 | | |
| 0.291 | | |
| 0.307 | | |
| 0.322 | | |
| 0.335 | | |
| 0.347 | | |
| 0.357 | | |
| 0.361 | |
| 51 months | |
| 0.246 | | |
| 0.268 | | |
| 0.287 | | |
| 0.304 | | |
| 0.320 | | |
| 0.333 | | |
| 0.346 | | |
| 0.357 | | |
| 0.361 | |
| 48 months | |
| 0.241 | | |
| 0.263 | | |
| 0.283 | | |
| 0.301 | | |
| 0.317 | | |
| 0.332 | | |
| 0.344 | | |
| 0.356 | | |
| 0.361 | |
| 45 months | |
| 0.235 | | |
| 0.258 | | |
| 0.279 | | |
| 0.298 | | |
| 0.315 | | |
| 0.330 | | |
| 0.343 | | |
| 0.356 | | |
| 0.361 | |
| 42 months | |
| 0.228 | | |
| 0.252 | | |
| 0.274 | | |
| 0.294 | | |
| 0.312 | | |
| 0.328 | | |
| 0.342 | | |
| 0.355 | | |
| 0.361 | |
| 39 months | |
| 0.221 | | |
| 0.246 | | |
| 0.269 | | |
| 0.290 | | |
| 0.309 | | |
| 0.325 | | |
| 0.340 | | |
| 0.354 | | |
| 0.361 | |
| 36 months | |
| 0.213 | | |
| 0.239 | | |
| 0.263 | | |
| 0.285 | | |
| 0.305 | | |
| 0.323 | | |
| 0.339 | | |
| 0.353 | | |
| 0.361 | |
| 33 months | |
| 0.205 | | |
| 0.232 | | |
| 0.257 | | |
| 0.280 | | |
| 0.301 | | |
| 0.320 | | |
| 0.337 | | |
| 0.352 | | |
| 0.361 | |
| 30 months | |
| 0.196 | | |
| 0.224 | | |
| 0.250 | | |
| 0.274 | | |
| 0.297 | | |
| 0.316 | | |
| 0.335 | | |
| 0.351 | | |
| 0.361 | |
| 27 months | |
| 0.185 | | |
| 0.214 | | |
| 0.242 | | |
| 0.268 | | |
| 0.291 | | |
| 0.313 | | |
| 0.332 | | |
| 0.350 | | |
| 0.361 | |
| 24 months | |
| 0.173 | | |
| 0.204 | | |
| 0.233 | | |
| 0.260 | | |
| 0.285 | | |
| 0.308 | | |
| 0.329 | | |
| 0.348 | | |
| 0.361 | |
| 21 months | |
| 0.161 | | |
| 0.193 | | |
| 0.223 | | |
| 0.252 | | |
| 0.279 | | |
| 0.304 | | |
| 0.326 | | |
| 0.347 | | |
| 0.361 | |
| 18 months | |
| 0.146 | | |
| 0.179 | | |
| 0.211 | | |
| 0.242 | | |
| 0.271 | | |
| 0.298 | | |
| 0.322 | | |
| 0.345 | | |
| 0.361 | |
| 15 months | |
| 0.130 | | |
| 0.164 | | |
| 0.197 | | |
| 0.230 | | |
| 0.262 | | |
| 0.291 | | |
| 0.317 | | |
| 0.342 | | |
| 0.361 | |
| 12 months | |
| 0.111 | | |
| 0.146 | | |
| 0.181 | | |
| 0.216 | | |
| 0.250 | | |
| 0.282 | | |
| 0.312 | | |
| 0.339 | | |
| 0.361 | |
| 9 months | |
| 0.090 | | |
| 0.125 | | |
| 0.162 | | |
| 0.199 | | |
| 0.237 | | |
| 0.272 | | |
| 0.305 | | |
| 0.336 | | |
| 0.361 | |
| 6 months | |
| 0.065 | | |
| 0.099 | | |
| 0.137 | | |
| 0.178 | | |
| 0.219 | | |
| 0.259 | | |
| 0.296 | | |
| 0.331 | | |
| 0.361 | |
| 3 months | |
| 0.034 | | |
| 0.065 | | |
| 0.104 | | |
| 0.150 | | |
| 0.197 | | |
| 0.243 | | |
| 0.286 | | |
| 0.326 | | |
| 0.361 | |
| 0 months | |
| — | | |
| — | | |
| 0.042 | | |
| 0.115 | | |
| 0.179 | | |
| 0.233 | | |
| 0.281 | | |
| 0.323 | | |
| 0.361 | |
The exact Redemption Fair Market Value and
Redemption Date may not be set forth in the table above, in which case, if the Redemption Fair Market Value is between two values
in the table or the Redemption Date is between two redemption dates in the table, the number of Ordinary Shares to be issued for
each Warrant exercised in a Make-Whole Exercise shall be determined by a straight-line interpolation between the number of shares
set forth for the higher and lower Redemption Fair Market Values and the earlier and later redemption dates, as applicable, based
on a 365- or 366-day year, as applicable.
The share prices set forth in the column
headings of the table above shall be adjusted as of any date on which the number of shares issuable upon exercise of a Warrant
or the Exercise Price is adjusted pursuant to Section 4 hereof. If the number of shares issuable upon exercise of a
Warrant is adjusted pursuant to Section 4 hereof, the adjusted share prices in the column headings shall equal the
share prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the number of shares deliverable
upon exercise of a Warrant immediately prior to such adjustment and the denominator of which is the number of shares deliverable
upon exercise of a Warrant as so adjusted. The number of shares in the table above shall be adjusted in the same manner and at
the same time as the number of shares issuable upon exercise of a Warrant. If the Exercise Price of a warrant is adjusted, (a) in
the case of an adjustment pursuant to Section 4.4 hereof, the adjusted share prices in the column headings shall equal
the share prices immediately prior to such adjustment multiplied by a fraction, the numerator of which is the higher of the Market
Value and the Newly Issued Price and the denominator of which is $10.00 and (b) in the case of an adjustment pursuant to Section 4.1.2
hereof, the adjusted share prices in the column headings shall equal the share prices immediately prior to such adjustment less
the decrease in the Exercise Price pursuant to such Exercise Price adjustment. In no event shall the number of shares issued in
connection with a Make-Whole Exercise exceed 0.361 Ordinary Shares per Warrant (subject to adjustment)
6.3.
Date Fixed for, and Notice of, Redemption; Redemption Price; Reference Value. In the event that the Company
elects to redeem the Warrants pursuant to Sections 6.1 or 6.2, the Company shall fix a date for the redemption
(the “Redemption Date”). Notice of redemption shall be mailed by first class mail, postage prepaid, by
the Company not less than thirty (30) days prior to the Redemption Date (the “30-day Redemption Period”)
to the Registered Holders of the Warrants to be redeemed at their last addresses as they shall appear on the registration books.
Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the Registered
Holder received such notice. As used in this Agreement, (a) “Redemption Price” shall mean the price per
Warrant at which any Warrants are redeemed pursuant to Sections 6.1 or 6.2 and (b) “Reference Value”
shall mean the last reported sales price of the Ordinary Shares for any twenty (20) trading days within the thirty (30) trading-day
period ending on the third trading day prior to the date on which notice of the redemption is given.
6.4.
Exercise After Notice of Redemption. The Warrants may be exercised, for cash (or on a “cashless basis”
in accordance with Section 6.2 of this Agreement) at any time after notice of redemption shall have been given by the
Company pursuant to Section 6.3 hereof and prior to the Redemption Date. On and after the Redemption Date, the record
holder of the Warrants shall have no further rights except to receive, upon surrender of the Warrants, the Redemption Price.
6.5.
Exclusion of Private Placement Warrants. The Company agrees that (a) the redemption rights provided in
Section 6.1 hereof shall not apply to the Private Placement Warrants if at the time of the redemption such Private
Placement Warrants continue to be held by the Sponsor or its Permitted Transferees and (b) if the Reference Value equals or
exceeds $18.00 per share (subject to adjustment in compliance with Section 4 hereof), the redemption rights provided
in Section 6.2 hereof shall not apply to the Private Placement Warrants if at the time of the redemption such Private
Placement Warrants continue to be held by the Sponsor or its Permitted Transferees. However, once such Private Placement Warrants
are transferred (other than to Permitted Transferees in accordance with Section 2.6 hereof), the Company may redeem
the Private Placement Warrants pursuant to Section 6.1 or 6.2 hereof, provided that the criteria for redemption
are met, including the opportunity of the holder of such Private Placement Warrants to exercise the Private Placement Warrants
prior to redemption pursuant to Section 6.4 hereof. Private Placement Warrants that are transferred to persons other
than Permitted Transferees shall upon such transfer cease to be Private Placement Warrants and shall become Public Warrants under
this Agreement, including for purposes of Section 9.8 hereof.
7.
Other Provisions Relating to Rights of Holders of Warrants.
7.1.
No Rights as Shareholder. A Warrant does not entitle the Registered Holder thereof to any of the rights of
a shareholder of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any
preemptive rights to vote or to consent or to receive notice as shareholders in respect of the meetings of shareholders or the
election of directors of the Company or any other matter.
7.2.
Lost, Stolen, Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the
Company and the Warrant Agent may on such terms as to indemnity or otherwise as they may in their discretion impose (which shall,
in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor, and date as
the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall constitute a substitute contractual obligation
of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by
anyone.
7.3.
Reservation of Ordinary Shares. The Company shall at all times reserve and keep available a number of its
authorized but unissued Ordinary Shares that shall be sufficient to permit the exercise in full of all outstanding Warrants issued
pursuant to this Agreement.
7.4.
Registration of Ordinary Shares; Cashless Exercise at Company’s Option.
7.4.1.
Registration of the Ordinary Shares. The Company agrees that as soon as practicable, but in no event later
than twenty (20) Business Days after the closing of its initial Business Combination, it shall use its commercially reasonable
efforts to file with the Commission a registration statement for the registration, under the Securities Act, of the Ordinary Shares
issuable upon exercise of the Warrants. The Company shall use its commercially reasonable efforts to cause the same to become effective
within sixty (60) Business Days following the closing of its initial Business Combination and to maintain the effectiveness
of such registration statement, and a current prospectus relating thereto, until the expiration or redemption of the Warrants in
accordance with the provisions of this Agreement. If any such registration statement has not been declared effective by the sixtieth
(60th) Business Day following the closing of the Business Combination, holders of the Warrants shall have the
right, during the period beginning on the sixty-first (61st) Business Day after the closing of the Business Combination
and ending upon such registration statement being declared effective by the Commission, and during any other period when the Company
shall fail to have maintained an effective registration statement covering the issuance of the Ordinary Shares issuable upon exercise
of the Warrants, to exercise such Warrants on a “cashless basis,” by exchanging the Warrants (in accordance with Section 3(a)(9)
of the Securities Act or another exemption) for that number of Ordinary Shares equal to the lesser of (A) the quotient obtained
by dividing (x) the product of the number of Ordinary Shares underlying the Warrants, multiplied by the excess of the “Fair
Market Value” (as defined below) less the Warrant Price by (y) the Fair Market Value and (B) 0.361. Solely for purposes
of this subsection 7.4.1, “Fair Market Value” shall mean the volume-weighted average price
of the Ordinary Shares as reported during the ten (10) trading day period ending on the trading day prior to the date that
notice of exercise is received by the Warrant Agent from the holder of such Warrants or its securities broker or intermediary.
The date that notice of “cashless exercise” is received by the Warrant Agent shall be conclusively determined
by the Warrant Agent. In connection with the “cashless exercise” of a Public Warrant, the Company shall, upon request,
provide the Warrant Agent with an opinion of counsel for the Company (which shall be an outside law firm with securities law experience)
stating that (i) the exercise of the Warrants on a “cashless basis” in accordance with this subsection 7.4.1
is not required to be registered under the Securities Act and (ii) the Ordinary Shares issued upon such exercise shall be
freely tradable under United States federal securities laws by anyone who is not an affiliate (as such term is defined in Rule
144 under the Securities Act) of the Company and, accordingly, shall not be required to bear a restrictive legend. Except as provided
in subsection 7.4.2, for the avoidance of doubt, unless and until all of the Warrants have been exercised or have expired,
the Company shall continue to be obligated to comply with its registration obligations under the first three sentences of this
subsection 7.4.1.
7.4.2.
Cashless Exercise at Company’s Option. If the Ordinary Shares are at the time of any exercise of a Public
Warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security”
under Section 18(b)(1) of the Securities Act, the Company may, at its option, (i) require holders of Public Warrants
who exercise Public Warrants to exercise such Public Warrants on a “cashless basis” in accordance with Section 3(a)(9)
of the Securities Act as described in subsection 7.4.1 and (ii) in the event the Company so elects, the Company
shall (x) not be required to file or maintain in effect a registration statement for the registration, under the Securities
Act, of the Ordinary Shares issuable upon exercise of the Warrants, notwithstanding anything in this Agreement to the contrary,
and (y) use its commercially reasonable efforts to register or qualify for sale the Ordinary Shares issuable upon exercise
of the Public Warrant under applicable blue sky laws to the extent an exemption is not available.
8.
Concerning the Warrant Agent and Other Matters.
8.1.
Payment of Taxes. The Company shall from time to time promptly pay all taxes and charges that may be imposed
upon the Company or the Warrant Agent in respect of the issuance or delivery of Ordinary Shares upon the exercise of the Warrants,
but the Company shall not be obligated to pay any transfer taxes in respect of the Warrants or such shares.
8.2.
Resignation, Consolidation, or Merger of Warrant Agent.
8.2.1.
Appointment of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may
resign its duties and be discharged from all further duties and liabilities hereunder after giving sixty (60) days’
notice in writing to the Company. If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise,
the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make
such appointment within a period of thirty (30) days after it has been notified in writing of such resignation or incapacity
by the Warrant Agent or by the holder of a Warrant (who shall, with such notice, submit his, her or its Warrant for inspection
by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York
for the appointment of a successor Warrant Agent at the Company’s cost. Any successor Warrant Agent, whether appointed by
the Company or by such court, shall be a corporation or other entity organized and existing under the laws of the State of New
York, in good standing and having its principal office in the United States of America, and authorized under such laws to exercise
corporate trust powers and subject to supervision or examination by federal or state authority. After appointment, any successor
Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant
Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason
it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an
instrument transferring to such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent
hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all
instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority,
powers, rights, immunities, duties, and obligations.
8.2.2.
Notice of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company
shall give notice thereof to the predecessor Warrant Agent and the Transfer Agent for the Ordinary Shares not later than the effective
date of any such appointment.
8.2.3.
Merger or Consolidation of Warrant Agent. Any entity into which the Warrant Agent may be merged or with which
it may be consolidated or any entity resulting from any merger or consolidation to which the Warrant Agent shall be a party shall
be the successor Warrant Agent under this Agreement without any further act.
8.3.
Fees and Expenses of Warrant Agent.
8.3.1.
Remuneration. The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such
Warrant Agent hereunder and shall, pursuant to its obligations under this Agreement, reimburse the Warrant Agent upon demand for
all expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder.
8.3.2.
Further Assurances. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed,
executed, acknowledged, and delivered all such further and other acts, instruments, and assurances as may reasonably be required
by the Warrant Agent for the carrying out or performing of the provisions of this Agreement.
8.4.
Liability of Warrant Agent.
8.4.1.
Reliance on Company Statement. Whenever in the performance of its duties under this Agreement, the Warrant
Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed
to be conclusively proved and established by a statement signed by the Chief Executive Officer, the President, the Chief Financial
Officer, Chief Operating Officer, the General Counsel, the Secretary or the Chairman of the Board of the Company and delivered
to the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant
to the provisions of this Agreement.
8.4.2.
Indemnity. The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct,
fraud or bad faith. The Company agrees to indemnify the Warrant Agent and save it harmless against any and all liabilities, including
judgments, out-of-pocket costs and reasonable outside counsel fees, for anything done or omitted by the Warrant Agent in the execution
of this Agreement, except as a result of the Warrant Agent’s gross negligence, willful misconduct, fraud or bad faith.
8.4.3.
Exclusions. The Warrant Agent shall have no responsibility with respect to the validity of this Agreement
or with respect to the validity or execution of any Warrant (except its countersignature thereof). The Warrant Agent shall not
be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant. The Warrant
Agent shall not be responsible to make any adjustments required under the provisions of Section 4 hereof or responsible
for the manner, method, or amount of any such adjustment or the ascertaining of the existence of facts that would require any such
adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation
of any Ordinary Shares to be issued pursuant to this Agreement or any Warrant or as to whether any Ordinary Shares shall, when
issued, be valid and fully paid and nonassessable.
8.5.
Acceptance of Agency. The Warrant Agent hereby accepts the agency established by this Agreement and agrees
to perform the same upon the terms and conditions herein set forth and among other things, shall account promptly to the Company
with respect to Warrants exercised and concurrently account for, and pay to the Company, all monies received by the Warrant Agent
for the purchase of Ordinary Shares through the exercise of the Warrants.
8.6.
Waiver. The Warrant Agent has no right of set-off or any other right, title, interest or claim of any kind
(“Claim”) in, or to any distribution of, the Trust Account (as defined in that certain Investment Management
Trust Agreement, dated as of the date hereof, by and between the Company and Continental Stock Transfer & Trust Company
as trustee thereunder) and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the
Trust Account for any reason whatsoever. The Warrant Agent hereby waives any and all Claims against the Trust Account and any and
all rights to seek access to the Trust Account.
9.
Miscellaneous Provisions.
9.1.
Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the
Warrant Agent shall bind and inure to the benefit of their respective successors and assigns.
9.2.
Notices. Any notice, statement or demand authorized by this Agreement to be given or made by the Warrant Agent
or by the holder of any Warrant to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery
or if sent by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid,
addressed (until another address is filed in writing by the Company with the Warrant Agent), as follows:
Spring Valley Acquisition Corp.
2100 McKinney Ave., Suite 1675
Dallas, Texas 75201
Attention: Jeffrey Schramm
with a copy to:
Kirkland & Ellis LLP
609 Main Street
Houston, Texas 77002
Attention: Matthew R. Pacey
Christian O. Nagler
Any notice, statement or demand authorized by this Agreement
to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given when
so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days
after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the
Company), as follows:
Continental Stock Transfer & Trust Company
One State Street, 30th Floor
New York, NY 10004
Attention: Compliance Department
9.3.
Applicable Law and Exclusive Forum. The validity, interpretation, and performance of this Agreement and of
the Warrants shall be governed in all respects by the laws of the State of New York. Subject to applicable law, the Company hereby
agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought
and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York,
and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive forum for any such action, proceeding or claim.
