As filed with the United States Securities and Exchange
Commission under the Securities Act of 1933, as amended, on January 29, 2021
Registration No. 333-252274
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2 to
FORM S -1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Fifth Wall Acquisition Corp. I
(Exact name of registrant as specified in its charter)
| |
Delaware
(State or other jurisdiction of
incorporation or organization)
|
|
|
6770
(Primary Standard Industrial
Classification Code Number)
|
|
|
85-4218526
(I.R.S. Employer
Identification No.)
|
|
6060 Center Drive
10th Floor
Los Angeles, California 90045
(310)-853-8878
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Brendan Wallace
6060 Center Drive
10th Floor
Los Angeles, California 90045
(310)-853-8878
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
| |
Jocelyn M. Arel
Daniel J. Espinoza
Audrey S. Leigh
Goodwin Procter LLP
100 Northern Avenue
Boston, Massachusetts 02210
Tel: (617) 570-1000
|
|
|
Joelle Khoury
6060 Center Drive
10th Floor
Los Angeles, California 90045
Tel: (310)-853-8878
|
|
|
Gregg A. Noel
Michael Mies
Skadden, Arps, Slate,
Meagher & Flom LLP
525 University Ave
Palo Alto, CA 94301
Tel: (650)-470-4500
|
|
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.
Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
| |
|
|
TITLE OF EACH CLASS OF SECURITIES
TO BE REGISTERED
|
|
|
|
AMOUNT
BEING
REGISTERED
|
|
|
|
PROPOSED
MAXIMUM
OFFERING
PRICE PER
SECURITY(1)
|
|
|
|
PROPOSED
MAXIMUM
AGGREGATE
OFFERING
PRICE(1)
|
|
|
|
AMOUNT OF
REGISTRATION
FEE
|
|
|
Class A common stock, $0.0001 par value(2)
|
|
|
|
28,750,000(3)
|
|
|
|
$10.00
|
|
|
|
$287,500,000
|
|
|
|
$31,367(4)
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
$287,500,000
|
|
|
|
$31,367(4)
|
|
(1)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act.
(2)
Pursuant to Rule 416(a), there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from share splits, share capitalizations or similar transactions.
(3)
Includes 3,750,000 shares of Class A common stock, which may be issued upon exercise of a 45-day option granted to the underwriters to cover over-allotments, if any.
(4)
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.
SUBJECT TO COMPLETION, DATED JANUARY 29, 2021
PRELIMINARY PROSPECTUS
$250,000,000
Fifth Wall Acquisition Corp. I
25,000,000 shares of Class A Common Stock
Fifth Wall Acquisition Corp. I is a newly organized blank check company incorporated in Delaware and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entities, which we refer to as our initial business combination. We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target.
This is the initial public offering of our Class A common stock, par value $0.0001, which we refer to as our public shares, at an initial public offiering price of $10.00 per share. The underwriters have a 45-day option from the date of this prospectus to purchase up to 3,750,000 additional public shares to cover over-allotments, if any. Unlike many other special purpose acquisition companies, we are not offering any warrants to prospective investors in this offering.
We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock 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 described below as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding shares of Class A common stock that were sold in this offering, which we refer to collectively as our public shares, subject to the limitations and on the conditions described herein. If we are unable to consummate an initial business combination within 24 months from the closing of this offering, we will redeem 100% of the public shares at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, subject to applicable law and certain conditions as further described herein.
Our sponsor, Fifth Wall Acquisition Sponsor, LLC, has agreed to purchase 857,500 shares of Class A common stock (or 932,500 shares of Class A common stock if the underwriters’ over-allotment option is exercised in full), at a price of $10.00 per share in a private placement to occur concurrently with the closing of this offering for an aggregate purchase price of $8,575,000 (or $9,325,000 if the underwriters’ over-allotment option is exercised in full). The private placement shares are identical to the Class A common stock sold in this offering, subject to certain limited exceptions as described in this prospectus.
Currently, there is no public market for our securities. We have applied to have our shares listed on The Nasdaq Capital Market, or Nasdaq, under the symbol “FWAA” on or promptly after the date of this prospectus. We cannot guarantee that our securities will be approved for listing on Nasdaq.
We are an “emerging growth company” under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 31 for a discussion of information that should be considered in connection with an investment in our securities. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings.
Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
| |
|
|
PER SHARE
|
|
|
TOTAL
|
|
|
Public offering price
|
|
|
|
$ |
10.00 |
|
|
|
|
$ |
250,000,000 |
|
|
|
Underwriting discounts and commissions(1)
|
|
|
|
$ |
0.55 |
|
|
|
|
$ |
13,750,000 |
|
|
|
Proceeds, before expenses, to us
|
|
|
|
$ |
9.45 |
|
|
|
|
$ |
236,250,000 |
|
|
(1)
Includes $0.35 per share, or $8,750,000 in the aggregate (or $10,062,500 in the aggregate if the underwriters’ over-allotment option is exercised in full), payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States as described herein and released to the underwriters only upon the consummation of an initial business combination. See also “Underwriting” beginning on page 128 for a description of compensation payable to the underwriters.
Of the proceeds we receive from this offering and the sale of the private placement shares described in this prospectus, $250,000,000, or $287,500,000 if the underwriters’ over-allotment option is exercised in full ($10.00 per share in either case), will be deposited into a trust account with Continental Stock Transfer & Trust Company acting as trustee.
The underwriters are offering the public shares for sale on a firm commitment basis. The underwriters expect to deliver the shares to the purchasers on or about , 2021.
Goldman Sachs & Co. LLC Deutsche Bank Securities
, 2021
TABLE OF CONTENTS
| |
|
|
PAGE
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
30
|
|
|
|
|
|
|
|
|
31
|
|
|
|
|
|
|
|
|
59
|
|
|
|
|
|
|
|
|
60
|
|
|
|
|
|
|
|
|
63
|
|
|
|
|
|
|
|
|
64
|
|
|
|
|
|
|
|
|
66
|
|
|
|
|
|
|
|
|
67
|
|
|
|
|
|
|
|
|
72
|
|
|
|
|
|
|
|
|
99
|
|
|
|
|
|
|
|
|
108
|
|
|
|
|
|
|
|
|
111
|
|
|
|
|
|
|
|
|
113
|
|
|
|
|
|
|
|
|
122
|
|
|
|
|
|
|
|
|
128
|
|
|
|
|
|
|
|
|
134
|
|
|
|
|
|
|
|
|
134
|
|
|
|
|
|
|
|
|
134
|
|
|
|
|
|
|
|
|
F-1
|
|
|
We are responsible for the information contained in this prospectus. We have not authorized anyone to provide you with different information, and we take no responsibility for any other information others may give to you. We are not, and the underwriters are not, making an offer to sell securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.
SUMMARY
This summary only highlights the more detailed information appearing elsewhere in this prospectus. Before investing, you should read this entire prospectus carefully, including the information under “Risk Factors” and our financial statements and the related notes included elsewhere in this prospectus.
Unless otherwise stated in this prospectus or the context otherwise requires, references to:
•
“Affiliate” of any person or entity means any other person or entity that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first person or entity.
•
“Affiliated Joint Acquisition” means an initial business combination opportunity we pursue jointly with our sponsor, Fifth Wall, or one or more of their respective affiliates, portfolio companies and/or investors.
•
“common stock” are to our shares of Class A common stock and our shares of Class B common stock;
•
“equity-linked securities” are to any debt or equity securities that are convertible, exercisable or exchangeable for our Class A common stock issued in a financing transaction in connection with our initial business combination, including, but not limited to, a private placement of equity or debt;
•
“Fifth Wall” are to Fifth Wall Asset Management, LLC, collectively with its Affiliates and any investment funds, investment vehicles or accounts managed or advised by any of the foregoing, which are Affiliates of our sponsor;
•
“founders” are to Brendan Wallace, co-founder and Managing Partner at Fifth Wall, and Andriy Mykhaylovskyy, Managing Partner and Chief Operating Officer at Fifth Wall.
•
“founder shares” are to shares of our Class B common stock initially issued to our sponsor in a private placement prior to this offering and shares of our Class B common stock transferred by our sponsor to certain of our directors, if any, as well as the Class A common stock that will be issued upon the automatic conversion of the shares of Class B common stock at the time of our initial business combination (for the avoidance of doubt, such shares of Class B common stock will not be “public shares”);
•
“management” or “our management team” are to our executive officers and directors;
•
“private placement shares” are to the Class A common stock to be issued to our sponsor in a private placement simultaneously with the closing of this offering (which private placement shares are identical to the shares sold in this offering, subject to certain limited exceptions as described in the prospectus) and upon conversion of working capital loans, if any;
•
“public shares” are to our shares of Class A common stock sold as part of this offering (whether they are purchased in this offering or thereafter in the open market);
•
“sponsor” are to Fifth Wall Acquisition Sponsor, LLC, a Delaware limited liability company, which is an Affiliate of Fifth Wall;
•
“stockholders” 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 “stockholder” will only exist with respect to such public shares; and
•
“we,” “us,” “company” or “our company” are to Fifth Wall Acquisition Corp. I, a Delaware corporation.
Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option.
General
We are a newly organized blank check company formed under the laws of the State of Delaware on November 23, 2020 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. To date, our efforts have been limited to organizational activities as well as activities related to this offering. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. We have generated no operating revenues to date and we do not expect that we will generate operating revenues until we consummate our initial business combination at the earliest.
While we may pursue an acquisition opportunity in any business, industry, sector or geographical location, we intend to focus on industries that complement our management team’s background, and to capitalize on the ability of our management team to identify and acquire a technology business focusing on verticals of the real estate industry, as well as the adjacent industries that collectively make up the human-made environment that provides the setting for human activity, ranging in scale from buildings to cities and beyond, which we call the “Built World.”
Fifth Wall
Our sponsor is an affiliate of Fifth Wall. Fifth Wall is one of the largest venture capital firms focused exclusively on investing at the intersection of real estate and technology, a category broadly referred to as “proptech”. Fifth Wall was founded in 2016 after identifying the growing market opportunity in proptech brought about by the real estate industry, the largest asset class as of the end of 2016, beginning to adopt technology at an increasingly rapid pace. Fifth Wall developed a differentiated model of venture capital predicated on raising capital from and partnering with leading real estate owners, who are among the largest users and customers for the technologies in which Fifth Wall invests. As of November 30, 2020, Fifth Wall manages $1.3 billion in committed capital on behalf of its investors across three core fund strategies, and has invested in more than 40 companies, including six that have gone on to become “unicorns”, or startups with a private market valuation in excess of $1 billion.
Since its founding 5 years ago, Fifth Wall has become a leading venture capital investor in the proptech space, for several reasons:
•
Fifth Wall was one of the first to recognize the growing market opportunity in real estate technology. With the close of its oversubscribed $212 million North American Real Estate Technology Fund in May 2017, Fifth Wall became one of the first institutional venture capital funds exclusively focused on the intersection of real estate and technology, or “proptech”. Since then, Fifth Wall has raised $126 million for its retail strategy, which is focused on the disruption of traditional brick & mortar retail. Its second North American Real Estate Tech Fund was also oversubscribed and closed at $503 million in July 2019. More recently, Fifth Wall has launched and completed the first close of its European Real Estate Technology Fund and is currently raising a Climate Technology Fund focused on investing in North American startups with technologies that enable transitions towards a decarbonized real estate industry, reduce greenhouse gas emissions, or address the impacts of global warming. As of November 30, 2020, Fifth Wall is approximately five times larger than the next largest proptech-focused venture capital manager.
•
Fifth Wall has pioneered a differentiated consortium-driven approach to venture capital. Fifth Wall’s model is predicated on raising a significant portion of its capital from leading real estate corporations, and advising its corporate limited partners on implementing emerging real estate technologies with the potential to transform their businesses. The firm’s initial North American Real Estate Technology Fund included 9 U.S.-based real estate corporations as limited partners. As of November 30, 2020, Fifth Wall’s global network of corporate partners has grown to include more than 60 real estate corporations from 14 countries, representing every major subsector in the real estate industry. In certain subsectors, like homebuilding, Fifth Wall’s corporate limited partners represent 4 of the 5 largest U.S.
homebuilders, which collectively account for approximately 20% of all homes delivered in the United States annually. Alongside its corporate limited partners, Fifth Wall has attracted investment from some of the world’s largest and most prominent institutional investors, including leading university endowments, pensions, and sovereign wealth funds.
•
Fifth Wall has distinct informational and distribution advantages. Fifth Wall’s dynamic working relationships with its global consortium of over 60 corporate real estate partners provide the firm with differentiated informational and distribution advantages when evaluating potential investments. Fifth Wall’s role as both a venture capital investor and a trusted advisor to real estate corporations provides significant visibility to the operational and technological challenges faced by its corporate partners. This enables its investment team to underwrite investments with knowledge of orchestrating large contracts and partnerships with Fifth Wall’s real estate investors, who are among the largest potential customers for these technologies. Similarly, success or failure for real estate technology companies often hinges on distribution to the real estate industry. Fifth Wall’s deep relationships with its 60 corporate limited partners, coupled with its expertise in real estate technology, enable Fifth Wall to flip “distribution risk” for its portfolio companies into a “distribution edge” by effectuating commercial partnerships to significantly accelerate their growth.
•
Fifth Wall has superior access and deal flow. Fifth Wall’s domain expertise in real estate technology, its partnerships with some of the largest real estate owners and operators globally, its brand positioning as a leading partner to proptech entrepreneurs, and its differentiated platform have helped to solidify the firm as a highly-sought after investor for technology companies that depend on distribution to the real estate industry. Generalist venture capital funds typically select Fifth Wall as their preferred co-investment partner in proptech companies based on Fifth Wall’s category expertise and ability to facilitate distribution to its real estate investors. Additionally, Fifth Wall’s corporate partners proactively send Fifth Wall technologies that they are evaluating for their own businesses. Management teams of portfolio companies are also often eager to introduce to Fifth Wall new companies that fit Fifth Wall’s strategies. Across these three channels, Fifth Wall benefits from meaningful network effects that are borne out in its deal flow and its portfolio of emergent winners in the proptech category. As of November 30, 2020, Fifth Wall’s CRM tracks more than 8,300 real estate technology companies, including more than 600 growth and later stage companies.
•
Fifth Wall is a highly visible, highly active investor and thought leader. Since its founding in 2016, Fifth Wall has carefully cultivated its brand and profile as a thought leader through the creation and dissemination of content related to the real estate technology ecosystem. Fifth Wall strives to be seen by other venture capital investors, proptech entrepreneurs, and the real estate industry as synonymous with proptech, as the thought leader in the space. This approach has enabled Fifth Wall to source investments in more than 40 companies, gaining access to highly competitive financing rounds for high-profile proptech businesses, sometimes with terms that enable Fifth Wall to reopen closed financing rounds at prior valuations, or to structure investments in such a way that ultimately generates greater upside . Fifth Wall’s investments at the intersection of real estate and technology include Opendoor, VTS, States Title, Hippo, Industrious, Blend, and Clutter.
•
Fifth Wall can influence outcomes to create outsized value. Beyond unlocking distribution to the real estate industry, Fifth Wall has played a leading role in the effectuation of major partnerships between its portfolio companies and some of the largest real estate corporations in the world, activating corporate innovation to create significant value. Fifth Wall partnered with what it believes to be the second largest homebuilder in the United States to launch large-scale partnerships with Opendoor, Hippo, Blend, and Notarize and, furthermore, helped to orchestrate the landmark sale of the homebuilder’s captive title insurance business to States Title, a Fifth Wall portfolio company. Similarly, Fifth Wall played a critical role in the execution of partnerships between Industrious and VTS and its corporate partners in the office vertical, catalyzing significant growth for both portfolio companies.
We believe that a SPAC is an important extension of Fifth Wall’s approach to partnering with leading real estate technology companies to create long-term value. While Fifth Wall’s existing fund
strategies typically invest relatively early on in a company’s lifecycle, Fifth Wall has also developed a track record of investing in proptech companies — including its own portfolio companies — as they mature, opportunistically deploying SPV capital to invest in later-stage funding rounds. With Fifth Wall Acquisition Corp. I, we intend to form a long-term partnership with a business that has the potential to become a category-defining market leader, guiding them in their transition from private to public markets while leveraging Fifth Wall’s global consortium of some of largest owners and operators of real estate in the world, creating value through distribution to the real estate industry and partnership with leading real estate corporations. We believe that our affiliation with Fifth Wall and its positioning and proptech category expertise will afford us substantial competitive advantages relative to other blank check companies, including those who are primarily focused on acquiring real estate technology businesses.
Market Opportunity
Fifth Wall was founded on the belief that the real estate industry is on the verge of massive change through technological innovation, and that emerging real estate technologies had the potential to create trillions of dollars of enterprise value over time. Today, technology is rapidly penetrating all verticals of the real estate industry, as well as the adjacent industries that collectively make up the human-made environment that provides the setting for human activity, ranging in scale from buildings to cities and beyond, which we call the “Built World”.
We believe the market for real estate technology businesses is attractive for a number of reasons:
•
Large and growing addressable market. Real estate and technology investments both represent a significant segment of the global economy. According to Bureau of Economic Analysis, US Department of Commerce, real estate and technology accounted for 13% and 12%, respectively, of the U.S. gross domestic product in 2019. Real estate technology investment has grown significantly in the last few years, with total venture capital funding in this sector reaching $32 billion in 2019 compared to $4 billion in 2016 according to CRETech. Despite this strong growth, we believe that the bulk of digitalization is still to come as we are only beginning to see fully digital transactions, data-driven decision making, replacement of middle-men with market places and incumbents embracing technology.
•
Accelerating pace of technological innovation. Technology has disrupted the real estate sector as owners and operators continuously seek to improve the efficiency of their assets, with emerging technologies often providing new solutions to longstanding business and operational challenges. We believe that increased rates of technology adoption will spur the creation of more new technologies and disruptive new entrants in order to create greater efficiencies in the real estate value chain. Real estate technology is penetrating the real estate asset class, driving innovation across transactions, work processes, tenant engagement and even the nature of buildings themselves, while also disrupting the middle-man heavy businesses that currently dominate the real estate industry. We further believe that the impacts of COVID-19 on the real estate industry have catalyzed and accelerated the adoption of technology, which we expect will have lasting, transformational effects on the real estate industry.
•
Robust and growing pipeline. From 2014 to 2019, over $64 billion has been invested in proptech companies, while more than $250 billion in enterprise value has been created within the real estate technology sector across public and private companies. As of November 30, 2020, we estimate that more than 35 proptech companies are valued at $1 billion or more in the private markets. In 2019, 528 real estate technology transactions were executed according to CREtech. We believe that many later stage proptech companies, the number of which we expect to continue to grow in the years ahead, could benefit from a public listing. Similarly, we believe that Fifth Wall Acquisition Corp. I will be able to offer them, or companies like them, a compelling path to enter the public markets.
•
Performance of real estate technology companies in public markets. In 2020, we saw a meaningful divergence between the public markets performance of the traditional real estate businesses and real estate technology businesses. From January 1, 2020 to December 14, 2020, traditional real estate companies underperformed, with the Dow Jones US Real Estate Index down 11% over the same period while a number of public real estate technology
companies saw significant increases in share price. For example, over the same period, the share prices of Zillow (residential marketplace), Redfin (iBuying brokerage company) and AppFolio (property management SaaS company) increased by 201%, 204% and 56%, respectively. Between the day before announcing that it would acquire Opendoor (iBuying brokerage company) on September 15, 2020 and December 14, 2020, the share price of SPAC Social Capital Hedosophia Holdings II Corp. increased 126%. We believe that value created by real estate technology companies for public markets investors will increase over time.
We currently intend to focus our investment effort broadly across real estate technology businesses, although we may pursue an acquisition opportunity in any industry or geographic region. We believe that our investment and operating expertise in both the real estate and technology industries will offer us a large, addressable universe of potential targets
Real estate software is penetrating the real estate asset class, driving technology use in transactions, work processes, tenant engagement and even the nature of buildings themselves; while marketplaces are replacing the middle-man-heavy business models that currently dominate the real estate industry. In particular, we believe the real estate software and real estate marketplace businesses, as well as other asset-light proptech businesses present significant opportunities with strong near-term growth potential. Our management team will seek to leverage their access to proprietary deal flow, sourcing capabilities, and network of industry contacts to generate business combination opportunities.
Business Strategy
Our strategy is to identify and acquire real estate technology businesses, with a focus on later-stage companies with high quality growth fundamentals and strong market dynamics, whose pace of growth can benefit from our operational expertise and differentiated distribution capabilities. Fifth Wall is one of the largest and most active venture investors at the intersection of real estate and technology and has a proven track record with deep experience in investing, operations and technology as well as a global consortium of real estate partners representing almost every real estate sector and ever major geography. We intend to leverage our sponsor’s expertise and extensive network of strategic LPs, portfolio companies, real estate relationships and reputation in the real estate technology sector to identify investment opportunities with meaningful near term growth potential that can generate attractive risk-adjusted returns for our stockholders.
Consistent with this strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective targets. We will use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines.
•
High quality fundamentals. We will focus our search on identifying transformative businesses with attractive margins and unit economics in line with best-in-class industry benchmarks, strong growth track record, and limited revenue concentration risks.
•
Strong market dynamics and growth potential. We will seek to acquire businesses that have a sizeable total addressable market with product offerings that are relevant across multiple asset classes, industries and geographies. We believe we can leverage our network to upsell and cross-sell additional product modules which will in turn further increase the addressable market and growth opportunities for the business and presents readily available growth targets.
•
Competitive positioning. We will seek to acquire one or more businesses that demonstrate market leadership and / or strong advantages when compared to their competitors, including the potential to disrupt the market through technology driven transformation, defensible proprietary technology, strong adoption rates, and low or manageable risks of technological obsolescence.
•
Attractive risk-adjusted return profile. We intend to focus our efforts on identifying later-stage businesses that we believe have meaningful near term growth opportunity and significant
potential for attractive risk-adjusted returns for stockholders, weighing potential growth opportunities and operational improvements in the target business against any identified downside risks.
•
Informational and structuring advantages. We intend to invest in one or more businesses where Fifth Wall’s global network of more than 60 real estate corporations in 14 countries can offer distinct informational advantages in underwriting a potential acquisition, and where Fifth Wall’s ability to unlock distribution to the real estate industry can enable us to structure a potential transaction in such a way that it maximizes value for all parties involved.
•
Value creation potential by Fifth Wall. We intend to acquire one or more businesses that we believe will benefit from Fifth Wall’s differentiated industry network, brand and proprietary value-creation capabilities in order to improve financial performance and business planning. For example, we intend to target companies that have strong traction regionally but lack national and international partners to support geographical expansion whose growth can be accelerated through Fifth Wall’s network of real estate partners, or companies with a sales cycle that is longer than best-in-class peers that could be shortened with strategic introductions to key management at real estate companies facilitated by Fifth Wall.
•
Management Team. We will seek to invest in one or more businesses that have proven management teams with a compelling strategy of selling their product and recruiting talent.
•
Benefit from Being a Public Company. We intend to invest in one or more businesses that will benefit from being publicly listed and can effectively utilize the broader access to capital and a public profile to grow and accelerate stockholders value creation.
These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our stockholders communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of tender offer documents or proxy solicitation materials that we would file with the SEC.
Team
•
Brendan Wallace is our Chief Executive Officer and Chairman. Mr. Wallace serves as a co-founder and Managing Partner at Fifth Wall, where he guides the firm’s strategic vision and serves as the chairman of the investment committee. Prior to starting Fifth Wall, Mr. Wallace co-founded Identified Inc., a venture-backed data and analytics company that was acquired by Workday, Inc. Mr. Wallace also co-founded Cabify, the largest ridesharing service in Latin America, and has been an active investor, leading more than 60 angel investments including Coinbase, Dollar Shave Club, Lyft, SpaceX, Clutter, and Philz Coffee. Mr. Wallace started his career at Goldman Sachs in the real estate, hospitality, and gaming group before joining The Blackstone Group’s real estate private equity practice where he was involved with the buyout of Hilton Hotels and Equity Office Properties. Mr. Wallace is a graduate of Princeton University and received his M.B.A. from Stanford University.
•
Andriy Mykhaylovskyy is our Chief Financial Officer. Mr. Mykhaylovskyy is a Managing Partner and Chief Operating Officer at Fifth Wall, where he oversees the firm’s day-to-day operations and investing activities. Prior to joining Fifth Wall, Mr. Mykhaylovskyy was a Principal and founding team member at Evergreen Coast Capital, a technology-focused private equity affiliate of Elliott Management Corporation. Other previous leadership roles include serving as Vice President at The Gores Group and Chief Financial Officer of Identified, a data and analytics company. Mr. Mykhaylovskyy started his career in investment banking at Morgan Stanley, where he offered financial advisory and capital-raising services to global industrial corporations, before joining technology-focused private equity firm Francisco Partners as an Associate. Mr. Mykhaylovskyy is a graduate of Princeton University and received his M.B.A. from Stanford University.
•
Alana Beard will be appointed as a member of our board of directors. In this role, she will advise the company from the consummation of the initial public offering through a special purpose acquisition company. Ms. Beard has been a Senior Associate at SVB Capital since February 2020 and President of the 318 Foundation, Inc., a non-profit organization, since January 2021. Prior to joining SVB, Alana was a member of the WNBA Los Angeles Sparks organization April 2012 to January 2020 and an ESPN/ACC women’s college basketball analyst from October 2019 to March 2020. During her career with the Sparks, Ms. Beard was a four-time WNBA All-Star, won the WNBA championship in 2016 and was named WNBA Defensive Player of the Year for the 2017 and 2018 seasons. Ms. Beard graduated from Duke University in 2004 with a bachelor’s degree in Sociology. We believe Ms. Beard’s prior leadership experience makes her well qualified to serve on our board of directors.
•
Victor Coleman will be appointed as a member of our board of directors. In this role, he will advise the company from the consummation of the initial public offering through a special purpose acquisition company. Mr. Coleman serves as Chief Executive Officer, President and Chairman of Hudson Pacific Properties, Inc. since June 2010. Prior to the formation of Hudson Pacific Properties, Inc., Mr. Coleman founded and served as a managing partner of its predecessor, Hudson Capital, LLC, a private real estate investment company, since October 2006. In 1990, Mr. Coleman co-founded and led Arden Realty, Inc. as its President and Chief Operating Officer and as a director until its sale to General Electric Co. in May 2006. Mr. Coleman also serves on the boards of directors of the Ronald Reagan UCLA Medical Center, the Fisher Center for Real Estate and Urban Economics, Los Angeles Sports & Entertainment Commission and the Los Angeles Chapter of the World Presidents’ Organization. Mr. Coleman’s experience as a director also includes service on the board of other publicly traded real estate investment trusts, or REITs, such as Douglas Emmett, Inc. from 2006 to 2009 and Kite Realty since 2012, where he currently serves as a member of both its compensation committee and nominating and corporate governance committee. He received his B.A. in History from the University of California, Berkeley in 1983 and his M.B.A. from Golden Gate University in 1985. We believe Mr. Coleman’s extensive executive and board experience makes him well qualified to serve on our board of directors.
•
Angela C. Huang will be appointed as a member of our board of directors. In this role, she will advise the company from the consummation of the initial public offering through a special purpose acquisition company. Ms. Huang is a Managing Director of EE Capital Pte. Ltd. since June 2020. Previously, Ms. Huang was an Asset Manager and Managing Director of Hillhouse Capital Management Pte. Ltd., a global private and public equity investment management firm, from February 2013 to April 2020. She received her A.B. in History of East Asian Studies from Princeton University in 2004 and her J.D. from Columbia University in 2008, where she was a Harlan Fiske Stone Scholar. We believe Ms. Huang’s substantial experience in the public and private equity markets with a focus on cross-border transactions makes her well qualified to serve on our board of directors.
•
Wisdom Lu will be appointed as a member of our board of directors. In this role, she will advise the company from the consummation of the initial public offering through a special purpose acquisition company. Ms. Lu has been serving as a General Partner of Stibel Investments since 2010 and Bryant Stibel since co-founding it in July 2015. Ms. Lu also serves as a member of the board of directors of Tailwind Acquisition Corp., a special purpose acquisition vehicle, and as the chairperson of its audit committee since September 2020. She has previously served as the Chief Financial Officer at Dun & Bradstreet Credibility Corp. from September 2014 to January 2017 and as its Senior Vice President, Data Works from February 2012 to August 2014. Prior to Dun & Bradstreet, she served as the Chief Financial Officer of Liberman Broadcasting where she oversaw finance, information technology, human resources, as well as legal and investor relations. Prior to Liberman Broadcasting, Ms. Lu served as Treasurer and Chief Investment Officer of Health Net, Inc. from August 1996 to April 2008. Ms. Lu received a degree in Bachelor of Engineering from Rensselaer Polytechnic Institute in 1987 and an M.B.A. from New York University in 1993. We believe Ms. Lu’s operational and executive experience make her well-qualified to serve as a member of our board of directors.
Our management team will be supported by Fifth Wall’s investment team and broader organization of more than 30 employees, based in Los Angeles, San Francisco, New York, and London. Fifth Wall’s team has experience in some of the largest and most established real estate firms, private equity firms, consulting firms, and technology companies, providing a deep bench of sourcing, investment, structuring, and operational talent.
Other key members of the Fifth Wall team include:
•
Brad Greiwe, who is a co-founder and Managing Partner at Fifth Wall. Prior to starting Fifth Wall, Mr. Greiwe co-founded Invitation Homes Inc. (NYSE: INVH). Mr. Greiwe started his career in investment banking at UBS Group AG in the real estate, lodging, and leisure group. He then worked in real estate private equity at Tishman Speyer Properties and Starwood Capital Group. Mr. Greiwe graduated from Harvard University, where he received his BA in economics.
•
Vik Chawla, who serves as Partner on the Real Estate Technology Investment team at Fifth Wall, where he focuses on technology and innovations within the homebuilding, retail, and industrial asset classes. Previously, Mr. Chawla was an Investment Associate at Echelon Asset Management. He began his career at The Blackstone Group Inc., where he worked on advisory transactions spanning the energy, real estate, and financial services industries. Mr. Chawla graduated from the University of Pennsylvania’s Wharton School, where he received his BS in economics with concentrations in finance and statistics and a minor in mathematics.
•
Dan Wenhold, who serves as Partner on the Real Estate Technology Investment team at Fifth Wall, where he focuses on emerging software and marketplace companies. Prior to joining Fifth Wall, he was the first employee and Director of Retail at The Black Tux, an omnichannel menswear brand. Prior to that the Black Tux, he was a member of the investment team at Battery Ventures L.P. Mr. Wenhold started his career as a financial analyst at Robert W. Baird & Co. Incorporated. Mr. Wenhold graduated from the University of Illinois with a degree in finance.
•
Kevin Campos, who serves as Partner on the Retail & Consumer Investment team at Fifth Wall, where he oversees the team’s operations and leads investments in omnichannel retail brands and technologies. Prior to joining Fifth Wall, Mr. Campos was the Chief Retail Officer for Combatant Gentlemen, Inc., a digitally native menswear brand. He also was a member of the retail team at Golden Gate Capital, a private equity firm. He started his career at Bain & Company as a strategy consultant advising technology, media, and investment fund clients. Mr. Campos graduated from Princeton University with a BA from the Princeton School of Public and International Affairs.
•
Joelle Khoury, who serves as Partner and General Counsel at Fifth Wall. Prior to joining Fifth Wall, Ms. Khoury worked as Vice President, Business and Legal Affairs at Saban Capital Group. Prior to joining Saban Capital Group, Inc., she was an Associate at both Gibson Dunn & Crutcher LLP and Cooley LLP, where she specialized in corporate transactions in the media, entertainment and technology industries. Ms. Khoury received her BA in Political Science from University of California, San Diego and then received her JD and LLM from Duke Law School.
•
G. M. Nicholas Vik, who serves as Vice President of Strategy & Operations at Fifth Wall, where he leads business operations and strategic initiatives across the firm. Prior to joining Fifth Wall, Mr. Vik was Director of Strategy & Finance and a member of the founding team at Renew Health Group, a healthcare startup founded in partnership with Venrock. Previously, he served as a member of the Revenue Strategy team at Snap Inc. (NYSE: SNAP). Mr. Vik started his career at Cambridge Associates, where he advised institutions on venture capital and private equity investment strategies, before joining ICONIQ Capital, a multifamily office and investment firm. Mr. Vik graduated from Tufts University where he received a BA in International Relations.
Initial Business Combination
Nasdaq rules and our certificate of incorporation require that we complete one or more business combinations having an aggregate fair market value of at least 80% of the assets held in the trust account
(excluding the amount of deferred underwriting discounts held in trust and taxes payable on the interest earned on the trust account) at the time of signing the agreement to enter into the initial business combination. If our board of directors is not able to independently determine the fair market value of the target business or businesses, or we are considering an initial business combination with an affiliated entity, we will obtain an opinion from an independent investment banking firm that is a member of the Financial Industry Regulatory Authority (FINRA), or an independent valuation or accounting firm with respect to the satisfaction of such criteria.
We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the prior owners of the target business, the target management team or stockholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock 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 stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking stockholders approval, as applicable.
Other Considerations
We are not prohibited from pursuing an initial business combination or subsequent transaction with a company that is affiliated with Fifth Wall or our sponsor, founders, officers, or directors, or a company in which any of the foregoing may have a direct or indirect interest. In the event we seek to complete our initial business combination with a company that is affiliated with Fifth Wall, our sponsor or any of our founders, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent valuation or accounting firm that such initial business combination or transaction is fair to our company from a financial point of view.
Affiliates of Fifth Wall and members of our board of directors will directly or indirectly own founder shares and private placement shares following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers or directors were to be included by a target business as a condition to any agreement with respect to our initial business combination.
We currently do not have any specific business combination under consideration. Our officers and directors have neither individually selected nor considered a target business nor have they had any substantive discussions regarding possible target businesses among themselves or with our underwriters or other advisors. Fifth Wall is continuously made aware of potential business opportunities, one or more of which we may desire to pursue for a business combination, but we have not (nor has anyone on our behalf) contacted any prospective target business or had any substantive discussions, formal or
otherwise, with respect to a business combination transaction with our company. We have not (nor have any of our agents or affiliates) been approached by any candidates (or representative of any candidates) with respect to a possible acquisition transaction with our company and we will not consider a business combination with any company identified to Fifth Wall at any time as a suitable acquisition candidate for it, unless Fifth Wall, in its sole discretion, declines such potential business combination or makes available to our company a co-investment opportunity, in each case, in accordance with any legal, contractual or other obligations of Fifth Wall and Fifth Wall’s applicable existing and future policies and procedures. Additionally, we have not, nor has anyone on our behalf, taken any substantive measure, directly or indirectly, to select or locate any suitable acquisition candidate for us, nor have we engaged or retained any agent or other representative to select or locate any such acquisition candidate.
Fifth Wall currently manages multiple investment vehicles and may raise additional funds successor funds or other investment vehicles or accounts in the future, which may be during the period in which we are seeking our initial business combination. Such Fifth Wall investment entities may be seeking investments or acquisition opportunities and related financing at any time. We may compete with any one or more of them on any given acquisition opportunity.
In addition, Fifth Wall, our sponsor and each of our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures, including without limitation forming investment funds or other vehicles whose strategies may conflict with or otherwise be competitive with us, during the period in which we are seeking an initial business combination. Wisdom Lu, a director, also serves as a member of the board of directors of Tailwind Acquisition Corp., a special purpose acquisition vehicle. Any such companies, businesses or investments, including without limitation investment funds or other vehicles, may present additional conflicts of interest in pursuing an initial business combination.
Fifth Wall and each of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations to other entities pursuant to which Fifth wall or such persons is or will be required to present a business combination opportunity. Accordingly, if Fifth Wall or any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which Fifth Wall or such person has then-current fiduciary, contractual or other obligations to present such opportunity to such entity, Fifth Wall or such person will honor such fiduciary, contractual or other obligations to present such opportunity to such entity, in which case such opportunity may not be made available to us. Further, Fifth Wall and each of our officers and directors have duties and obligations with respect to confidentiality to other entities and may in the future agree to additional such duties or obligations, which may prevent Fifth Wall and such officers and directors from disclosing such information to us. Fifth Wall and our officers and directors will comply with such duties and obligations of confidentiality to such other entities, in which case, we may not have access to such information. In addition, we may, at our option, pursue an Affiliated Joint Acquisition opportunity with an entity to which Fifth Wall or an officer or director currently has, or may in the future have, a fiduciary or contractual obligation. Any such entity may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the business combination by making a specified future issuance to any such entity. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate 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 such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal, contractual or other obligation.
In addition, Fifth Wall, our founders, officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. Moreover, our founders, officers and directors have, and will have in the future, time and attention requirements for current and future businesses, including investment funds, accounts, co-investment vehicles and other entities managed by Fifth Wall. To the extent any
conflict of interest arises between, on the one hand, us and, on the other hand, such businesses, investments funds, accounts, co-investment vehicles and other entities managed by Fifth Wall (including, without limitation, arising as a result of certain of our founders, officers and directors being required to offer investment or acquisition opportunities to such investment funds, accounts, co-investment vehicles and other entities), Fifth Wall, its affiliates and our founders, officers and directors will resolve such conflicts of interest in their sole discretion in accordance with their then existing fiduciary, contractual, and other duties, and there can be no assurance that such conflict of interest will be resolved in our favor.
Any past experience and performance of Fifth Wall or our management team is not a guarantee either: (1) that we will be able to successfully identify a suitable candidate for our initial business combination; or (2) of any results with respect to any initial business combination we may consummate. You should not rely on the historical record of Fifth Wall or our management team’s performance as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. An investment in us is not an investment in Fifth Wall. None of our sponsor, officers, directors or Fifth Wall has had experience with a blank check company or special purpose acquisition company in the past.
Unlike many other special purpose acquisition companies, we are not offering any warrants to prospective investors in this offering.
Corporate Information
Our executive offices are located at 6060 Center Drive, 10th Floor, Los Angeles, California 90045.
We are 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 stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A common stock that is held by non-affiliates exceeds $700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. References herein to “emerging growth company” will have the meaning associated with it in the JOBS Act.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates exceeds $250 million as of the prior June 30th, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30.
Prior to the date of this prospectus, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. As a result, we are subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
THE OFFERING
In deciding whether to invest in our securities, you should take into account not only the backgrounds of the members of our management team, but also the special risks we face as a blank check company and the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. You will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. You should carefully consider these and the other risks set forth in the section below entitled “Risk Factors” of this prospectus.
25,000,000 shares of Class A common stock (or 28,750,000 shares of Class A common stock, at $10.00 per share.
Class A common stock: “FWAA”
Common stock:
Number outstanding before this offering
6,250,000(2)(3)
Number outstanding after this offering
32,107,500(1)(2)(4)(5)
On December 2, 2020, we issued to our sponsor 7,187,500 founder shares in exchange for a payment of $25,000, or approximately $0.003 per share, to cover for certain expenses and offering costs on behalf of us.
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 shares of Class B common stock immediately prior to the consummation of this offering in such amount as to maintain the ownership of our sponsor (and its permitted transferees), on an as-converted basis, at 20% of our issued and outstanding shares of Class A common stock upon the consummation of this offering. Up to 937,500 of the founder shares held by our sponsor will be forfeited depending on the extent to which the underwriters’ over-allotment option is not exercised.
The founder shares are identical to the shares of Class A common stock being sold in this offering, except that:
•
the founder shares are subject to certain transfer restrictions, as described in more detail below;
(1)
Assumes no exercise of the underwriters’ over-allotment option.
(2)
Founder shares are currently classified as shares of Class B common stock, which shares will automatically convert into shares of Class A common stock at the time of our initial business combination as described below adjacent to the caption “Founder shares conversion and anti-dilution rights” and in our amended and restated certificate of incorporation.
(3)
Excludes an aggregate of up to 937,500 shares of Class B common stock held by our sponsor that are subject to forfeiture if the underwriters’ over-allotment option is not exercised in full.
(4)
Assumes no exercise of the underwriters’ over-allotment option and includes 25,000,000 public shares, 857,500 private shares and 6,250,000 founder shares, assuming 937,500 founder shares have been forfeited.
(5)
Unlike other special purpose acquisition companies, we are not offering any warrants to prospective investors in this offering.
•
our sponsor and our directors and executive officers have entered into an agreement with us, pursuant to which it has agreed to (i) waive their redemption rights with respect to their founder shares and (ii) waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to consummate an initial business combination within 24 months from the closing of this offering. Our sponsor and our directors and executive officers have also agreed (A) that they will not propose any amendment to our amended and restated certificate of incorporation that would modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares and (B) to waive their redemption rights with respect to their founder shares and any public shares they may acquire during or after this offering in connection with the completion of our initial business combination. However, if our sponsor, directors or executive officers acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to consummate an initial business combination within 24 months from the closing of this offering. If we submit our initial business combination to our public stockholders for a vote, our sponsor and our directors and executive officers have agreed to vote their founder shares and any public shares purchased during or after this offering in favor of our initial business combination. As a result, in addition to our founder shares, we would need 9,375,001, or 37.5%, of the 25,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted and the over-allotment option is not exercised). The other members of our management team have entered into agreements similar to the one entered into by our sponsor with respect to any public shares acquired by them in or after this offering;
•
the founder shares are entitled to registration rights; and
•
the founder shares will be automatically convertible into our shares of Class A common stock at the time of our initial business combination as described below adjacent to the caption “Founder shares conversion and anti-dilution rights” and in our amended and restated certificate of incorporation.
Transfer restrictions on founder shares
Except as described herein, our sponsor and our directors and executive officers have agreed not to transfer, assign or sell any of their founder shares until the earliest of (A) one year after the completion of our initial business combination or (B) subsequent to our initial business combination, (x) the date on which we complete a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of our stockholders having the right to exchange their common stock for cash, securities or other property or (y) if the closing price of our common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination. Any permitted transferees would be subject to the same restrictions and other agreements of our initial stockholders with respect to any founder shares.
Founder shares conversion and anti-dilution rights
The founder shares are designated as shares of Class B common stock and will automatically convert into shares of Class A common stock at the time of our initial business combination on a one-for-one basis (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like), and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in this prospectus and related to the closing of the business combination, including pursuant to a specified future issuance, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless our sponsor agrees to waive such adjustment with respect to any such issuance or deemed issuance, including a specified future issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon completion of this offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with the business combination (after giving effect to any redemptions of shares of Class A common stock by public stockholders) (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the business combination, the private placement shares, and any private placement shares issued to our sponsor, officers or directors upon conversion of working capital loans). Our sponsor may also elect to convert their shares of Class B common stock into an equal number of shares of Class A common stock, subject to adjustment as provided above, at any time.
With respect to all matters submitted to a vote of our stockholders, including any vote in connection with our initial business combination, except as required by law or the applicable rules of Nasdaq then in effect, holders of our founder shares and holders of our public shares will vote together as a single class, with each share entitling the holder to one vote.
Our amended and restated certificate of incorporation provides that our board of directors will be 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 stockholders) serving a three-year term.
Our sponsor has committed, pursuant to a written agreement, to purchase 857,500 private placement shares (or 932,500 private placement shares if the underwriters’ over-allotment option is exercised in full), at a price of $10.00 per share in a private placement to occur concurrently with the closing of this offering for an aggregate purchase price of $8,575,000 (or $9,325,000 if the underwriters’ over-allotment option is exercised in full). The private placement shares are identical to the Class A common stock sold in this offering, subject to certain limited exceptions as described in this prospectus.
Proceeds to be held in trust account
Nasdaq rules provide that at least 90% of the gross proceeds from this offering and the sale of the private placement shares be deposited in a trust account. Of the proceeds we will receive from this offering and the sale of the private placement shares described in this prospectus, $250,000,000, or $287,500,000 if the underwriters’ over-allotment option is exercised in full ($10.00 per share in either case), will be deposited into a segregated trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee and $2,250,000 will be used to pay expenses in connection with the closing of this offering and for working capital following this offering. The proceeds to be placed in the trust account include $8,750,000 (or $10,062,500 if the underwriters’ over-allotment option is exercised in full) in deferred underwriting commissions.
Except for the withdrawal of interest income to pay our income taxes, our amended and restated certificate of incorporation, as discussed below and subject to the requirements of law and regulation, provides that none of the funds held in the trust account will be released from the trust account until the earliest of (i) the completion of our initial business combination, (ii) the redemption of our public shares if we are unable to consummate an initial business combination within 24 months from the closing of this offering, subject to applicable law, or (iii) the redemption of our public shares properly submitted in connection with a stockholder vote to approve an amendment to our amended
and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.
Anticipated expenses and funding sources
Unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use, except the withdrawal of interest income to pay our income taxes and/or to redeem our public shares in connection with an amendment to our amended and restated certificate of incorporation, as described above. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Assuming an interest rate of 0.1% per year, we estimate the interest earned on the trust account will be approximately $250,000 per year; however, we can provide no assurances regarding this amount. Unless and until we complete our initial business combination, we may pay our expenses only from:
•
the net proceeds of this offering not held in the trust account, which will be approximately $1,000,000 in working capital after the payment of approximately $2,575,000 in 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 or invest in us, and provided any such loans will not have any claim on the proceeds held in the trust account unless such proceeds are released to us upon completion of our initial business combination. Up to $1,500,000 of such loans may be convertible into private placement shares, at a price of $10.00 per share, at the option of the lender.
Conditions to completing our initial business combination
Nasdaq rules and our certificate of incorporation require that our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of our assets held in the trust account (excluding the amount of deferred underwriting discounts held in trust and taxes payable on the interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. If our board of directors is not able to independently determine the fair market value of the target
business or businesses, we will obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent valuation or accounting firm. Our stockholders may not be provided with a copy of such opinion nor will they be able to rely on such opinion.
We will complete our initial business combination only if the post-transaction company in which our public stockholders own shares will own or acquire 50% or more of the outstanding voting securities of the target or is otherwise not required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to our initial business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock or shares 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 stockholders immediately prior to our initial business combination could own less than a majority of our issued and outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test, provided that in the event that the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as the initial business combination for purposes of seeking stockholder approval or conducting a tender offer, as applicable.
Permitted purchases and other transactions with respect to our securities
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, initial stockholders directors, executive officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. There is no limit on the number of shares our initial stockholders, directors, executive officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, our sponsor, directors, executive officers, advisors or their affiliates have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions
for any such transactions. None of the funds held in the trust account will be used to purchase shares in such transactions. If our sponsor, directors, executive officers, advisors or their affiliates engage in such transactions, they will not make any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Securities Exchange Act of 1934, as amended, or the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. See “Proposed Business — Permitted Purchases of Our Securities” for a description of how our sponsor, directors, executive officers, advisors or any of their affiliates will select which stockholders to purchase securities from in any private transaction.
The purpose of any such purchases of shares could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our shares of Class A common stock 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 stockholders upon completion of our initial business combination
We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business combination, including interest (net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per share amount we will distribute to investors who properly redeem their shares will
not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. There will be no redemption rights upon the completion of our initial business combination with respect to our private placement shares. Our sponsor and our directors and executive officers have entered into agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares, private placement shares and any public shares they may acquire during or after this offering in connection with the completion of our initial business combination.
Limitations on redemptions
Our amended and restated certificate of incorporation provides that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules). However, a greater net tangible asset or cash requirement may be contained in the agreement relating to our initial business combination. For example, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock 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 shares of Class A common stock submitted for redemption will be returned to the holders thereof.
Manner of conducting
redemptions
We will provide our public stockholders 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 stockholder meeting called to approve the business combination or (ii) by means of a tender offer. The decision as to whether we will seek stockholder 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 stockholder approval under applicable law or stock exchange listing requirement. Asset acquisitions and stock purchases would not typically require stockholder approval, while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding shares of Class A common stock or seek to amend our amended and restated certificate of incorporation would require stockholder approval. We
currently intend to conduct redemptions in connection with a stockholder vote unless stockholder approval is not required by applicable law or stock exchange listing requirement and we choose to conduct redemptions pursuant to the tender offer rules of the SEC for business or other legal reasons.
If we hold a stockholder 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
•
file proxy materials with the SEC.
If we seek stockholder approval, we will complete our initial business combination only if a majority of the shares of common stock voted are voted in favor of the business combination. In such case, our sponsor and our directors and executive officers have agreed to vote their founder shares and any public shares purchased during or after this offering in favor of our initial business combination. As a result, in addition to our founder shares, we would need 9,375,001, or 37.5%, of the 25,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted and the over-allotment option is not exercised). The other members of our management team have entered into agreements similar to the one entered into by our sponsor with respect to any public shares acquired by them in or after this offering. Each public stockholder 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 certificate of incorporation requires that at least five days’ notice be given of any such stockholder meeting.
If we conduct redemptions pursuant to the tender offer rules of the SEC, we will, pursuant to our amended and restated certificate of incorporation:
•
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 or our sponsor will terminate any
plan established in accordance with Rule 10b5-1 to purchase our shares of Class A common stock 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 stockholders not tendering more than the number of public shares we are permitted to redeem. If public stockholders 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 stockholders holding 15% or more of the shares sold in this offering if we hold a stockholder vote
Notwithstanding the foregoing redemption rights, if we seek stockholder 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 certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder 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 stockholders 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 stockholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights against a business combination if such holder’s shares are not purchased by us, our sponsor or our management at a premium to the then-current market price or on other undesirable terms. By limiting our public stockholders’ 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 stockholders 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 stockholders’ ability to vote all of their shares (including all shares held by those stockholders 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 stockholders who exercise their redemption rights as described above adjacent to the caption “Redemption rights for public stockholders upon completion of our initial business combination,” to pay the underwriters their deferred underwriting commissions, to pay all or a portion of the consideration payable to the target or owners of the target of our initial business combination and to pay other expenses associated with our initial business combination. If our initial business combination is paid for using equity or debt securities or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
Redemption of public shares and distribution and liquidation if no initial business combination
Our amended and restated certificate of incorporation provides that we will have only 24 months from the closing of this offering to consummate our initial business combination. If we are unable to consummate an initial business combination within 24 months from the closing of this offering, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (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 stockholders and our board of directors, liquidate and dissolve, subject in each case, to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
Our sponsor has entered into an agreement with us, pursuant to which it has agreed to (i) waive its redemption rights with respect to its founder shares and (ii) waive its rights to liquidating distributions from the trust account with respect to its founder shares if we fail to consummate an initial business combination within 24 months from the
closing of this offering. Our sponsor and our directors and executive officers have also agreed (A) that they will not propose any amendment to our amended and restated certificate of incorporation that would modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares and (B) to waive their redemption rights with respect to their founder shares and any public shares they may acquire during or after this offering in connection with the completion of our initial business combination. However, if our sponsor or members of our management team acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to consummate an initial business combination within 24 months from the closing of this offering.
The underwriters have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not consummate an initial business combination within 24 months from the closing of this offering or any extended period of time that we may have to consummate an initial business combination as a result of an amendment to our amended and restated certificate of incorporation 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 certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not consummate an initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations described above adjacent to the caption “Limitations on redemptions.” For example, our board of directors may propose such an amendment if it determines that additional time is necessary to complete our initial business combination. In such event, we will conduct a proxy solicitation and distribute proxy materials pursuant to Regulation 14A of the Exchange Act seeking stockholder approval of such proposal and, in connection therewith,
provide our public stockholders with the redemption rights described above upon stockholder approval of such amendment. This redemption right shall apply in the event of the approval of any such amendment, whether proposed by our sponsors, any executive officer, director or director nominee, or any other person.
Limited payments to insiders
There will be no finder’s fees, reimbursements or cash payments made by the company to our sponsor, officers or directors, or our or their affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination, other than the following payments, none of which will be made from the proceeds of this offering and the sale of the private placement shares held in the trust account prior to the completion of our initial business combination:
•
repayment of up to an aggregate of $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses;
•
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 shares of the post business combination entity at a price of $10.00 per share at the option of the lender. The shares would be identical to the private placement shares. Except for the foregoing, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans.
Any such payments will be made either (i) prior to our initial business combination using proceeds of this offering held outside the trust account or from loans made to us by our sponsor or (ii) in connection with or after the consummation of our initial business combination.
We 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 to our sponsor, officers or directors, or our or their affiliates and monitor compliance with the other terms relating to this offering. If any noncompliance is identified, then the audit committee will be charged with the responsibility to promptly take all action necessary to rectify such noncompliance or otherwise to cause compliance with the terms of this offering. For more information, see the section entitled “Management — Committees of the Board of Directors — Audit Committee.”
Fifth Wall engages in a range of business activities, including managing or advising several investment funds, investment vehicles or other accounts, and providing certain
consulting services to third-party client, including third-parties engaged in industries in which we may pursue an initial business acquisition. Further, Fifth Wall and each of our officers and directors currently engage in, and may in the future engage in, additional or other businesses from time to time, including managing additional investment vehicles, including vehicles that may compete with us for investment or acquisition opportunities or that may compete in industries or markets with potential targets for our initial business acquisition. Fifth Wall, our officers and directors and their respective Affiliates and portfolio companies, currently compete with us, and may compete with us, for investment or acquisition opportunities. If these entities or persons decide to pursue any such opportunity, we may be precluded from procuring such opportunities in Fifth Wall’s or such person’s sole discretion in accordance with any legal, fiduciary, contractual or other obligation of Fifth Wall or such other person and their respective existing and future policies and procedures. In addition, investment ideas generated within Fifth Wall may be suitable for both us and for current or future Fifth Wall investment funds, investment vehicles, accounts or clients and may be directed to such Fifth Wall funds, vehicles, accounts or clients rather than to us. None of Fifth Wall, nor members of our management team or directors who are also employed by, or otherwise provides services to, Fifth Wall or its current or future affiliates or portfolio companies have any obligation to present us with any opportunity for a potential business combination of which they become aware, unless presented to such person solely in his or her capacity as an officer or director of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal, contractual or other obligation. Fifth Wall, our management team and our directors, in their capacities as employees, managers or members of Fifth Wall or in their other endeavors, are required to present certain potential business combinations to other entities before they present such opportunities to us. Each such person presently has, and any of them in the future may have, additional, fiduciary, contractual or other obligations to another entity, including private funds under the management of Fifth Wall and their respective portfolio companies, pursuant to which such member of our management team is or will be required to present a business combination opportunity to such entity. In addition, existing and future Fifth Wall funds, investment vehicles, accounts or clients and their respective portfolio companies may compete with us for business combination opportunities and, if such opportunities are pursued by such entities, we may be precluded from pursuing such opportunities. Accordingly, if any such person becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary,
contractual or other obligations, he or she will honor his or her fiduciary, contractual or other obligations to present such business combination opportunity to such entity, and may only decide to present it to us if such entity rejects the opportunity and consummating the same would not violate any restrictive covenants or other legal, fiduciary, contractual or other obligations to which such officers and directors are subject.
In addition, Fifth Wall, our sponsor and each of our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures, including without limitation forming investment funds or other vehicles whose strategies may conflict with or othewis be competitive with us, during the period in which we are seeking an initial business combination. Any such companies, businesses or investments, including without limitation investment funds or other vehicles, may present additional conflicts of interest in pursuing an initial business combination.
Notwithstanding the foregoing, we may pursue an Affiliated Joint Acquisition opportunity with one or more affiliates of Fifth Wall and/or investors. Such entities may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the acquisition by issuing to such entities a class of equity or equity-linked securities. Any Affiliated Joint Acquisition alongside a Fifth Wall investment fund, investment vehicle, account or other client may also require the consent of some or all investors in such fund, vehicle, account or client, and our ability to complete any Affiliated Joint Acquisition would be subject to any such consent. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate 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 such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation.
RISKS
We are a newly formed company that has conducted no operations and has generated no revenues. Until we complete our initial business combination (at the earliest), we will have no operations and will generate no operating revenues. In making your decision whether to invest in our securities, you should take into account not only the background of our management team, but also the special risks we face as a blank check company. This offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. Accordingly, you will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. For additional information concerning how Rule 419 blank check offerings differ from this offering, please see “Proposed Business — Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.” You should carefully consider these and the other risks set forth in the section entitled “Risk Factors” of this prospectus.
You should read and carefully consider these risks, together with the risks set forth under the section entitled “Risk Factors” and all of the other information in this prospectus, including the financial statements and the related notes included elsewhere in this prospectus, before deciding whether to invest in our common stock. If any of the risks discussed in this prospectus actually occur, our business, financial condition or operating results could be materially and adversely affected. In particular, our risks include, but are not limited to, the following:
•
We are a blank check company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
•
Past performance by Fifth Wall, including our management team, may not be indicative of future performance of an investment in us.
•
Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent COVID 19 coronavirus pandemic and the status of debt and equity markets.
•
The requirement that the target business or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account (excluding any taxes payable) at the time of the execution of a definitive agreement for our initial business combination may limit the type and number of companies with which we may complete such a business combination.
•
Our public stockholders may not be afforded an opportunity to vote on our proposed business combination, which means we may consummate our initial business combination even though a majority of our public stockholders do not support such a combination.
•
Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.
•
If we seek stockholders approval of our initial business combination, our sponsor has agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote.
•
The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into our initial business combination with a target.
•
The ability of a large number of our stockholders to exercise redemption rights may not allow us to consummate the most desirable business combination or optimize our capital structure.
•
The requirement that we maintain a minimum net worth or retain a certain amount of cash could increase the probability that we cannot consummate our business combination and that you would have to wait for liquidation in order to redeem your shares.
•
The requirement that we complete our initial business combination within 24 months from the closing of this offering may give potential target businesses leverage over us in negotiating our initial business combination.
•
We may not be able to consummate our initial business combination within the required time period, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate.
•
If we seek stockholder approval of our business combination, our sponsor, directors, officers, advisors and their affiliates may elect to purchase shares from stockholders, in which case they may influence a vote in favor of a proposed business combination that you do not support.
•
Purchases of shares of common stock in the open market or in privately negotiated transactions by our sponsor, directors, officers, advisors or their affiliates may make it difficult for us to maintain the listing of our shares on a national securities exchange following the consummation of an initial business combination.
•
If a stockholders fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
•
You will not be entitled to protections normally afforded to investors of many other blank check companies.
•
If we seek stockholder approval of our business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold in excess of 15% of our shares of common stock, you will lose the ability to redeem all such shares in excess of 15% of our shares of common stock.
•
If the net proceeds of this offering not being held in the trust account are insufficient to allow us to operate for at least the next 24 months, we may be unable to complete our initial business combination.
•
Unlike some other similarly structured special purpose acquisition companies, our sponsor will receive additional shares of Class A common stock if we issue certain shares to consummate an initial business combination.
•
Our executive officers and directors will allocate their time to other businesses, thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.
•
Fifth Wall and each of our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations to other entities and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
•
Our executive officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
•
We may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, executive officers, directors or existing holders which may raise potential conflicts of interest.
SUMMARY FINANCIAL DATA
The following table summarizes the relevant financial data for our business and should be read with our financial statements, which are included in this prospectus. We have not had any significant operations to date, so only balance sheet data is presented.
| |
|
|
December 31, 2020
|
|
|
Balance Sheet Data:
|
|
|
|
Working capital
|
|
|
|
$ |
(135,509) |
|
|
|
Total assets
|
|
|
|
$ |
153,990 |
|
|
|
Total liabilities
|
|
|
|
$ |
135,509 |
|
|
|
Stockholder's equity
|
|
|
|
$ |
18,481 |
|
|
RISK FACTORS
An investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in this prospectus, before making a decision to invest in our shares. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment.
Risks Related to Our Business and Financial Position
We are a blank check company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a blank check company with no operating results, and we will not commence operations until obtaining funding through this offering and consummating our initial business combination. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target businesses. We have no plans, arrangements or understandings with any prospective target business concerning our initial business combination and may be unable to complete our initial business combination. If we fail to complete our initial business combination, we will never generate any operating revenues.
Past performance by Fifth Wall, including our management team, may not be indicative of future performance of an investment in us.
Information regarding performance by, or businesses associated with, Fifth Wall is presented for informational purposes only. Any past experience and performance of Fifth Wall or our management team is not a guarantee either: (1) that we will be able to successfully identify a suitable candidate for our initial business combination; or (2) of any results with respect to any initial business combination we may consummate. You should not rely on the historical record of Fifth Wall or our management team’s performance as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. An investment in us is not an investment in Fifth Wall. None of our sponsor, officers, directors or Fifth Wall has had experience with a blank check company or special purpose acquisition company in the past.
We are dependent upon our executive officers and directors and their loss could adversely affect our ability to operate.
Our operations are dependent upon a relatively small group of individuals and, in particular, our executive officers and directors. We believe that our success depends on the continued service of our officers and directors, at least until we have completed our initial business combination. In addition, our executive officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating their time among various business activities, including identifying potential business combinations and monitoring the related due diligence. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or executive officers. The unexpected loss of the services of one or more of our directors or executive officers could have a detrimental effect on us. Further, Fifth Wall and each of our officers and directors have duties and obligations with respect to confidentiality to other entities and may in the future agree to additional such duties or obligations, which may prevent Fifth Wall and such officers and directors from disclosing such information to the company. Fifth Wall and our officers and directors will comply with such duties and obligations of confidentiality to such other entities, in which case, the company may not have access to such information.
Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent COVID-19 coronavirus pandemic and the status of debt and equity markets.
In December 2019, a novel strain of coronavirus was reported to have surfaced, which has and is continuing to spread throughout the world, including the United States. On January 30, 2020, the World
Health Organization declared the outbreak of the COVID- 19 coronavirus disease a “Public Health Emergency of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020, the World Health Organization characterized the outbreak as a “pandemic.” The COVID-19 outbreak has resulted in, and a significant outbreak of other infectious diseases could result in, a widespread health crisis that could materially and adversely affect the economies and financial markets worldwide, and the operations and financial position of any potential target business with which we consummate a business combination could be materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors, if the target company’s personnel, vendors and service providers are unavailable to negotiate and consummate a transaction in a timely manner, or if COVID-19 causes a prolonged economic downturn. The extent to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.
In addition, our ability to consummate a business combination may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all.
The requirement that the target business or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account (excluding any taxes payable) at the time of the execution of a definitive agreement for our initial business combination may limit the type and number of companies with which we may complete such a business combination.
Nasdaq rules and our certificate of incorporation require that the target business or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account (excluding any taxes payable) at the time of the execution of a definitive agreement for our initial business combination. This restriction may limit the type and number of companies that we may complete a business combination with. If we are unable to locate a target business or businesses that satisfy this fair market value test, we may be forced to liquidate and you will only be entitled to receive your pro rata portion of the funds in the trust account, which may be less than $10.00 per share.
Risks Related to Our Proposed Initial Business Combination
Our public stockholders may not be afforded an opportunity to vote on our proposed business combination, which means we may consummate our initial business combination even though a majority of our public stockholders do not support such a combination.
If a stockholder vote is not required, we may conduct redemptions via a tender offer. Accordingly, we may consummate our initial business combination even if holders of a majority of our public shares do not approve the business combination.
Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.
At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of one or more target businesses. Because our board of directors may consummate our initial business combination without seeking stockholder approval, public stockholders
may not have the right or opportunity to vote on the business combination. Accordingly, your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public stockholders in which we describe our business combination.
If we seek stockholder approval of our initial business combination, our sponsor has agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote.
Our sponsor will own, on an as-converted basis, 20% of our outstanding common stock immediately following the completion of this offering. Our sponsor also may from time to time purchase shares of Class A common stock prior to our initial business combination. Our amended and restated certificate of incorporation provides that, if we seek stockholder approval of an initial business combination, such initial business combination will be approved if we receive the affirmative vote of a majority of the shares voted at such meeting, including the founder shares. As a result, in addition to our sponsor’s founder shares, we would need 9,375,001, or 37.5%, of the 25,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted and the over-allotment option is not exercised). Accordingly, if we seek stockholder approval of our initial business combination, the agreement by our sponsor to vote in favor of our initial business combination will increase the likelihood that we will receive the requisite stockholders approval for such initial business combination.
The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into our initial business combination with a target.
We may enter into a transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights, we may not be able to meet such closing condition, and as a result, would not be able to proceed with the business combination. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination. Prospective targets would be aware of these risks and, thus, may be reluctant to enter into our initial business combination transaction with us.
The ability of a large number of our stockholders to exercise redemption rights may not allow us to consummate the most desirable business combination or optimize our capital structure.
In connection with the successful consummation of our business combination, we may redeem up to that number of shares of common stock that would permit us to maintain net tangible assets of $5,000,001. If our business combination requires us to use substantially all of our cash to pay the purchase price, the redemption threshold may be further limited. Alternatively, we may need to arrange third party financing to help fund our business combination in case a larger percentage of stockholders exercise their redemption rights than we expect. If the acquisition involves the issuance of our shares as consideration, we may be required to issue a higher percentage of our shares to the target or its stockholders to make up for the failure to satisfy a minimum cash requirement. Raising additional funds to cover any shortfall may involve dilutive equity financing or incurring indebtedness at higher than desirable levels. This may limit our ability to effectuate the most attractive business combination available to us.
The requirement that we maintain a minimum net worth or retain a certain amount of cash could increase the probability that we cannot consummate our business combination and that you would have to wait for liquidation in order to redeem your shares.
If, pursuant to the terms of our proposed business combination, we are required to maintain a minimum net worth or retain a certain amount of cash in trust in order to consummate the business
combination and regardless of whether we proceed with redemptions under the tender offer or proxy rules, the probability that we cannot consummate our business combination is increased. If we do not consummate our business combination, you would not receive your pro rata portion of the trust account until we liquidate. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may trade at a discount to the pro rata amount in our trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your shares in the open market.
The requirement that we complete our initial business combination within 24 months from the closing of this offering may give potential target businesses leverage over us in negotiating our initial business combination.
Any potential target business with which we enter into negotiations concerning our initial business combination will be aware that we must consummate our initial business combination within 24 months from the closing of this offering. Consequently, such target businesses may obtain leverage over us in negotiating our initial business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
We may not be able to consummate our initial business combination within the required time period, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate.
We may not be able to find a suitable target business and consummate an initial business combination within 24 months after the closing of this offering. Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein. If we have not consummated an initial business combination within such applicable time period, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (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 stockholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
If we seek stockholder approval of our business combination, our sponsor, directors, officers, advisors and their affiliates may elect to purchase shares from stockholders, in which case they may influence a vote in favor of a proposed business combination that you do not support.
If we seek stockholder approval of our business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares or equity-linked securities in privately negotiated transactions or in the open market either prior to or following the consummation of our initial business combination. Such purchases will not be made if our sponsor, directors, officers, advisors or their affiliates are in possession of any material non-public information that has not been disclosed to the selling stockholder, although they are under no obligation to do so. However, other than as expressly stated herein, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. In the event that our sponsor, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. It is intended that,
if Rule 10b-18 would apply to purchases by our sponsor, directors, officers, advisors or their affiliates, then such purchases will comply with Rule 10b-18 under the Exchange Act, to the extent it applies, which provides a safe harbor for purchases made under certain conditions, including with respect to timing, pricing and volume of purchases.
The purpose of such purchases would be to (1) increase the likelihood of obtaining stockholder approval of the business combination or (2) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of the business combination, where it appears that such requirement would otherwise not be met. This may result in the consummation of an initial business combination that may not otherwise have been possible.
Purchases of shares of common stock in the open market or in privately negotiated transactions by our sponsor, directors, officers, advisors or their affiliates may make it difficult for us to maintain the listing of our shares on a national securities exchange following the consummation of an initial business combination.
If our sponsor, directors, officers, advisors or their affiliates purchase shares of common stock in the open market or in privately negotiated transactions, the public “float” of our shares of common stock and the number of beneficial holders of our securities would both be reduced, possibly making it difficult to maintain the listing or trading of our securities on a national securities exchange following consummation of the business combination.
If a stockholder 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 stockholder fails to receive our proxy solicitation or tender offer materials, as applicable, such stockholder 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 stockholder fails to comply with these procedures, its shares may not be redeemed. See “Proposed Business — Effecting Our Initial Business Combination — Tendering Share Certificates in Connection with a Tender Offer or Redemption Rights.”
You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares, potentially at a loss.
Our public stockholders shall be entitled to receive funds from the trust account only in the event of a redemption to public stockholders prior to any winding up in the event we do not consummate our initial business combination or our liquidation, if they redeem their shares in connection with an initial business combination that we consummate or if we seek to amend our certificate of incorporation to modify the substance or timing of our redemption obligation to redeem all public shares if we cannot complete an initial business combination within 24 months of the closing of this offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity. In no other circumstances will a stockholder have any right or interest of any kind to the funds in the trust account. Accordingly, to liquidate your investment, you may be forced to sell your public shares, potentially at a loss.
You will not be entitled to protections normally afforded to investors of many other blank check companies.
Because the net proceeds of this offering are intended to be used to complete our initial business combination with a target business that has not been identified, we may be deemed to be a “blank check” company under the United States securities laws. However, because we will have net tangible assets
in excess of $5,000,000 upon the successful consummation of this offering and will expect to file a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means our shares will be immediately tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, offerings subject to Rule 419 would prohibit the release of any interest earned on funds held in the trust account to us. For a more detailed comparison of our offering to offerings that comply with Rule 419, please see “Proposed Business — Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.”
We may engage one or more of our underwriters or one of their respective affiliates to provide additional services to us after this offering, which may include acting as financial advisor in connection with an initial business combination or as placement agent in connection with a related financing transaction. Our underwriters are entitled to receive deferred commissions that will released from the trust only on a completion of an initial business combination. These financial incentives may cause them to have potential conflicts of interest in rendering any such additional services to us after this offering, including, for example, in connection with the sourcing and consummation of an initial business combination.
We may engage one or more of our underwriters or one of their respective affiliates to provide additional services to us after this offering, including, for example, identifying potential targets, providing financial advisory services, acting as a placement agent in a private offering or arranging debt financing. We may pay such underwriter or its affiliate fair and reasonable fees or other compensation that would be determined at that time in an arm’s length negotiation; provided that no agreement will be entered into with any of the underwriters or their respective affiliates and no fees or other compensation for such services will be paid to any of the underwriters or their respective affiliates prior to the date that is 60 days from the date of this prospectus, unless such payment would not be deemed underwriters’ compensation in connection with this offering. The underwriters are also entitled to receive deferred commissions that are conditioned on the completion of an initial business combination. The underwriters’ or their respective affiliates’ financial interests tied to the consummation of a business combination transaction may give rise to potential conflicts of interest in providing any such additional services to us, including potential conflicts of interest in connection with the sourcing and consummation of an initial business combination.
If we seek stockholder approval of our business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold in excess of 15% of our shares of common stock, you will lose the ability to redeem all such shares in excess of 15% of our shares of common stock.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our certificate of incorporation provides that a public stockholder, individually or together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in this offering. Your inability to redeem more than an aggregate of 15% of the shares sold in this offering will reduce your influence over our ability to consummate our initial business combination and you could suffer a material loss on your investment in us if you sell such excess shares in open market transactions. As a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, you would be required to sell your shares in open market transaction, potentially at a loss.
As the number of special purpose acquisition companies increases, there may be more competition to find an attractive target for an initial business combination. This could increase the costs associated with completing our initial business combination and may result in our inability to find a suitable target for our initial business combination.
In recent years, the number of special purpose acquisition companies that have been formed has increased substantially. Many companies have entered into business combinations with special purpose
acquisition companies, and there are still many special purpose acquisition companies seeking targets for their initial business combination, as well as many additional special purpose acquisition companies currently in registration. As a result, at times, fewer attractive targets may be available, and it may require more time, effort and resources to identify a suitable target for an initial business combination.
In addition, because there are more special purpose acquisition companies seeking to enter into an initial business combination with available targets, the competition for available targets with attractive fundamentals or business models may increase, which could cause target companies to demand improved financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions or increases in the cost of additional capital needed to close business combinations or operate targets post-business combination. This could increase the cost of, delay or otherwise complicate or frustrate our ability to find a suitable target for and/or complete our initial business combination.
If the net proceeds of this offering not being held in the trust account are insufficient to allow us to operate for at least the next 24 months, we may be unable to complete our initial business combination.
The funds available to us outside of the trust account may not be sufficient to allow us to operate for at least the next 24 months, assuming that our initial business combination is not consummated during that time. Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent designed to keep target businesses from “shopping” around for transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we are unable to fund such down payments or “no shop” provisions, our ability to close a contemplated transaction could be impaired. Furthermore, if we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business. If we are unable to complete our initial business combination, our public stockholders may only receive a pro rata portion of the amount then in the trust account (which may be less than $10.00 per share) (whether or not the underwriters’ over-allotment option is exercised in full) on our redemption.
Subsequent to our consummation of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges.
Even if we conduct thorough due diligence on a target business with which we combine, this diligence may not surface all material issues that may be present inside a particular target business. And, regardless of how comprehensive our diligence may be, factors outside of the target business and outside of our control may arise later. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing.
Our directors may decide not to enforce indemnification obligations against our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public stockholders.
In the event that the proceeds in the trust account are reduced below $10.00 per share (whether or not the underwriters’ overallotment option is exercised in full) and our sponsor asserts that it is unable
to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine on our behalf whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations on our behalf, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.00 per share.
Unlike some other similarly structured special purpose acquisition companies, our sponsor will receive additional shares of Class A common stock if we issue certain shares to consummate an initial business combination.
The founder shares will automatically convert into shares of Class A common stock concurrently with or immediately following the consummation of our initial business combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with our initial business combination, the number of shares of Class A common stock issuable upon conversion of all founder shares will equal, in the aggregate, on an as converted basis, 20% of the total number of shares of Class A common stock outstanding after such conversion (after giving effect to any redemptions of shares of Class A common stock by public stockholders). This amount will include the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the company in connection with or in relation to the consummation of the initial business combination, but will exclude any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in the initial business combination, the private placement shares, and any private placement shares issued to our sponsor, officers or directors upon conversion of working capital loans, provided that such conversion of founder shares will never occur on a less than one-for-one basis. This is different than some other similarly structured special purpose acquisition companies in which the initial stockholders will only be issued an aggregate of 20% of the total number of shares to be outstanding prior to our initial business combination.
Our executive officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs. Our independent directors also serve as officers and board members for other entities. If our executive officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination. For a complete discussion of our executive officers’ and directors’ other business affairs, please see “Management — Officers, Directors and Director Nominees.”
Fifth Wall and each of our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual or other obligations to other entities and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
Following the completion of this offering and until we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses. Fifth Wall
and each of our officers and directors presently has, and any of them in the future may have, additional fiduciary, contractual or other obligations to other entities, including Fifth Wall investment funds, investment vehicles, accounts and clines and their respective portfolio companies, pursuant to which such officer or director is or will be required to present a business combination opportunity or other business opportunities to such entity. In addition, existing and future Fifth Wall investment funds, investment vehicles, accounts, accounts and clients and their respective portfolio companies may compete with us for business combination opportunities and, if such opportunities are pursued by such entities, we may be precluded from pursuing such opportunities. Further, any of the foregoing may engage in businesses that are competitive to a prospective or actual target for the company’s initial business acquisition. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate 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 such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation. In addition, Fifth Wall, our sponsor and each of our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures, including without limitation forming investment funds or other vehicles whose strategies may conflict with or otherwise be competitive with us, during the period in which we are seeking an initial business combination. Any such companies, businesses or investments, including without limitation investment funds or other vehicles, may present additional conflicts of interest in pursuing an initial business combination. 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 or a target business in which any of the foregoing have an interest, although we do not intend to do so, or we may acquire a target business through an Affiliated Joint Acquisition with one or more affiliates of Fifth Wall and/or one or more investors in any current or future Fifth Wall investment fund, investment vehicle, account or client. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours. In particular, certain of the Fifth Wall funds are focused on investments in the PropTech industry. As a result, there may be substantial overlap between companies that would be a suitable business combination for us and companies that would make an attractive target for the Fifth Wall funds. In addition, our amended and restated certificate of incorporation provides that we renounce our interest in any corporate 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 such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation.
The personal and financial interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination or in determining the outcome of any conflicts of interest that may arise as a result of such personal and financial interests. 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 stockholders’ best interest.
If this were the case, it would be a breach of their fiduciary duties to us as a matter of Delaware law and we or our stockholders might have a claim against such individuals for infringing on our stockholders’ rights. However, we might not ultimately be successful in any claim we may make against them for such reason.
We may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, executive officers, directors or existing holders which may raise potential conflicts of interest.
In light of the involvement of our sponsor, executive officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, executive officers, directors or existing holders. Our directors also serve as officers and board members for other entities, including, without limitation, those described under “Management — Conflicts of Interest.” Such entities may compete with us for business combination opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with which they are affiliated, and there have been no substantive discussions concerning a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business combination as set forth in “Proposed Business — Effecting our initial business combination — Evaluation of a target business and structuring of our initial business combination” and such transaction was approved by a majority of our independent and disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our sponsor, executive officers, directors or existing holders, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public stockholders as they would be absent any conflicts of interest.
Moreover, we may pursue an Affiliated Joint Acquisition opportunity with one or more affiliates of Fifth Wall and/or one or more investors in Fifth Wall. Any such parties may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the business combination by issuing to such parties a class of equity or equity-linked securities. Accordingly, such persons or entities may have a conflict between their interests and ours.
If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including restrictions on the nature of our investments and restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial business combination. In addition, we may have imposed upon us burdensome requirements, including registration as an investment company, adoption of a specific form of corporate structure and reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to consummate our initial business combination.
In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading in securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business will be to identify and complete a business combination and thereafter to operate the post-business combination business or assets for the long term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act. This offering is not intended for persons who are seeking a return on investments in government securities or investment securities. The trust account is intended as a holding place for funds pending the earliest to occur of either: (i) the completion of our initial business combination; (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to provide holders of shares of our Class A common stock the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of shares of our Class A common stock, and (iii) the redemption of our public shares if we have not consummated an initial business within 24 months from the closing of this offering, subject to applicable law and as further described herein. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete a business combination. If we do not complete our initial business combination within the required time period, our public stockholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account.
We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which a substantial majority of our stockholders do not agree.
Our amended and restated certificate of incorporation does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. In addition, our proposed initial business combination may impose a minimum cash requirement for: (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. As a result, we may be able to complete our initial business combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or any of their affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares in connection with such initial business combination, all shares of Class A common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations.
We are subject to laws and regulations enacted by national, regional and local governments, in particular, the Securities and Exchange Commission, or the SEC. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application also may change from time to time and those changes could
have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business and results of operations.
If we are unable to consummate our initial business combination, our public stockholders may be forced to wait up to 24 months or longer before redemption from our trust account.
If we are unable to consummate our initial business combination within 24 months from the closing of this offering, we will, as promptly as reasonably possible but not more than five business days thereafter (subject to our certificate of incorporation and applicable law), distribute the aggregate amount then on deposit in the trust account (net of taxes payable), pro rata to our public stockholders by way of redemption and cease all operations except for the purposes of winding up of our affairs by way of a voluntary liquidation, as further described herein. Any redemption of public stockholders from the trust account shall be effected as required by our certificate of incorporation prior to our commencing any voluntary liquidation. Except as otherwise described herein, we have no obligation to return funds to investors prior to the date of any redemption required as a result of our failure to consummate our initial business combination within the period described above or our liquidation, unless we consummate our initial business combination prior thereto and only then in cases where investors have sought to redeem their shares of common stock. Only upon any such redemption of public shares as we are required to effect, or any liquidation, will public stockholders be entitled to distributions if we are unable to complete our initial business combination.
The grant of registration rights to our sponsor may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our shares of common stock.
Pursuant to an agreement to be entered into on the date of this prospectus, our sponsor (and/or our sponsor’s designees) and their permitted transferees can demand that we register the founder shares, the private shares, the underlying securities and any securities issued upon conversion of working capital loans. We will bear the cost of registering these securities. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our shares of common stock. In addition, the existence of the registration rights may make our initial business combination more costly or difficult to conclude. This is because the stockholder 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 shares of common stock that is expected to occur when the securities owned by our sponsor, holders of our private shares or their respective permitted transferees are registered.
Because we have not selected a particular business or specific geographic location or any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’ operations.
We may pursue an acquisition opportunity in any business industry or sector, but we intend to initially focus on those industries or sectors that complement our management team’s background. Except for the limitations that a target business have a fair market value of at least 80% of the value of the trust account (excluding any taxes payable) and that we are not permitted to effectuate our initial business combination with another blank check company or similar company with nominal operations, we will have virtually unrestricted flexibility in identifying and selecting a prospective acquisition candidate. Because we have not yet identified or approached any specific target business with respect to our initial business combination, there is no basis to evaluate the possible merits or risks of any particular target business’ operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we consummate our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may not properly ascertain or assess all of the significant risk factors and we may
not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and thus leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. In addition, investors will be relying on the business judgment of our board of directors, which will have significant discretion in choosing the standard used to establish the fair market value of a particular target business. An investment in our shares may not ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in an acquisition target.
We may seek investment opportunities outside our management’s area of expertise and our management may not be able to adequately ascertain or assess all significant risks associated with the target company.
There is no limitation on the industry or business sector we may consider when contemplating our initial business combination. We may therefore be presented with a business combination candidate in an industry unfamiliar to our management team, but determine that such candidate offers an attractive investment opportunity for our company. In the event we elect to pursue an investment outside of our management’s expertise, our management’s experience may not be directly applicable to the target business or their evaluation of its operations.
Although we identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified specific criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not have all of these positive attributes. If we consummate our initial business combination with a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce our initial business combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders 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 stockholder approval of the transaction is required by law or the Nasdaq, or we decide to obtain stockholder approval for business or other legal reasons, it may be more difficult for us to attain stockholder approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our public stockholders may only receive $10.00 per share or even less (whether or not the underwriters’ over-allotment option is exercised in full) on our redemption.
Management’s flexibility in identifying and selecting a prospective acquisition candidate, along with our management’s financial interest in consummating our initial business combination, may lead management to enter into an acquisition agreement that is not in the best interest of our stockholders.
Subject to the requirements in Nasdaq rules and our certificate of incorporation that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the trust account (excluding any taxes payable) at the time of the agreement to enter into such initial business combination, we will have virtually unrestricted flexibility in identifying and selecting a prospective acquisition candidate. Investors will be relying on management’s ability to identify business combinations, evaluate their merits, conduct or monitor diligence and conduct negotiations. Management’s flexibility in identifying and selecting a prospective acquisition candidate, along with management’s financial interest in consummating our initial business combination, may lead management to enter into an acquisition agreement that is not in the best interest of our stockholders, which would be the case if the trading price of our shares of common stock after giving effect to such business combination was less than the per-share trust liquidation value that our stockholders would have received if we had dissolved without consummating our initial business combination.
We are not required to obtain an opinion from an independent investment banking firm, and consequently, an independent source may not confirm that the price we are paying for the business is fair to our stockholders from a financial point of view.
Unless we consummate our initial business combination with an affiliated entity, we are not required to obtain an opinion from an independent investment banking firm that the price we are paying is fair to our stockholders from a financial point of view. If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination.
Resources could be wasted in researching acquisitions that are not consummated.
We anticipate that the investigation of each specific target business and the negotiation, drafting, and execution of relevant agreements, disclosure documents, and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to consummate our initial business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders may only receive $10.00 per share or even less (whether or not the underwriters’ over-allotment option is exercised in full) on our redemption.
Our ability to successfully effect our initial business combination and to be successful thereafter will be largely dependent upon the efforts of our officers, directors and key personnel, some of whom may join us following our initial business combination.
Our operations are dependent upon a relatively small group of individuals and, in particular, our officers and directors. We believe that our success depends on the continued service of our officers and directors, at least until we have consummated our initial business combination. In addition, our officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or officers. The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us.
The role of such persons in the target business, however, cannot presently be ascertained. Although some of such persons may remain with the target business in senior management or advisory positions following our initial business combination, it is likely that some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, our assessment of these individuals may not prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
Members of our management team may negotiate employment or consulting agreements with a target business in connection with a particular business combination. These agreements may provide for them to receive compensation following our business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.
Members of our management team may be able to remain with the company after the completion of our business combination only if they are able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the
negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the business combination. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business. However, we believe the ability of such individuals to remain with us after the completion of our business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination. There is no certainty, however, that any members of our management team will remain with us after the completion of our business combination. We cannot assure you that any members of our management team will remain in senior management or advisory positions with us. The determination as to whether any members of our management team will remain with us will be made at the time of our initial business combination.
We may have a limited ability to assess the management of a prospective target business and, as a result, may effectuate our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the target business’ management may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively impacted.
The officers and directors of an acquisition candidate may resign upon consummation of our initial business combination. The loss of an acquisition target’s key personnel could negatively impact the operations and profitability of our post-combination business.
The role of an acquisition candidate’s key personnel upon the consummation of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial business combination, it is possible that some members of the management team of an acquisition candidate will not wish to remain in place.
Risks Related to Our Operations
Our executive officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs. Our independent directors also serve as officers and board members for other entities. If our executive officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination. For a complete discussion of our executive officers’ and directors’ other business affairs, please see “Management — Officers, Directors and Director Nominees.”
Fifth Wall and certain of our officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in allocating their time and determining to which entity a particular business opportunity should be presented.
Following the completion of this offering and until we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses. Fifth Wall
and our sponsor and officers and directors are, and may in the future become, affiliated with entities (such as operating companies or investment vehicles) that are engaged in a similar business. Our sponsor and directors and officers are also not prohibited from sponsoring, or otherwise becoming involved with, any other blank check companies prior to us completing our initial business combination. Moreover, certain of our directors and officers have time and attention requirements for investment funds of which affiliates of our sponsor are the investment managers.
Fifth Wall and our officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the other entities in the future to which they owe certain fiduciary or contractual duties. 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. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate 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 such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue.
For a complete discussion of our officers’ and directors’ business affiliations and the potential conflicts of interest that you should be aware of, please see the sections of this prospectus entitled “Management — Officers and Directors,” “Management — Conflicts of Interest” and “Certain Relationships and Related Party Transactions.”
Our 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, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact (subject to certain approvals and consents), we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or officers, although we do not intend to do so. We 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.
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, officers, directors or existing holders which may raise potential conflicts of interest.
In light of the involvement of our sponsor, officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, officers or directors. Our directors also serve as officers and board members for other entities, including, without limitation, those described under the section of this prospectus entitled “Management — Conflicts of Interest.” Such entities may compete with us for business combination opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our business combination with any entities with which they are affiliated, and there have been no preliminary discussions concerning a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business combination as set forth in the section of this prospectus entitled “Proposed Business — Sources of Target Businesses” and such transaction was approved by a majority of our disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking firm that is a member of FINRA, or from an independent accounting firm, regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our officers, directors or existing holders, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public stockholders as they would be absent any conflicts of interest.
Since our sponsor, officers and directors will lose their entire investment in us if our business combination is not completed, a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
On December 2, 2020, our sponsor paid $25,000 to cover for certain expenses and offering costs on behalf of the company in exchange for issuance of 7,187,500 founder shares. Prior to the initial investment in the company of $25,000 by our sponsor, the company had no assets, tangible or intangible. The number of founder shares issued was determined based on the expectation that such founder shares would represent 20% of the outstanding shares after this offering. The founder shares will be worthless if we do not complete an initial business combination. In addition, our sponsor has committed to purchase an aggregate of 857,500 shares of Class A common stock (or 932,500 shares of Class A common stock if the underwriters’ over-allotment option is exercised in full), at a price of $10.00 per share in a private placement to occur concurrently with the closing of this offering for an aggregate purchase price of $8,575,000 (or $9,325,000 if the underwriters’ over-allotment option is exercised in full). The private placement shares are identical to the Class A common stock sold in this offering, subject to certain limited exceptions as described in this prospectus. Our sponsor and our directors and executive officers have agreed (A) to vote any shares owned by them in favor of any proposed business combination and (B) not to redeem any founder shares in connection with a stockholder vote to approve a proposed initial business combination. In addition, we may obtain loans from our sponsor, affiliates of our sponsor or an officer or director. The personal and financial interests of our officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following the initial business combination.
Certain shares beneficially owned by our officers and directors will not participate in liquidating distributions and, therefore, our officers and directors may have a conflict of interest in determining whether a particular target business is appropriate for our initial business combination.
Our sponsor has agreed to (i) waive its redemption rights with respect to its founder shares and (ii) waive its rights to liquidating distributions from the trust account with respect to its founder shares if we fail to consummate an initial business combination within 24 months from the closing of this offering. Our sponsor and our directors and executive officers have entered into agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and any public shares they may acquire during or after this offering in connection with the completion of our initial business combination. However, if our sponsor, directors or executive officers acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to consummate an initial business combination within 24 months from the closing of this offering. Accordingly, the founder shares will be worthless if we do not consummate our initial business combination. The personal and financial interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination. 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 stockholders’ best interest.
We may issue notes or other debt securities, or otherwise incur substantial debt, to complete our initial business combination, which may adversely affect our financial condition and thus negatively impact the value of our stockholders’ investment in us.
Although we have no commitments as of the date of this prospectus to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial debt to complete our initial business combination. If we incur any indebtedness without a waiver from the lender of any right, title, interest or claim of any kind in or to any monies held in the trust account, the incurrence of debt could have a variety of negative effects, including:
•
default and foreclosure on our assets if our operating revenues after our 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 security is payable on demand;
•
our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;
•
our inability to pay dividends on our shares of common stock;
•
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 shares of common stock 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.
We may only be able to complete one business combination with the proceeds of this offering, which will cause us to be solely dependent on a single business, which may have a limited number of products or services. This lack of diversification may negatively impact our operations and profitability.
The net proceeds from this offering together with the funds we will receive from the sale of the private shares (excluding $1,000,000 of net proceeds that will not be held in the trust account) will provide us with approximately $241,250,000 assuming no redemptions (or approximately $277,437,500 if the underwriters’ over-allotment option is exercised in full) that we may use to complete our initial business combination, after payment of the deferred underwriting discount and estimated offering expenses of $2,575,000.
We may effectuate our initial business combination with a single target business or multiple target businesses simultaneously. However, we may not be able to effectuate our initial business combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By consummating our initial business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities, which may have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success may be solely dependent upon the performance of a single business, property or asset, or dependent upon the development or market acceptance of a single or limited number of products or services. This lack of diversification may subject us to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
The securities in which we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.00 per share.
The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7
under the Investment Company Act, which invest only in direct U.S. government treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that we are unable to complete our initial business combination or make certain amendments to our amended and restated certificate of incorporation, our public stockholders are entitled to receive their prorate share of the proceeds held in the trust account, plus any interest income, net of taxes paid or payable (less, in the case we are unable to complete our initial business combination, $100,000 of interest). Negative interest rates could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.00 per share.
Changes in the market for directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination.
In recent months, the market for directors and officers liability insurance for special purpose acquisition companies has changed in ways adverse to us and our management team. Fewer insurance companies are offering quotes for directors and officers liability coverage, the premiums charged for such policies have generally increased and the terms of such policies have generally become less favorable. These trends may continue into the future.
The increased cost and decreased availability of directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination. In order to obtain directors and officers liability insurance or modify its coverage as a result of becoming a public company, the post-business combination entity might need to incur greater expense and/or accept less favorable terms. Furthermore, any failure to obtain adequate directors and officers liability insurance could have an adverse impact on the post-business combination’s ability to attract and retain qualified officers and directors.
In addition, after completion of any initial business combination, our directors and officers could be subject to potential liability from claims arising from conduct alleged to have occurred prior to such initial business combination. As a result, in order to protect our directors and officers, the post-business combination entity may need to purchase additional insurance with respect to any such claims (“run-off insurance”). The need for run-off insurance would be an added expense for the post-business combination entity and could interfere with or frustrate our ability to consummate an initial business combination on terms favorable to our investors.
If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholder may be less than $10.00 per public share.
Our placing of funds in the trust account may not protect those funds from third party claims against us. Although we will seek to have all vendors, service providers (excluding our independent registered public accounting firm), prospective partner businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements, they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our founders will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if our founding team believes that such third party’s engagement would be significantly more beneficial to us than any alternative.
Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are
believed by our founding team to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where our founding team is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we have not consummated an initial business combination within 24 months from the closing of this offering or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per share redemption amount received by public stockholder could be less than the $10.00 per public share initially held in the trust account, due to claims of such creditors. Pursuant to the letter agreement the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.20 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 $10.20 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
We may attempt to simultaneously consummate business combinations with multiple prospective targets, which may hinder our ability to consummate our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete the initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
We may attempt to consummate our initial business combination with a private company about which little information is available.
In pursuing our acquisition strategy, we may seek to effectuate our initial business combination with a privately held company. By definition, very little public information exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information, which may result in our initial business combination with a company that is not as profitable as we suspected, if at all.
We may not be able to maintain control of a target business after our initial business combination.
We may structure our initial business combination to acquire less than 100% of the equity interests or assets of a target business, but we will only consummate such business combination if we will become the majority stockholder of the target (or control the target through contractual arrangements in limited
circumstances for regulatory compliance purposes) or are otherwise not required to register as an investment company under the Investment Company Act or to the extent permitted by law we may acquire interests in a variable interest entity, in which we may have less than a majority of the voting rights in such entity, but in which we are the primary beneficiary. Even though we may own a majority interest in the target, our stockholders prior to the business combination may collectively own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to such transaction could own less than a majority of our outstanding shares subsequent to such transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s stock than we initially acquired. Accordingly, this may make it more likely that we will not be able to maintain our control of the target business.
The ability of our public stockholders to exercise their redemption rights may not allow us to effectuate the most desirable business combination or optimize our capital structure.
If our initial business combination requires us to use substantially all of our cash to pay the purchase price, because we will not know how many public stockholders may exercise redemption rights, we may either need to reserve part of the trust account for possible payment upon such redemption, or we may need to arrange third party financing to help fund our initial business combination. In the event that the acquisition involves the issuance of our stock as consideration, we may be required to issue a higher percentage of our stock to make up for a shortfall in funds. Raising additional funds to cover any shortfall may involve dilutive equity financing or incurring indebtedness at higher than desirable levels. This may limit our ability to effectuate the most attractive business combination available to us.
In connection with any meeting held to approve an initial business combination, we will offer each public stockholder the option to vote in favor of the proposed business combination and still seek redemption of their shares.
In connection with any meeting held to approve an initial business combination, we will offer each public stockholder (but not our sponsor, officers or directors) the right to have their shares of common stock redeemed for cash (subject to the limitations described elsewhere in this prospectus) regardless of whether such stockholder votes for or against such proposed business combination; provided that a stockholder must in fact vote for or against a proposed business combination in order to have their shares of common stock redeemed for cash. If a stockholder fails to vote for or against a proposed business combination, that stockholder would not be able to have their shares of common stock so redeemed. We will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and a majority of the outstanding shares of common stock voted are voted in favor of the business combination. This is different than other similarly structured blank check companies where stockholders are offered the right to redeem their shares only when they vote against a proposed business combination. This threshold and the ability to seek redemption while voting in favor of a proposed business combination may make it more likely that we will consummate our initial business combination.
We will require public stockholders who wish to redeem their shares of common stock in connection with a proposed business combination, or an amendment to our certificate of incorporation to effect the substance or timing of their redemption obligation if we fail to timely complete a business combination, to comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline for exercising their rights.
We will require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either (i) tender their certificates to our transfer agent prior to the expiration date set forth in the tender offer documents mailed to such holders, or in the event we distribute proxy materials, up to two business days prior to the vote on the proposal to
approve the business combination or amendment to our certificate of incorporation to modify the substance or timing of our redemption obligation to redeem all public shares if we cannot complete an initial business combination or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity, or (ii) deliver their shares to the transfer agent electronically using Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker, DTC and our transfer agent will need to act to facilitate this request. It is our understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, because we do not have any control over this process or over the brokers or DTC, it may take significantly longer than two weeks to obtain a physical stock certificate. While we have been advised that it takes a short time to deliver shares through the DWAC System, this may not be the case. Under our certificate of incorporation, we are required to provide at least 10 days advance notice of any stockholder meeting, which would be the minimum amount of time a stockholder would have to determine whether to exercise redemption rights. Accordingly, if it takes longer than we anticipate for stockholders to deliver their shares, stockholders who wish to redeem may be unable to meet the deadline for exercising their redemption rights and thus may be unable to redeem their shares.
Redeeming stockholders may be unable to sell their securities when they wish to in the event that the proposed business combination is not approved.
We will require public stockholders who wish to redeem their shares of common stock in connection with any proposed business combination to comply with the delivery requirements discussed above for redemption. If such proposed business combination is not consummated, we will promptly return such certificates to the tendering public stockholders. Accordingly, investors who attempted to redeem their shares in such a circumstance will be unable to sell their securities after the failed acquisition until we have returned their securities to them. The market price for our shares of common stock may decline during this time and you may not be able to sell your securities when you wish, even while other stockholders that did not seek redemption may be able to sell their securities.
Because of our structure, other companies may have a competitive advantage and we may not be able to consummate an attractive business combination.
We expect to encounter intense competition from entities other than blank check companies having a business objective similar to ours, including PropTech investment funds and operating businesses competing for acquisitions. Many of these entities are well established and have extensive experience in identifying and effecting business combinations directly or through affiliates. Many of these competitors possess greater technical, human and other resources than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. Therefore, our ability to compete in acquiring certain sizable target businesses may be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, seeking stockholder approval of our initial business combination may delay the consummation of a transaction. Additionally, our rights, and the future dilution they represent (entitling the holders to receive shares of common stock on consummation of our initial business combination), may not be viewed favorably by certain target businesses. Any of the foregoing may place us at a competitive disadvantage in successfully negotiating our initial business combination.
We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination. If we are unable to complete our initial business combination, our public stockholders may only receive $10.00 per share or even less (whether or not the underwriters’ over-allotment option is exercised in full) on our redemption.
Although we believe that the net proceeds of this offering will be sufficient to allow us to consummate our initial business combination, because we have not yet identified any prospective target business we cannot ascertain the capital requirements for any particular transaction or our costs to identify and consummate a transaction and to operate the target business. If the net proceeds of this offering prove
to be insufficient for one or more reasons including the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to repurchase for cash a significant number of shares from stockholders who elect redemption in connection with our initial business combination, or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the proposed business combination. Financing may not be available on acceptable terms, if at all. The current economic environment may make it especially difficult for companies to obtain acquisition financing. To the extent that additional financing proves to be unavailable when needed to consummate our initial business combination, we would be compelled to either restructure the transaction or abandon that particular initial business combination and seek an alternative target business candidate. If we are unable to complete our initial business combination, our public stockholders may only receive $10.00 per share or even less (whether or not the underwriters’ over-allotment option is exercised in full) on our redemption. In addition, even if we do not need additional financing to consummate our initial business combination, we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our officers, directors or stockholders 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 stockholder vote, potentially in a manner that you do not support.
Upon closing of this offering, our sponsor (and its transferees/designees, if any) collectively will own 20% of our issued and outstanding shares of common stock (assuming they do not purchase any shares in this offering). Accordingly, they may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our certificate of incorporation. If our sponsor purchases any shares in this offering, or if we or our sponsor purchase any additional shares of common stock in the aftermarket or in privately negotiated transactions, this would increase their control. Neither our sponsor nor, to our knowledge, any of our officers or directors, has any current intention to purchase additional securities. Factors that would be considered in making such additional purchases would include consideration of the current trading price of our shares of common stock.
Our sponsor paid an aggregate of $25,000, or approximately $0.003 per founder share and, accordingly, you will experience immediate and substantial dilution from the purchase of our shares of common stock.
The difference between the public offering price per share (allocating all of the share purchase price to the shares of common stock) and the pro forma net tangible book value per share after this offering constitutes the dilution to you and the other investors in this offering. Our sponsor acquired the founder shares at a nominal price, significantly contributing to this dilution. Upon closing of this offering, you and the other public stockholders will incur an immediate and substantial dilution of approximately 94.0% or $9.40 per share (the difference between the pro forma net tangible book value per share of $0.60 and the initial offering price of $10.00 per share immediately upon the closing of this offering), or a dilution of approximately 94.8% dilution or $9.48 per share (the difference between the pro forma net tangible book value per share of $0.52 and the initial offering price of $10.00 per share) if the over-allotment is fully exercised.
The determination of the offering price of our Class A common stock and the size of this offering is more arbitrary than the pricing of securities and size of an offering of an operating company in a particular industry.
Prior to this offering there has been no public market for any of our securities. The public offering price of the Class A common stock was negotiated between us and the underwriters. In determining the size of this offering, management held customary organizational meetings with representatives of the underwriters, both prior to our inception and thereafter, with respect to the state of capital markets, generally, and the amount the underwriters believed they reasonably could raise on our behalf. Factors considered in determining the size of this offering, prices and terms of Class A common stock include:
•
the history and prospects of companies whose principal business is the acquisition of other companies;
•
prior offerings of those companies;
•
our prospects for acquiring an operating business at attractive values;
•
a review of debt to equity ratios in leveraged transactions;
•
our capital structure;
•
an assessment of our management and their experience in identifying operating companies;
•
general conditions of the securities markets at the time of this offering; and
•
other factors as were deemed relevant.
Although these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities of an operating company in a particular industry since we have no historical operations or financial results.
There is currently no market for our securities and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities.
As of the date of this prospectus there is currently no market for our securities. Prospective stockholders therefore have no access to information about prior market history on which to base their investment decision. Following this offering, the price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions. Once listed on Nasdaq, an active trading market for our securities may never develop or, if developed, may not be sustained. Additionally, if our securities become delisted from Nasdaq for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities not listed on a national exchange, the liquidity and price of our securities may be more limited than if we were listed on Nasdaq or another national exchange. You may be unable to sell your securities unless a market can be established and sustained.
Once initially listed on Nasdaq, our securities may not continue to be listed on Nasdaq in the future, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
We anticipate that our securities will be initially listed on Nasdaq upon consummation of this offering. However, we cannot assure you of this or that our securities will continue to be listed on Nasdaq in the future. Additionally, in connection with our business combination, Nasdaq may require us to file a new initial listing application and meet its initial listing requirements as opposed to its more lenient continued listing requirements. We cannot assure you that we will be able to meet those initial listing requirements at that time. If Nasdaq delists our securities from trading on its exchange, we could face significant material adverse consequences, including:
•
a limited availability of market quotations for our securities;
•
a reduced liquidity with respect to our securities;
•
a determination that our shares of common stock are a “penny stock” which will require brokers trading in our shares of common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our shares of common stock;
•
a limited amount of news and analyst coverage for our company; and
•
a decreased ability to issue additional securities or obtain additional financing in the future.
Because we must furnish our stockholders with target business financial statements prepared in accordance with U.S. generally accepted accounting principles or international financial reporting standards, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses.
The federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma financial statement disclosure in periodic reports. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or international financial reporting standards, or IFRS, as issued by the International Accounting Standards Board or the IASB, depending on the circumstances. Historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. We will include substantially the same financial statement disclosure in connection with any tender offer documents we use, whether or not they are required under the tender offer rules. These financial statement requirements may limit the pool of potential target businesses with which we consummate our initial business combination, because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules, and hence we may be unable to complete our initial business combination within the prescribed time frame.
Compliance obligations under the Sarbanes-Oxley Act of 2002 may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources, and increase the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December 31, 2021. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to all public companies because a target company with which we seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our securities less attractive to investors.
We are an “emerging growth company,” as defined in the JOBS Act. We will remain an “emerging growth company” for up to five years. However, if either our non-convertible debt issued within a three-year period, or our revenues exceed $1.07 billion, or the market value of our shares of common stock that are held by non-affiliates exceeds $700 million on the last day of the second fiscal quarter of any given fiscal year, we would cease to be an emerging growth company as of the following fiscal year. As an emerging growth company, we (i) are not required to comply with the auditor attestation requirements of section 404 of the Sarbanes-Oxley Act, (ii) have reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and (iii) are exempt from the requirements of holding a nonbinding advisory vote on executive compensation and obtaining stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different
application dates for public or private companies, we, as an emerging growth company, will not adopt the new or revised standard until the time private companies are required to adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.
We cannot predict if investors will find our shares less attractive because we may rely on these provisions. If some investors find our shares less attractive as a result, there may be a less active trading market for our shares and our share price may be more volatile.
Our amended and restated certification of incorporation designates the Court of Chancery in the State of Delaware as the sole and exclusive forum for certain actions or proceedings that may be initiated by our stockholders, which could discourage claims or limit stockholders’ ability to make a claim against the Company, our directors, officers, and employees.
Our amended and restated certificate of incorporation provides that, unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for: (a) any derivative action or proceeding brought on our behalf; (b) any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers or other employees to us or to our stockholders; (c) any action asserting a claim arising pursuant to the Delaware General Corporate Law, or the DGCL, our amended and restated certificate of incorporation or our bylaws; or (d) any action asserting a claim governed by the internal affairs doctrine, except for, as to each of (a) through (d) above, any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or for which the Court of Chancery does not have subject matter jurisdiction. These exclusive forum provisions would not apply to suits brought to enforce a duty or liability created by the Exchange Act, which provides for exclusive jurisdiction of the federal courts. It could apply, however, to a suit that falls within one or more of the categories enumerated in the exclusive forum provision and asserts claims under the Securities Act, inasmuch as Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder; provided, that with respect to claims under the Securities Act, our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder. These exclusive forum provisions may limit the ability of our stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with us or our directors, officers, or employees, which may discourage such lawsuits against us and our directors, officers, and employees. Alternatively, if a court were to find the choice of forum provisions contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition, and operating results.
Our letter agreement with our sponsor, officers and directors may be amended without stockholder approval.
Our letter agreement with our sponsor, officers and directors contain provisions relating to transfer restrictions of our founder shares and private placement shares, indemnification of the trust account, waiver of redemption rights and participation in liquidating distributions from the trust account. The letter agreement may be amended without stockholder approval (although releasing the parties from the restriction not to transfer the founder shares for 185 days following the date of this prospectus will require the prior written consent of the underwriters). While we do not expect our board to approve any amendment to the letter agreement prior to our initial business combination, it may be possible that our board, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to the letter agreement. Any such amendments to the letter agreement would not require approval from our stockholders and may have an adverse effect on the value of an investment in our securities.
Risks Associated with Acquiring and Operating a Business outside of the United States
We may effect our initial business combination with a company located outside of the United States.
If we effect our initial business combination with a company located outside of the United States, we would be subject to any special considerations or risks associated with companies operating in the target business’ home jurisdiction, including any of the following:
•
rules and regulations or currency redemption or corporate withholding taxes on individuals;
•
laws governing the manner in which future business combinations may be effected;
•
exchange listing and/or delisting requirements;
•
tariffs and trade barriers;
•
regulations related to customs and import/export matters;
•
longer payment cycles;
•
tax issues, such as tax law changes and variations in tax laws as compared to the United States;
•
currency fluctuations and exchange controls;
•
rates of inflation or deflation;
•
challenges in collecting accounts receivable;
•
cultural and language differences;
•
employment regulations;
•
crime, strikes, riots, civil disturbances, terrorist attacks, pandemics and wars; and
•
deterioration of political relations with the United States. We may not be able to adequately address these additional risks. If we were unable to do so, our operations might suffer.
Social unrest, acts of terrorism, regime changes, changes in laws and regulations, political upheaval, or policy changes or enactments may occur in a country in which we may operate after we effect our initial business combination.
Political events in another country may significantly affect our business, assets or operations. Social unrest, acts of terrorism, regime changes, changes in laws and regulations, political upheaval, pandemics and policy changes or enactments could negatively impact our business in a particular country.
Many countries have difficult and unpredictable legal systems and underdeveloped laws and regulations that are unclear and subject to corruption and inexperience.
Our ability to seek and enforce legal protections, including with respect to intellectual property and other property rights, or to defend ourselves with regard to legal actions taken against us in a given country, may be difficult or impossible, which could adversely impact our operations, assets or financial condition.
Rules and regulations in many countries are often ambiguous or open to differing interpretation by responsible individuals and agencies at the municipal, state, regional and federal levels. The attitudes and actions of such individuals and agencies are often difficult to predict and inconsistent.
Delay with respect to the enforcement of particular rules and regulations, including those relating to customs, tax, environmental and labor, could cause serious disruption to operations abroad and negatively impact our results.
If relations between the United States and foreign governments deteriorate, it could cause potential target businesses or their goods and services to become less attractive.
The relationship between the United States and foreign governments could be subject to sudden fluctuation and periodic tension. For instance, the United States may announce its intention to impose quotas on certain imports. Such import quotas may adversely affect political relations between the two countries and result in retaliatory countermeasures by the foreign government in industries that may affect our ultimate target business. Changes in political conditions in foreign countries and changes in the state of U.S. relations with such countries are difficult to predict and could adversely affect our operations or cause potential target businesses or their goods and services to become less attractive. Because we are not limited to any specific industry, there is no basis for investors in this offering to evaluate the possible extent of any impact on our ultimate operations if relations are strained between the United States and a foreign country in which we acquire a target business or move our principal manufacturing or service operations.
If our management following our initial business combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws.
Following our initial business combination, our management may resign from their positions as officers or directors of the company and the management of the target business at the time of the business combination will remain in place. Management of the target business may not be familiar with United States securities laws. If new management is unfamiliar with our laws, they may have to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues, which may adversely affect our operations.
Currency policies may cause a target business’ ability to succeed in the international markets to be diminished.
In the event we acquire a non-U.S. target, all revenues and income would likely be received in a foreign currency, the dollar equivalent of our net assets and distributions, if any, could be adversely affected by reductions in the value of the local currency. The value of the currencies in our target regions fluctuate and are affected by, among other things, changes in political and economic conditions. Any change in the relative value of such currency against our reporting currency may affect the attractiveness of any target business or, following consummation of our initial business combination, our financial condition and results of operations. Additionally, if a currency appreciates in value against the dollar prior to the consummation of our initial business combination, the cost of a target business as measured in dollars will increase, which may make it less likely that we are able to consummate such transaction.
Because foreign law could govern our material agreements, we may not be able to enforce our rights within such jurisdiction or elsewhere.
Foreign law could govern our material agreements. The target business may not be able to enforce any of its material agreements and remedies may not be available outside of such foreign jurisdiction’s legal system. The system of laws and the enforcement of existing laws and contracts in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The judiciaries in certain foreign countries may be relatively inexperienced in enforcing corporate and commercial law, leading to a higher than usual degree of uncertainty as to the outcome of any litigation. Any such jurisdictions may not favor outsiders or could be corrupt. As a result, the inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business and business opportunities.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this prospectus may include, for example, statements about:
•
our ability to complete our initial business combination;
•
our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;
•
our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination;
•
our potential ability to obtain additional financing to complete our initial business combination;
•
our pool of prospective target businesses;
•
the ability of our officers and directors to generate a number of potential investment opportunities;
•
our public securities’ potential liquidity and trading;
•
the lack of a market for our securities;
•
the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;
•
the trust account not being subject to claims of third parties; or
•
our financial performance following this offering.
The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
USE OF PROCEEDS
We are offering 25,000,000 shares at an offering price of $10.00 per share. We estimate that the net proceeds of this offering, together with the funds we will receive from the sale of the private placement shares, will be used as set forth in the following table.
| |
|
|
WITHOUT
OVER-
ALLOTMENT
OPTION
|
|
|
OVER-
ALLOTMENT
OPTION
EXERCISED
|
|
|
Gross proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross proceeds from shares offered to public(1)
|
|
|
|
$ |
250,000,000 |
|
|
|
|
$ |
287,500,000 |
|
|
|
Gross proceeds from private placement shares offered in the private placement
|
|
|
|
|
8,575,000 |
|
|
|
|
|
9,325,000 |
|
|
|
Total gross proceeds
|
|
|
|
$ |
258,575,000 |
|
|
|
|
$ |
296,825,000 |
|
|
|
Offering expenses(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting commissions (2.0% of gross proceeds from shares offered to public, excluding deferred portion)(3)
|
|
|
|
$ |
5,000,000 |
|
|
|
|
$ |
5,750,000 |
|
|
|
Legal fees and expenses
|
|
|
|
|
300,000 |
|
|
|
|
|
300,000 |
|
|
|
Printing and engraving expenses
|
|
|
|
|
40,000 |
|
|
|
|
|
40,000 |
|
|
|
Accounting fees and expenses
|
|
|
|
|
60,000 |
|
|
|
|
|
60,000 |
|
|
|
SEC/FINRA Expenses
|
|
|
|
|
80,000 |
|
|
|
|
|
80,000 |
|
|
|
Travel and road show
|
|
|
|
|
20,000 |
|
|
|
|
|
20,000 |
|
|
|
Nasdaq listing and filing fees
|
|
|
|
|
75,000 |
|
|
|
|
|
75,000 |
|
|
|
Director & Officer liability insurance premiums
|
|
|
|
|
1,700,000 |
|
|
|
|
|
1,700,000 |
|
|
|
Miscellaneous
|
|
|
|
|
300,000 |
|
|
|
|
|
300,000 |
|
|
|
Total offering expenses (other than underwriting commissions)
|
|
|
|
$ |
2,575,000 |
|
|
|
|
$ |
2,575,000 |
|
|
|
Proceeds after offering expenses
|
|
|
|
$ |
251,000,000 |
|
|
|
|
$ |
288,500,000 |
|
|
|
Held in trust account(3)
|
|
|
|
$ |
250,000,000 |
|
|
|
|
$ |
287,500,000 |
|
|
|
% of public offering size
|
|
|
|
|
100% |
|
|
|
|
|
100% |
|
|
|
Not held in trust account
|
|
|
|
$ |
1,000,000 |
|
|
|
|
$ |
1,000,000 |
|
|
The following table shows the use of the $1,000,000 of net proceeds not held in the trust account.(4)(5)
| |
|
|
AMOUNT
|
|
|
% OF TOTAL
|
|
|
Legal, accounting, due diligence, travel, and other expenses in connection with any business combination(6)
|
|
|
|
|
350,000 |
|
|
|
|
|
35.0% |
|
|
|
Legal and accounting fees related to regulatory reporting obligations
|
|
|
|
|
150,000 |
|
|
|
|
|
15.0% |
|
|
|
Administrative and support services
|
|
|
|
|
240,000 |
|
|
|
|
|
24.0% |
|
|
|
Nasdaq continued listing fees
|
|
|
|
|
55,000 |
|
|
|
|
|
5.5% |
|
|
|
Working capital to cover miscellaneous expenses
|
|
|
|
|
205,000 |
|
|
|
|
|
20.5% |
|
|
|
Total
|
|
|
|
$ |
1,000,000 |
|
|
|
|
|
100.0% |
|
|
(1)
Includes amounts payable to stockholders who properly redeem their shares in connection with the successful completion of our initial business combination.
(2)
In addition, a portion of the offering expenses have been paid from the proceeds up to $300,000 in loans from our sponsor, as described in this prospectus. Upon completion of this offering these loans will be repaid out of the $2,575,000 of offering proceeds allocated for the payment of offering expenses other than underwriting commissions. In the event that offering expenses are less than set forth in this table, any such amounts will be used for post-closing working capital expenses.
(3)
The underwriters have agreed to defer underwriting commissions of 3.5% of the gross proceeds of this offering. Concurrently with the completion of our initial business combination, $8,750,000, which constitutes the underwriters’ deferred commissions (or $10,062,500 if the underwriters’ over-allotment option is exercised in full) will be paid to the underwriters from the funds held in the trust account. See “Underwriting.” The remaining funds, less amounts released to the trustee to pay redeeming stockholders, will be released to us and can be used to pay all or a portion of the purchase price of the business or businesses with which our initial business combination occurs or for general corporate purposes, including payment of principal or interest on indebtedness incurred in connection with our initial business combination, to fund the purchases of other companies or for working capital. The underwriters will not be entitled to any interest accrued on the deferred underwriting discounts and commissions.
(4)
These expenses are estimates only. Our actual expenditures for some or all of these items may differ from the estimates set forth herein. For example, we may incur greater legal and accounting expenses than our current estimates in connection with negotiating and structuring our initial business combination based upon the level of complexity of such business combination. In the event we identify a business combination target in a specific industry subject to specific regulations, we may incur additional expenses associated with legal due diligence and the engagement of special legal counsel. In addition, our staffing needs may vary and as a result, we may engage a number of consultants to assist with legal and financial due diligence. We do not anticipate any change in our intended use of proceeds, other than fluctuations among the current categories of allocated expenses, which fluctuations, to the extent they exceed current estimates for any specific category of expenses, would not be available for our expenses. The amount in the table above does not include interest available to us from the trust account. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Assuming an interest rate of 0.1% per year, and no exercise of the underwriters’ over-allotment, we estimate the interest earned on the trust account will be approximately $250,000 per year; however, we can provide no assurances regarding this amount.
(5)
Assumes no exercise of the underwriters’ over-allotment option.
(6)
Includes estimated amounts that may also be used in connection with our initial business combination to fund a “no shop” provision and commitment fees for financing.
The rules of Nasdaq provide that at least 90% of the gross proceeds from this offering and the private placement be deposited in a trust account. Of the $258,575,000 in proceeds we receive from this offering and the sale of the private placement shares described in this prospectus, or $296,825,000 if the underwriters’ over-allotment option is exercised in full, $250,000,000 ($10.00 per share), or $287,500,000 if the underwriters’ over-allotment option is exercised in full ($10.00 per share), will be deposited into a trust account with Continental Stock Transfer & Trust Company acting as trustee, and $3,250,000, will be used to pay expenses in connection with the closing of this offering and for working capital following this offering. We will not be permitted to withdraw any of the principal or interest held in the trust account, except for the withdrawal of interest income to pay our income taxes, until the earliest of (i) the completion of our initial business combination, (ii) the redemption of our public shares if we are unable to consummate an initial business combination within 24 months from the closing of this offering, subject to applicable law, or (iii) the redemption of our public shares properly submitted in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity. Based on current interest rates, we expect that interest income earned on the trust account (if any) will be sufficient to pay income taxes.
The net proceeds held in the trust account may be used as consideration to pay the sellers of a target business with which we ultimately complete our initial business combination. If our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination, we may apply the balance of the cash released from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination.
We believe that amounts not held in trust, together with funds available to us from loans from our sponsor, will be sufficient to pay the costs and expenses to which such proceeds are allocated. However, if our estimate of the costs of undertaking in-depth due diligence and negotiating a business combination is less than the actual amount necessary to do so, we may be required to raise additional capital, the amount, availability and cost of which is currently unascertainable. If we are required to seek additional capital, we could seek such additional capital through loans or additional investments from our sponsor,
members of our management team or any of their affiliates, but such persons are not under any obligation to advance funds to, or invest in, us.
Fifth Wall will provide us office space and administrative and support services free of charge.
Our sponsor has agreed to loan us up to $300,000 to be used for a portion of the expenses of this offering. These loans are non-interest bearing, unsecured and are due at the earlier of the closing of this offering or the date on which we determine not to consummate this offering. The loans will be repaid upon the closing of this offering out of the $2,575,000 of offering proceeds allocated to the payment of offering expenses.
In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans would be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts, but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into Class A common stock of the post business combination entity at a price of $10.00 per share at the option of the lender. The shares would be identical to the private placement shares. Except as set forth above, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
DIVIDEND POLICY
We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time and subject to Delaware law. 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 shares of Class A common stock 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 share of Class A common stock and the pro forma net tangible book value per share of our Class A common stock after this offering constitutes the dilution to investors in this offering. 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 shares of Class A common stock which may be redeemed for cash), by the number of outstanding shares of Class A common stock.
At December 31, 2020, our net tangible book value was $(135,509), or approximately $(0.02) per share of common stock. After giving effect to the sale of 25,000,000 shares of Class A common stock we are offering by this prospectus (or 28,750,000 shares of Class A common stock if the underwriters’ over-allotment option is exercised in full), the sale of the private placement shares and the deduction of underwriting commissions and estimated expenses of this offering, our pro forma net tangible book value at December 31, 2020 would have been $5,000,001, or $0.60 per share (or $5,000,001, or $0.52 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 23,726,848 shares of Class A common stock that may be redeemed for cash, or 27,345,598 shares of Class A common stock if the underwriters’ over-allotment option is exercised in full) of $0.68 per share (or $0.60 if the underwriters’ over-allotment option is exercised in full) to our sponsor as of the date of this prospectus. Total dilution to stockholders from this offering will be $9.40 per share (or $9.48 if the underwriters’ over-allotment option is exercised in full).
The following table illustrates the dilution to the stockholders on a per-share basis:
| |
|
|
Without
Over-allotment
|
|
|
With
Over-allotment
|
|
|
Public offering price
|
|
|
|
$ |
10.00 |
|
|
|
|
$ |
10.00 |
|
|
|
Net tangible book value before this offering
|
|
|
|
|
(0.02) |
|
|
|
|
|
(0.02) |
|
|
|
Increase attributable to public stockholders
|
|
|
|
|
0.62 |
|
|
|
|
|
0.54 |
|
|
|
Pro forma net tangible book value after this offering and
the sale of the private placement shares
|
|
|
|
|
0.60 |
|
|
|
|
|
0.52 |
|
|
|
Dilution to public stockholders
|
|
|
|
$ |
9.40 |
|
|
|
|
$ |
9.48 |
|
|
|
Percentage of dilution to public stockholders
|
|
|
|
|
94.0% |
|
|
|
|
|
94.8% |
|
|
For purposes of presentation, we have reduced our pro forma net tangible book value after this offering (assuming no exercise of the underwriters’ over-allotment option) by $237,268,480 because holders of up to approximately 94.9% of our public shares may redeem their shares for a pro rata share of the aggregate amount then on deposit in the trust account at a per share redemption price equal to the amount in the trust account as set forth in our proxy or tender offer materials (initially anticipated to be the aggregate amount held in trust two days prior to the commencement of our stockholders meeting or tender offer, including interest and net of taxes payable), divided by the number of shares of Class A common stock sold in this offering.
The following table sets forth information with respect to our sponsor and the stockholders:
| |
|
|
SHARES PURCHASED
|
|
|
TOTAL CONSIDERATION
|
|
|
AVERAGE
PRICE
|
|
| |
|
|
NUMBER
|
|
|
PERCENTAGE
|
|
|
AMOUNT
|
|
|
PERCENTAGE
|
|
|
PER SHARE
|
|
|
Class B common stock(1)
|
|
|
|
|
6,250,000 |
|
|
|
|
|
19.5% |
|
|
|
|
$ |
25,000 |
|
|
|
|
|
0.01% |
|
|
|
|
$ |
0.04 |
|
|
|
Private shares
|
|
|
|
|
857,500 |
|
|
|
|
|
2.7% |
|
|
|
|
|
8,575,000 |
|
|
|
|
|
3.32% |
|
|
|
|
$ |
10.00 |
|
|
|
Class A common stock
|
|
|
|
|
25,000,000 |
|
|
|
|
|
77.9% |
|
|
|
|
|
250,000,000 |
|
|
|
|
|
96.67% |
|
|
|
|
$ |
10.00 |
|
|
| |
|
|
|
|
32,107,500 |
|
|
|
|
|
100.0% |
|
|
|
|
$ |
258,600,000 |
|
|
|
|
|
100.0% |
|
|
|
|
|
|
|
|
(1)
Assumes no exercise of the underwriters’ over-allotment option and the corresponding forfeiture of 937,500 shares of Class B common stock held by our sponsor.
The pro forma net tangible book value per share after the 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
|
|
|
|
$ |
(135,509) |
|
|
|
|
$ |
(135,509) |
|
|
|
Net proceeds from this offering and sale of the private placement shares(1)
|
|
|
|
|
251,000,000 |
|
|
|
|
|
288,500,000 |
|
|
|
Plus: Offering costs accrued for or paid in advance,
excluded from tangible book value before this offering
|
|
|
|
|
153,990 |
|
|
|
|
|
153,990 |
|
|
|
Less: Deferred underwriting commissions
|
|
|
|
|
(8,750,000) |
|
|
|
|
|
(10,062,500) |
|
|
|
Less: Proceeds held in trust subject to redemption(2)
|
|
|
|
|
(237,268,480) |
|
|
|
|
|
(273,455,980) |
|
|
| |
|
|
|
$ |
5,000,001 |
|
|
|
|
$ |
5,000,001 |
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B common stock outstanding prior to this offering
|
|
|
|
|
7,187,500 |
|
|
|
|
|
7,187,500 |
|
|
|
Class B common stock forfeited if over-allotment is not exercised
|
|
|
|
|
(937,500) |
|
|
|
|
|
— |
|
|
|
Class A common stock
|
|
|
|
|
25,000,000 |
|
|
|
|
|
28,750,000 |
|
|
|
Class A common stock offered in the private placement
|
|
|
|
|
857,500 |
|
|
|
|
|
932,500 |
|
|
|
Less: Shares subject to redemption
|
|
|
|
|
(23,726,848) |
|
|
|
|
|
(27,345,598) |
|
|
| |
|
|
|
|
8,380,652 |
|
|
|
|
|
9,524,402 |
|
|
(1)
Expenses applied against gross proceeds include offering expenses of $2,575,000 and underwriting commissions of $5,000,000 or $5,750,000 if the underwriters exercise their over-allotment option (excluding deferred underwriting fees). See “Use of Proceeds.”
(2)
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. In the event of any such purchases of our shares prior to the completion of our initial business combination, the number of shares of Class A common stock 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 — Permitted Purchases of Our Securities.”
CAPITALIZATION
The following table sets forth our capitalization at December 31, 2020, and as adjusted to give effect to the filing of our amended and restated certificate of incorporation, the sale of our public shares in this offering and the private placement shares and the application of the estimated net proceeds derived from the sale of such securities:
| |
|
|
December 31, 2020
|
|
| |
|
|
Actual
|
|
|
As Adjusted(1)
|
|
|
Note payable to related party(2)
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
Deferred underwriting commissions(3)
|
|
|
|
|
— |
|
|
|
|
|
8,750,000 |
|
|
|
Class A common stock subject to possible redemption; -0- and 23,726,848 shares, actual and as adjusted, respectively
|
|
|
|
|
— |
|
|
|
|
|
237,268,480 |
|
|
|
Preferred stock, $0.0001 par value, -0- and 1,000,000 shares authorized, actual and as adjusted, respectively; none issued and outstanding, actual and as adjusted
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Class A common stock, $0.0001 par value, -0- and 100,000,000
shares authorized; -0- and 2,130,652 shares issued and outstanding
(excluding -0- and 23,726,848 shares subject to possible
redemption), actual and as adjusted, respectively(4)
|
|
|
|
|
— |
|
|
|
|
|
213 |
|
|
|
Class B common stock, $0.0001 par value, 10,000,000 shares authorized, actual and as adjusted, respectively; 7,187,500 and 6,250,000 shares issued and outstanding, actual and as adjusted, respectively(4)
|
|
|
|
|
719 |
|
|
|
|
|
625 |
|
|
|
Additional paid-in capital
|
|
|
|
|
24,281 |
|
|
|
|
|
5,005,682 |
|
|
|
Accumulated deficit
|
|
|
|
|
(6,519) |
|
|
|
|
|
(6,519) |
|
|
|
Total stockholders’ equity
|
|
|
|
$ |
18,481 |
|
|
|
|
$ |
5,000,001 |
|
|
|
Total capitalization
|
|
|
|
$ |
18,481 |
|
|
|
|
$ |
251,018,481 |
|
|
(1)
Assumes no exercise of the underwriters’ over-allotment option and the corresponding forfeiture of 937,500 shares of Class B common stock held by our sponsor.
(2)
Our sponsor may loan us up to $300,000 under an unsecured promissory note to be used for a portion of the expenses of this offering. To date, we have borrowed approximately $80,000 from our sponsor to cover for expenses in connection with this offering.
(3)
$0.35 per Share, or $8,750,000 in the aggregate, will be payable to the underwriters for deferred underwriting commissions. The deferred underwriting commissions will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the company completes a Business Combination, subject to the terms of the underwriting agreement. The company records deferred underwriting commissions upon the closing of the initial public offering as a reduction of additional paid-in capital. Since the actual additional paid-in capital was reduced by the recording of the accrued deferred underwriting commission, total capitalization, as adjusted, includes the amount of the deferred underwriting commission to reflect total capitalization.
(4)
Upon the completion of our initial business combination, we will provide our public stockholders 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 (net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations described herein whereby redemptions cannot cause our net tangible assets to be less than $5,000,001 and any limitations (including, but not limited to, cash requirements) created by the terms of the proposed business combination.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
We are a blank check company incorporated on November 23, 2020 as a Delaware corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the private placement of the private placement shares, our shares, debt or a combination of cash, equity and debt.