The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Notwithstanding
the foregoing, the provisions of this paragraph will not apply to suits brought to enforce any liability or duty created by the
Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive
forum.
Any person or entity purchasing or otherwise
acquiring any interest in the Warrants shall be deemed to have notice of and to have consented to the forum provisions in this
Section 9.3. If any action, the subject matter of which is within the scope the forum provisions above, is filed in
a court other than a court located within the State of New York or the United States District Court for the Southern District of
New York (a “foreign action”) in the name of any warrant holder, such warrant holder shall be deemed
to have consented to: (x) the personal jurisdiction of the state and federal courts located within the State of New York or
the United States District Court for the Southern District of New York in connection with any action brought in any such court
to enforce the forum provisions (an “enforcement action”), and (y) having service of process made
upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action
as agent for such warrant holder.
9.4.
Persons Having Rights under this Agreement. Nothing in this Agreement shall be construed to confer upon, or
give to, any person, corporation or other entity other than the parties hereto and the Registered Holders of the Warrants any right,
remedy, or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise, or agreement hereof.
All covenants, conditions, stipulations, promises, and agreements contained in this Agreement shall be for the sole and exclusive
benefit of the parties hereto and their successors and assigns and of the Registered Holders of the Warrants.
9.5.
Examination of the Warrant Agreement. A copy of this Agreement shall be available at all reasonable times
at the office of the Warrant Agent in the United States of America, for inspection by the Registered Holder of any Warrant. The
Warrant Agent may require any such holder to submit such holder’s Warrant for inspection by the Warrant Agent.
9.6.
Counterparts. This Agreement may be executed in any number of original or facsimile counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but
one and the same instrument. Signatures to this Agreement transmitted via facsimile or e-mail shall be valid and effective to bind
the party so signing (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions
Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com).
9.7.
Effect of Headings. The section headings herein are for convenience only and are not part of this Agreement
and shall not affect the interpretation thereof.
9.8.
Amendments. This Agreement may be amended by the parties hereto without the consent of any Registered Holder
for the purpose of (i) curing any ambiguity or to correct any mistake, including to conform the provisions hereof to the description
of the terms of the Warrants and this Agreement set forth in the Prospectus, or defective provision contained herein, (ii) amending
the definition of “Ordinary Cash Dividend” as contemplated by and in accordance with the second sentence of subsection 4.1.2
or (iii) adding or changing any provisions with respect to matters or questions arising under this Agreement as the parties
may deem necessary or desirable and that the parties deem shall not adversely affect the rights of the Registered Holders under
this Agreement. All other modifications or amendments, including any modification or amendment to increase the Warrant Price or
shorten the Exercise Period and any amendment to the terms of only the Private Placement Warrants, shall require the vote or written
consent of the Registered Holders of 65% of the then-outstanding Public Warrants and, solely with respect to any amendment to the
terms of the Private Placement Warrants or any provision of this Agreement with respect to the Private Placement Warrants, 65%
of the then-outstanding Private Placement Warrants. Notwithstanding the foregoing, the Company may lower the Warrant Price or extend
the duration of the Exercise Period pursuant to Sections 3.1 and 3.2, respectively, without the consent of the
Registered Holders.
9.9.
Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term
or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof.
Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added
as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be
valid and enforceable.
Exhibit A — Form of Warrant Certificate
Exhibit B Legend — Private Placement Warrants
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the date first above written.
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SPRING VALLEY ACQUISITION CORP. |
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By: | |
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| Name: | Christopher Sorrells |
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| Title: | Chief Executive Officer |
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CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
as Warrant Agent |
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By: | | |
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| Name: | |
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| Title: | |
EXHIBIT A
[FACE]
Number
Warrants
THIS WARRANT SHALL BE VOID IF NOT EXERCISED
PRIOR TO
THE EXPIRATION OF THE EXERCISE PERIOD
PROVIDED FOR
IN THE WARRANT AGREEMENT DESCRIBED
BELOW
Spring Valley Acquisition Corp.
Incorporated Under the Laws of the Cayman
Islands
CUSIP [●]
Warrant Certificate
This Warrant Certificate certifies
that [ ], or registered
assigns, is the registered holder of [ ]
warrant(s) (the “Warrants” and each, a “Warrant”) to purchase Class A
ordinary shares, $0.0001 par value (“Ordinary Shares”), of Spring Valley Acquisition Corp., a Cayman
Islands exempted company (the “Company”). Each Warrant entitles the holder, upon exercise during the
period set forth in the Warrant Agreement referred to below, to receive from the Company that number of fully paid and nonassessable
Ordinary Shares as set forth below, at the exercise price (the “Exercise Price”) as determined pursuant
to the Warrant Agreement, payable in lawful money (or through “cashless exercise” as provided for in
the Warrant Agreement) of the United States of America upon surrender of this Warrant Certificate and payment of the Exercise Price
at the office or agency of the Warrant Agent referred to below, subject to the conditions set forth herein and in the Warrant Agreement.
Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.
Each whole Warrant is initially exercisable
for one fully paid and non-assessable Ordinary Share. Fractional shares shall not be issued upon exercise of any Warrant. If, upon
the exercise of Warrants, a holder would be entitled to receive a fractional interest in an Ordinary Share, the Company shall,
upon exercise, round down to the nearest whole number the number of Ordinary Shares to be issued to the Warrant holder. The number
of Ordinary Shares issuable upon exercise of the Warrants is subject to adjustment upon the occurrence of certain events as set
forth in the Warrant Agreement.
The initial Exercise Price per one Ordinary
Share for any Warrant is equal to $11.50 per share. The Exercise Price is subject to adjustment upon the occurrence of certain
events as set forth in the Warrant Agreement.
Subject to the conditions set forth in the
Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the end of
such Exercise Period, such Warrants shall become void. The Warrants may be redeemed, subject to certain conditions, as set forth
in the Warrant Agreement.
Reference is hereby made to the further
provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for all purposes have
the same effect as though fully set forth at this place.
This Warrant Certificate shall not be valid
unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement. This Warrant Certificate shall be governed
by and construed in accordance with the internal laws of the State of New York.
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| By: | |
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| Name: | |
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| Title: | Authorized Signatory |
| | CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
AS WARRANT AGENT |
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| Name: | |
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| Title: | |
[Form of Warrant Certificate]
[Reverse]
The Warrants evidenced by this Warrant Certificate
are part of a duly authorized issue of Warrants entitling the holder on exercise to receive [ ]
Ordinary Shares and are issued or to be issued pursuant to a Warrant Agreement dated as of [●], 2020 (the “Warrant
Agreement”), duly executed and delivered by the Company to Continental Stock Transfer & Trust Company, a
New York limited purpose trust company, as warrant agent (the “Warrant Agent”), which Warrant Agreement
is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the holders (the words
“holders” or “holder” meaning the Registered Holders or Registered Holder,
respectively) of the Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof upon written request to the
Company. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant
Agreement.
Warrants may be exercised at any time during
the Exercise Period set forth in the Warrant Agreement. The holder of Warrants evidenced by this Warrant Certificate may exercise
them by surrendering this Warrant Certificate, with the form of Election to Purchase set forth hereon properly completed and executed,
together with payment of the Exercise Price as specified in the Warrant Agreement (or through “cashless exercise”
as provided for in the Warrant Agreement) at the principal corporate trust office of the Warrant Agent. In the event that upon
any exercise of Warrants evidenced hereby the number of Warrants exercised shall be less than the total number of Warrants evidenced
hereby, there shall be issued to the holder hereof or his, her or its assignee, a new Warrant Certificate evidencing the number
of Warrants not exercised.
Notwithstanding anything else in this Warrant
Certificate or the Warrant Agreement, no Warrant may be exercised unless at the time of exercise (i) a registration statement
covering the issuance of the Ordinary Shares to be issued upon exercise is effective under the Securities Act and (ii) a prospectus
thereunder relating to the Ordinary Shares is current, except through “cashless exercise” as provided for in
the Warrant Agreement.
The Warrant Agreement provides that upon
the occurrence of certain events the number of Ordinary Shares issuable upon exercise of the Warrants set forth on the face hereof
may, subject to certain conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof would be entitled to receive
a fractional interest in an Ordinary Share, the Company shall, upon exercise, round down to the nearest whole number of Ordinary
Shares to be issued to the holder of the Warrant.
Warrant Certificates, when surrendered at
the principal corporate trust office of the Warrant Agent by the Registered Holder thereof in person or by legal representative
or attorney duly authorized in writing, may be exchanged, in the manner and subject to the limitations provided in the Warrant
Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor evidencing
in the aggregate a like number of Warrants.
Upon due presentation for registration of
transfer of this Warrant Certificate at the office of the Warrant Agent a new Warrant Certificate or Warrant Certificates of like
tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any tax or other governmental
charge imposed in connection therewith.
The Company and the Warrant Agent may deem
and treat the Registered Holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the holder(s)
hereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a shareholder of the Company.
Election
to Purchase
(To Be
Executed Upon Exercise of Warrant)
The undersigned hereby irrevocably elects
to exercise the right, represented by this Warrant Certificate, to receive [ ]
Ordinary Shares and herewith tenders payment for such Ordinary Shares to the order of Spring Valley Acquisition Corp. (the “Company”)
in the amount of $[ ] in accordance
with the terms hereof. The undersigned requests that a certificate for such Ordinary Shares be registered in the name of [ ],
whose address is [ ] and that such
Ordinary Shares be delivered to [ ]
whose address is [ ]. If said [ ]
number of Ordinary Shares is less than all of the Ordinary Shares purchasable hereunder, the undersigned requests that a new Warrant
Certificate representing the remaining balance of such Ordinary Shares be registered in the name of [ ],
whose address is [ ] and that such
Warrant Certificate be delivered to [ ],
whose address is [ ].
In the event that the Warrant has been called
for redemption by the Company pursuant to Section 6.2 of the Warrant Agreement and a holder thereof elects to exercise
its Warrant pursuant to a Make-Whole Exercise, the number of Ordinary Shares that this Warrant is exercisable for shall be determined
in accordance with subsection 3.3.1(c) or Section 6.2 of the Warrant Agreement, as applicable.
In the event that the Warrant is a Private
Placement Warrant that is to be exercised on a “cashless” basis pursuant to subsection 3.3.1(c) of the
Warrant Agreement, the number of Ordinary Shares that this Warrant is exercisable for shall be determined in accordance with subsection 3.3.1(c)
of the Warrant Agreement.
In the event that the Warrant is to be exercised
on a “cashless” basis pursuant to Section 7.4 of the Warrant Agreement, the number of Ordinary Shares that
this Warrant is exercisable for shall be determined in accordance with Section 7.4 of the Warrant Agreement.
In the event that the Warrant may be exercised,
to the extent allowed by the Warrant Agreement, through cashless exercise (i) the number of Ordinary Shares that this Warrant
is exercisable for would be determined in accordance with the relevant section of the Warrant Agreement which allows for such cashless
exercise and (ii) the holder hereof shall complete the following: The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, through the cashless exercise provisions of the Warrant Agreement, to receive Ordinary
Shares. If said number of shares is less than all of the Ordinary Shares purchasable hereunder (after giving effect to the cashless
exercise), the undersigned requests that a new Warrant Certificate representing the remaining balance of such Ordinary Shares be
registered in the name of [ ], whose
address is [ ] and that such Warrant
Certificate be delivered to [ ],
whose address is [ ].
[Signature Page Follows]
Date: [ ],
20
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THE SIGNATURE(S) SHOULD BE GUARANTEED BY
AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED).
EXHIBIT B
LEGEND
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS
OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. IN ADDITION, SUBJECT TO ANY ADDITIONAL LIMITATIONS ON TRANSFER DESCRIBED IN THE
LETTER AGREEMENT BY AND AMONG SPRING VALLEY ACQUISITION CORP. (THE “COMPANY”), SPRING VALLEY ACQUISITION
SPONSOR, LLC AND THE OTHER PARTIES THERETO, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED PRIOR
TO THE DATE THAT IS THIRTY (30) DAYS AFTER THE DATE UPON WHICH THE COMPANY COMPLETES ITS INITIAL BUSINESS COMBINATION (AS
DEFINED IN SECTION 3 OF THE WARRANT AGREEMENT REFERRED TO HEREIN) EXCEPT TO A PERMITTED TRANSFEREE (AS DEFINED IN SECTION 2
OF THE WARRANT AGREEMENT) WHO AGREES IN WRITING WITH THE COMPANY TO BE SUBJECT TO SUCH TRANSFER PROVISIONS.
SECURITIES EVIDENCED BY THIS CERTIFICATE AND CLASS A ORDINARY
SHARES OF THE COMPANY ISSUED UPON EXERCISE OF SUCH SECURITIES SHALL BE ENTITLED TO REGISTRATION RIGHTS UNDER A REGISTRATION AND
SHAREHOLDER RIGHTS AGREEMENT TO BE EXECUTED BY THE COMPANY.
NO. [ ]
WARRANT
Exhibit 10.1
INVESTMENT MANAGEMENT TRUST AGREEMENT
This Investment Management Trust Agreement
(this “Agreement”) is made effective as of [●], 2020 by and between Spring Valley Acquisition Corp.,
a Cayman Islands exempted company (the “Company”), and Continental Stock Transfer & Trust Company,
a New York limited purpose trust company (the “Trustee”).
WHEREAS, the Company’s registration
statement on Form S-1, File No. 333-249067 (the “Registration Statement”) and prospectus
(the “Prospectus”) for the initial public offering of the Company’s units (the “Units”),
each of which consists of one of the Company’s Class A ordinary shares, par value $0.0001 per share (the “Ordinary
Shares”), and one-half of one redeemable warrant, each whole warrant entitling the holder thereof to purchase
one Ordinary Share (such initial public offering hereinafter referred to as the “Public Offering”), has
been declared effective as of the date hereof by the U.S. Securities and Exchange Commission; and
WHEREAS, the Company has entered into an
Underwriting Agreement (the “Underwriting Agreement”) with Cowen and Company, LLC and Wells Fargo Securities,
LLC, as representatives (the “Representatives”) to the several underwriters (the “Underwriters”)
named therein; and
WHEREAS, simultaneously with the
Public Offering, the Company’s sponsor (the “Sponsor”) will be purchasing 8,000,000 warrants (“Private
Placement Warrants”) from the Company for an aggregate purchase price of $8,000,000 up to 8,900,000 Private Placement
Warrants for an aggregate purchase price of up to $8,900,000 if the underwriters’ over-allotment option is exercised in
full) and the Sponsor has an option to purchase 2,000,000 (or up to 2,300,000 if the underwriters’ over-allotment option
is exercised in full) additional Private Placement Warrants in order to extend the initial period of time for the Company to
consummate a Business Combination (as defined below) (the “Extension Private Placement Warrants”);
WHEREAS, as described in the
Prospectus, $202,000,000 of the gross proceeds of the Public Offering and sale of the Private Placement Warrants (as defined
in the Underwriting Agreement) (or $232,300,000 if the Underwriters’ option to purchase additional units is exercised
in full) and the gross proceeds of the sale of the Extension Private Placement Warrants, as and when sold will be delivered
to the Trustee to be deposited and held in a segregated trust account located at all times in the United States (the
“Trust Account”) for the benefit of the Company and the holders of the Ordinary Shares included in
the Units issued in the Public Offering as hereinafter provided (the amount to be delivered to the Trustee (and any interest
subsequently earned thereon) is referred to herein as the “Property,” the shareholders for whose
benefit the Trustee shall hold the Property will be referred to as the “Public Shareholders,” and
the Public Shareholders and the Company will be referred to together as the “Beneficiaries”);
and
WHEREAS, pursuant to the Underwriting Agreement,
a portion of the Property equal to $7,000,000, or $8,050,000 if the Underwriters’ option to purchase additional units is
exercised in full, is attributable to deferred underwriting discounts and commissions that will be payable by the Company to the
Underwriters upon the consummation of the Business Combination (as defined below) (the “Deferred Discount”);
and
WHEREAS, the Company and the Trustee desire
to enter into this Agreement to set forth the terms and conditions pursuant to which the Trustee shall hold the Property.
NOW THEREFORE, IT IS AGREED:
1. Agreements
and Covenants of Trustee. The Trustee hereby agrees and covenants to:
(a) Hold
the Property in trust for the Beneficiaries in accordance with the terms of this Agreement in the Trust Account established by
the Trustee in the United States at J.P. Morgan Chase Bank N.A., (or at another U.S. chartered commercial bank with consolidated
assets of $100 billion or more) in the United States, maintained by Trustee and at a brokerage institution selected by the
Trustee that is reasonably satisfactory to the Company;
(b) Manage,
supervise and administer the Trust Account subject to the terms and conditions set forth herein;
(c) In
a timely manner, upon the written instruction of the Company, invest and reinvest the Property in United States government securities
within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, having a maturity of 185 days or
less, or in money market funds meeting the conditions of paragraphs (d)(1), (d)(2), (d)(3) and (d)(4) of Rule 2a-7
promulgated under the Investment Company Act of 1940, as amended (or any successor rule), which invest only in direct U.S. government
treasury obligations, as determined by the Company; the Trustee may not invest in any other securities or assets, it being understood
that the Trust Account will earn no interest while account funds are uninvested awaiting the Company’s instructions hereunder
and the Trustee may earn bank credits or other consideration;
(d) Collect
and receive, when due, all principal, interest or other income arising from the Property, which shall become part of the “Property,”
as such term is used herein;
(e) Promptly
notify the Company and the Representatives of all communications received by the Trustee with respect to any Property requiring
action by the Company;
(f) Supply
any necessary information or documents as may be requested by the Company (or its authorized agents) in connection with the Company’s
preparation of the tax returns relating to assets held in the Trust Account;
(g) Participate
in any plan or proceeding for protecting or enforcing any right or interest arising from the Property if, as and when instructed
by the Company to do so;
(h) Render
to the Company monthly written statements of the activities of, and amounts in, the Trust Account reflecting all receipts and disbursements
of the Trust Account;
(i) Commence
liquidation of the Trust Account only after and promptly after (x) receipt of, and only in accordance with, the terms of
a letter from the Company (“Termination Letter”) in a form substantially similar to that attached
hereto as either Exhibit A or Exhibit B, as applicable, signed on behalf of the Company by its Chief Executive
Officer, Chief Financial Officer or other authorized officer of the Company, and complete the liquidation of the Trust
Account and distribute the Property in the Trust Account, including interest and other income earned on the funds held in the
Trust Account and not previously released to the Company to pay its income taxes (less up to $100,000 of interest to pay
dissolution expenses), only as directed in the Termination Letter and the other documents referred to therein, or
(y) upon the date which is the later of (1) 18 months after the closing of the Public Offering (2) such later date as may be extended by the Sponsor in accordance with the Company's amended and restated memorandum and articles
of association by deposit of additional Property into the Trust Account upon the sale of the Extension Private Placement Warrants, and
(3) such later
date as may be approved by the Company’s shareholders in accordance with the Company’s amended and restated
memorandum and articles of association, if a Termination Letter has not been received by the Trustee prior to such date, in
which case the Trust Account shall be liquidated in accordance with the procedures set forth in the Termination Letter
attached as Exhibit B and the Property in the Trust Account, including interest and other income earned on the funds
held in the Trust Account and not previously released to the Company to pay its income taxes (less up to $100,000 of interest
to pay dissolution expenses), shall be distributed to the Public Shareholders of record as of such date. It is acknowledged
and agreed that there should be no reduction in the principal amount per share initially deposited in the Trust
Account;
(j) Upon written request from the Company, which may be given from
time to time in a form substantially similar to that attached hereto as Exhibit C (a “Tax Payment Withdrawal
Instruction”), withdraw from the Trust Account and distribute to the Company the amount of interest and other income
earned on the Property requested by the Company to cover any tax obligation owed by the Company as a result of assets of the Company
or interest or other income earned on the Property, which amount shall be delivered directly to the Company by electronic funds
transfer or other method of prompt payment, and the Company shall forward such payment to the relevant taxing authority, so long
as there is no reduction in the principal amount per share initially deposited in the Trust Account; provided, however,
that to the extent there is not sufficient cash in the Trust Account to pay such tax obligation, the Trustee shall liquidate such
assets held in the Trust Account as shall be designated by the Company in writing to make such distribution (it being acknowledged
and agreed that any such amount in excess of interest income earned on the Property shall not be payable from the Trust Account).
The written request of the Company referenced above shall constitute presumptive evidence that the Company is entitled to said
funds, and the Trustee shall have no responsibility to look beyond said request;
(k) Upon
written request from the Company, which may be given from time to time in a form substantially similar to that attached hereto
as Exhibit D (a “Shareholder Redemption Withdrawal Instruction”), the Trustee shall distribute
to the remitting brokers on behalf of Public Shareholders redeeming Ordinary Shares the amount required to pay redeemed Ordinary
Shares from Public Shareholders pursuant to the Company’s amended and restated memorandum and articles of association; and
(l) Not
make any withdrawals or distributions from the Trust Account other than pursuant to Section 1(i), (j) or
(k) above.
2. Agreements
and Covenants of the Company. The Company hereby agrees and covenants to:
(a) Give
all instructions to the Trustee hereunder in writing, signed by the Company’s Chief Executive Officer, Chief Financial Officer
or other authorized officer of the Company. In addition, except with respect to its duties under Sections 1(i), (j) or
(k) hereof, the Trustee shall be entitled to rely on, and shall be protected in relying on, any verbal or telephonic
advice or instruction which it, in good faith and with reasonable care, believes to be given by any one of the persons authorized
above to give written instructions, provided that the Company shall promptly confirm such instructions in writing;
(b) Subject to Section 4 hereof, hold the Trustee harmless
and indemnify the Trustee from and against any and all expenses, including reasonable counsel fees and disbursements, or losses
suffered by the Trustee in connection with any action taken by it hereunder and in connection with any action, suit or other proceeding
brought against the Trustee involving any claim, or in connection with any claim or demand, which in any way arises out of or relates
to this Agreement, the services of the Trustee hereunder, or the Property or any interest and other income earned on the Property,
except for expenses and losses resulting from the Trustee’s gross negligence, fraud or willful misconduct. Promptly after
the receipt by the Trustee of notice of demand or claim or the commencement of any action, suit or proceeding, pursuant to which
the Trustee intends to seek indemnification under this Section 2(b), it shall notify the Company in writing of such
claim (hereinafter referred to as the “Indemnified Claim”). The Trustee shall have the right to conduct
and manage the defense against such Indemnified Claim; provided that the Trustee shall obtain the consent of the Company
with respect to the selection of counsel, which consent shall not be unreasonably withheld. The Trustee may not agree to settle
any Indemnified Claim without the prior written consent of the Company, which such consent shall not be unreasonably withheld.
The Company may participate in such action with its own counsel;
(c) Pay
the Trustee the fees set forth on Schedule A hereto, including an initial acceptance fee, annual administration fee, and
transaction processing fee which fees shall be subject to modification by the parties from time to time. It is expressly understood
that the Property shall not be used to pay such fees unless and until it is distributed to the Company pursuant to Sections 1(i) through
1(k) hereof. The Company shall pay the Trustee the initial acceptance fee and the first annual administration fee at
the consummation of the Public Offering. The Trustee shall refund to the Company the annual administration fee (on a pro rata basis)
with respect to any period after the liquidation of the Trust Account. The Company shall not be responsible for any other fees
or charges of the Trustee except as set forth in this Section 2(c) and as may be provided in Section 2(b) hereof;
(d) In
connection with any vote of the Company’s shareholders regarding a merger, share exchange, asset acquisition, share purchase,
reorganization or similar business combination involving the Company and one or more businesses (the “Business Combination”),
provide to the Trustee an affidavit or certificate of the inspector of elections for the shareholder meeting verifying the vote
of such shareholders regarding such Business Combination;
(e) Provide
the Representatives with a copy of any Termination Letter(s) and/or any other correspondence that is sent to the Trustee with
respect to any proposed withdrawal from the Trust Account promptly after it issues the same;
(f) Unless
otherwise agreed between the Company and the Representatives, ensure that any Instruction Letter (as defined in Exhibit A)
delivered in connection with a Termination Letter in the form of Exhibit A expressly provides that the Deferred Discount
is paid directly to the account or accounts directed by the Representatives on behalf of the Underwriters prior to any transfer
of the funds held in the Trust Account to the Company or any other person;
(g) Instruct
the Trustee to make only those distributions that are permitted under this Agreement, and refrain from instructing the Trustee
to make any distributions that are not permitted under this Agreement;
(h) If the Company seeks to amend any provisions of its
amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s
obligation to allow redemption in connection with its Business Combination or to redeem 100% of
the Company’s Ordinary Shares if it has not completed a Business Combination within
18 months from the closing of the Public Offering or within such later date as may be
extended by the Sponsor in accordance with the Company’s amended and restated memorandum and articles
of association by a deposit of additional Property into the Trust Account upon the sale of the Extension Private Placement
Warrants or (B) with respect to any other provision relating to the rights of holders of the Ordinary Shares (in each case,
an “Amendment”), the Company will provide the Trustee with an amendment notification letter in the form of
Exhibit D providing instructions for the distribution of funds to Public Shareholders who exercise their redemption option in
connection with such Amendment; and
(i) Within
five (5) business days after the Underwriters exercise their option to purchase additional units (or any unexercised portion
thereof) or such option to purchase additional units expires, provide the Trustee with a notice in writing of the total amount
of the Deferred Discount.
3. Limitations
of Liability. The Trustee shall have no responsibility or liability to:
(a) Imply
obligations, perform duties, inquire or otherwise be subject to the provisions of any agreement or document other than this Agreement
and that which is expressly set forth herein;
(b) Take
any action with respect to the Property, other than as directed in Section 1 hereof, and the Trustee shall have no
liability to any third party except for liability arising out of the Trustee’s gross negligence, fraud or willful misconduct;
(c) Institute
any proceeding for the collection of any principal and income arising from, or institute, appear in or defend any proceeding of
any kind with respect to, any of the Property unless and until it shall have received written instructions from the Company given
as provided herein to do so and the Company shall have advanced or guaranteed to it funds sufficient to pay any expenses incident
thereto;
(d) Change
the investment of any Property, other than in compliance with Section 1 hereof;
(e) Refund
any depreciation in principal of any Property;
(f) Assume
that the authority of any person designated by the Company to give instructions hereunder shall not be continuing unless provided
otherwise in such designation, or unless the Company shall have delivered a written revocation of such authority to the Trustee;
(g) The
other parties hereto or to anyone else for any action taken or omitted by it, or any action suffered by it to be taken or omitted,
in good faith and in the Trustee’s best judgment, except for the Trustee’s gross negligence, fraud or willful misconduct.
The Trustee may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice
of counsel (including counsel chosen by the Trustee, which counsel may be the Company’s counsel), statement, instrument,
report or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also
as to the truth and acceptability of any information therein contained) which the Trustee believes, in good faith and with reasonable
care, to be genuine and to be signed or presented by the proper person or persons. The Trustee shall not be bound by any notice
or demand, or any waiver, modification, termination or rescission of this Agreement or any of the terms hereof, unless evidenced
by a written instrument delivered to the Trustee, signed by the proper party or parties and, if the duties or rights of the Trustee
are affected, unless it shall give its prior written consent thereto;
(h) Verify
the accuracy of the information contained in the Registration Statement;
(i) Provide
any assurance that any Business Combination entered into by the Company or any other action taken by the Company is as contemplated
by the Registration Statement;
(j) File
information returns with respect to the Trust Account with any local, state or federal taxing authority or provide periodic written
statements to the Company documenting the taxes payable by the Company, if any, relating to any interest income earned on the Property;
(k) Prepare,
execute and file tax reports, income or other tax returns and pay any taxes with respect to any income generated by, and activities
relating to, the Trust Account, regardless of whether such tax is payable by the Trust Account or the Company, including, but not
limited to, income tax obligations, except pursuant to Section 1(j) hereof; or
(l) Verify
calculations, qualify or otherwise approve the Company’s written requests for distributions pursuant to Sections 1(i),
1(j) or 1(k) hereof.
4. Trust
Account Waiver. The Trustee has no right of set-off or any right, title, interest or claim of any kind (“Claim”)
to, or to any monies in, the Trust Account, and hereby irrevocably waives any Claim to, or to any monies in, the Trust Account
that it may have now or in the future. In the event the Trustee has any Claim against the Company under this Agreement, including,
without limitation, under Section 2(b) or Section 2(c) hereof, the Trustee shall pursue such
Claim solely against the Company and its assets outside the Trust Account and not against the Property or any monies in the Trust
Account.
5. Termination.
This Agreement shall terminate as follows:
(a) If
the Trustee gives written notice to the Company that it desires to resign under this Agreement, the Company shall use its reasonable
efforts to locate a successor trustee, pending which the Trustee shall continue to act in accordance with this Agreement. At such
time that the Company notifies the Trustee that a successor trustee has been appointed by the Company and has agreed to become
subject to the terms of this Agreement, the Trustee shall transfer the management of the Trust Account to the successor trustee,
including but not limited to the transfer of copies of the reports and statements relating to the Trust Account, whereupon this
Agreement shall terminate; provided, however, that in the event that the Company does not locate a successor trustee
within ninety (90) days of receipt of the resignation notice from the Trustee, the Trustee may submit an application to have
the Property deposited with any court in the State of New York or with the United States District Court for the Southern District
of New York and upon such deposit, the Trustee shall be immune from any liability whatsoever; or
(b) At
such time that the Trustee has completed the liquidation of the Trust Account and its obligations in accordance with the provisions
of Section 1(i) hereof and distributed the Property in accordance with the provisions of the Termination Letter,
this Agreement shall terminate except with respect to Section 2(b).
6. Miscellaneous.
(a) The
Company and the Trustee each acknowledge that the Trustee will follow the security procedures set forth below with respect to funds
transferred from the Trust Account. The Company and the Trustee will each restrict access to confidential information relating
to such security procedures to authorized persons. Each party must notify the other party immediately if it has reason to believe
unauthorized persons may have obtained access to such confidential information, or of any change in its authorized personnel. In
executing funds transfers, the Trustee shall rely upon all information supplied to it by the Company, including, account names,
account numbers, and all other identifying information relating to a Beneficiary, Beneficiary’s bank or intermediary bank.
Except for any liability arising out of the Trustee’s gross negligence, fraud or willful misconduct, the Trustee shall not
be liable for any loss, liability or expense resulting from any error in the information or transmission of the funds.
(b) This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of New York, without giving effect to conflicts of law principles that would result in
the application of the substantive laws of another jurisdiction. This Agreement may be executed in several original or facsimile
counterparts, each one of which shall constitute an original, and together shall constitute but one instrument. Signatures to this
Agreement transmitted via facsimile or e-mail shall be valid and effective to bind the party so signing (including any electronic
signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records
Act or other applicable law, e.g., www.docusign.com).
(c) This Agreement contains the entire agreement and understanding
of the parties hereto with respect to the subject matter hereof. Except for Section 1(i), 1(j) and 1(k)
hereof (which sections may not be modified, amended or deleted without the affirmative vote of sixty-five percent (65%) of the
then outstanding Ordinary Shares and Class B ordinary shares, par value $0.0001 per share, of the Company, voting together
as a single class; provided that no such amendment will affect any Public Shareholder who has properly elected to redeem
his or her Ordinary Shares in connection with a shareholder vote to amend this Agreement (A) to modify the substance or timing
of the Company’s obligation to provide for the redemption of the Ordinary Shares in connection with an initial Business Combination
or an Amendment or to redeem 100% of its Ordinary Shares if the Company does not complete its initial Business Combination within
the time frame specified in the Company’s amended and restated memorandum and articles of association or (B) with respect
to any other provision relating to the rights of holders of the Ordinary Shares), this Agreement or any provision hereof may only
be changed, amended or modified (other than to correct a typographical error) by a writing signed by each of the parties hereto.
(d) The
parties hereto consent to the jurisdiction and venue of any state or federal court located in the City of New York, State of New
York, for purposes of resolving any disputes hereunder. AS TO ANY CLAIM, CROSS-CLAIM OR COUNTERCLAIM IN ANY WAY RELATING TO THIS
AGREEMENT, EACH PARTY WAIVES THE RIGHT TO TRIAL BY JURY.
(e) Any
notice, consent or request to be given in connection with any of the terms or provisions of this Agreement shall be in writing
and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery
or by electronic mail:
if to the Trustee, to:
Continental Stock Transfer &
Trust Company
1 State Street, 30th Floor
New York, New York 10004
| Attn: |
Francis E. Wolf, Jr. & Celeste Gonzalez |
| Email: |
fwolf@continentalstock.com |
| |
cgonzalez@continentalstock.com |
if to the Company, to:
Spring Valley Acquisition Corp.
2100 McKinney Ave, Suite 1675
Dallas, TX 75201
| Attn: |
Jeffrey Schramm |
| Email: |
jeff.schramm@sv-ac.com |
in each case, with copies to:
Kirkland & Ellis
LLP
609 Main Street
Houston, Texas 77002
| Attn: |
Matthew Pacey |
| |
Christian O. Nagler |
| E-mail: |
matt.pacey@kirkland.com |
| |
cnagler@kirkland.com |
and
Cowen and Company, LLC
599 Lexington Avenue
New York, New York 10022
| Attn: |
Head of Equity Capital Markets, with a copy to the
General Counsel Investment Banking |
and
Wells Fargo Securities, LLC
500 West 33rd Street
New York, New York 10001
| Attn.: |
Equity Syndicate Department (fax no: (212) 214-5918) |
and
Shearman & Sterling LLP
599 Lexington Avenue
New York, New York 10022
| Attn.: |
Ilir Mujalovic |
| |
William B. Nelson |
(f) Each
of the Company and the Trustee hereby represents that it has the full right and power and has been duly authorized to enter into
this Agreement and to perform its respective obligations as contemplated hereunder. The Trustee acknowledges and agrees that it
shall not make any claims or proceed against the Trust Account, including by way of set-off, and shall not be entitled to any funds
in the Trust Account under any circumstance.
(g) This
Agreement is the joint product of the Trustee and the Company and each provision hereof has been subject to the mutual consultation,
negotiation and agreement of such parties and shall not be construed for or against any party hereto.
(h) This
Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts
shall together constitute one and the same instrument. Delivery of a signed counterpart of this Agreement by facsimile or electronic
transmission shall constitute valid and sufficient delivery thereof.
(i) Each of the Company and the Trustee hereby acknowledges and
agrees that the Representatives on behalf of the Underwriters are third-party beneficiaries of this Agreement.
(j) Except
as specified herein, no party to this Agreement may assign its rights or delegate its obligations hereunder to any other person
or entity.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have
duly executed this Investment Management Trust Agreement as of the date first written above.
| | CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
as Trustee |
| | | |
| | | |
| By: | |
| Name: | Francis Wolf |
| Title: | Vice President |
| | SPRING VALLEY ACQUISITION CORP. |
| | | |
| | | |
| By: | |
| Name: | Christopher Sorrells |
| Title: | Chief Executive Officer |
SCHEDULE A
| Fee Item | |
Time and method of payment | |
Amount | |
| Initial acceptance fee | |
Initial closing of IPO by wire transfer | |
$ | 3,500.00 | |
| Annual fee | |
First year, initial closing of IPO by wire transfer; thereafter on the anniversary of the effective date of the IPO by wire transfer or check | |
$ | 10,000.00 | |
| Transaction processing fee for disbursements to Company under Sections 1(i),(j), and (k) | |
Billed by Trustee to Company under Section 1 | |
$ | 250.00 | |
| Paying Agent services as required pursuant to Section 1(i) and 1(k) | |
Billed to Company upon delivery of service pursuant to Section 1(i) and 1(k) | |
| Prevailing rates | |
EXHIBIT A
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf & Celeste Gonzalez
Re: Trust
Account - Termination Letter
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section 1(i) of
the Investment Management Trust Agreement between Spring Valley Acquisition Corp. (the “Company”) and
Continental Stock Transfer & Trust Company (“Trustee”), dated as of [●], 2020 (the “Trust
Agreement”), this is to advise you that the Company has entered into an agreement with
(the “Target Business”) to consummate a business combination with Target Business (the “Business
Combination”) on or about [insert date]. The Company shall notify you at least seventy-two (72) hours
in advance of the actual date (or such shorter time period as you may agree) of the consummation of the Business Combination (the
“Consummation Date”). Capitalized terms used but not defined herein shall have the meanings set forth
in the Trust Agreement.
In accordance with the terms of the Trust
Agreement, we hereby authorize you to commence to liquidate all of the assets of the Trust Account, and to transfer the proceeds
into the trust operating account at [●] to the effect that, on the Consummation Date, all of the funds held in the Trust
Account will be immediately available for transfer to the account or accounts that the Representatives (with respect to the Deferred
Discount) and the Company shall direct on the Consummation Date. It is acknowledged and agreed that while the funds are on deposit
in said trust operating account at [●] awaiting distribution, neither the Company nor the Representatives will earn any interest
or dividends.