The issuance of additional shares in a business combination:
•
may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the shares of Class B common stock resulted in the issuance of shares of Class A common stock on a greater than one-to-one basis upon conversion of the shares of Class B common stock;
•
may subordinate the rights of holders of shares of Class A common stock if shares of preferred stock are issued with rights senior to those afforded our shares of Class A common stock;
•
could cause a change in control if a substantial number of shares of our Class A common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
•
may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; and
•
may adversely affect prevailing market prices for our shares of Class A common stock. Similarly, if we issue debt securities or otherwise incur significant debt, it could result in:
•
default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
•
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves (in the absence of a waiver or renegotiation of that covenant);
•
our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;
•
our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;
•
our inability to pay dividends on our shares of Class A common stock;
•
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 shares of Class A common stock 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 December 31, 2020, we had no cash and deferred offering costs of approximately $154,000. Further, we expect to incur significant costs in the pursuit of our initial business combination. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful.
Results of Operations and Known Trends or Future Events
We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for this offering. Following this offering, we will not generate any operating revenues until after completion of our initial business combination at the earliest. We will generate non-operating income in the form of interest income on cash and cash equivalents after this offering. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements. After this offering, we expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially after the closing of this offering.
Liquidity and Capital Resources
Our liquidity needs have been satisfied prior to the completion of this offering through a payment of $25,000 from our sponsor to cover for certain expenses and offering costs on behalf of us in exchange for the issuance of the founder shares and a commitment from our sponsor to loan us up to $300,000 to cover our expenses in connection with this offering. We estimate that the net proceeds from (i) the sale of the shares in this offering, after deducting offering expenses of $2,575,000, underwriting commissions of $5,000,000, or $5,750,000 if the underwriters’ over-allotment option is exercised in full (excluding deferred underwriting commissions of $8,750,000, or $10,062,500 if the underwriters’ over-allotment option is exercised in full), and (ii) the sale of the private placement shares for a purchase price of $8,575,000 (or $9,325,000 if the underwriters’ over-allotment option is exercised in full) will be $251,000,000 (or $288,500,000 if the underwriters’ over-allotment option is exercised in full). $250,000,000 (or $287,500,000 if the underwriters’ over-allotment option is exercised in full) will be held in the trust account, which includes the deferred underwriting commissions described above. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. The remaining $1,000,000 will not be held in the trust account. In the event that our offering expenses exceed our estimate of $2,575,000, we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $2,575,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.
We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (less taxes payable and deferred underwriting commissions), to complete our initial business combination. We may withdraw interest income to pay our income taxes, if any. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. We expect the interest income earned on the amount in the trust account (if any) will be sufficient to pay our income taxes. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
Prior to the completion of our initial business combination, we will have available to us the $1,000,000 of proceeds held outside the trust account, as well as certain funds from loans from our sponsor. We will use these funds to primarily identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective
target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a business combination.
We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business prior to our initial business combination, other than funds available from loans from our sponsor. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into Class A common stock of the post business combination entity at a price of $10.00 per share at the option of the lender. The shares would be identical to the private placement shares. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
We expect our primary liquidity requirements during that period to include approximately $350,000 for legal, accounting, due diligence, travel and other expenses associated with structuring, negotiating and documenting successful business combinations; $150,000 for legal and accounting fees related to regulatory reporting requirements; $240,000 for administrative and support services incurred during the search for an initial business combination target; $55,000 for Nasdaq continued listing fees; and $205,000 for general working capital that will be used for miscellaneous expenses and reserves. Fifth Wall will provide us office space and administrative and support services free of charge.
These amounts are estimates and may differ materially from our actual expenses. In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a “no-shop” provision (a provision designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into an agreement where we paid for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a “no-shop” provision would be determined based on the terms of the specific business combination and the amount of our available funds at the time. Our forfeiture of such funds (whether as a result of our breach or otherwise) could result in our not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses.
Moreover, we may need to obtain additional financing to complete our initial business combination, either because the transaction requires more cash than is available from the proceeds held in our trust account, or because we become obligated to redeem a significant number of our public shares upon completion of the business combination, in which case we may issue additional securities or incur debt in connection with such business combination. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account.
Controls and Procedures
We are not currently required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act. We will be required to comply with the internal control requirements of the Sarbanes-Oxley Act for the fiscal year ending December 31, 2021 only in the event that we are deemed to be a large accelerated filer or an accelerated filer would we be required to
comply with the independent registered public accounting firm attestation requirement. Further, for as long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirement.
Prior to the closing of this offering, we have not completed an assessment, nor 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. 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 shares held in the trust account will be invested in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.
Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results
As of December 31, 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, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.
PROPOSED BUSINESS
Introduction
We are a newly organized blank check company formed under the laws of the State of Delaware on November 23, 2020 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. To date, our efforts have been limited to organizational activities as well as activities related to this offering. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. We have generated no operating revenues to date and we do not expect that we will generate operating revenues until we consummate our initial business combination at the earliest.
While we may pursue an acquisition opportunity in any business, industry, sector or geographical location, we intend to focus on industries that complement our management team’s background, and to capitalize on the ability of our management team to identify and acquire a business focusing on verticals of the real estate industry, as well as the adjacent industries that collectively make up the human-made environment that provides the setting for human activity, ranging in scale from buildings to cities and beyond, which we call the “Built World.”
Fifth Wall
Our sponsor is an affiliate of Fifth Wall. Fifth Wall is one of the largest venture capital firms focused exclusively on investing at the intersection of real estate and technology, a category broadly referred to as “proptech”. Fifth Wall was founded in 2016 after identifying the growing market opportunity in proptech brought about by the real estate industry, the largest asset class as of the end of 2016, beginning to adopt technology at an increasingly rapid pace. Fifth Wall developed a differentiated model of venture capital predicated on raising capital from and partnering with leading real estate owners, who are among the largest users and customers for the technologies in which Fifth Wall invests. As of November 30, 2020, Fifth Wall manages $1.3 billion in committed capital on behalf of its investors across three core fund strategies, and has invested in more than 40 companies, including six that have gone on to become “unicorns”, or startups with a private market valuation in excess of $1 billion.
Since its founding 5 years ago, Fifth Wall has become a leading venture capital investor in the proptech space, for several reasons:
•
Fifth Wall was one of the first to recognize the growing market opportunity in real estate technology. With the close of its oversubscribed $212 million North American Real Estate Technology Fund in May 2017, Fifth Wall became one of the first institutional venture capital funds exclusively focused on the intersection of real estate and technology, or “proptech”. Since then, Fifth Wall has raised $126 million for its retail strategy, which is focused on the disruption of traditional brick & mortar retail. Its second North American Real Estate Tech Fund was also oversubscribed and closed at $503 million in July 2019. More recently, Fifth Wall has launched and completed the first close of its European Real Estate Technology Fund and is currently raising a Climate Technology Fund focused on investing in North American startups with technologies that enable transitions towards a decarbonized real estate industry, reduce greenhouse gas emissions, or address the impacts of global warming. As of November 30, 2020, Fifth Wall is approximately five times larger than the next largest proptech-focused venture capital manager.
•
Fifth Wall has pioneered a differentiated consortium-driven approach to venture capital. Fifth Wall’s model is predicated on raising a significant portion of its capital from leading real estate corporations, and advising its corporate limited partners on implementing emerging real estate technologies with the potential to transform their businesses. The firm’s initial North American Real Estate Technology Fund included 9 U.S.-based real estate corporations as limited partners. As of November 30, 2020, Fifth Wall’s global network of corporate partners has grown to include more than 60 real estate corporations from 14 countries,
representing every major subsector in the real estate industry. In certain subsectors, like homebuilding, Fifth Wall’s corporate limited partners represent 4 of the 5 largest U.S. homebuilders, which collectively account for approximately 20% of all homes delivered in the United States annually. Alongside its corporate limited partners, Fifth Wall has attracted investment from some of the world’s largest and most prominent institutional investors, including leading university endowments, pensions, and sovereign wealth funds.
•
Fifth Wall has distinct informational and distribution advantages. Fifth Wall’s dynamic working relationships with its global consortium of over 60 corporate real estate partners provide the firm with differentiated informational and distribution advantages when evaluating potential investments. Fifth Wall’s role as both a venture capital investor and a trusted advisor to real estate corporations provides significant visibility to the operational and technological challenges faced by its corporate partners. This enables its investment team to underwrite investments with knowledge of orchestrating large contracts and partnerships with Fifth Wall’s real estate investors, who are among the largest potential customers for these technologies. Similarly, success or failure for real estate technology companies often hinges on distribution to the real estate industry. Fifth Wall’s deep relationships with its 60 corporate limited partners, coupled with its expertise in real estate technology, enable Fifth Wall to flip “distribution risk” for its portfolio companies into a “distribution edge” by effectuating commercial partnerships to significantly accelerate their growth.
•
Fifth Wall has superior access and deal flow. Fifth Wall’s domain expertise in real estate technology, its partnerships with some of the largest real estate owners and operators globally, its brand positioning as a leading partner to proptech entrepreneurs, and its differentiated platform have helped to solidify the firm as a highly-sought after investor for technology companies that depend on distribution to the real estate industry. Generalist venture capital funds typically select Fifth Wall as their preferred co-investment partner in proptech companies based on Fifth Wall’s category expertise and ability to facilitate distribution to its real estate investors. Additionally, Fifth Wall’s corporate partners proactively send Fifth Wall technologies that they are evaluating for their own businesses. Management teams of portfolio companies are also often eager to introduce to Fifth Wall new companies that fit Fifth Wall’s strategies. Across these three channels, Fifth Wall benefits from meaningful network effects that are borne out in its deal flow and its portfolio of emergent winners in the proptech category. As of November 30, 2020, Fifth Wall’s CRM tracks more than 8,300 real estate technology companies, including more than 600 growth and later stage companies.
•
Fifth Wall is a highly visible, highly active investor and thought leader. Since its founding in 2016, Fifth Wall has carefully cultivated its brand and profile as a thought leader through the creation and dissemination of content related to the real estate technology ecosystem. Fifth Wall strives to be seen by other venture capital investors, proptech entrepreneurs, and the real estate industry as synonymous with proptech, as the thought leader in the space. This approach has enabled Fifth Wall to source investments in more than 40 companies, gaining access to highly competitive financing rounds for high-profile proptech businesses, sometimes with terms that enable Fifth Wall to reopen closed financing rounds at prior valuations, or to structure investments in such a way that ultimately generates greater upside . Fifth Wall’s investments at the intersection of real estate and technology include Opendoor, VTS, States Title, Hippo, Industrious, Blend, and Clutter.
•
Fifth Wall can influence outcomes to create outsized value. Beyond unlocking distribution to the real estate industry, Fifth Wall has played a leading role in the effectuation of major partnerships between its portfolio companies and some of the largest real estate corporations in the world, activating corporate innovation to create significant value. Fifth Wall partnered with what it believes to be the second largest homebuilder in the United States to launch large-scale partnerships with Opendoor, Hippo, Blend, and Notarize and, furthermore, helped to orchestrate the landmark sale of the homebuilder’s captive title insurance business to States Title, a Fifth Wall portfolio company. Similarly, Fifth Wall played a critical role in the execution of partnerships between Industrious and VTS and its corporate partners in the office vertical, catalyzing significant growth for both portfolio companies.
We believe that a SPAC is an important extension of Fifth Wall’s approach to partnering with leading real estate technology companies to create long-term value. While Fifth Wall’s existing fund strategies typically invest relatively early on in a company’s lifecycle, Fifth Wall has also developed a track record of investing in proptech companies — including its own portfolio companies — as they mature, opportunistically deploying SPV capital to invest in later-stage funding rounds. With Fifth Wall Acquisition Corp. I, we intend to form a long-term partnership with a business that has the potential to become a category-defining market leader, guiding them in their transition from private to public markets while leveraging Fifth Wall’s global consortium of some of largest owners and operators of real estate in the world, creating value through distribution to the real estate industry and partnership with leading real estate corporations. We believe that our affiliation with Fifth Wall and its positioning and proptech category expertise will afford us substantial competitive advantages relative to other blank check companies, including those who are primarily focused on acquiring real estate technology businesses.
Market Opportunity
Fifth Wall was founded on the belief that the real estate industry is on the verge of massive change through technological innovation, and that emerging real estate technologies had the potential to create trillions of dollars of enterprise value over time. Today, technology is rapidly penetrating all verticals of the real estate industry, as well as the adjacent industries that collectively make up the human-made environment that provides the setting for human activity, ranging in scale from buildings to cities and beyond, which we call the “Built World”.
We believe the market for real estate technology businesses is attractive for a number of reasons:
•
Large and growing addressable market. Real estate and technology investments both represent a significant segment of the global economy. According to Bureau of Economic Analysis, US Department of Commerce, real estate and technology accounted for 13% and 12%, respectively, of the U.S. gross domestic product in 2019. Real estate technology investment has grown significantly in the last few years, with total venture capital funding in this sector reaching $32 billion in 2019 compared to $4 billion in 2016 according to CRETech. Despite this strong growth, we believe that the bulk of digitalization is still to come as we are only beginning to see fully digital transactions, data-driven decision making, replacement of middle-men with market places and incumbents embracing technology.
•
Accelerating pace of technological innovation. Technology has disrupted the real estate sector as owners and operators continuously seek to improve the efficiency of their assets, with emerging technologies often providing new solutions to longstanding business and operational challenges. We believe that increased rates of technology adoption will spur the creation of more new technologies and disruptive new entrants in order to create greater efficiencies in the real estate value chain. Real estate technology is penetrating the real estate asset class, driving innovation across transactions, work processes, tenant engagement and even the nature of buildings themselves, while also disrupting the middle-man heavy businesses that currently dominate the real estate industry. We further believe that the impacts of COVID-19 on the real estate industry have catalyzed and accelerated the adoption of technology, which we expect will have lasting, transformational effects on the real estate industry.
•
Robust and growing pipeline. From 2014 to 2019, over $64 billion has been invested in proptech companies, while more than $250 billion in enterprise value has been created within the real estate technology sector across public and private companies. As of November 30, 2020, we estimate that more than 35 proptech companies are valued at $1 billion or more in the private markets. In 2019, 528 real estate technology transactions were executed according to CREtech. We believe that many later stage proptech companies, the number of which we expect to continue to grow in the years ahead, could benefit from a public listing. Similarly, we believe that Fifth Wall Acquisition Corp. I will be able to offer them, or companies like them, a compelling path to enter the public markets.
•
Performance of real estate technology companies in public markets. In 2020, we saw a meaningful divergence between the public markets performance of the traditional real estate businesses and real estate technology businesses. From January 1, 2020 to December 14,
2020, traditional real estate companies underperformed, with the Dow Jones US Real Estate Index down 11% over the same period while a number of public real estate technology companies saw significant increases in share price. For example, over the same period, the share prices of Zillow (residential marketplace), Redfin (iBuying brokerage company) and AppFolio (property management SaaS company) increased by 201%, 204% and 56%, respectively. Between the day before announcing that it would acquire Opendoor (iBuying brokerage company) on September 15, 2020 and December 14, 2020, the share price of SPAC Social Capital Hedosophia Holdings II Corp. increased 126%. We believe that value created by real estate technology companies for public markets investors will increase over time.
We currently intend to focus our investment effort broadly across real estate technology businesses, although we may pursue an acquisition opportunity in any industry or geographic region. We believe that our investment and operating expertise in both the real estate and technology industries will offer us a large, addressable universe of potential targets
Real estate software is penetrating the real estate asset class, driving technology use in transactions, work processes, tenant engagement and even the nature of buildings themselves; while marketplaces are replacing the middle-man-heavy business models that currently dominate the real estate industry. In particular, we believe the real estate software and real estate marketplace businesses, as well as other asset-light proptech businesses present significant opportunities with strong near-term growth potential. Our management team will seek to leverage their access to proprietary deal flow, sourcing capabilities, and network of industry contacts to generate business combination opportunities.
Business Strategy
Our strategy is to identify and acquire real estate technology businesses, with a focus on later-stage companies with high quality growth fundamentals and strong market dynamics, whose pace of growth can benefit from our operational expertise and differentiated distribution capabilities. Fifth Wall is one of the largest and most active venture investors at the intersection of real estate and technology and has a proven track record with deep experience in investing, operations and technology as well as a global consortium of real estate partners representing almost every real estate sector and ever major geography. We intend to leverage our sponsor’s expertise and extensive network of strategic LPs, portfolio companies, real estate relationships and reputation in the real estate technology sector to identify investment opportunities with meaningful near term growth potential that can generate attractive risk-adjusted returns for our stockholders.
Consistent with this strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective targets. We will use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines.
•
High quality fundamentals. We will focus our search on identifying transformative businesses with attractive margins and unit economics in line with best-in-class industry benchmarks, strong growth track record, and limited revenue concentration risks.
•
Strong market dynamics and growth potential. We will seek to acquire businesses that have a sizeable total addressable market with product offerings that are relevant across multiple asset classes, industries and geographies. We believe we can leverage our network to upsell and cross-sell additional product modules which will in turn further increase the addressable market and growth opportunities for the business and presents readily available growth targets.
•
Competitive positioning. We will seek to acquire one or more businesses that demonstrate market leadership and / or strong advantages when compared to their competitors, including the potential to disrupt the market through technology driven transformation, defensible proprietary technology, strong adoption rates, and low or manageable risks of technological obsolescence.
•
Attractive risk-adjusted return profile. We intend to focus our efforts on identifying later-stage businesses that we believe have meaningful near term growth opportunity and significant
potential for attractive risk-adjusted returns for stockholders, weighing potential growth opportunities and operational improvements in the target business against any identified downside risks.
•
Informational and structuring advantages. We intend to invest in one or more businesses where Fifth Wall’s global network of more than 60 real estate corporations in 14 countries can offer distinct informational advantages in underwriting a potential acquisition, and where Fifth Wall’s ability to unlock distribution to the real estate industry can enable us to structure a potential transaction in such a way that it maximizes value for all parties involved.
•
Value creation potential by Fifth Wall. We intend to acquire one or more businesses that we believe will benefit from Fifth Wall’s differentiated industry network, brand and proprietary value-creation capabilities in order to improve financial performance and business planning. For example, we intend to target companies that have strong traction regionally but lack national and international partners to support geographical expansion whose growth can be accelerated through Fifth Wall’s network of real estate partners, or companies with a sales cycle that is longer than best-in-class peers that could be shortened with strategic introductions to key management at real estate companies facilitated by Fifth Wall.
•
Management Team. We will seek to invest in one or more businesses that have proven management teams with a compelling strategy of selling their product and recruiting talent.
•
Benefit from Being a Public Company. We intend to invest in one or more businesses that will benefit from being publicly listed and can effectively utilize the broader access to capital and a public profile to grow and accelerate stockholder value creation.
These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our stockholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of tender offer documents or proxy solicitation materials that we would file with the SEC.
Team
•
Brendan Wallace is our Chief Executive Officer and Chairman. Mr. Wallace serves as a co-founder and Managing Partner at Fifth Wall, where he guides the firm’s strategic vision and serves as the chairman of the investment committee. Prior to starting Fifth Wall, Mr. Wallace co-founded Identified Inc., a venture-backed data and analytics company that was acquired by Workday, Inc. Mr. Wallace also co-founded Cabify, the largest ridesharing service in Latin America, and has been an active investor, leading more than 60 angel investments including Coinbase, Dollar Shave Club, Lyft, SpaceX, Clutter, and Philz Coffee. Mr. Wallace started his career at Goldman Sachs in the real estate, hospitality, and gaming group before joining The Blackstone Group’s real estate private equity practice where he was involved with the buyout of Hilton Hotels and Equity Office Properties. Mr. Wallace is a graduate of Princeton University and received his M.B.A. from Stanford University.
•
Andriy Mykhaylovskyy is our Chief Financial Officer. Mr. Mykhaylovskyy is a Managing Partner and Chief Operating Officer at Fifth Wall, where he oversees the firm’s day-to-day operations and investing activities. Prior to joining Fifth Wall, Mr. Mykhaylovskyy was a Principal and founding team member at Evergreen Coast Capital, a technology-focused private equity affiliate of Elliott Management Corporation. Other previous leadership roles include serving as Vice President at The Gores Group and Chief Financial Officer of Identified, a data and analytics company. Mr. Mykhaylovskyy started his career in investment banking at Morgan Stanley, where he offered financial advisory and capital-raising services to global industrial corporations, before joining technology-focused private equity firm Francisco Partners as an Associate. Mr. Mykhaylovskyy is a graduate of Princeton University and received his M.B.A. from Stanford University.
•
Alana Beard will be appointed as a member of our board of directors. In this role, she will advise the company from the consummation of the initial public offering through a special purpose acquisition company. Ms. Beard has been a Senior Associate at SVB Capital since February 2020 and President of the 318 Foundation, Inc., a non-profit organization, since January 2021. Prior to joining SVB, Alana was a member of the WNBA Los Angeles Sparks organization April 2012 to January 2020 and an ESPN/ACC women’s college basketball analyst from October 2019 to March 2020. During her career with the Sparks, Ms. Beard was a four-time WNBA All-Star, won the WNBA championship in 2016 and was named WNBA Defensive Player of the Year for the 2017 and 2018 seasons. Ms. Beard graduated from Duke University in 2004 with a bachelor’s degree in Sociology. We believe Ms. Beard’s prior leadership experience makes her well qualified to serve on our board of directors.
•
Victor Coleman will be appointed as a member of our board of directors. In this role, he will advise the company from the consummation of the initial public offering through a special purpose acquisition company. Mr. Coleman serves as Chief Executive Officer, President and Chairman of Hudson Pacific Properties, Inc. since June 2010. Prior to the formation of Hudson Pacific Properties, Inc., Mr. Coleman founded and served as a managing partner of its predecessor, Hudson Capital, LLC, a private real estate investment company, since October 2006. In 1990, Mr. Coleman co-founded and led Arden Realty, Inc. as its President and Chief Operating Officer and as a director until its sale to General Electric Co. in May 2006. Mr. Coleman also serves on the boards of directors of the Ronald Reagan UCLA Medical Center, the Fisher Center for Real Estate and Urban Economics, Los Angeles Sports & Entertainment Commission and the Los Angeles Chapter of the World Presidents’ Organization. Mr. Coleman’s experience as a director also includes service on the board of other publicly traded real estate investment trusts, or REITs, such as Douglas Emmett, Inc. from 2006 to 2009 and Kite Realty since 2012, where he currently serves as a member of both its compensation committee and nominating and corporate governance committee. He received his B.A. in History from the University of California, Berkeley in 1983 and his M.B.A. from Golden Gate University in 1985. We believe Mr. Coleman’s extensive executive and board experience makes him well qualified to serve on our board of directors.
•
Angela C. Huang will be appointed as a member of our board of directors. In this role, she will advise the company from the consummation of the initial public offering through a special purpose acquisition company. Ms. Huang is a Managing Director of EE Capital Pte. Ltd. since June 2020. Previously, Ms. Huang was an Asset Manager and Managing Director of Hillhouse Capital Management Pte. Ltd., a global private and public equity investment management firm, from February 2013 to April 2020. She received her A.B. in History of East Asian Studies from Princeton University in 2004 and her J.D. from Columbia University in 2008, where she was a Harlan Fiske Stone Scholar. We believe Ms. Huang’s substantial experience in the public and private equity markets with a focus on cross-border transactions makes her well qualified to serve on our board of directors.
•
Wisdom Lu will be appointed as a member of our board of directors. In this role, she will advise the company from the consummation of the initial public offering through a special purpose acquisition company. Ms. Lu has been serving as a General Partner of Stibel Investments since 2010 and Bryant Stibel since co-founding it in July 2015. Ms. Lu also serves as a member of the board of directors of Tailwind Acquisition Corp., a special purpose acquisition vehicle, and as the chairperson of its audit committee since September 2020. She has previously served as the Chief Financial Officer at Dun & Bradstreet Credibility Corp. from September 2014 to January 2017 and as its Senior Vice President, Data Works from February 2012 to August 2014. Prior to Dun & Bradstreet, she served as the Chief Financial Officer of Liberman Broadcasting where she oversaw finance, information technology, human resources, as well as legal and investor relations. Prior to Liberman Broadcasting, Ms. Lu served as Treasurer and Chief Investment Officer of Health Net, Inc. from August 1996 to April 2008. Ms. Lu received a degree in Bachelor of Engineering from Rensselaer Polytechnic Institute in 1987 and an M.B.A. from New York University in 1993. We believe Ms. Lu’s operational and executive experience make her well-qualified to serve as a member of our board of directors.
Our management team will be supported by Fifth Wall’s investment team and broader organization of more than 30 employees, based in Los Angeles, San Francisco, New York, and London. Fifth Wall’s team has experience in some of the largest and most established real estate firms, private equity firms, consulting firms, and technology companies, providing a deep bench of sourcing, investment, structuring, and operational talent.
Other key members of the Fifth Wall team include:
•
Brad Greiwe, who is a co-founder and Managing Partner at Fifth Wall. Prior to starting Fifth Wall, Mr. Greiwe co-founded Invitation Homes Inc. (NYSE: INVH). Mr. Greiwe started his career in investment banking at UBS Group AG in the real estate, lodging, and leisure group. He then worked in real estate private equity at Tishman Speyer Properties and Starwood Capital Group. Mr. Greiwe graduated from Harvard University, where he received his BA in economics.
•
Vik Chawla, who serves as Partner on the Real Estate Technology Investment team at Fifth Wall, where he focuses on technology and innovations within the homebuilding, retail, and industrial asset classes. Previously, Mr. Chawla was an Investment Associate at Echelon Asset Management. He began his career at The Blackstone Group Inc., where he worked on advisory transactions spanning the energy, real estate, and financial services industries. Mr. Chawla graduated from the University of Pennsylvania’s Wharton School, where he received his BS in economics with concentrations in finance and statistics and a minor in mathematics.
•
Dan Wenhold, who serves as Partner on the Real Estate Technology Investment team at Fifth Wall, where he focuses on emerging software and marketplace companies. Prior to joining Fifth Wall, he was the first employee and Director of Retail at The Black Tux, an omnichannel menswear brand. Prior to that the Black Tux, he was a member of the investment team at Battery Ventures L.P. Mr. Wenhold started his career as a financial analyst at Robert W. Baird & Co. Incorporated. Mr. Wenhold graduated from the University of Illinois with a degree in finance.
•
Kevin Campos, who serves as Partner on the Retail & Consumer Investment team at Fifth Wall, where he oversees the team’s operations and leads investments in omnichannel retail brands and technologies. Prior to joining Fifth Wall, Mr. Campos was the Chief Retail Officer for Combatant Gentlemen, Inc., a digitally native menswear brand. He also was a member of the retail team at Golden Gate Capital, a private equity firm. He started his career at Bain & Company as a strategy consultant advising technology, media, and investment fund clients. Mr. Campos graduated from Princeton University with a BA from the Princeton School of Public and International Affairs.
•
Joelle Khoury, who serves as Partner and General Counsel at Fifth Wall. Prior to joining Fifth Wall, Ms. Khoury worked as Vice President, Business and Legal Affairs at Saban Capital Group. Prior to joining Saban Capital Group, Inc., she was an Associate at both Gibson Dunn & Crutcher LLP and Cooley LLP, where she specialized in corporate transactions in the media, entertainment and technology industries. Ms. Khoury received her BA in Political Science from University of California, San Diego and then received her JD and LLM from Duke Law School.
•
G. M. Nicholas Vik, who serves as Vice President of Strategy & Operations at Fifth Wall, where he leads business operations and strategic initiatives across the firm. Prior to joining Fifth Wall, Mr. Vik was Director of Strategy & Finance and a member of the founding team at Renew Health Group, a healthcare startup founded in partnership with Venrock. Previously, he served as a member of the Revenue Strategy team at Snap Inc. (NYSE: SNAP). Mr. Vik started his career at Cambridge Associates, where he advised institutions on venture capital and private equity investment strategies, before joining ICONIQ Capital, a multifamily office and investment firm. Mr. Vik graduated from Tufts University where he received a BA in International Relations.
Initial Business Combination
Nasdaq rules and our certificate of incorporation require that we complete one or more business combinations having an aggregate fair market value of at least 80% of the assets held in the trust account
(excluding the amount of deferred underwriting discounts held in trust and taxes payable on the interest earned on the trust account) at the time of signing the agreement to enter into the initial business combination and that a majority of our independent directors approve such initial business combination. If our board of directors is not able to independently determine the fair market value of the target business or businesses, or we are considering an initial business combination with an affiliated entity, we will obtain an opinion from an independent investment banking firm that is a member of the Financial Industry Regulatory Authority (FINRA), or an independent valuation or accounting firm with respect to the satisfaction of such criteria.
We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the prior owners of the target business, the target management team or stockholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock 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 stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking stockholder approval, as applicable.
Other Considerations
We are not prohibited from pursuing an initial business combination or subsequent transaction with a company that is affiliated with Fifth Wall or our sponsor, founders, officers, or directors, or a company in which any of the foregoing may have a direct or indirect interest. In the event we seek to complete our initial business combination with a company that is affiliated with Fifth Wall, our sponsor or any of our founders, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent valuation or accounting firm that such initial business combination or transaction is fair to our company from a financial point of view.
Affiliates of Fifth Wall and members of our board of directors will directly or indirectly own founder shares and private placement shares following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers or directors were to be included by a target business as a condition to any agreement with respect to our initial business combination.
We currently do not have any specific business combination under consideration. Our officers and directors have neither individually selected nor considered a target business nor have they had any substantive discussions regarding possible target businesses among themselves or with our underwriters or other advisors. Fifth Wall is continuously made aware of potential business opportunities, one or more of which we may desire to pursue for a business combination, but we have not (nor has anyone
on our behalf) contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to a business combination transaction with our company. We have not (nor have any of our agents or affiliates) been approached by any candidates (or representative of any candidates) with respect to a possible acquisition transaction with our company and we will not consider a business combination with any company identified to Fifth Wall at any time as a suitable acquisition candidate for it, unless Fifth Wall, in its sole discretion, declines such potential business combination or makes available to our company a co-investment opportunity, in each case, in accordance with any legal, contractual or other obligations of Fifth Wall and Fifth Wall’s applicable existing and future policies and procedures. Additionally, we have not, nor has anyone on our behalf, taken any substantive measure, directly or indirectly, to select or locate any suitable acquisition candidate for us, nor have we engaged or retained any agent or other representative to select or locate any such acquisition candidate.
Fifth Wall currently manages multiple investment vehicles and may raise additional funds successor funds or other investment vehicles or accounts in the future, which may be during the period in which we are seeking our initial business combination. Such Fifth Wall investment entities may be seeking investment or acquisition opportunities and related financing at any time. We may compete with any one or more of them on any given acquisition opportunity.
In addition, Fifth Wall, our sponsor and each of our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures, including without limitation forming investment funds or other vehicles whose strategies may conflict with or othewis be competitive with us, during the period in which we are seeking an initial business combination. Any such companies, businesses or investments, including without limitation investment funds or other vehicles, may present additional conflicts of interest in pursuing an initial business combination.
Fifth Wall and each of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations to other entities pursuant to which Fifth wall or such persons is or will be required to present a business combination opportunity. Accordingly, if Fifth Wall or any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which Fifth Wall or such person has then-current fiduciary, contractual or other obligations to present such opportunity to such entity, Fifth Wall or such person will honor such fiduciary, contractual or other obligations to present such opportunity to such entity, in which case such opportunity may not be made available to us. Further, Fifth Wall and each of our officers and directors have duties and obligations with respect to confidentiality to other entities and may in the future agree to additional such duties or obligations, which may prevent Fifth Wall and such officers and directors from disclosing such information to us. Fifth Wall and our officers and directors will comply with such duties and obligations of confidentiality to such other entities, in which case, we may not have access to such information. In addition, we may, at our option, pursue an Affiliated Joint Acquisition opportunity with an entity to which Fifth Wall or an officer or director currently has, or may in the future have, a fiduciary or contractual obligation. Any such entity may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the business combination by making a specified future issuance to any such entity. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate 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 such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal, contractual or other obligation.
In addition, Fifth Wall, our founders, officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. Moreover, Fifth Wall, our founders, officers and directors have, and will have in the future, time and attention requirements for current and future businesses, including investment funds, accounts, co-investment vehicles and other entities managed by Fifth Wall. To the extent any conflict of interest arises between, on the one hand, us and, on the other hand, such
businesses, investments funds, accounts, co-investment vehicles and other entities managed by Fifth Wall (including, without limitation, arising as a result of certain of our founders, officers and directors being required to offer investment or acquisition opportunities to such investment funds, accounts, co-investment vehicles and other entities), Fifth Wall, its affiliates and our founders, officers and directors will resolve such conflicts of interest in their sole discretion in accordance with their then existing fiduciary, contractual, and other duties, and there can be no assurance that such conflict of interest will be resolved in our favor.
Any past experience and performance of Fifth Wall or our management team is not a guarantee either: (1) that we will be able to successfully identify a suitable candidate for our initial business combination; or (2) of any results with respect to any initial business combination we may consummate. You should not rely on the historical record of Fifth Wall or our management team’s performance as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. An investment in us is not an investment in Fifth Wall. None of our sponsor, officers, directors or Fifth Wall has had experience with a blank check company or special purpose acquisition company in the past.
Unlike other special purpose acquisition companies, we are not offering any warrants to prospective investors in this offering.
Status as a Public Company
We believe our structure will make us an attractive business combination partner to target businesses. As an existing public company, we offer a target business an alternative to the traditional initial public offering through a merger or other business combination with us. In a business combination transaction with us, the owners of the target business may, for example, exchange their shares of stock in the target business for our shares of Class A common stock (or shares of a new holding company) or for a combination of our shares of Class A common stock and cash, allowing us to tailor the consideration to the specific needs of the sellers. We believe target businesses will find this method a more expeditious and cost effective method to become a public company than the typical initial public offering. The typical initial public offering process takes a significantly longer period of time than the typical business combination transaction process, and there are significant expenses in the initial public offering process, including underwriting discounts and commissions, that may not be present to the same extent in connection with a business combination with us.
Furthermore, once a proposed business combination is completed, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could prevent the offering from occurring. Once public, we believe the target business would then have greater access to capital, an additional means of providing management incentives consistent with stockholders’ 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 stockholder approval of any proposed initial business combination, negatively.
We are an “emerging growth company,” as defined in the JOBS Act. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our shares of Class A common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Financial Position
With funds available for a business combination initially in the amount of $241,250,000, after payment of the estimated expenses of this offering and $8,750,000 of deferred underwriting fees (or $277,437,500 after payment of $10,062,500 of deferred underwriting fees if the underwriters’ over-allotment option is exercised in full), we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third party financing and there can be no assurance it will be available to us.
Effecting Our Initial Business Combination
General
We are not presently engaged in, and we will not engage in, any operations for an indefinite period of time following this offering. We intend to effectuate our initial business combination using cash from the proceeds of this offering, the private placements of the private placement shares, our equity, debt or a combination of these as the consideration to be paid in our initial business combination. We may seek to complete our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemptions of our shares of Class A common stock, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions with any business combination target. Additionally, we have not engaged or retained any agent or other representative to select or locate any suitable acquisition candidate, to conduct any research or take any measures, directly or indirectly, to locate or contact a target business, other than our officers and directors. Accordingly, there is no current basis for investors in this offering to evaluate the possible merits or risks of the target business with which we may ultimately complete our initial business combination. Although our management will assess the risks inherent in a particular target business with which we may combine, we cannot assure you that this assessment will result in our identifying all risks that a target business may encounter. Furthermore, some of those risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that those risks will adversely affect a target business.
We may need to obtain additional financing to complete our initial business combination, either because the transaction requires more cash than is available from the proceeds held in our trust account, or because we become obligated to redeem a significant number of our public shares upon completion of the business combination, in which case we may issue additional securities or incur debt in connection with such business combination. There are no prohibitions on our ability to issue securities or incur debt in connection with our initial business combination. We are not currently a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities, the incurrence of debt or otherwise.
Sources of Target Businesses
Certain members of our management team have spent significant portions of their careers working with businesses in the PropTech industry and have developed a wide network of professional services
contacts and business relationships in that industry. The members of our board of directors also have significant executive management and public company experience with PropTech companies. Our process of identifying acquisition targets will leverage our management team’s industry experiences, demonstrated deal sourcing capabilities and broad and deep network of relationships, including executives and management teams, private equity groups and other institutional investors, large business enterprises, lenders, investment bankers and other investment market participants, restructuring advisers, consultants, attorneys and accountants, which we believe should provide us with a number of business combination opportunities. We expect that the collective experience, capability and network of our founders, directors and officers, combined with their individual and collective reputations in the investment community, will help to create prospective business combination opportunities.
In addition, we anticipate that target business candidates may be brought to our attention from various unaffiliated sources, including investment bankers and private investment funds. Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us through calls or mailings. These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources will have read this prospectus and know what types of businesses we are targeting. Our officers and directors, as well as their affiliates, may also bring to our attention target business candidates of which they become aware through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions.
While we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. We will engage a finder only to the extent our management determines that the use of a finder may bring opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our best interest to pursue. Payment of a finder’s fee is customarily tied to completion of a transaction, in which case any such fee will be paid out of the funds held in the trust account. In no event, however, will our sponsor or any of our existing officers or directors, or any entity with which they are affiliated, be paid any finder’s fee, consulting fee or other compensation by the company prior to, or for any services they render in order to effectuate, the completion of our initial business combination (regardless of the type of transaction that it is). None of our sponsor, executive officers or directors, or any of their respective affiliates, will be allowed to receive any compensation, finder’s fees or consulting fees from a prospective business combination target in connection with a contemplated acquisition of such target by us.
We are not prohibited from pursuing an initial business combination with a business combination target that is affiliated with our sponsor, officers or directors, or from making the acquisition through a joint venture or other form of shared ownership with our sponsor, officers or directors. Although we will not be specifically focusing on, or targeting, any transactions with affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business combination as set forth below and such transaction was approved by a majority of our independent and disinterested directors. In the event we seek to complete our initial business combination with a business combination target that is affiliated with our sponsor, executive officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking which is a member of FINRA or an independent valuation or accounting firm, that such an initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
As more fully discussed in “Management — Conflicts of Interest,” if any of our executive officers becomes aware of a business combination opportunity that falls within the line of business of any entity, including private funds under the management of Fifth Wall and their respective portfolio companies, to which he or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us. In addition, existing and future funds managed by Fifth Wall and their respective portfolio companies may compete with us for business combination opportunities and if such
opportunities are pursued by such entities, we may be precluded from pursuing such opportunities. All of our executive officers currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us. In addition, we may pursue an Affiliated Joint Acquisition opportunity with an entity to which an officer or director has a fiduciary or contractual obligation. Any such entity may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the acquisition by issuing to such entity a class of equity or equity-linked securities. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate 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 such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue.
Evaluation of a Target Business and Structuring of Our Initial Business Combination
In evaluating a prospective target business, we expect to conduct a thorough due diligence review which may encompass, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial, operational, legal and other information which will be made available to us. If we determine to move forward with a particular target, we will proceed to structure and negotiate the terms of the business combination transaction.
The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of, and negotiation with, a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination. The company will not pay any consulting fees to members of our management team, or any of their respective affiliates, for services rendered to or in connection with our initial business combination.
Lack of Business Diversification
For an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. By completing our initial business combination with only a single entity, our lack of diversification may:
•
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
•
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.
Stockholders May Not Have the Ability to Approve Our Initial Business Combination
We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC subject to the provisions of our amended and restated certificate of incorporation. However, we will seek stockholder approval if it is required by law or applicable stock exchange rule, or we may decide to seek stockholder approval for business or other legal reasons.
Under Nasdaq’s listing rules, stockholder approval would be required for our initial business combination if, for example:
•
we issue (other than in a public offering for cash) common stock that will either (a) be equal to or in excess of 20% of the number of shares of Class A common stock then outstanding or (b) have voting power equal to or in excess of 20% of the voting power then outstanding;
•
any of our directors, officers or substantial stockholders (as defined by Nasdaq rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of common stock could result in an increase in outstanding common stock or voting power of 5% or more; or
•
the issuance or potential issuance of common stock will result in our undergoing a change of control.
The decision as to whether we will seek stockholder approval of a proposed business combination in those instances in which stockholder approval is not required by law will be made by us, solely in our discretion, and will be based on business and legal reasons, which include a variety of factors, including, but not limited to:
•
the timing of the transaction, including in the event we determine stockholder approval would require additional time and there is either not enough time to seek stockholder approval or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company;
•
the expected cost of holding a stockholder vote;
•
the risk that the stockholders would fail to approve the proposed business combination;
•
other time and budget constraints of the company; and
•
additional legal complexities of a proposed business combination that would be time-consuming and burdensome to present to stockholders.
Permitted Purchases of Our Securities
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase public shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. However, they have no current commitments, plans or intentions to engage in
such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase public shares in such transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act.
In the event that our sponsor, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.
The purpose of any such purchases of shares could be to (i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or (ii) to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public “float” of our shares of Class A common stock 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 stockholders with whom our sponsor, officers, directors or their affiliates may pursue privately negotiated purchases by either the stockholders contacting us directly or by our receipt of redemption requests submitted by stockholders (in the case of shares of Class A common stock) following our mailing of proxy materials in connection with our initial business combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter into a private purchase, they would identify and contact only potential selling stockholders 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 stockholder has already submitted a proxy with respect to our initial business combination but only if such shares have not already been voted at the stockholder meeting related to our initial business combination. Our sponsor, executive officers, directors, advisors or any of their affiliates will select which stockholders to purchase shares from based on the negotiated price and number of shares and any other factors that they may deem relevant, and will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws.
Our sponsor, officers, directors and/or their affiliates will not make purchases of shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.
Redemption Rights for Stockholders upon Completion of Our Initial Business Combination
We will provide our stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest (net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption rights will
include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. Our sponsor has entered into an agreement with us, pursuant to which it has agreed to (i) waive its redemption rights with respect to its founder shares and (ii) waive its rights to liquidating distributions from the trust account with respect to its founder shares if we fail to consummate an initial business combination within 24 months from the closing of this offering. Our sponsor and our directors and executive officers have also agreed (A) that they will not propose any amendment to our amended and restated certificate of incorporation that would modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares and (B) to waive their redemption rights with respect to their founder shares and any public shares they may acquire during or after this offering in connection with the completion of our initial business combination. However, if our sponsor or members of our management team acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to consummate an initial business combination within 24 months from the closing of this offering.
Limitations on Redemptions
Our amended and restated certificate of incorporation provides that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules). However, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock 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 shares of Class A common stock submitted for redemption will be returned to the holders thereof.
Manner of Conducting Redemptions
We will provide our stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial business combination either (i) in connection with a stockholder meeting called to approve the business combination or (ii) by means of a tender offer. The decision as to whether we will seek stockholder 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 stockholder 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 stockholder approval under SEC rules). Asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation would require stockholder approval. We currently intend to conduct redemptions in connection with a stockholder vote unless stockholder approval is not required by applicable law or stock exchange listing requirement and we choose to conduct redemptions pursuant to the tender offer rules of the SEC for business or other legal reasons.
If we held a stockholder vote to approve our initial business combination, we will, pursuant to our amended and restated certificate of incorporation:
•
conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and
•
file proxy materials with the SEC.
In the event that we seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our stockholders with the redemption rights described above upon completion of the initial business combination.
If we seek stockholder approval, we will complete our initial business combination only if a majority of the shares of Class A common stock voted, on an as converted basis, are voted in favor of the business combination. In such case, our sponsor has agreed to vote the founder shares and any public shares purchased by our sponsor during or after this offering in favor of our initial business combination. As a result, in addition to our sponsor’s founder shares, we would need 9,375,001, or 37.5%, of the 25,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted and the over-allotment option is not exercised). Each stockholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction. In addition, our sponsor and our directors and executive officers have entered into agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and public shares in connection with the completion of a business combination.
If we conduct redemptions pursuant to the tender offer rules of the SEC, we will, pursuant to our amended and restated certificate of incorporation:
•
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, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of Class A common stock in the open market if we elect to redeem our public shares through a tender offer, to comply with Rule 14e-5 under the Exchange Act.
In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on stockholders not tendering more than the number of public shares we are permitted to redeem. If stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination.
Limitation on Redemption upon Completion of Our Initial Business Combination If We Seek Stockholder Approval
If we seek stockholder 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 certificate of incorporation provides that a stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to Excess Shares. We believe this restriction will discourage stockholders 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 stockholder 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 stockholders’ 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 stockholders 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 stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
Tendering Share Certificates in Connection with Redemption Rights or a Tender Offer
Public stockholders 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 stockholder would have from the time we send out our tender offer materials up to two days prior to the vote on the business combination to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short period in which to exercise redemption rights, it is advisable for stockholders 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 stockholders’ vote on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise their redemption rights. After the business combination was approved, the company would contact such stockholder to arrange for them to deliver their certificate to verify ownership. As a result, the stockholder then had an “option window” after the completion of the business combination during which he or she could monitor the price of the company’s shares in the market. If the price rose above the redemption price, they could sell their shares in the open market before actually delivering their shares to the company for cancellation. As a result, the redemption rights, to which stockholders were aware they needed to commit before the stockholder 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 stockholder’s election to redeem is irrevocable once the business combination is approved.
Any request to redeem such shares, once made, may be withdrawn at any time up to two business days prior to the vote on the proposal to approve the business combination, unless otherwise agreed to by us. Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly after the completion of our initial business combination.
If our initial business combination is not approved or completed for any reason, then our stockholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.
If our initial proposed business combination is not completed, we may continue to try to complete a business combination with a different target until 24 months from the closing of this offering.
Redemption of Public Shares and Liquidation If No Initial Business Combination
Our amended and restated certificate of incorporation provides that we will have only 24 months from the closing of this offering to consummate an initial business combination. If we are unable to consummate an initial business combination within 24 months from the closing of this offering, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (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 stockholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to our obligations to provide for claims of creditors and the requirements of other applicable law.
Our sponsor has entered into an agreement with us, pursuant to which it has waived its rights to liquidating distributions from the trust account with respect to its founder shares if we fail to consummate an initial business combination within 24 months from the closing of this offering. However, if our sponsor or members of our management team acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to consummate an initial business combination within 24 months from the closing of this offering.
Our sponsor had agreed, pursuant to a written agreement with us, that they it not propose any amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not consummate an initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of taxes payable), divided by the number of then outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules). If this optional redemption right is exercised with respect to an excessive number of public shares such that we cannot satisfy the net tangible asset requirement, we would not proceed with the amendment or the related redemption of our public shares at such time. This redemption right shall apply in the event of the approval of any such amendment, whether proposed by our sponsors, any executive officer, 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 of proceeds held outside the trust account, although we cannot assure you that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, we may request the trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If we were to expend all of the net proceeds of this offering, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption amount received by stockholders upon our dissolution would be $10.00. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure you that the actual per-share redemption amount received by stockholders will not be less than $10.00. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.
Although we will seek to have all vendors, service providers (excluding our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. The underwriters will not execute agreements with us waiving such claims to the monies held in the trust account. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. In order to protect the amounts held in the trust account, our sponsor has agreed that it will be liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of the trust assets, in each case less taxes payable, provided that such liability will not apply to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third party claims. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of the trust assets, in each case less taxes payable, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less than $10.00 per share.
We will seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (excluding our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. We will have access to up to $1,000,000 from the proceeds of this offering with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently
estimated to be no more than approximately $100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, stockholders who received funds from our trust account could be liable for claims made by creditors. In the event that our offering expenses exceed our estimate of $2,575,000, we may fund such excess with funds from the funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $2,575,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.
If we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return $10.00 per share to our public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy 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 stockholders. 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 stockholders 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 stockholders will be entitled to receive funds from the trust account only (i) in the event of the redemption of our public shares if we do not consummate an initial business combination within 24 months from the closing of this offering, (ii) in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not consummate an initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity or (iii) if they redeem their respective shares for cash upon the completion of the initial business combination. In no other circumstances will a stockholder have any right or interest of any kind to or in the trust account. In the event we seek stockholder approval in connection with our initial business combination, a stockholder’s voting in connection with the business combination alone will not result in a stockholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such stockholder must have also exercised its redemption rights described above. These provisions of our amended and restated certificate of incorporation, like all provisions of our amended and restated certificate of incorporation, may be amended with a stockholder vote.
Comparison of Redemption or Purchase Prices in Connection with Our Initial Business Combination and If We Fail to Complete Our Initial Business Combination
The following table compares the redemptions and other permitted purchases of public shares that may take place in connection with the completion of our initial business combination and if we are unable to consummate an initial business combination within 24 months from the closing of this offering.
| |
|
|
REDEMPTIONS IN
CONNECTION WITH
OUR INITIAL
BUSINESS
COMBINATION
|
|
|
OTHER PERMITTED
PURCHASES OF
PUBLIC SHARES BY
OUR AFFILIATES
|
|
|
REDEMPTIONS IF WE
FAIL TO COMPLETE
AN INITIAL BUSINESS
COMBINATION
|
|
|
Calculation of redemption price
|
|
|
Redemptions at the time of our initial business combination may be made in connection with a stockholder vote or pursuant to a tender
|
|
|
If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors or their affiliates may purchase shares in
|
|
|
If we are unable to consummate an initial business combination within 24 months from the closing of this offering, we will redeem all public shares at a
|
|
| |
|
|
REDEMPTIONS IN
CONNECTION WITH
OUR INITIAL
BUSINESS
COMBINATION
|
|
|
OTHER PERMITTED
PURCHASES OF
PUBLIC SHARES BY
OUR AFFILIATES
|
|
|
REDEMPTIONS IF WE
FAIL TO COMPLETE
AN INITIAL BUSINESS
COMBINATION
|
|
| |
|
|
offer. The redemption price will be the same whether we conduct redemptions pursuant to a tender offer or in connection with a stockholder vote. In either case, our stockholders may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination (which is initially anticipated to be $10.00 per share), including interest (net of taxes payable), divided by the number of then outstanding public shares, subject to the limitation that no redemptions will take place if all of the redemptions would cause our net tangible assets to be less than $5,000,001 and any limitations (including but not limited to cash requirements) agreed to in connection with the negotiation of terms of a proposed business combination.
|
|
|
privately negotiated transactions or in the open market either prior to or following completion of our initial business combination. There is no limit to the prices that our sponsor, directors, officers, advisors or their affiliates may pay in these transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Securities Exchange Act of 1934, as amended, or the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.
|
|
|
per-share price, payable in cash, equal to the aggregate amount, then on deposit in the trust account (which is initially anticipated to be $10.00 per share), including interest (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable) divided by the number of then outstanding public shares.
|
|
|
Impact to remaining stockholders
|
|
|
The redemptions in connection with our initial business combination will reduce the book value per share for our remaining stockholders, who will bear the burden of the deferred underwriting commissions and taxes payable.
|
|
|
If the permitted purchases described above are made, there would be no impact to our remaining stockholders because the purchase price would not be paid by us.
|
|
|
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 our sponsor, who will be our only remaining stockholder after such redemptions.
|
|
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.
| |
|
|
TERMS OF OUR OFFERING
|
|
|
TERMS UNDER A RULE 419
OFFERING
|
|
|
Escrow of offering proceeds
|
|
|
$250,000,000 of the net proceeds of this offering and the sale of the private placement shares will be deposited into a trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee.
|
|
|
Approximately $212,625,000 of the offering proceeds, representing the gross proceeds of this offering, would be required to be deposited into either an escrow account with an insured depositary institution or in a separate bank account established by a broker-dealer in which the broker-dealer acts as trustee for persons having the beneficial interests in the account.
|
|
|
Investment of net proceeds
|
|
|
$250,000,000 of the net proceeds of this offering and the sale of the private placement shares held in trust will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations.
|
|
|
Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act or in securities that are direct obligations of, or obligations guaranteed as to principal or interest by, the United States.
|
|
|
Receipt of interest on escrowed funds
|
|
|
Interest income on proceeds from the trust account to be paid to stockholders is reduced by (i) any 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.
|
|
|
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.
|
|
|
Limitation on fair value or net assets of target business
|
|
|
Nasdaq rules and our certificate of incorporation require that we complete one or more business combinations having an aggregate fair market value of at least 80% of our assets held in the trust account (excluding the amount of deferred underwriting discounts held in trust and taxes payable on the interest earned on the trust account) at the time of the agreement to enter into the initial business combination.
|
|
|
The fair value or net assets of a target business must represent at least 80% of the maximum offering proceeds.
|
|
| |
|
|
TERMS OF OUR OFFERING
|
|
|
TERMS UNDER A RULE 419
OFFERING
|
|
|
Trading of securities issued
|
|
|
The public shares are expected to begin trading on or promptly after the date of this prospectus. If the over- allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the over-allotment option.
|
|
|
No trading of the Class A common stock would be permitted until the completion of a business combination. During this period, the securities would be held in the escrow or trust account.
|
|
|
Election to remain an investor
|
|
|
We will provide our stockholders 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 (net of taxes payable), divided by the number of then outstanding public shares, upon the completion of our initial business combination, subject to the limitations described herein. We may not be required by law to hold a stockholder vote. If we are not required by law and do not otherwise decide to hold a stockholder vote, we will, pursuant to our amended and restated certificate of incorporation, 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 stockholder 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 stockholder approval, we will complete our initial business combination only if a majority of the shares of Class A common stock, on an as converted basis, voted are voted in favor of the business combination. Additionally, each stockholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction. Our amended and
|
|
|
A prospectus containing information pertaining to the business combination required by the SEC would be sent to each investor. Each investor would be given the opportunity to notify the company in writing, within a period of no less than 20 business days and no more than 45 business days from the effective date of a post-effective amendment to the company’s registration statement, to decide if they elect to remain a stockholder of the company or require the return of their investment. If the company has not received the notification by the end of the 45th business day, funds and interest or dividends, if any, held in the trust or escrow account are automatically returned to the stockholder. 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.
|
|
| |
|
|
TERMS OF OUR OFFERING
|
|
|
TERMS UNDER A RULE 419
OFFERING
|
|
| |
|
|
restated certificate of incorporation requires that at least five days’ notice be given of any such stockholder meeting.
|
|
|
|
|
|
Business combination deadline
|
|
|
If we are unable to consummate an initial business combination within 24 months from the closing of this offering, we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable), divided by the number of then outstanding public shares, which redemption will completely extinguish stockholders’ rights as stockholders (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 stockholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to our obligations to provide for claims of creditors and the requirements of other applicable law.
|
|
|
If an acquisition has not been completed within 18 months after the effective date of the company’s registration statement, funds held in the trust or escrow account are returned to investors.
|
|
|
Release of funds
|
|
|
Except for the withdrawal of interest income to pay our income taxes, none of the funds held in trust will be released from the trust account until the earliest of: (i) the completion of our initial business combination, (ii) the redemption of our public shares if we are unable to consummate an initial business combination within 24 months from the closing of this offering, subject to applicable law, or (iii) the redemption of our public shares properly submitted in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business
|
|
|
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.
|
|
| |
|
|
TERMS OF OUR OFFERING
|
|
|
TERMS UNDER A RULE 419
OFFERING
|
|
| |
|
|
combination within 24 months from the closing of this offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity.
|
|
|
|
|
Competition
In identifying, evaluating and selecting a target business for our initial business combination, we may encounter intense competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, public companies, operating businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than us. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay cash in connection with our stockholders who exercise their redemption rights may reduce the resources available to us for our initial business combination, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business combination.
Facilities
We currently maintain our executive offices at 6060 Center Drive, 10th Floor, Los Angeles, CA 90045. Fifth Wall will provide us use of such office space and administrative and support services free of charge. 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 shares of Class A common stock 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 stockholders with audited financial statements of the prospective target business as part of the proxy solicitation or tender offer materials, as applicable, sent to stockholders. 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 will we be required to have our internal control procedures audited. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
Prior to the date of this prospectus, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
We are 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 stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our shares of Class A common stock that are held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Legal Proceedings
There is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such.
MANAGEMENT
Officers, Directors and Director Nominees
Our officers, directors and director nominees are as follows:
|
NAME
|
|
|
AGE
|
|
|
POSITION
|
|
|
Brendan Wallace
|
|
|
39
|
|
|
Chairman of the Board and Chief Executive Officer
|
|
|
Andriy Mykhaylovskyy
|
|
|
35
|
|
|
Director and Chief Financial Officer
|
|
|
Alana Beard
|
|
|
38
|
|
|
Director Nominee
|
|
|
Victor Coleman
|
|
|
59
|
|
|
Director Nominee
|
|
|
Angela C. Huang
|
|
|
38
|
|
|
Director Nominee
|
|
|
Wisdom Lu
|
|
|
54
|
|
|
Director Nominee
|
|
Brendan Wallace serves as our Chief Executive Officer and Chairman. Mr. Wallace also serves as a co-founder and Managing Partner at Fifth Wall since May 2016, where he also serves as the chairman of the investment committee. Prior to starting Fifth Wall, Mr. Wallace co-founded Identified Inc., a venture-backed data and analytics company, in January 2009, that was subsequently acquired by Workday, Inc. in February 2014. Mr. Wallace also was involved in the founding of Maxi Mobility Spain, S.L. (d/b/a Cabify) in September 2012. Mr. Wallace has been an active investor, leading more than 65 angel investments including Dollar Shave Club, Bonobos, Carbon38, Clutter, Inc., Philz Coffee, Inc., Allbirds, Inc., MasterClass, Roofstock, Inc., Common Living, Inc. Mr. Wallace started his career at The Goldman Sachs Group, Inc. in the real estate, hospitality, and gaming investment banking before joining The Blackstone Group Inc.’s real estate private equity group where he was involved with the buyout of Hilton Hotels and Equity Office Properties. Mr. Wallace received his B.A. Summa Cum Laude in Political Science from Princeton University in 2004 and received his M.B.A. from Stanford University in 2010. We believe Mr. Wallace is well suited to be a member of our board of directors based on his extensive investment experience.
Andriy Mykhaylovskyy serves as our Chief Financial Officer. Mr. Mykhaylovskyy is a Managing Partner and Chief Operating Officer at Fifth Wall since April 2017, where he oversees the firm’s day-to-day operations and investing activities. Prior to joining Fifth Wall, Mr. Mykhaylovskyy was a Principal and founding team member at Evergreen Coast Capital, a technology-focused private equity affiliate of Elliott Management Corporation, from January 2016 to March 2017. Mr. Mykhaylovskyy’s other previous leadership roles include serving as the Vice President at The Gores Group from May 2014 to January 2016 and Chief Financial Officer of Identified, Inc., a data and analytics company, from August 2013 to February 2014. Mr. Mykhaylovskyy started his career in investment banking at Morgan Stanley & Co. LLC, where he offered financial advisory and capital-raising services to global industrial corporations, before joining technology-focused private equity firm Francisco Partners as an associate. Mr. Mykhaylovskyy received his B.A. in Economics from Princeton University in 2007 and received his M.B.A. from Stanford University in 2013. We believe Mr. Mykhaylovsky’s financial expertise and experience in evaluating and investing in technology and data analytics companies makes him well qualified to serve on our board of directors.
Alana Beard will be appointed as a member of our board of directors. In this role, she will advise the company from the consummation of the initial public offering through a special purpose acquisition company. Ms. Beard has been a Senior Associate at SVB Capital since February 2020 and President of the 318 Foundation, Inc., a non-profit organization, since January 2021. Prior to joining SVB, Alana was a member of the WNBA Los Angeles Sparks organization from April 2012 to January 2020 and an ESPN/ACC women’s college basketball analyst from October 2019 to March 2020. During her career with the Sparks, Ms. Beard was a four-time WNBA All-Star, won the WNBA championship in 2016 and was named WNBA Defensive Player of the Year for the 2017 and 2018 seasons. Ms. Beard graduated from Duke University in 2004 with a bachelor’s degree in Sociology. We believe Ms. Beard’s prior leadership experience makes her well qualified to serve on our board of directors.
Victor Coleman will be appointed as a member of our board of directors. In this role, he will advise the company from the consummation of the initial public offering through a special purpose acquisition
company. Mr. Coleman serves as Chief Executive Officer, President and Chairman of Hudson Pacific Properties, Inc. since June 2010. Prior to the formation of Hudson Pacific Properties, Inc., Mr. Coleman founded and served as a managing partner of its predecessor, Hudson Capital, LLC, a private real estate investment company since October 2006. In 1990, Mr. Coleman co-founded and led Arden Realty, Inc. as its President and Chief Operating Officer and as a director until its sale to General Electric Co. in May 2006. Mr. Coleman also serves on the boards of directors of the Ronald Reagan UCLA Medical Center, the Fisher Center for Real Estate and Urban Economics, Los Angeles Sports & Entertainment Commission and the Los Angeles Chapter of the World Presidents’ Organization. Mr. Coleman’s experience as a director also includes service on the board of other publicly traded real estate investment trusts, or REITs, such as Douglas Emmett, Inc. from 2006 to 2009 and Kite Realty since 2012, where he currently serves as a member of both its compensation committee and nominating and corporate governance committee. He received his B.A. in History from the University of California, Berkeley in 1983 and his M.B.A. from Golden Gate University in 1985. We believe Mr. Coleman’s extensive executive and board experience makes him well qualified to serve on our board of directors.
Angela C. Huang will be appointed as a member of our board of directors. In this role, she will advise the company from the consummation of the initial public offering through a special purpose acquisition company. Ms. Huang is a Managing Director of EE Capital Pte. Ltd. since June 2020. Previously, Ms. Huang was an Asset Manager and Managing Director of Hillhouse Capital Management Pte. Ltd., a global private and public equity investment management firm, from February 2013 to April 2020. She received her A.B. in History of East Asian Studies from Princeton University in 2004 and her J.D. from Columbia University in 2008, where she was a Harlan Fiske Stone Scholar. We believe Ms. Huang’s substantial experience in the public and private equity markets with a focus on cross-border transactions makes her well qualified to serve on our board of directors.
Wisdom Lu will be appointed as a member of our board of directors. In this role, she will advise the company from the consummation of the initial public offering through a special purpose acquisition company. Ms. Lu has been serving as a General Partner of Stibel Investments since 2010 and Bryant Stibel since co-founding it in July 2015. Ms. Lu also serves as a member of the board of directors of Tailwind Acquisition Corp., a special purpose acquisition vehicle, and as the chairperson of its audit committee since September 2020. She has previously served as the Chief Financial Officer at Dun & Bradstreet Credibility Corp. from September 2014 to January 2017 and as its Senior Vice President, Data Works from February 2012 to August 2014. Prior to Dun & Bradstreet, she served as the Chief Financial Officer of Liberman Broadcasting where she oversaw finance, information technology, human resources, as well as legal and investor relations. Prior to Liberman Broadcasting, Ms. Lu served as Treasurer and Chief Investment Officer of Health Net, Inc. from August 1996 to April 2008. Ms. Lu received a degree in Bachelor of Engineering from Rensselaer Polytechnic Institute in 1987 and an M.B.A. from New York University in 1993. We believe Ms. Lu’s operational and executive experience make her 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 elected in each year, and with each class (except for those directors appointed prior to our first annual meeting of stockholders) serving a three-year term. Upon the appointment of our director nominees, the term of office of the first class of directors, consisting of Alana Beard and Victor Coleman is expected to expire at our first annual meeting of stockholders and the term of office of the second class of directors, consisting of Angela C. Huang and Wisdom Lu is expected to expire at our second annual meeting of stockholders. The term of office of the third class of directors, consisting of Brendan Wallace and Andriy Mykhaylovskyy will expire at our third annual meeting of stockholders.
Prior to the completion of an initial business combination, any vacancy on the board of directors may be filled by a nominee chosen by holders of a majority of our founder shares. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason.
Pursuant to an agreement to be entered into concurrently with the issuance and sale of the securities in this offering, our sponsor, upon consummation of an initial business combination and for
so long as our sponsor and its permitted transferees collectively hold at least 50% of the number of shares of common stock held by the sponsor upon consummation of this offering (after giving appropriate effect to any share splits, reverse share splits or other similar corporate transactions, or any adjustment to the conversion rate of the founder shares in connection with an initial business combination), will be entitled to nominate one person for election to our board of directors.
Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our amended and restated certificate of incorporation as it deems appropriate. Our amended and restated certificate of incorporation provides that our officers may consist of one or more chairperson of the board, chief executive officer, president, chief financial officer, vice presidents, secretary, treasurer and such other offices as may be determined by the board of directors.
Director Independence
Applicable rules of the Nasdaq require a majority of a listed company’s board of directors to be comprised of independent directors within one year of listing. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Upon the effectiveness of the registration statement of which this prospectus forms a part, we expect to have “independent directors” as defined in Nasdaq’s listing standards and applicable SEC rules. Our board of directors has determined that Alana Beard, Victor Coleman, Angela Huang and Wisdom Lu are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. Our independent directors will have regularly scheduled meetings at which only independent directors are, subject to the transition rules described above for newly listed companies present.
Executive Officer and Director Compensation
None of our executive officers or directors have received any cash compensation for services rendered to us. Our sponsor, executive officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, executive officers or directors, or our or their affiliates. Any such payments prior to an initial business combination will be made from funds held outside the trust account. Other than quarterly audit committee review of such reimbursements, we do not expect to have any additional controls in place governing our reimbursement payments to our directors and executive officers for their out-of-pocket expenses incurred in connection with our activities on our behalf in connection with identifying and consummating an initial business combination. Other than these payments and reimbursements, no compensation of any kind, including finder’s and consulting fees, will be paid by the company to our sponsor, executive officers and directors, or any of their respective affiliates, prior to completion of our initial business combination.
After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting or management fees from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in the proxy solicitation materials or tender offer materials furnished to our stockholders in connection with a proposed business combination. We have not established any limit on the amount of such fees that may be paid by the combined company to our directors or members of management. It is unlikely the amount of such compensation will be known at the time of the proposed business combination, because the directors of the post-combination business will be responsible for determining executive officer and director compensation. Any compensation to be paid to our executive officers will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our board of directors.
We do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation of our initial business combination, although it is possible
that some or all of our executive officers and directors may negotiate employment or consulting arrangements to remain with us after our initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions with us may influence our management’s motivation in identifying or selecting a target business but we do not believe that the ability of our management to remain with us after the consummation of our initial business combination will be a determining factor in our decision to proceed with any potential business combination. We are not party to any agreements with our executive officers and directors that provide for benefits upon termination of employment.
Committees of the Board of Directors
Upon the effectiveness of the registration statement of which this prospectus forms a part, our board of directors will have three standing committees: an audit committee, a nominating committee and a compensation committee. Subject to phase-in rules and a limited exception, the rules of Nasdaq and Rule 10A of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors. Subject to phase-in rules and a limited exception, the rules of Nasdaq require that the compensation committee of a listed company be comprised solely of independent directors. Each committee will operate under a charter that has been approved by our board and will have the composition and responsibilities described below.
Audit Committee
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish an audit committee of the board of directors. Angela C. Huang, Victor Coleman and Wisdom Lu are expected to serve as members of our audit committee. Our board of directors has determined that each of Angela C. Huang, Victor Coleman and Wisdom Lu are independent. Wisdom Lu is expected to serve as the Chairperson of the audit committee. Each member of the audit committee meets the financial literacy requirements of Nasdaq and our board of directors has determined that Wisdom Lu qualifies as an “audit committee financial expert” as defined in applicable SEC rules and has accounting or related financial management expertise.
The audit committee is responsible for:
•
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 stockholders, 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 are expected to be Angela C. Huang, Alana Beard and Victor Coleman and Victor Coleman is expected to serve as chairperson of the nominating committee. Our board of directors has determined that each of Angela C. Huang, Alana Beard and Victor Coleman 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, stockholders, investment bankers and others.
Guidelines for Selecting Director Nominees
The guidelines for selecting nominees, which will be specified a charter to be adopted by us, generally 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 stockholders.
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 stockholders 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 are expected to be Alana Beard, Wisdom Lu and Angela C. Huang and Angela C. Huang is expected to serve as chairperson of the compensation committee.
Our board of directors has determined that each of Alana Beard, Wisdom Lu and Angela C. Huang 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 Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;
•
reviewing and approving the compensation of all of our other Section 16 executive officers;
•
reviewing our executive compensation policies and plans;
•
implementing and administering our incentive compensation equity-based remuneration plans;
•
assisting management in complying with our proxy statement and annual report disclosure requirements;
•
approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees;
•
producing a report on executive compensation to be included in our annual proxy statement; and
•
reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
The charter will also provide that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.
Compensation Committee Interlocks and Insider Participation
None of our executive officers currently serves, and in the past year has not served, as a member of the compensation committee of any entity that has one or more executive officers serving on our board of directors.
Code of Ethics
Upon to the effectiveness of the registration statement of which this prospectus forms a part, we will have adopted a Code of Ethics applicable to our directors, officers and employees. A copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.
Conflicts of Interest
In general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if:
•
the corporation could financially undertake the opportunity;
•
the opportunity is within the corporation’s line of business; and
•
it would not be fair to our company and its stockholders for the opportunity not to be brought to the attention of the corporation.
Fifth Wall and each of our officers and directors presently has, and any of them in the future may have, additional, fiduciary, contractual or other obligations to other entities pursuant to which such persons is or will be required to present a business combination opportunity. Wisdom Lu, a director, also serves as a member of the board of directors of Tailwind Acquisition Corp., a special purpose acquisition vehicle. Accordingly, if Fifth Wall or any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which such person has then-current fiduciary, contractual or other obligations to present such opportunity to such entity, such person will honor such fiduciary, contractual or other obligations to present such opportunity to such entity, in which case such opportunity may not be made available to us. Further, Fifth Wall and each of our officers and directors have duties and obligations with respect to confidentiality to other entities and may in the future agree to additional such duties or obligations, which may prevent Fifth Wall and such officers and directors from disclosing such information to us. Fifth Wall and our officers and directors will comply with such duties and obligations of confidentiality to such other entities, in which case, we may not have access to such information. In addition, we may, at our option, pursue an Affiliated Joint Acquisition opportunity with an entity to which Fifth Wall or an officer or director currently has, or may in the future have, a fiduciary or contractual obligation. Any such entity may co-invest with us in the target business at
the time of our initial business combination, or we could raise additional proceeds to complete the business combination by making a specified future issuance to any such entity. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate 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 such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal, contractual or other obligation.
Below is a table summarizing the entities to which our executive officers and directors currently have fiduciary duties or similar contractual obligations:
|
Individual
|
|
|
Entity
|
|
|
Entity’s Business
|
|
|
Affiliation
|
|
|
Brendan Wallace
|
|
|
Fifth Wall
|
|
|
Investments and Advisory
|
|
|
Co-Founder and Managing Partner
|
|
| |
|
|
Global Uprising, PBC
|
|
|
Retail & wholesale products
|
|
|
Board Member of Portfolio Company
|
|
| |
|
|
Honest Networks, Inc.
|
|
|
Internet service provider
|
|
|
Board Member of Portfolio Company
|
|
| |
|
|
Loft Holdings Ltd
|
|
|
Real-estate platform to buy, sell, and rent residential and commercial properties.
|
|
|
Board Member of Portfolio Company
|
|
|
Andriy Mykhaylovskyy
|
|
|
Fifth Wall
|
|
|
Investments and Advisory
|
|
|
Managing Partner and Chief Operating Officer
|
|
| |
|
|
FHF Ventures, Ltd
|
|
|
Fund vehicle
|
|
|
Board Member of Portfolio Company
|
|
Potential investors should also be aware of the following other potential conflicts of interest:
•
In the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
•
Our sponsor and its transferees, if any, have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the consummation of our initial business combination. Additionally, our sponsor has agreed to waive its redemption rights with respect to any founder shares held by it if we fail to consummate our initial business combination within 24 months after the closing of this offering. However, if our sponsor acquires public shares in or after this offering, it will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to consummate an initial business combination within 24 months from the closing of this offering. If we do not complete our initial business combination within such applicable time period, the proceeds of the sale of the private placement shares held in the trust account will be used to fund the redemption of our public shares, and the private placement shares will expire worthless. With certain limited exceptions, the founder shares will not be transferable, assignable by our sponsor or certain of our directors that hold founder shares (or any other permitted assigns, if any) until the earlier of: (A) one year after the completion of our initial business combination or (B) subsequent to our initial business combination, (x) if the last sale price of our shares of Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within 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, capital stock exchange, reorganization or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property. With certain limited exceptions,
the private placement shares and the shares of Class A common stock, will not be transferable, assignable or salable by our sponsor or its permitted transferees until 30 days after the completion of our initial business combination. Since our sponsor and officers and directors may directly or indirectly own common stock following this offering, our officers and directors may have a conflict of interest in determining whether a particular target business is an appropriate business with which to complete our initial business combination.
•
Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.
•
Our sponsor, officers or directors may have a conflict of interest with respect to evaluating a business combination and financing arrangements as we may obtain loans from our sponsor or an affiliate of our sponsor or any of our officers or directors to finance transaction costs in connection with an intended initial business combination. Up to $1,500,000 of such loans may be convertible into Class A common stock at a price of $10.00 per share at the option of the lender. Such shares would be identical to the private placement shares, including as to exercise price, exercisability and exercise period.
The conflicts described above may not be resolved in our favor.
We are not prohibited from pursuing an initial business combination with a business combination target that is affiliated with our sponsor, officers or directors or completing the business combination through a joint venture or other form of shared ownership with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a business combination target that is affiliated with our sponsor, executive officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking which is a member of FINRA or a valuation or appraisal firm, that such initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context. Furthermore, in no event will our sponsor or any of our existing officers or directors, or any of their respective affiliates, be paid by the company any finder’s fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the completion of our initial business combination. Our office space and administrative and support services will be provided to us free of charge by Fifth Wall.
In the event that we submit our initial business combination to our public stockholders for a vote, our sponsor has agreed to vote any founder shares held by it and any public shares purchased during or after the offering in favor of our initial business combination and our officers and directors have also agreed to vote any public shares purchased during or after the offering in favor of our initial business combination.
Limitation on Liability and Indemnification of Officers and Directors
Our amended and restated certificate of incorporation provides that our officers and directors will be indemnified by us to the fullest extent authorized by Delaware law, as it now exists or may in the future be amended. In addition, our amended and restated certificate of incorporation provides that our directors will not be personally liable for monetary damages to us or our stockholders for breaches of their fiduciary duty as directors, unless they violated their duty of loyalty to us or our stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived an improper personal benefit from their actions as directors.
We will enter into agreements with our officers and directors to provide contractual indemnification in addition to the indemnification provided for in our amended and restated certificate of incorporation. Our bylaws also will permit us to secure insurance on behalf of any officer, director or employee for any liability arising out of his or her actions, regardless of whether Delaware law would permit such indemnification.
We will purchase a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors. Except with respect to any public shares they may acquire in this offering or thereafter (in the event we do not consummate an initial business combination), our officers and directors have agreed to waive (and any other persons who may become an officer or director prior to the initial business combination will also be required to waive) any right, title, interest or claim of any kind in or to any monies in the trust account, and not to seek recourse against the trust account for any reason whatsoever, including with respect to such indemnification (although our officers and directors 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).
These provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against officers and directors pursuant to these indemnification provisions.
We believe that these provisions, the directors’ and officers’ liability insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.
PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding the beneficial ownership of our common stock as of the date of this prospectus, and as adjusted to reflect the sale of our shares of Class A common stock offered by this prospectus, and assuming no purchase of shares in this offering, by:
•
each person known by us to be the beneficial owner of more than 5% of our outstanding common stock;
•
each of our executive officers, directors and director nominees that beneficially owns common stock; 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 common stock beneficially owned by them.
On December 2, 2020, we issued to our sponsor 7,187,500 founder shares (of which 937,500 are subject to forfeiture if the underwriters do not exercise their over-allotment option) in exchange for a payment of $25,000, or approximately $0.003 per share, from our sponsor to cover for certain expenses and offering costs on behalf of us. 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 number of shares beneficially owned and the post-offering percentages in the following table assume that the underwriters do not exercise their over-allotment option and that there are 31,250,000 shares of common stock issued and outstanding after this offering.
| |
|
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED(2)
|
|
|
APPROXIMATE
PERCENTAGE OF
OUTSTANDING
COMMON STOCK
|
|
|
NAME AND ADDRESS OF BENEFICIAL OWNER(1)
|
|
|
BEFORE
OFFERING
|
|
|
AFTER
OFFERING
|
|
|
Fifth Wall Acquisition Sponsor, LLC (our sponsor)(3)
|
|
|
|
|
7,107,500 |
|
|
|
|
|
100.0% |
|
|
|
|
|
22.14% |
|
|
|
Andriy Mykhaylovskyy(3)(4).
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Brendan Wallace(4)
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Alana Beard
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Victor Coleman
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Angela C. Huang
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Wisdom Lu
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
All officers, directors and director nominees as a group
(6 individuals)
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
(1)
Unless otherwise noted, the business address of each of our stockholders is 6060 Center Drive, 10th Floor, Los Angeles, CA 90045.
(2)
Interests shown consist solely of founder shares, classified as shares of Class B common stock. Such shares will automatically convert into shares of Class A common stock at the time of our initial business combination as described in the section entitled “Description of Securities.”
(3)
Interests shown consist solely of founder shares (assuming the underwriters do not exercise their over-allotment option), classified as Class B common stock, and 857,500 private placement shares to be sold in the private placement that will close simultaneously with the closing of this offering. The Class B common stock will automatically convert into Class A common stock at the time of our initial business combination as described in the section entitled “Description of Securities.”
(4)
Does not include any shares indirectly owned by this individual as a result of his or her interest in our sponsor.
Immediately after this offering, our sponsor will beneficially own 20% of the then issued and outstanding common stock (assuming they do not purchase any shares in this offering). Because of this ownership block, our sponsor may be able to effectively influence the outcome of all other matters
requiring approval by our stockholders, including amendments to our amended and restated certificate of incorporation and approval of significant corporate transactions including our initial business combination.
Our sponsor and our directors and executive officers have agreed (a) to vote any founder shares owned by them in favor of any proposed business combination and (b) not to redeem any founder shares in connection with a stockholder vote to approve a proposed initial business combination.
Our sponsor is deemed to be our “promoter” as such term is defined under the federal securities laws.
Transfers of Founder Shares and Private Placement Shares
The founder shares and private placement shares are each subject to transfer restrictions pursuant to lock-up provisions in the agreements entered into by our sponsor and management team. Our sponsor and our directors and executive officers have agreed not to transfer, assign or sell (i) any of their founder shares until the earliest of (a) one year after the completion of our initial business combination and (b) upon consummation of our initial business combination, (x) if the closing price of our shares of Class A common stock equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination or (y) the date on which we complete a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of our stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property, and (ii) any of their private placement shares until 30 days after the completion of our initial business combination except in each case (a) to our officers or directors, any affiliates or family members of any of our officers or directors, to our sponsor, any members or partners of our sponsor or their affiliates, or any affiliates of our sponsor; (b) in the case of an individual, by gift to a member of one of the individual’s immediate family or to a trust, the beneficiary of which is a member of the individual’s immediate family, an affiliate of such person or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with the consummation of a business combination at prices no greater than the price at which the founder shares, private placement shares or shares of Class A common stock 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, capital stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property subsequent to our completion of our initial business combination; provided, however, that in the case of clauses (a) through (f) these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions and the other restrictions contained in the letter agreements.
Registration Rights
The holders of the (i) founder shares, which were issued in a private placement, or transferred by our sponsor, prior to the closing of this offering, (ii) private placement shares, which will be issued in a private placement simultaneously with the closing of this offering and (iii) private placement shares that may be issued upon conversion of working capital loans will have registration rights to require us to register a sale of any of our securities held by them pursuant to a registration rights agreement to be signed prior to or on the effective date of this offering. Pursuant to the registration rights agreement and assuming the underwriters exercise their over-allotment option in full and $1.5 million of working capital loans are converted into private placement shares, we will be obligated to register up to 8,270,000 shares of Class A common. The number of shares of Class A common stock includes (i) 7,187,500 shares of Class A common stock to be issued upon conversion of the founder shares, (ii) 932,500 shares of Class A common stock underlying the private placement shares and (iii) 150,000 shares of Class A common stock underlying the private placement shares issued upon conversion of working capital loans.
The holder of these securities, our sponsor, is entitled to make unlimited 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. We will bear the expenses incurred in connection with the filing of any such registration statements. However, the registration and stockholder rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period, which occurs (i) in the case of the founder shares, as described elsewhere in this prospectus, and (ii) in the case of the private placement shares, 30 days after the completion of our initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
On December 2, 2020, we issued 7,187,500 founder shares to our sponsor in exchange for a payment of $25,000, or approximately $0.003 per share, to cover for certain expenses and offering costs on behalf of us. The number of founder shares issued was determined based on the expectation that such founder shares would represent 20% of the outstanding shares upon completion of this offering. If we increase or decrease the size of the offering, we will effect a share capitalization or a share surrender or other appropriate mechanism, as applicable, with respect to our shares of Class B common stock immediately prior to the consummation of the offering in such amount as to maintain the ownership of our sponsor (and other permitted transferees, if any) at 20% of the issued and outstanding shares of our common stock upon the consummation of this offering. Up to 937,500 founder shares are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised. The shares transferred to certain of our directors will not be subject to forfeiture in the event the underwriters’ over-allotment option is not exercised. The founder shares (including the shares of Class A common stock issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder.
Our sponsor has committed, pursuant to a written agreement, to purchase 857,500 shares of Class A common stock (or 932,500 shares of Class A common stock if the underwriters’ over-allotment option is exercised in full), at a price of $10.00 per share in a private placement to occur concurrently with the closing of this offering for an aggregate purchase price of $8,575,000 (or $9,325,000 if the underwriters’ over-allotment option is exercised in full). The private placement shares are identical to the Class A common stock sold in this offering, subject to certain limited exceptions as described in this prospectus.
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.
No compensation of any kind, including finder’s and consulting fees, will be paid to our sponsor, officers and directors, or any of their respective affiliates, for services rendered prior to or in connection with the completion of an initial business combination. However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
Our sponsor may loan us funds to be used for a portion of the expenses of this offering. These loans would be non-interest bearing, unsecured and are due at the earlier of the closing of this offering or the date on which we determine not to consummate this offering. The loan would be repaid upon the closing of this offering out of the estimated $2,575,000 of offering proceeds that has been allocated to the payment of offering expenses.
In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete an initial business combination, we would repay such loaned amounts. In the event that the initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into Class A common stock at a price of $10.00 per share at the option of the lender. The shares would be identical to the private placement shares, including as to exercise price, exercisability and exercise period. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to
seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
After our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to our stockholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our stockholders. 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 stockholder 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 stockholder rights agreement pursuant to which our sponsor, and it permitted transferees, if any, will be entitled to certain registration rights with respect to the private placement shares, the shares issuable upon conversion of working capital loans (if any) and upon conversion of the founder shares. Further, upon consummation of our initial business combination and for so long as our sponsor and its permitted transferees collectively hold at least 50% of the number of common stock held by the sponsor upon consummation of this offering (after giving appropriate effect to any share splits, reverse share splits or other similar corporate transactions, or any adjustment to the conversion rate of the founder shares in connection with an initial business combination), our sponsor will be entitled to nominate one person for election to our board of directors, which is described under the section of this prospectus entitled “Description of Securities — Registration and Stockholder Rights.”
We have entered into a registration rights agreement with respect to the founder shares and private placement shares, which is described under the heading “Principal Stockholders — Registration Rights.”
Policy for Approval of Related Party Transactions
The audit committee of our board of directors will adopt a charter, providing for the review, approval and/or ratification of “related party transactions,” which are those transactions required to be disclosed pursuant to Item 404 of Regulation S-K as promulgated by the SEC, by the audit committee. At its meetings, the audit committee shall be provided with the details of each new, existing, or proposed related party transaction, including the terms of the transaction, any contractual restrictions that the company has already committed to, the business purpose of the transaction, and the benefits of the transaction to the company and to the relevant related party. Any member of the committee who has an interest in the related party transaction under review by the committee shall abstain from voting on the approval of the related party transaction, but may, if so requested by the chairperson of the committee, participate in some or all of the committee’s discussions of the related party transaction. Upon completion of its review of the related party transaction, the committee may determine to permit or to prohibit the related party transaction.
DESCRIPTION OF SECURITIES
Pursuant to our amended and restated certificate of incorporation, we are authorized to issue 100,000,000 shares of Class A common stock and 10,000,000 shares of Class B common stock, as well as 1,000,000 shares of preferred stock, $0.0001 par value each. The following description summarizes certain terms of our shares as set out more particularly in our amended and restated certificate of incorporation. Because it is only a summary, it may not contain all the information that is important to you.
Common Stock
Upon the closing of this offering, 31,250,000 shares of our common stock will be outstanding (assuming no exercise of the underwriters’ over-allotment option and the corresponding forfeiture of 937,500 founder shares by our sponsor), consisting of:
•
25,000,000 shares of our Class A common stock being offered in this offering; and
•
6,250,000 shares of Class B common stock held by our sponsor.
If we increase or decrease the size of the offering, we will effect a stock dividend or share contribution back to capital or other appropriate mechanism, as applicable, with respect to our shares of Class B common stock immediately prior to the consummation of the offering in such amount as to maintain the ownership of founder shares by our initial stockholders prior to this offering at 20% of the issued and outstanding shares of our common stock upon the consummation of this offering.
Common stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. With respect to any matter submitted to a vote of our stockholders, including any vote in connection with our initial business combination, except as required by law or the applicable rules of Nasdaq then in effect, holders of our shares of Class A common stock and shares of Class B common stock will vote together as a single class on all matters submitted to a vote of our stockholders. Unless specified in our amended and restated certificate of incorporation or bylaws, or as required by applicable provisions of the DGCL, or applicable stock exchange rules, the affirmative vote of a majority of our shares of Class A common stock, on an as converted basis, entitled to vote on any matters that are voted on such matter is required to approve any such matter. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors. Our stockholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor.
Because our amended and restated certificate of incorporation authorizes the issuance of up to 100,000,000 shares of Class A common stock, 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 shares of Class A common stock which we are authorized to issue at the same time as our stockholders vote on the business combination to the extent we seek stockholder approval in connection with our business combination.
In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our first fiscal year end following our listing on Nasdaq. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws, unless such election is made by written consent in lieu of such a meeting.
We will provide our stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of our initial business combination including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes, divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be approximately $10.00 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred
underwriting commissions we will pay to the underwriters. Our sponsor has entered into a letter agreement with us, pursuant to which it has agreed to waive its redemption rights with respect to any founder shares and any public shares held by it in connection with the completion of our business combination. However, if our sponsor acquires public shares in or after this offering, it will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to consummate an initial business combination within 24 months from the closing of this offering. Unlike many blank check companies that hold stockholder 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 stockholder vote is not required by law and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation, 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 certificate of incorporation requires these tender offer documents to contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, stockholder approval of the transaction is required by law, or we decide to obtain stockholder approval for business or other legal reasons, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting. However, the participation of our sponsor or its advisors or affiliates in privately-negotiated transactions (as described in this prospectus), if any, could result in the approval of our business combination even if a majority of our public stockholders vote, or indicate their intention to vote, against such business combination. For purposes of seeking approval of the majority of our outstanding shares of common stock voted, non-votes will have no effect on the approval of our business combination once a quorum is obtained. We intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any such meeting, if required, at which a vote shall be taken to approve our business combination. These quorum and voting thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate our initial business combination.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder 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 of common stock sold in this offering, which we refer to as the Excess Shares. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our business combination. Our stockholders’ inability to redeem the Excess Shares will reduce their influence over our ability to complete our business combination, and such stockholders could suffer a material loss in their investment if they sell such Excess Shares on the open market. Additionally, such stockholders will not receive redemption distributions with respect to the Excess Shares if we complete the business combination. And, as a result, such stockholders will continue to hold that number of shares exceeding 15% and, in order to dispose such shares would be required to sell their stock in open market transactions, potentially at a loss.
If we seek stockholder approval in connection with our business combination, our sponsor has agreed to vote its founder shares and any public shares purchased by it during or after this offering in favor of our initial business combination. As a result, in addition to our sponsor’s founder shares, we would need 9,375,001, or 37.5%, of the 25,000,000 public shares sold in this offering to be voted in favor of a transaction (assuming all outstanding shares are voted) in order to have our initial business combination approved (assuming the over-allotment option is not exercised). Additionally, each public stockholder may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction (subject to the limitation described in the preceding paragraph).
Pursuant to our amended and restated certificate of incorporation, if we are unable to complete our business combination within 24 months from the closing of this offering, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter subject to lawfully available funds therefor, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our franchise taxes, divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Our sponsor has entered into a letter agreement with us, pursuant to which it has agreed to waive its rights to liquidating distributions from the trust account with respect to any founder shares held by it if we fail to complete our business combination within 24 months from the closing of this offering. However, if our sponsor acquires public shares in or after this offering, it will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our business combination within the prescribed time period.
In the event of a liquidation, dissolution or winding up of the company after a business combination, our stockholders 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 stock, if any, having preference over the common stock. Our stockholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the common stock, except that we will provide our stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account, upon the completion of our initial business combination, subject to the limitations described herein.
Founder Shares
The founder shares are identical to the shares of Class A common stock being sold in this offering, and our sponsor has the same stockholder rights as public stockholders, except that (i) the founder shares are subject to certain transfer restrictions, as described in more detail below, (ii) our sponsor has entered into a letter agreement with us, pursuant to which it has agreed (A) to waive its redemption rights with respect to any founder shares and any public shares held by it in connection with the completion of our business combination, (B) to waive its rights to liquidating distributions from the trust account with respect to any founder shares held by it if we fail to complete our business combination within 24 months from the closing of this offering, although our sponsor will be entitled to liquidating distributions from the trust account with respect to any public shares it holds if we fail to complete our business combination within such time period, (C) not to propose any amendment to our amended and restated certificate of incorporation that would modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares, (iii) the founder shares are shares of our Class B common stock that will automatically convert into shares of our Class A common stock at the time of our initial business combination, or at any time prior thereto at the option of our sponsor, on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described herein and (iv) are subject to registration rights. If we submit our business combination to our public stockholders for a vote, our sponsor has agreed to vote any founder shares held by it and any public shares purchased during or after this offering in favor of our initial business combination.
The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of our initial business combination on a one-for-one basis (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like), and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in this prospectus and
related to the closing of the business combination, including pursuant to a specified future issuance, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless our sponsor agrees to waive such adjustment with respect to any such issuance or deemed issuance, including a specified future issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon completion of this offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with the business combination (after giving effect to any redemptions of shares of Class A common stock by public stockholders) (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the business combination, the private placement shares, and any private placement shares issued to our sponsor, officers or directors upon conversion of working capital loans). Our sponsor may also elect to convert their shares of Class B common stock into an equal number of shares of Class A common stock, subject to adjustment as provided above, at any time.
With certain limited exceptions, the founder shares are not transferable, assignable or salable (except to our officers and directors and other persons or entities affiliated with our sponsor, each of whom will be subject to the same transfer restrictions) until the earlier of (A) one year after the completion of our initial business combination or (B) subsequent to our initial business combination, (x) if the last sale price of our shares of Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within 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, capital stock exchange, reorganization or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property.
Preferred Stock
There are no shares of preferred stock outstanding. Our certificate of incorporation filed with the State of Delaware will authorize the issuance of 1,000,000 shares of preferred stock with such designation, rights and preferences as may be determined from time to time by our board of directors. No shares of preferred stock are being issued or registered in this offering. Accordingly, our board of directors is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting or other rights which could adversely affect the voting power or other rights of the holders of common stock. However, the underwriting agreement prohibits us, prior to a business combination, from issuing preferred stock which participates in any manner in the proceeds of the trust account, or which votes as a class with the common stock on our initial business combination. We may issue some or all of the preferred stock to effect our initial business combination. In addition, the preferred stock could be utilized as a method of discouraging, delaying or preventing a change in control of us. Although we do not currently intend to issue any shares of preferred stock, we reserve the right to do so in the future. No shares of preferred stock are being issued or registered in this offering.
Dividends
We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of a business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of a business combination. The payment of any cash dividends subsequent to a business combination will be within the discretion of our board of directors at such time. If we increase the size of this offering, then we will effect a share capitalization with respect to our founder shares immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of our issued and outstanding shares of our common stock upon the consummation of this offering. Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
Our Transfer Agent
The transfer agent for our common stock is Continental Stock Transfer & Trust Company. We have agreed to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent, its
agents and each of its stockholders, 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.
Amended and Restated Certificate of Incorporation
Our amended and restated certificate of incorporation contains certain requirements and restrictions relating to this offering that will apply to us until the completion of our initial business combination. These provisions cannot be amended without the approval of the holders of a majority of our common stock. Our sponsor, who beneficially owns 20% of our common stock upon the closing of this offering (assuming our sponsor does not purchase any shares in this offering), may participate in any vote to amend our amended and restated certificate of incorporation and will have the discretion to vote in any manner it chooses.
Specifically, our amended and restated certificate of incorporation provides, among other things, that:
•
If we do not complete our initial business combination within 24 months from the closing of this offering, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to fund our working capital requirements (less taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and in all cases subject to the requirements of other applicable law;
•
Prior to our initial business combination, we may not issue additional securities that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote as a class with our public shares (a) on our initial business combination or (b) to approve an amendment to our amended and restated certificate of incorporation to (x) extend the time we have to consummate a business combination beyond 24 months from the closing of this offering or (y) amend the foregoing provisions;
•
Although we do not intend to enter into a business combination with a target business that is affiliated with our sponsor, our directors or our executive officers, we are not prohibited from doing so. In the event we enter into such a transaction, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm that such a business combination is fair to our company from a financial point of view;
•
If a stockholder vote on our initial business combination is not required by law and we do not decide to hold a stockholder vote for business or other legal reasons, we will offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, and will file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act. Whether or not we maintain our registration under the Exchange Act or our listing on Nasdaq, we will provide our public stockholders with the opportunity to redeem their public shares by one of the two methods listed above;
•
We must complete one or more business combinations having an aggregate fair market value of at least 80% of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the income earned on the trust account) at the time of the agreement to enter into the initial business combination;
•
If our stockholders approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering, or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity, we will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon such approval at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes and up to $100,000 of interest to pay dissolution expenses, divided by the number of then outstanding public shares, subject to the limitations described herein; and
•
We will not effectuate our initial business combination with another blank check company or a similar company with nominal operations.
In addition, our amended and restated certificate of incorporation provides that under no circumstances will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination and after payment of deferred underwriters’ commission.
Certain Anti-Takeover Provisions of Delaware Law and our Certificate of Incorporation and By-Laws
We will be subject to the provisions of Section 203 of the DGCL regulating corporate takeovers upon completion of this offering. This statute prevents certain Delaware corporations, under certain circumstances, from engaging in a “business combination” with:
•
a stockholder who owns 10% or more of our outstanding voting stock (otherwise known as an “interested stockholder”);
•
an affiliate of an interested stockholder; or
•
an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder.
A “business combination” includes a merger or sale of more than 10% of our assets. However, the above provisions of Section 203 do not apply if:
•
our board of directors approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction;
•
after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of common stock; or
•
on or subsequent to the date of the transaction, the business combination is approved by our board of directors and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder.
Exclusive forum for certain lawsuits
Our amended and restated certificate of incorporation requires, unless we consent in writing to the selection of an alternative forum, that (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee to us or our stockholders, (iii) any action asserting a claim against us, our directors, officers or employees arising pursuant to any provision of the DGCL or our second amended and restated certificate of incorporation or bylaws, or (iv) any action asserting a claim against us, our directors, officers or employees governed by the internal affairs doctrine, may be brought only in the Court of Chancery in the State of Delaware, except any claim (A) as to which the Court of Chancery of the State of Delaware
determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, (C) for which the Court of Chancery does not have subject matter jurisdiction, or (D) any action arising under the Securities Act, as to which the Court of Chancery and the federal district court for the District of Delaware shall have concurrent jurisdiction. If an action is brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have the effect of discouraging lawsuits against our directors and officers, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder.
Notwithstanding the foregoing, our amended and restated certificate of incorporation provides that the exclusive forum provision will not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.
Special Meeting of Stockholders
Our bylaws provide that special meetings of our stockholders may be called only by a majority vote of our board of directors, by our chief executive officer or by our chairperson.
Advance Notice Requirements for Stockholder Proposals and Director Nominations
Our bylaws provide that stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual meeting of stockholders must provide timely notice of their intent in writing. To be timely, a stockholder’s notice will need to be delivered to our principal executive offices not later than the close of business on the 90th day nor earlier than the opening of business on the 120th day prior to the scheduled date of the annual meeting of stockholders. Our bylaws also specify certain requirements as to the form and content of a stockholders’ meeting. These provisions may preclude our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders.
Authorized but Unissued Shares of Common Stock and Preferred Stock
Our authorized but unissued common stock and preferred stock are available for future issuances without stockholder 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 common stock and preferred stock 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 21,875,000 shares of Class A common stock (or 25,156,250 shares of Class A common stock if the underwriters’ over-allotment option is exercised in full) issued and outstanding on an as-converted basis. Of these shares, the shares of Class A common stock sold in this offering (17,500,000 shares of Class A common stock if the underwriters’ over-allotment option is not exercised and 20,125,000 shares of Class A common stock 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 shares of Class A common stock purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act. All of the outstanding founder shares (4,375,000 founder shares if the underwriters’ over-allotment option is not exercised and 5,031,250 founder shares if the underwriters’ over-allotment option is exercised in full) and all of the outstanding private placement shares (857,500 private placement shares if the underwriters’ over-allotment option is
not exercised and 932,500 private placement shares if the underwriters’ over-allotment option is exercised in full) will be restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering.
Rule 144
Pursuant to Rule 144, a person who has beneficially owned restricted shares for at least six months would be entitled to sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as we were required to file reports) preceding the sale.
Persons who have beneficially owned restricted shares for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:
•
1% of the total number of shares of common stock then outstanding, which will equal 218,750 shares immediately after this offering (or 251,563 shares if the underwriters exercise their over-allotment option in full); or
•
the average weekly reported trading volume of the shares of Class A common stock 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:
•
the issuer of the securities that was formerly a shell company has ceased to be a shell company;
•
the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
•
the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and
•
at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
As a result, our sponsor will be able to sell their founder shares and our sponsor will be able to sell its private placement shares pursuant to Rule 144 without registration one year after we have completed our initial business combination.
Registration and Stockholder Rights
The holders of the founder shares and private placement shares that may be issued upon conversion of working capital loans (and any shares of Class A common stock issuable upon conversion of working capital loans) will be entitled to registration rights pursuant to a registration and stockholder rights agreement to be signed prior to or on the effective date of this offering. The holders of these securities are entitled to make unlimited 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 stockholder rights agreement
provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period, which occurs (i) in the case of the founder shares, as described in the following paragraph, and (ii) in the case of the private placement shares, 30 days after the completion of our initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.
Except as described herein, our sponsor and our directors and executive officers have agreed not to transfer, assign or sell any of their founder shares until (a) one year after the completion of our initial business combination, or (b) following the completion of the company’s initial business combination, the date on which we complete a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of our stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property. Any permitted transferees will be subject to the same restrictions and other agreements of our sponsor with respect to any founder shares. We refer to such transfer restrictions throughout this prospectus as the lock-up. Notwithstanding the foregoing, if the closing price of our shares of Class A common stock equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, the founder shares will be released from the lock-up.
In addition, pursuant to the registration and stockholder rights agreement, our sponsor, upon consummation of an initial business combination and for so long as our sponsor and its permitted transferees collectively hold at least 50% of the number of shares of common stock held by the sponsor upon consummation of this offering (after giving appropriate effect to any share splits, reverse share splits or other similar corporate transactions, or any adjustment to the conversion rate of the founder shares in connection with an initial business combination), will be entitled to nominate one person for election to our board of directors.
Listing of Securities
We have applied to have our Class A common stock listed on Nasdaq under the symbol “FWAA.”
U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of U.S. federal income tax considerations generally applicable to the acquisition, ownership and disposition of our shares of Class A common stock, which we refer to as our securities. This discussion applies only to securities that are held as capital assets for U.S. federal income tax purposes and is applicable only to holders who purchased shares in this offering.
This discussion is a summary only and does not describe all of the tax consequences that may be relevant to you in light of your particular circumstances, including but not limited to the alternative minimum tax, the Medicare tax on certain investment income and the different consequences that may apply if you are subject to special rules that apply to certain types of investors, including but not limited to:
•
our sponsor, founders, officers or directors or holders of our Class B common stock;
•
banks, financial institutions or financial services entities;
•
brokers;
•
dealers or traders in securities, commodities or currencies that are subject to a mark-to-market method of tax accounting for their securities holdings;
•
S-corporations, partnerships, or other entities or arrangements classified as partnerships for U.S. federal income tax purposes and any beneficial owners of such entities;
•
tax-exempt entities;
•
governments or agencies or instrumentalities thereof;
•
insurance companies;
•
regulated investment companies;
•
passive foreign investment companies;
•
controlled foreign corporations;
•
real estate investment trusts;
•
U.S. expatriates and certain former or long-term residents of the United States;
•
persons that actually or constructively own five percent or more of our shares (by vote or value);
•
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;
•
persons that hold our securities as part of a straddle, constructive sale, hedging, conversion or other integrated or similar transaction; and
•
U.S. holders (as defined below) whose functional currency is not the U.S. dollar.
If a partnership (including an entity or arrangement treated as a partnership or other pass-through entity for U.S. federal income tax purposes) holds our securities, the tax treatment of a partner, member or other beneficial owner in such partnership will generally depend upon the status of the partner, member or other beneficial owner, the activities of the partnership and certain determinations made at the partner, member or other beneficial owner level. If you are a partner, member or other beneficial owner of a partnership holding our securities, you are urged to consult your tax advisor regarding the tax consequences of the acquisition, ownership and disposition of our securities.
This discussion is based on the Internal Revenue Code of 1986, as amended, or the Code, and administrative pronouncements, judicial decisions and final, temporary and proposed Treasury regulations as of the date hereof, which are subject to change, possibly on a retroactive basis, and changes to any of which subsequent to the date of this prospectus may affect the tax consequences described herein. This discussion does not address any aspect of state, local or non-U.S. taxation, or any U.S. federal taxes other than income taxes (such as gift and estate taxes).
We have not sought, and will not seek, a ruling from the Internal Revenue Service, or 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. You are urged to consult your tax advisor with respect to the application of U.S. federal tax laws to your particular situation, as well as any tax consequences arising under the laws of any state, local or foreign jurisdiction.
Personal Holding Company Status
We could be subject to a second level of U.S. federal income tax on a portion of our income if we are determined to be a personal holding company, or PHC, for U.S. federal income tax purposes. A U.S. corporation generally will be classified as a PHC for U.S. federal income tax purposes in a given taxable year if (i) at any time during the last half of such taxable year, five or fewer individuals (without regard to their citizenship or residency and including as individuals for this purpose certain entities such as certain tax-exempt organizations, pension funds and charitable trusts) own or are deemed to own (pursuant to certain constructive ownership rules) more than 50% of the stock of the corporation by value and (ii) at least 60% of the corporation’s adjusted ordinary gross income, as determined for U.S. federal income tax purposes, for such taxable year consists of PHC income (which includes, among other things, dividends, interest, certain royalties, annuities and, under certain circumstances, rents).
At least 60% of our adjusted ordinary gross income may consist of PHC income, depending on the date and size of our initial business combination. In addition, depending on the concentration of our stock in the hands of individuals, including the members of our sponsor and certain tax-exempt organizations, pension funds and charitable trusts, more than 50% of our stock may be owned or deemed owned (pursuant to the constructive ownership rules) by such persons during the last half of a taxable year. Thus, no assurance can be given that we will not be a PHC following this offering or in the future. If we are or were to become a PHC in a given taxable year, we would be subject to an additional PHC tax, currently 20%, on our undistributed PHC income, which generally includes our taxable income, subject to certain adjustments.
U.S. Holders
This section applies to you if you are a “U.S. holder.” A U.S. holder is a beneficial owner of our shares of Class A common stock who or that is, for U.S. federal income tax purposes:
•
an individual who is a citizen or resident of the United States;
•
a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized in or under the laws of the United States, any state thereof or the District of Columbia; or
•
an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or
•
a trust, if (i) 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 (as defined in the Code) have authority to control all substantial decisions of the trust or (ii) it has a valid election in effect under Treasury regulations to be treated as a U.S. person.
Taxation of Distributions. If we pay distributions in cash or other property (other than certain distributions of our stock or rights to acquire our stock) to U.S. holders of shares of our Class A common stock, such distributions generally will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of current and accumulated earnings and profits will constitute a return of capital that will be applied against and reduce (but not below zero) the U.S. holder’s adjusted tax basis in our shares of Class A common stock. Any remaining excess will be treated as gain realized on the sale or other disposition of the shares of Class A common stock and will be
treated as described under “U.S. Holders — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock” below.
Dividends we pay to a U.S. holder that is a taxable corporation generally will qualify for the dividends received deduction if the requisite holding period is satisfied. With certain exceptions (including, but not limited to, dividends treated as investment income for purposes of investment interest deduction limitations), and provided certain holding period requirements are met, dividends we pay to a non-corporate U.S. holder may constitute “qualified dividends” that will be subject to tax at the maximum tax rate accorded to long-term capital gains. It is unclear whether the redemption rights with respect to the shares of Class A common stock described in this prospectus may prevent a U.S. holder from satisfying the applicable holding period requirements with respect to the dividends received deduction or the preferential tax rate on qualified dividend income, as the case may be. If the holding period requirements are not satisfied, then a corporation may not be able to qualify for the dividends received deduction and would have taxable income equal to the entire dividend amount, and non-corporate holders may be subject to tax on such dividend at regular ordinary income tax rates instead of the preferential rate that applies to qualified dividend income. A U.S. holder should consult with its tax advisor regarding its applicable holding period for these purposes.
Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Shares of Class A Common Stock. Upon a sale or other taxable disposition of our shares of Class A common stock which, in general, would include a redemption of shares of Class A common stock that is treated as a sale of such securities as described below, and including as a result of a dissolution and liquidation in the event we do not consummate an initial business combination within the required time period, a U.S. holder generally will recognize capital gain or loss in an amount equal to the difference between the amount realized and the U.S. holder’s adjusted tax basis in the shares of Class A common stock. Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. holder’s holding period for the shares of Class A common stock so disposed of exceeds one year. It is unclear, however, whether the redemption rights with respect to the shares of Class A common stock described in this prospectus may suspend the running of the applicable holding period for this purpose. If the running of the holding period for the shares of Class A common stock is suspended, then non-corporate U.S. holders may not be able to satisfy the one-year holding period requirement for long-term capital gain treatment, in which case any gain on a sale or taxable disposition of the shares would be subject to short-term capital gain treatment and would be taxed at regular ordinary income tax rates. Long-term capital gains recognized by non-corporate U.S. holders will generally be eligible to be taxed at reduced rates. The deductibility of capital losses is subject to limitations.
Generally, the amount of gain or loss recognized on a sale or other taxable disposition by a U.S. holder generally will be an amount 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 and (ii) the U.S. holder’s adjusted tax basis in its shares of Class A common stock so disposed. A U.S. holder’s adjusted tax basis in its shares of Class A common stock generally will equal the U.S. holder’s acquisition cost.
Redemption of Shares of Class A Common Stock. In the event that a U.S. holder’s shares of Class A common stock is redeemed pursuant to the redemption provisions described in this prospectus under the section of this prospectus entitled “Description of Securities — Common Stock” or if we purchase a U.S. holder’s shares of Class A common stock in an open market transaction (each of which we refer to as a “redemption”), the treatment of the transaction for U.S. federal income tax purposes will depend on whether the redemption qualifies as a sale of the shares of Class A common stock under Section 302 of the Code. If the redemption qualifies as a sale of common stock, the U.S. holder will be treated as described under “U.S. Holders — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Shares of Class A Common Stock” above. If the redemption does not qualify as a sale of common stock, the U.S. holder will be treated as receiving a corporate distribution with the tax consequences described above under “U.S. Holders — Taxation of Distributions”. Whether a redemption qualifies for sale treatment will depend largely on the total number of shares of our stock treated as held by the U.S. holder (including any stock constructively owned by the U.S. holder described in the following paragraph) relative to all of our shares outstanding both before and after the redemption. The redemption of shares of Class A common stock generally will be treated as a sale of the shares
of Class A common stock (rather than as a corporate distribution) if the 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 stock actually owned by the U.S. holder, but also shares of our stock that are constructively owned by it. A U.S. holder may constructively own, in addition to stock owned directly, stock 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 stock the U.S. holder has a right to acquire by exercise of an option. In order to meet the substantially disproportionate test, the percentage of our outstanding voting stock actually and constructively owned by the U.S. holder immediately following the redemption of shares of Class A common stock must, among other requirements, be less than 80% of the percentage of our outstanding voting stock actually and constructively owned by the U.S. holder immediately before the redemption. There will be a complete termination of a U.S. holder’s interest if either (i) all of the shares of our stock actually and constructively owned by the U.S. holder are redeemed or (ii) all of the shares of our stock 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 stock owned by certain family members and the U.S. holder does not constructively own any other shares of our stock. The redemption of the shares of Class A common stock will not be essentially equivalent to a dividend if the redemption or purchase by us 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 stockholder 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 “U.S. Holders — Taxation of Distributions,” above. After the application of those rules, any remaining tax basis of the U.S. holder in the redeemed shares of Class A common stock will be added to the U.S. holder’s adjusted tax basis in its remaining stock, or, if it has none, to the U.S. holder’s adjusted tax basis in other stock constructively owned by it.
Information Reporting and Backup Withholding. In general, information reporting requirements may apply to dividends paid to a U.S. holder and to the proceeds of the sale or other disposition of our shares of Class A common stock, unless the U.S. holder is an exempt recipient. Backup withholding may apply to such payments if the U.S. holder fails to provide a taxpayer identification number, a certification of exempt status or has been notified by the IRS that it is subject to backup withholding (and such notification has not been withdrawn).
Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against a U.S. holder’s U.S. federal income tax liability provided the required information is timely furnished to the IRS.
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 shares of Class A common stock who or that is for U.S. federal income tax purposes:
•
a non-resident alien individual (other than certain former citizens and residents of the United States subject to U.S. tax as expatriates);
•
a foreign corporation or
•
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 a period or periods aggregating 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 acquisition, ownership or sale or other disposition of our securities.
Taxation of Distributions. In general, any distributions (including constructive distributions) we make to a Non-U.S. holder of shares of our Class A common stock, to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles), will constitute dividends for U.S. federal income tax purposes and, provided such dividends are not effectively connected with the Non-U.S. holder’s conduct of a trade or business within the United States, we will be required to withhold tax from the gross amount of the dividend at a rate of 30%, unless such Non-U.S. holder is eligible for a reduced rate of withholding tax under an applicable income tax treaty and provides proper certification of its eligibility for such reduced rate (usually on an IRS Form W-8BEN or W-8BEN-E). In the case of any constructive dividend, it is possible that withholding tax attributable to a Non-U.S. holder would be withheld from other amounts payable or distributable to such Non-U.S. holder by the applicable withholding agent. Any distribution not constituting a dividend will be treated first as reducing (but not below zero) the Non-U.S. holder’s adjusted tax basis in its shares of our Class A common stock and, to the extent such distribution exceeds the Non-U.S. holder’s adjusted tax basis, as gain realized from the sale or other disposition of the shares of Class A common stock, which will be treated as described under “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Shares of Class A Common Stock” below. In addition, if we determine that we are likely to be classified as a “U.S. real property holding corporation” (see “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Shares of Class A Common Stock” below), we will withhold 15% of any distribution that exceeds our current and accumulated earnings and profits.
The withholding tax does not apply to dividends paid to a Non-U.S. holder who provides a Form W-8ECI, certifying that the dividends are effectively connected with the Non-U.S. holder’s conduct of a trade or business within the United States. Instead, the effectively connected dividends will be subject to regular U.S. income tax as if the Non-U.S. holder were a U.S. resident, subject to an applicable income tax treaty providing otherwise. A Non-U.S. corporation receiving effectively connected dividends may also be subject to an additional “branch profits tax” imposed at a rate of 30% (or a lower treaty rate).
Gain on Sale, Taxable Exchange or Other Taxable Disposition of Shares of Class A Common Stock. A Non-U.S. holder generally will not be subject to U.S. federal income or withholding tax in respect of gain recognized on a sale, taxable exchange or other taxable disposition of our shares of Class A common stock, which would include a dissolution and liquidation in the event we do not complete an initial business combination within 24 months from the closing of this offering, unless:
•
the gain is effectively connected with the conduct of a trade or business by the Non-U.S. holder within the United States (and, under certain income tax treaties, is attributable to a United States permanent establishment or fixed base maintained by the Non-U.S. holder); or
•
we are or have been a “U.S. real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the Non-U.S. holder held our shares of Class A common stock, and, in the case where shares of our shares of Class A common stock are regularly traded on an established securities market, the Non-U.S. holder has owned, directly or constructively, more than 5% of our shares of Class A common stock at any time within the shorter of the five-year period preceding the disposition or such Non-U.S. holder’s holding period for the shares of our Class A common stock. There can be no assurance that our shares of Class A common stock will be treated as regularly traded on an established securities market for this purpose.
Unless an applicable treaty provides otherwise, gain described in the first bullet point above will be subject to tax at generally applicable U.S. federal income tax rates as if the Non-U.S. holder were a U.S. resident. Any gains described in the first bullet point above of a Non-U.S. holder that is a foreign corporation may also be subject to an additional “branch profits tax” at a 30% rate (or lower treaty rate).
If the second bullet point above applies to a Non-U.S. holder, gain recognized by such holder on the sale, exchange or other disposition of our shares of Class A common stock will be subject to tax at generally applicable U.S. federal income tax rates. In addition, a buyer of our shares of Class A common stock from such holder may be required to withhold U.S. federal income tax at a rate of 15% of the amount realized upon such disposition. We cannot determine whether we will be a “United States real property holding corporation” in the future until we complete an initial business combination. We will be classified as a U.S. real property holding corporation if the fair market value of our “United States real property interests” equals or exceeds 50 percent of the sum of the fair market value of our worldwide real property interests plus our other assets used or held for use in a trade or business, as determined for U.S. federal income tax purposes.
Redemption of Shares of Class A Common Stock. The characterization for U.S. federal income tax purposes of the redemption of a Non-U.S. holder’s shares of Class A common stock pursuant to the redemption provisions described in the section of this prospectus entitled “Description of Securities — Common Stock” generally will correspond to the U.S. federal income tax characterization of such a redemption of a U.S. holder’s shares of Class A common stock, as described under “U.S. Holders — Redemption of Shares of Class A Common Stock” above, and the consequences of the redemption to the Non-U.S. holder will be as described above under “Non-U.S. holders — Taxation of Distributions” and “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Shares of Class A Common Stock,” as applicable. It is possible that because the applicable withholding agent may not be able to determine the proper characterization of a redemption of a Non-U.S. holder’s shares of Class A common stock, the withholding agent might treat the redemption as a distribution subject to withholding tax.
Information Reporting and Backup Withholding. Information returns will be filed with the IRS in connection with payments of dividends and the proceeds from a sale or other disposition of our shares of Class A common stock. A Non-U.S. holder may have to comply with certification procedures to establish that it is not a United States person in order to avoid information reporting and backup withholding requirements. The certification procedures required to claim a reduced rate of withholding under a treaty will satisfy the certification requirements necessary to avoid the backup withholding as well. The amount of any backup withholding from a payment to a Non-U.S. holder will be allowed as a credit against such holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that the required information is timely furnished to the IRS.
FATCA Withholding Taxes. Provisions commonly referred to as “FATCA” impose withholding of 30% on payments of dividends (including constructive dividends) on our shares of Class A common stock to “foreign financial institutions” (which is broadly defined for this purpose and in general includes investment vehicles) and certain other Non-U.S. entities, unless various U.S. information reporting and due diligence requirements (generally relating to ownership by U.S. persons of interests in or accounts with those entities) have been satisfied by, or an exemption applies to, the payee (typically certified as to by the delivery of a properly completed IRS Form W-8BEN-E). The IRS has issued proposed regulations (on which taxpayers may rely until final regulations are issued) that would generally not apply these withholding requirements to gross proceeds from sales or other disposition proceeds from our shares of Class A common stock. Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules. Under certain circumstances, a Non-U.S. holder might be eligible for refunds or credits of such withholding taxes, and a Non-U.S. holder might be required to file a U.S. federal income tax return to claim such refunds or credits. Prospective investors should consult their tax advisors regarding the effects of FATCA on their investment in our securities.
UNDERWRITING
Subject to the terms and conditions of the underwriting agreement, underwriters named below through their representatives Goldman Sachs & Co. LLC and Deutsche Bank Securities Inc. have severally agreed to purchase from us the following respective number of shares at a public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus.
|
Underwriters
|
|
|
Number
of Shares
|
|
|
Goldman Sachs & Co. LLC
|
|
|
|
|
|
|
|
|
Deutsche Bank Securities Inc.
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
25,000,000 |
|
|
The underwriting agreement provides that the underwriters are obligated to purchase all the public shares in the offering if any are purchased, other than those shares covered by the option to purchase additional shares described below.
We have granted to the underwriters a 45-day option to purchase on a pro rata basis up to 3,750,000 additional shares at the initial public offering price, less the underwriting discounts and commissions. The option may be exercised only to cover any over-allotments of shares.
The underwriters propose to offer the shares initially at the public offering price on the cover page of this prospectus and to selling group members at that price less a selling concession of $ per share. After the initial public offering the underwriters may change the public offering price and concession and discount to broker/dealers. The offering of the shares by the underwriters is subject to receipt and acceptance and subject to the underwriters’ right to reject any order in whole or in part.
The following table summarizes the compensation and estimated expenses we will pay:
| |
|
|
Per Share(1)
|
|
|
Total(1)
|
|
| |
|
|
Without
Over-
allotment
|
|
|
With
Over-
allotment
|
|
|
Without
Over-
allotment
|
|
|
With
Over-
allotment
|
|
|
Underwriting Discounts and Commissions paid by us
|
|
|
|
$ |
0.55 |
|
|
|
|
$ |
0.55 |
|
|
|
|
$ |
13,750,000 |
|
|
|
|
$ |
15,812,500 |
|
|
(1)
Includes $0.35 per share, or $8,750,000 (or $10,062,000 if the underwriters’ option to purchase additional shares is exercised in full), payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States as described herein and released to the underwriters only upon the consummation of an initial business combination. The deferred commissions will be released to the underwriters only on completion of an initial business combination, in an amount equal to $0.35 multiplied by the number of shares of common stock sold as part of the shares in this offering, as described in this prospectus.
We estimate that our out-of-pocket expenses for this offering will be approximately $2,575,000. We have agreed to pay for the FINRA-related fees and expenses of the underwriters’ legal counsel, not to exceed $25,000.
The representatives have informed us that the underwriters do not intend to make sales to discretionary accounts.
We, our sponsor and our officers and directors have agreed that we will not offer, sell, contract to sell, pledge or grant any option to purchase or otherwise dispose of, directly or indirectly, without the prior written consent of Goldman Sachs & Co. LLC and Deutsche Bank Securities Inc. for a period of 180 days after the date of this prospectus, any shares of common stock or any other securities convertible into, or exercisable, or exchangeable for, shares of common stock or enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any shares of common stock or any securities convertible into, or exercisable, or exchangeable for, shares of common stock owned, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise; provided, however, that we may (1) issue and sell the
private placement shares; (2) issue and sell the additional shares to cover our underwriters’ option to purchase additional shares (if any); (3) register with the SEC pursuant to an agreement to be entered into concurrently with the issuance and sale of the securities in this offering, the resale of the private placement shares and the shares of Class A stock issuable upon exercise of the founder shares; and (4) issue securities in connection with our initial business combination. However, the foregoing shall not apply to the forfeiture of any founder shares pursuant to their terms or any transfer of founder shares to any current or future independent director of the company (as long as such current or future independent director is subject to the terms of the letter agreement, filed herewith, at the time of such transfer; and as long as, to the extent any Section 16 reporting obligation is triggered as a result of such transfer, any related Section 16 filing includes a practical explanation as to the nature of the transfer). Goldman Sachs & Co. LLC and Deutsche Bank Securities in their sole discretion may release any of the securities subject to these lock-up agreements at any time without notice.
Our initial stockholders have agreed not to transfer, assign or sell any of their founder shares until the earliest of (A) one year after the completion of our initial business combination or (B) subsequent to our initial business combination, (x) the date on which we complete a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of our stockholders having the right to exchange their common stock for cash, securities or other property or (y) if the closing price of our common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 trading day period commencing at least 150 days after our initial business combination. Any permitted transferees would be subject to the same restrictions and other agreements of our initial stockholders with respect to any founder shares.
The private placement shares will not be transferable, assignable or salable until 30 days after the completion of our initial business combination, except as described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Shares.”
We have agreed to indemnify the several underwriters against certain liabilities under the Securities Act, or contribute to payments that the underwriters may be required to make in that respect.
We expect our shares to be listed on Nasdaq, under the symbol “FWAA.”
Prior to this offering, there has been no public market for our securities.
The determination of our per share offering price was more arbitrary than would typically be the case if we were an operating company. Among the factors considered in determining the initial public offering price were the history and prospects of companies whose principal business is the acquisition of other companies, prior offerings of those companies, our management, our capital structure, and currently prevailing general conditions in equity securities markets, including current market valuations of publicly traded companies considered comparable to our company. We cannot assure you, however, that the price at which the Class A common stock will sell in the public market after this offering will not be lower than the initial public offering price or that an active trading market in our Class A common stock will develop and continue after this offering.
If we do not complete our initial business combination, the underwriters have agreed that: (1) the underwriters will forfeit any rights or claims to their deferred underwriting discounts and commissions, including any accrued interest thereon, then in the trust account; and (2) that the deferred underwriters’ discounts and commissions will be distributed on a pro rata basis, together with any accrued interest thereon (which interest shall be net of taxes payable) to the public stockholders.
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 shares in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The
short position may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriters is not greater than the number of shares that they may purchase in the option to purchase additional shares. In a naked short position, the number of shares involved is greater than the number of shares in the option to purchase additional shares. The underwriters may close out any covered short position by either exercising their option to purchase additional shares and/or purchasing shares in the open market.
•
Syndicate covering transactions involve purchases of the shares in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the option to purchase additional shares. If the underwriters sell more shares than could be covered by the option to purchase additional shares, a naked short position, the position can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in this offering.
•
Penalty bids permit the representatives to reclaim a selling concession from a syndicate member when the shares originally sold by the syndicate member are purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.
These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our shares or preventing or retarding a decline in the market price of the shares. As a result the price of our shares may be higher than the price that might otherwise exist in the open market. These transactions may be effected on Nasdaq or otherwise and, if commenced, may be discontinued at any time.
We are not under any contractual obligation to engage the underwriters to provide any services for us after this offering, and have no present intent to do so. However, the underwriters may introduce us to potential target businesses or assist us in raising additional capital in the future. If any of the underwriters provide services to us after this offering, we may pay such underwriter fair and reasonable fees that would be determined at that time in an arm’s length negotiation; provided that no agreement will be entered into with the underwriters and no fees for such services will be paid to the underwriters prior to the date that is 60 days from the date of this prospectus, unless such payment would not be deemed underwriters’ compensation in connection with this offering. We may pay the underwriters of this offering or any entity with which they are affiliated a finder’s fee or other compensation for services rendered to us in connection with the completion of a business combination.
The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services. Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us or our affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions.
In addition, in the ordinary course of their business activities, the underwriters and their respective affiliates, officers, directors and employees may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
Notice to Prospective Investors in Canada
The shares may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 — Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 — Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the shares must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.
Pursuant to section 3A.3 of National Instrument 33-105 — Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.
European Economic Area
In relation to each Member State of the European Economic Area (each, a “Member State”) no shares have been offered or will be offered pursuant to the offering to the public in that Member State prior to the publication of a prospectus in relation to the shares which has been approved by the competent authority in that Member State or, where appropriate, approved in another Member State and notified to the competent authority in that Member State, all in accordance with the Prospectus Regulation, except that offers of shares may be made to the public in that Member State at any time under the following exemptions under the Prospectus Regulation:
(a)
to any legal entity which is a qualified investor as defined in the Prospectus Regulation;
(b)
to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Regulation), subject to obtaining the prior consent of the representatives for any such offer; or
(c)
in any other circumstances falling within Article 1(4) of the Prospectus Regulation.
provided that no such offer of shares shall require the issuer or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.
For the purposes of this provision, the expression an “offer to the public” in relation to any shares in any Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any shares to be offered so as to enable an investor to decide to purchase or subscribe for any shares, and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129.
This European Economic Area selling restriction is in addition to any other selling restrictions set out below.
Notice to Residents of Hong Kong
The shares may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong) and no advertisement, invitation or document relating to the shares may be issued or may be in the possession of any person for the
purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.
Notice to Residents of Japan
The shares have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948, as amended) and, accordingly, will not be offered or sold, directly or indirectly, in Japan, or for the benefit of any Japanese Person or to others for re-offering or resale, directly or indirectly, in Japan or to any Japanese Person, except in compliance with all applicable laws, regulations and ministerial guidelines promulgated by relevant Japanese governmental or regulatory authorities in effect at the relevant time. For the purposes of this paragraph, “Japanese Person” shall mean any person resident in Japan, including any corporation or other entity organized under the laws of Japan.
Notice to Residents of Singapore
This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to compliance with conditions set forth in the SFA.
Where the shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is:
•
shares, debentures and shares of shares and debentures of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the shares pursuant to an offer made under Section 275 of the SFA except:
•
to an institutional investor (for corporations, under Section 274 of the SFA) or to a relevant person defined in Section 275(2) of the SFA, or to any person pursuant to an offer that is made on terms that such shares, and debentures of that corporation or such rights and interest in that trust are acquired at a consideration of not less than $200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further for corporations, in accordance with the conditions specified in Section 275 of the SFA;
•
where no consideration is or will be given for the transfer; or
•
where the transfer is by operation of law.
Notice to Investors in the United Kingdom
In relation to the United Kingdom, no shares have been offered or will be offered pursuant to this offering to the public in the United Kingdom prior to the publication of a prospectus in relation to the shares that either (i) has been approved by the Financial Conduct Authority, or (ii) is to be treated as if it had been approved by the Financial Conduct Authority in accordance with the transitional provision in Regulation 74 of the Prospectus (Amendment etc.) (EU Exit) Regulations 2019, except that offers of shares may be made to the public in the United Kingdom at any time under the following exemptions under the UK Prospectus Regulation:
(a)
to any legal entity which is a qualified investor as defined in Article 2 of the UK Prospectus Regulation;
(b)
to fewer than 150 natural or legal persons (other than qualified investors as defined in Article 2 of the UK Prospectus Regulation), subject to obtaining the prior consent of the Representative for any such offer; or
(c)
in any other circumstances falling within section 86 of the Financial Services and Markets Act 2000, as amended (the “FSMA”),
provided that no such offer of shares shall require the issuer or any underwriter to publish a prospectus pursuant to section 85 of the FSMA or supplement a prospectus pursuant to Article 23 of the UK Prospectus Regulation.
For the purposes of this provision, the expression an “offer to the public” in relation to any shares in the United Kingdom means the communication in any form and by any means of sufficient information on the terms of the offer and any shares to be offered so as to enable an investor to decide to purchase or subscribe for any shares, and the expression “UK Prospectus Regulation” means Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018.
The underwriters have represented and agreed that:
(a)
they have only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (FSMA)) received by it in connection with the issue or sale of the shares in circumstances in which Section 21(1) of the FSMA does not apply to the company; and
(b)
they have complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares in, from or otherwise involving the United Kingdom.
LEGAL MATTERS
Goodwin Procter LLP, Boston, Massachusetts will pass upon the validity of the securities offered in this prospectus with respect to shares. In connection with this offering, Skadden, Arps, Slate, Meagher & Flom LLP advised the underwriters in connection with the offering of the securities.