On the Consummation Date (i) counsel
for the Company shall deliver to you written notification that the Business Combination has been consummated, or will be consummated
substantially concurrently with your transfer of funds to the accounts as directed by the Company (the “Notification”),
and (ii) the Company shall deliver to you (a) a certificate by the Chief Executive Officer, Chief Financial Officer or
other authorized officer of the Company, which verifies that the Business Combination has been approved by a vote of the Company’s
shareholders, if a vote is held and (b) joint written instruction signed by the Company and the Representatives with respect
to the transfer of the funds held in the Trust Account, including payment of the Deferred Discount from the Trust Account (the
“Instruction Letter”). You are hereby directed and authorized to transfer the funds held in the Trust
Account immediately upon your receipt of the Notification and the Instruction Letter, in accordance with the terms of the Instruction
Letter. In the event that certain deposits held in the Trust Account may not be liquidated by the Consummation Date without penalty,
you will notify the Company in writing of the same and the Company shall direct you as to whether such funds should remain in the
Trust Account and be distributed after the Consummation Date to the Company. Upon the distribution of all the funds, net of any
payments necessary for reasonable unreimbursed expenses related to liquidating the Trust Account, your obligations under the Trust
Agreement shall be terminated.
In the event that the Business Combination
is not consummated on the Consummation Date described in the notice thereof and we have not notified you on or before the original
Consummation Date of a new Consummation Date, then upon receipt by the Trustee of written instructions from the Company, the funds
held in the Trust Account shall be reinvested as provided in Section 1(c) of the Trust Agreement on the business day
immediately following the Consummation Date as set forth in such notice as soon thereafter as possible.
| | Very truly yours, |
| | | |
| | Spring Valley Acquisition Corp. |
| | | |
| | | |
| By: | |
| Name: | |
| Title: | |
cc: Cowen
and Company, LLC and Wells Fargo Securities, LLC.
EXHIBIT B
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf & Celeste Gonzalez
| Re: | Trust Account - Termination Letter |
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section 1(i) of
the Investment Management Trust Agreement between Spring Valley Acquisition Corp. (the “Company”) and
Continental Stock Transfer & Trust Company (the “Trustee”), dated as of [●], 2020 (the
“Trust Agreement”), this is to advise you that the Company has been unable to effect a business combination
with a target business (the “Business Combination”) within the time frame specified in the Company’s
Amended and Restated Memorandum and Articles of Association, as described in the Company’s Prospectus relating to the Public
Offering. Capitalized terms used but not defined herein shall have the meanings set forth in the Trust Agreement.
In accordance with the terms of the Trust Agreement, we hereby
authorize you to liquidate all of the assets in the Trust Account and to transfer the total proceeds into the trust operating account
at J.P. Morgan Chase Bank N.A. to await distribution to the Public Shareholders. The Company has selected
as the effective date for the purpose of determining when the Public Shareholders will be entitled to receive their share of the
liquidation proceeds. It is acknowledged that no interest will be earned by the Company on the liquidation proceeds while on deposit
in the trust operating account. You agree to be the Paying Agent of record and, in your separate capacity as Paying Agent, agree
to distribute said funds directly to the Company’s Public Shareholders in accordance with the terms of the Trust Agreement
and the Amended and Restated Memorandum and Articles of Association of the Company. Upon the distribution of all the funds, net
of any payments necessary for reasonable unreimbursed expenses related to liquidating the Trust Account, your obligations under
the Trust Agreement shall be terminated, except to the extent otherwise provided in Section 1(j) of the Trust Agreement.
| | Very truly yours, |
| | | |
| | Spring Valley Acquisition Corp. |
| | | |
| | | |
| By: | |
| Name: | |
| Title: | |
cc: Cowen
and Company, LLC and Wells Fargo Securities, LLC
EXHIBIT C
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf& Celeste Gonzalez
| Re: | Trust Account - Tax Payment Withdrawal Instruction |
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section 1(j) of
the Investment Management Trust Agreement between Spring Valley Acquisition Corp. (the “Company”) and
Continental Stock Transfer & Trust Company (the “Trustee”), dated as of [●], 2020 (the
“Trust Agreement”), the Company hereby requests that you deliver to the Company $
of the interest income earned on the Property as of the date hereof. Capitalized terms used but not defined herein shall have the
meanings set forth in the Trust Agreement.
The Company needs such funds to pay for
the tax obligations as set forth on the attached tax return or tax statement. In accordance with the terms of the Trust Agreement,
you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to
the Company’s operating account at:
[WIRE INSTRUCTION INFORMATION]
| | Very truly yours, |
| | | |
| | Spring Valley Acquisition Corp. |
| | | |
| | | |
| By: | |
| Name: | |
| Title: | |
cc: Cowen
and Company, LLC and Wells Fargo Securities, LLC
EXHIBIT D
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf& Celeste Gonzalez
| Re: | Trust Account - Shareholder Redemption Withdrawal Instruction |
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section 1(k) of
the Investment Management Trust Agreement between Spring Valley Acquisition Corp. (the “Company”) and
Continental Stock Transfer & Trust Company (the “Trustee”), dated as of [●], 2020 (the
“Trust Agreement”), the Company hereby requests that you deliver to the Company’s shareholders
$
of the principal and interest income earned on the Property as of the date hereof. Capitalized terms used but not defined herein
shall have the meanings set forth in the Trust Agreement.
Pursuant to Section 1(k) of the
Trust Agreement, this is to advise you that the Company has sought an Amendment. Accordingly, in accordance with the terms of the
Trust Agreement, we hereby authorize you to liquidate a sufficient portion of the Trust Account and to transfer $[●] of the
proceeds of the Trust Account to the trust operating account at [●] for distribution to the shareholders that have requested
redemption of their shares in connection with such Amendment.
| | Very truly yours, |
| | | |
| | Spring Valley Acquisition Corp. |
| | | |
| | | |
| By: | |
| Name: | |
| Title: | |
cc: Cowen
and Company, LLC and Wells Fargo Securities, LLC
Exhibit 10.2
REGISTRATION AND SHAREHOLDER RIGHTS
AGREEMENT
THIS REGISTRATION
AND SHAREHOLDER RIGHTS AGREEMENT (this “Agreement”), dated as of [●], 2020, is made and entered
into by and among Spring Valley Acquisition Corp., a Cayman Islands exempted company (the “Company”),
Spring Valley Acquisition Sponsor, LLC, a Delaware limited liability company (the “Sponsor”), and the
undersigned parties listed under Holder on the signature page hereto (each such party, together with the Sponsor and any
person or entity who hereafter becomes a party to this Agreement pursuant to Section 6.2 of this Agreement, a “Holder”
and collectively the “Holders”).
RECITALS
WHEREAS,
the Sponsor currently beneficially owns 5,750,000 shares of the Company’s Class B ordinary shares, par value $0.0001
per share (the “Class B Ordinary Shares”);
WHEREAS,
the Class B Ordinary Shares are convertible into the Company’s Class A ordinary shares, par value $0.0001 per
share (the “Ordinary Shares”), at the time of the initial Business Combination (as defined below), or
earlier at the option of the holder, on a one-for-one basis, subject to adjustment, on the terms and conditions provided in the
Company’s amended and restated memorandum and articles of association, as may be amended from time to time;
WHEREAS,
on [●], 2020, the Company and the Sponsor entered into that certain Private Placement Warrants Purchase Agreement,
pursuant to which the Sponsor agreed to purchase 8,000,000 warrants (or up to 8,900,000 warrants if the Underwriters’
(as defined below) option to purchase additional units in connection with the Company’s initial public offering is
exercised in full) (the “Private Placement Warrants”), in a private placement transaction
occurring simultaneously with the closing of the Company’s initial public offering and the Sponsor has an option to
purchase 2,000,000 (or up to 2,300,000 if the underwriters' over-allotment option is exercised in full) additional warrants in order to extend the initial period of time for the Company to consummate a Business Combination;
WHEREAS,
in order to finance the Company’s transaction costs in connection with an intended Business Combination, the Sponsor or
certain of the Company’s officers or directors may, but are not obligated to, loan the Company funds as the Company may
require, of which up to $1,500,000 of such loans may be convertible into an additional 1,500,000 Private Placement Warrants (the
“Working Capital Warrants”); and
WHEREAS,
the Company and the Holders desire to enter into this Agreement, pursuant to which the Company shall grant the Holders certain
registration rights with respect to certain securities of the Company, as set forth in this Agreement.
NOW,
THEREFORE, in consideration of the mutual representations, covenants and agreements contained herein, and certain other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
Article 1
DEFINITIONS
1.1 Definitions.
The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth
below:
“Adverse
Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the
good faith judgment of the principal executive officer or principal financial officer of the Company, after consultation with
counsel to the Company, (i) would be required to be made in any Registration Statement or Prospectus in order for the applicable
Registration Statement or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances
under which they were made) not misleading, (ii) would not be required to be made at such time if the Registration Statement
were not being filed, and (iii) the Company has a bona fide business purpose for not making such information public.
“Agreement”
shall have the meaning given in the Preamble.
“Board”
shall mean the Board of Directors of the Company.
“Business
Combination” shall mean any merger, share exchange, asset acquisition, share purchase, reorganization or
other similar business combination with one or more businesses, involving the Company.
“Class B
Ordinary Shares” shall have the meaning given in the Recitals hereto.
“Commission”
shall mean the U.S. Securities and Exchange Commission.
“Company”
shall have the meaning given in the Preamble.
“Demand
Registration” shall have the meaning given in subsection 2.1.1.
“Demanding
Holder” shall have the meaning given in subsection 2.1.1.
“Exchange
Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.
“Form S-1”
shall have the meaning given in subsection 2.1.1.
“Form S-3”
shall have the meaning given in subsection 2.3.1.
“Founder
Shares” shall mean the Class B Ordinary Shares and shall be deemed to include the Ordinary Shares issuable
upon conversion thereof.
“Founder
Shares Lock-up Period” shall mean, with respect to the Founder Shares, the period ending on the earlier of
(A) one year after the completion of the Company’s initial Business Combination and (B) subsequent to the Business
Combination, (x) if the last reported sales price of the Ordinary Shares equals or exceeds $12.00 per share (as adjusted
for share splits, share capitalizations, reorganizations, recapitalizations and other similar transactions) for any 20 trading
days within any 30-trading day period commencing at least 150 days after the Company’s initial Business Combination or (y) the
date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results
in all of the Company’s shareholders having the right to exchange their Ordinary Shares for cash, securities or other property.
“Holders”
shall have the meaning given in the Preamble.
“Insider
Letter” shall mean that certain letter agreement, dated as of the date hereof, by and among the Company,
the Sponsor and each of the Company’s officers, directors and director nominees.
“Maximum
Number of Securities” shall have the meaning given in subsection 2.1.4.
“Misstatement”
shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration
Statement or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus (in the case of a Prospectus,
in the light of the circumstances under which they were made) not misleading.
“Nominee”
is defined in Section 6.1.
“Ordinary
Shares” shall have the meaning given in the Recitals hereto.
“Permitted
Transferees” shall mean a person or entity to whom a Holder of Registrable Securities is permitted to transfer
such Registrable Securities prior to the expiration of the Founder Shares Lock-up Period or Private Placement Lock-up Period,
as the case may be, under the Insider Letter and any other applicable agreement between such Holder and the Company, and to any
transferee thereafter.
“Piggyback
Registration” shall have the meaning given in subsection 2.2.1.
“Private
Placement Lock-up Period” shall mean, with respect to Private Placement Warrants that are held by the initial
purchasers of such Private Placement Warrants or their Permitted Transferees, and any of the Ordinary Shares issued or issuable
upon the exercise or conversion of the Private Placement Warrants and that are held by the initial purchasers of the Private Placement
Warrants or their Permitted Transferees, the period ending 30 days after the completion of the Company’s initial Business
Combination.
“Private
Placement Warrants” shall have the meaning given in the Recitals hereto.
“Prospectus”
shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements
and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.
“Pro Rata”
shall have the meaning given in subsection 2.1.4.
“Registrable
Security” shall mean (a) the Founder Shares (including any Ordinary Shares or other equivalent equity
security issued or issuable upon the conversion of any such Founder Shares or exercisable for Ordinary Shares), (b) the Private
Placement Warrants (including any Ordinary Shares issued or issuable upon the exercise of any such Private Placement Warrants),
(c) the Working Capital Warrants (including any Ordinary Shares issued or issuable upon the conversion of working capital
loans), (d) any outstanding Ordinary Shares or any other equity security (including the Ordinary Shares issued or issuable
upon the exercise of any other equity security) of the Company held by a Holder as of the date of this Agreement, and (e) any
other equity security of the Company issued or issuable with respect to any such Ordinary Shares by way of a share capitalization
or share split or in connection with a combination of shares, recapitalization, merger, consolidation or reorganization; provided,
however, that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities when:
(i) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities
Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement;
(ii) such securities shall have been otherwise transferred, new certificates for such securities not bearing a legend restricting
further transfer shall have been delivered by the Company and subsequent public distribution of such securities shall not require
registration under the Securities Act; (iii) such securities shall have ceased to be outstanding; or (iv) such securities
have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction.
“Registration”
shall mean a registration effected by preparing and filing a registration statement or similar document in compliance with the
requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration
statement becoming effective.
“Registration
Expenses” shall mean the out-of-pocket expenses of a Registration, including, without limitation, the following:
(A) all
registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory
Authority, Inc.) and any securities exchange on which the Ordinary Shares are then listed;
(B) fees
and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters
in connection with blue sky qualifications of Registrable Securities);
(C) printing,
messenger, telephone and delivery expenses;
(D) reasonable
fees and disbursements of counsel for the Company;
(E) reasonable
fees and disbursements of all independent registered public accountants of the Company incurred specifically in connection with
such Registration; and
(F) reasonable
fees and expenses of one (1) legal counsel selected by the majority-in-interest of the Demanding Holders initiating a Demand
Registration to be registered for offer and sale in the applicable Registration or the Takedown Requesting Holder initiating an
Underwritten Shelf Takedown.
“Registration
Statement” shall mean any registration statement that covers the Registrable Securities pursuant to the provisions
of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments)
and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration
statement.
“Requesting
Holder” shall have the meaning given in subsection 2.1.1.
“Securities
Act” shall mean the Securities Act of 1933, as amended from time to time.
“Shelf”
shall have the meaning given in subsection 2.3.1.
“Sponsor”
shall have the meaning given in the Preamble.
“Sponsor
Director” means an individual elected to the Board that has been nominated by the Sponsor pursuant to this
Agreement.
“Subsequent
Shelf Registration” shall have the meaning given in subsection 2.3.2.
“Takedown
Requesting Holder” shall have the meaning given in subsection 2.3.3.
“Underwriter”
shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not
as part of such dealer’s market-making activities.
“Underwritten
Registration” or “Underwritten Offering” shall mean a Registration in which securities
of the Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public.
“Underwritten
Shelf Takedown” shall have the meaning given in subsection 2.3.3.
“Working
Capital Warrants” shall have the meaning given in the Recitals hereto.
Article 2
REGISTRATIONS
2.1 Demand
Registration.
2.1.1 Request
for Registration. Subject to the provisions of subsection 2.1.4 and Section 2.4 hereof, at any time and
from time to time on or after the date the Company consummates the Business Combination, the Holders of at least a majority in
interest of the then-outstanding number of Registrable Securities (the “Demanding Holders”) may
make a written demand for Registration of all or part of their Registrable Securities, which written demand shall describe the
amount and type of securities to be included in such Registration and the intended method(s) of distribution thereof (such
written demand a “Demand Registration”). The Company shall, within five (5) days of the
Company’s receipt of the Demand Registration, notify, in writing, all other Holders of Registrable Securities of such demand,
and each Holder of Registrable Securities who thereafter wishes to include all or a portion of such Holder’s Registrable
Securities in a Registration pursuant to a Demand Registration (each such Holder that includes all or a portion of such Holder’s
Registrable Securities in such Registration, a “Requesting Holder”) shall so notify the Company,
in writing, within three (3) business days after the receipt by the Holder of the notice from the Company. Upon receipt by
the Company of any such written notification from a Requesting Holder(s) to the Company, such Requesting Holder(s) shall
be entitled to have their Registrable Securities included in a Registration pursuant to a Demand Registration and the Company
shall effect, as soon thereafter as practicable, but not more than forty five (45) days immediately after the Company’s
receipt of the Demand Registration, the Registration of all Registrable Securities requested by the Demanding Holders and Requesting
Holders pursuant to such Demand Registration. Under no circumstances shall the Company be obligated to effect more than an aggregate
of three (3) Registrations pursuant to a Demand Registration under this subsection 2.1.1 with respect to any or all
Registrable Securities; provided, however, that a Registration shall not be counted for such purposes unless a Form S-1
or any similar long-form registration statement that may be available at such time (“Form S-1”)
has become effective and all of the Registrable Securities requested by the Requesting Holders to be registered on behalf
of the Requesting Holders in such Form S-1 Registration have been sold, in accordance with Section 3.1 of this
Agreement; provided, further, that an Underwritten Shelf Takedown shall not count as a Demand Registration.
2.1.2 Effective
Registration. Notwithstanding the provisions of subsection 2.1.1 above or any other part of this Agreement, a Registration
pursuant to a Demand Registration shall not count as a Registration unless and until (i) the Registration Statement filed
with the Commission with respect to a Registration pursuant to a Demand Registration has been declared effective by the Commission
and (ii) the Company has complied with all of its obligations under this Agreement with respect thereto; provided,
further, that if, after such Registration Statement has been declared effective, an offering of Registrable Securities
in a Registration pursuant to a Demand Registration is subsequently interfered with by any stop order or injunction of the Commission,
federal or state court or any other governmental agency the Registration Statement with respect to such Registration shall be
deemed not to have been declared effective, unless and until, (i) such stop order or injunction is removed, rescinded or
otherwise terminated and (ii) a majority-in-interest of the Demanding Holders initiating such Demand Registration thereafter
affirmatively elect to continue with such Registration and accordingly notify the Company in writing, but in no event later than
five (5) days, of such election; provided, further, that the Company shall not be obligated or required to
file another Registration Statement until the Registration Statement that has been previously filed with respect to a Registration
pursuant to a Demand Registration becomes effective or is subsequently terminated.