EXPERTS
The financial statements of Fifth Wall Acquisition Corp. I as of December 31, 2020, and for the period from November 23, 2020 (inception) through December 31, 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
| |
|
|
Page
|
|
|
Audited Financial Statements of Fifth Wall Acquisition Corp. I:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-2
|
|
|
|
|
|
|
|
|
F-3
|
|
|
|
|
|
|
|
|
F-4
|
|
|
|
|
|
|
|
|
F-5
|
|
|
|
|
|
|
|
|
F-6
|
|
|
|
|
|
|
|
|
F-7
|
|
|
Report of Independent Registered Public Accounting Firm
To the Stockholder and the Board of Directors of
Fifth Wall Acquisition Corp. I
Opinion on the Financial Statements
We have audited the accompanying balance sheet of Fifth Wall Acquisition Corp. I (the “Company”) as of December 31, 2020, and the related statements of operations, changes in stockholder’s equity and cash flows for the period from November 23, 2020 (inception) through December 31, 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 December 31, 2020 and the results of its operations and its cash flows for the period from November 23, 2020 (inception) through December 31, 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) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ WithumSmith+Brown, PC
We have served as the Company’s auditor since 2020.
New York, New York
January 29, 2021
Fifth Wall Acquisition Corp. I
BALANCE SHEET
December 31, 2020
| |
Assets:
|
|
|
|
|
|
|
|
| |
Deferred offering costs associated with proposed public offering
|
|
|
|
$ |
153,990 |
|
|
| |
Total assets
|
|
|
|
$ |
153,990 |
|
|
| |
Liabilities and Stockholder’s Equity:
|
|
|
|
|
|
|
|
| |
Current liabilities:
|
|
|
|
|
|
|
|
| |
Accounts payable
|
|
|
|
$ |
38,045 |
|
|
| |
Accrued expenses
|
|
|
|
|
97,289 |
|
|
| |
Franchise tax payable
|
|
|
|
|
175 |
|
|
| |
Total current liabilities
|
|
|
|
|
135,509 |
|
|
| |
Commitments and Contingencies
|
|
|
|
|
|
|
|
| |
Stockholder’s Equity:
|
|
|
|
|
|
|
|
| |
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
|
|
|
|
|
— |
|
|
| |
Class A common stock, $0.0001 par value; 100,000,000 shares authorized; none issued and outstanding
|
|
|
|
|
— |
|
|
| |
Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 7,187,500 shares issued and outstanding(1)
|
|
|
|
|
719 |
|
|
| |
Additional paid-in capital
|
|
|
|
|
24,281 |
|
|
| |
Accumulated deficit
|
|
|
|
|
(6,519) |
|
|
| |
Total stockholder’s equity
|
|
|
|
|
18,481 |
|
|
| |
Total Liabilities and Stockholder’s Equity
|
|
|
|
$ |
153,990 |
|
|
(1)
This number includes up to 937,500 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 4).
The accompanying notes are an integral part of these financial statements.
Fifth Wall Acquisition Corp. I
STATEMENT OF OPERATIONS
For The Period From November 23, 2020 (inception) through December 31, 2020
| |
General and administrative expenses
|
|
|
|
$ |
6,344 |
|
|
| |
Franchise tax expenses
|
|
|
|
|
175 |
|
|
| |
Net loss
|
|
|
|
$ |
(6,519) |
|
|
| |
Weighted average shares outstanding of Class B common stock, basic and diluted(1)
|
|
|
|
|
6,250,000 |
|
|
| |
Basic and diluted net loss per share, Class B
|
|
|
|
$ |
(0.00) |
|
|
(1)
This number excludes an aggregate of up to 937,500 Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 4).
The accompanying notes are an integral part of these financial statements.
Fifth Wall Acquisition Corp. I
STATEMENT OF CHANGES IN STOCKHOLDER’S EQUITY
For The Period From November 23, 2020 (inception) through December 31, 2020
| |
|
|
Common Stock
|
|
|
Additional
Paid-In
Capital
|
|
|
Accumulated
Deficit
|
|
|
Total
Stockholder’s
Equity
|
|
| |
|
|
Class A
|
|
|
Class B
|
|
| |
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Balance – November 23,
2020 (inception)
|
|
|
|
|
— |
|
|
|
|
$ |
— |
|
|
|
|
|
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
Issuance of Class B common stock to Sponsor(1)
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
7,187,500 |
|
|
|
|
|
719 |
|
|
|
|
|
24,281 |
|
|
|
|
|
— |
|
|
|
|
|
25,000 |
|
|
|
Net loss
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
(6,519) |
|
|
|
|
|
(6,519) |
|
|
|
Balance – December 31,
2020
|
|
|
|
|
— |
|
|
|
|
$ |
— |
|
|
|
|
|
7,187,500 |
|
|
|
|
$ |
719 |
|
|
|
|
$ |
24,281 |
|
|
|
|
$ |
(6,519) |
|
|
|
|
$ |
18,481 |
|
|
(1)
This number includes up to 937,500 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 4).
The accompanying notes are an integral part of these financial statements.
Fifth Wall Acquisition Corp. I
STATEMENT OF CASH FLOWS
For The Period From November 23, 2020 (inception) through December 31, 2020
| |
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
| |
Net loss
|
|
|
|
$ |
(6,519) |
|
|
| |
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
| |
General and administrative expenses paid by Sponsor in exchange for issuance of Class B common stock
|
|
|
|
|
5,000 |
|
|
| |
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
| |
Accrued expenses
|
|
|
|
|
1,344 |
|
|
| |
Franchise tax payable
|
|
|
|
|
175 |
|
|
| |
Net cash used in operating activities
|
|
|
|
|
— |
|
|
| |
Net change in cash
|
|
|
|
|
— |
|
|
| |
Cash – beginning of the period
|
|
|
|
|
—
|
|
|
| |
Cash – end of the period
|
|
|
|
$ |
— |
|
|
| |
Supplemental disclosure of noncash financing activities:
|
|
|
|
|
|
|
|
| |
Deferred offering costs paid in exchange for issuance of Class B common stock to Sponsor
|
|
|
|
$ |
20,000 |
|
|
| |
Deferred offering costs included in accounts payable
|
|
|
|
$ |
38,045 |
|
|
| |
Deferred offering costs included in accrued expenses
|
|
|
|
$ |
95,945 |
|
|
The accompanying notes are an integral part of these financial statements.
FIFTH WALL ACQUISITION CORP. I
NOTES TO FINANCIAL STATEMENTS
Note 1 — Description of Organization, Business Operations, Going Concern and Basis of Presentation
Fifth Wall Acquisition Corp. I (the “Company”) is a blank check company incorporated in Delaware on November 23, 2020. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with emerging growth companies.
As of December 31, 2020, the Company had not commenced any operations. All activity for the period from November 23, 2020 (inception) through December 31, 2020 relates to the Company’s formation and the proposed public offering described below. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Proposed Public Offering (as defined below). The Company has selected December 31 as its fiscal year end.
The Company’s sponsor is Fifth Wall Acquisition Sponsor, LLC, a Delaware limited liability company(the “Sponsor”). The Company’s ability to commence operations is contingent upon obtaining adequate financial resources through a proposed public offering (the “Proposed Public Offering”) of 25,000,000 shares (each, a “Share” and collectively, the “Shares”) at $10.00 per Share (or 28,750,000 Shares if the underwriters’ over-allotment option is exercised in full), which is discussed in Note 3, and the sale of 857,500 shares of Class A common stock (or 932,500 if the underwriters’ over-allotment option is exercised in full) (each, a “Private Placement Share” and collectively, the “Private Placement Shares”), at a price of $10.00 per Private Placement Share in a private placement to the Sponsor that will close simultaneously with the Proposed Public Offering.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Proposed Public Offering and the sale of Private Placement Shares, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the value of the funds held in the Trust Account (as defined below) (excluding the amount of deferred underwriting discounts held in trust and taxes payable on the interest earned on the Trust Account) at the time of the agreement to enter into the initial Business Combination. However, the Company only intends to complete a Business Combination if the post-transaction company owns or acquires 50% or more of the 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 1940, as amended (the “Investment Company Act”). Upon the closing of the Proposed Public Offering, management will agree that an amount equal to at least $10.00 per Share sold in the Proposed Public Offering, including the proceeds from the sale of the Private Placement Shares, will be held in a trust account (“Trust Account”) located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and 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, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.
The Company will provide the holders (the “Public Stockholders”) of the Company’s outstanding shares of Class A common stock, par value $0.0001 per share, sold in the Proposed Public Offering (the “Public Shares”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be
made by the Company, solely in its discretion. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then held in the Trust Account (initially anticipated to be $10.00 per Public Share). The per-share amount to be distributed to Public Stockholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 5). These Public Shares will be recorded at a redemption value and classified as temporary equity upon the completion of the Proposed Public Offering in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” If the Company seeks stockholder approval, the Company will proceed with a Business Combination if a majority of the shares voted are voted in favor of the Business Combination. The Company will not redeem the Public Shares in connection with a Business Combination in an amount that would cause its net tangible assets to be less than $5,000,001. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its amended and restated Certificate of Incorporation (the “Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each Public Stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or do not vote at all or are not a holder of record of Public Shares on the record date established in connection with a Business Combination. If the Company seeks stockholder approval in connection with a Business Combination, the initial stockholders (as defined below) will agree to vote their Founder Shares (as defined below in Note 4) and any Public Shares purchased during or after the Proposed Public Offering in favor of a Business Combination. In addition, the initial stockholders will agree to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of a Business Combination.
The Certificate of Incorporation will provide that a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder 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% or more of the Public Shares, without the prior consent of the Company.
The holders of the Founder Shares (the “initial stockholders”) will agree not to propose an amendment to the Certificate of Incorporation to modify the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or with respect to any other material provisions relating to stockholders’ rights or pre-initial Business Combination activity, unless the Company provides the Public Stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
If the Company is unable to complete a Business Combination within 24 months from the closing of the Proposed Public Offering (the “Combination Period”) and the Company’s stockholders have not amended the Certificate of Incorporation to extend such Combination Period, the Company will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its income taxes (less taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law,; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, liquidate and dissolve, subject in each case, to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
The initial stockholders will agree to waive their rights to liquidating distributions from the Trust Account with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the initial stockholders acquire Public Shares in or after the Proposed Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriters will agree to waive their rights to the deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not complete a Business Combination within in 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 residual assets remaining available for distribution (including Trust Account assets) will be only $10.00 per share initially held in the Trust Account (or less than that in certain circumstances). In order to protect the amounts held in the Trust Account, the Sponsor will agree to be liable to the Company if and to the extent any claims by a third party (except for 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 entered into a letter of intent, confidentiality or other similar agreement or business combination agreement (a “Target”), reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or Target that executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriters of the Proposed Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except for the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Basis of Presentation
The accompanying financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC.
In connection with the Company’s assessment of going concern considerations in accordance with ASU 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” as of December 31, 2020, the Company does not have sufficient liquidity to meet its current obligations. However, management has determined that the Company has access to funds from the Sponsor and the Sponsor has the financial wherewithal to provide such funds that are sufficient to fund the working capital needs of the Company until the earlier of the consummation of the Proposed Public Offering and a minimum 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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Note 2 — Summary of Significant Accounting Policies
Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amount represented in the balance sheet, primarily due to their short-term nature.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Deferred Offering Costs Associated with the Proposed Public Offering
Deferred offering costs consist of legal fees incurred through the balance sheet date that are directly related to the Proposed Public Offering and that will be charged to stockholder’s equity upon the completion of the Proposed Public Offering. Should the Proposed Public Offering prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations.
Net Loss Per Share of Common Stock
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net loss per share is computed by dividing net loss by the weighted average number of shares of Class B common stock outstanding during the period excluding Class B common stock subject to forfeiture. Weighted average shares were reduced for the effect of an aggregate of 937,500 shares of Class B common stock that are subject to forfeiture if the over-allotment option is not exercised by the underwriters (Note 4). At December 31, 2020, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into shares of common stock and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the period presented.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Deferred tax assets were deemed de minimus as of December 31, 2020.
FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of December 31, 2020. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties as of December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. The provision for income taxes was deemed to be de minimus for the period from November 23, 2020 (inception) through December 31, 2020.
Recent Accounting Standards
The Company’s management does not believe that any recently issued, but not yet effective, accounting standards updates, if currently adopted, would have a material effect on the accompanying financial statements.
Note 3 — Proposed Public Offering
Pursuant to the Proposed Public Offering, the Company intends to offer for sale 25,000,000 Shares at a price of $10.00 per Share (see Note 6).
The Company will grant the underwriters a 45-day option from the date of the final prospectus relating to the Proposed Public Offering to purchase up to 3,750,000 additional Shares to cover over-allotments, if any, at the Proposed Public Offering price, less underwriting discounts and commissions.
Note 4 — Related Party Transactions
Founder Shares
On December 2, 2020, the Sponsor paid $25,000 to cover for certain expenses and offering costs on behalf of the Company in exchange for issuance of 7,187,500 shares of the Company’s common stock, which was later designated as 7,187,500 shares of the Company’s Class B common stock, par value $0.0001 per share (the “Founder Shares”). The initial stockholders agreed to forfeit up to 937,500 Founder Shares to the extent that the over-allotment option is not exercised in full by the underwriters. The forfeiture will be adjusted to the extent that the over-allotment option is not exercised in full by the underwriters so that the Founder Shares will represent 20.0% of the Company’s issued and outstanding shares after the Proposed Public Offering. If the Company increases or decreases the size of the offering, the Company will effect a stock dividend or share contribution back to capital, as applicable, immediately prior to the consummation of the Proposed Public Offering so as to maintain the ownership of the initial stockholder at 20.0% of the Company’s issued and outstanding common stock upon the consummation of the Proposed Public Offering.
The initial stockholder will agree, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (A) one year after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the last sale price of Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the stockholders having the right to exchange their shares of common
stock for cash, securities or other property. Any permitted transferees will be subject to the same restrictions and other agreements of the initial stockholder with respect to any Founder Shares.
Private Placement Shares
The Sponsor will agree to purchase 857,500 Private Placement Shares (or 932,500 Private Placement Shares if the over-allotment option is exercised in full) at a price of $10.00 per Private Placement Shares (approximately $8.6 million in the aggregate, or approximately $9.3 million if the underwriters’ over-allotment option is exercised in full) in the Private Placement that will occur simultaneously with the closing of the Proposed Public Offering.
A portion of the proceeds from the sale of the Private Placement Shares to the Sponsor will be added to the proceeds from the Proposed Public Offering to be held in the Trust Account.
The Sponsor and the Company’s officers and directors will agree, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Shares until 30 days after the completion of the initial Business Combination.
Related Party Loans
On December 2, 2020, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Proposed Public Offering pursuant to a promissory note (the “Note”). This loan is non-interest bearing and payable on the earlier of December 31, 2021 or the completion of the Proposed Public Offering. As of December 31, 2020, the Company had not borrowed any amount under the Note. Subsequent to December 31, 2020, the Company borrowed approximately $80,000 under the Note.
In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company 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 the proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into shares of the post Business Combination entity at a price of $10.00 per share. The shares would be identical to the Private Placement Shares. 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. As of December 31, 2020, the Company had no borrowings under the Working Capital Loans.
Note 5 — Commitments and Contingencies
Registration Rights
The holders of Founder Shares, Private Placement Shares and shares that may be issued upon conversion of Working Capital Loans will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to the consummation of the Proposed Public Offering. These holders will be entitled to certain demand and “piggyback” registration rights. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriters will be entitled to an underwriting discount of $0.20 per Share, or $5.0 million in the aggregate (or approximately $5.8 million in the aggregate if the underwriters’ over-allotment option is exercised in full), payable upon the closing of the Proposed Public Offering. An additional fee of $0.35
per Share, or approximately $8.8 million in the aggregate (or approximately $10.1 million in the aggregate if the underwriters’ over-allotment option is exercised in full) will be payable to the underwriters for deferred underwriting commissions. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
Risks and Uncertainties
Management continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, close of the Proposed Public Offering and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Note 6 — Stockholder’s Equity
Preferred Stock — The Company is authorized to issue 1,000,000 shares of preferred stock, par value $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. As of December 31, 2020, there were no shares of preferred stock issued or outstanding.
Class A Common Stock — The Company is authorized to issue 100,000,000 shares of Class A common stock with a par value of $0.0001 per share. As of December 31, 2020, there were no shares of Class A common stock issued or outstanding.
Class B Common Stock — The Company is authorized to issue 10,000,000 shares of Class B common stock with a par value of $0.0001 per share. As of December 31, 2020 there were 7,187,500 shares of Class B common stock issued and outstanding. Of the 7,187,500 shares of Class B common stock outstanding, up to 937,500 shares are subject to forfeiture, to the Company by the initial stockholders for no consideration to the extent that the underwriter’s over-allotment option is not exercised in full or in part, so that the number of shares of Class B common stock will collectively equal 20% of the Company’s issued and outstanding common stock after the Proposed Public Offering.
Stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Holders of Class A common stock and holders of Class B common stock will vote together as a single class on all matters submitted to a vote of the stockholders except as required by law.
The Class B common stock will automatically convert into Class A common stock at the time of the initial Business Combination on a one-for-one basis (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like), and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the Proposed Public Offering and related to the closing of the Business Combination, including pursuant to a specified future issuance, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the Sponsor agrees to waive such adjustment with respect to any such issuance or deemed issuance, including a specified future issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon completion of the Proposed Public Offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with the Business Combination (after giving effect to any redemptions of shares of Class A common stock by Public Stockholders) (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the Business Combination, the private placement shares, and any private placement shares issued to the Sponsor, officers or directors upon conversion of Working Capital Loans). The Sponsor may also elect to convert their shares of Class B common stock into an equal number of shares of Class A common stock, subject to adjustment as provided above, at any time.
Note 7 — Subsequent Events
Subsequent to December 31, 2020, the Company borrowed approximately $80,000 under the Note.
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to January 29, 2021, the date that the financial statements were available to be issued. Based on this review, except as noted above, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
25,000,000 shares of Class A Common Stock
FIFTH WALL ACQUISITION CORP. I
PRELIMINARY PROSPECTUS
, 2021
| |
Book-Running Managers
|
|
| |
Goldman Sachs & Co. LLC
|
|
|
Deutsche Bank Securities
|
|
Until , 2021 (25 days after the date of this prospectus), all dealers that buy, sell or trade our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
We have not, and the underwriters have not, authorized anyone to provide you with any information or to make any representations other than contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may provide you. We are not, and the underwriters are not, making an offer to sell securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.
No dealer, salesperson or any other person is authorized to give any information or make any representations in connection with this offering other than those contained in this prospectus and, if given or made, the information or representations must not be relied upon as having been authorized by us. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any security other than the securities offered by this prospectus, or an offer to sell or a solicitation of an offer to buy any securities by anyone in any jurisdiction in which the offer or solicitation is not authorized or is unlawful.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The estimated expenses payable by us in connection with the offering described in this registration statement (other than the underwriting discount and commissions) will be as follows:
| |
SEC expenses
|
|
|
|
$ |
31,367 |
|
|
| |
FINRA expenses
|
|
|
|
|
48,633 |
|
|
| |
Accounting fees and expenses
|
|
|
|
|
60,000 |
|
|
| |
Printing and engraving expenses
|
|
|
|
|
40,000 |
|
|
| |
Travel and road show expenses
|
|
|
|
|
20,000 |
|
|
| |
Legal fees and expenses
|
|
|
|
|
300,000 |
|
|
| |
Nasdaq listing and filing fees
|
|
|
|
|
75,000 |
|
|
| |
Director & Officers liability insurance premiums(1)
|
|
|
|
|
1,700,000 |
|
|
| |
Miscellaneous
|
|
|
|
|
300,000 |
|
|
| |
Total
|
|
|
|
|
2,575,000 |
|
|
(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.
Our certificate of incorporation provides that all directors, officers, employees and agents of the registrant shall be entitled to be indemnified by us to the fullest extent permitted by Section 145 of the DGCL.
Section 145 of the DGCL concerning indemnification of officers, directors, employees and agents is set forth below.
Section 145. Indemnification of officers, directors, employees and agents; insurance.
a)
A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful.
b)
A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
c)
To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.
d)
Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders.
e)
Expenses (including attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys’ fees) incurred by former officers and directors or other employees and agents may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.
f)
The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office. A right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw shall not be eliminated or impaired by an amendment to such provision after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred.
g)
A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under this section.
h)
For purposes of this section, references to “the corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued.
i)
For purposes of this section, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this section.
j)
The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
k)
The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation’s obligation to advance expenses (including attorneys’ fees).
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, 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 of expenses incurred or paid by a director, officer or controlling person in a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to the court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
In accordance with Section 102(b)(7) of the DGCL, our certificate of incorporation, will provide that no director shall be personally liable to us or any of our stockholders for monetary damages resulting from breaches of their fiduciary duty as directors, except to the extent such limitation on or exemption from liability is not permitted under the DGCL unless they violated their duty of loyalty to the Company or its stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived improper personal benefit from their actions as directors. The effect of this provision of our certificate of incorporation is to eliminate our rights and those of our stockholders (through stockholders’ derivative suits on our behalf) to recover monetary damages against a director for breach of the fiduciary duty of care as a director, including breaches resulting from negligent or grossly negligent behavior, except, as restricted by Section 102(b)(7) of the DGCL. However, this provision does not limit or eliminate our rights or the rights of any stockholder to seek non-monetary relief, such as an injunction or rescission, in the event of a breach of a director’s duty of care.
If the DGCL is amended to authorize corporate action further eliminating or limiting the liability of directors, then, in accordance with our certificate of incorporation, the liability of our directors to us or our stockholders will be eliminated or limited to the fullest extent authorized by the DGCL, as so amended. Any repeal or amendment of provisions of our certificate of incorporation limiting or eliminating the liability of directors, whether by our stockholders or by changes in law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to further limit or eliminate the liability of directors on a retroactive basis.
Our certificate of incorporation will also provide that we will, to the fullest extent authorized or permitted by applicable law, indemnify our current and former officers and directors, as well as those persons who, while directors or officers of our corporation, are or were serving as directors, officers, employees or agents of another entity, trust or other enterprise, including service with respect to an employee benefit plan, in connection with any threatened, pending or completed proceeding, whether civil, criminal, administrative or investigative, against all expense, liability and loss (including, without limitation, attorney’s fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred or suffered by any such person in connection with any such proceeding. Notwithstanding the foregoing, a person eligible for indemnification pursuant to our certificate of incorporation will be indemnified by us in connection with a proceeding initiated by such person only if such proceeding was authorized by our board of directors, except for proceedings to enforce rights to indemnification.
The right to indemnification conferred by our certificate of incorporation is a contract right that includes the right to be paid by us the expenses incurred in defending or otherwise participating in any proceeding referenced above in advance of its final disposition, provided, however, that if the DGCL requires, an advancement of expenses incurred by our officer or director (solely in the capacity as an officer or director of our corporation) will be made only upon delivery to us of an undertaking, by or on behalf of such officer or director, to repay all amounts so advanced if it is ultimately determined that such person is not entitled to be indemnified for such expenses under our certificate of incorporation or otherwise.
The rights to indemnification and advancement of expenses will not be deemed exclusive of any other rights which any person covered by our certificate of incorporation may have or hereafter acquire under law, our certificate of incorporation, our bylaws, an agreement, vote of stockholders or disinterested directors, or otherwise.
Any repeal or amendment of provisions of our certificate of incorporation affecting indemnification rights, whether by our stockholders or by changes in law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not in any way diminish or adversely affect any right or protection existing at the time of such repeal or amendment or adoption of such inconsistent provision with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision. Our certificate of incorporation will also permit us, to the extent and in the manner authorized or permitted by law, to indemnify and to advance expenses to persons other that those specifically covered by our certificate of incorporation.
Our bylaws, which we intend to adopt immediately prior to the closing of this offering, include the provisions relating to advancement of expenses and indemnification rights consistent with those set forth in our certificate of incorporation. In addition, our bylaws provide for a right of indemnity to bring a suit in the event a claim for indemnification or advancement of expenses is not paid in full by us within a specified period of time. Our bylaws also permit us to purchase and maintain insurance, at our expense, to protect us and/or any director, officer, employee or agent of our corporation or another entity, trust or other enterprise against any expense, liability or loss, whether or not we would have the power to indemnify such person against such expense, liability or loss under the DGCL.
Any repeal or amendment of provisions of our bylaws affecting indemnification rights, whether by our board of directors, stockholders or by changes in applicable law, or the adoption of any other
provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not in any way diminish or adversely affect any right or protection existing thereunder with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision.
We will enter into indemnity agreements with each of our officers and directors a form of which is filed as Exhibit 10.3 to this Registration Statement. These agreements will require us to indemnify these individuals to the fullest extent permitted under Delaware law and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.
Pursuant to the Underwriting Agreement filed as Exhibit 1.1 to this Registration Statement, we have agreed to indemnify the Underwriters and the Underwriters have agreed to indemnify us against certain civil liabilities that may be incurred in connection with this offering, including certain liabilities under the Securities Act.
Item 15. Recent Sales of Unregistered Securities.
On December 2, 2020, we issued to Fifth Wall Acquisition Sponsor, LLC, our sponsor, 7,187,500 shares of our Class B common stock, in exchange for a payment of $25,000, or approximately $0.003 per share, to cover for certain expenses and offering costs on behalf of us. Such securities were issued in connection with our organization pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
Our sponsor is an accredited investor for purposes of Rule 501 of Regulation D. Each of the equity holders in our sponsor is an accredited investor under Rule 501 of Regulation D. The sole business of our sponsor is to act as the company’s sponsor in connection with this offering.
Our sponsor has committed, pursuant to a written agreement, to purchase 857,500 private placement shares (or 932,500 private placement shares if the underwriters’ over-allotment option is exercised in full), at a price of $10.00 per share ($8,575,000 in the aggregate or $9,325,000 if the underwriters’ over-allotment option is exercised in full), in a private placement that will close simultaneously with the closing of this offering. These issuances will be made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
No underwriting discounts or commissions were paid with respect to such sales.
Item 16. Exhibits and Financial Statement Schedules.
(a)
The Exhibit Index is incorporated herein by reference.
Item 17. Undertakings.
(a)
The undersigned registrant hereby undertakes:
(1)
That for the purpose of determining any liability under the Securities Act of 1933 in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii)
The portion of any other free writing prospectus relating to the offering containing material
information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv)
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(2)
That for the purpose of determining liability under the Securities Act of 1933 to any purchaser, if the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(b)
The undersigned hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.
(c)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(d)
The undersigned registrant hereby undertakes that:
(1)
For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2)
For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
EXHIBIT INDEX
*
Previously filed.
#
To be filed by amendment.
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 Los Angeles, State of California, on the 29th day of January, 2021.
FIFTH WALL ACQUISITION CORP. I
By:
/s/ Brendan Wallace
Name: Brendan Wallace
Title: Chief Executive Officer
FIFTH WALL ACQUISITION CORP. I
By:
/s/ Andriy Mykhaylovskyy
Name: Andriy Mykhaylovskyy
Title: Chief Financial 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 and on the dates indicated.
| |
NAME
|
|
|
POSITION
|
|
|
DATE
|
|
| |
/s/ Brendan Wallace
Brendan Wallace
|
|
|
Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)
|
|
|
January 29, 2021
|
|
| |
/s/ Andriy Mykhaylovskyy
Andriy Mykhaylovskyy
|
|
|
Director and Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
|
January 29, 2021
|
|
Exhibit 1.1
Fifth Wall Acquisition Corp. I
25,000,000 Shares of Class A Common
Stock
Underwriting Agreement
[DATE]
Goldman Sachs & Co. LLC
200 West Street,
New York, New York 10282-2198
Deutsche Bank Securities Inc.
60 Wall Street
New York, New York 10005
As representatives (the “Representatives”)
of the several Underwriters named in Schedule I hereto,
Ladies and Gentlemen:
Fifth Wall Acquisition
Corp. I, a Delaware corporation (the “Company”), proposes, subject to the terms and conditions stated in this agreement
(this “Agreement”), to issue and sell to the Underwriters named in Schedule I hereto (collectively, the “Underwriters”)
an aggregate of 25,000,000 shares (the “Firm Shares”) of the Company’s Class A common stock, par value U.S.
$0.0001 per share (the “Class A Common Stock”), and, at the election of the Underwriters, up to 3,750,000 additional
shares of Class A Common Stock, if any (the “Optional Shares,” the Optional Shares, together with the Firm Shares,
that the Underwriters elect to purchase pursuant to Section 2 hereof being collectively called the “Shares”).
The Company has entered
into an Investment Management Trust Agreement, effective as of [ ], 2021, with Continental Stock Transfer & Trust Company
(“CST”), as trustee, in substantially the form filed as Exhibit 10.1 to the Registration Statement (the “Trust
Agreement”), pursuant to which the proceeds from the sale of the Private Placement Shares (as defined below) and certain
proceeds of the Offering will be deposited and held in a U.S. based trust account (the “Trust Account”) for the benefit
of the Company, the Underwriters and the holders of the Firm Shares and the Optional Shares, if and when issued, in each case as
described more fully in the Prospectus.
The Company has entered
into a Subscription Agreement, dated as of December 2, 2020, with Fifth Wall Acquisition Sponsor, LLC, a Delaware limited
liability company (the “Sponsor”), in substantially the form filed as Exhibit 10.5 (the “Founder’s
Subscription Agreement”), pursuant to which the Sponsor then held an aggregate of 7,187,500 shares of Class B common
stock, par value U.S. $0.0001 per share, of the Company (including the shares of Class A Common Stock issuable upon conversion
thereof, the “Founder Shares”), which it received for an aggregate purchase price of U.S. $25,000. The Founder Shares
are substantially similar to the Shares, except as described in the Prospectus.
The Company has entered
into a private placement shares purchase agreement, as of [ ], 2021, with the Sponsor (the “Private Placement Shares Purchase
Agreement”) in substantially the form filed as Exhibit 10.3, pursuant to which, the Sponsor agreed to purchase an aggregate
of 857,500 shares of Class A Common Stock (or up to 932,500 shares of Class A Common Stock if the Underwriters elect
to purchase the Optional Shares) of the Company at price of $10.00 per share (the “Private Placement Shares”). The
Private Placement Shares are identical to the Shares sold in the Offering, except as described in the Prospectus.
The Company has entered
into a Registration Rights Agreement, as of [ ], 2021, with the Sponsor and the other security holders of the Company party thereto,
in substantially the form filed as Exhibit 10.2 to the Registration Statement (the “Registration Rights Agreement”),
pursuant to which the Company has granted certain registration rights in respect of the Founder Shares, the Private Placement Shares,
and Shares that may be issued upon conversion of working capital loans.
The Company has caused
to be duly executed and delivered letters by the Sponsor, the initial stockholders and each of the Company’s officers and
directors, each dated as of [·], 2021 and in substantially the form filed as Exhibit 10.4 to the Registration Statement
(collectively, the “Insider Letters”).
1. The
Company represents and warrants to, and agrees with, each of the Underwriters that:
(a) A
registration statement on Form S-1 (File No. 333-252274) (the “Initial Registration Statement”) in respect
of the Shares has been filed with the Securities and Exchange Commission (the “Commission”); the Initial Registration
Statement and any post-effective amendment thereto, each in the form heretofore delivered to you, have been declared effective
by the Commission in such form; other than a registration statement, if any, increasing the size of the offering (a “Rule 462(b) Registration
Statement”), filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the “Act”),
which became effective upon filing, no other document with respect to the Initial Registration Statement has been filed with the
Commission; and no stop order suspending the effectiveness of the Initial Registration Statement, any post-effective amendment
thereto or the Rule 462(b) Registration Statement, if any, has been issued and no proceeding for that purpose has been
initiated or, to the Company’s knowledge, threatened by the Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act is hereinafter called a “Preliminary Prospectus”; the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, including all exhibits thereto and including the information
contained in the form of final prospectus filed with the Commission pursuant to Rule 424(b) under the Act in accordance
with Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to be part of the Initial Registration
Statement at the time it was declared effective, each as amended at the time such part of the Initial Registration Statement became
effective or such part of the Rule 462(b) Registration Statement, if any, became or hereafter becomes effective, are
hereinafter collectively called the “Registration Statement”; the Preliminary Prospectus relating to the Shares that
was included in the Registration Statement immediately prior to the Applicable Time (as defined in Section 1(c) hereof)
is hereinafter called the “Pricing Prospectus”; and such final prospectus, in the form first filed pursuant to Rule 424(b) under
the Act, is hereinafter called the “Prospectus”; any oral or written communication with potential investors undertaken
in reliance on Section 5(d) of the Act or Rule 163B under the Act is hereinafter called a “Testing-the-Waters
Communication”; and any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405
under the Act is hereinafter called a “Written Testing-the-Waters Communication”; and any “issuer free writing
prospectus” as defined in Rule 433 under the Act relating to the Shares is hereinafter called an “Issuer Free
Writing Prospectus”);
(b) (A) No
order preventing or suspending the use of any Preliminary Prospectus or any Issuer Free Writing Prospectus has been issued by the
Commission, and (B) each Preliminary Prospectus, at the time of filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission thereunder, and did not contain an untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with the Underwriter Information
(as defined in Section 9(b) of this Agreement);
(c) The
Company has filed with the Commission a Form 8-A (file number 001-[●]) providing for the registration under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), of the Shares, which registration is currently effective on
the date hereof. The Shares have been authorized for listing, subject to official notice of issuance and evidence of satisfactory
distribution, on The Nasdaq Capital Market, and the Company knows of no reason or set of facts that is likely to adversely affect
such authorization;
(d) For
the purposes of this Agreement, the “Applicable Time” is [●] p.m (Eastern time) on the date of this Agreement.
The Pricing Prospectus, as supplemented by the information listed on Schedule II(c) hereto, taken together (collectively,
the “Pricing Disclosure Package”), as of the Applicable Time, did not, and as of each Time of Delivery (as defined
in Section 4(a) of this Agreement) will not, include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
and each Issuer Free Writing Prospectus and each Written Testing-the-Waters Communication does not conflict with the information
contained in the Registration Statement, the Pricing Prospectus or the Prospectus and each Issuer Free Writing Prospectus and each
Written Testing-the-Waters Communication, as supplemented by and taken together with the Pricing Disclosure Package, as of the
Applicable Time, did not , and as of each Time of Delivery will not, include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and warranty shall not apply to statements or omissions
made in reliance upon and in conformity with the Underwriter Information;
(e) The
Registration Statement conforms, and the Prospectus and any further amendments or supplements to the Registration Statement and
the Prospectus will conform, in all material respects to the requirements of the Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable effective date as to each part of the Registration Statement,
as of the applicable filing date as to the Prospectus and any amendment or supplement thereto, and as of each Time of Delivery,
contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements
or omissions made in reliance upon and in conformity with the Underwriter Information;
(f) The
Company has not, since the date of the latest audited financial statements included in the Pricing Prospectus, (i) sustained
any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree or (ii) entered into any transaction or agreement
(whether or not in the ordinary course of business) that is material to the Company or incurred any liability or obligation, direct
or contingent, that is material to the Company, in each case otherwise than as set forth or contemplated in the Pricing Prospectus;
and, since the respective dates as of which information is given in the Registration Statement and the Pricing Prospectus, there
has not been (x) any change in the capital stock (other than as a result of (i) the exercise, if any, of stock options
or the award, if any, of stock options or restricted stock in the ordinary course of business pursuant to the Company’s equity
plans that are described in the Pricing Prospectus and the Prospectus or (ii) the issuance, if any, of stock upon conversion
of Company securities as described in the Pricing Prospectus and the Prospectus) or long-term debt of the Company or (y) any
Material Adverse Effect (as defined below); as used in this Agreement, “Material Adverse Effect” shall mean any material
adverse change or effect, or any development involving a prospective material adverse change or effect, in or affecting (i) the
business, properties, management, financial position, stockholders’ equity or results of operations of the Company, taken
as a whole, except as set forth or contemplated in the Pricing Prospectus, or (ii) the ability of the Company to perform its
obligations under this Agreement, including the issuance and sale of the Shares, or to consummate the transactions contemplated
in the Pricing Prospectus and the Prospectus;
(g) The
Company does not own any real property, and the Company has good and marketable title to all personal property owned by it, in
each case free and clear of all liens, encumbrances and defects except such as are described in the Pricing Prospectus or such
as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made
of such property by the Company;
(h) The
Company has been (i) duly incorporated and is validly existing and in good standing under the laws of its jurisdiction of
organization, with power and authority (corporate and other) to own its properties and conduct its business as described in the
Pricing Prospectus, and (ii) duly qualified as a foreign corporation and is in good standing (to the extent the concept of
good standing exists in such jurisdiction) under the laws of each other jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, except, in the case of this clause (ii), where the failure to be so qualified
or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;
(i) The
Company has an authorized capitalization as set forth in the Pricing Prospectus and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued and are fully paid and non-assessable and conform in all material
respects to the description thereof contained in the Pricing Disclosure Package and Prospectus;
(j) All
issued and outstanding shares of the Company have been duly and validly authorized and issued and are fully paid and nonassessable;
and none of such shares were issued in violation of the preemptive rights of any holders of any security of the Company or similar
contractual rights granted by the Company. The offers and sales of the outstanding shares of Class A Common Stock were at
all relevant times either registered under the Act, the applicable state securities and blue sky laws or, based in part on the
representations and warranties of the purchasers of such shares of Class A Common Stock, exempt from such registration requirements.
The holders of outstanding shares of the Company are not entitled to preemptive or other rights to subscribe for the Securities
arising by operation of law or under the Amended and Restated Certificate of Incorporation; and, except as set forth in the Pricing
Prospectus and the Prospectus, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights
to convert any obligations into or exchange any securities for, shares or other ownership interests in the Company are outstanding.
(k) The
Shares have been duly authorized for issuance and sale pursuant to this Agreement and, when issued and delivered by the Company
against payment therefor as provided herein, will be validly issued, fully paid and non-assessable and will confirm in all material
respects to the description of the Shares contained in the Pricing Disclosure Package and the Prospectus; and the issuance of the
Shares is not subject to any preemptive or similar rights.
(l) Intentionally
omitted.
(m) Intentionally
omitted.
(n) The
Private Placement Shares have been duly authorized for issuance and sale pursuant to the Private Placement Shares Purchase Agreement
and, when issued and delivered by the Company in the manner set forth in the Private Placement Shares Purchase Agreement against
payment therefor, will be validly issued, fully paid and non-assessable.
(o) Except
as set forth in the Pricing Prospectus and the Prospectus, no holders of any securities of the Company or any rights exercisable
for or convertible or exchangeable into securities of the Company have the right to require the Company to register any such securities
of the Company under the Act or to include any such securities in a registration statement to be filed by the Company.
(p) No
securities of the Company have been sold by the Company or by or on behalf of, or for the benefit of, any person or persons controlling,
controlled by, or under common control with the Company from its inception through and including the date hereof, except as disclosed
in the Registration Statement, the Pricing Prospectus and the Prospectus.
(q) Neither
the Company nor any of its affiliates has, prior to the date hereof, made any offer or sale of any securities that are required
to be “integrated” pursuant to the Act with the offer and sale of the Shares pursuant to the Registration Statement.
(r) The
shares of Class B common stock included in the Founder Shares are duly authorized, validly issued, fully paid and nonassessable.
(s) The
issue and sale of the Shares and the compliance by the Company with this Agreement, the Trust Agreement, the Founder’s Subscription
Agreement, the Private Placement Shares Purchase Agreement, the Registration Rights Agreement or the Insider Letters and the consummation
by the Company of the transactions contemplated in this Agreement, the Trust Agreement, the Founder’s Subscription Agreement,
the Private Placement Shares Purchase Agreement, the Registration Rights Agreement or the Insider Letters will not conflict with
or result in a breach or violation of any of the terms or provisions of, or constitute a default under, (A) any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company is a party or by which the Company
is bound or to which any of the property or assets of the Company is subject, except, in the case of this clause (A) for such
conflicts, defaults, breaches, or violations that would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, (B) the Amended and Restated Certificate of Incorporation or by-laws (or other applicable organizational
document) of the Company, or (C) any statute or any judgment, order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its properties, except, in the case of this clause (C), for such
conflicts, defaults, breaches, or violations that would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; and no consent, approval, authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale of the Shares or the consummation by the Company of the
transactions contemplated by this Agreement, except (i) such as have been obtained or may be obtained under the Act, (ii) the
approval by the Financial Industry Regulatory Authority, Inc. (“FINRA”) of the underwriting terms and arrangements
and (iii) consents, approvals, authorizations, registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Shares by the Underwriters or (iv) the absence of which
would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;
(t) The
historical financial statements, including the notes thereto and the supporting schedules, if any, of the Company included in
the Pricing Prospectus, the Prospectus and the Registration Statement present fairly the financial condition, results of
operations and cash flows of the Company as of the dates and for the periods indicated. The summary financial data set forth under the caption
“Summary Financial Data” in the Pricing Prospectus, Prospectus and Registration Statement fairly present, on the
basis stated in the Pricing Prospectus, Prospectus and Registration Statement, the information included therein. The Company
is not party to any off-balance sheet transactions, arrangements, obligations (including contingent obligations), or other
relationships with unconsolidated entities or other persons that may have a material current or material future effect on the
Company’s financial condition, changes in financial condition, results of operations, liquidity, capital expenditures,
capital resources, or significant components of revenues or expenses. The statistical, industry-related and market-related
data included in the Registration Statement, the Pricing Prospectus and the Prospectus are based on or derived from sources
that the Company reasonably and in good faith believes are reliable and accurate, and such data agree with the sources from
which they are derived.
(u) The
Company is not (i) in violation of its certificate of incorporation or by-laws (or other applicable organizational document),
(ii) in violation of any statute or any judgment, order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its properties, or (iii) in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any of its properties may be bound, except, in the case of the
foregoing clauses (ii) and (iii), for such defaults as would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect;
(v) The
statements set forth in the Pricing Prospectus and Prospectus under the caption “U.S. Federal Income Tax Considerations”,
and under the caption “Underwriting”, insofar as they purport to describe the provisions of the laws and documents
referred to therein, are accurate, complete and fair in all material respects;
(w) Other
than as set forth in the Pricing Prospectus, there are no legal or governmental proceedings pending to which the Company or, to
the Company’s knowledge, any officer or director of the Company, is a party or of which any property of the Company or, to
the Company’s knowledge, any officer or director of the Company, is the subject which, if determined adversely to the Company
(or such officer or director), would, individually or in the aggregate, be expected to have a Material Adverse Effect; and, to
the Company’s knowledge, no such proceedings are threatened or contemplated by governmental authorities or others;
(x) The
Company is not and, after giving effect to the offering and sale of the Shares and the application of the proceeds thereof, will
not be an “investment company”, as such term is defined in the Investment Company Act of 1940, as amended (the “Investment
Company Act”);
(y) At
the time of filing the Initial Registration Statement and any post-effective amendment thereto, at the earliest time thereafter
that the Company or any offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Act)
of the Shares, and at the date hereof, the Company was and is an “ineligible issuer,” as defined under Rule 405
under the Act;
(z) The
Company has not prepared or used any Issuer Free Writing Prospectus.
(aa) WithumSmith+Brown,
PC (“Withum”), who have certified certain financial statements of the Company and delivered their report with respect
to the audited financial statements and schedules included in the Registration Statement, are independent public accountants as
required by the Act and the rules and regulations of the Commission thereunder;
(bb) To
the extent required by Rule 13a-15 under the Exchange Act, the Company maintains a system of internal control over financial
reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that (i) complies with the requirements
of the Exchange Act, (ii) has been designed by the Company’s principal executive officer and principal financial officer,
or under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted accounting principles and (iii) is sufficient
to provide reasonable assurance that (A) transactions are executed in accordance with management’s general or specific
authorization, (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for assets, (C) access to assets is permitted only
in accordance with management’s general or specific authorization and (D) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and
except as disclosed in the Pricing Prospectus, the Company’s internal control over financial reporting is effective and the
Company is not aware of any material weaknesses in its internal control over financial reporting;
(cc) Except
as disclosed in the Pricing Prospectus, since the date of the latest audited financial statements included in the Pricing Prospectus,
there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control over financial reporting;
(dd) To
the extent required by Rule 13a-15 under the Exchange Act, the Company maintains disclosure controls and procedures (as such
term is defined in Rule 13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act; such
disclosure controls and procedures have been designed to ensure that material information relating to the Company is made known
to the Company’s principal executive officer and principal financial officer by others within those entities; and such disclosure
controls and procedures are effective;
(ee) There
is no franchise, contract or other document of a character required to be described in the Registration Statement or Prospectus,
or to be filed as an exhibit thereto, which is not described or filed as required (and the Pricing Prospectus contains in all material
respects the same description of the foregoing matters contained in the Prospectus); and the statements in the Pricing Prospectus
and the Prospectus under the headings “Principal Stockholders,” “Certain Relationships and Related Party Transactions,”
and “Description of Securities” insofar as such statements summarize legal matters, agreements, documents or proceedings
discussed therein, are accurate and fair summaries of such legal matters, agreements, documents or proceedings in all material
respects. There are no business relationships or related party transactions involving the Company or any other person required
by the Act to be described in the Registration Statement or Prospectus that have not been described as required.
(ff) This
Agreement has been duly authorized, executed and delivered by the Company;
(gg) Intentionally
omitted.
(hh) The
Trust Agreement has been duly authorized, executed and delivered by the Company, and is a valid and binding agreement of the Company,
enforceable against the Company, in accordance with its terms except as the enforceability thereof may be limited by bankruptcy,
insolvency, or similar laws affecting creditors’ rights generally from time to time in effect and by equitable principles
of general applicability.
(ii) Intentionally
omitted.
(jj) The
Founder’s Subscription Agreement has been duly authorized, executed and delivered by the Company and the Sponsor, and is
a valid and binding agreement of the Company and the Sponsor, enforceable against the Company and the Sponsor in accordance with
its terms except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors’
rights generally from time to time in effect and by equitable principles of general applicability.
(kk) The
Private Placement Shares Purchase Agreement has been duly authorized, executed and delivered by the Company and the Sponsor, and
is a valid and binding agreement of the Company and the Sponsor, enforceable against the Company and the Sponsor in accordance
with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors’
rights generally from time to time in effect and by equitable principles of general applicability.
(ll) The
Registration Rights Agreement has been duly authorized, executed and delivered by the Company, and is a valid and binding agreement
of the Company, enforceable against the Company in accordance with its terms except as the enforceability thereof may be limited
by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from time to time in effect and by equitable
principles of general applicability.
(mm) Each
of the Insider Letters executed by the Company, the Sponsor and, to the Company’s knowledge, each executive officer, director
and director nominee of the Company, have been duly authorized, executed and delivered by the Company, the Sponsor and, to the
Company’s knowledge, and each such executive officer, director and director nominee, respectively, and is a valid and binding
agreement of the Company, the Sponsor and, to the Company’s knowledge, and each such executive officer, director and director
nominee, respectively, enforceable against the Company, the Sponsor and, to the Company’s knowledge, each such executive
officer, director and director nominee, respectively, in accordance with its terms except as the enforceability thereof may be
limited by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from time to time in effect and
by equitable principles of general applicability.
(nn) Intentionally
omitted.
(oo) The
Company, the Sponsor, and their directors and officers have not and, to the Company’s knowledge, no agent, employee, affiliate
or other person associated with or acting on behalf of the Company has (i) made, offered, promised or authorized any unlawful
contribution, gift, entertainment or other unlawful expense or taken any act in furtherance thereof; (ii) made, offered,
promised or authorized any direct or indirect unlawful payment or taken any act in furtherance thereof; or (iii) violated
or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, the Bribery Act 2010 of the United Kingdom or
any other applicable antibribery or anti-corruption law (collectively, “Anti-Bribery Laws”). The Company has instituted
and maintained policies and procedures reasonably designed to promote and ensure continued compliance with all Anti-Bribery Laws
and with the representation and warranty contained herein.
(pp) The
operations of the Company and the Sponsor are and have been conducted at all times in compliance with the requirements of applicable
anti-money laundering laws, including, but not limited to, the Bank Secrecy Act of 1970, as amended by the USA PATRIOT ACT of 2001,
and the rules and regulations promulgated thereunder, and the anti-money laundering laws of the various jurisdictions in which
the Company conducts business (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering
Laws is pending or, to the knowledge of the Company, threatened;
(qq) The
Company, the Sponsor, and their directors and officers are not and, to the Company’s knowledge, no agent, employee, affiliate
or other person associated with or acting on behalf of the Company is currently the subject or the target of any sanctions administered
or enforced by the U.S. Government, including, without limitation, the Office of Foreign Assets Control of the U.S. Department
of the Treasury or the U.S. Department of State and including, without limitation, the designation as a “specially designated
national” or “blocked person,” the European Union, Her Majesty’s Treasury, the United Nations Security
Council, or other relevant sanctions authority (collectively, “Sanctions”), nor is the Company located, organized or
resident in a country or territory that is the subject or target of Sanctions, and the Company will not directly or indirectly
use the proceeds of the offering of the Shares hereunder, or lend, contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any
person, or in any country or territory, that, at the time of such funding, is the subject or the target of Sanctions or (ii) in
any other manner that will result in a violation by any person (including any person participating in the transaction, whether
as underwriter, advisor, investor or otherwise) of Sanctions;
(rr) The
financial statements included in the Registration Statement, the Pricing Prospectus and the Prospectus, together with the related
schedules and notes, present fairly the financial position of the Company at the dates indicated and the statement of operations,
stockholders’ equity and cash flows of the Company for the periods specified; said financial statements have been prepared
in conformity with U.S. generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout
the periods involved. The supporting schedules, if any, present fairly in accordance with GAAP the information required to be stated
therein. The selected financial data and the summary financial information included in the Registration Statement, the Pricing
Prospectus and the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that
of the audited financial statements included therein. Except as included therein, no historical or pro forma financial statements
or supporting schedules are required to be included in the Registration Statement, the Pricing Prospectus or the Prospectus under
the Act or the rules and regulations promulgated thereunder. All disclosures contained in the Registration Statement, the
Pricing Prospectus and the Prospectus regarding “non-GAAP financial measures” (as such term is defined by the rules and
regulations of the Commission) comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Act, to the extent
applicable;
(ss) There
is and has been no failure on the part of the Company or, to the knowledge of the Company, any of the Company’s officers
or directors, in their capacities as such, to comply with (as and when applicable), and immediately following the Effective Date
the Company will be in compliance with the applicable listing rules of Nasdaq (subject to applicable phase-in Rules). Further,
there is and has been no failure on the part of the Company or, to the knowledge of the Company, any of the Company’s officers
or directors, in their capacities as such, to comply with (as and when applicable), and immediately following the Effective Date
the Company will be in compliance with, the phase-in requirements and all other applicable provisions of the Nasdaq corporate governance
requirements set forth in the Nasdaq Marketplace Rules.
(tt) There
are no transfer, stamp, issue, registration, documentary or other similar taxes, duties, fees or charges under U.S. federal law
or the laws of any state, or under the laws of any non-U.S. jurisdiction, required to be paid in connection with the execution
and delivery of this Agreement or the issuance or sale by the Company of the Securities.
(uu) The
Company has filed all tax returns (including U.S. federal, state and non-U.S.) that are required to be filed by it or has requested
extensions thereof (except in any case in which the failure so to file would not have a Material Adverse Effect) through the date
hereof and has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent
that any of the foregoing is due and payable, except for any such assessment, fine or penalty that is currently being contested
in good faith and for which adequate reserves required by generally accepted accounting principles have been created with respect
thereto or as would not have a Material Adverse Effect, except as set forth in or contemplated in the Registration Statement, Pricing
Prospectus and the Prospectus (exclusive of any supplement thereto).
(vv) The
Company possesses all licenses, certificates, permits and other authorizations issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct its business, and the Company has not received any notice of proceedings relating to
the revocation or modification of any such license, certificate, authorization or permit that, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect, except as set forth in or contemplated
in the Pricing Prospectus and the Prospectus (exclusive of any supplement thereto).
(ww) The
Company (i) does not have any material lending or other relationship with any bank or lending affiliate of any of the Underwriters
and (ii) does not intend to use any of the proceeds from the sale of the Shares hereunder to repay any outstanding debt owed
to any affiliate of any of the Underwriters.
(xx) All
information contained in the questionnaires (the “Questionnaires”) completed by the Sponsor and, to the knowledge of
the Company, the Company’s officers, directors and director nominees and provided to the Underwriters, is true and correct
in all material respects and the Company has not become aware of any information that would cause the information disclosed in
the Questionnaires completed by the Sponsor or the Company’s officers, directors and director nominees to become inaccurate
and incorrect.
(yy) Prior
to the date hereof, the Company has not selected any specific acquisition target and has not, nor has anyone on its behalf, engaged
in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial Business
Combination.
(zz) Except
as described in the Registration Statement, the Pricing Prospectus and the Prospectus, there are no claims, payments, arrangements,
contracts, agreements or understandings relating to the payment of a brokerage commission or finder’s, consulting, origination
or similar fee by the Company or the Sponsor with respect to the sale of the Shares hereunder or any other arrangements, agreements
or understandings of the Company, the Sponsor or any officer or director of the Company, or their respective affiliates, that may
affect the Underwriters’ compensation, as determined by FINRA.
(aaa) Except
as described in the Registration Statement, the Pricing Prospectus and the Prospectus, the Company has not made any direct or indirect
payments (in cash, securities or any other form that would be “underwriting compensation” as defined in Rule 5110
of the FINRA Manual): (i) to any person, as a finder’s fee, consulting fee or otherwise, in consideration of such person
raising capital for the Company or introducing to the Company persons who raised or provided capital to the Company; (ii) to
any person that, to the Company’s knowledge, has been accepted by FINRA as a member of FINRA (a “Member”);
or (iii) to any person or entity that, to the Company’s knowledge, has any direct or indirect affiliation or association
with any Member, within the FINRA Review Period, as defined in Rule 5110(j)(20) of the FINRA Manual, other than payments to
the Underwriters pursuant to this Agreement.
(bbb) Except
as described in the Registration Statement, the Pricing Prospectus and the Prospectus, during the period beginning 180 days prior
to the initial filing of the Registration Statement and ending on the Effective Date, no Member and/or any person associated or
affiliated with a Member has provided any investment banking, financial advisory and/or consulting services to the Company.
(ccc) Except
as disclosed in the FINRA Questionnaires provided to the Representatives, to the Company’s knowledge no officer, director,
or beneficial owner of any class of the Company’s securities (whether debt or equity, registered or unregistered, regardless
of the time acquired or the source from which derived) (any such individual or entity, a “Company Affiliate”) is a
Member or a person associated or affiliated with a Member.
(ddd) Except
as disclosed in the FINRA Questionnaires provided to the Representatives, to the Company’s knowledge, no Company Affiliate
is an owner of shares or other securities of any Member (other than securities purchased on the open market).
(eee) Except
as described in the Registration Statement, the Pricing Prospectus and the Prospectus, no proceeds from the sale of the Firm Shares
(excluding underwriting compensation as disclosed in the Registration Statement, Pricing Prospectus and the Prospectus) will be
paid by the Company to any Member, or any persons associated or affiliated with a Member.
(fff) The
Company has not issued any warrants or other securities, or granted any options, directly or indirectly to anyone who is a Participating
Member (as defined in Rule 5110(j)(15) of the FINRA Manual) within the 180-day period prior to the initial confidential submission
of the Registration Statement.
(ggg) No
person to whom securities of the Company have been privately issued within the 180-day period prior to the initial filing date
of the Registration Statement has, to the Company’s knowledge, any relationship or affiliation or association with any Member
intending to participate in the Offering.
(hhh) To
the Company’s knowledge, no Member intending to participate in the Offering has a conflict of interest with the Company.
For this purpose, a “conflict of interest” means, if at the time of the Member’s participation in the Offering,
any of the following applies: (A) the securities are to be issued by the Member; (B) the Company controls, is controlled
by or is under common control with the Member or the Member’s associated persons; (C) at least 5% of the net offering
proceeds, not including underwriting compensation, are intended to be: (i) used to reduce or retire the balance of a loan
or credit facility extended by the Member, its affiliates and its associated persons, in the aggregate; or (ii) otherwise
directed to the Member, its affiliates and associated persons, in the aggregate; or (D) as a result of the Offering and
any transactions contemplated at the time of the Offering: (i) the Member will be an affiliate of the Company; (ii) the
Member will become publicly owned; or (iii) the Company will become a Member or form a broker-dealer subsidiary.
(iii) The
Company has not taken, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected
to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares.
(jjj) The
Company does not own an interest in any corporation, partnership, limited liability company, joint venture, trust or other entity.
(kkk) No
relationship, direct or indirect, exists between or among any of the Company or any affiliate of the Company, on the one hand,
and any director, director nominee, officer, stockholder, special advisor, customer or supplier of the Company or any affiliate
of the Company, on the other hand, which is required by the Act or the Exchange Act to be described in the Registration Statement,
Pricing Prospectus or the Prospectus that is not described as required. There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit
of any of the officers, directors or director nominees of the Company or any of their respective family members, except as disclosed
in the Registration Statement, Pricing Prospectus and the Prospectus. The Company has not extended or maintained credit, arranged
for the extension of credit, or renewed an extension of credit, in the form of a personal loan to or for any director or officer
of the Company.
(lll) The
Company has not offered, or caused the Underwriters to offer, the Shares to any person or entity with the intention of unlawfully
influencing: (a) a customer or supplier of the Company or any affiliate of the Company to alter the customer’s or supplier’s
level or type of business with the Company or such affiliate or (b) a journalist or publication to write or publish favorable
information about the Company or any such affiliate.
(mmm) Upon
delivery and payment for the Shares on the Closing Date and the filing of the Form 8-K, the Company will not be subject to
Rule 419 under the Act and none of the Company’s outstanding securities will be deemed to be a “penny stock”
as defined in Rule 3a51-1 under the Exchange Act.
(nnn) From
the time of the initial confidential submission of the Registration Statement to the Commission (or, if earlier, the first date
on which the Company engaged, directly or through any person authorized to act on its behalf, in any Testing-the-Waters Communication)
through the Execution Time, the Company has been and is an Emerging Growth Company. “Testing-the-Waters Communication”
means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Act.
(ooo) The
Company does not have any subsidiaries.
(ppp) As
of the time of filing of the Registration Statement, the Company was a “smaller reporting company,” as defined in Rule 12b-2
of the Exchange Act Regulations.
2. Subject
to the terms and conditions herein set forth, (a) the Company agrees to issue and sell to each of the Underwriters, and each
of the Underwriters agrees, severally and not jointly, to purchase from the Company, at a purchase price per share of Class A
Common Stock of $10.00, the number of Firm Shares set forth opposite the name of such Underwriter in Schedule I hereto and (b) in
the event and to the extent that the Underwriters shall exercise the election to purchase Optional Shares as provided below, the
Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at the purchase price per share set forth in clause (a) of this Section 2 (provided that the
purchase price per Optional Share shall be reduced by an amount per share equal to any dividends or distributions declared by the
Company and payable on the Firm Shares but not payable on the Optional Shares), that portion of the number of Optional Shares as
to which such election shall have been exercised (to be adjusted by you so as to eliminate fractional shares) determined by multiplying
such number of Optional Shares by a fraction, the numerator of which is the maximum number of Optional Shares which such Underwriter
is entitled to purchase as set forth opposite the name of such Underwriter in Schedule I hereto and the denominator of which is
the maximum number of Optional Shares that all of the Underwriters are entitled to purchase hereunder.
The Company hereby
grants to the Underwriters the right to purchase at their election up to 3,750,000 Optional Shares, at the purchase price per share
set forth in the paragraph above, for the sole purpose of covering sales of shares in excess of the number of Firm Shares, provided
that the purchase price per Optional Share shall be reduced by an amount per share equal to any dividends or distributions declared
by the Company and payable on the Firm Shares but not payable on the Optional Shares. Any such election to purchase Optional Shares
may be exercised only by written notice from you to the Company, given within a period of 45 calendar days after the date of this
Agreement, setting forth the aggregate number of Optional Shares to be purchased and the date on which such Optional Shares are
to be delivered, as determined by you but in no event earlier than the First Time of Delivery (as defined in Section 4 hereof)
or, unless you and the Company otherwise agree in writing, earlier than two or later than ten business days after the date of such
notice.
In addition to the
discount from the public offering price represented by the purchase price set forth in the first sentence of Section 2 of
this Agreement, the Company hereby agrees to pay to the Underwriters a deferred discount of $0.35 per Share (including both Firm
Shares and Optional Shares) purchased hereunder (the “Deferred Discount”). The Underwriters hereby agree that if no
Business Combination is consummated within the time period provided in the Trust Agreement and the funds held under the Trust Agreement
are distributed to the holders of the Shares sold pursuant to this Agreement (the “Public Stockholders,” which term
shall include any officers or directors of the Company solely to the extent they hold any Public Stock (as defined below)), (i) the
Underwriters will forfeit any rights or claims to the Deferred Discount and (ii) the trustee under the Trust Agreement is
authorized to distribute the Deferred Discount to the Public Stockholders on a pro rata basis.
3. Upon
the authorization by you of the release of the Firm Shares, the several Underwriters propose to offer the Firm Shares for sale
upon the terms and conditions set forth in the Pricing Prospectus and the Prospectus (the “Offering”).
4. (a) The
Shares to be purchased by each Underwriter hereunder, in definitive or book-entry form, and in such authorized denominations and
registered in such names as the Representatives may request upon at least forty-eight hours’ prior notice to the Company
shall be delivered by or on behalf of the Company to the Representatives, through the facilities of the Depository Trust Company
(“DTC”), for the account of such Underwriter, against payment by or on behalf of such Underwriter of the purchase price
therefor by wire transfer of Federal (same-day) funds to the account specified by the Company to the Representatives at least forty-eight
hours in advance. The Company will cause the certificates, if any, representing the Shares to be made available for checking and
packaging at least twenty-four hours prior to the Time of Delivery (as defined below) with respect thereto at the office of DTC
or its designated custodian (the “Designated Office”). The time and date of such delivery and payment shall be, with
respect to the Firm Shares, 9:30 a.m., New York City time, on [___________], 2021 or such other time and date as the Representatives
and the Company may agree upon in writing, and, with respect to the Optional Shares, 9:30 a.m., New York time, on the date specified
by the Representatives in the written notice given by the Representatives of the Underwriters’ election to purchase such
Optional Shares, or such other time and date as the Representatives and the Company may agree upon in writing. Such time and date
for delivery of the Firm Shares is herein called the “First Time of Delivery”, such time and date for delivery of the
Optional Shares, if not the First Time of Delivery, is herein called the “Second Time of Delivery”, and each such time
and date for delivery is herein called a “Time of Delivery”.
(b) The
documents to be delivered at each Time of Delivery by or on behalf of the parties hereto pursuant to Section 8 hereof, including
the cross receipt for the Shares and any additional documents requested by the Underwriters pursuant to Section 8(l) hereof,
will be delivered at the offices of Skadden, Arps, Slate, Meagher & Flom LLP at 525 University Ave., Palo Alto, CA 94301
(the “Closing Location”), and the Shares will be delivered at the Designated Office, all at such Time of Delivery.
A meeting will be held at the Closing Location at 4 p.m., New York City time, on the New York Business Day next preceding such
Time of Delivery, at which meeting the final drafts of the documents to be delivered pursuant to the preceding sentence will be
available for review by the parties hereto. For the purposes of this Section 4, “New York Business Day” shall
mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York City are
generally authorized or obligated by law or executive order to close.