2.1.3 Underwritten
Offering. Subject to the provisions of subsection 2.1.4 and Section 2.4 hereof, if a majority-in-interest
of the Demanding Holders so advise the Company as part of their Demand Registration that the offering of the Registrable Securities
pursuant to such Demand Registration shall be in the form of an Underwritten Offering, then the right of such Demanding Holder
or Requesting Holder (if any) to include its Registrable Securities in such Registration shall be conditioned upon such Holder’s
participation in such Underwritten Offering and the inclusion of such Holder’s Registrable Securities in such Underwritten
Offering to the extent provided herein. All such Holders proposing to distribute their Registrable Securities through an Underwritten
Offering under this subsection 2.1.3 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected
for such Underwritten Offering by the majority-in-interest of the Demanding Holders initiating the Demand Registration.
2.1.4 Reduction
of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Registration pursuant to a Demand
Registration, in good faith, advises the Company, the Demanding Holders and the Requesting Holders (if any) in writing that the
dollar amount or number of Registrable Securities that the Demanding Holders and the Requesting Holders (if any) desire to sell,
taken together with all other Ordinary Shares or other equity securities that the Company desires to sell and the Ordinary Shares,
if any, as to which a Registration has been requested pursuant to separate written contractual piggy-back registration rights
held by any other shareholders who desire to sell, exceeds the maximum dollar amount or maximum number of equity securities that
can be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution
method, or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable,
the “Maximum Number of Securities”), then the Company shall include in such Underwritten Offering,
as follows: (i) first, the Registrable Securities of the Demanding Holders and the Requesting Holders (if any) (pro rata
based on the respective number of Registrable Securities that each Demanding Holder and Requesting Holder (if any) has requested
be included in such Underwritten Registration and the aggregate number of Registrable Securities that the Demanding Holders and
Requesting Holders have requested be included in such Underwritten Registration (such proportion is referred to herein as “Pro
Rata”)) that can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that
the Maximum Number of Securities has not been reached under the foregoing clause (i), the Ordinary Shares or other equity securities
that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (iii) third,
to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the Ordinary
Shares or other equity securities of other persons or entities that the Company is obligated to register in a Registration pursuant
to separate written contractual arrangements with such persons and that can be sold without exceeding the Maximum Number of Securities.
2.1.5 Demand
Registration Withdrawal. A majority-in-interest of the Demanding Holders initiating a Demand Registration or a majority-in-interest
of the Requesting Holders (if any), pursuant to a Registration under subsection 2.1.1 shall have the right to withdraw
from a Registration pursuant to such Demand Registration for any or no reason whatsoever upon written notification to the Company
and the Underwriter or Underwriters (if any) of their intention to withdraw from such Registration prior to the effectiveness
of the Registration Statement filed with the Commission with respect to the Registration of their Registrable Securities pursuant
to such Demand Registration. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for
the Registration Expenses incurred in connection with a Registration pursuant to a Demand Registration prior to its withdrawal
under this subsection 2.1.5.
2.2 Piggyback
Registration.
2.2.1 Piggyback
Rights. If, at any time on or after the date the Company consummates a Business Combination, the Company proposes to file
a Registration Statement under the Securities Act with respect to an offering of equity securities, or securities or other obligations
exercisable or exchangeable for, or convertible into equity securities, for its own account or for the account of shareholders
of the Company (or by the Company and by the shareholders of the Company including, without limitation, pursuant to Section 2.1
hereof), other than a Registration Statement (i) filed in connection with any employee stock option or other benefit
plan, (ii) for an exchange offer or offering of securities solely to the Company’s existing shareholders, (iii) for
an offering of debt that is convertible into equity securities of the Company or (iv) for a dividend reinvestment plan, then
the Company shall give written notice of such proposed filing to all of the Holders of Registrable Securities as soon as practicable
but not less than seven (7) days before the anticipated filing date of such Registration Statement, which notice shall (A) describe
the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of
the proposed managing Underwriter or Underwriters, if any, in such offering, and (B) offer to all of the Holders of Registrable
Securities the opportunity to register the sale of such number of Registrable Securities as such Holders may request in writing
within three (3) business days after receipt of such written notice (such Registration a “Piggyback Registration”).
The Company shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and shall
use its best efforts to cause the managing Underwriter or Underwriters of a proposed Underwritten Offering to permit the Registrable
Securities requested by the Holders pursuant to this subsection 2.2.1 to be included in a Piggyback Registration on the
same terms and conditions as any similar securities of the Company included in such Registration and to permit the sale or other
disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. All such Holders
proposing to distribute their Registrable Securities through an Underwritten Offering under this subsection 2.2.1 shall
enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by
the Company. The notice periods set forth in this subsection 2.2.1 shall not apply to an Underwritten Shelf Takedown conducted
in accordance with subsection 2.3.3.
2.2.2 Reduction
of Piggyback Registration. If the managing Underwriter or Underwriters in an Underwritten Registration that is to be a Piggyback
Registration (other than Underwritten Shelf Takedown), in good faith, advises the Company and the Holders of Registrable Securities
participating in the Piggyback Registration in writing that the dollar amount or number of the Ordinary Shares that the Company
desires to sell, taken together with (i) the Ordinary Shares, if any, as to which Registration has been demanded pursuant
to separate written contractual arrangements with persons or entities other than the Holders of Registrable Securities hereunder,
(ii) the Registrable Securities as to which registration has been requested pursuant Section 2.2 hereof, and
(iii) the Ordinary Shares, if any, as to which Registration has been requested pursuant to separate written contractual piggy-back
registration rights of other shareholders of the Company, exceeds the Maximum Number of Securities, then:
(a) If
the Registration is undertaken for the Company’s account, the Company shall include in any such Registration (A) first,
the Ordinary Shares or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum
Number of Securities; and (B) second, to the extent that the Maximum Number of Securities has not been reached under the
foregoing clause (A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant
to subsection 2.2.1 hereof, Pro Rata based on the respective number of Registrable Securities that each Holder has so requested
exercising its rights to register its Registrable Securities pursuant to subsection 2.2.1 hereof, which can be sold without
exceeding the Maximum Number of Securities; and (C) third, to the extent that the Maximum Number of Securities has not been
reached under the foregoing clauses (A) and (B), the Ordinary Shares, if any, as to which Registration has been requested
pursuant to written contractual piggy-back registration rights of other shareholders of the Company, which can be sold without
exceeding the Maximum Number of Securities;
(b) If
the Registration is pursuant to a request by persons or entities other than the Holders of Registrable Securities, then the Company
shall include in any such Registration (A) first, the Ordinary Shares or other equity securities, if any, of such requesting
persons or entities, other than the Holders of Registrable Securities, which can be sold without exceeding the Maximum Number
of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause
(A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to subsection
2.2.1, Pro Rata, which can be sold without exceeding the Maximum Number of Securities; (C) third, to the extent that
the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the Ordinary Shares or other
equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and
(D) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and
(C), the Ordinary Shares or other equity securities for the account of other persons or entities that the Company is obligated
to register pursuant to separate written contractual arrangements with such persons or entities, which can be sold without exceeding
the Maximum Number of Securities.
2.2.3 Piggyback
Registration Withdrawal. Any Holder of Registrable Securities shall have the right to withdraw from a Piggyback Registration
for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of his,
her or its intention to withdraw from such Piggyback Registration prior to the effectiveness of the Registration Statement filed
with the Commission with respect to such Piggyback Registration. The Company (whether on its own good faith determination or as
the result of a request for withdrawal by persons pursuant to separate written contractual obligations) may withdraw a Registration
Statement filed with the Commission in connection with a Piggyback Registration at any time prior to the effectiveness of such
Registration Statement. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration
Expenses incurred in connection with the Piggyback Registration prior to its withdrawal under this subsection 2.2.3.
2.2.4 Unlimited
Piggyback Registration Rights. For purposes of clarity, any Registration effected pursuant to Section 2.2 hereof
shall not be counted as a Registration pursuant to a Demand Registration effected under Section 2.1 hereof.
2.3 Shelf
Registrations.
2.3.1 The
Holders of Registrable Securities may at any time, and from time to time, request in writing that the Company, pursuant to Rule 415
under the Securities Act (or any successor rule promulgated thereafter by the Commission), register the resale of any or
all of their Registrable Securities on Form S-3 or similar short form registration statement that may be available at such
time (“Form S-3”), or if the Company is ineligible to use Form S-3, on Form S-1;
a registration statement filed pursuant to this subsection 2.3.1 (a “Shelf”) shall provide for
the resale of the Registrable Securities included therein pursuant to any method or combination of methods legally available to,
and requested by, any Holder. Within three (3) days of the Company’s receipt of a written request from a Holder or
Holders of Registrable Securities for a Registration on a Shelf, the Company shall promptly give written notice of the proposed
Registration to all other Holders of Registrable Securities, and each Holder of Registrable Securities who thereafter wishes to
include all or a portion of such Holder’s Registrable Securities in such Registration shall so notify the Company, in writing,
within three (3) business days after the receipt by the Holder of the notice from the Company. As soon as practicable thereafter,
but not more than ten (10) days after the Company’s initial receipt of such written request for a Registration on a
Shelf, the Company shall register all or such portion of such Holder’s Registrable Securities as are specified in such written
request, together with all or such portion of Registrable Securities of any other Holder or Holders joining in such request as
are specified in the written notification given by such Holder or Holders; provided, however, that the Company shall
not be obligated to effect any such Registration pursuant to this subsection 2.3.1 if the Holders of Registrable Securities,
together with the Holders of any other equity securities of the Company entitled to inclusion in such Registration, propose to
sell the Registrable Securities and such other equity securities (if any) at any aggregate price to the public of less than $10,000,000.
The Company shall maintain each Shelf in accordance with the terms hereof, and shall prepare and file with the SEC such amendments,
including post-effective amendments, and supplements as may be necessary to keep such Shelf continuously effective, available
for use and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities
included on such Shelf. In the event the Company files a Shelf on Form S-1, the Company shall use its commercially reasonable
efforts to convert the Form S-1 to a Form S-3 as soon as practicable after the Company is eligible to use Form S-3.
2.3.2 If
any Shelf ceases to be effective under the Securities Act for any reason at any time while Registrable Securities included thereon
are still outstanding, the Company shall use its commercially reasonable efforts to as promptly as is reasonably practicable cause
such Shelf to again become effective under the Securities Act (including obtaining the prompt withdrawal of any order suspending
the effectiveness of such Shelf), and shall use its commercially reasonable efforts to as promptly as is reasonably practicable
amend such Shelf in a manner reasonably expected to result in the withdrawal of any order suspending the effectiveness of such
Shelf or file an additional registration statement (a “Subsequent Shelf Registration”) registering the
resale of all Registrable Securities including on such Shelf, and pursuant to any method or combination of methods legally available
to, and requested by, any Holder. If a Subsequent Shelf Registration is filed, the Company shall use its commercially reasonable
efforts to (i) cause such Subsequent Shelf Registration to become effective under the Securities Act as promptly as is reasonably
practicable after the filing thereof and (ii) keep such Subsequent Shelf Registration continuously effective, available for
use and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities
included thereon. Any such Subsequent Shelf Registration shall be on Form S-3 to the extent that the Company is eligible
to use such form. Otherwise, such Subsequent Shelf Registration shall be on another appropriate form. In the event that any Holder
holds Registrable Securities that are not registered for resale on a delayed or continuous basis, the Company, upon request of
a Holder shall promptly use its commercially reasonable efforts to cause the resale of such Registrable Securities to be covered
by either, at the Company’s option, a Shelf (including by means of a post-effective amendment) or a Subsequent Shelf Registration
and cause the same to become effective as soon as practicable after such filing and such Shelf or Subsequent Shelf Registration
shall be subject to the terms hereof; provided, however, the Company shall only be required to cause such Registrable
Securities to be so covered once annually after inquiry of the Holders.
2.3.3 At
any time and from time to time after a Shelf has been declared effective by the Commission, the Sponsor may request to sell all
or any portion of its Registrable Securities in an underwritten offering that is registered pursuant to the Shelf (each, an “Underwritten
Shelf Takedown”); provided that the Company shall only be obligated to effect an Underwritten Shelf Takedown
if such offering shall include securities with a total offering price (including piggyback securities and before deduction of
underwriting discounts) reasonably expected to exceed, in the aggregate, $10,000,000. All requests for Underwritten Shelf Takedowns
shall be made by giving written notice to the Company at least 48 hours prior to the public announcement of such Underwritten
Shelf Takedown, which shall specify the approximate number of Registrable Securities proposed to be sold in the Underwritten Shelf
Takedown and the expected price range (net of underwriting discounts and commissions) of such Underwritten Shelf Takedown. The
Company shall include in any Underwritten Shelf Takedown the securities requested to be included by any holder (each a “Takedown
Requesting Holder”) at least 24 hours prior to the public announcement of such Underwritten Shelf Takedown pursuant
to written contractual piggyback registration rights of such holder (including to those set forth herein). The Sponsor shall have
the right to select the underwriter(s) for such offering (which shall consist of one or more reputable nationally recognized
investment banks), subject to the Company’s prior approval which shall not be unreasonably withheld, conditioned or delayed.
For purposes of clarity, any Registration effected pursuant to this subsection 2.3.3 shall not be counted as a Registration
pursuant to a Demand Registration effected under Section 2.1 hereof.
2.3.4 If
the managing Underwriter or Underwriters in an Underwritten Shelf Takedown, in good faith, advises the Company, the Sponsor and
the Takedown Requesting Holders (if any) in writing that the dollar amount or number of Registrable Securities that the Sponsor
and the Takedown Requesting Holders (if any) desire to sell, taken together with all other Ordinary Shares or other equity securities
that the Company desires to sell, exceeds the Maximum Number of Securities, then the Company shall include in such Underwritten
Shelf Takedown, as follows: (i) first, the Registrable Securities of the Sponsor that can be sold without exceeding the Maximum
Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing
clause (i), the Ordinary Shares or other equity securities that the Company desires to sell, which can be sold without exceeding
the Maximum Number of Securities; and (iii) third, to the extent that the Maximum Number of Securities has not been reached
under the foregoing clauses (i) and (ii), the Ordinary Shares or other equity securities of the Takedown Requesting Holders,
if any, that can be sold without exceeding the Maximum Number of Securities, determined Pro Rata based on the respective number
of Registrable Securities that each Takedown Requesting Holder has so requested to be included in such Underwritten Shelf Takedown.
2.3.5 The
Sponsor shall have the right to withdraw from an Underwritten Shelf Takedown for any or no reason whatsoever upon written notification
to the Company and the Underwriter or Underwriters (if any) of its intention to withdraw from such Underwritten Shelf Takedown
prior to the public announcement of such Underwritten Shelf Takedown. Notwithstanding anything to the contrary in this Agreement,
the Company shall be responsible for the Registration Expenses incurred in connection with an Underwritten Shelf Takedown prior
to a withdrawal under this subsection 2.3.5.
2.4 Restrictions
on Registration Rights. If (A) during the period starting with the date sixty (60) days prior to the Company’s
good faith estimate of the date of the filing of, and ending on a date one hundred and twenty (120) days after the effective date
of, a Company initiated Registration and provided that the Company has delivered written notice to the Holders prior to receipt
of a Demand Registration pursuant to subsection 2.1.1 and it continues to actively employ, in good faith, all reasonable
efforts to cause the applicable Registration Statement to become effective; (B) the Holders have requested an Underwritten
Registration and the Company and the Holders are unable to obtain the commitment of underwriters to firmly underwrite the offer;
or (C) in the good faith judgment of the Board such Registration would be seriously detrimental to the Company and the Board
concludes as a result that it is essential to defer the filing of such Registration Statement at such time, then in each case
the Company shall furnish to such Holders a certificate signed by the Chairman of the Board stating that in the good faith judgment
of the Board it would be seriously detrimental to the Company for such Registration Statement to be filed in the near future and
that it is therefore essential to defer the filing of such Registration Statement. In such event, the Company shall have the right
to defer such filing for a period of not more than thirty (30) days; provided, however, that the Company shall not
defer its obligation in this manner more than once in any 12-month period. Notwithstanding anything to the contrary contained
in this Agreement, no Registration shall be effected or permitted and no Registration Statement shall become effective, with respect
to any Registrable Securities held by any Holder, until after the expiration of the Founder Shares Lock-Up Period or the Private
Placement Lock-Up Period, as the case may be.
Article 3
COMPANY PROCEDURES
3.1 General
Procedures. If at any time on or after the date the Company consummates a Business Combination the Company is required
to effect the Registration of Registrable Securities, the Company shall use its best efforts to effect such Registration to permit
the sale of such Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto the
Company shall, as expeditiously as possible:
3.1.1 prepare
and file with the Commission as soon as practicable a Registration Statement with respect to such Registrable Securities and use
its reasonable best efforts to cause such Registration Statement to become effective and remain effective until all Registrable
Securities covered by such Registration Statement have been sold;
3.1.2 prepare
and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements
to the Prospectus, as may be requested by the Holders or any Underwriter of Registrable Securities or as may be required by the
rules, regulations or instructions applicable to the registration form used by the Company or by the Securities Act or rules and
regulations thereunder to keep the Registration Statement effective until all Registrable Securities covered by such Registration
Statement are sold in accordance with the intended plan of distribution set forth in such Registration Statement or supplement
to the Prospectus;
3.1.3 prior
to filing a Registration Statement or Prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters,
if any, and the Holders of Registrable Securities included in such Registration, and such Holders’ legal counsel, copies
of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each
case including all exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration
Statement (including each preliminary Prospectus), and such other documents as the Underwriters and the Holders of Registrable
Securities included in such Registration or the legal counsel for any such Holders may request in order to facilitate the disposition
of the Registrable Securities owned by such Holders;
3.1.4 prior
to any public offering of Registrable Securities, use its best efforts to (i) register or qualify the Registrable Securities
covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United
States as the Holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution)
may request and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement
to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations
of the Company and do any and all other acts and things that may be necessary or advisable to enable the Holders of Registrable
Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions;
provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify or take any action to which it would be subject to general service of process
or taxation in any such jurisdiction where it is not then otherwise so subject;
3.1.5 cause
all such Registrable Securities to be listed on each securities exchange or automated quotation system on which similar securities
issued by the Company are then listed;
3.1.6 provide
a transfer agent or warrant agent, as applicable, and registrar for all such Registrable Securities no later than the effective
date of such Registration Statement;
3.1.7 advise
each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance
of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening
of any proceeding for such purpose and promptly use its reasonable best efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such stop order should be issued;
3.1.8 at
least five (5) days prior to the filing of any Registration Statement or Prospectus or any amendment or supplement to such
Registration Statement or Prospectus (other than by way of a document incorporated by reference) furnish a copy thereof to each
seller of such Registrable Securities or its counsel;
3.1.9 notify
the Holders at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities
Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect,
includes a Misstatement, and then to correct such Misstatement as set forth in Section 3.4 hereof;
3.1.10 permit
a representative of the Holders, the Underwriters, if any, and any attorney or accountant retained by such Holders or Underwriter
to participate, at each such person’s own expense, in the preparation of the Registration Statement, and cause the Company’s
officers, directors and employees to supply all information reasonably requested by any such representative, Underwriter, attorney
or accountant in connection with the Registration; provided, however, that such representatives or Underwriters
enter into a confidentiality agreement, in form and substance reasonably satisfactory to the Company, prior to the release or
disclosure of any such information;
3.1.11 obtain
a “cold comfort” letter from the Company’s independent registered public accountants in the event of an Underwritten
Registration, in customary form and covering such matters of the type customarily covered by “cold comfort” letters
as the managing Underwriter may reasonably request, and reasonably satisfactory to a majority-in-interest of the participating
Holders;
3.1.12 on
the date the Registrable Securities are delivered for sale pursuant to such Registration, obtain an opinion, dated such date,
of counsel representing the Company for the purposes of such Registration, addressed to the Holders, the placement agent or sales
agent, if any, and the Underwriters, if any, covering such legal matters with respect to the Registration in respect of which
such opinion is being given as the Holders, placement agent, sales agent, or Underwriter may reasonably request and as are customarily
included in such opinions and negative assurance letters, and reasonably satisfactory to a majority in interest of the participating
Holders;
3.1.13 in
the event of any Underwritten Offering, enter into and perform its obligations under an underwriting agreement, in usual and customary
form, with the managing Underwriter of such offering;
3.1.14 make
available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve
(12) months beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration
Statement which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any
successor rule promulgated thereafter by the Commission);
3.1.15 if
the Registration involves the Registration of Registrable Securities involving gross proceeds in excess of $50,000,000, use its
reasonable efforts to make available senior executives of the Company to participate in customary “road show” presentations
that may be reasonably requested by the Underwriter in any Underwritten Offering; and
3.1.16 otherwise,
in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the Holders, in connection
with such Registration.
3.2 Registration
Expenses. The Registration Expenses of all Registrations shall be borne by the Company. It is acknowledged by the Holders
that the Holders shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’
commissions and discounts, brokerage fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration
Expenses,” all reasonable fees and expenses of any legal counsel representing the Holders.
3.3 Requirements
for Participation in Underwritten Offerings. No person may participate in any Underwritten Offering for equity securities
of the Company pursuant to a Registration initiated by the Company hereunder unless such person (i) agrees to sell such person’s
securities on the basis provided in any underwriting arrangements approved by the Company and (ii) completes and executes
all customary questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting agreements and other customary
documents as may be reasonably required under the terms of such underwriting arrangements.
3.4 Suspension
of Sales; Adverse Disclosure. Upon receipt of written notice from the Company that a Registration Statement or Prospectus
contains a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until it has received
copies of a supplemented or amended Prospectus correcting the Misstatement (it being understood that the Company hereby covenants
to prepare and file such supplement or amendment as soon as practicable after the time of such notice), or until it is advised
in writing by the Company that the use of the Prospectus may be resumed. If the filing, initial effectiveness or continued use
of a Registration Statement in respect of any Registration at any time would require the Company to make an Adverse Disclosure
or would require the inclusion in such Registration Statement of financial statements that are unavailable to the Company for
reasons beyond the Company’s control, the Company may, upon giving prompt written notice of such action to the Holders,
delay the filing or initial effectiveness of, or suspend use of, such Registration Statement for the shortest period of time,
but in no event more than thirty (30) days, determined in good faith by the Company to be necessary for such purpose. In the event
the Company exercises its rights under the preceding sentence, the Holders agree to suspend, immediately upon their receipt of
the notice referred to above, their use of the Prospectus relating to any Registration in connection with any sale or offer to
sell Registrable Securities. The Company shall immediately notify the Holders of the expiration of any period during which it
exercised its rights under this Section 3.4.
3.5 Reporting
Obligations. As long as any Holder shall own Registrable Securities, the Company, at all times while it shall be a
reporting company under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Sections 13(a) or
15(d) of the Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings. The Company
further covenants that it shall take such further action as any Holder may reasonably request, all to the extent required from
time to time to enable such Holder to sell Ordinary Shares held by such Holder without registration under the Securities Act within
the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule promulgated
thereafter by the Commission, to the extent that such rule or such successor rule is available to the Company), including
providing any legal opinions. Upon the request of any Holder, the Company shall deliver to such Holder a written certification
of a duly authorized officer as to whether it has complied with such requirements.
Article 4
INDEMNIFICATION AND CONTRIBUTION
4.1 Indemnification.
4.1.1 The
Company agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its officers and directors
and each person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities
and expenses (including attorneys’ fees) caused by any untrue or alleged untrue statement of material fact contained in
any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission
or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading,
except insofar as the same are caused by or contained in any information furnished in writing to the Company by such Holder expressly
for use therein. The Company shall indemnify the Underwriters, their officers and directors and each person who controls such
Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to the indemnification
of the Holder.
4.1.2 In
connection with any Registration Statement in which a Holder of Registrable Securities is participating, such Holder shall furnish
to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such
Registration Statement or Prospectus and, to the extent permitted by law, shall indemnify the Company, its directors and officers
and agents and each person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages,
liabilities and expenses (including without limitation reasonable attorneys’ fees) resulting from any untrue statement of
material fact contained in the Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement
thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading,
but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing
by such Holder expressly for use therein; provided, however, that the obligation to indemnify shall be several,
not joint and several, among such Holders of Registrable Securities, and the liability of each such Holder of Registrable Securities
shall be in proportion to and limited to the net proceeds received by such Holder from the sale of Registrable Securities pursuant
to such Registration Statement. The Holders of Registrable Securities shall indemnify the Underwriters, their officers, directors
and each person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the
foregoing with respect to indemnification of the Company.
4.1.3 Any
person entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s
right to indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party) and (ii) unless
in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties
may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability
for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees
and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless
in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other
of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party,
consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money
(and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement does not include
as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability
in respect to such claim or litigation.
4.1.4 The
indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by
or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and shall survive
the transfer of securities. The Company and each Holder of Registrable Securities participating in an offering also agrees to
make such provisions as are reasonably requested by any indemnified party for contribution to such party in the event the Company’s
or such Holder’s indemnification is unavailable for any reason.
4.1.5 If
the indemnification provided under Section 4.1 hereof from the indemnifying party is unavailable or insufficient to
hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then
the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified
party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether
any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, was made by, or relates to information supplied by, such indemnifying party or indemnified party, and the
indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to
correct or prevent such action; provided, however, that the liability of any Holder under this subsection 4.1.5
shall be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such liability.
The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include,
subject to the limitations set forth in subsections 4.1.1, 4.1.2 and 4.1.3 above, any legal or other fees,
charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree
that it would not be just and equitable if contribution pursuant to this subsection 4.1.5 were determined by pro rata allocation
or by any other method of allocation, which does not take account of the equitable considerations referred to in this subsection
4.1.5. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution pursuant to this subsection 4.1.6 from any person who was not guilty of such fraudulent
misrepresentation.
Article 5
SHAREHOLDER RIGHTS
5.1 Subject
to the terms and conditions of this Agreement, at any time and from time to time on or after the date that the Company consummates
a Business Combination and for so long as the Sponsor holds any Registrable Securities:
5.1.1 The
Sponsor shall have the right, but not the obligation, to designate three individuals to be appointed or nominated, as the case
may be, for election to the Board (including any successor, each, a “Nominee”) by giving written notice
to the Company on or before the time such information is reasonably requested by the Board or the Nominating Committee of the
Board, as applicable, for inclusion in a proxy statement for a meeting of shareholders provided to the Sponsor.
5.1.2 The
Company will, as promptly as practicable, use its best efforts to take all necessary and desirable actions (including, without
limitation, calling special meetings of the Board and the shareholders and recommending, supporting and soliciting proxies) so
that there are three Sponsor Directors serving on the Board at all times.
5.1.3 The
Company shall, to the fullest extent permitted by applicable law, use its best efforts to take all actions necessary to ensure
that: (i) each Nominee is included in the Board’s slate of nominees to the shareholders of the Company for each election
of Directors; and (ii) each Nominee is included in the proxy statement prepared by management of the Company in connection
with soliciting proxies for every meeting of the shareholders of the Company called with respect to the election of members of
the Board, and at every adjournment or postponement thereof, and on every action or approval by written consent of the shareholders
of the Company or the Board with respect to the election of members of the Board.
5.1.4 If
a vacancy occurs because of the death, disability, disqualification, resignation, or removal of a Sponsor Director or for any
other reason, the Sponsor shall be entitled to designate such person’s successor, and the Company will, as promptly as practicable
following such designation, use its best efforts to take all necessary and desirable actions, to the fullest extent permitted
by law, within its control such that such vacancy shall be filled with such successor Nominee.
5.1.5 If
a Nominee is not elected because of such Nominee’s death, disability, disqualification, withdrawal as a nominee or for any
other reason, the Sponsor shall be entitled to designate promptly another Nominee and the Company will take all necessary and
desirable actions within its control such that the director position for which such Nominee was nominated shall not be filled
pending such designation or the size of the Board shall be increased by one and such vacancy shall be filled with such successor
Nominee as promptly as practicable following such designation.
5.1.6 As
promptly as reasonably practicable following the request of any Sponsor Director, the Company shall enter into an indemnification
agreement with such Sponsor Director, in the form entered into with the other members of the Board. The Company shall pay the
reasonable, documented out-of-pocket expenses incurred by the Sponsor Director in connection with his or her services provided
to or on behalf of the Company, including attending meetings or events attended explicitly on behalf of the Company at the Company’s
request.
5.1.7 The
Company shall (i) purchase directors’ and officers’ liability insurance in an amount determined by the Board
to be reasonable and customary and (ii) for so long as a Sponsor Director serves as a Director of the Company, maintain such
coverage with respect to such Sponsor Director; provided that upon removal or resignation of such Sponsor Director for
any reason, the Company shall take all actions reasonably necessary to extend such directors’ and officers’ liability
insurance coverage for a period of not less than six years from any such event in respect of any act or omission occurring at
or prior to such event.
5.1.8 For
so long as a Sponsor Director serves as a Director of the Company, the Company shall not amend, alter or repeal any right to indemnification
or exculpation covering or benefiting any Director nominated pursuant to this Agreement as and to the extent consistent with applicable
law, whether such right is contained in the Company’s amended and restated memorandum and articles of association, each
as amended, or another document (except to the extent such amendment or alteration permits the Company to provide broader indemnification
or exculpation rights on a retroactive basis than permitted prior thereto).
5.1.9 Each
Nominee may, but does not need to qualify as “independent” pursuant to listing standards of the Nasdaq Capital Market
(or such other national securities exchange upon which the Company’s securities are then listed), except as required by
law.
5.1.10 Any
Nominee will be subject to the Company’s customary due diligence process, including its review of a completed questionnaire
and a background check. Based on the foregoing, the Company may object to any Nominee provided (a) it does so in good faith,
and (b) such objection is based upon any of the following: (i) such Nominee was convicted in a criminal proceeding or
is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses), (ii) such Nominee
was the subject of any order, judgment, or decree not subsequently reversed, suspended or vacated of any court of competent jurisdiction,
permanently or temporarily enjoining such proposed director from, or otherwise limiting, the following activities: (A) engaging
in any type of business practice, or (B) engaging in any activity in connection with the purchase or sale of any security
or in connection with any violation of federal or state securities laws, (iii) such Nominee was the subject of any order,
judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring, suspending or
otherwise limiting for more than 60 days the right of such person to engage in any activity described in clause (ii)(B), or to
be associated with persons engaged in such activity, (iv) such proposed director was found by a court of competent jurisdiction
in a civil action or by the Commission to have violated any federal or state securities law, and the judgment in such civil action
or finding by the Commission has not been subsequently reversed, suspended or vacated, or (v) such proposed director was
the subject of, or a party to any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently
reversed, suspended or vacated, relating to a violation of any federal or state securities laws or regulations. In the event the
Board reasonably finds the Nominee to be unsuitable based upon one or more of the foregoing clauses (i) through (v) and
reasonably objects to the identified director, Sponsor shall be entitled to propose a different nominee to the Board within 30
calendar days of the Company’s notice to Sponsor of its objection to the Nominee and such replacement Nominee shall be subject
to the review process outlined above.
5.1.11 The
Company shall take all necessary action to cause a Nominee chosen by the Sponsor, at the request of such Nominee to be elected
to the board of directors (or similar governing body) of each material operating subsidiary of the Company. The Nominee, as applicable,
shall have the right to attend (in person or remotely) any meetings of the board of directors (or similar governing body or committee
thereof) of each subsidiary of the Company.
Article 6
MISCELLANEOUS
6.1 Notices.
Any notice or communication under this Agreement must be in writing and given by (i) deposit in the United States mail, addressed
to the party to be notified, postage prepaid and registered or certified with return receipt requested, (ii) delivery in
person or by courier service providing evidence of delivery, or (iii) transmission by hand delivery, electronic mail, telecopy,
telegram or facsimile. Each notice or communication that is mailed, delivered, or transmitted in the manner described above shall
be deemed sufficiently given, served, sent, and received, in the case of mailed notices, on the third business day following the
date on which it is mailed and, in the case of notices delivered by courier service, hand delivery, electronic mail, telecopy,
telegram or facsimile, at such time as it is delivered to the addressee (with the delivery receipt or the affidavit of messenger)
or at such time as delivery is refused by the addressee upon presentation. Any notice or communication under this Agreement must
be addressed, if to the Company, to: Spring Valley Acquisition Corp., 2100 McKinney Ave, Suite 1675, Dallas, TX 75201, Attention:
Christopher Sorrells, with copy to; Kirkland & Ellis LLP, 601 Lexington Avenue, New York, New York 10022, Attention:
Christian O. Nagler and Matthew R. Pacey, and, if to any Holder, at such Holder’s address or facsimile number as
set forth in the Company’s books and records. Any party may change its address for notice at any time and from time to time
by written notice to the other parties hereto, and such change of address shall become effective thirty (30) days after delivery
of such notice as provided in this Section 6.1.
6.2 Assignment;
No Third Party Beneficiaries.
6.2.1 This
Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole
or in part.
6.2.2 Prior
to the expiration of the Founder Shares Lock-up Period or the Private Placement Lock-up Period, as the case may be, no Holder
may assign or delegate such Holder’s rights, duties or obligations under this Agreement, in whole or in part, except in
connection with a transfer of Registrable Securities by such Holder to a Permitted Transferee.
6.2.3 This
Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors
and the permitted assigns of the Holders, which shall include Permitted Transferees.
6.2.4 This
Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth
in this Agreement and Section 6.2 hereof.
6.2.5 No
assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate
the Company unless and until the Company shall have received (i) written notice of such assignment as provided in Section 6.1
hereof and (ii) the written agreement of the assignee, in a form reasonably satisfactory to the Company, to be bound
by the terms and provisions of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement).
Any transfer or assignment made other than as provided in this Section 6.2 shall be null and void.
6.3 Severability.
This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid
or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision
as similar in terms to such invalid or unenforceable provision as may be possible that is valid and enforceable.
6.4 Counterparts.
This Agreement may be executed in multiple counterparts (including facsimile or PDF counterparts), each of which shall be deemed
an original, and all of which together shall constitute the same instrument, but only one of which need be produced. Signatures
to this Agreement transmitted via facsimile or e-mail shall be valid and effective to bind the party so signing (including any
electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures
and Records Act or other applicable law, e.g., www.docusign.com).
6.5 Entire
Agreement. This Agreement (including all agreements entered into pursuant hereto and all certificates and instruments
delivered pursuant hereto and thereto) constitute the entire agreement of the parties with respect to the subject matter hereof
and supersede all prior and contemporaneous agreements, representations, understandings, negotiations and discussions between
the parties, whether oral or written.
6.6 Governing
Law; Venue. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES
EXPRESSLY AGREE THAT THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO AGREEMENTS
AMONG NEW YORK RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS
OF SUCH JURISDICTION.
6.7 WAIVER
OF TRIAL BY JURY. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY
ACTION, SUIT, COUNTERCLAIM OR OTHER PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF, CONNECTED WITH OR
RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY, OR THE ACTIONS OF THE SPONSOR IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT HEREOF.
6.8 Amendments
and Modifications. Upon the written consent of the Company and the Holders of at least a majority in interest of the
Registrable Securities at the time in question, compliance with any of the provisions, covenants and conditions set forth in this
Agreement may be waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however, that
notwithstanding the foregoing, any amendment hereto or waiver hereof that adversely affects one Holder, solely in its capacity
as a holder of the shares of the Company, in a manner that is materially different from the other Holders (in such capacity) shall
require the consent of the Holder so affected. No course of dealing between any Holder or the Company and any other party hereto
or any failure or delay on the part of a Holder or the Company in exercising any rights or remedies under this Agreement shall
operate as a waiver of any rights or remedies of any Holder or the Company. No single or partial exercise of any rights or remedies
under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or
thereunder by such party.
6.9 Titles
and Headings. Titles and headings of sections of this Agreement are for convenience only and shall not affect the construction
of any provision of this Agreement.
6.10 Waivers
and Extensions. Any party to this Agreement may waive any right, breach or default which such party has the right to
waive, provided that such waiver will not be effective against the waiving party unless it is in writing, is signed by such party,
and specifically refers to this Agreement. Waivers may be made in advance or after the right waived has arisen or the breach or
default waived has occurred. Any waiver may be conditional. No waiver of any breach of any agreement or provision herein contained
shall be deemed a waiver of any preceding or succeeding breach thereof nor of any other agreement or provision herein contained.
No waiver or extension of time for performance of any obligations or acts shall be deemed a waiver or extension of the time for
performance of any other obligations or acts.
6.11 Remedies
Cumulative. In the event that the Company fails to observe or perform any covenant or agreement to be observed or performed
under this Agreement, the Holders may proceed to protect and enforce its rights by suit in equity or action at law, whether for
specific performance of any term contained in this Agreement or for an injunction against the breach of any such term or in aid
of the exercise of any power granted in this Agreement or to enforce any other legal or equitable right, or to take any one or
more of such actions, without being required to post a bond. None of the rights, powers or remedies conferred under this Agreement
shall be mutually exclusive, and each such right, power or remedy shall be cumulative and in addition to any other right, power
or remedy, whether conferred by this Agreement or now or hereafter available at law, in equity, by statute or otherwise.