5. The
Company agrees with each of the Underwriters:
(a) To
prepare the Prospectus in a form approved by you and to file such Prospectus pursuant to Rule 424(b) under the Act not
later than the Commission’s close of business on the second business day following the execution and delivery of this Agreement,
or, if applicable, such earlier time as may be required by Rule 430A(a)(3) under the Act; to make no further amendment
or any supplement to the Registration Statement or the Prospectus prior to the last Time of Delivery which shall be disapproved
by you promptly after reasonable notice thereof; to advise you, promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes effective or any amendment or supplement to the Prospectus has
been filed and to furnish you with copies thereof; to file promptly all material required to be filed by the Company with the Commission
pursuant to Rule 433(d) under the Act; to advise you, promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or other prospectus
in respect of the Shares, of the suspension of the qualification of the Shares for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or the Prospectus or for additional information; and, in the event of the issuance of any stop order
or of any order preventing or suspending the use of any Preliminary Prospectus or other prospectus or suspending any such qualification,
to promptly use its best efforts to obtain the withdrawal of such order;
(b) Promptly
from time to time to take such action as you may reasonably request to qualify the Shares for offering and sale under the securities
laws of such jurisdictions as you may request and to comply with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete the distribution of the Shares, provided that in connection
therewith the Company shall not be required to qualify as a foreign corporation (where not otherwise required) or to file a general
consent to service of process in any jurisdiction (where not otherwise required);
(c) Prior
to 10:00 a.m., New York City time, on the New York Business Day next succeeding the date of this Agreement and from time to time,
to furnish the Underwriters with written and electronic copies of the Prospectus in New York City in such quantities as you may
reasonably request, and, if the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under
the Act) is required at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection
with the offering or sale of the Shares and if at such time any event shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus (or
in lieu thereof, the notice referred to in Rule 173(a) under the Act) is delivered, not misleading, or, if for any other
reason it shall be necessary during such same period to amend or supplement the Prospectus in order to comply with the Act, to
notify you and upon your request to prepare and furnish without charge to each Underwriter and to any dealer in securities as many
written and electronic copies as you may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such compliance; and in case any Underwriter is required to deliver a prospectus
(or in lieu thereof, the notice referred to in Rule 173(a) under the Act) in connection with sales of any of the Shares
at any time nine months or more after the time of issue of the Prospectus, upon your request but at the expense of such Underwriter,
to prepare and deliver to such Underwriter as many written and electronic copies as you may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) To
make generally available to its securityholders as soon as practicable, but in any event not later than sixteen months after the
effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earnings statement of the
Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including, at the option of the Company, Rule 158); provided that any documents
filed with the Commission pursuant to Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”) shall be deemed
to have been furnished or delivered to you pursuant to this paragraph;
(e) (1) The
Company will not, without the prior written consent of the Representatives, (x) offer, sell, contract to sell, pledge, hedge
or otherwise dispose of (or enter into any transaction that is designed to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Company or any affiliate
of the Company or any person in privity with the Company or any affiliate of the Company), directly or indirectly, including the
filing (or participation in the filing) of a registration statement with the Commission in respect of, or establish or increase
a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange
Act with respect to, any other shares of Class A Common Stock or any securities convertible into, or exercisable, or exchangeable
for, shares of Class A Common Stock or publicly announce an intention to effect any such transaction during the period commencing
on the date hereof and ending 180 days after the date of this Agreement; provided, however, that the Company may (1) issue
and sell the Private Placement Shares, (2) register with the Commission pursuant to the Registration Rights Agreement, in
accordance with the terms of the Registration Rights Agreement, the resale of the Founder Shares, the Private Placement Shares,
and Class A Common Stock that may be issued upon conversion of working capital loans, and (3) issue securities in connection
with a Business Combination, or (y) release the Sponsor or any officer, director or director nominee from the 180-day lock-up
contained in the Insider Letters.
(2) Intentionally
Omitted.
(f) The
Company will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected
to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
(g) For
a period commencing on the effective date of the Registration Statement and until the Termination Date (as defined below), to furnish
to its stockholders as soon as practicable after the end of each fiscal year an annual report (including a balance sheet and statements
of income, stockholders’ equity and cash flows of the Company and its consolidated subsidiaries certified by independent
public accountants) and, as soon as practicable after the end of each of the first three quarters of each fiscal year (beginning
with the fiscal quarter ending after the effective date of the Registration Statement), to make available to its stockholders consolidated
summary financial information of the Company and its subsidiaries for such quarter in reasonable detail; provided that any documents
filed with the Commission pursuant to shall be deemed to have been furnished or delivered to you pursuant to this paragraph;
(h) During
a period of five years from the effective date of the Registration Statement or until such earlier time as the Liquidation occurs
or the Company is acquired or completes a going private transaction in a transaction where the Shares are no longer outstanding
(the “Termination Date”), to furnish to you copies of all reports or other communications (financial or other)
furnished to stockholders, and to deliver to you (i) as soon as they are available, copies of any reports and financial statements
furnished to or filed with the Commission or any national securities exchange on which any class of securities of the Company is
listed; and (ii) such additional information concerning the business and financial condition of the Company as you may from
time to time reasonably request (such financial statements to be on a consolidated basis to the extent the accounts of the Company
and its subsidiaries are consolidated in reports furnished to its stockholders generally or to the Commission); provided that any
documents filed with the Commission pursuant to EDGAR shall be deemed to have been furnished or delivered to you pursuant to this
paragraph;
(i) For
a period commencing on the Effective Date and ending five (5) years from the date of the consummation of the Business Combination
or until such earlier time at which the Liquidation occurs, the Company will use its best efforts to maintain the registration
of the Shares under the provisions of the Exchange Act, except after giving effect to a going private transaction after the completion
of a Business Combination. The Company will not deregister the Shares under the Exchange Act (except in connection with a going
private transaction after the completion of a Business Combination) without the prior written consent of the Representative.
(j) To
use the net proceeds received by it from the sale of the Shares pursuant to this Agreement in the manner specified in the Pricing
Prospectus under the caption “Use of Proceeds”;
(k) To
use its best efforts to list for quotation the Shares on The Nasdaq Capital Market;
(l) On
the date hereof, to retain its independent registered public accounting firm to audit the balance sheet of the Company as of the
Closing Date (the “Audited Balance Sheet”) reflecting the receipt by the Company of the proceeds of the Offering on
the Closing Date. As soon as the Audited Balance Sheet becomes available, the Company shall promptly, but not later than four Business
Days after the Closing Date, file a Current Report on Form 8-K with the Commission, which Report shall contain the Audited
Balance Sheet. Additionally, upon the Company’s receipt of the proceeds from the exercise of all or any portion of the option
provided for in Section 2 hereof, the Company shall promptly, but not later than four Business Days after the receipt of such
proceeds, file a Current Report on Form 8-K with the Commission, which report shall disclose the Company’s sale of the
Optional Shares and its receipt of the proceeds therefrom;
(m) For
a period commencing on the Effective Date and ending on the Termination Date, the Company, at its expense, shall cause its regularly
engaged independent registered public accounting firm to review (but not audit) the Company’s financial statements for each
of the first three fiscal quarters prior to the announcement of quarterly financial information, the filing of the Company’s
Form 10-Q quarterly report and the mailing, if any, of quarterly financial information to stockholders.
(n) To
file with the Commission such information on Form 10-Q or Form 10-K as may be required by Rule 463 under the Act;
(o) If
the Company elects to rely upon Rule 462(b), the Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and the
Company shall at the time of filing either pay to the Commission the filing fee for the Rule 462(b) Registration Statement
or give irrevocable instructions for the payment of such fee pursuant to Rule 111(b) under the Act;
(p) For
a period commencing on the effective date of the Registration Statement and ending on the Termination Date, the Company shall retain
a transfer agent;
(q) Upon
request of any Underwriter, to furnish, or cause to be furnished, to such Underwriter an electronic version of the Company’s
trademarks, servicemarks and corporate logo, if any, for use on the website, if any, operated by such Underwriter for the purpose
of facilitating the on-line offering of the Shares (the “License”); provided, however, that the License shall
be used solely for the purpose described above, is granted without any fee and may not be assigned or transferred;
(r) The
Company will not consummate an initial Business Combination with any entity that is affiliated with the Sponsor or any of the Company’s
officers or directors unless it or a committee of independent members of the Company’s Board of Directors obtains an opinion
from an independent investment banking firm which is a member of FINRA, or from an independent accounting firm, that such initial
Business Combination is fair to the Company from a financial point of view. The Company shall not pay the Sponsor or its affiliates
or any of the Company’s officers, directors or any of their respective affiliates any fees or compensation for services rendered
to the Company prior to, or in connection with, the consummation of an initial Business Combination except as disclosed in the
Registration Statement.
(s) For
a period of 60 days’ following the effective date of the Registration Statement, in the event any person or entity (regardless
of any FINRA affiliation or association) is engaged to assist the Company in its search for a merger candidate or to provide any
other merger and acquisition services, or has provided or will provide any investment banking, financial, advisory and/or consulting
services to the Company, the Company agrees that it shall promptly provide to the Representatives and their counsel a notification
prior to entering into the agreement or transaction relating to a potential Business Combination: (i) the identity of the
person or entity providing any such services; (ii) complete details of all such services and copies of all agreements
governing such services prior to entering into the agreement or transaction; and (iii) justification as to why the value
received by any person or entity for such services is not underwriting compensation for the Offering.
(t) The
Company agrees that proper disclosure of any arrangement or potential arrangement that the Company has with any person or entity
to assist the Company in its search for a merger candidate or to provide any other merger and acquisition services or investment
banking, financial, advisory and/or consulting services will be made in the tender offer materials or proxy statement, as applicable,
which the Company may file in connection with the Business Combination for purposes of offering redemption of shares held by its
stockholders or for soliciting stockholder approval, as applicable. To the extent that the Company discloses arrangements with
respect to any of the Representatives, the Company will provide the applicable Representative with an opportunity to review and
comment on any such tender offer materials or proxy statement.
(u) The
Company shall advise FINRA, the Representatives and their counsel if it is aware that any 10% or greater stockholder of the Company
becomes an affiliate or associated person of a Member participating in the distribution of the Shares.
(v) The
Company shall cause the proceeds of the Offering and the sale of the Private Placement Shares held in the Trust Account to be invested
only in United States government treasury bills with a maturity of 185 days or less or in money market funds meeting certain conditions
under Rule 2a-7 under the Investment Company Act as set forth in the Trust Agreement and disclosed in the Pricing Prospectus
and the Prospectus. The Company will otherwise conduct its business in a manner so that it will not become subject to the Investment
Company Act. Furthermore, once the Company consummates an initial Business Combination, it will not be required to register as
an investment company under the Investment Company Act.
(w) During
the period prior to the Company’s initial Business Combination or Liquidation, the Company may instruct the trustee under
the Trust Agreement to release from the Trust Account, (i) solely with respect to interest from the Trust Account, the amounts
necessary to pay franchise and income tax obligations and (ii) to pay Public Stockholders who properly redeem their Public
Stock in connection with a vote to approve an amendment to the Amended and Restated Certificate of Incorporation (x) to modify
the substance or timing of the Company’s obligation to redeem 100% of our public shares if the Company has not consummated
an initial Business Combination within twenty-four (24) months from the closing of this offering or (y) with respect to any
other provisions relating to shareholders’ rights or pre-initial Business Combination activity. Otherwise, all funds held
in the Trust Account (including any interest income earned on the amounts held in the Trust Account (net of taxes payable thereon
in accordance with the preceding sentence)) will remain in the Trust Account until the earlier of the consummation of the Company’s
initial Business Combination or the Liquidation; provided, however, that in the event of the Liquidation, up to $100,000
of interest income may be released to the Company if the proceeds of the Offering held outside of the Trust Account are not sufficient
to cover the costs and expenses associated with implementing the Company’s plan of dissolution.
(x) The
Company will reserve and keep available that maximum number of its authorized but unissued securities that are issuable upon the
conversion of the Founder Shares.
(y) Prior
to the consummation of an initial Business Combination or the Liquidation, the Company shall not issue any shares of Class A
Common Stock, warrants or any options or other securities convertible into shares of Common Stock, or any preferred shares, in
each case, that participate in any manner in the Trust Account or that vote as a class with the shares of Class A Common Stock
on a Business Combination.
(z) Prior
to the consummation of an initial Business Combination or the Liquidation, the Company’s audit committee will review on a
quarterly basis all payments made to the Sponsor, to the Company’s officers or directors, or to the Company’s or any
of such other persons’ respective affiliates.
(aa) The
Company agrees that it will use commercially reasonable efforts to prevent the Company from becoming subject to Rule 419 prior
to the consummation of any Business Combination, including, but not limited to, using its best efforts to prevent any of the Company’s
outstanding securities from being deemed to be a “penny stock” as defined in Rule 3a51-1 under the Exchange Act
during such period.
(bb) To
the extent required by Rule 13a-15(e) under the Exchange Act, the Company will maintain “disclosure controls and
procedures” (as defined under Rule 13a-15(e) under the Exchange Act) and, to the extent required by Rule 13a-15(f) under
the Exchange Act, a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions
are executed in accordance with management’s general or specific authorization, (ii) transactions are recorded as necessary
in order to permit preparation of financial statements in accordance with GAAP and to maintain accountability for assets, (iii) access
to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect
to any differences.
(cc) The
Company shall not take any action or omit to take any action that would cause the Company to be in breach or violation of its Amended
and Restated Certificate of Incorporation or bylaws.
(dd) The
Company will seek to have all vendors, service providers (other than independent accountants), prospective target businesses, lenders
or other entities with which it does business enter into agreements waiving any right, title, interest or claim of any kind in
or to any monies held in the Trust Account for the benefit of the Public Stockholders. The Company may forego obtaining such waivers
only if the Company shall have received the approval of any of its Chief Executive Officers.
(ee) The
Company may consummate the initial Business Combination and conduct redemptions of shares of Class A Common Stock for cash
upon consummation of such Business Combination without a stockholder 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 stockholder of the Company with the opportunity prior to the
consummation of the initial Business Combination to redeem the shares of Class A Common Stock held by such stockholder for
an amount of cash equal to (A) the aggregate amount then on deposit in the Trust Account as of two business days prior to
the consummation of the initial Business Combination, representing (x) the proceeds held in the Trust Account from the Offering
and the sale of the Private Placement Shares and (y) any interest income earned on the funds held in the Trust Account not
previously released to pay franchise and income taxes, divided by (B) the total number of Shares sold in the Offering (the
“Public Stock”) then outstanding, subject to the limitation that no redemptions will take place if all of the redemptions
would cause our net tangible assets to be less than $5,000,001. If, however, a stockholder vote is required by law or stock exchange
listing requirement in connection with the initial Business Combination or the Company decides to hold a stockholder vote for business
or other legal reasons, the Company will submit such Business Combination to the Company’s stockholders for their approval
(“Business Combination Vote”). With respect to the initial Business Combination Vote, if any, the Sponsor, officers
and directors have agreed to vote all of their Founder Shares, the Private Placement Shares, and any other shares of Class A
Common Stock purchased during or after the Offering in favor of the Company’s initial Business Combination. If the Company
seeks stockholder approval of the initial Business Combination, the Company will offer to each Public Stockholder holding shares
of Class A Common Stock the right to have its shares redeemed in conjunction with a proxy solicitation pursuant to the proxy
rules of the Commission at a per share redemption price (the “Redemption Price”) equal to (I) the aggregate
amount then on deposit in the Trust Account as of two business days prior to the consummation of the initial Business Combination,
representing (1) the proceeds held in the Trust Account from the Offering and the sale of the Private Placement Shares and
(2) any interest income earned on the funds held in the Trust Account not previously released to pay franchise and income
taxes, divided by (II) the total number of Public Stock then outstanding, subject to the limitation that no redemptions will
take place if all of the redemptions would cause our net tangible assets to be less than $5,000,001. If the Company seeks stockholder
approval of the initial Business Combination, the Company may proceed with such Business Combination only if a majority of the
outstanding shares of common stock voted by the stockholders at a duly held stockholders meeting are voted to approve such Business
Combination. If, after seeking and receiving such stockholder approval, the Company elects to so proceed, it will redeem shares,
at the Redemption Price, from those Public Stockholders who affirmatively requested such redemption. Only Public Stockholders holding
shares of Class A Common Stock who properly exercise their redemption rights, in accordance with the applicable tender offer
or proxy materials related to such Business Combination and the Amended and Restated Certificate of Incorporation and bylaws of
the Company, shall be entitled to receive distributions from the Trust Account in connection with an initial Business Combination,
and the Company shall pay no distributions with respect to any other holders of shares of capital stock of the Company in connection
therewith. In the event that the Company does not effect a Business Combination by twenty-four (24) months from the closing of
the Offering, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably
possible but not more than ten (10) business days thereafter, redeem 100% of the Public Stock, at a per-share price, payable
in cash, equal to the aggregate amount then on deposit in the Trust Account (including interest not previously released to the
Company to pay franchise and income taxes, and less up to $100,000 of interest to pay dissolution expenses), divided by the number
of then outstanding Public Stock, which redemption will completely extinguish Public Stockholders’ rights as stockholders
(including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly
as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the
Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware
law to provide for claims of creditors and the requirements of other applicable law. Only Public Stockholders holding shares of
Class A Common Stock shall be entitled to receive such redemption amounts and the Company shall pay no such redemption amounts
or any distributions in liquidation with respect to any other shares of the Company. The Sponsor and the Company’s officers
and directors have agreed that they will not propose any amendment to the Amended and Restated Certificate of Incorporation that
would affect the substance or timing of the Company’s obligation to redeem 100% of the outstanding Public Stock if the Company
has not consummated a Business Combination within twenty-four months from the closing of the Offering or with respect to any other
material provisions relating to stockholders’ rights or pre-initial Business Combination activity, unless the Company offers
to redeem the Public Stock in connection with such amendment, as described in the Pricing Prospectus and Prospectus.
(ff) In
the event that the Company desires or is required by an applicable law or regulation to cause an announcement (a “Business
Combination Announcement”) to be placed in The Wall Street Journal, The New York Times or any other news or media publication
or outlet or to be made via a public filing with the Commission announcing the consummation of an initial Business Combination
that indicates that the Underwriters were the underwriters in the Offering, the Company shall supply the Representatives with a
draft of the Business Combination Announcement and provide the Representatives with a reasonable advance opportunity to comment
thereon, subject to the agreement of the Underwriters to keep confidential such draft announcement in accordance with the Representatives’
standard policies regarding confidential information.
(gg) Upon
the consummation of the initial Business Combination, the Company will direct the Trustee to pay the Underwriters the Deferred
Discount out of the proceeds of the Offering held in the Trust Account. The Underwriters shall have no claim to payment of any
interest earned on the portion of the proceeds held in the Trust Account representing the Deferred Discount. If the Company fails
to consummate its initial Business Combination within twenty-four months from the closing of the Offering (or later if the Public
stockholders approve an amendment to the Amended and Restated Certificate of Incorporation extending such deadline), the Deferred
Discount will not be paid to the Underwriters and will, instead, be included in the distribution of the proceeds held in the Trust
Account made to the Public Stockholders upon Liquidation. In connection with any such Liquidation, the Underwriters forfeit any
rights or claims to the Deferred Discount.
(hh) If
at any time following the distribution of any Written Testing-the-Waters Communication, there occurred or occurs an event or development
as a result of which such Written Testing-the-Waters Communication included or would include any untrue statement of a material
fact or omitted or would omit to state any material fact necessary to make the statements therein in light of the circumstances
under which they were made at such time, not misleading, the Company will promptly (i) notify the Representatives so that
use of the Written Testing-the-Waters Communication may cease until it is amended or supplemented; (ii) amend or supplement,
at its own expense, such Written Testing-the-Waters Communication to eliminate or correct such untrue statement or omission;
and (iii) supply any amendment or supplement to the Representatives in such quantities as may be reasonably requested.
(ii) The
Company will promptly notify the Representatives if the Company ceases to be an Emerging Growth Company at any time prior to the
later of (i) completion of the distribution of the Shares within the meaning of the Act and (ii) completion of the 180-day
restricted period referred to in Section 5 hereof.
(jj) Upon
the earlier to occur of the expiration or termination of the Underwriters’ option to purchase Optional Shares, the Company
shall cancel or otherwise effect the forfeiture of Founder Shares from the Sponsor in an aggregate amount equal to the number of
Founder Shares determined by multiplying (a) 937,500 by (b) a fraction, (i) the numerator of which is 3,750,000
minus the number of Optional Shares purchased by the Underwriters upon the exercise of their option to purchase Optional Shares,
and (ii) the denominator of which is 3,750,000. For the avoidance of doubt, if the Underwriters exercise their option to purchase
Optional Shares in full, the Company shall not cancel or otherwise affect the forfeiture of the Founder Shares pursuant to this
subsection.
6. (a)The
Company represents and agrees that it has not made or used and will not make or use any offer relating to the Shares that would
constitute an Issuer Free Writing Prospectus;
(b) The
Company represents that it has satisfied and agrees that it will satisfy the conditions under Rule 433 under the Act to avoid
a requirement to file with the Commission any electronic road show;
(c) The
Company will endeavor in good faith, in cooperation with the Representatives to qualify the Securities for offering and sale under
the securities laws of such jurisdictions as the Representatives may reasonably designate, provided that no such qualification
shall be required in any jurisdiction where, as a result thereof, the Company would be subject to service of general process or
to taxation as a foreign corporation doing business in such jurisdiction. Until the earliest of (i) the date on which all
Underwriters shall have ceased to engage in market-making activities in respect of the Securities, (ii) the date on which
the Securities are listed on The Nasdaq Capital Market (or any successor thereto), (iii) a going private transaction after
the completion of a Business Combination, and (iv) the date of the liquidation of the Company, in each jurisdiction where
such qualification shall be effected, the Company will, unless the Representatives agree that such action is not at the time necessary
or advisable, use all reasonable efforts to file and make such statements or reports at such times as are or may be required to
qualify the Securities for offering and sale under the securities laws of such jurisdiction.
(d) The
Company agrees that if at any time following issuance of a Written Testing-the-Waters Communication any event occurred or occurs
as a result of which such Written Testing-the-Waters Communication would conflict with the information in the Registration Statement,
the Pricing Prospectus or the Prospectus or would include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the circumstances then prevailing, not misleading, the
Company will give prompt notice thereof to the Representatives and, if requested by the Representatives, will prepare and furnish
without charge to each Underwriter a Written Testing-the-Waters Communication or other document which will correct such conflict,
statement or omission;
(e) The
Company represents and agrees that (i) it has not engaged in, or authorized any other person to engage in, any Testing-the-Waters
Communications, other than Testing-the-Waters Communications with the prior consent of the Representatives with entities that the
Company reasonably believes are qualified institutional buyers as defined in Rule 144A under the Act or institutions that
are accredited investors as defined in Rule 501(a) under the Act; and (ii) it has not distributed, or authorized
any other person to distribute, any Written Testing-the-Waters Communications, other than those distributed with the prior consent
of the Representatives that are listed on Schedule III(d) hereto; and the Company reconfirms that the Underwriters have been
authorized to act on its behalf in engaging in Written Testing-the-Waters Communications;
(f) Each
Underwriter represents and agrees that any Testing-the-Waters Communications undertaken by it were with entities that such Underwriter
reasonably believes are qualified institutional buyers as defined in Rule 144A under the Act or institutions that are accredited
investors as defined in Rule 501(a) under the Act.
7. The
Company covenants and agrees with the several Underwriters that the Company will pay or cause to be paid the following: (i) the
fees, disbursements and expenses of the Company’s counsel and accountants in connection with the registration of the Shares
under the Act and all other expenses in connection with the preparation, printing, reproduction and filing of the Registration
Statement, any Preliminary Prospectus, any Written Testing-the-Waters Communication and the Prospectus and amendments and supplements
thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Blue Sky Memorandum, closing documents (including any compilations thereof)
and any other documents in connection with the offering, purchase, sale and delivery of the Shares; (iii) all expenses in
connection with the qualification of the Shares for offering and sale under state securities laws as provided in Section 5(b) hereof,
including the fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with
the Blue Sky survey; (iv) all fees and expenses in connection with listing the Shares on The Nasdaq Capital Market; (v) the
filing fees incident to, and the fees and disbursements of counsel for the Underwriters in connection with, any required review
by FINRA of the terms of the sale of the Shares (such fees and disbursements of counsel to the Underwriters not to exceed $25,000);
(vi) the cost of preparing stock certificates; (vii) the cost and charges of any trustee, warrant agent, transfer
agent or registrar; and (viii) all other costs and expenses incident to the performance of its obligations hereunder
which are not otherwise specifically provided for in this Section 7. It is understood, however, that, except as provided in
this Section 7, and Sections 9 and 12 hereof, the Underwriters will pay all of their own costs and expenses, including the
fees of their counsel.
8. The
obligations of the Underwriters hereunder, as to the Shares to be delivered at each Time of Delivery, shall be subject, in their
discretion, to the condition that all representations and warranties and other statements of the Company herein are, at and as
of the Applicable Time and such Time of Delivery, true and correct, the condition that the Company shall have performed all of
its obligations hereunder theretofore to be performed, and the following additional conditions:
(a) The
Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the Act within the applicable time
period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 5(a) hereof;
all material required to be filed by the Company pursuant to Rule 433(d) under the Act shall have been filed with the
Commission within the applicable time period prescribed for such filing by Rule 433; if the Company has elected to rely upon
Rule 462(b) under the Act, the Rule 462(b) Registration Statement shall have become effective by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement; no stop order suspending the effectiveness of the Registration Statement
or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or, to the Company’s
knowledge, threatened by the Commission; no stop order suspending or preventing the use of the Pricing Prospectus or Prospectus
shall have been initiated or, to the Company’s knowledge, threatened by the Commission; and all requests for additional information
on the part of the Commission shall have been complied with to your reasonable satisfaction;
(b) Skadden,
Arps, Slate, Meagher & Flom LLP, counsel for the Underwriters, shall have furnished to you such written opinion or opinions,
in form and substance reasonably satisfactory to the Representatives, dated such Time of Delivery, and such counsel shall have
received such papers and information as they may reasonably request to enable them to pass upon such matters;
(c) Goodwin
Proctor LLP, counsel for the Company, shall have furnished to the Representatives their written opinion, dated such Time of Delivery,
in form and substance reasonably satisfactory to the Representatives;
(d) On
the date of the Prospectus at a time prior to the execution of this Agreement, at 9:30 a.m., New York City time, on the effective
date of any post-effective amendment to the Registration Statement filed subsequent to the date of this Agreement and also at each
Time of Delivery, Withum shall have furnished to you a letter or letters, dated the respective dates of delivery thereof, in form
and substance reasonably satisfactory to you;
(e) On
the effective date of the Registration Statement, the Company shall have delivered to the Representatives executed copies of the
Trust Agreement, the Founder’s Subscription Agreement, the Private Placement Shares Purchase Agreement, the Insider Letters
and the Registration Rights Agreement;
(f) (i)The
Company shall not have sustained since the date of the latest audited financial statements included in the Pricing Prospectus any
loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Pricing
Prospectus, and (ii) since the respective dates as of which information is given in the Pricing Prospectus, there shall not
have been any change in the capital stock or long-term debt of the Company or any change or effect, or any development involving
a prospective change or effect, in or affecting (x) the business, properties, management, financial position, stockholders’
equity or results of operations of the Company, taken as a whole, except as set forth or contemplated in the Pricing Prospectus
and the Prospectus, or (y) the ability of the Company to perform its obligations under this Agreement, including the issuance
and sale of the Shares, or to consummate the transactions contemplated in the Pricing Prospectus and the Prospectus, the effect
of which, in any such case described in clause (i) or (ii), is in your judgment so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering or the delivery of the Shares being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Pricing Prospectus and the Prospectus;
(g) On
or after the Applicable Time (i) no downgrading shall have occurred in the rating accorded the Company’s debt securities
or preferred stock by any “nationally recognized statistical rating organization”, as that term is defined by the Commission
for purposes of Rule 436(g)(2) under the Act, and (ii) no such organization shall have publicly announced that it
has under surveillance or review, with possible negative implications, its rating of any of the Company’s debt securities
or preferred stock;
(h) Since
the date of the most recent financial statements included in the Prospectus, there has been no Material Adverse Effect, except
as set forth in the Prospectus;
(i) On
or after the Applicable Time there shall not have occurred any of the following: (i) a suspension or material limitation in
trading in securities generally on The Nasdaq Capital Market; (ii) a suspension or material limitation in trading in the Company’s
securities on The Nasdaq Capital Market; (iii) a general moratorium on commercial banking activities declared by either Federal
or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in
the United States; (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United
States of a national emergency or war or (v) the occurrence of any other calamity or crisis or any change in financial, political
or economic conditions in the United States or elsewhere, if the effect of any such event specified in clause (iv) or (v) in
your judgment makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Shares being delivered
at such Time of Delivery on the terms and in the manner contemplated in the Pricing Prospectus and the Prospectus;
(j) The
Shares to be sold at such Time of Delivery shall have been duly listed, subject to notice of issuance, on the Exchange;
(k) The
Company shall have obtained and delivered to the Underwriters executed copies of the Insider Letters from Brendan Wallace and Andriy
Mykhaylovskyy, substantially to the effect set forth in Section 5(e) hereof in form and substance reasonably satisfactory
to you;
(l) The
Company shall have complied with the provisions of Section 5(c) hereof with respect to the furnishing of prospectuses
on the New York Business Day next succeeding the date of this Agreement; and
(m) The
Company shall have furnished or caused to be furnished to you at such Time of Delivery certificates of officers of the Company
reasonably satisfactory to you as to the accuracy of the representations and warranties of the Company herein at and as of such
Time of Delivery, as to the performance by the Company of all of its obligations hereunder to be performed at or prior to such
Time of Delivery, as to the matters set forth in subsections (a) and (e) of this Section and as to such other matters
as you may reasonably request.
9. (a)The
Company will indemnify and hold harmless each Underwriter, the directors, officers, employees, affiliates and agents of each Underwriter,
each person who controls any Underwriter within the meaning of either the Act or otherwise and each affiliate of each Underwriter,
against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any Preliminary
Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus,
any “roadshow” as defined in Rule 433(h) under the Act (a “roadshow”), any “issuer information”
filed or required to be filed pursuant to Rule 433(d) under the Act or any Testing-the-Waters Communication, or arise
out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, and will reimburse each Underwriter for any documented out-of-pocket legal or other
expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or
any amendment or supplement thereto, or any Issuer Free Writing Prospectus or any Written Testing-the-Waters Communication, in
reliance upon and in conformity with the Underwriter Information.
(b) Each
Underwriter, severally and not jointly, will indemnify and hold harmless the Company, each of its directors and director nominees,
each of its officers who signs the Registration Statement, and each persons who controls the Company within the meaning of either
the Act or otherwise, against any losses, claims, damages or liabilities to which the Company may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any Preliminary
Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus,
or any roadshow or any Written Testing-the-Waters Communication, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission
was made in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment
or supplement thereto, or any Issuer Free Writing Prospectus, or any roadshow or any Written Testing-the-Waters Communication,
in reliance upon and in conformity with the Underwriter Information; and will reimburse the Company for any documented out-of-pocket
legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim
as such expenses are incurred. As used in this Agreement with respect to an Underwriter and an applicable document, “Underwriter
Information” shall mean the written information furnished to the Company by or on behalf of such Underwriter through the
Representatives expressly for use therein; it being understood and agreed upon that the only such information furnished by any
Underwriter consists of the following information in the Prospectus furnished on behalf of each Underwriter: the information contained
in the [•] paragraphs under the caption “Underwriting”.
(c) Promptly
after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection,
notify the indemnifying party in writing of the commencement thereof; provided that the failure to notify the indemnifying party
shall not relieve it from any liability that it may have under the preceding paragraphs of this Section 9 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided
further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified
party otherwise than under the preceding paragraphs of this Section 9. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under
such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise
or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or
claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf
of any indemnified party.
(d) If
the indemnification provided for in this Section 9 is unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Shares.
If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect
not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company on the one hand or the Underwriters on the other and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined
by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid
or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred
to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection
(d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting obligations and not joint.
(e) The
obligations of the Company under this Section 9 shall be in addition to any liability which the Company may otherwise have
and shall extend, upon the same terms and conditions, to each employee, officer and director of each Underwriter and each person,
if any, who controls any Underwriter within the meaning of the Act and each broker-dealer or other affiliate of any Underwriter;
and the obligations of the Underwriters under this Section 9 shall be in addition to any liability which the respective Underwriters
may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company including
any person who, with his or her consent, is named in the Registration Statement as about to become a director of the Company and
to each person, if any, who controls the Company within the meaning of the Act.
10. (a) If
any Underwriter shall default in its obligation to purchase the Shares which it has agreed to purchase hereunder at a Time of Delivery,
you may in your discretion arrange for you or another party or other parties to purchase such Shares on the terms contained herein.
If within thirty-six hours after such default by any Underwriter you do not arrange for the purchase of such Shares, then the Company
shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to
you to purchase such Shares on such terms. In the event that, within the respective prescribed periods, you notify the Company
that you have so arranged for the purchase of such Shares, or the Company notifies you that it has so arranged for the purchase
of such Shares, you or the Company shall have the right to postpone such Time of Delivery for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any amendments or supplements to the Registration Statement
or the Prospectus which in your opinion may thereby be made necessary. The term “Underwriter” as used in this Agreement
shall include any person substituted under this Section with like effect as if such person had originally been a party to
this Agreement with respect to such Shares.
(b) If,
after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by you and the
Company as provided in subsection (a) above, the aggregate number of such Shares which remains unpurchased does not exceed
one-eleventh of the aggregate number of all the Shares to be purchased at such Time of Delivery, then the Company shall have the
right to require each non-defaulting Underwriter to purchase the number of Shares which such Underwriter agreed to purchase hereunder
at such Time of Delivery and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on
the number of Shares which such Underwriter agreed to purchase hereunder) of the Shares of such defaulting Underwriter or Underwriters
for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If,
after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by you and the
Company as provided in subsection (a) above, the aggregate number of such Shares which remains unpurchased exceeds one-eleventh
of the aggregate number of all the Shares to be purchased at such Time of Delivery, or if the Company shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to purchase Shares of a defaulting Underwriter or
Underwriters, then this Agreement (or, with respect to the Second Time of Delivery, the obligations of the Underwriters to purchase
and of the Company to sell the Optional Shares) shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the Company and the Underwriters as provided in Section 7
hereof and the indemnity and contribution agreements in Section 9 hereof; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
11. The
respective indemnities, agreements, representations, warranties and other statements of the Company and the several Underwriters,
as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full
force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter
or any controlling person of any Underwriter, or the Company, or any officer or director or controlling person of the Company,
and shall survive delivery of and payment for the Shares.
12. If
this Agreement shall be terminated pursuant to Section 10 hereof, the Company shall not then be under any liability to any
Underwriter except as provided in Sections 7 and 9 hereof; but, if for any other reason, any Shares are not delivered by or
on behalf of the Company as provided herein or the Underwriters decline to purchase the Shares for any reason permitted under this
Agreement, the Company will reimburse the Underwriters through you for all documented out-of-pocket expenses approved in writing
by you, including the documented fees and disbursements of counsel, reasonably incurred by the Underwriters in making preparations
for the purchase, sale and delivery of the Shares not so delivered, but the Company shall then be under no further liability to
any Underwriter except as provided in Sections 7 and 9 hereof.
13. In
all dealings hereunder, the Representatives shall act on behalf of each of the Underwriters, and the parties hereto shall be entitled
to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by you jointly or by
Goldman Sachs & Co. LLC on behalf of you as the Representative.
All statements, requests,
notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representative in care of Goldman Sachs & Co. LLC, 200 West Street, New York, New
York 10282-2198, Attention: Registration Department; in care of [ ]; and if to
the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice to an Underwriter pursuant to Section 9(c) hereof
shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters’
Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Company by you upon request; provided,
however, that notices under subsection 5(e) shall be in writing, and if to the Underwriters shall be delivered or sent
by mail, telex or facsimile transmission to you as the representatives at Goldman Sachs & Co. LLC, 200 West Street, New
York, New York 10282-2198, Attention: Control Room; and if to the other parties to a lock-up letter to the address provided therein.
Any such statements, requests, notices or agreements shall take effect upon receipt thereof.
In accordance with
the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the underwriters
are required to obtain, verify and record information that identifies their respective clients, including the Company, which information
may include the name and address of their respective clients, as well as other information that will allow the underwriters to
properly identify their respective clients.
14. This
Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Company and, to the extent provided
in Sections 9 and 11 hereof, the officers and directors of the Company and each person who controls the Company or any Underwriter,
and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the Shares from any Underwriter shall be deemed a successor or assign
by reason merely of such purchase.
15. Time
shall be of the essence of this Agreement. As used herein, the term “business day” shall mean any day when the Commission’s
office in Washington, D.C. is open for business.
16. The
Company acknowledges and agrees that (i) the purchase and sale of the Shares pursuant to this Agreement is an arm’s-length
commercial transaction between the Company, on the one hand, and the several Underwriters, on the other, (ii) in connection
therewith and with the process leading to such transaction each Underwriter is acting solely as a principal and not the agent or
fiduciary of the Company, (iii) no Underwriter has assumed an advisory or fiduciary responsibility in favor of the Company
with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised
or is currently advising the Company on other matters) or any other obligation to the Company except the obligations expressly
set forth in this Agreement and (iv) the Company has consulted its own legal and financial advisors to the extent it deemed
appropriate. The Company agrees that it will not claim that the Underwriters, or any of them, has rendered advisory services of
any nature or respect, or owes a fiduciary or similar duty to the Company, in connection with such transaction or the process leading
thereto. None of the activities of the Underwriters in connection with the transactions contemplated herein constitutes a recommendation,
investment advice, or solicitation of any action by the Underwriters with respect to any entity or natural person.
17. This
Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Underwriters,
or any of them, with respect to the subject matter hereof.
18. This
Agreement and any transaction contemplated by this Agreement and any claim, controversy or dispute arising under or related thereto
shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflict
of laws that would results in the application of any other law than the laws of the State of New York. The Company agrees that
any suit or proceeding arising in respect of this Agreement or any transaction contemplated by this Agreement will be tried exclusively
in the U.S. District Court for the Southern District of New York or, if that court does not have subject matter jurisdiction, in
any state court located in The City and County of New York and the Company agrees to submit to the jurisdiction of, and to venue
in, such courts.
19. The
Company and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all
right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
20. This
Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one and the same instrument. Delivery of this Agreement
by one party to the other may be made by facsimile, electronic mail (including any electronic signature complying with the New
York Electronic Signatures and Records Act (N.Y. State Tech. §§ 301-309), as amended from time to time, or other applicable
law) or other transmission method, and the parties hereto agree that any counterpart so delivered shall be deemed to have been
duly and validly delivered and be valid and effective for all purposes.
21. Notwithstanding
anything herein to the contrary, the Company is authorized to disclose to any persons the U.S. federal and state income tax treatment
and tax structure of the potential transaction and all materials of any kind (including tax opinions and other tax analyses) provided
to the Company relating to that treatment and structure, without the Underwriters imposing any limitation of any kind. However,
any information relating to the tax treatment and tax structure shall remain confidential (and the foregoing sentence shall not
apply) to the extent necessary to enable any person to comply with securities laws. For this purpose, “tax structure”
is limited to any facts that may be relevant to that treatment.
22. Recognition
of the U.S. Special Resolution Regimes.
(a) In
the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime,
the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective
to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such
interest and obligation, were governed by the laws of the United States or a state of the United States.
(b) In
the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding
under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are
permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime
if this Agreement were governed by the laws of the United States or a state of the United States.
(c) As
used in this section:
“BHC Act Affiliate”
has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. §
1841(k).
“Covered Entity”
means any of the following:
(i) a “covered
entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(ii) a “covered
bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(iii) a “covered
FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right”
has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1,
as applicable.
“U.S. Special
Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and
(ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
If the foregoing is
in accordance with your understanding, please sign and return to us one for the Company and the Representatives plus one for each
counsel counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Underwriters, this letter and such
acceptance hereof shall constitute a binding agreement between each of the Underwriters and the Company. It is understood that
your acceptance of this letter on behalf of each of the Underwriters is pursuant to the authority set forth in a form of Agreement
among Underwriters, the form of which shall be submitted to the Company for examination upon request, but without warranty on your
part as to the authority of the signers thereof.
[Signature Page Follows]
| |
Very truly yours, |
| |
|
| |
[ ] |
| |
|
| |
By: |
|
| |
|
| |
|
Name: [ ] |
| |
|
Title: [ ] |
| Accepted as of the date hereof: |
|
| |
|
| Goldman Sachs & Co. LLC |
|
| |
|
| By: |
|
|
| |
Name: |
|
| |
Title: |
|
| |
|
| Deutsche Bank Securities Inc. |
|
| |
|
| By: |
|
|
| |
Name: |
|
| |
Title: |
|
| |
|
| By: |
|
|
| |
Name: |
|
| |
Title: |
|
| |
|
|
| |
On behalf of each of the Underwriters |
|
| SCHEDULE I |
| | |
| |
Number of
Optional |
| | |
| |
Shares to be |
| | |
Total Number of | |
Purchased if |
| | |
Firm Shares | |
Maximum Option |
| Underwriter | |
to
be Purchased | |
Exercised |
| Goldman Sachs & Co. LLC | |
| |
|
| Deutsche Bank Securities Inc. | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| | |
| |
|
| Total | |
| |
|
SCHEDULE II
(a) Issuer Free Writing Prospectuses not included in the
Pricing Disclosure Package:
None
(b) Additional Documents Incorporated by Reference:
None
(c) Information other than the Pricing Prospectus that
comprise the Pricing Disclosure Package:
The initial public offering price per
Share is $10.00.
The number of Shares purchased by the Underwriters
is [ . . . ].
(d) Written
Testing-the-Waters Communication:
None.
Exhibit 3.2
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
FIFTH WALL ACQUISITION CORP. I
December 18, 2020
Fifth Wall Acquisition Corp. I, a corporation
organized and existing under the laws of the State of Delaware (the “Corporation”), DOES HEREBY CERTIFY
AS FOLLOWS:
1. The name of the Corporation is “Fifth
Wall Acquisition Corp. I”. The original certificate of incorporation of the Corporation was filed with the Secretary
of State of the State of Delaware on November 23, 2020 (the “Original Certificate”).
2. This Amended and Restated Certificate
of Incorporation (the “Amended and Restated Certificate”), which both restates and amends the provisions of
the Original Certificate, was duly adopted in accordance with Sections 228, 242 and 245 of the General Corporation Law of the State
of Delaware, as amended from time to time (the “DGCL”).
3. This Amended and Restated Certificate
shall become effective on the date of filing with the Secretary of State of Delaware.
4. The text of the Original Certificate
is hereby restated and amended in its entirety to read as follows:
Article
I
The name of this corporation is Fifth Wall
Acquisition Corp. I (the “Corporation”).
Article
II
The address of the Corporation’s registered
office in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle, 19801. The name of the
registered agent at such address is The Corporation Trust Company.
Article
III
The purpose of the Corporation is to engage
in any lawful act or activity for which corporations may be organized under the DGCL.
Article
IV
The total number of shares of all classes
of capital stock, each with a par value of $0.0001 per share, which the Corporation shall have authority to issue is 111,000,000
shares, of which (a) 110,000,000 shares shall be common stock, including (i) 100,000,000 shares of Class A common stock (the “Class
A Common Stock”), (ii) 10,000,000 shares of Class B common stock (the “Class B Common Stock”, and
together with the Class A Common Stock, the “Common Stock”) and (b) 1,000,000 shares shall be preferred stock
(the “Preferred Stock”).
A. Preferred Stock. The Board of
Directors is expressly granting authority to issue shares of the Preferred Stock, in one or more series, and to fix for each
such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional or
other special rights and such qualifications, limitations or restrictions thereof as shall be stated and expressed in the
resolution or resolutions adopted by the Board of Directors providing for the issue of such series (a “Preferred
Stock Designation”) and as may be permitted by the DGCL. The number of authorized shares of Preferred Stock may be
increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders
of a majority of the voting power of all of the then outstanding shares of the capital stock of the Corporation entitled to
vote generally in the election of directors, voting together as a single class, without a separate vote of the holders of the
Preferred Stock, or any series thereof, unless a vote of any such holders is required pursuant to any Preferred Stock
Designation.
B. Common Stock.
(i) Except as otherwise
required by law or as otherwise provided in any Preferred Stock Designation, the holders of the Common Stock shall exclusively
possess all voting power.
(ii) Except as otherwise
required by law or as otherwise provided in any Preferred Stock Designation, the holders of shares of Common Stock shall be entitled
to one vote for each such share on each matter properly submitted to the stockholders on which the holders of the Common Stock
are entitled to vote.
(iii) Shares of Class
B Common Stock are convertible into shares of Class A Common Stock on a one-for-one basis (the “Initial Conversion Ratio”)
and shall automatically convert into Class A Common Stock at the time of the closing of the Business Combination (as defined below).
(iv) Notwithstanding
the Initial Conversion Ratio, in the case that additional shares of Class A Common Stock, or equity-linked securities, are issued
or deemed issued in excess of the amounts offered in the Corporation’s initial public offering of securities and related
to the closing of the Business Combination, all issued and outstanding shares of Class B Common Stock shall automatically convert
into shares of Class A Common Stock at the time of the closing of the Corporation’s initial merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business
Combination”) at a ratio for which:
| |
(x) |
the numerator shall be equal to the sum of (A) 25% of all shares of Class A Common Stock issued or issuable (upon the conversion or exercise of any equity-linked securities or otherwise) by the Corporation, related to or in connection with the consummation of the Business Combination (excluding any securities issued or issuable to any seller in the Business Combination) plus (B) the number of shares of Class B Common Stock issued and outstanding prior to the closing of the Business Combination; and |
| |
(y) |
the denominator shall be the number of shares of Class B Common Stock issued and outstanding prior to the closing of the Business Combination. |
Notwithstanding anything to the contrary
contained herein, in no event may the Class B Common Stock convert into Class A Common Stock at a ratio that is less than one-for-one.
The foregoing conversion
ratio shall be adjusted to account for any subdivision (by stock split, subdivision, exchange, stock dividend, reclassification,
recapitalization or otherwise) or combination (by reverse stock split, exchange, reclassification, recapitalization or otherwise)
or similar reclassification or recapitalization of the outstanding shares of Class A Common Stock into a greater or lesser number
of shares occurring after the original filing of this Amended and Restated Certificate without a proportionate and corresponding
subdivision, combination or similar reclassification or recapitalization of the outstanding shares of Class B Common Stock.
Upon the filing of this Amended and Restated
Certificate, each issued and outstanding share of common stock of the Corporation issued and outstanding immediately prior
to the filing of this Amended and Restated Certificate will be automatically reclassified as one share of Class B Common Stock.
Article
V
The name and mailing address of the incorporator
is as follows:
Danielle Shelbourne
c/o Goodwin Procter LLP
601 Marshall Street
Redwood City, CA 940635
Article
VI
In furtherance and not in limitation of
the powers conferred by statute, the Board of Directors of the Corporation (the “Board”) is expressly authorized
to make, alter, amend or repeal the bylaws of the Corporation (the “Bylaws”).
Article
VII
Elections of directors need not be by written
ballot unless otherwise provided in the Bylaws.
Article
VIII
Meetings of stockholders may be held within
or without the State of Delaware, as the Bylaws of the Corporation may provide. The books of the Corporation may be kept (subject
to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time
to time by the Board or in the Bylaws of the Corporation.
Article
IX
To the fullest extent permitted by the DGCL,
a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent
permitted by the DGCL.
The Corporation shall indemnify, to the
fullest extent permitted by applicable law, any director or officer of the Corporation who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (a “Proceeding”) by reason of the fact that he or she is or was a director, officer, employee
or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit
plans, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with any such Proceeding. The Corporation shall be required to indemnify a person in connection
with a Proceeding initiated by such person only if the Proceeding was authorized by the Board.
The Corporation shall have the power to
indemnify, to the extent permitted by the DGCL, as it presently exists or may hereafter be amended from time to time, any employee
or agent of the Corporation who was or is a party or is threatened to be made a party to any Proceeding by reason of the fact that
he or she is or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, against expenses (including attorneys’ fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by such person in connection with any such Proceeding.
Neither any amendment nor repeal of this
Article, nor the adoption of any provision of this Amended and Restated Certificate inconsistent with this Article, shall eliminate
or reduce the effect of this Article in respect of any matter occurring, or any cause of action, suit or claim accruing or arising
or that, but for this Article, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision.
Article
X
Except as provided in Article IX
above, the Corporation reserves the right to amend, alter, change or repeal any provision contained in this Amended and Restated
Certificate, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted
subject to this reservation.
Article
XI
Unless the Corporation consents in writing
to the selection of an alternative forum, the Court of Chancery in the State of Delaware shall be the sole and exclusive forum
for any stockholder (including a beneficial owner) to bring (i) any derivative action or proceeding brought on behalf of the
Corporation, (ii) any action asserting a claim of breach of fiduciary duty owed by any director, officer or other employee
of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against
the Corporation, its directors, officers or employees arising pursuant to any provision of the DGCL Law or the Corporation’s
certificate of incorporation or bylaws or (iv) any action asserting a claim against the Corporation, its directors, officers
or employees governed by the internal affairs doctrine, except for, as to each of (i) through (iv) above, any claim as to which
the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery
(and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such
determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or for which
the Court of Chancery does not have subject matter jurisdiction. If any provision or provisions of this Article XI shall
be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then,
to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance
and of the remaining provisions of this Article XI (including, without limitation, each portion of any sentence of this
Article XI containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid,
illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any
way be affected or impaired thereby.
[Signature Page Follows]
IN WITNESS WHEREOF, Fifth Wall Acquisition
Corp. I has caused this Amended and Restated Certificate to be duly executed and acknowledged in its name and on its behalf by
an authorized officer as of the date first set forth above.
| |
FIFTH WALL ACQUISITION CORP. I |
| |
|
| |
|
| |
By: |
/s/ Brendan Wallace |
| |
|
Name: Brendan Wallace |
| |
|
Title: Chief Executive Officer |
[Signature Page to Amended and Restated
Certificate of Incorporation]
Exhibit 3.3
SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
FIFTH WALL ACQUISITION CORP. I
[_], 2021
Fifth Wall Acquisition Corp. I, a corporation
organized and existing under the laws of the State of Delaware (the “Corporation”), DOES HEREBY CERTIFY
AS FOLLOWS:
1. The name of the Corporation is “Fifth
Wall Acquisition Corp. I”. The original certificate of incorporation of the Corporation was filed with the Secretary
of State of the State of Delaware on November 23, 2020, and an Amended and Restated Certificate of Incorporation was filled on
December 18, 2020 (the “Original Certificate”).
2. This Second Amended and Restated Certificate
of Incorporation (the “Amended and Restated Certificate”), amends, restates and integrates the provisions
of the certificate of incorporation of the Corporation filed with the Secretary of State of the State on December 18, 2020 (the
“Prior Certificate”), and was duly adopted in accordance with Sections 228, 242 and 245 of the General
Corporation Law of the State of Delaware, as amended from time to time (the “DGCL”).
3. This Amended and Restated Certificate
shall become effective on the date of filing with the Secretary of State of Delaware.
4. The text of the Prior Certificate is
hereby restated and amended in its entirety to read as follows:
ARTICLE I
NAME
The name of the corporation is Fifth Wall
Acquisition Corp. I (the “Corporation”).
ARTICLE II
PURPOSE
The purpose of the Corporation is to engage
in any lawful act or activity for which corporations may be organized under the DGCL. In addition to the powers and privileges
conferred upon the Corporation by law and those incidental thereto, the Corporation shall possess and may exercise all the powers
and privileges that are necessary or convenient to the conduct, promotion or attainment of the business or purposes of the Corporation,
including, but not limited to, effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or
similar business combination involving the Corporation and one or more businesses (a “Business Combination”).
ARTICLE III
REGISTERED AGENT
The address of the Corporation’s registered
office in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle, 19801. The name of the
Corporation’s registered agent at such address is The Corporation Trust Company.
ARTICLE IV
CAPITALIZATION
Section 4.1 Authorized
Capital Stock. The total number of shares of all classes of capital stock, each with a par value of $0.0001 per share,
which the Corporation is authorized to issue is 111,000,000 shares, consisting of (a) 110,000,000 shares of common stock
(the “Common Stock”), including (i) 100,000,000 shares of Class A common stock (the
“Class A Common Stock”), and (ii) 10,000,000 shares of Class B common stock (the
“Class B Common Stock”), and (b) 1,000,000 shares of preferred stock (the
“Preferred Stock”).
Section 4.2 Preferred
Stock. Subject to Article IX of this Amended and Restated Certificate, the Board of Directors of the
Corporation (the “Board”) is hereby expressly authorized to provide out of the unissued shares of
the Preferred Stock for one or more series of Preferred Stock and to establish from time to time the number of shares to be
included in each such series and to fix the voting rights, if any, designations, powers, preferences and relative,
participating, optional, special and other rights, if any, of each such series and any qualifications, limitations and
restrictions thereof, as shall be stated in the resolution or resolutions adopted by the Board providing for the issuance of
such series and included in a certificate of designation (a “Preferred Stock Designation”) filed
pursuant to the DGCL, and the Board is hereby expressly vested with the authority to the full extent provided by law, now or
hereafter, to adopt any such resolution or resolutions.
Section 4.3
Common Stock.
(a)
Voting.
(i)
Except as otherwise required by law or this Amended and Restated Certificate (including any Preferred Stock Designation), the holders
of the Common Stock shall exclusively possess all voting power with respect to the Corporation.
(ii)
Except as otherwise required by law or this Amended and Restated Certificate (including any Preferred Stock Designation), the holders
of shares of Common Stock shall be entitled to one vote for each such share on each matter properly submitted to the stockholders
on which the holders of the Common Stock are entitled to vote.
(iii)
Except as otherwise required by law or this Amended and Restated Certificate (including any Preferred Stock Designation), at any
annual or special meeting of the stockholders of the Corporation, holders of the Class A Common Stock and holders of the Class B
Common Stock, voting together as a single class, shall have the exclusive right to vote for the election of directors and on all
other matters properly submitted to a vote of the stockholders. Notwithstanding the foregoing, except as otherwise required by
law or this Amended and Restated Certificate (including any Preferred Stock Designation), holders of shares of any series of Common
Stock shall not be entitled to vote on any amendment to this Amended and Restated Certificate (including any amendment to any Preferred
Stock Designation) that relates solely to the terms of one or more outstanding series of Preferred Stock or other series of Common
Stock if the holders of such affected series of Preferred Stock or Common Stock, as applicable, are entitled exclusively, either
separately or together with the holders of one or more other such series, to vote thereon pursuant to this Amended and Restated
Certificate (including any Preferred Stock Designation) or the DGCL.
(b)
Class B Common Stock.
(i)
Shares of Class B Common Stock shall be convertible into shares of Class A Common Stock on a one-for-one basis (the “Initial
Conversion Ratio”) automatically on the closing of the Business Combination (as defined below).
(ii)
Notwithstanding the Initial Conversion Ratio, in the case that additional shares of Class A Common Stock or Equity-Linked
Securities (as defined below) are issued or deemed issued in excess of the amounts sold in the Corporation’s initial public
offering of securities (the “Offering”) and related to or in connection with the closing of the initial
Business Combination (as defined below), all issued and outstanding shares of Class B Common Stock shall automatically convert
into shares of Class A Common Stock at the time of the closing of the Corporation’s initial Business Combination; provided,
that the ratio for which the shares of Class B Common Stock shall convert into shares of Class A Common
Stock at the time of the closing of the
Corporation’s initial Business Combination will be adjusted so that the number of shares of Class A Common Stock
issuable upon such conversion of all shares of Class B Common Stock will equal, in the aggregate, 25% of the sum of
(a) the total number of all shares of Class A Common Stock issued in the Offering (including any shares of
Class A Common Stock issued pursuant to the underwriters’ over-allotment option) plus (b) the sum of
(i) all shares of Class A Common Stock issued or deemed issued or issuable upon conversion or exercise of any
Equity-Linked Securities or rights issued or deemed issued in connection with or in relation to the consummation of a
Business Combination (including any shares of Class A Common Stock issued pursuant to a forward purchase agreement),
excluding any shares of Class A Common Stock or Equity-Linked Securities or rights issued, or to be issued, to any
seller in a Business Combination, and any private placement shares issued to Fifth Wall Acquisition Sponsor, LLC (the
“Sponsor”), or an affiliate of the Sponsor or the Corporation’s officers and directors upon
the conversion of working capital loans made to the Corporation, minus (ii) the number of shares of Class A Common Stock redeemed in connection with a Business
Combination, provided that such conversion of shares of Class B Common Stock shall never be less than the Initial
Conversion Ratio. As used herein, the term “Equity-Linked Securities” means any securities of the
Corporation which are directly or indirectly convertible into or exchangeable or exercisable for Common Stock.
Notwithstanding anything to the
contrary contained herein, (i) the foregoing adjustment to the Initial Conversion Ratio may be waived as to any particular
issuance or deemed issuance of additional shares of Class A Common Stock or Equity-Linked Securities by the written consent
or agreement of holders of a majority of the shares of Class B Common Stock then outstanding consenting or agreeing separately
as a single class in the manner provided in Section 4.3(b)(iii), and (ii) in no event shall the Class B Common
Stock convert into Class A Common Stock at a ratio that is less than one-for-one.
The foregoing conversion ratio
shall also be adjusted to account for any subdivision (by stock split, subdivision, exchange, stock dividend, reclassification,
recapitalization or otherwise) or combination (by reverse stock split, exchange, reclassification, recapitalization or otherwise)
or similar reclassification or recapitalization of the outstanding shares of Class A Common Stock into a greater or lesser
number of shares occurring after the original filing of this Amended and Restated Certificate without a proportionate and corresponding
subdivision, combination or similar reclassification or recapitalization of the outstanding shares of Class B Common Stock.
Each share of Class B Common
Stock shall convert into its pro rata number of shares of Class A Common Stock pursuant to this Section 4.3(b).
The pro rata share for each holder of Class B Common Stock will be determined as follows: Each share of Class B
Common Stock shall convert into such number of shares of Class A Common Stock as is equal to the product of one (1) multiplied
by a fraction, the numerator of which shall be the total number of shares of Class A Common Stock into which all of the issued
and outstanding shares of Class B Common Stock shall be converted pursuant to this Section 4.3(b) and the
denominator of which shall be the total number of issued and outstanding shares of Class B Common Stock at the time of conversion.
(iii)
Voting. Except as otherwise required by law or this Amended and Restated Certificate (including any Preferred Stock Designation),
for so long as any shares of Class B Common Stock shall remain outstanding, the Corporation shall not, without the prior vote
or written consent of the holders of a majority of the shares of Class B Common Stock then outstanding, voting separately
as a single class, amend, alter or repeal any provision of this Amended and Restated Certificate, whether by merger, consolidation
or otherwise, if such amendment, alteration or repeal would alter or change the powers, preferences or relative, participating,
optional or other or special rights of the Class B Common Stock. Any action required or permitted to be taken at any meeting
of the holders of Class B Common Stock may be taken without a meeting, without prior notice and without a vote, if a consent
or consents in writing, setting forth the action so taken, shall be signed by the holders of the outstanding Class B Common
Stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at
which all shares of Class B Common Stock were present and voted and shall be delivered to the Corporation by delivery to its
registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody
of the book in which minutes of proceedings of
stockholders are recorded. Delivery made to the Corporation’s
registered office shall be by hand or by certified or registered mail, return receipt requested. Prompt written notice of the taking
of corporate action without a meeting by less than unanimous written consent of the holders of Class B Common Stock shall,
to the extent required by law, be given to those holders of Class B Common Stock who have not consented in writing and who,
if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such
meeting had been the date that written consents signed by a sufficient number of holders of Class B Common Stock to take the
action were delivered to the Corporation.
(c)
Dividends. Subject to applicable law, the rights, if any, of the holders of any outstanding series of the Preferred Stock
and the provisions of Article IX hereof, the holders of shares of Common Stock shall be entitled to receive such dividends
and other distributions (payable in cash, property or capital stock of the Corporation) when, as and if declared thereon by the
Board from time to time out of any assets or funds of the Corporation legally available therefor and shall share equally on a per
share basis in such dividends and distributions.
(d)
Liquidation, Dissolution or Winding Up of the Corporation. Subject to applicable law, the rights, if any, of the holders
of any outstanding series of the Preferred Stock and the provisions of Article IX hereof, in the event of any voluntary
or involuntary liquidation, dissolution or winding up of the Corporation, after payment or provision for payment of the debts and
other liabilities of the Corporation, the holders of shares of Common Stock shall be entitled to receive all the remaining assets
of the Corporation available for distribution to its stockholders, ratably in proportion to the number of shares of Class A
Common Stock (on an as converted basis with respect to the Class B Common Stock) held by them.
Section 4.4 Rights
and Options. The Corporation has the authority to create and issue rights, warrants and options entitling the holders
thereof to acquire from the Corporation any shares of its capital stock of any class or classes, with such rights, warrants
and options to be evidenced by or in instrument(s) approved by the Board. The Board is empowered to set the exercise
price, duration, times for exercise and other terms and conditions of such rights, warrants or options; provided, however,
that the consideration to be received for any shares of capital stock issuable upon exercise thereof may not be less than the
par value thereof.
ARTICLE V
BOARD OF DIRECTORS
Section 5.1 Board
Powers. The business and affairs of the Corporation shall be managed by, or under the direction of, the Board. In
addition to the powers and authority expressly conferred upon the Board by statute, this Amended and Restated Certificate or
the Bylaws of the Corporation (“Bylaws”), the Board is hereby empowered to exercise all such powers
and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of
the DGCL, this Amended and Restated Certificate and any Bylaws adopted by the stockholders; provided, however, that no Bylaws
hereafter adopted by the stockholders shall invalidate any prior act of the Board that would have been valid if such Bylaws
had not been adopted.
Section 5.2
Number, Election and Term.
(a)
The number of directors of the Corporation, other than those who may be elected by the holders of one or more series of the Preferred
Stock voting separately by class or series, shall be fixed from time to time exclusively by the Board pursuant to a resolution
adopted by a majority of the Board.
(b)
Subject to Section 5.5 hereof, the Board shall be divided into three classes, as nearly equal in number as
possible and designated Class I, Class II and Class III. The Board is authorized to assign members of the
Board already in office to Class I, Class II or Class III. The term of the initial Class I Directors
shall expire at the first annual meeting of the stockholders of the Corporation following the effectiveness of this Amended
and Restated Certificate, the term of the initial Class II Directors shall expire at the second annual meeting of the
stockholders of the Corporation following the effectiveness of this Amended and Restated Certificate and the term of the
initial Class III Directors shall expire at the third annual meeting of the stockholders of the Corporation following
the effectiveness of this Amended and Restated Certificate. At each succeeding annual meeting of the stockholders of the
Corporation, beginning with the first annual meeting of the stockholders of the Corporation following the effectiveness of
this Amended and Restated Certificate, each of the successors elected to replace the class of directors whose term expires at
that annual meeting shall be elected for a three-year term or until the election and qualification of their respective
successors in office, subject to their earlier death, resignation or removal. Subject to Section 5.5 hereof, if
the number of directors that constitutes the Board is changed, any increase or decrease shall be apportioned by the Board
among the classes so as to maintain the number of directors in each class as nearly equal as possible, but in no case shall a
decrease in the number of directors constituting the Board shorten the term of any incumbent director. Subject to the rights
of the holders of one or more series of Preferred Stock, voting separately by class or series, to elect directors pursuant to
the terms of one or more series of Preferred Stock, the election of directors shall be determined by a plurality of the votes
cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon. The Board is
hereby expressly authorized, by resolution or resolutions thereof, to assign members of the Board already in office to the
aforesaid classes at the time this Amended and Restated Certificate (and therefore such classification) becomes effective in
accordance with the DGCL.
(c)
Subject to Section 5.5 hereof, a director shall hold office until the annual meeting for the year in which his or her
term expires and until his or her successor has been elected and qualified, subject, however, to such director’s earlier
death, resignation, retirement, disqualification or removal.
(d)
Unless and except to the extent that the Bylaws shall so require, the election of directors need not be by written ballot.
There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the
shares voted for the election of directors can elect all of the directors (prior to consummation of the Corporation’s initial
Business Combination).
Section 5.3 Newly
Created Directorships and Vacancies. Subject to Section 5.5 hereof, newly created directorships resulting
from an increase in the number of directors and any vacancies on the Board resulting from death, resignation, retirement,
disqualification, removal or other cause may be filled solely and exclusively by a majority vote of the remaining directors
then in office, even if less than a quorum or by a sole remaining director (and not by stockholders), and any director so
chosen shall hold office for the remainder of the full term of the class of directors to which the new directorship was added
or in which the vacancy occurred and until his or her successor has been elected and qualified, subject, however, to such
director’s earlier death, resignation, retirement, disqualification or removal.
Section 5.4 Removal.
Subject to Section 5.5 hereof, any or all of the directors may be removed from office at any time, but only for
cause and only by the affirmative vote of holders of a majority of the voting power of all then outstanding shares of capital
stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.
Section 5.5 Preferred
Stock - Directors. Notwithstanding any other provision of this Article V, and except as otherwise required by
law, whenever the holders of one or more series of the Preferred Stock shall have the right, voting separately by class or
series, to elect one or more directors, the term of office, the filling of vacancies, the removal from office and other
features of such directorships shall be governed by the terms of such series of the Preferred Stock as set forth in this
Amended and Restated Certificate (including any Preferred Stock Designation) and such directors shall not be included in any
of the classes created pursuant to this Article V unless expressly provided by such terms.