6.12 Other
Registration Rights. The Company represents and warrants that
no person, other than a Holder of Registrable Securities, has any right to require the Company to register any securities of the
Company for sale or to include such securities of the Company in any Registration filed by the Company for the sale of securities
for its own account or for the account of any other person. Further, the Company represents and warrants that this Agreement
supersedes any other registration rights agreement or agreement with similar terms and conditions and in the event of a conflict
between any such agreement or agreements and this Agreement, the terms of this Agreement shall prevail.
6.13 Term.
This Agreement shall terminate upon the earlier of (i) the tenth anniversary of the date of this Agreement and (ii) the
date as of which no Registrable Securities remain outstanding. The provisions of Section 3.5 and Article IV
shall survive any termination.
[SIGNATURE PAGES FOLLOW]
IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.
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COMPANY: |
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SPRING VALLEY ACQUISITION
CORP. |
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By: |
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Name: Christopher Sorrells |
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Title: Chief Executive Officer |
[Signature Page to
Registration and Shareholder Rights Agreement]
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HOLDERS: |
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SPRING VALLEY ACQUISITION SPONSOR,
LLC |
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By: |
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Name: |
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Title: |
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[Signature Page to Registration
and Shareholder Rights Agreement]
Exhibit 10.3
PRIVATE PLACEMENT WARRANTS PURCHASE
AGREEMENT
THIS PRIVATE PLACEMENT WARRANTS PURCHASE
AGREEMENT (as it may from time to time be amended and including all exhibits referenced herein, this “Agreement”),
dated as of [●], 2020, is entered into by and between Spring Valley Acquisition Corp., a Cayman Islands exempted company
(the “Company”), and Spring Valley Acquisition Sponsor, LLC, a Delaware limited liability company (the
“Purchaser”).
WHEREAS, the Company intends to consummate
an initial public offering of the Company’s units (the “Public Offering”), each unit consisting
of one Class A ordinary share of the Company, par value $0.0001 per share (each, a “Share”), and
one-half of one redeemable warrant, each whole warrant entitling the holder to purchase one Share at an exercise price of $11.50
per Share, as set forth in the Company’s Registration Statement on Form S-l, filed with the U.S. Securities and Exchange
Commission (the “SEC”), File Number 333-249067, under the Securities Act of 1933, as amended (the
“Securities Act”).
WHEREAS, the Purchaser has agreed to purchase
an aggregate of 8,000,000 warrants (and up to 900,000 additional warrants if the underwriters in the Public Offering
exercise their option to purchase additional units in full) (the “Private Placement Warrants”), each
Private Placement Warrant entitling the holder to purchase one Share at an exercise price of $11.50 per Share, at a price of $1.00
per warrant, subject to adjustment, and the Sponsor also has an option to purchase 2,000,000 Private Placement Warrants (and up to 300,000 additional Private Placement Warrants
if the underwriters in the Public Offering exercise their option to purchase additional units in full) in order to extend the initial
18-month period (the "Initial Deadline") to consummate an initial business combination (the "Business Combination").
NOW THEREFORE, in consideration of the mutual
promises contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement hereby, intending legally to be bound, agree as follows:
AGREEMENT
Section 1. Authorization,
Purchase and Sale; Terms of the Private Placement Warrants.
A. Authorization
of the Private Placement Warrants. The Company has duly authorized the issuance and sale of the Private Placement Warrants
to the Purchaser.
B. Purchase
and Sale of the Private Placement Warrants.
(i) On
the date of the consummation of the Public Offering or on such earlier time and date as may be mutually agreed by the
Purchaser and the Company (the “IPO Closing Date”), the Company shall issue and sell to the
Purchaser, and the Purchaser shall purchase from the Company, 8,000,000 Private Placement Warrants at a price of $1.00 per
warrant for an aggregate purchase price of $8,000,000 (the “Purchase Price”). The Purchaser shall
pay the Purchase Price by wire transfer of immediately available funds in the following amounts: (i) $2,000,000 to the
Company at a financial institution to be chosen by the Company, and (ii) $6,000,000 to the trust account maintained by
Continental Stock Transfer & Trust Company, acting as trustee (the “Trust Account”), in
each case in accordance with the Company’s wiring instructions, at least one (1) business day prior to the IPO
Closing Date. On the IPO Closing Date, subject to the receipt of funds pursuant to the immediately prior sentence, the
Company, at its option, shall deliver a certificate evidencing the Private Placement Warrants purchased on such date duly
registered in the Purchaser’s name to the Purchaser or effect such delivery in book-entry form.
(ii) On
the date of the closing of the option to purchase additional units, if any, in connection with the Public Offering or on such
earlier time and date as may be mutually agreed by the Purchaser and the Company (the “Over-Allotment Closing
Date”), the Company shall issue and sell to the Purchaser, and the Purchaser shall purchase from the Company,
up to 900,000 Private Placement Warrants (or, to the extent the option to purchase additional units is not exercised in full,
a lesser number of Private Placement Warrants in proportion to the portion of the option that is exercised) at a price of
$1.00 per warrant for an aggregate purchase price of up to $ (the “Over-Allotment Purchase
Price”). The Purchaser shall pay the Over-Allotment Purchase Price in accordance with the Company’s wire
instruction by wire transfer of immediately available funds to the Trust Account, at least one (1) business day prior to
the Over-Allotment Closing Date. On the Over-Allotment Closing Date, subject to the receipt of funds pursuant to the
immediately prior sentence, the Company shall, at its option, deliver a certificate evidencing the Private Placement Warrants
purchased on such date duly registered in the Purchaser’s name to the Purchaser or effect such delivery in book-entry
form.
(iii) Upon not less than five days' notice to the Company, at the option of the Purchaser, on the date that is 18 months from the IPO
Closing Date (the “Option Closing Date” and each Over-allotment Closing Date and Option Closing Date, together with the IPO
Closing Date, the “Closing Dates”) the Company shall issue and sell to the Purchaser, its affiliates or permitted designees
(the “Option Purchaser”) and the Option Purchaser shall purchase from the Company, an additional 2,000,000, or up to 2,300,000
if the over-allotment option in connection with the Public Offering is exercised in full (such number of warrants, pro rata to the extent
to which the over-allotment option in connection with the Public Offering is exercised), Private Placement Warrants at a price of $1.00
per warrant for an aggregate purchase price of $2,000,000, or up to $2,300,000 if the over-allotment option in connection with the Public
Offering is exercised in full (such purchase price, pro rata to the extent to which the over-allotment option in connection with the Public
Offering is exercised, and in any event $0.10 per Class A Ordinary Share sold in the Public Offering) (the “Option Purchase Price”).The
Option Purchaser shall pay the Option Purchase Price in accordance with the Company's wire instruction by wire transfer of immediately
available funds to the Trust Account at least one (1) business day prior to the Option Closing Date. On the Option Closing Date, subject
to the receipt of funds pursuant to the immediately prior sentence, the Company shall, at its option, deliver a certificate evidencing
the Private Placement Warrants purchased by the Option Purchaser on such date duly registered in the Option Purchaser's name or names
to the Option Purchaser, or effect such delivery in book-entry form.
(iv) In the event that the Company receives a request from the Sponsor, its affiliates or permitted designees five days prior to the Initial
Deadline to effect an extension thereof, the Company shall issue a press release announcing such extension at least three days prior to
the Initial Deadline. In addition, the Company shall issue a press release the day after the Initial Deadline announcing whether or not
the proceeds from the sale of the Private Placement Warrants as contemplated under Section 1(B)(iii) hereof had been timely deposited
into the Trust Account.
C. Terms
of the Private Placement Warrants.
(i) Each
Private Placement Warrant shall have the terms set forth in a Warrant Agreement to be entered into by the Company and a warrant
agent on the IPO Closing Date, in connection with the Public Offering (the “Warrant Agreement”).
(ii) On
or prior to the IPO Closing Date, the Company and the Purchaser shall enter into a registration and shareholder rights agreement
(the “Registration and Shareholder Rights Agreement”) pursuant to which the Company will grant certain
registration rights to the Purchaser relating to the Private Placement Warrants and the Shares underlying the Private Placement
Warrants.
Section 2. Representations
and Warranties of the Company. As a material inducement to the Purchaser to enter into
this Agreement and purchase the Private Placement Warrants, the Company hereby represents and warrants to the Purchaser (which
representations and warranties shall survive each of the Closing Dates) that:
A. Incorporation
and Corporate Power. The Company is an exempted company duly incorporated, validly existing and in good standing under the
laws of the Cayman Islands and is qualified to do business in every jurisdiction in which the failure to so qualify would reasonably
be expected to have a material adverse effect on the financial condition, operating results or assets of the Company. The Company
possesses all requisite corporate power and authority necessary to carry out the transactions contemplated by this Agreement and
the Warrant Agreement.
B. Authorization:
No Breach. The execution, delivery and performance of this Agreement and the Private Placement Warrants have been duly authorized
by the Company as of the Closing Date. This Agreement constitutes the valid and binding obligation of the Company, enforceable
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other laws
of general applicability relating to or affecting creditors’ rights and to general equitable principles (whether considered
in a proceeding in equity or law). Upon issuance in accordance with, and payment pursuant to, the terms of the Warrant Agreement
and this Agreement, the Private Placement Warrants will constitute valid and binding obligations of the Company, enforceable in
accordance with their terms as of the Closing Date.
(i) The
execution and delivery by the Company of this Agreement and the Private Placement Warrants, the issuance and sale of the Private
Placement Warrants, the issuance of the Shares upon exercise of the Private Placement Warrants and the fulfillment of and compliance
with the respective terms hereof and thereof by the Company, do not and will not as of the Closing Date (a) conflict with
or result in a breach of the terms, conditions or provisions of, (b) constitute a default under, (c) result in the creation
of any lien, security interest, charge or encumbrance upon the Company’s share capital or assets under, (d) result in
a violation of, or (e) require any authorization, consent, approval, exemption or other action by or notice or declaration
to, or filing with, any court or administrative or governmental body or agency pursuant to the memorandum and articles of association
of the Company (in effect on the date hereof or as may be amended prior to completion of the Public Offering) or any material law,
statute, rule or regulation to which the Company is subject, or any agreement, order, judgment or decree to which the Company
is subject, except for any filings required after the date hereof under federal or state securities laws.
C. Title
to Securities. Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, and upon
registration in the Company’s register of members, the Shares issuable upon exercise of the Private Placement Warrants will
be duly and validly issued, fully paid and nonassessable. On the date of issuance of the Private Placement Warrants, the Shares
issuable upon exercise of the Private Placement Warrants shall have been reserved for issuance. Upon issuance in accordance with,
and payment pursuant to, the terms hereof and the Warrant Agreement, and upon registration in the Company’s register of members,
the Purchaser will have good title to the Private Placement Warrants purchased by it and the Shares issuable upon exercise of such
Private Placement Warrants, free and clear of all liens, claims and encumbrances of any kind, other than (i) transfer restrictions
hereunder and under the other agreements contemplated hereby, (ii) transfer restrictions under federal and state securities
laws, and (iii) liens, claims or encumbrances imposed due to the actions of the Purchaser.
D. Governmental
Consents. No permit, consent, approval or authorization of, or declaration to or filing with, any governmental authority is
required in connection with the execution, delivery and performance by the Company of this Agreement or the consummation by the
Company of any other transactions contemplated hereby.
E. Regulation
D Qualification. Neither the Company nor, to its actual knowledge, any of its affiliates, members, officers, directors or beneficial
shareholders of 20% or more of its outstanding securities, has experienced a disqualifying event as enumerated pursuant to Rule 506(d) of
Regulation D under the Securities Act.
Section 3. Representations
and Warranties of the Purchaser. As a material inducement to the Company to enter into
this Agreement and issue and sell the Private Placement Warrants to the Purchaser, the Purchaser hereby represents and warrants
to the Company (which representations and warranties shall survive each Closing Date) that:
A. Organization
and Requisite Authority. The Purchaser possesses all requisite power and authority necessary to carry out the transactions
contemplated by this Agreement.
B. Authorization:
No Breach.
(i) This
Agreement constitutes a valid and binding obligation of the Purchaser, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other laws of general applicability relating to or affecting
creditors’ rights and to general equitable principles (whether considered in a proceeding in equity or law).
(ii) The
execution and delivery by the Purchaser of this Agreement and the fulfillment of and compliance with the terms hereof by the Purchaser
does not and shall not as of each Closing Date (a) conflict with or result in a breach by the Purchaser of the terms, conditions
or provisions of, (b) constitute a default under, (c) result in the creation of any lien, security interest, charge or
encumbrance upon the Purchaser’s equity or assets under, (d) result in a violation of, or (e) require authorization,
consent, approval, exemption or other action by or notice or declaration to, or filing with, any court or administrative or governmental
body or agency pursuant to the Purchaser’s organizational documents in effect on the date hereof or as may be amended prior
to completion of the contemplated Public Offering, or any material law, statute, rule or regulation to which the Purchaser
is subject, or any agreement, instrument, order, judgment or decree to which the Purchaser is subject, except for any filings required
after the date hereof under federal or state securities laws.
C. Investment
Representations.
For the purposes of this Section 3(C) the term “Purchaser” includes an Option Purchaser, to the extent applicable on any Option
Closing Date.
(i) The
Purchaser is acquiring the Private Placement Warrants and, upon exercise of the Private Placement Warrants, the Shares issuable
upon such exercise (collectively, the “Securities” for its own account, for investment purposes only
and not with a view towards, or for resale in connection with, any public sale or distribution thereof.
(ii) The
Purchaser is an “accredited investor” as such term is defined in Rule 501(a)(3) of
Regulation D under the Securities Act, and the Purchaser has not experienced a disqualifying event as enumerated pursuant to
Rule 506(d) of Regulation D under the Securities Act.
(iii) The
Purchaser understands that the Securities are being offered and will be sold to it in reliance on specific exemptions from the
registration requirements of the United States federal and state securities laws and that the Company is relying upon the truth
and accuracy of, and the Purchaser’s compliance with, the representations and warranties of the Purchaser set forth herein
in order to determine the availability of such exemptions and the eligibility of the Purchaser to acquire such Securities.
(iv) The
Purchaser did not decide to enter into this Agreement as a result of any general solicitation or general advertising within the
meaning of Rule 502(c) under the Securities Act.
(v) The
Purchaser has been furnished with all materials relating to the business, finances and operations of the Company and materials
relating to the offer and sale of the Securities which have been requested by the Purchaser. The Purchaser has been afforded the
opportunity to ask questions of the executive officers and directors of the Company. The Purchaser understands that its investment
in the Securities involves a high degree of risk and it has sought such accounting, legal and tax advice as it has considered necessary
to make an informed investment decision with respect to the acquisition of the Securities.
(vi) The
Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed on
or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities
by the Purchaser nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
(vii) The
Purchaser understands that: (a) the Securities have not been and are not being registered under the Securities Act or any
state securities laws, and may not be offered for sale, sold, assigned or transferred unless (1) subsequently registered thereunder
or (2) sold in reliance on an exemption therefrom; and (b) except as specifically set forth in the Registration and Shareholder
Rights Agreement, neither the Company nor any other person is under any obligation to register the Securities under the Securities
Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. In this regard, the Purchaser
understands that the SEC has taken the position that promoters or affiliates of a blank check company and their transferees, both
before and after an initial Business Combination, are deemed to be “underwriters” under the Securities
Act when reselling the securities of a blank check company. Based on that position, Rule 144 adopted pursuant to the Securities
Act would not be available for resale transactions of the Securities despite technical compliance with the requirements of such
Rule, and the Securities can be resold only through a registered offering or in reliance upon another exemption from the registration
requirements of the Securities Act.
(viii) The
Purchaser has such knowledge and experience in financial and business matters, knowledge of the high degree of risk associated
with investments in the securities of companies in the development stage such as the Company, is capable of evaluating the merits
and risks of an investment in the Securities and is able to bear the economic risk of an investment in the Securities in the amount
contemplated hereunder for an indefinite period of time. The Purchaser has adequate means of providing for its current financial
needs and contingencies and will have no current or anticipated future needs for liquidity which would be jeopardized by the investment
in the Securities. The Purchaser can afford a complete loss of its investments in the Securities.
(ix) The
Purchaser understands that the Private Placement Warrants shall bear the legend substantially in the form set forth in the Warrant
Agreement.
Section 4. Conditions
of the Purchaser’s Obligations. The obligations of the Purchaser to purchase and
pay for the Private Placement Warrants are subject to the fulfillment, on or before each Closing Date, of each of the following
conditions:
A. Representations
and Warranties. The representations and warranties of the Company contained in Section 2 shall be true and correct at
and as of the Closing Date as though then made.
B. Performance.
The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before such Closing Date.
C. No
Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions
contemplated by this Agreement or the Warrant Agreement.
D. Warrant
Agreement and Registration and Shareholder Rights Agreement. The Company shall have entered into the Warrant Agreement, in
the form of Exhibit A hereto, and the Registration and Shareholder Rights Agreement, in the form of Exhibit B hereto,
in each case on terms satisfactory to the Purchaser.
Section 5. Conditions
of the Company’s Obligations. The obligations of the Company to the Purchaser under
this Agreement are subject to the fulfillment, on or before each Closing Date, of each of the following conditions:
A. Representations
and Warranties. The representations and warranties of the Purchaser contained in Section 3 shall be true and correct at
and as of such Closing Date as though then made.
B. Performance.
The Purchaser shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by the Purchaser on or before such Closing Date.
C. Corporate
Consents. The Company shall have obtained the consent of its Board of Directors authorizing the execution, delivery and performance
of this Agreement and the Warrant Agreement and the issuance and sale of the Private Placement Warrants hereunder.
D. No
Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions
contemplated by this Agreement or the Warrant Agreement.
E. Warrant
Agreement. The Company shall have entered into the Warrant Agreement.
Section 6. Miscellaneous.
A. Successors
and Assigns. Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors of the parties hereto whether
so expressed or not. Notwithstanding the foregoing or anything to the contrary herein, the parties may not assign this Agreement,
other than assignments by the Purchaser to affiliates thereof (including, without limitation one or more of its members).
B. Severability.
Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.
C. Counterparts.
This Agreement may be executed simultaneously in two or more counterparts, none of which need contain the signatures of more than
one party, but all such counterparts taken together shall constitute one and the same agreement. Signatures to this Agreement
transmitted via facsimile or e-mail shall be valid and effective to bind the party so signing (including any electronic signature
covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or
other applicable law, e.g., www.docusign.com).
D. Descriptive
Headings: Interpretation. The descriptive headings of this Agreement are inserted for convenience only and do not constitute
a substantive part of this Agreement. The use of the word “including” in this Agreement shall be by way of example
rather than by limitation.
E. Governing
Law. This Agreement shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall
be construed in accordance with the internal laws of the State of New York, without giving effect to conflicts of law principles
that would result in the application of the laws of another jurisdiction.
F. Amendments.
This Agreement may not be amended, modified or waived as to any particular provision, except by a written instrument executed by
the parties hereto.
[Signature page follows]
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement.
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COMPANY: |
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SPRING VALLEY ACQUISITION CORP. |
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By: |
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Name: |
Jeffrey Schramm |
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Title: |
Chief Financial Officer |
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PURCHASER: |
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SPRING VALLEY ACQUISITION SPONSOR, LLC. |
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By: |
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Name: |
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Title: |
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[Signature page to Private Placement
Warrants Purchase Agreement]
EXHIBIT A
Warrant Agreement
EXHIBIT B
Registration and Shareholder Rights Agreement
Exhibit 10.8
[●], 2020
Spring Valley Acquisition Corp.
2100 McKinney Ave, Suite 1675
Dallas, TX 75201
| Re: |
Initial Public
Offering |
Ladies and Gentlemen:
This
letter (this “Letter Agreement”) is being delivered to you in accordance with the Underwriting
Agreement (the “Underwriting Agreement”) entered into by and among Spring Valley Acquisition Corp.,
a Cayman Islands exempted company (the “Company”), Cowen and Company, LLC and Wells Fargo Securities,
LLC, as representatives (the “Representatives”) of the several underwriters (the “Underwriters”),
relating to an underwritten initial public offering (the “Public Offering”) of 23,000,000 of the Company’s
units (including 3,000,000 units that may be purchased pursuant to the Underwriters’ option to purchase additional units,
the “Units”), each comprising of one of the Company’s Class A ordinary shares, par value
$0.0001 per share (the “Ordinary Shares”), and one-half of one redeemable warrant (each whole warrant,
a “Warrant”). Each Warrant entitles the holder thereof to purchase one Ordinary Share at a price of
$11.50 per share, subject to adjustment. The Units will be sold in the Public Offering pursuant to a registration statement on
Form S-l and a prospectus (the “Prospectus”) filed by the Company with the U.S. Securities and
Exchange Commission (the “Commission”). Certain capitalized terms used herein are defined in paragraph 1
hereof.
In
order to induce the Company and the Underwriters to enter into the Underwriting Agreement and to proceed with the Public Offering
and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Spring Valley Acquisition
Sponsor, LLC (the “Sponsor”) and each of the undersigned (each, an “Insider”
and, collectively, the “Insiders”) hereby agree with the Company as follows:
1. Definitions.
As used herein, (i) “Business Combination” shall mean a merger, share exchange, asset acquisition,
share purchase, reorganization or similar business combination with one or more businesses or entities; (ii) “Founder
Shares” shall mean the 5,750,000 Class B ordinary shares of the Company, par value $0.0001 per share, outstanding
prior to the consummation of the Public Offering; (iii) “Private Placement Warrants” shall mean
the warrants to purchase Ordinary Shares of the Company that will be acquired by the Sponsor for an aggregate purchase price of
$8,000,000 (or up to $8,900,000 if the Underwriters’ exercise their option to purchase additional units), or $1.00 per Warrant,
in a private placement that shall close simultaneously with the consummation of the Public Offering (including Ordinary Shares
issuable upon conversion thereof); (iv) “Public Shareholders” shall mean the holders of Ordinary
Shares included in the Units issued in the Public Offering; (v) “Public Shares” shall mean the
Ordinary Shares included in the Units issued in the Public Offering; (vi) “Trust Account” shall
mean the trust account into which a portion of the net proceeds of the Public Offering and the sale of the Private Placement Warrants
shall be deposited; (vii) “Transfer” shall mean the (a) sale of, offer to sell, contract or
agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly
or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call
equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder with respect to, any security, (b) entry into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such
transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public announcement of any intention
to effect any transaction specified in clause (a) or (b); and (viii) “Charter” shall mean
the Company’s Amended and Restated Memorandum and Articles of Association, as the same may be amended from time to time.
2. Representations
and Warranties.
(a) The
Sponsor and each Insider, with respect to itself, herself or himself, represent and warrant to the Company that it, she or he has
the full right and power, without violating any agreement to which it, she or he is bound (including, without limitation, any non-competition
or non-solicitation agreement with any employer or former employer), to enter into this Letter Agreement, as applicable, and to
serve as an officer of the Company and/or a director on the Company’s Board of Directors (the “Board”),
as applicable, and each Insider hereby consents to being named in the Prospectus, road show and any other materials as an officer
and/or director of the Company, as applicable.
(b) Each
Insider represents and warrants, with respect to herself or himself, that such Insider’s biographical information furnished
to the Company (including any such information included in the Prospectus) is true and accurate in all material respects and does
not omit any material information with respect to such Insider’s background. The Insider’s questionnaire furnished
to the Company is true and accurate in all material respects. Each Insider represents and warrants that such Insider is not subject
to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain
from any act or practice relating to the offering of securities in any jurisdiction; such Insider has never been convicted of,
or pleaded guilty to, any crime (i) involving fraud, (ii) relating to any financial transaction or handling of funds
of another person, or (iii) pertaining to any dealings in any securities and such Insider is not currently a defendant in
any such criminal proceeding; and such Insider has never been suspended or expelled from membership in any securities or commodities
exchange or association or had a securities or commodities license or registration denied, suspended or revoked.
3. Business
Combination Vote . It is acknowledged and agreed that the Company shall not enter into a definitive agreement
regarding a proposed Business Combination without the prior consent of the Sponsor. The Sponsor and each Insider, with respect
to itself, herself or himself, agrees that if the Company seeks shareholder approval of a proposed initial Business Combination,
then in connection with such proposed initial Business Combination, it, she or he, as applicable, shall vote all Founder Shares
and any Public Shares held by it, her or him, as applicable, in favor of such proposed initial Business Combination (including
any proposals recommended by the Board in connection with such Business Combination) and not redeem any Public Shares held by
it, her or him, as applicable, in connection with such shareholder approval.
4. Failure
to Consummate a Business Combination: Trust Account Waiver.
(a) The
Sponsor and each Insider hereby agree, with respect to itself, herself or himself, that in the event that the Company fails to
consummate its initial Business Combination within the time period set forth in the Charter, the Sponsor and each Insider shall
take all reasonable steps to cause the Company to (i) cease all operations except for the purpose of winding up; (ii) as
promptly as reasonably possible but not more than 10 business days thereafter, redeem 100% of the Public Shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds
held in the Trust Account and not previously released to the Company to pay income taxes (less up to $100,000 of interest to pay
dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public
Shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as
promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders
and the Board, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to the Company’s obligations
under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law.
The Sponsor and each Insider agree not to propose any amendment to the Charter (i) that would modify the substance or timing
of the Company’s obligation to provide holders of the Public Shares the right to have their shares redeemed in connection
with an initial Business Combination or to redeem 100% of the Public Shares if the Company does not complete an initial Business
Combination within the required time period set forth in the Charter or (ii) with respect to any other provision relating
to the rights of holders of Public Shares unless the Company provides its Public Shareholders with the opportunity to redeem their
Public Shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on
deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the
Company to pay taxes, if any, divided by the number of then-outstanding Public Shares.
(b) The
Sponsor and each Insider, with respect to itself, herself or himself, acknowledges that it, she or he has no right, title, interest
or claim of any kind in or to any monies held in the Trust Account or any other asset of the Company as a result of any liquidation
of the Company with respect to the Founder Shares held by it, her or him, if any. The Sponsor and each of the Insiders hereby further
waive, with respect to any Founder Shares and Public Shares held by it, her or him, as applicable,
any redemption rights it, she or he may have in connection with the consummation of a Business Combination, including, without
limitation, any such rights available in the context of a shareholder vote to approve such Business Combination or a shareholder
vote to approve an amendment to the Charter (i) that would modify the substance or timing of the Company’s obligation
to provide holders of the Public Shares the right to have their shares redeemed in connection with an initial Business Combination
or to redeem 100% of the Public Shares if the Company has not consummated an initial Business Combination within the time period
set forth in the Charter or (ii) with respect to any other provision relating to the rights of holders of Public Shares (although
the Sponsor and the Insiders shall be entitled to liquidation rights with respect to any Public Shares they hold if the Company
fails to consummate a Business Combination within the required time period set forth in the Charter).
5. Lock-up:
Transfer Restrictions.
(a) The
Sponsor and the Insiders agree that they shall not Transfer any Founder Shares (the “Founder Shares Lock-up”)
until the earliest of (A) one year after the completion of an initial Business Combination and (B) following the completion
of an initial Business Combination, the date on which the Company completes a liquidation, merger, share exchange or other similar
transaction that results in all of the Company’s shareholders having the right to exchange their Ordinary Shares for cash,
securities or other property (the “Founder Shares Lock-up Period”). Notwithstanding the foregoing, if,
subsequent to a Business Combination, the closing price of the Ordinary Shares equals or exceeds $12.00 per share (as adjusted
for share sub-divisions, share capitalizations, share consolidations, reorganizations, recapitalizations and other similar transactions)
for any 20 trading days within a 30-trading day period commencing at least 150 days after the Company’s initial Business
Combination, the Founder Shares shall be released from the Founder Shares Lock-up.
(b) The
Sponsor and Insiders agree that they shall not effectuate any Transfer of Private Placement Warrants or Ordinary Shares underlying
such warrants until 30 days after the completion of an initial Business Combination.
(c) Notwithstanding
the provisions set forth in paragraphs 5(a) and (b), Transfers of the Founder Shares, Private Placement Warrants
and Ordinary Shares underlying the Private Placement Warrants are permitted (a) to the Company’s officers or directors,
any affiliate or family member of any of the Company’s officers or directors, any members or partners of the Sponsor or their
affiliates, any affiliates of the Sponsor, or any employees of such affiliates; (b) in the case of an individual, by gift
to a member of one of the individual’s immediate family or to a trust, the beneficiary of which is a member of the individual’s
immediate family, an affiliate of such person or to a charitable organization; (c) in the case of an individual, by virtue
of laws of descent and distribution upon death of the individual; (d) in the case of an individual, pursuant to a qualified
domestic relations order; (e) by private sales or transfers made in connection with any forward purchase agreement or similar
arrangement or in connection with the consummation of a Business Combination at prices no greater than the price at which the Founder
Shares, Private Placement Warrants or Ordinary Shares, as applicable, were originally purchased; (f) by virtue of the Sponsor’s
organizational documents upon liquidation or dissolution of the Sponsor; (g) to the Company for no value for cancellation
in connection with the consummation of an initial Business Combination, (h) in the event of the Company’s liquidation
prior to the completion of a Business Combination; or (i) in the event of completion of a liquidation, merger, share exchange
or other similar transaction which results in all of the Company’s Public Shareholders having the right to exchange their
Ordinary Shares for cash, securities or other property subsequent to the completion of an initial Business Combination; provided,
however, that in the case of clauses (a) through (f) these permitted transferees must enter into a written agreement
agreeing to be bound by these transfer restrictions.
(d) During
the period commencing on the effective date of the Underwriting Agreement and ending 180 days after such date, the Sponsor and
each Insider shall not, without the prior written consent of Cowen and Company, LLC, Transfer any Units, Ordinary Shares, Warrants
or any other securities convertible into, or exercisable or exchangeable for, Ordinary Shares held by it, her or him, as applicable,
subject to certain exceptions enumerated in Section 6(h) of the Underwriting Agreement.
6. Remedies .
The Sponsor and each of the Insiders hereby agree and acknowledge that (i) each of the Underwriters and the Company would
be irreparably injured in the event of a breach by the Sponsor or such Insider of its, her or his obligations, as applicable under
paragraphs 3, 4, 5, 7, 10 and 11. (ii) monetary damages may not be an adequate
remedy for such breach and (iii) the non-breaching party shall be entitled to injunctive relief, in addition to any other
remedy that such party may have in law or in equity, in the event of such breach.
7. Payments
by the Company . Except as disclosed in the Prospectus, neither the Sponsor nor any affiliate of the Sponsor
nor any director or officer of the Company nor any affiliate of the officers shall receive from the Company any finder’s
fee, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation prior to, or in connection
with any services rendered in order to effectuate the consummation of the Company’s initial Business Combination (regardless
of the type of transaction that it is).
8. Director
and Officer Liability Insurance . The Company will maintain an insurance policy or policies providing directors’
and officers’ liability insurance, and the Insiders shall be covered by such policy or policies, in accordance with its
or their terms, to the maximum extent of the coverage available for any of the Company’s directors or officers.
9. Termination .
This Letter Agreement shall terminate on the earlier of (i) the expiration of the Founder Shares Lock-up Period and (ii) the
liquidation of the Company.
10. Indemnification .
In the event of the liquidation of the Trust Account upon the failure of the Company to consummate its initial Business Combination
within the time period set forth in the Charter, the Sponsor (the “Indemnitor”) agrees to indemnify
and hold harmless the Company against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited
to, any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, whether
pending or threatened) to which the Company may become subject as a result of any claim by (i) any third party for services
rendered or products sold to the Company (except for the Company’s independent auditors) or (ii) any prospective target
business with which the Company has discussed entering into a transaction agreement (a “Target”); provided,
however, that such indemnification of the Company by the Indemnitor (x) shall apply only to the extent necessary to
ensure that such claims by a third party for services rendered or products sold to the Company or a Target do not reduce the amount
of funds in the Trust Account to below the lesser of (i) $10.10 per Public Share and (ii) the actual amount per Public
Share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.10 per Public Share due
to reductions in the value of the trust assets, in each case net of interest that may be withdrawn to pay the Company’s
tax obligations, (y) shall not apply to any claims by a third party or Target who executed a waiver of any and all rights
to the monies held in the Trust Account (whether or not such waiver is enforceable) and (z) shall not apply to any claims
under the Company’s indemnity of the Underwriters against certain liabilities, including liabilities under the Securities
Act of 1933, as amended. The Indemnitor shall have the right to defend against any such claim with counsel of its choice reasonably
satisfactory to the Company if, within 15 days following written receipt of notice of the claim to the Indemnitor, the Indemnitor
notifies the Company in writing that it shall undertake such defense.
11. Forfeiture
of Founder Shares . To the extent that
the Underwriters do not exercise their option to purchase additional Units within 45 days from the date of the Prospectus in full
(as further described in the Prospectus), the Sponsor agrees to automatically surrender to the Company for no consideration, for
cancellation at no cost, an aggregate number of Founder Shares so that the number of Founder Shares will equal 20% of the sum
of the total number of Ordinary Shares and Founder Shares outstanding at such time. The Sponsor and Insiders further agree that
to the extent that the size of the Public Offering is increased or decreased, the Company will effect a share capitalization or
a share repurchase, as applicable, with respect to the Founder Shares immediately prior to the consummation of the Public Offering
in such amount as to maintain the number of Founder Shares at 20% of the sum of the total number of Ordinary Shares and Founder
Shares outstanding at such time.
12. Entire
Agreement . This Letter Agreement constitutes the entire agreement and understanding of the parties hereto
in respect of the subject matter hereof and supersedes all prior understandings, agreements, or representations by or among the
parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof or the transactions contemplated
hereby. This Letter Agreement may not be changed, amended, modified or waived (other than to correct a typographical error) as
to any particular provision, except by a written instrument executed by all parties hereto.
13. Assignment .
No party hereto may assign either this Letter Agreement or any of its rights, interests, or obligations hereunder without the
prior written consent of the other parties. Any purported assignment in violation of this paragraph shall be void and ineffectual
and shall not operate to transfer or assign any interest or title to the purported assignee. This Letter Agreement shall be binding
on the Sponsor, each of the Insiders and each of their respective successors, heirs, personal representatives and assigns and
permitted transferees.
14. Counterparts .
This Letter Agreement may be executed in any number of original or facsimile counterparts, and each of such counterparts shall
for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
Signatures to this Agreement transmitted via facsimile or e-mail shall be valid and effective to bind the party so signing
(including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic
Signatures and Records Act or other applicable law, e.g., www.docusign.com).
15. Effect
of Headings . The paragraph headings herein are for convenience only and are not part of this Letter Agreement
and shall not affect the interpretation thereof.
16. Severability .
This Letter Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall
not affect the validity or enforceability of this Letter Agreement or of any other term or provision hereof. Furthermore, in lieu
of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this
Letter Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and
enforceable.
17. Governing
Law . This Letter Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflicts of law principles
that would result in the application of the substantive laws of another jurisdiction. The parties hereto (i) all agree
that any action, proceeding, claim or dispute arising out of, or relating in any way to, this Letter Agreement shall be brought
and enforced in the courts of New York City, in the State of New York, and irrevocably submit to such jurisdiction and venue,
which jurisdiction and venue shall be exclusive, and (ii) waive any objection to such exclusive jurisdiction and venue or
that such courts represent an inconvenient forum.
18. Notices .
Any notice, consent or request to be given in connection with any of the terms or provisions of this Letter Agreement shall be
in writing and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested),
by hand delivery or facsimile or other electronic transmission.
19. Each
party hereto shall not be liable for any breaches or misrepresentations contained in this Letter Agreement by any other party to
this Letter Agreement (including, for the avoidance of doubt, any Insider with respect to any other Insider), and no party shall
be liable or responsible for the obligations of another party, including, without limitation, indemnification obligations and notice
obligations.
[Signature Page Follows]
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Sincerely, |
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SPRING VALLEY ACQUISITION SPONSOR, LLC |
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By: |
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Name: |
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Title: |
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[Signature
Page to Insider Letter Agreement]
[Signature
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[Signature
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[Signature
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[Signature
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[Signature
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[Signature
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[Signature
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| Acknowledged and Agreed: |
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| SPRING VALLEY ACQUISITION CORP. |
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| By: |
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Name: |
Christopher Sorrells |
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Title: |
Chief Executive Officer |
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[Signature
Page to Insider Letter Agreement]
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
We hereby consent to the use in this
Registration Statement on Form S-1, Amendment No. 4, of our report dated October 23, 2020, relating to the balance sheet
of Spring Valley Acquisition Corp. as of August 21, 2020, and the related statements of operations, changes in shareholder’s
equity and cash flows for the period from August 20, 2020 (inception) through August 21, 2020, and to the reference
to our Firm under the caption “Experts” in the Prospectus.
| /s/ WithumSmith+Brown, PC |
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| New York, New York |
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| November 13, 2020 |
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