Section 5.6
Quorum. A quorum for the transaction of business by the directors shall be set forth in the Bylaws.
ARTICLE VI
BYLAWS
In furtherance and not in limitation
of the powers conferred upon it by law, the Board shall have the power and is expressly authorized to adopt, amend, alter or
repeal the Bylaws. The affirmative vote of a majority of the Board shall be required to adopt, amend, alter or repeal the
Bylaws. The Bylaws also may be adopted, amended, altered or repealed by the stockholders; provided, however, that in addition
to any vote of the holders of any class or series of capital stock of the Corporation required by law or by this Amended and
Restated Certificate (including any Preferred Stock Designation), the affirmative vote of the holders of at least a majority
of the voting power of all then outstanding shares of capital stock of the Corporation entitled to vote generally in the
election of directors, voting together as a single class, shall be required for the stockholders to adopt, amend, alter or
repeal the Bylaws; and provided further, however, that no Bylaws hereafter adopted by the stockholders shall invalidate any
prior act of the Board that would have been valid if such Bylaws had not been adopted.
ARTICLE VII
MEETINGS OF STOCKHOLDERS; ACTION BY WRITTEN CONSENT
Section 7.1 Meetings.
Subject to the rights, if any, of the holders of any outstanding series of the Preferred Stock, and to the requirements of
applicable law, special meetings of stockholders of the Corporation may be called only by the Chairperson of the Board, Chief
Executive Officer of the Corporation, or the Board pursuant to a resolution adopted by a majority of the Board, and the
ability of the stockholders to call a special meeting is hereby specifically denied. Except as provided in the foregoing
sentence, special meetings of stockholders may not be called by another person or persons.
Section 7.2 Advance
Notice. Advance notice of stockholder nominations for the election of directors and of business to be brought by
stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the
Bylaws.
Section 7.3 Action
by Written Consent. Except as may be otherwise provided for or fixed pursuant to this Amended and Restated Certificate
(including any Preferred Stock Designation) relating to the rights of the holders of any outstanding series of Preferred
Stock, subsequent to the consummation of the Offering, any action required or permitted to be taken by the stockholders of
the Corporation must be effected by a duly called annual or special meeting of such stockholders and may not be effected by
written consent of the stockholders other than with respect to the Class B Common Stock with respect to which action may
be taken by written consent.
ARTICLE VIII
LIMITED LIABILITY; INDEMNIFICATION
Section 8.1 Limitation
of Director Liability. A director of the Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from
liability or limitation thereof is not permitted under the DGCL as the same exists or may hereafter be amended unless a
director violated his or her duty of loyalty to the Corporation or its stockholders, acted in bad faith, knowingly or
intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions,
or derived improper personal benefit from his or her actions as a director. Any amendment, modification or repeal of the
foregoing sentence shall not adversely affect any right or protection of a director of the Corporation hereunder in respect
of any act or omission occurring prior to the time of such amendment, modification or repeal.
Section 8.2
Indemnification and Advancement of Expenses.
(a)
To the fullest extent permitted by applicable law, as the same exists or may hereafter be amended, the Corporation shall
indemnify and hold harmless each person who is or was made a party or is threatened to be made a party to or is otherwise
involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (a “proceeding”) by reason of the fact that he or she is or was a director or officer
of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as
a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, other enterprise or
nonprofit entity, including service with respect to an employee benefit plan (an “indemnitee”),
whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent, or
in any other capacity while serving as a director, officer, employee or agent, against all liability and loss suffered and
expenses (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes and penalties and
amounts paid in settlement) reasonably incurred by such indemnitee in connection with such proceeding. The Corporation shall
to the fullest extent not prohibited by applicable law pay the expenses (including attorneys’ fees) incurred by an
indemnitee in defending or otherwise participating in any proceeding in advance of its final disposition; provided, however,
that, to the extent required by applicable law, such payment of expenses in advance of the final disposition of the
proceeding shall be made only upon receipt of an undertaking, by or on behalf of the indemnitee, to repay all amounts so
advanced if it shall ultimately be determined that the indemnitee is not entitled to be indemnified under this Section 8.2 or
otherwise. The rights to indemnification and advancement of expenses conferred by this Section 8.2 shall be
contract rights and such rights shall continue as to an indemnitee who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of his or her heirs, executors and administrators. Notwithstanding the foregoing
provisions of this Section 8.2(a), except for proceedings to enforce rights to indemnification and advancement of
expenses, the Corporation shall indemnify and advance expenses to an indemnitee in connection with a proceeding (or part
thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board.
(b)
The rights to indemnification and advancement of expenses conferred on any indemnitee by this Section 8.2 shall not
be exclusive of any other rights that any indemnitee may have or hereafter acquire under law, this Amended and Restated Certificate,
the Bylaws, an agreement, vote of stockholders or disinterested directors, or otherwise.
(c)
Any repeal or amendment of this Section 8.2 by the stockholders of the Corporation or by changes in law, or the adoption
of any other provision of this Amended and Restated Certificate inconsistent with this Section 8.2, shall, unless otherwise
required by law, be prospective only (except to the extent such amendment or change in law permits the Corporation to provide broader
indemnification rights on a retroactive basis than permitted prior thereto), and shall not in any way diminish or adversely affect
any right or protection existing at the time of such repeal or amendment or adoption of such inconsistent provision in respect
of any proceeding (regardless of when such proceeding is first threatened, commenced or completed) arising out of, or related to,
any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision.
(d)
This Section 8.2 shall not limit the right of the Corporation, to the extent and in the manner authorized or permitted
by law, to indemnify and to advance expenses to persons other than indemnitees.
ARTICLE IX
BUSINESS COMBINATION REQUIREMENTS; EXISTENCE
Section 9.1
General.
(a)
The provisions of this Article IX shall apply during the period commencing upon the effectiveness of this Amended and
Restated Certificate and terminating upon the consummation of the Corporation’s initial Business Combination and no amendment
to this Article IX shall be effective prior to the consummation of the initial Business Combination unless approved
by the affirmative vote of the holders of at least sixty-five percent (65%) of all then outstanding shares of the Common Stock.
(b)
Immediately after the Offering, a certain amount of the net offering proceeds received by the Corporation in the Offering (including
the proceeds of any exercise of the underwriters’ over-allotment option) and certain other amounts specified in the Corporation’s
registration statement on Form S-1, initially filed with the U.S. Securities and Exchange Commission (the “SEC”)
on January 20, 2021, as amended (the “Registration Statement”), shall be deposited in a trust account
(the “Trust Account”), established for the benefit of the Public Stockholders (as defined below) pursuant
to a trust agreement described in the Registration Statement. Except for the withdrawal of interest to pay taxes, none of the funds
held in the Trust Account (including the interest earned on the funds held in the Trust Account) will be released from the Trust
Account until the earliest to occur of (i) the completion of the initial Business Combination, (ii) the redemption of
100% of the Offering Shares (as defined below) if the Corporation is unable to complete its initial Business Combination within
24 months from the closing of the Offering and (iii) the redemption of the Offering Shares in connection with a vote seeking
to amend such provisions of this Amended and Restated Certificate as described in Section 9.7. Holders of shares of
Common Stock sold in the Offering (the “Offering Shares”) (whether such
Offering Shares were purchased in the Offering or in the secondary market following the Offering and whether or not such holders
are the Sponsor or officers or directors of the Corporation, or affiliates of any of the foregoing) are referred to herein as “Public
Stockholders.”
Section 9.2
Redemption Rights.
(a)
Prior to the consummation of the initial Business Combination, the Corporation shall provide all holders of Offering Shares with
the opportunity to have their Offering Shares redeemed upon the consummation of the initial Business Combination pursuant to, and
subject to the limitations of, Sections 9.2(b) and 9.2(c) (such rights of such holders to have their Offering
Shares redeemed pursuant to such Sections, the “Redemption Rights”) hereof for cash equal to the applicable
redemption price per share determined in accordance with Section 9.2(b) hereof (the “Redemption Price”);
provided, however, that the Corporation shall not redeem Offering Shares in an amount that would cause the Corporation to have
net tangible assets to be less than $5,000,001 (such limitation hereinafter called the “Redemption Limitation”).
(b)
If the Corporation offers to redeem the Offering Shares other than in conjunction with a stockholder vote on an initial Business
Combination with a proxy solicitation pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) (or any successor rules or regulations) and filing proxy materials with the SEC, the Corporation shall
offer to redeem the Offering Shares upon the consummation of the initial Business Combination, subject to lawfully available funds
therefor, in accordance with the provisions of Section 9.2(a) hereof pursuant to a tender offer in accordance
with Rule 13e-4 and Regulation 14E of the Exchange Act (or any successor rule or regulation) (such rules and regulations
hereinafter called the “Tender Offer Rules”) which it shall commence prior to the consummation of the
initial Business Combination and shall file tender offer documents with the SEC prior to the consummation of the initial Business
Combination that 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 (or any successor rule or regulation) (such rules and
regulations hereinafter called the “Proxy Solicitation Rules”), even if such information is not required
under the Tender Offer Rules; provided, however, that if a stockholder vote is required by law to approve the proposed initial
Business Combination, or the Corporation decides to submit the proposed initial Business Combination to the stockholders for their
approval for business or other legal reasons, the Corporation shall offer to redeem the Offering Shares, subject to lawfully available
funds therefor, in accordance with the provisions of Section 9.2(a) hereof in conjunction with a proxy solicitation
pursuant to the Proxy Solicitation Rules (and not the Tender Offer Rules) at a price per share equal to the Redemption Price
calculated in accordance with the following provisions of this Section 9.2(b). In the event that the Corporation offers
to redeem the Offering Shares pursuant to a tender offer in accordance with the Tender Offer Rules, the Redemption Price per share
of the Common Stock payable to holders of the Offering Shares tendering their Offering Shares pursuant to such tender offer shall
be equal to the quotient obtained by dividing: (i) the aggregate amount on deposit in the Trust Account as of two business
days prior to the consummation of the initial Business Combination, including interest not previously released to the Corporation
to pay its taxes, by (ii) the total number of then outstanding Offering Shares. If the Corporation offers to redeem the Offering
Shares in conjunction with a stockholder vote on the proposed initial Business Combination pursuant to a proxy solicitation, the
Redemption Price per share of the Common Stock payable to holders of the Offering Shares exercising their Redemption Rights (irrespective
of whether they voted in favor or against the Business Combination) shall be equal to the quotient obtained by dividing: (x) the
aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the initial Business Combination,
including interest not previously released to the Corporation to pay its taxes, by (y) the total number of then outstanding
Offering Shares.
(c)
If the Corporation offers to redeem the Offering Shares in conjunction with a stockholder vote on an initial Business Combination
pursuant to a proxy solicitation, a Public Stockholder, together with any affiliate of such stockholder or any other person with
whom such stockholder is acting in concert or as a “group” (as defined under Section 13(d)(3) of
the Exchange Act), shall be restricted from seeking Redemption Rights with respect to more than an aggregate of 15% of the Offering
Shares without the prior consent of the Corporation.
(d)
In the event that the Corporation has not consummated an initial Business Combination within 24 months from the closing of
the Offering, the Corporation shall (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 subject to lawfully available funds therefor, redeem
100% of the Offering Shares in consideration of a per-share price, payable in cash, equal to the quotient obtained by
dividing (A) the aggregate amount then on deposit in the Trust Account, including interest not previously released to
the Corporation to pay its taxes (less taxes payable and up to $100,000 of interest to pay dissolution expenses), by
(B) the total number of then outstanding Offering Shares, which redemption will completely extinguish rights of the
Public Stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law,
and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining
stockholders and the Board in accordance with applicable law, dissolve and liquidate, subject in each case to the
Corporation’s obligations under the DGCL to provide for claims of creditors and other requirements of applicable
law.
(e)
If the Corporation offers to redeem the Offering Shares in conjunction with a stockholder vote on an initial Business Combination,
the Corporation shall consummate the proposed initial Business Combination only if (i) such initial Business Combination is
approved by the affirmative vote of the holders of a majority of the shares of the Common Stock that are voted at a stockholder
meeting held to consider such initial Business Combination and (ii) the Redemption Limitation is not exceeded.
(f)
If the Corporation conducts a tender offer pursuant to Section 9.2(b), the Corporation shall consummate the proposed
initial Business Combination only if the Redemption Limitation is not exceeded.
Section 9.3
Distributions from the Trust Account.
(a)
A Public Stockholder shall be entitled to receive funds from the Trust Account only as provided in Sections 9.2(a), 9.2(b),
9.2(d) or 9.7 hereof. In no other circumstances shall a Public Stockholder have any right or interest of any
kind in or to distributions from the Trust Account, and no stockholder other than a Public Stockholder shall have any interest
in or to the Trust Account.
(b)
Each Public Stockholder that does not exercise its Redemption Rights shall retain its interest in the Corporation and shall be
deemed to have given its consent to the release of the remaining funds in the Trust Account to the Corporation, and following payment
to any Public Stockholders exercising their Redemption Rights, the remaining funds in the Trust Account shall be released to the
Corporation.
(c)
The exercise by a Public Stockholder of the Redemption Rights shall be conditioned on such Public Stockholder following the specific
procedures for redemptions set forth by the Corporation in any applicable tender offer or proxy materials sent to the Public Stockholders
relating to the proposed initial Business Combination, including the requirement that any Public Stockholder holder that holds
Offering Shares beneficially through a nominee must identify itself to the Corporation in connection with any redemption election
in order to validly redeem such Offering Shares. Holders of Offering Shares seeking to exercise their Redemption Rights may be
required to either tender their certificates (if any) to the Corporation’s transfer agent 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 originally scheduled vote on the proposal to approve a
Business Combination. Payment of the amounts necessary to satisfy the Redemption Rights properly exercised shall be made as promptly
as practical after the consummation of the initial Business Combination.
Section 9.4 Share
Issuances. Prior to the consummation of the Corporation’s initial Business Combination, the Corporation shall not
issue any additional shares of capital stock of the Corporation that would entitle the holders thereof to receive funds from
the Trust Account or vote as a class with the Class A Common Stock on: (a) any initial Business Combination;
(b) on any pre-Business Combination activity; (c) any amendment to this Amended and Restated Certificate to modify
the substance or timing of the Corporation’s obligation to allow redemption in connection with our initial Business
Combination or to redeem 100% of the Offering Shares if the Corporation has not consummated an initial Business Combination
within 24 months from the date of the closing of the Offering; or (d) on any amendment to this Article IX.
Section 9.5 Transactions
with Affiliates. In the event the Corporation enters into an initial Business Combination with a target business that is
affiliated with the Sponsor, or the directors or officers of the Corporation, the Corporation, or a committee of the
independent directors of the Corporation, shall obtain an opinion from an independent accounting firm or an independent
investment banking firm that is a member of the Financial Industry Regulatory Authority that such Business Combination is
fair to the Corporation from a financial point of view.
Section 9.6 No
Transactions with Other Blank Check Companies. The Corporation shall not enter into an initial Business Combination with
another blank check company or a similar company with nominal operations.
Section 9.7 Additional
Redemption Rights. If, in accordance with Section 9.1(a), any amendment is made to this Amended and Restated
Certificate (a) to modify the substance or timing of the Corporation’s obligation to allow redemption in
connection with our initial Business Combination or to redeem 100% of the Offering Shares if the Corporation has not
consummated an initial Business Combination within 24 months from the date of the closing of the Offering or (b) with
respect to any other material provisions of this Amended and Restated Certificate relating to stockholders’ rights or
pre-initial Business Combination activity, the Public Stockholders shall be provided with the opportunity to allow redemption
in connection with our initial Business Combination or to redeem their Offering Shares upon the 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 not previously released to the Corporation to pay its taxes, divided by the number of then outstanding
Offering Shares; provided, however, that any such amendment will be voided, and this Article IX will remain unchanged,
if any stockholders who wish to redeem are unable to redeem due to the Redemption Limitation.
Section 9.8 Minimum
Value of Initial Business Combination. The Corporation’s initial Business Combination must be comprised of one or
more Business Combinations having 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 interest earned on the Trust Account) at
the time the Corporation signs a definitive agreement in connection with the initial Business Combination.
ARTICLE X
CORPORATE OPPORTUNITY
To the extent allowed by law, the doctrine
of corporate opportunity, or any other analogous doctrine, shall not apply with respect to the Corporation or any of its officers
or directors, or any of their respective affiliates, in circumstances where the application of any such doctrine would conflict
with any fiduciary duties or contractual obligations they may have as of the date of this Amended and Restated Certificate or in
the future, and the Corporation renounces any expectancy that any of the directors or officers of the Corporation will offer any
such corporate opportunity of which he or she may become aware to the Corporation, except, the doctrine of corporate opportunity
shall apply with respect to any of the directors or officers of the Corporation only with respect to a corporate opportunity that
was offered to such person solely in his or her capacity as a director or officer of the Corporation and (i) such opportunity
is one the Corporation is legally and contractually permitted to undertake and would otherwise be reasonable for the Corporation
to pursue and (ii) the director or officer is permitted to refer that opportunity to the Corporation without violating any
legal obligation.
ARTICLE XI
AMENDMENT OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
The Corporation reserves the right at any
time and from time to time to amend, alter, change or repeal any provision contained in this Amended and Restated Certificate (including
any Preferred Stock Designation), and other provisions authorized by the laws of the State of Delaware at the time in force that
may be added or inserted, in the manner now or hereafter prescribed by this Amended and Restated Certificate and the DGCL; and,
except as set forth in Article VIII, all rights, preferences and privileges of whatever nature herein conferred upon
stockholders, directors or any other persons by and pursuant to this Amended and Restated Certificate in its present form or as
hereafter amended are granted subject to the right reserved in this Article XI; provided, however, that
Article IX and Section 4.3(a)(iii) of this Amended and Restated Certificate may be amended only as provided therein.
ARTICLE XII
EXCLUSIVE FORUM FOR CERTAIN LAWSUITS
Section 12.1 Forum.
Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of
Delaware (the “Court of Chancery”) shall be the sole and exclusive forum for any stockholder
(including a beneficial owner) to bring (i) any derivative action or proceeding brought on behalf of the Corporation,
(ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the
Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the
Corporation, its directors, officers or employees arising pursuant to any provision of the DGCL or this Amended and Restated
Certificate or the Bylaws, or (iv) any action asserting a claim against the Corporation, its directors, officers or
employees governed by the internal affairs doctrine and, if brought outside of Delaware, the stockholder bringing the suit
will be deemed to have consented to service of process on such stockholder’s counsel, except for, as to each of
(i) through (iv) above, any claim (A) as to which the Court of Chancery determines that there is an
indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to
the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in
the exclusive jurisdiction of a court or forum other than the Court of Chancery, (C) for which the Court of Chancery
does not have subject matter jurisdiction, or (D) any action arising under the Securities Act of 1933, as amended, as to
which the Court of Chancery and the federal district court for the District of Delaware shall have concurrent jurisdiction.
Notwithstanding the foregoing, the provisions of this Section 12.1 will not apply to suits brought to enforce a
duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
Any person or entity purchasing or otherwise acquiring any interest in any security of the Corporation shall be deemed to
have notice of and consented to the provisions of this Section 12.1.
Section 12.2 Consent
to Jurisdiction. If any action the subject matter of which is within the scope of Section 12.1 immediately above is
filed in a court other than a court located within the State of Delaware (a “Foreign Action”) in
the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the
state and federal courts located within the State of Delaware in connection with any action brought in any such court to
enforce Section 12.1 immediately above (an “FSC Enforcement Action”) and (ii) having
service of process made upon such stockholder in any such FSC Enforcement Action by service upon such stockholder’s
counsel in the Foreign Action as agent for such stockholder.
Section 12.3 Notice.
Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be
deemed to have notice of and consented to the provisions of this Article XII.
ARTICLE XIII
SEVERABILITY
If any provision or provisions (or any part
thereof) of this Amended and Restated Certificate shall be held to be invalid, illegal or unenforceable as applied to any person
or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, (i) the validity, legality
and enforceability of such provisions in any other circumstance and of the remaining provisions of this Amended and Restated Certificate
(including, without limitation, each portion of any paragraph of this Amended and Restated Certificate containing any such provision
held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application
of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby, and (ii) the
provisions of this Amended and Restated Certificate (including, without limitation, each portion of any paragraph of this Amended
and Restated Certificate containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to
permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their faith
service or for the benefit of the Corporation to the fullest extent permitted by law
[Signature Page Follows]
IN WITNESS WHEREOF, Fifth Wall Acquisition
Corp. I has caused this Amended and Restated Certificate to be duly executed and acknowledged in its name and on its behalf by
an authorized officer as of the date first set forth above.
| |
FIFTH WALL ACQUISITION CORP. I |
| |
|
| |
By: |
|
| |
|
Name: Brendan Wallace |
| |
|
Title: Chief Executive Officer |
[Signature Page to Second Amended
and Restated Certificate of Incorporation]
Exhibit 3.4
FIFTH WALL ACQUISITION CORP. I
BYLAWS
Adopted December 2, 2020
Article I-
STOCKHOLDERS
Section 1
Annual Meeting.
An annual meeting of the stockholders, for
the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly come
before the meeting, shall be held at such place, on such date, and at such time as the Board of Directors shall each year fix,
which date shall be within 13 months of the last annual meeting of stockholders or, if no such meeting has been held, the date
of incorporation.
Section 2
Special Meetings.
Special meetings of the stockholders, for
any purpose or purposes prescribed in the notice of the meeting, may be called by the Board of Directors or the chief executive
officer and shall be held at such place, on such date, and at such time as they or he or she shall fix.
Section 3
Notice of Meetings.
Notice of the place, if any, date, and time
of all meetings of the stockholders, the means of remote communications, if any, by which stockholders and proxyholders may be
deemed to be present in person and vote at such meeting, and the record date for determining the stockholders entitled to vote
at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting,
shall be given, not less than 10 nor more than 60 days before the date on which the meeting is to be held, to each stockholder
entitled to vote at such meeting as of the record date for determining the stockholders entitled to notice of the meeting, except
as otherwise provided herein or required by law (meaning, here and hereinafter, as required from time to time by the Delaware General
Corporation Law or the Certificate of Incorporation of the Corporation).
When a meeting is adjourned to another time
or place, notice need not be given of the adjourned meeting if the time and place, if any, thereof, and the means of remote communications,
if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting are announced
at the meeting at which the adjournment is taken; provided, however, that if the date of any adjourned meeting is
more than 30 days after the date for which the meeting was originally noticed, notice of the place, if any, date, and time of the
adjourned meeting and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present
in person and vote at such adjourned meeting, shall be given to each stockholder in conformity herewith. If after the adjournment
a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Board of Directors shall fix a new
record date for notice of such adjourned meeting, which record date shall not precede the date upon which the resolution fixing
the record date is adopted by the Board of Directors and, except as otherwise required by law, shall not be more than 60 nor less
than 10 days before the date of such adjourned meeting, and shall give notice of the adjourned meeting to each stockholder of record
entitled to vote at such adjourned meeting as of the record date fixed for notice of such adjourned meeting. At any adjourned meeting,
any business may be transacted which might have been transacted at the original meeting.
Section 4
Quorum.
At any meeting of the stockholders, the
holders of a majority of the voting power of all of the shares of stock entitled to vote at the meeting, present in person or by
proxy, shall constitute a quorum for all purposes, unless or except to the extent that the presence of a larger number may be required
by law. Where a separate vote by a class or classes or series is required, a majority of the voting power of the shares of such
class or classes or series present in person or represented by proxy shall constitute a quorum entitled to take action with respect
to that vote on that matter. The stockholders present at a duly constituted meeting may continue to transact business until adjournment
notwithstanding the withdrawal of enough stockholders to reduce the voting shares below a quorum.
If a quorum shall fail to attend any meeting,
the chairman of the meeting or the holders of a majority of the shares of stock entitled to vote who are present, in person or
by proxy, may adjourn the meeting to another place, if any, date, or time.
Section 5
Organization.
Such person as the Board of Directors may
have designated or, in the absence of such a person, the President of the Corporation or, in his or her absence, such person as
may be chosen by the holders of a majority of the voting power of the shares entitled to vote who are present, in person or by
proxy, shall call to order any meeting of the stockholders and act as chairman of the meeting. In the absence of the Secretary
of the Corporation, the secretary of the meeting shall be such person as the chairman of the meeting appoints.
Section 6
Conduct of Business.
The chairman of any meeting of stockholders
shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the
conduct of discussion as seem to him or her in order. The date and time of the opening and closing of the polls for each matter
upon which the stockholders will vote at the meeting shall be announced at the meeting.
Section 7
Proxies and Voting.
At any meeting of the stockholders, every
stockholder entitled to vote may vote in person or by proxy authorized by an instrument in writing or by a transmission permitted
by law filed in accordance with the procedure established for the meeting. Any copy, facsimile telecommunication or other reliable
reproduction of the writing or transmission created pursuant to this paragraph may be substituted or used in lieu of the original
writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such
copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.
The Corporation may, and to the extent required
by law, shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written
report thereof. The Corporation may designate one or more alternate inspectors to replace any inspector who fails to act. If no
inspector or alternate is able to act at a meeting of stockholders, the person presiding at the meeting may, and to the extent
required by law, shall, appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge
of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according
to the best of his or her ability. Every vote taken by ballots shall be counted by an inspector or inspectors appointed by the
chairman of the meeting.
All elections shall be determined by a plurality
of the votes cast, and except as otherwise required by law, all other matters shall be determined by a majority of the votes cast
affirmatively or negatively.
Section 8
Stock List.
The officer who has charge of the stock
ledger of the Corporation shall, at least 10 days before every meeting of stockholders, prepare and make a complete list of stockholders
entitled to vote at any meeting of stockholders, provided, however, if the record date for determining the stockholders
entitled to vote is less than 10 days before the meeting date, the list shall reflect the stockholders entitled to vote as of the
10th day before the meeting date, arranged in alphabetical order and showing the address of each such stockholder and the number
of shares registered in his or her name. Such list shall be open to the examination of any stockholder for a period of at least
10 days prior to the meeting in the manner provided by law.
A stock list shall also be open to the examination
of any stockholder during the whole time of the meeting as provided by law. This list shall presumptively determine (a) the
identity of the stockholders entitled to examine such stock list and to vote at the meeting and (b) the number of shares held
by each of them.
Section 9
Consent of Stockholders in Lieu of Meeting.
Any action required to be taken at any annual
or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of the
stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting
forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present
and voted and shall be delivered to the Corporation by delivery to its registered office in Delaware, its principal place of business,
or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded.
Delivery made to the Corporation’s registered office shall be made by hand or by certified or registered mail, return receipt
requested.
Every written consent shall bear the date
of signature of each stockholder who signs the consent, and no written consent shall be effective to take the corporate action
referred to therein unless, within 60 days of the earliest dated consent delivered to the Corporation, a written consent or consents
signed by a sufficient number of holders to take action are delivered to the Corporation in the manner prescribed in the first
paragraph of this Section. A telegram, cablegram or other electronic transmission consenting to an action to be taken and transmitted
by a stockholder or proxyholder, or by a person or persons authorized to act for a stockholder or proxyholder, shall be deemed
to be written, signed and dated for the purposes of this Section to the extent permitted by law. Any such consent shall be delivered
in accordance with Section 228(d)(1) of the Delaware General Corporation Law.
Any copy, facsimile or other reliable reproduction
of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original
writing could be used, provided that such copy, facsimile or other reproduction shall be a complete reproduction of the
entire original writing.
Article II-
BOARD OF DIRECTORS
Section 1
Number and Term of Office.
The number of directors who shall constitute
the whole Board of Directors shall be such number as the Board of Directors shall from time to time have designated. Each director
shall be elected for a term of one year and until his or her successor is elected and qualified, except as otherwise provided herein
or required by law.
Whenever the authorized number of directors
is increased between annual meetings of the stockholders, a majority of the directors then in office shall have the power to elect
such new directors for the balance of a term and until their successors are elected and qualified. Any decrease in the authorized
number of directors shall not become effective until the expiration of the term of the directors then in office unless, at the
time of such decrease, there shall be vacancies on the board which are being eliminated by the decrease.
Section 2
Removal of Directors; Resignation Unless otherwise
provided by the Certificate of Incorporation or these bylaws, any director or the entire Board of Directors may be removed, with
or without cause, by the holders of a majority of shares entitled to vote at an election of directors. Any director may resign
at any time upon notice given in writing or by electronic transmission to the Corporation. Such resignation shall be effective
upon receipt unless it is specified to be effective at some other time or upon the happening of some other event.
Section 3
Vacancies.
Unless otherwise provided in the Corporation’s
Certificate of Incorporation, as it may be amended, if the office of any director becomes vacant by reason of death, resignation,
disqualification, removal or other cause, a majority of the directors remaining in office, although less than a quorum, may elect
a successor for the unexpired term and until his or her successor is elected and qualified. Unless otherwise provided in the Corporation’s
Certificate of Incorporation, as it may be amended, vacancies and newly created directorships resulting from any increase in the
authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a
sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors
are duly elected and shall qualify, unless sooner displaced. If there are no directors in office, then an election of directors
may be held in the manner provided by statute.
Section 4
Regular Meetings.
Regular meetings of the Board of Directors
shall be held at such place or places, on such date or dates, and at such time or times as shall have been established by the Board
of Directors and publicized among all directors. A notice of each regular meeting shall not be required.
Section 5
Special Meetings.
Special meetings of the Board of Directors
may be called by one-third of the directors then in office (rounded up to the nearest whole number) or by the President and shall
be held at such place, on such date, and at such time as they or he or she shall fix. Notice of the place, date, and time of each
such special meeting shall be given to each director by whom it is not waived by mailing written notice not less than five days
before the meeting or by telegraphing or telexing or by facsimile or electronic transmission of the same not less than 24 hours
before the meeting. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting.
A meeting may be held at any time without notice if all the directors are present (except as otherwise provided by law) or if those
not present waive notice of the meeting in writing, either before or after such meeting.
Section 6
Quorum.
At any meeting of the Board of Directors,
the greater of (a) a majority of the directors then in office at the time quorum is to be determined and (b) one-third of the total
number of directors fixed pursuant to Section 1 of Article II of these Bylaws shall constitute a quorum
for the transaction of business. Less than a quorum may adjourn any meeting from time to time, and the meeting may be held as adjourned
without further notice.
Section 7
Participation in Meetings By Conference Telephone.
Members of the Board of Directors, or of
any committee thereof, may participate in a meeting of such Board of Directors or committee by means of conference telephone or
other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation
shall constitute presence in person at such meeting.
Section 8
Conduct of Business.
At any meeting of the Board of Directors,
business shall be transacted in such order and manner as the Board of Directors may from time to time determine, and all matters
shall be determined by the vote of a majority of the directors present, except as otherwise provided herein or required by law.
Action may be taken by the Board of Directors without a meeting if all members thereof consent thereto in writing or by electronic
transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings
of the Board of Directors. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic
form if the minutes are maintained in electronic form.
Section 9
Compensation of Directors.
Directors, as such, may receive, pursuant
to resolution of the Board of Directors, fixed fees and other compensation for their services as directors, including, without
limitation, their services as members of committees of the Board of Directors.
Article III-
COMMITTEES
Section 1
Committees of the Board of Directors.
The Board of Directors may from time to
time designate committees of the Board of Directors, with such lawfully delegable powers and duties as it thereby confers, to serve
at the pleasure of the Board of Directors and shall, for those committees and any others provided for herein, elect a director
or directors to serve as the member or members, designating, if it desires, other directors as alternate members who may replace
any absent or disqualified member at any meeting of the committee. In the absence or disqualification of any member of any committee
and any alternate member in his or her place, the member or members of the committee present at the meeting and not disqualified
from voting, whether or not he or she or they constitute a quorum, may by unanimous vote appoint another member of the Board of
Directors to act at the meeting in the place of the absent or disqualified member.
Section 2
Conduct of Business.
Each committee may determine the procedural
rules for meeting and conducting its business and shall act in accordance therewith, except as otherwise provided herein or required
by law. Adequate provision shall be made for notice to members of all meetings; one-third of the members shall constitute a quorum
unless the committee shall consist of one or two members, in which event one member shall constitute a quorum; and all matters
shall be determined by a majority vote of the members present.
Action may be taken by any committee without a meeting if all
members thereof consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission
or transmissions are filed with the minutes of the proceedings of such committee. Such filing shall be in paper form if the minutes
are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
Article IV-
OFFICERS
Section 1
Generally.
The officers of the Corporation will be
chosen by the Board of Directors and will consist of a President, a Secretary, a Treasurer and such other officers as may from
time to time be appointed by the Board of Directors. Officers shall be elected by the Board of Directors, which shall consider
that subject at its first meeting after every annual meeting of stockholders. Each officer shall hold office until his or her successor
is elected and qualified or until his or her earlier resignation or removal. Any number of offices may be held by the same person.
Subject to any limitations which may be
set forth in a resolution of the Board of Directors, all deeds, leases, transfers, contracts, bonds, notes and other obligations
to be entered into by the Corporation in the ordinary course of its business without director action may be executed on behalf
of the Corporation by a President or by any other officer, employee or agent of the Corporation as the Board of Directors may authorize.
Section 2
President.
The President shall be the chief executive
officer of the Corporation. Subject to the provisions of these Bylaws and to the direction of the Board of Directors, he or she
shall have the responsibility for the general management and control of the business and affairs of the Corporation and shall perform
all duties and have all powers which are commonly incident to the office of chief executive or which are delegated to him or her
by the Board of Directors. He or she shall have power to sign all stock certificates, contracts and other instruments of the Corporation
which are authorized and shall have general supervision and direction of all of the other officers, employees and agents of the
Corporation.
Section 3
Vice President.
Each Vice President shall have such powers
and duties as may be delegated to him or her by the Board of Directors. One Vice President shall be designated by the Board of
Directors to perform the duties and exercise the powers of the President in the event of the President’s absence or disability.
Section 4
Treasurer.
The Treasurer shall have the responsibility
for maintaining the financial records of the Corporation. He or she shall make such disbursements of the funds of the Corporation
as are authorized and shall render from time to time an account of all such transactions and of the financial condition of the
Corporation. The Treasurer shall also perform such other duties as the Board of Directors may from time to time prescribe.
Section 5
Secretary.
The Secretary shall issue all authorized
notices for, and shall keep minutes of, all meetings of the stockholders and the Board of Directors. He or she shall have charge
of the corporate books and shall perform such other duties as the Board of Directors may from time to time prescribe.
Section 6
Chairman of the Board.
Unless otherwise provided by the Board of
Directors, the Chairman of the Board of Directors, if one is elected, shall preside, when present, at all meetings of the stockholders
and the Board of Directors. The Chairman of the Board shall have such other powers and shall perform such duties as the Board of
Directors may from time to time designate.
Section 7
Delegation of Authority.
The Board of Directors may from time to
time delegate the powers or duties of any officer to any other officers or agents, notwithstanding any provision hereof.
Section 8
Removal.
Any officer of the Corporation may be removed
at any time, with or without cause, by the Board of Directors.
Section 9
Action with Respect to Securities of Other Corporations.
Unless otherwise directed by the Board of
Directors, the President or any officer of the Corporation authorized by the President shall have power to vote and otherwise act
on behalf of the Corporation, in person or by proxy, at any meeting of stockholders of or with respect to any action of stockholders
of any other corporation in which this Corporation may hold securities and otherwise to exercise any and all rights and powers
which this Corporation may possess by reason of its ownership of securities in such other corporation.
Article V-
STOCK
Section 1
Certificates of Stock.
The shares of the Corporation shall be represented
by certificates, provided that the Board may provide by resolution or resolutions that some or all of any or all classes
or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate
until such certificate is surrendered to the Corporation. Each holder of stock represented by certificates shall be entitled to
a certificate signed by, or in the name of the Corporation, by any two of the President, a Vice President, the Secretary, an Assistant
Secretary, the Treasurer, an Assistant Treasurer or any other authorized officers of the Corporation, certifying the number of
shares owned by him or her. Any or all of the signatures on the certificate may be by facsimile.
Section 2
Transfers of Stock.
Transfers of stock shall be made only upon
the transfer books of the Corporation kept at an office of the Corporation or by transfer agents designated to transfer shares
of the stock of the Corporation. Except where a certificate is issued in accordance with Section 4 of Article V
of these Bylaws, an outstanding certificate, if one has been issued, for the number of shares involved shall be surrendered for
cancellation before a new certificate, if any, is issued therefor.
Section 3
Record Date.
In order that the Corporation may determine
the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors may, except
as otherwise required by law, fix a record date, which record date shall not precede the date upon which the resolution fixing
the record date is adopted by the Board of Directors, and which record date shall not be more than 60 nor less than 10 days before
the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the
stockholders entitled to vote at such meeting unless the Board of Directors determines, at the time it fixes such record date,
that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed
by the Board of Directors, the record date for determining stockholders entitled to notice of and to vote at a meeting of stockholders
shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close
of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled
to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting,
and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an
earlier date as that fixed for determination of stockholders entitled to vote in accordance with the foregoing provisions of this
Section 3 at the adjourned meeting.
In order that the Corporation may determine
the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders
entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful
action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing
the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed,
the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board
of Directors adopts the resolution relating thereto.
In order that the Corporation may determine
the stockholders entitled to consent to corporate action without a meeting, (including by telegram, cablegram or other electronic
transmission as permitted by law), the Board of Directors may fix a record date, which shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors, and which record date shall be not more than ten days after
the date upon which the resolution fixing the record date is adopted. If no record date has been fixed by the Board of Directors
and no prior action by the Board of Directors is required by the Delaware General Corporation Law, the record date shall be the
first date on which a consent setting forth the action taken or proposed to be taken is delivered to the Corporation in the manner
prescribed by Article I, Section 9 hereof. If no record date has been fixed by the Board of Directors and
prior action by the Board of Directors is required by the Delaware General Corporation Law with respect to the proposed action
by consent of the stockholders without a meeting, the record date for determining stockholders entitled to consent to corporate
action without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking
such prior action.
Section 4
Lost, Stolen or Destroyed Certificates.
In the event of the loss, theft or destruction
of any certificate of stock, another may be issued in its place pursuant to such regulations as the Board of Directors may establish
concerning proof of such loss, theft or destruction and concerning the giving of a satisfactory bond or bonds of indemnity.
Section 5
Regulations.
The issue, transfer, conversion and registration
of certificates of stock shall be governed by such other regulations as the Board of Directors may establish.
Article VI-
NOTICES
Section 1
Notices.
If mailed, notice to stockholders shall
be deemed given when deposited in the mail, postage prepaid, directed to the stockholder at such stockholder’s address as
it appears on the records of the Corporation. Without limiting the manner by which notice otherwise may be given effectively to
stockholders, any notice to stockholders may be given by electronic transmission in the manner provided in Section 232 of the Delaware
General Corporation Law.
Section 2
Waivers.
A written waiver of any notice, signed by
a stockholder or director, or waiver by electronic transmission by such person, whether given before or after the time of the event
for which notice is to be given, shall be deemed equivalent to the notice required to be given to such person. Neither the business
nor the purpose of any meeting need be specified in such a waiver. Attendance of a person at a meeting shall constitute a waiver
of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully called or convened.
Article VII-
MISCELLANEOUS
Section 1
Facsimile Signatures.
In addition to the provisions for use of
facsimile signatures elsewhere specifically authorized in these Bylaws, facsimile signatures of any officer or officers of the
Corporation may be used whenever and as authorized by the Board of Directors or a committee thereof.
Section 2
Corporate Seal.
The Board of Directors may provide a suitable
seal, containing the name of the Corporation, which seal shall be in the charge of the Secretary. If and when so directed by the
Board of Directors or a committee thereof, duplicates of the seal may be kept and used by the Treasurer or by an Assistant Secretary
or Assistant Treasurer.
Section 3
Reliance upon Books, Reports and Records.
Each director, each member of any committee
designated by the Board of Directors, and each officer of the Corporation shall, in the performance of his or her duties, be fully
protected in relying in good faith upon the books of account or other records of the Corporation and upon such information, opinions,
reports or statements presented to the Corporation by any of its officers or employees, or committees of the Board of Directors
so designated, or by any other person as to matters which such director or committee member reasonably believes are within such
other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.
Section 4
Fiscal Year.
The fiscal year of the Corporation shall
be as fixed by the Board of Directors.
Section 5
Offices.
The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the
business of the Corporation may require.
Section 6
Records and Reports.
The application and requirements of Section
1501 of the California General Corporation Law are hereby expressly waived to the fullest extent permitted thereunder.
Section 7
Time Periods.
In applying any provision of these Bylaws
which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a
period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded,
and the day of the event shall be included.
Article VIII-
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 1
Right to Indemnification.
Each person who was or is made a party to
or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative
or investigative (hereinafter a “proceeding”), by reason of the fact that he or she is or was a director or
an officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, or trustee of another
corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit
plan (hereinafter an “indemnitee”), whether the basis of such proceeding is alleged action in an official capacity
as a director, officer or trustee, or in any other capacity while serving as a director, officer or trustee, shall be indemnified
and held harmless by the Corporation to the fullest extent permitted by Delaware law, as the same exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification
rights than such law permitted the Corporation to provide prior to such amendment) against all expense, liability and loss (including
attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or
suffered by such indemnitee in connection therewith; provided, however, that, except as provided in Section 3
of this Article VIII with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify
any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or
part thereof) was authorized by the Board of Directors of the Corporation.
Section 2
Right to Advancement of Expenses.
In addition to the right to
indemnification conferred in Section 1 of this Article VIII, an indemnitee shall also have the right
to be paid by the Corporation the expenses (including attorney’s fees) incurred in defending any such proceeding in
advance of its final disposition (hereinafter an “advancement of expenses”); provided, however,
that, if the Delaware General Corporation Law requires, an advancement of expenses incurred by an indemnitee in his or her
capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee,
including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an
undertaking (hereinafter an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal
(hereinafter a “final adjudication”) that such indemnitee is not entitled to be indemnified for such
expenses under this Section 2 or otherwise.
Section 3
Right of Indemnitee to Bring Suit.
If a claim under Section 1 or
2 of this Article VIII is not paid in full by the Corporation within 60 days after a written claim has been
received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period
shall be 20 days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of
the claim. To the fullest extent permitted by law, if successful in whole or in part in any such suit, or in a suit brought by
the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled
to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by the indemnitee to enforce a right
to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it
shall be a defense that, and (ii) in any suit brought by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee
has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law. Neither the failure
of the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal
counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee
is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the Delaware General
Corporation Law, nor an actual determination by the Corporation (including its directors who are not parties to such action, a
committee of such directors, independent legal counsel, or its stockholders) that the indemnitee has not met such applicable standard
of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such
a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification
or to an advancement of expenses hereunder, or brought by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of
expenses, under this Article VIII or otherwise, shall be on the Corporation.
Section 4
Non-Exclusivity of Rights.
The rights to indemnification and to the
advancement of expenses conferred in this Article VIII shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, the Corporation’s Certificate of Incorporation, Bylaws, agreement, vote of stockholders
or disinterested directors or otherwise.
Section 5
Insurance.
The Corporation may maintain insurance,
at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership,
joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the
power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law.
Section 6
Indemnification of Employees and Agents of the Corporation.
The Corporation may, to the extent
authorized from time to time by the Board of Directors, grant rights to indemnification and to the advancement of expenses to
any employee or agent of the Corporation to the fullest extent of the provisions of this Article VIII with
respect to the indemnification and advancement of expenses of directors and officers of the Corporation.
Section 7
Nature of Rights.
The rights conferred upon indemnitees in
this Article VIII shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be
a director, officer or trustee and shall inure to the benefit of the indemnitee’s heirs, executors and administrators. Any
amendment, alteration or repeal of this Article VIII that adversely affects any right of an indemnitee or its successors
shall be prospective only and shall not limit, eliminate, or impair any such right with respect to any proceeding involving any
occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment, alteration or repeal.
Article IX-
AMENDMENTS
These Bylaws may be amended or repealed
by the Board of Directors at any meeting or by the stockholders at any meeting.
CERTIFICATE OF SECRETARY OF
Fifth
Wall Acquisition Corp. I
The undersigned, Andriy
Mykhaylovskyy, hereby certifies that he is the duly elected and acting Secretary of Fifth Wall Acquisition Corp. I, a Delaware
corporation (the “Corporation”), and that the Bylaws attached hereto constitute the Bylaws of said Corporation
as duly adopted by Action by Unanimous Written Consent in Lieu of Organizational Meeting by the Board of Directors on December
2, 2020.
IN WITNESS WHEREOF, the undersigned
has hereunto subscribed his name this 2nd day of December, 2020
| |
/s/ Andriy Mykhaylovskyy |
| |
Andriy Mykhaylovskyy, Secretary |
Exhibit 4.1
NUMBER
C- |
|
SHARES |
| |
|
|
| SEE REVERSE FOR CERTAIN DEFINITIONS |
|
|
| |
|
|
| |
|
CUSIP [ ] |
FIFTH WALL ACQUISITION CORP. I
CLASS A COMMON STOCK
THIS CERTIFIES THAT
is the owner of
fully paid and non-assessable shares of Class A common stock, par value $0.0001 per share (the “Common Stock”),
of Fifth Wall Acquisition Corp. I, a Delaware corporation (the “Company”), transferable on the books
of the Company in person or by duly authorized attorney upon surrender of this certificate properly endorsed.
This certificate is not valid unless countersigned
by the Transfer Agent and registered by the Registrar of the Company.
Witness the facsimile signature of a duly
authorized signatory of the Company.
| |
|
|
|
| Authorized Signatory |
|
Transfer Agent |
|
FIFTH WALL ACQUISITION CORP. I
The Company will furnish without charge
to each stockholder who so requests, a statement of the powers, designations, preferences and relative, participating, optional
or other special rights of each class of equity or series thereof of the Company and the qualifications, limitations, or restrictions
of such preferences and/or rights. This certificate and the shares represented thereby are issued and shall be held subject to
all the provisions of the Company’s Amended and Restated Certificate of Incorporation and all amendments thereto and resolutions
of the Board of Directors providing for the issue of securities (copies of which may be obtained from the secretary of the Company),
to all of which the holder of this certificate by acceptance hereof assents.
The following abbreviations, when used in
the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable
laws or regulations:
| TEN COM |
— |
as tenants in common |
UNIF GIFT MIN ACT |
— |
|
Custodian |
|
| TEN ENT |
— |
as tenants by the entireties |
|
|
(Cust) |
|
(Minor) |
| |
|
|
|
|
|
|
|
| JT TEN |
— |
as joint tenants with right of survivorship and not as tenants in common |
|
under Uniform Gifts to Minors Act |
|
| |
|
|
|
|
(State) |
|
Additional abbreviations may also be used
though not in the above list.
For value received,
hereby sells, assigns and transfers unto
(PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER(S) OF ASSIGNEE(S))
(PLEASE PRINT OR TYPEWRITE NAME(S) AND
ADDRESS(ES), INCLUDING ZIP CODE, OF ASSIGNEE(S))
shares of Common Stock represented
by the within Certificate, and hereby irrevocably constitutes and appoints
Attorney to transfer the said shares of
Common Stock on the books of the within named Company with full power of substitution in the premises.
Dated:
| |
|
| |
Notice: The signature(s) to this assignment must correspond with the name as written upon the face of the certificate in every particular, without alteration or enlargement or any change whatever. |
| THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (OR ANY SUCCESSOR RULE). |
|
As more fully described in, and subject to the terms and conditions
described in, the Company’s final prospectus for its initial public offering dated ,
2021, the holder(s) of this certificate shall be entitled to receive a pro rata portion of certain funds held in the trust
account established in connection with the Company’s initial public offering only in the event that (i) the Company
redeems the shares of Common Stock sold in the Company’s initial public offering and liquidates because it does not consummate
an initial business combination by the date set forth (the “Last Date”) in the Company’s Amended and Restated
Certificate of Incorporation, as the same may be amended from time to time (the “Charter”), (ii) the Company redeems
the shares of Common Stock sold in its initial public offering properly submitted in connection with a stockholder vote to amend
the Charter to modify the substance or timing of the Company’s obligation to redeem 100% of the Common Stock if it does not
consummate an initial business combination by the Last Date or with respect to any other material provisions relating to stockholders’
rights or pre-initial business combination activity, or (iii) if the holder(s) seek(s) to redeem for cash his, her
or its respective shares of Common Stock in connection with a tender offer (or proxy solicitation, solely in the event the Company
seeks stockholder approval of the proposed initial business combination) setting forth the details of a proposed initial business
combination. In no other circumstances shall the holder(s) have any right or interest of any kind in or to the trust account.
Exhibit 5.1
January
29, 2021
Fifth
Wall Acquisition Corp. I
6060 Center Drive 10th Floor
Los Angeles, California 90045
Re:
Securities Registered under Registration Statement on Form S-1
We have acted as counsel to you in connection with your filing
of a Registration Statement on Form S-1 (File No. 333-252274) (as amended or supplemented, the “Registration Statement”)
pursuant to the Securities Act of 1933, as amended (the “Securities Act”), relating to the registration of the offering
by Fifth Wall Acquisition Corp. I, a Delaware corporation (the “Company”), of up to 28,750,000 shares (the “Shares”)
of Class A common stock of the Company, par value $0.0001 per share (the “Common Stock”), including 3,750,000
Shares purchasable by the underwriters upon their exercise of an over-allotment option granted to the underwriters by the Company.
The Shares are expected to be sold to the several underwriters named in, and pursuant to, an underwriting agreement to be entered
into among the Company and such underwriters (the “Underwriting Agreement”).
We have reviewed such documents and made such examination of
law as we have deemed appropriate to give the opinions set forth below. We have relied, without independent verification,
on certificates of public officials and, as to matters of fact material to the opinions set forth below, on certificates of officers
of the Company.
The
opinion set forth below is limited to the Delaware General Corporation Law.
Based
on the foregoing, we are of the opinion that the Shares have been duly authorized and, upon issuance and delivery against
payment therefor in accordance with the terms of the Underwriting Agreement, the Shares will be validly issued, fully paid and non-assessable.
We hereby consent to the inclusion of this opinion as Exhibit 5.1
to the Registration Statement and to the references to our firm under the caption “Legal Matters” in the Registration
Statement. In giving our consent, we do not admit that we are in the category of persons whose consent is required under
Section 7 of the Securities Act or the rules and regulations thereunder.
Very truly yours,
/s/ Goodwin Procter LLP
GOODWIN PROCTER LLP
Exhibit 10.1
INVESTMENT MANAGEMENT TRUST AGREEMENT
This Investment Management Trust Agreement
(this “Agreement”) is made effective as of [ ], 2021 by and between Fifth Wall Acquisition
Corp. I, a Delaware corporation (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. 333-252274 (the “Registration Statement”) and prospectus (the
“Prospectus”) for the initial public offering (the “Offering”) of the Company’s
shares (“Shares”) of the Company’s Class A common stock, par value $0.0001 per share (the
“Common Stock”), 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 Goldman Sachs & Co. LLC and
Deutsche Bank Securities, as representatives (the “Representatives”) of the several underwriters (the
“Underwriters”) named therein; and
WHEREAS, as described in the Prospectus,
$250,000,000 of the gross proceeds of the Offering and sale of the Private Placement Shares (as defined in the Underwriting Agreement)
(or $287,500,000 if the Underwriters’ over-allotment option is exercised in full) will be delivered to the Trustee to be
deposited and held in a segregated trust account located at all times in the United States (the “Trust Account”)
for the benefit of the Company and the holders of the Common Stock issued in the Offering as hereinafter provided (the amount to
be delivered to the Trustee (and any interest subsequently earned thereon) is referred to herein as the “Property,”
the stockholders for whose benefit the Trustee shall hold the Property will be referred to as the “Public Stockholders,”
and the Public Stockholders and the Company will be referred to together as the “Beneficiaries”);
WHEREAS, pursuant to the Underwriting
Agreement, a portion of the Property up to $8,750,000, or up to $10,062,500 if the Underwriters’ over-allotment option
is exercised in full, is attributable to deferred underwriting discounts and commissions that will be payable by the Company
to the Underwriters only upon and concurrently with the consummation of a Business Combination (as defined below) (the
“Deferred Discount”); and
WHEREAS, the Company and the Trustee desire
to enter into this Agreement to set forth the terms and conditions pursuant to which the Trustee shall hold the Property.
NOW THEREFORE, IT IS AGREED:
1.
Agreements and Covenants of Trustee. The Trustee hereby agrees and covenants to:
(a)
Hold the Property in trust for the Beneficiaries in accordance with the terms of this Agreement in the Trust Account
established by the Trustee in the United States at First Republic Securities Company (or at another U.S. chartered commercial
bank with consolidated assets of $100 billion or more) in the United States, maintained by the Trustee and at a brokerage
institution selected by the Trustee that is reasonably satisfactory to the Company;
(b)
Manage, supervise and administer the Trust Account subject to the terms and conditions set forth herein;
(c)
In a timely manner, upon the written instruction of the Company, invest and reinvest the Property solely in United States government
securities within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, having a maturity of
185 days or less, or in money market funds meeting the conditions of paragraphs (d)(1), (d)(2), (d)(3) and (d)(4) of
Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended (or any successor rule), which invest only in direct
U.S. government treasury obligations, as determined by the Company; it being understood that the Trust Account will earn no interest
while account funds are uninvested awaiting the Company’s instructions hereunder and the Trustee may earn bank credits or
other consideration;
(d)
Collect and receive, when due, all interest or other income arising from the Property, which shall become part of the “Property,”
as such term is used herein;
(e)
Promptly notify the Company and the Representatives of all communications received by the Trustee with respect to any Property requiring
action by the Company;
(f)
Supply any necessary information or documents as may be requested by the Company (or its authorized agents) in connection with
the Company’s preparation of the tax returns relating to assets held in the Trust Account;
(g)
Participate in any plan or proceeding for protecting or enforcing any right or interest arising from the Property if, as and when
instructed by the Company to do so;
(h)
Render to the Company monthly written statements of the activities of, and amounts in, the Trust Account reflecting all receipts
and disbursements of the Trust Account;
(i)
Commence liquidation of the Trust Account only after and promptly after (x) receipt of, and only in accordance with, the terms
of a letter from the Company (“Termination Letter”) in a form substantially similar to that attached
hereto as either Exhibit A or Exhibit B, as applicable, signed on behalf of the Company by its Chief Executive
Officer, Chief Financial Officer, President, Executive Vice President, Vice President, Secretary or Chairman of the board of directors
of the Company (the “Board”) or other authorized officer of the Company, and, in the case of Exhibit A,
acknowledged and agreed to by the Representatives, and complete the liquidation of the Trust Account and distribute the Property
in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company
to its taxes (less taxes payable and up to $100,000 of such net interest to pay dissolution expenses), only as directed in the
Termination Letter and the other documents referred to therein, or (y) upon the date which is, the later of (1) 24 months
after the closing of the Offering and (2) such later date as may be approved by the Company’s stockholders in accordance
with the Company’s amended and restated certificate of incorporation if a Termination Letter has not been received by the
Trustee prior to such date, in which case the Trust Account shall be liquidated in accordance with the procedures set forth in
the Termination Letter attached as Exhibit B and the Property in the Trust Account, including interest earned on the
funds held in the Trust Account and not previously released to the Company to pay its taxes (less taxes payable and up to $100,000
of such net interest to pay dissolution expenses), shall be distributed to the Public Stockholders of record as of such date;
(j)
Upon written request from the Company, which may be given from time to time in a form substantially similar to that attached hereto
as Exhibit C (a “Tax Payment Withdrawal Instruction”), withdraw from the Trust Account and
distribute to the Company the amount of interest earned on the Property requested by the Company to cover any tax obligation owed
by the Company as a result of assets of the Company or interest or other income earned on the Property, which amount shall be delivered
directly to the Company by electronic funds transfer or other method of prompt payment, and the Company shall forward such payment
to the relevant taxing authority so long as there is no reduction in the principal amount per share initially deposited in the
Trust Account; provided, however, that to the extent there is not sufficient cash in the Trust Account to pay such
tax obligation, the Trustee shall liquidate such assets held in the Trust Account as shall be designated by the Company in writing
to make such distribution (it being acknowledged and agreed that any such amount in excess of interest income earned on the Property
shall not be payable from the Trust Account). The written request of the Company referenced above shall constitute presumptive
evidence that the Company is entitled to said funds, and the Trustee shall have no responsibility to look beyond said request;
(k)
Upon written request from the Company, which may be given from time to time in a form substantially similar to that attached hereto
as Exhibit D (a “Stockholder Redemption Withdrawal Instruction”), the Trustee shall distribute
on behalf of the Company the amount requested by the Company to be used to redeem shares of Common Stock from Public Stockholders
properly submitted in connection with a stockholder vote to approve an amendment to the Company’s amended and restated certificate
of incorporation to modify the substance or timing of the Company’s obligation to redeem 100% of shares of Common Stock sold in the Offering (the “public shares”) if the Company has not consummated
an initial Business Combination within such time as is described in the Company’s amended and restated certificate of incorporation
or with respect to any other material provisions relating to stockholders’ rights or pre-initial Business Combination activity.
The written request of the Company referenced above shall constitute presumptive evidence that the Company is entitled to distribute
said funds, and the Trustee shall have no responsibility to look beyond said request; and
(l)
Not make any withdrawals or distributions from the Trust Account other than pursuant to Section 1(i), (j) or
(k) above.
2.
Agreements and Covenants of the Company. The Company hereby agrees and covenants to:
(a)
Give all instructions to the Trustee hereunder in writing, signed by the Company’s Chairman of the Board, Chief Executive
Officer, Chief Financial Officer, President, Executive Vice President, Vice President or Secretary. In addition, except with respect
to its duties under Sections 1(i), 1(j) and 1(k) hereof, the Trustee shall be entitled to rely on,
and shall be protected in relying on, any verbal or telephonic advice or instruction which it, in good faith and with reasonable
care, believes to be given by any one of the persons authorized above to give written instructions, provided that the Company shall
promptly confirm such instructions in writing;
(b)
Subject to Section 4 hereof, hold the Trustee harmless and indemnify the Trustee from and against any and all expenses,
including reasonable counsel fees and disbursements, or losses suffered by the Trustee in connection with any action taken by it
hereunder and in connection with any action, suit or other proceeding brought against the Trustee involving any claim, or in connection
with any claim or demand, which in any way arises out of or relates to this Agreement, the services of the Trustee hereunder, or
the Property or any interest earned on the Property, except for expenses and losses resulting from the Trustee’s gross negligence,
fraud or willful misconduct. Promptly after the receipt by the Trustee of notice of demand or claim or the commencement of any
action, suit or proceeding, pursuant to which the Trustee intends to seek indemnification under this Section 2(b),
it shall notify the Company in writing of such claim (hereinafter referred to as the “Indemnified Claim”).
The Trustee shall have the right to conduct and manage the defense against such Indemnified Claim; provided that
the Trustee shall obtain the consent of the Company with respect to the selection of counsel, which consent shall not be unreasonably
withheld. The Trustee may not agree to settle any Indemnified Claim without the prior written consent of the Company, which such
consent shall not be unreasonably withheld. The Company may participate in such action with its own counsel;
(c)
Pay the Trustee the fees set forth on Schedule A hereto, including an initial acceptance fee, annual administration fee,
and transaction processing fee which fees shall be subject to modification by the parties from time to time. It is expressly understood
that the Property shall not be used to pay such fees unless and until it is distributed to the Company pursuant to Sections
1(i) through 1(j) hereof. The Company shall pay the Trustee the initial acceptance fee and the first annual
administration fee at the consummation of the Offering. The Company shall not be responsible for any other fees or charges of the
Trustee except as set forth in this Section 2(c), Schedule A and as may be provided in Section 2(b) hereof;
(d)
In connection with any vote of the Company’s stockholders regarding a merger, capital stock exchange, asset acquisition,
stock 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 stockholder
meeting verifying the vote of such stockholders 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; and
(h)
Within four (4) business days after the Underwriters exercise the over-allotment option (or any unexercised portion thereof)
or such over-allotment option expires, provide the Trustee with a notice in writing of the total amount of the Deferred Discount.
3.
Limitations of Liability. The Trustee shall have no responsibility or liability to:
(a)
Imply obligations, perform duties, inquire or otherwise be subject to the provisions of any agreement or document other than
this Agreement and that which is expressly set forth herein;
(b)
Take any action with respect to the Property, other than as directed in Section 1 hereof, and the Trustee shall have
no liability to any third party except for liability arising out of the Trustee’s gross negligence, fraud or willful misconduct;
(c)
Institute any proceeding for the collection of any principal and income arising from, or institute, appear in or defend any proceeding
of any kind with respect to, any of the Property unless and until it shall have received instructions from the Company given as
provided herein to do so and the Company shall have advanced or guaranteed to it funds sufficient to pay any expenses incident
thereto;
(d)
Refund any depreciation in principal of any Property;
(e)
Assume that the authority of any person designated by the Company to give instructions hereunder shall not be continuing unless
provided otherwise in such designation, or unless the Company shall have delivered a written revocation of such authority to the
Trustee;
(f)
The other parties hereto or to anyone else for any action taken or omitted by it, or any action suffered by it to be taken or omitted,
in good faith and in the Trustee’s best judgment, except for the Trustee’s gross negligence, fraud or willful misconduct.
The Trustee may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice
of counsel (including counsel chosen by the Trustee, which counsel may be the Company’s counsel), statement, instrument,
report or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also
as to the truth and acceptability of any information therein contained) which the Trustee believes, in good faith and with reasonable
care, to be genuine and to be signed or presented by the proper person or persons. The Trustee shall not be bound by any notice
or demand, or any waiver, modification, termination or rescission of this Agreement or any of the terms hereof, unless evidenced
by a written instrument delivered to the Trustee, signed by the proper party or parties and, if the duties or rights of the Trustee
are affected, unless it shall give its prior written consent thereto;
(g)
Verify the accuracy of the information contained in the Registration Statement;
(h)
Provide any assurance that any Business Combination entered into by the Company or any other action taken by the Company is as
contemplated by the Registration Statement;
(i)
File information returns with respect to the Trust Account with any local, state or federal taxing authority or provide periodic
written statements to the Company documenting the taxes payable by the Company, if any, relating to any interest income earned
on the Property;
(j)
Prepare, execute and file tax reports, income or other tax returns and pay any taxes with respect to any income generated by, and
activities relating to, the Trust Account, regardless of whether such tax is payable by the Trust Account or the Company, including,
but not limited to, tax obligations, except pursuant to Section 1(j) hereof; or
(k)
Verify calculations, qualify or otherwise approve the Company’s written requests for distributions pursuant to Sections
1(i), 1(j) or 1(k) hereof.
4. Trust Account Waiver. The Trustee has no right of set-off or any right, title, interest or claim of any kind (“Claim”)
to, or to any monies in, the Trust Account, and hereby irrevocably waives any Claim to, or to any monies in, the Trust Account
that it may have now or in the future. In the event the Trustee has any Claim against the Company under this Agreement, including,
without limitation, under Section 2(b) or Section 2(c) hereof, the Trustee shall pursue
such Claim solely against the Company and its assets outside the Trust Account and not against the Property or any monies in the
Trust Account.
5.
Termination. This Agreement shall terminate as follows:
(a)
If the Trustee gives written notice to the Company that it desires to resign under this Agreement, the Company shall use its reasonable
efforts to locate a successor trustee, pending which the Trustee shall continue to act in accordance with this Agreement. At such
time that the Company notifies the Trustee that a successor trustee has been appointed and has agreed to become subject to the
terms of this Agreement, the Trustee shall transfer the management of the Trust Account to the successor trustee, including but
not limited to the transfer of copies of the reports and statements relating to the Trust Account, whereupon this Agreement shall
terminate; provided, however, that in the event that the Company does not locate a successor trustee within
ninety (90) days of receipt of the resignation notice from the Trustee, the Trustee may submit an application to have the Property
deposited with any court in the State of New York or with the United States District Court for the Southern District of New York
and upon such deposit, the Trustee shall be immune from any liability whatsoever; or
(b)
At such time that the Trustee has completed the liquidation of the Trust Account and its obligations in accordance with the provisions
of Section 1(i) hereof and distributed the Property in accordance with the provisions of the Termination Letter,
this Agreement shall terminate except with respect to Section 2(b).
6.
Miscellaneous.
(a)
The Company and the Trustee each acknowledge that the Trustee will follow the security procedures set forth below with respect
to funds transferred from the Trust Account. The Company and the Trustee will each restrict access to confidential information
relating to such security procedures to authorized persons. Each party must notify the other party immediately if it has reason
to believe unauthorized persons may have obtained access to such confidential information, or of any change in its authorized personnel.
In executing funds transfers, the Trustee shall rely upon all information supplied to it by the Company, including, account names,
account numbers, and all other identifying information relating to a Beneficiary, Beneficiary’s bank or intermediary bank.
Except for any liability arising out of the Trustee’s gross negligence, fraud or willful misconduct, the Trustee shall not
be liable for any loss, liability or expense resulting from any error in the information or transmission of the funds.
(b)
This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York. This Agreement
may be executed in several original or facsimile counterparts, each one of which shall constitute an original, and together shall
constitute but one instrument.
(c)
This Agreement contains the entire agreement and understanding of the parties hereto with respect to the subject matter hereof.
Subject to Section 6(d) hereof, this Agreement or any provision hereof may only be changed, amended or modified (other
than to correct a typographical error) by a writing signed by each of the parties hereto.
(d)
This Agreement or any provision hereof may only be changed, amended or modified pursuant to Section 6(c) hereof with
the Consent of the Stockholders. For purposes of this Section 6(d), the “Consent of the Stockholders” means receipt
by the Trustee of a certificate from the inspector of elections of the stockholder meeting certifying that the Company’s
stockholders of record as of a record date established in accordance with Section 213(a) of the Delaware General Corporation
Law, as amended (“DGCL”) (or any successor rule), who hold sixty-five percent (65%) or more of all then outstanding
shares of the Common Stock and Class B common stock, par value $0.0001 per share, of the Company voting together as a single
class, have voted in favor of such change, amendment or modification. No such amendment will affect any Public Stockholder who
has otherwise indicated his election to redeem his shares of Common Stock in connection with a stockholder vote sought to amend
this Agreement to modify the substance or timing of the Company’s obligation to redeem 100% of the Common Stock if the Company
does not complete its initial Business Combination within the time frame specified in the Company’s amended and restated
certificate of incorporation. Except for any liability arising out of the Trustee’s gross negligence, fraud or willful misconduct,
the Trustee may rely conclusively on the certification from the inspector or elections referenced above and shall be relieved
of all liability to any party for executing the proposed amendment in reliance thereon.
(e)
The parties hereto consent to the jurisdiction and venue of any state or federal court located in the City of New York or the State
of New York, for purposes of resolving any disputes hereunder. AS TO ANY CLAIM, CROSS-CLAIM OR COUNTERCLAIM IN ANY WAY RELATING
TO THIS AGREEMENT, EACH PARTY WAIVES THE RIGHT TO TRIAL BY JURY.
(f)
Any notice, consent or request to be given in connection with any of the terms or provisions of this Agreement shall be in writing
and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery
or by electronic mail:
if to the Trustee, to:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf & Celeste Gonzalez
Email: fwolf@continentalstock.com
Email: cgonzalez@continentalstock.com
if to the Company, to:
Fifth Wall Acquisition Corp. I
6060 Center Drive 10th Floor
Los Angeles, California 90045
Attn: Brendan Wallace
Email: brendan@fifthwall.com
in each case, with copies to:
Skadden, Arps, Slate, Meagher & Flom LLP
525 University Ave
Palo Alto, CA 94301
Attn: Gregg A. Noel
Email: Gregg.Noel@skadden.com
and
Goodwin Procter LLP
100 Northern Avenue
Boston, Massachusetts 02210
Attn.: Jocelyn M. Arel, Esq.
Email: JArel@goodwinlaw.com
(g)
Each of the Company and the Trustee hereby represents that it has the full right and power and has been duly authorized to enter
into this Agreement and to perform its respective obligations as contemplated hereunder. The Trustee acknowledges and agrees that
it shall not make any claims or proceed against the Trust Account, including by way of set-off, and shall not be entitled to any
funds in the Trust Account under any circumstance.
(h)
This Agreement is the joint product of the Trustee and the Company and each provision hereof has been subject to the mutual consultation,
negotiation and agreement of such parties and shall not be construed for or against any party hereto.
(i)
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts
shall together constitute one and the same instrument. Delivery of a signed counterpart of this Agreement by facsimile or electronic
transmission shall constitute valid and sufficient delivery thereof.
(j)
Each of the Company and the Trustee hereby acknowledges and agrees that the Representatives on behalf of the Underwriters is a third-party
beneficiary of this Agreement.
(k)
Except as specified herein, no party to this Agreement may assign its rights or delegate its obligations hereunder to any other
person or entity.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have
duly executed this Investment Management Trust Agreement as of the date first written above.
| |
CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Trustee |
| |
|
| |
By: |
|
| |
|
Name: Francis Wolf |
| |
|
Title: Vice President |
| |
|
| |
|
| |
FIFTH WALL ACQUISITION CORP. I |
| |
|
| |
By: |
|
| |
|
Name: |
Brendan Wallace |
| |
|
Title: |
Chief Executive Officer |
[Signature Page to Investment Management
Trust Agreement]
SCHEDULE A
| Fee Item | |
Time and method of payment | |
Amount |
| Initial set-up fee | |
Initial closing of Offering by wire transfer. | |
$ | 3,500.00 |
| Trustee administration fee | |
Payable annually. First year fee payable, at initial closing of Offering by wire transfer, thereafter by wire transfer or check. | |
$ | 10,000.00 |
| Transaction processing fee for disbursements to Company under Sections 1 | |
Billed to Company following disbursement made 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 No. - Termination Letter
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section 1(i) of
the Investment Management Trust Agreement between Fifth Wall Acquisition Corp. I (the “Company”) and
Continental Stock Transfer & Trust Company (“Trustee”), dated as of
, 2021 (the “Trust Agreement”), this is to advise you that the Company has entered into an agreement
with (the “Target Business”) to consummate
a business combination with Target Business (the “Business Combination”) on or about [insert date].
The Company shall notify you at least seventy-two (72) hours in advance of the actual date (or such shorter period as you may agree)
of the consummation of the Business Combination (the “Consummation Date”). Capitalized terms used but
not defined herein shall have the meanings set forth in the Trust Agreement.
In accordance with the terms of the Trust
Agreement, we hereby authorize you to commence to liquidate all of the assets of the Trust Account and to transfer the proceeds
to a segregated account held by you on behalf of the Beneficiaries to the effect that, on the Consummation Date, all of the funds
held in the Trust Account will be immediately available for transfer to the account or accounts that the Company shall direct on
the Consummation Date (including as directed to it by the Representatives on behalf of the Underwriters (with respect to the Deferred
Discount)).
On the Consummation Date (i) counsel
for the Company shall deliver to you written notification that the Business Combination has been consummated, or will be consummated
concurrently with your transfer of funds to the accounts as directed by the Company (the “Notification”),
and (ii) the Company shall deliver to you (a) a certificate by the Chief Executive Officer, Chief Financial Officer,
Co-Executive Chairman or Vice Chairman, which verifies that the Business Combination has been approved by a vote of the Company’s
stockholders, if a vote is held and (b) a joint written instruction signed by the Company and the Representatives with respect
to the transfer of the funds held in the Trust Account, including payment of amounts owed to public stockholders who have properly
exercised their redemption rights and payment of the Deferred Discount directly to the account or accounts directed by the Representatives
from the Trust Account (the “Instruction Letter”). You are hereby directed and authorized to transfer
the funds held in the Trust Account immediately upon your receipt of the Notification and the Instruction Letter, in accordance
with the terms of the Instruction Letter. In the event that certain deposits held in the Trust Account may not be liquidated by
the Consummation Date without penalty, you will notify the Company in writing of the same and the Company shall direct you as to
whether such funds should remain in the Trust Account and be distributed after the Consummation Date to the Company. Upon the distribution
of all the funds, net of any payments necessary for reasonable unreimbursed expenses related to liquidating the Trust Account,
your obligations under the Trust Agreement shall be terminated.
In the event that the Business Combination
is not consummated on the Consummation Date described in the notice thereof and we have not notified you on or before the original
Consummation Date of a new Consummation Date, then upon receipt by the Trustee of written instructions from the Company, the funds
held in the Trust Account shall be reinvested as provided in Section 1(c) of the Trust Agreement on the business day
immediately following the Consummation Date as set forth in such notice as soon thereafter as possible.
| |
Fifth Wall Acquisition Corp. I |
| |
|
| |
By: |
|
| |
|
Name: |
| |
|
Title: |
| Agreed and acknowledged by: |
|
| |
|
| Goldman Sachs & Co. LLC |
|
| |
|
| |
|
| By: |
|
|
| |
Name: |
|
| |
Title: |
|
| Agreed and acknowledged by: |
|
| |
|
| Deutsche Bank Securities |
|
| |
|
| |
|
| By: |
|
|
| |
Name: |
|
| |
Title: |
|
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 No. - Termination Letter
Dear Mr. Wolf and Ms. Gonzalez :
Pursuant to Section 1(i) of
the Investment Management Trust Agreement between Fifth Wall Acquisition Corp. I (the “Company”) and
Continental Stock Transfer & Trust Company (the “Trustee”), dated as of
, 2021 (the “Trust Agreement”), this is to advise you that the Company has been unable to effect a business
combination with a Target Business (the “Business Combination”) within the time frame specified in the
Company’s Amended and Restated Certificate of Incorporation, as described in the Company’s Prospectus relating to the
Offering. Capitalized terms used but not defined herein shall have the meanings set forth in the Trust Agreement.
In accordance with the terms of the Trust
Agreement, we hereby authorize you to liquidate all of the assets in the Trust Operating Account and to transfer the total proceeds
into a segregated account held by you on behalf of the Beneficiaries to await distribution to the Public Stockholders. The Company
has selected (2) as the effective date for the purpose of determining
when the Public Stockholders will be entitled to receive their share of the liquidation proceeds. You agree to be the Paying Agent
of record and, in your separate capacity as Paying Agent, agree to distribute said funds directly to the Company’s Public
Stockholders in accordance with the terms of the Trust Agreement and the Amended and Restated Certificate of Incorporation of the
Company. Upon the distribution of all the funds, net of any payments necessary for reasonable unreimbursed expenses related to
liquidating the Trust Account, your obligations under the Trust Agreement shall be terminated, except to the extent otherwise provided
in Section 1(i) of the Trust Agreement.
| |
Very truly yours, |
| |
|
| |
Fifth Wall Acquisition Corp. I |
| |
|
| |
By: |
|
| |
|
Name: |
| |
|
Title: |
| cc: Goldman Sachs & Co. LLC |
|
| Deutsche Bank Securities |
|
(2) 24 months from the closing of the Offering or such
later date as may be approved by the Company’s stockholders in accordance with the Company’s amended and restated certificate
of incorporation.
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 No. - Tax Payment Withdrawal Instruction
Dear Mr. Wolf and Ms. Gonzalez :
Pursuant to Section 1(j) of
the Investment Management Trust Agreement between Fifth Wall Acquisition Corp. I (the “Company”) and
Continental Stock Transfer & Trust Company (the “Trustee”), dated as of
, 2021 (the “Trust Agreement”), the Company hereby requests that you deliver to the Company $
of the interest income earned on the Property as of the date hereof. Capitalized terms used but not defined herein shall have the
meanings set forth in the Trust Agreement.
The Company needs such funds to pay for
the tax obligations as set forth on the attached tax return or tax statement. In accordance with the terms of the Trust Agreement,
you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to
the Company’s operating account at:
[WIRE INSTRUCTION INFORMATION]
| |
Very truly yours, |
| |
|
| |
Fifth Wall Acquisition Corp. I |
| |
|
| |
By: |
|
| |
|
Name: |
| |
|
Title: |
| |
|
| cc: Goldman Sachs & Co. LLC |
|
| Deutsche Bank Securities |
|
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 No. - Stockholder Redemption Withdrawal Instruction
Dear Mr. Wolf and Ms. Gonzalez :
Pursuant to Section 1(k) of
the Investment Management Trust Agreement between Fifth Wall Acquisition Corp. I (the “Company”) and
Continental Stock Transfer & Trust Company (the “Trustee”), dated as of , 2021 (the “Trust Agreement”), the Company hereby requests that you deliver to the redeeming Public
Stockholders of the Company $ of the principal and interest
income earned on the Property as of the date hereof to a segregated account held by you on behalf of the Beneficiaries. Capitalized
terms used but not defined herein shall have the meanings set forth in the Trust Agreement.
The Company needs such funds to pay its
Public Stockholders who have properly elected to have their shares of Common Stock redeemed by the Company in connection with a
stockholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation to modify the
substance or timing of the Company’s obligation to redeem 100% of public shares of Common Stock if the Company has not consummated
an initial Business Combination within such time as is described in the Company’s amended and restated certificate of incorporation
or with respect to any other material provisions relating to stockholders’ rights or pre-initial Business Combination activity.
As such, you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter
to a segregated account held by you on behalf of the Beneficiaries.
| |
Very truly yours, |
| |
|
| |
Fifth Wall Acquisition Corp. I |
| |
|
| |
By: |
|
| |
|
Name: |
| |
|
Title: |
| |
|
| cc: Goldman Sachs & Co. LLC |
|
| Deutsche Bank Securities |
|
Exhibit 10.2
REGISTRATION AND STOCKHOLDER RIGHTS AGREEMENT
THIS REGISTRATION AND STOCKHOLDER RIGHTS
AGREEMENT (this “Agreement”), dated as of [ ], 2021, is made and entered into by and among Fifth
Wall Acquisition Corp. I, a Delaware corporation (the “Company”), Fifth Wall Acquisition Sponsor, LLC,
a Delaware limited liability company (the “Sponsor”) and the undersigned parties listed on the signature
page hereto under “Holders” (each such party, together with the Sponsor and any person or entity who hereafter
becomes a party to this Agreement pursuant to Section 5.2 of this Agreement, a “Holder” and
collectively the “Holders”).
RECITALS
WHEREAS, the Company has 7,187,500
shares of Class B common stock, par value $0.0001 per share (the “Founder Shares”), issued and outstanding,
up to 937,500 of which will be forfeited to the Company for no consideration depending on the extent to which the underwriters
of the Company’s initial public offering exercise their over-allotment option;
WHEREAS, the Founder Shares are convertible
into shares of the Company’s Class A common stock, par value $0.0001 per share (the “Common Stock”),
on the terms and conditions provided in the Company’s amended and restated certificate of incorporation;
WHEREAS,
on [ ], 2021, the Company and the Sponsor entered into that certain Private Placement Share Purchase Agreement (the “Private
Placement Share Purchase Agreement”), pursuant to which the Sponsor agreed to purchase up to 857,500 private placement
shares (or up to 932,500 shares to the extent that the over-allotment option in connection with the Company’s initial public
offering is exercised) (the “Private Placement Shares”) in a private placement transaction occurring
simultaneously with the closing of the Company’s initial public offering;
WHEREAS,
in order to finance the Company’s transaction costs in connection with its search for and consummation of an initial Business
Combination (as defined below), the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors
may loan to the Company funds as the Company may require, of which up to $1,500,000 of such loans may be convertible into private
placement-equivalent shares (“Working Capital Shares”) at a price of $10.00 per share at the option of
the lender; and
WHEREAS, the Company and the Holders
desire to enter into this Agreement, pursuant to which the Company shall grant the Holders certain registration rights with respect
to certain securities of the Company, as set forth in this Agreement.
NOW, THEREFORE, in consideration
of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. The terms defined
in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth
below:
“Adverse Disclosure”
shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the
Chief Executive Officer or principal financial officer of the Company, after consultation with counsel to the Company,
(i) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration
Statement or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the
circumstances under which they were made) not misleading, (ii) would not be required to be made at such time if the
Registration Statement were not being filed, and (iii) the Company has a bona fide business purpose for not making such
information public.
“Agreement” shall
have the meaning given in the Preamble.
“Board” shall
mean the Board of Directors of the Company.
“Business Combination”
shall mean any merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination
with one or more businesses, involving the Company.
“Commission” shall
mean the Securities and Exchange Commission.
“Common Stock”
shall have the meaning given in the Recitals hereto.
“Company” shall
have the meaning given in the Preamble.
“Demand Registration”
shall have the meaning given in subsection 2.1.1.
“Demanding Holder”
shall have the meaning given in subsection 2.1.1.
“Exchange Act”
shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.
“Form S-1”
shall have the meaning given in subsection 2.1.1.
“Form S-3”
shall have the meaning given in subsection 2.3.
“Founder Shares”
shall have the meaning given in the Recitals hereto and shall be deemed to include the shares of Common Stock 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 closing price
of the Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) for any 20 trading days within 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, capital stock exchange, reorganization
or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares
of Common Stock 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 [ ], 2021, 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 light of the circumstances
under which they were made) not misleading.
“Permitted Transferees”
shall mean any person or entity to whom a Holder of Registrable Securities is permitted to transfer such Registrable Securities
prior to the expiration of the Founder Shares Lock-up Period, Private Placement Lock-up Period or any other lock-up period, as
the case may be, under the Insider Letter, the Private Placement Share Purchase Agreement, this Agreement and any other applicable
agreement between such Holder and the Company, and to any transferee thereafter.
“Piggyback Registration”
shall have the meaning given in subsection 2.2.1.
“Private Placement Lock-up Period”
shall mean, with respect to Private Placement Shares that are held by the initial purchasers of such Private Placement Shares or
their Permitted Transferees, the period ending 30 days after the completion of the Company’s initial Business Combination.
“Private Placement Shares”
shall have the meaning given in the Recitals hereto.
“Private Placement Share
Purchase Agreement” shall have the meaning given in the Recitals hereto.
“Pro Rata” shall
have the meaning given in subsection 2.1.4.
“Prospectus” shall
mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended
by any and all post-effective amendments and including all material incorporated by reference in such prospectus.
“Registrable Security”
shall mean (a) the Founder Shares and the shares of Common Stock issued or issuable upon the conversion of the Founder Shares,
(b) the Private Placement Shares (including any shares of Common Stock issued or issuable upon the exercise of the Private
Placement Shares), (c) any outstanding shares of Common Stock or any other equity security (including the shares of Common
Stock issued or issuable upon the exercise of any other equity security) of the Company held by a Holder as of the date of this
Agreement, (d) any equity securities (including the shares of Common Stock issued or issuable upon the exercise of any such
equity security) of the Company issuable upon conversion of any working capital loans in an amount up to $1,500,000 made to the
Company by a Holder (including the Working Capital Shares) and (e) any other equity security of the Company issued or issuable
with respect to any such share of Common Stock by way of a stock dividend or stock 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: (A) a Registration Statement with respect
to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred,
disposed of or exchanged in accordance with such Registration Statement; (B) such securities shall have been otherwise transferred,
new certificates for such securities not bearing a legend restricting further transfer shall have been delivered by the Company
and subsequent public distribution of such securities shall not require registration under the Securities Act; (C) such securities
shall have ceased to be outstanding; (D) such securities may be sold without registration pursuant to Rule 144 promulgated
under the Securities Act (or any successor rule promulgated thereafter by the Commission) (but with no volume or other restrictions
or limitations); or (E) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution
or other public securities transaction.
“Registration”
shall mean a registration effected by preparing and filing a registration statement or similar document in compliance with the
requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration
statement becoming effective.
“Registration Expenses”
shall mean the out-of-pocket expenses of a Registration, including, without limitation, the following:
(A) all registration and filing fees
(including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc.) and any
securities exchange on which the Common Stock is then listed;
(B) fees and expenses of compliance
with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters in connection with
blue sky qualifications of Registrable Securities);
(C) printing, messenger, telephone
and delivery expenses;
(D) reasonable fees and disbursements
of counsel for the Company;
(E) reasonable fees and disbursements
of all independent registered public accountants of the Company incurred specifically in connection with such Registration; and
(F) reasonable fees and expenses of
one (1) legal counsel selected by the majority-in-interest of the Demanding Holders initiating a Demand Registration to be
registered for offer and sale in the applicable Registration.
“Registration Statement”
shall mean any registration statement that covers the Registrable Securities pursuant to the provisions of this Agreement, including
the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such
registration statement, and all exhibits to and all material incorporated by reference in such registration statement.
“Requesting Holder”
shall have the meaning given in subsection 2.1.1.
“Securities Act”
shall mean the Securities Act of 1933, as amended from time to time.
“Sponsor” shall
have the meaning given in the Recitals hereto.
“Underwriter”
shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part
of such dealer’s market-making activities.
“Underwritten Registration”
or “Underwritten Offering” shall mean a Registration in which securities of the Company
are sold to an Underwriter in a firm commitment underwriting for distribution to the public.
“Working Capital Shares”
shall have the meaning given in the Recitals hereto.
ARTICLE II
REGISTRATIONS
2.1 Demand Registration.
2.1.1 Request for Registration. Subject
to the provisions of subsection 2.1.4 and Section 2.4 hereof, at any time and from time to time on or after
the date the Company consummates the Business Combination, the Holders of at least fifteen percent (15%) of the then-outstanding
number of Registrable Securities (the “Demanding Holders”) may make a written demand
for Registration of all or part of their Registrable Securities, which written demand shall describe the amount and type of securities
to be included in such Registration and the intended method(s) of distribution thereof (such written demand a “Demand Registration”).
The Company shall, within ten (10) days of the Company’s receipt of the Demand Registration, notify, in writing, all
other Holders of Registrable Securities of such demand, and each Holder of Registrable Securities who thereafter wishes to include
all or a portion of such Holder’s Registrable Securities in a Registration pursuant to a Demand Registration (each such Holder
that includes all or a portion of such Holder’s Registrable Securities in such Registration, a “Requesting Holder”)
shall so notify the Company, in writing, within five (5) days after the receipt by the Holder of the notice from the Company.
Upon receipt by the Company of any such written notification from a Requesting Holder(s) to the Company, such Requesting Holder(s) shall
be entitled to have their Registrable Securities included in a Registration pursuant to a Demand Registration and the Company shall
effect, as soon thereafter as practicable, but not more than forty five (45) days immediately after the Company’s receipt
of the Demand Registration, the Registration of all Registrable Securities requested by the Demanding Holders and Requesting Holders
pursuant to such Demand Registration. Under no circumstances shall the Company be obligated to effect more than an aggregate of
three (3) Registrations pursuant to a Demand Registration under this subsection 2.1.1 with respect to any
or all Registrable Securities; provided, however, that a Registration shall not be counted for such purposes
unless a Form S-1 or any similar long-form registration statement that may be available at such time (“Form S-1”)
has become effective and all of the Registrable Securities requested by the Requesting Holders to be registered on behalf of the
Requesting Holders in such Form S-1 Registration have been sold, in accordance with Section 3.1 of this
Agreement.
2.1.2 Effective Registration. Notwithstanding
the provisions of subsection 2.1.1 above or any other part of this Agreement, a Registration pursuant to a Demand
Registration shall not count as a Registration unless and until (i) the Registration Statement filed with the Commission with
respect to a Registration pursuant to a Demand Registration has been declared effective by the Commission and (ii) the Company
has complied with all of its obligations under this Agreement with respect thereto; provided, further,
that if, after such Registration Statement has been declared effective, an offering of Registrable Securities in a Registration
pursuant to a Demand Registration is subsequently interfered with by any stop order or injunction of the Commission, federal or
state court or any other governmental agency the Registration Statement with respect to such Registration shall be deemed not to
have been declared effective, unless and until, (i) such stop order or injunction is removed, rescinded or otherwise terminated,
and (ii) a majority-in-interest of the Demanding Holders initiating such Demand Registration thereafter affirmatively elect
to continue with such Registration and accordingly notify the Company in writing, but in no event later than five (5) days,
of such election; and provided, further, that the Company shall not be obligated or required to file another
Registration Statement until the Registration Statement that has been previously filed with respect to a Registration pursuant
to a Demand Registration becomes effective or is subsequently terminated.
2.1.3 Underwritten Offering. Subject
to the provisions of subsection 2.1.4 and Section 2.4 hereof, if a majority-in-interest
of the Demanding Holders so advise the Company as part of their Demand Registration that the offering of the Registrable Securities
pursuant to such Demand Registration shall be in the form of an Underwritten Offering, then the right of such Demanding Holder
or Requesting Holder (if any) to include its Registrable Securities in such Registration shall be conditioned upon such Holder’s
participation in such Underwritten Offering and the inclusion of such Holder’s Registrable Securities in such Underwritten
Offering to the extent provided herein. All such Holders proposing to distribute their Registrable Securities through an Underwritten
Offering under this subsection 2.1.3 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected
for such Underwritten Offering by the majority-in-interest of the Demanding Holders initiating the Demand Registration.
2.1.4 Reduction of Underwritten Offering.
If the managing Underwriter or Underwriters in an Underwritten Registration pursuant to a Demand Registration, in good faith, advises
the Company, the Demanding Holders and the Requesting Holders (if any) in writing that the dollar amount or number of Registrable
Securities that the Demanding Holders and the Requesting Holders (if any) desire to sell, taken together with all other Common
Stock or other equity securities that the Company desires to sell and the Common Stock, if any, as to which a Registration has
been requested pursuant to separate written contractual piggy-back registration rights held by any other stockholders who desire
to sell, exceeds the maximum dollar amount or maximum number of equity securities that can be sold in the Underwritten Offering
without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of
such offering (such maximum dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”),
then the Company shall include in such Underwritten Offering, as follows: (i) first, the Registrable Securities of the Demanding
Holders and the Requesting Holders (if any) (pro rata based on the respective number of Registrable Securities that each Demanding
Holder and Requesting Holder (if any) has requested be included in such Underwritten Registration and the aggregate number of Registrable
Securities that the Demanding Holders and Requesting Holders have requested be included in such Underwritten Registration (such
proportion is referred to herein as “Pro Rata”)) that can be sold without exceeding
the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under
the foregoing clause (i), the Registrable Securities of Holders (Pro Rata, based on the respective number of Registrable Securities
that each Holder has so requested) exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1 hereof,
without exceeding the Maximum Number of Securities; and (iii) third, to the extent that the Maximum Number of Securities has
not been reached under the foregoing clauses (i) and (ii), the Common Stock or other equity securities that the Company desires
to sell, which can be sold without exceeding the Maximum Number of Securities; and (iv) fourth, to the extent that the Maximum
Number of Securities has not been reached under the foregoing clauses (i), (ii) and (iii), the Common Stock 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 stockholders of the Company (or by the Company
and by the stockholders 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 stockholders, (iii) for an offering of
debt that is convertible into equity securities of the Company or (iv) for a dividend reinvestment plan, then the Company
shall give written notice of such proposed filing to all of the Holders of Registrable Securities as soon as practicable but not
less than ten (10) days before the anticipated filing date of such Registration Statement, which notice shall (A) describe
the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of
the proposed managing Underwriter or Underwriters, if any, in such offering, and (B) offer to all of the Holders of Registrable
Securities the opportunity to register the sale of such number of Registrable Securities as such Holders may request in writing
within five (5) days after receipt of such written notice (such Registration a “Piggyback Registration”).
The Company shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and shall use
its best efforts to cause the managing Underwriter or Underwriters of a proposed Underwritten Offering to permit the Registrable
Securities requested by the Holders pursuant to this subsection 2.2.1 to be included in a Piggyback Registration
on the same terms and conditions as any similar securities of the Company included in such Registration and to permit the sale
or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. All
such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this subsection
2.2.1 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten
Offering by the Company.
2.2.2 Reduction of Piggyback Registration.
If the managing Underwriter or Underwriters in an Underwritten Registration that is to be a Piggyback Registration, in good faith,
advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration in writing that the dollar
amount or number of the shares of Common Stock that the Company desires to sell, taken together with (i) the shares of Common
Stock, if any, as to which Registration has been demanded pursuant to separate written contractual arrangements with persons or
entities other than the Holders of Registrable Securities hereunder, (ii) the Registrable Securities as to which registration
has been requested pursuant to Section 2.2 hereof, and (iii) the shares of Common Stock, if any, as
to which Registration has been requested pursuant to separate written contractual piggy-back registration rights of other stockholders
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 Common Stock or other equity
securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; (B) second,
to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities
of Holders exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1 hereof
(pro rata based on the respective number of Registrable Securities that such Holder has requested be included in such Registration),
which can be sold without exceeding the Maximum Number of Securities; and (C) third, to the extent that the Maximum Number
of Securities has not been reached under the foregoing clauses (A) and (B), the Common Stock, if any, as to which Registration
has been requested pursuant to written contractual piggy-back registration rights of other stockholders 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 Common Stock or other equity securities, if any, of such requesting persons or
entities, other than the Holders of Registrable Securities, which can be sold without exceeding the Maximum Number of
Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing
clause (A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant
to subsection 2.2.1, pro rata based on the number of Registrable Securities that each Holder has requested
be included in such Registration and the aggregate number of Registrable Securities that the Holders have requested to be
included in such Registration, which can be sold without exceeding the Maximum Number of Securities; (C) third, to the
extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the Common
Stock 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 Common Stock or other equity securities for the account of other persons or entities that
the Company is obligated to register pursuant to separate written contractual arrangements with such persons or entities,
which can be sold without exceeding the Maximum Number of Securities.
2.2.3 Piggyback Registration Withdrawal.
Any Holder of Registrable Securities shall have the right to withdraw from a Piggyback Registration for any or no reason whatsoever
upon written notification to the Company and the Underwriter or Underwriters (if any) of his, her or its intention to withdraw
from such Piggyback Registration prior to the effectiveness of the Registration Statement filed with the Commission with respect
to such Piggyback Registration. The Company (whether on its own good faith determination or as the result of a request for withdrawal
by persons pursuant to separate written contractual obligations) may withdraw a Registration Statement filed with the Commission
in connection with a Piggyback Registration at any time prior to the effectiveness of such Registration Statement. Notwithstanding
anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection
with the Piggyback Registration prior to its withdrawal under this subsection 2.2.3.
2.2.4 Unlimited Piggyback Registration
Rights. For purposes of clarity, any Registration effected pursuant to Section 2.2 hereof shall not be counted
as a Registration pursuant to a Demand Registration effected under Section 2.1 hereof.
2.3 Registrations on Form S-3.
The Holders of Registrable Securities may at any time, and from time to time, request in writing that the Company, pursuant to
Rule 415 under the Securities Act (or any successor rule promulgated thereafter by the Commission), register the resale
of any or all of their Registrable Securities on Form S-3 or any similar short form registration statement that may be available
at such time (“Form S-3”); provided, however, that the Company shall not be obligated
to effect such request through an Underwritten Offering. Within five (5) days of the Company’s receipt of a written
request from a Holder or Holders of Registrable Securities for a Registration on Form S-3, the Company shall promptly give
written notice of the proposed Registration on Form S-3 to all other Holders of Registrable Securities, and each Holder of
Registrable Securities who thereafter wishes to include all or a portion of such Holder’s Registrable Securities in such
Registration on Form S-3 shall so notify the Company, in writing, within ten (10) days after the receipt by the Holder
of the notice from the Company. As soon as practicable thereafter, but not more than twelve (12) days after the Company’s
initial receipt of such written request for a Registration on Form S-3, the Company shall register all or such portion of
such Holder’s Registrable Securities as are specified in such written request, together with all or such portion of Registrable
Securities of any other Holder or Holders joining in such request as are specified in the written notification given by such Holder
or Holders; provided, however, that the Company shall not be obligated to effect any such Registration pursuant to
Section 2.3 hereof if (i) a Form S-3 is not available for such offering; or (ii) the Holders of Registrable
Securities, together with the Holders of any other equity securities of the Company entitled to inclusion in such Registration,
propose to sell the Registrable Securities and such other equity securities (if any) at any aggregate price to the public of less
than $10,000,000.
2.4 Restrictions on Registration
Rights. If (A) during the period starting with the date sixty (60) days prior to the Company’s good faith
estimate of the date of the filing of, and ending on a date one hundred and twenty (120) days after the effective date of, a
Company initiated Registration and provided that the Company has delivered written notice to the Holders prior to receipt of
a Demand Registration pursuant to subsection 2.1.1 and it continues to actively employ, in good faith, all
reasonable efforts to cause the applicable Registration Statement to become effective; (B) the Holders have requested an
Underwritten Registration and the Company and the Holders are unable to obtain the commitment of underwriters to firmly
underwrite the offer; or (C) in the good faith judgment of the Board such Registration would be seriously detrimental to
the Company and the Board concludes as a result that it is essential to defer the filing of such Registration Statement at
such time, then in each case the Company shall furnish to such Holders a certificate signed by the Chairman of the Board
stating that in the good faith judgment of the Board it would be seriously detrimental to the Company for such Registration
Statement to be filed in the near future and that it is therefore essential to defer the filing of such Registration
Statement. In such event, the Company shall have the right to defer such filing for a period of not more than thirty
(30) days; provided, however, that the Company shall not defer its obligation in this manner
more than once in any 12-month period.
ARTICLE III
COMPANY PROCEDURES
3.1 General Procedures. If at any
time on or after the date the Company consummates a Business Combination the Company is required to effect the Registration of
Registrable Securities, the Company shall use its best efforts to effect such Registration to permit the sale of such Registrable
Securities in accordance with the intended plan of distribution thereof, and pursuant thereto the Company shall, as expeditiously
as possible:
3.1.1 prepare and file with the Commission
as soon as practicable a Registration Statement with respect to such Registrable Securities and use its reasonable best efforts
to cause such Registration Statement to become effective and remain effective until all Registrable Securities covered by such
Registration Statement have been sold;
3.1.2 prepare and file with the Commission
such amendments and post-effective amendments to the Registration Statement, and such supplements to the Prospectus, as may be
requested by the Holders or any Underwriter of Registrable Securities or as may be required by the rules, regulations or instructions
applicable to the registration form used by the Company or by the Securities Act or rules and regulations thereunder to keep
the Registration Statement effective until all Registrable Securities covered by such Registration Statement are sold in accordance
with the intended plan of distribution set forth in such Registration Statement or supplement to the Prospectus;
3.1.3 prior to filing a Registration Statement
or prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters, if any, and the Holders of Registrable
Securities included in such Registration, and such Holders’ legal counsel, copies of such Registration Statement as proposed
to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents
incorporated by reference therein), the Prospectus included in such Registration Statement (including each preliminary Prospectus),
and such other documents as the Underwriters and the Holders of Registrable Securities included in such Registration or the legal
counsel for any such Holders may request in order to facilitate the disposition of the Registrable Securities owned by such Holders;
3.1.4 prior to any public offering of Registrable
Securities, use its best efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement
under such securities or “blue sky” laws of such jurisdictions in the United States as the Holders of Registrable Securities
included in such Registration Statement (in light of their intended plan of distribution) may request and (ii) take such action
necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such
other governmental authorities as may be necessary by virtue of the business and operations of the Company and do any and all other
acts and things that may be necessary or advisable to enable the Holders of Registrable Securities included in such Registration
Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however,
that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be
required to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction
where it is not then otherwise so subject;
3.1.5 cause all such Registrable Securities
to be listed on each securities exchange or automated quotation system on which similar securities issued by the Company are then
listed;
3.1.6 provide a transfer agent or warrant
agent, as applicable, and registrar for all such Registrable Securities no later than the effective date of such Registration Statement;
3.1.7 advise each seller of such Registrable
Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission
suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose
and promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop
order should be issued;
3.1.8 at least five (5) days prior to
the filing of any Registration Statement or Prospectus or any amendment or supplement to such Registration Statement furnish a
copy thereof to each seller of such Registrable Securities and its counsel, including, without limitation, providing copies promptly
upon receipt of any comment letters received with respect to any such Registration Statement or Prospectus;
3.1.9 notify the Holders at any time when
a Prospectus relating to such Registration Statement is required to be delivered under the Securities Act, of the happening of
any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes a Misstatement,
and then to correct such Misstatement as set forth in Section 3.4 hereof;
3.1.10 permit a representative of the Holders
(such representative to be selected by a majority of the participating Holders), the Underwriters, if any, and any attorney or
accountant retained by such Holders or Underwriter to participate, at each such person’s own expense, in the preparation
of the Registration Statement, and cause the Company’s officers, directors and employees to supply all information reasonably
requested by any such representative, Underwriter, attorney or accountant in connection with the Registration; provided, however,
that such representatives or Underwriters enter into a confidentiality agreement, in form and substance reasonably satisfactory
to the Company, prior to the release or disclosure of any such information; and provided further, the Company
may not include the name of any Holder or Underwriter or any information regarding any Holder or Underwriter in any Registration
Statement or Prospectus, any amendment or supplement to such Registration Statement or Prospectus, any document that is to be incorporated
by reference into such Registration Statement or Prospectus, or any response to any comment letter, without the prior written consent
of such Holder or Underwriter and providing each such Holder or Underwriter a reasonable amount of time to review and comment on
such applicable document, which comments the Company shall include unless contrary to applicable law;
3.1.11 obtain a “cold comfort”
letter from the Company’s independent registered public accountants in the event of an Underwritten Registration which the
participating Holders may rely on, in customary form and covering such matters of the type customarily covered by “cold comfort”
letters as the managing Underwriter may reasonably request, and reasonably satisfactory to a majority-in-interest of the participating
Holders;
3.1.12 on the date the Registrable Securities
are delivered for sale pursuant to such Registration, obtain an opinion, dated such date, of counsel representing the Company for
the purposes of such Registration, addressed to the Holders, the placement agent or sales agent, if any, and the Underwriters,
if any, covering such legal matters with respect to the Registration in respect of which such opinion is being given as the Holders,
placement agent, sales agent, or Underwriter may reasonably request and as are customarily included in such opinions and negative
assurance letters, and reasonably satisfactory to a majority in interest of the participating Holders;
3.1.13 in the event of any Underwritten Offering,
enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing Underwriter
of such offering;
3.1.14 make available to its security holders,
as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with
the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement which satisfies
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor rule promulgated
thereafter by the Commission);
3.1.15 if the Registration involves the
Registration of Registrable Securities involving gross proceeds in excess of $25,000,000, use its reasonable efforts to make
available senior executives of the Company to participate in customary “road show” presentations that may be
reasonably requested by the Underwriter in any Underwritten Offering; and
3.1.16 otherwise, in good faith, cooperate
reasonably with, and take such customary actions as may reasonably be requested by the Holders, in connection with such Registration.
3.2 Registration Expenses. The Registration
Expenses of all Registrations shall be borne by the Company. It is acknowledged by the Holders that the Holders shall bear all
incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’ commissions and discounts,
brokerage fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration Expenses,”
all reasonable fees and expenses of any legal counsel representing the Holders.
3.3 Requirements for Participation in
Underwritten Offerings. No person may participate in any Underwritten Offering for equity securities of the Company pursuant
to a Registration initiated by the Company hereunder unless such person (i) agrees to sell such person’s securities
on the basis provided in any underwriting arrangements approved by the Company and (ii) completes and executes all customary
questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting agreements and other customary documents as may
be reasonably required under the terms of such underwriting arrangements.
3.4 Suspension of Sales; Adverse Disclosure.
Upon receipt of written notice from the Company that a Registration Statement or Prospectus contains a Misstatement, each of the
Holders shall forthwith discontinue disposition of Registrable Securities until he, she or it has received copies of a supplemented
or amended Prospectus correcting the Misstatement (it being understood that the Company hereby covenants to prepare and file such
supplement or amendment as soon as practicable after the time of such notice), or until he, she or it is advised in writing by
the Company that the use of the Prospectus may be resumed. If the filing, initial effectiveness or continued use of a Registration
Statement in respect of any Registration at any time would require the Company to make an Adverse Disclosure or would require the
inclusion in such Registration Statement of financial statements that are unavailable to the Company for reasons beyond the Company’s
control, the Company may, upon giving prompt written notice of such action to the Holders, delay the filing or initial effectiveness
of, or suspend use of, such Registration Statement for the shortest period of time, but in no event more than thirty (30) days,
determined in good faith by the Company to be necessary for such purpose. In the event the Company exercises its rights under the
preceding sentence, the Holders agree to suspend, immediately upon their receipt of the notice referred to above, their use of
the Prospectus relating to any Registration in connection with any sale or offer to sell Registrable Securities. The Company shall
immediately notify the Holders of the expiration of any period during which it exercised its rights under this Section 3.4.
3.5 Reporting Obligations. As long
as any Holder shall own Registrable Securities, the Company, at all times while it shall be a reporting company under the Exchange
Act, covenants to file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to Sections 13(a) or 15(d) of
the Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings. The Company further covenants
that it shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable
such Holder to sell shares of Common Stock held by such Holder without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter
by the Commission), including providing any legal opinions. Upon the request of any Holder, the Company shall deliver to such Holder
a written certification of a duly authorized officer as to whether it has complied with such requirements.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
4.1 Indemnification.
4.1.1 The Company agrees to indemnify,
to the extent permitted by law, each Holder of Registrable Securities, its officers and directors and each person who
controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses
(including attorneys’ fees) caused by any untrue or alleged untrue statement of material fact contained in any
Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission
or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Company by
such Holder expressly for use therein. The Company shall indemnify the Underwriters, their officers and directors and each
person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the
foregoing with respect to the indemnification of the Holder.
4.1.2 In connection with any Registration
Statement in which a Holder of Registrable Securities is participating, such Holder shall furnish to the Company in writing such
information and affidavits as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus
and, to the extent permitted by law, shall indemnify the Company, its directors and officers and agents and each person who controls
the Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including
without limitation reasonable attorneys’ fees) resulting from any untrue statement of material fact contained in the Registration
Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission of a material fact
required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue
statement or omission is contained in any information or affidavit so furnished in writing by such Holder expressly for use therein;
provided, however, that the obligation to indemnify shall be several, not joint and several, among such Holders of
Registrable Securities, and the liability of each such Holder of Registrable Securities shall be in proportion to and limited to
the net proceeds received by such Holder from the sale of Registrable Securities pursuant to such Registration Statement. The Holders
of Registrable Securities shall indemnify the Underwriters, their officers, directors and each person who controls such Underwriters
(within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to indemnification of the
Company.
4.1.3 Any person entitled to indemnification
herein shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification
(provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the
extent such failure has not materially prejudiced the indemnifying party) and (ii) unless in such indemnified party’s
reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party.
If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified
party without its consent (but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled to,
or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel (plus
local counsel) for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties
with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of
any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so
paid by the indemnifying party pursuant to the terms of such settlement) or which settlement does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such
claim or litigation.
4.1.4 The indemnification provided for under
this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party
or any officer, director or controlling person of such indemnified party and shall survive the transfer of securities. The Company
and each Holder of Registrable Securities participating in an offering also agrees to make such provisions as are reasonably requested
by any indemnified party for contribution to such party in the event the Company’s or such Holder’s indemnification
is unavailable for any reason.
4.1.5 If the indemnification provided under Section 4.1 hereof
from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims,
damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party,
shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities
and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified
party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party
shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information
supplied by, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative
intent, knowledge, access to information and opportunity to correct or prevent such action; provided, however,
that the liability of any Holder under this subsection 4.1.5 shall be limited to the amount of the net proceeds
received by such Holder in such offering giving rise to such liability. The amount paid or payable by a party as a result of the
losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in subsections
4.1.1, 4.1.2 and 4.1.3 above, any legal or other fees, charges or expenses reasonably incurred
by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable
if contribution pursuant to this subsection 4.1.5 were determined by pro rata allocation or by any other method
of allocation, which does not take account of the equitable considerations referred to in this subsection 4.1.5. No
person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution pursuant to this subsection 4.1.5 from any person who was not guilty of such fraudulent
misrepresentation.
ARTICLE V
MISCELLANEOUS
5.1 Notices. Any notice or communication
under this Agreement must be in writing and given by (i) deposit in the United States mail, addressed to the party to be notified,
postage prepaid and registered or certified with return receipt requested, (ii) delivery in person or by courier service providing
evidence of delivery, or (iii) transmission by hand delivery, electronic mail, telecopy, telegram or facsimile. Each notice
or communication that is mailed, delivered, or transmitted in the manner described above shall be deemed sufficiently given, served,
sent, and received, in the case of mailed notices, on the third business day following the date on which it is mailed and, in the
case of notices delivered by courier service, hand delivery, electronic mail, telecopy, telegram or facsimile, at such time as
it is delivered to the addressee (with the delivery receipt or the affidavit of messenger) or at such time as delivery is refused
by the addressee upon presentation. Any notice or communication under this Agreement must be addressed, if to the Company, to:
6060 Center Drive 10th Floor Los Angeles, California 90045, and, if to any Holder, at such Holder’s address or
contact information as set forth in the Company’s books and records. Any party may change its address for notice at any time
and from time to time by written notice to the other parties hereto, and such change of address shall become effective thirty (30) days
after delivery of such notice as provided in this Section 5.1.
5.2 Assignment; No Third Party Beneficiaries.
5.2.1 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.
5.2.2 Prior to the expiration of the Founder
Shares Lock-up Period or the Private Placement Lock-up Period, as the case may be, no Holder may assign or delegate such Holder’s
rights, duties or obligations under this Agreement, in whole or in part, except in connection with a transfer of Registrable Securities
by such Holder to a Permitted Transferee but only if such Permitted Transferee agrees to become bound by the transfer restrictions
set forth in this Agreement.
5.2.3 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.
5.2.4 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 5.2 hereof.
5.2.5 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 5.1 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 5.2 shall be null and void.
5.3 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.
5.4 Governing Law; Venue. NOTWITHSTANDING
THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT (I) THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO AGREEMENTS AMONG NEW YORK RESIDENTS
ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN NEW YORK AND (II) THE VENUE FOR ANY ACTION TAKEN WITH RESPECT TO THIS AGREEMENT
SHALL BE ANY STATE OR FEDERAL COURT IN THE STATE OF NEW YORK.
5.5 Amendments and Modifications.
Upon the written consent of the Company and the Holders of at least a majority in interest of the Registrable Securities at the
time in question, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be waived, or
any of such provisions, covenants or conditions may be amended or modified; provided, however, that notwithstanding
the foregoing, any amendment hereto or waiver hereof that adversely affects one Holder, solely in his, her or its capacity as a
holder of the shares of capital stock 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.
5.6 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.
5.7 Term. This Agreement shall terminate
upon the earlier of (i) the tenth anniversary of the date of this Agreement or (ii) the date as of which (A) all
of the Registrable Securities have been sold pursuant to a Registration Statement (but in no event prior to the applicable period
referred to in Section 4(a)(3) of the Securities Act and Rule 174 thereunder (or any successor rule promulgated
thereafter by the Commission)) or (B) the Holders of all Registrable Securities are permitted to sell the Registrable Securities
without registration pursuant to Rule 144 (or any similar provision) under the Securities Act with no volume or other restrictions
or limitations. The provisions of Section 3.5 and Article IV shall survive any termination.
[Signature Page Follows]
IN WITNESS WHEREOF,
the undersigned have caused this Agreement to be executed as of the date first written above.
| |
COMPANY: |
| |
|
| |
FIFTH WALL ACQUISITION CORP. I, a Delaware corporation |
| |
|
| |
By: |
|
| |
|
Name: |
|
| |
|
Title: |
Chief Executive Officer |
| |
|
| |
HOLDERS: |
| |
|
| |
FIFTH WALL ACQUISITION SPONSOR, LLC, a Delaware limited liability company |
| |
|
| |
By: |
|
| |
|
Name: |
|
| |
|
Title: |
Manager |
| |
|
| |
|
| |
[Independent director] |
| |
|
| |
|
| |
[Independent director] |
| |
|
| |
|
| |
[Independent director] |
Exhibit 10.4
[_______], 2021
Fifth Wall Acquisition Corp. I
6060 Center Drive 10th Floor
Los Angeles, California 90045
Re:
Initial Public Offering
Ladies and Gentlemen:
This letter (this “Letter Agreement”)
is being delivered to you in accordance with the Underwriting Agreement (the “Underwriting Agreement”)
entered into by and among Fifth Wall Acquisition Corp. I, a Delaware corporation (the “Company”), Goldman
Sachs & Co. LLC and Deutsche Bank Securities Inc. as representatives (the “Representatives”) of the
several underwriters (each, an “Underwriter” and collectively, the “Underwriters”),
relating to an underwritten initial public offering (the “Public Offering”), of up to 28,750,000 of the
Company’s shares (the Shares”) of Class A common stock, par value $0.0001 per share (the “Class A
Common Stock”), including up to 3,750,000 Shares that may be purchased to cover over-allotments, if any. The Shares
will be sold in the Public Offering pursuant to a registration statement on Form S-1 and prospectus (the “Prospectus”)
filed by the Company with the U.S. Securities and Exchange Commission (the “Commission”) and the Company
has applied to have the Shares listed on the Nasdaq Capital Market. Certain capitalized terms used herein are defined in paragraph
11 hereof.
In order to induce the Company and the Underwriters
to enter into the Underwriting Agreement and to proceed with the Public Offering and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, each of Fifth Wall Acquisition Sponsor, LLC (the “Sponsor”)
and the undersigned individuals, each of whom is a member of the Company’s board of directors and/or management team (each
of the undersigned individuals, an “Insider” and collectively, the “Insiders”),
hereby agrees with the Company as follows:
| 1. | The Sponsor and each Insider agrees that if the Company
seeks stockholder approval of a proposed Business Combination, then in connection with such proposed Business Combination, it,
he or she shall (i) vote any shares of Common Stock (as defined below) owned by it, him or her in favor of any proposed Business
Combination and (ii) not redeem any shares of Common Stock owned by it, him or her in connection with such stockholder approval.
If the Company seeks to consummate a proposed Business Combination by engaging in a tender offer, the Sponsor and each Insider
agrees that it, he or she will not sell or tender any shares of Common Stock owned by it, him or her in connection therewith. |
| 2. | The Sponsor and each Insider hereby agrees that in the
event that the Company fails to consummate a Business Combination within 24 months from the closing of the Public Offering, or
such later period approved by the Company’s stockholders in accordance with the Company’s amended and restated certificate
of incorporation (as it may be amended from time to time, 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 ten business days thereafter, redeem 100% of the shares of Class A Common
Stock sold in the Public Offering (the “Offering Shares”), at a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the Trust Account (as defined below), including interest earned
on the funds held in the Trust Account and not previously released to the Company to pay its taxes (less taxes payable and up
to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Offering Shares, which redemption
will completely extinguish all Public Stockholders’ (as defined below) rights as stockholders (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 stockholders and the Company’s board of directors, liquidate and dissolve,
subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and other requirements
of applicable law. The Sponsor and each Insider agrees to not propose any amendment to the Charter to modify the substance or
timing of the Company’s obligation to redeem 100% of the Offering Shares if the Company does not complete a Business Combination
within the required time period set forth in the Charter or with respect to any other material provisions relating to stockholders’
rights or pre-initial business combination activity, unless the Company provides its Public Stockholders with the opportunity
to redeem their Offering Shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously
released to the Company to pay its taxes, divided by the number of then outstanding Offering Shares. |
The Sponsor and each Insider acknowledges
that it, he or she has no right, title, interest or claim of any kind in or to any monies held in the Trust Account or any other
asset of the Company as a result of any liquidation of the Company with respect to the Founder Shares (as defined below) held by
it, him or her. The Sponsor and each Insider hereby further waives, with respect to any shares of Common Stock held by it, him
or her, if any, any redemption rights it, he or she may have in connection with (A) the consummation of a Business Combination,
including, without limitation, any such rights available in the context of a stockholder vote to approve such Business Combination,
or (B) a stockholder vote to approve an amendment to the Charter to modify the substance or timing of the Company’s
obligation to redeem 100% of the Offering Shares if the Company has not consummated a Business Combination within the time period
set forth in the Charter or with respect to any other material provisions relating to stockholders’ rights or pre-initial
business combination activity or in the context of a tender offer made by the Company to purchase Offering Shares (although the
Sponsor, the Insiders and their respective affiliates shall be entitled to redemption and liquidation rights with respect to any
Offering Shares it or they hold if the Company fails to consummate a Business Combination within the time period set forth in the
Charter).
| 3. | During the period commencing on the effective date of the Underwriting
Agreement and ending 180 days after such date, the Sponsor and each Insider shall not, without the prior written consent of the
Representatives, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or
otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate
or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), and the rules and regulations of the Commission promulgated thereunder, with
respect to, any shares of Common Stock (including, but not limited to, Founder Shares) or any securities convertible into, or exercisable,
or exchangeable for, shares of Common Stock owned by it, him or her, (ii) enter into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of ownership of any shares of Common Stock (including, but not
limited to, Founder Shares) or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock owned
by it, him or her, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (iii) publicly
announce any intention to effect any transaction specified in clause (i) or (ii)[; provided, however, that the foregoing does
not apply to the forfeiture of any Founder Shares pursuant to their terms or any transfer of Founder Shares to any current or future
independent director of the company (as long as such current or future independent director transferee is subject to this Letter
Agreement or executes an agreement substantially identical to the terms of this Letter Agreement, as applicable to directors and
officers at the time of such transfer; and as long as, to the extent any Section 16 reporting obligation is triggered as a result
of such transfer, any related Section 16 filing includes a practical explanation as to the nature of the transfer)]1.
Each of the Insiders and the Sponsor acknowledges and agrees that, prior to the effective date of any release or waiver, of the
restrictions set forth in this paragraph 3 or paragraph 7 below, the Company shall announce the impending release or waiver by
press release through a major news service at least two business days before the effective date of the release or waiver. Any release
or waiver granted shall only be effective two business days after the publication date of such press release. The provisions of
this paragraph will not apply if the release or waiver is effected solely to permit a transfer not for consideration and the transferee
has agreed in writing to be bound by the same terms described in this Letter Agreement to the extent and for the duration that
such terms remain in effect at the time of the transfer. Notwithstanding the foregoing, nothing in this Section 3 will prohibit
(1) the issuance and sale of Private Placement Shares (as defined below), (2) the issuance and sale of any Shares in
the Public Offering, including any Shares issued and sold to cover over-allotments, if any, (3) the registration with the
SEC pursuant to an agreement to be entered into concurrently with the execution of this Agreement, the resale of the Private Placement
Shares and the Founder Shares and (4) issuance of securities in connection with a Business Combination. |
1
Note to Goodwin: Consider adding in light of disclosure on p. 144 of S-1.
| 4. | In the event of the liquidation of the Trust Account
upon the failure of the Company to consummate its initial Business Combination within the time period set forth in the 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
or (ii) any prospective target business with which the Company has entered into a written letter of intent, confidentiality
or other similar agreement or Business Combination agreement (a “Target”); provided, however,
that such indemnification of the Company by the Indemnitor (x) shall apply only to the extent necessary to ensure that such
claims by a third party or a Target do not reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00
per Offering Share and (ii) the actual amount per Offering Share held in the Trust Account as of the date of the liquidation
of the Trust Account, if less than $10.00 per Offering Share is then held in the Trust Account due to reductions in the value
of the trust assets, less taxes payable, (y) shall not apply to any claims by a third party or a Target which executed a
waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) and (z) shall
not apply to any claims under the Company’s indemnity of the Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended. The Indemnitor shall have the right to defend against any such claim with counsel
of its choice reasonably satisfactory to the Company if, within 15 days following written receipt of notice of the claim to the
Indemnitor, the Indemnitor notifies the Company in writing that it shall undertake such defense. |
| 5. | To the extent that the Underwriters do not exercise their over-allotment
option to purchase up to an additional 3,750,000 Shares within 45 days from the date of the Prospectus (and as further described
in the Prospectus), the Sponsor agrees to forfeit, at no cost, a number of Founder Shares in the aggregate equal to 937,500 multiplied
by a fraction, (i) the numerator of which is 3,750,000 minus the number of Shares purchased by the Underwriters upon the exercise
of their over-allotment option, and (ii) the denominator of which is 3,750,000. The forfeiture will be adjusted to the extent
that the over-allotment option is not exercised in full by the Underwriters so that the Founder Shares will represent an aggregate
of 20.0% of the Company’s issued and outstanding shares of Class A Common Stock after the Public Offering (not including
the Private Placement Shares (as defined below)). The Sponsor further agrees that to the extent that the size of the Public Offering
is increased or decreased, the Company will purchase or sell Shares or effect a share repurchase or share capitalization, as applicable,
immediately prior to the consummation of the Public Offering in such amount as to maintain the ownership of the initial shareholders
prior to the Public Offering at 20.0% of its issued and outstanding Capital Shares upon the consummation of the Public Offering.
In connection with such increase or decrease in the size of the Public Offering, then (A) the references to 3,750,000 in the
numerator and denominator of the formula in the first sentence of this paragraph shall be changed to a number equal to 15% of the
number of Public Shares issued in the Public Offering and (B) the reference to 937,500 in the formula set forth in the first
sentence of this paragraph shall be adjusted to such number of Founder Shares that the Sponsor would have to surrender to the Company
in order for the initial shareholders to hold an aggregate of 20.0% of the Company’s issued and outstanding shares of Class A
Common Stock after the Public Offering (not including Private Placement Shares). |
| 6. | The Sponsor and each Insider hereby agrees and acknowledges
that: (i) the Underwriters and the Company would be irreparably injured in the event of a breach by such Sponsor or an Insider
of its, his or her obligations under paragraphs 1, 2, 3, 4, 5, 7(a), and 7(b), as applicable, of this Letter Agreement (ii) monetary
damages may not be an adequate remedy for such breach and (iii) the non-breaching party shall be entitled to injunctive relief,
in addition to any other remedy that such party may have in law or in equity, in the event of such breach. |
| 7. | (a) The Sponsor and each Insider agrees that it, he or she shall not Transfer any Founder Shares (or any shares of Class A Common
Stock issuable upon conversion thereof) until 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 closing price of the Class A
Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) for any 20 trading days within 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, capital stock exchange,
reorganization or other similar transaction that results in all of the Company’s stockholders having the right to exchange
their shares of Class A Common Stock for cash, securities or other property (the “Founder Shares Lock-up Period”). |
| | (b) The Sponsor and each Insider agrees that it, he or she shall
not Transfer any Private Placement Shares, until 30 days after the completion of a Business Combination (the “Private
Placement Shares Lock-up Period”, together with the Founder Shares Lock-up Period, the “Lock-up Periods”). |
| | (c) Notwithstanding the provisions set forth in paragraphs 7(a) and
(b), Transfers of the Founder Shares, Private Placement Shares or the Founder Shares that are held by the Sponsor, any Insider
or any of their permitted transferees (that have complied with this paragraph 7(c)), are permitted (a) to the
Company’s officers or directors, any affiliates or family members of any of the Company’s officers or directors, to
the Sponsor, any members or partners of the Sponsor or their affiliates, or any affiliates of the Sponsor; (b) in the case
of an individual, by gift to a member of such individual’s immediate family or to a trust, the beneficiary of which is a
member of such individual’s immediate family, an affiliate of such individual or to a charitable organization; (c) in
the case of an individual, by virtue of laws of descent and distribution upon death of such individual; (d) in the case of
an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with
any forward purchase agreement or similar arrangement or in connection with the consummation of an initial Business Combination
at prices no greater than the price at which the securities were originally purchased; (f) by virtue of the laws of the State
of Delaware or the Sponsor’s limited liability company agreement upon dissolution of the Sponsor; (g) to the Company
for no value for cancellation in connection with the consummation of a Business Combination; (h) in the event of the Company’s
liquidation prior to the consummation of a Business Combination; or (i) in the event of the Company’s liquidation,
merger, capital stock exchange or other similar transaction which results in all of the Company’s stockholders having the
right to exchange their shares of Class A Common Stock for cash, securities or other property subsequent to the Company’s
completion of an initial Business Combination; provided, however, that in the case of clauses (a) through (f),
these permitted transferees must enter into a written agreement with the Company agreeing to be bound by the transfer restrictions
herein and the other restrictions contained in this Agreement (including provisions relating to voting, the Trust Account and
liquidating distributions). |
| 8. | The Sponsor and each Insider represents and warrants
that it, he or she has never been suspended or expelled from membership in any securities or commodities exchange or association
or had a securities or commodities license or registration denied, suspended or revoked. Each Insider’s biographical information
furnished to the Company (including any such information included in the Prospectus) is true and accurate in all respects and
does not omit any material information with respect to the Insider’s background. The Sponsor and each Insider’s questionnaire
furnished to the Company is true and accurate in all respects. The Sponsor and each Insider represents and warrants that: it,
he or she is not subject to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation
to desist or refrain from any act or practice relating to the offering of securities in any jurisdiction; it, he or she has never
been convicted of, or pleaded guilty to, any crime (i) involving fraud, (ii) relating to any financial transaction or
handling of funds of another person, or (iii) pertaining to any dealings in any securities and it, he or she is not currently
a defendant in any such criminal proceeding. |
| 9. | Except as disclosed in the Prospectus, neither the Sponsor nor
any officer, nor any affiliate of the Sponsor or any officer, nor any director of the Company, shall receive from the Company any
finder’s fee, reimbursement, consulting fee, non-cash payments, monies in respect of any repayment of a loan or other compensation
prior to, or in connection with any services rendered in order to effectuate, the consummation of the Company’s initial Business
Combination (regardless of the type of transaction that it is), other than the following, none of which will be made from the proceeds
held in the Trust Account prior to the completion of the initial Business Combination: repayment of a loan and advances up to an
aggregate of $300,000 made to the Company by the Sponsor; reimbursement for any reasonable out-of-pocket expenses related to identifying,
investigating, negotiating and completing an initial Business Combination, and repayment of loans, if any, and on such terms as
to be determined by the Company from time to time, made by the Sponsor or an affiliate of the Sponsor or any of the Company’s
officers or directors to finance transaction costs in connection with an intended initial Business Combination, provided, that,
if the Company does not consummate an initial Business Combination, a portion of the working capital held outside the Trust Account
may be used by the Company to repay such loaned amounts so long as no proceeds from the Trust Account are used for such repayment.
Up to $1,500,000 of such loans may be convertible into shares at a price of $10.00 per share at the option of the lender. Such
shares would be identical to the Private Placement Shares. |
| 10. | The Sponsor and each Insider has full right and power,
without violating any agreement to which it is bound (including, without limitation, any non-competition or non-solicitation agreement
with any employer or former employer), to enter into this Letter Agreement and, as applicable, to serve as an officer and/or director
on the board of directors of the Company and hereby consents to being named in the Prospectus as an officer and/or director of
the Company. |
| 11. | As used herein, (i) “Business Combination”
shall mean a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination,
involving the Company and one or more businesses; (ii) “Common Stock” shall mean the Class A
common stock and Class B common stock; (iii) “Founder Shares” shall mean the 7,187,500 shares
of Class B common stock issued and outstanding (up to 937,500 Shares of which are subject to complete or partial forfeiture
if the over-allotment option is not exercised by the Underwriters); (iv) “Initial Stockholders”
shall mean the Sponsor and any Insider that holds Founder Shares; (v) “Private Placement Shares”
shall mean the up to 857,500 shares (or up to 932,500 shares if the over-allotment option is exercised in full) that the Sponsor
has agreed to purchase for an aggregate purchase price of $8,575,000 (or $9,325,000 if the over-allotment option is exercised in
full), or $10.00 per Share, in a private placement that shall occur simultaneously with the consummation of the Public Offering;
(vi) “Public Stockholders” shall mean the holders of securities issued in the Public Offering; (vii) “Trust
Account” shall mean the trust fund into which a portion of the net proceeds of the Public Offering and the sale of
the Private Placement Shares shall be deposited; (viii) “Transfer” shall mean the (a) sale
of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of
or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with
respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act, and the rules and
regulations of the Commission promulgated thereunder with respect to, any security, (b) entry into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such
transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public announcement of any intention
to effect any transaction specified in clause (a) or (b); and (ix) “Shares” shall mean the
Private Placement Shares and public shares. |
| 12. | The Company will maintain an insurance policy or policies
providing directors’ and officers’ liability insurance, and each Director shall be covered by such policy or policies,
in accordance with its or their terms, to the maximum extent of the coverage available for any of the Company’s directors
or officers. |
| 13. | This Letter Agreement constitutes the entire agreement
and understanding of the parties hereto in respect of the subject matter hereof and supersedes all prior understandings, agreements,
or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter
hereof or the transactions contemplated hereby. This Letter Agreement may not be changed, amended, modified or waived (other than
to correct a typographical error) as to any particular provision, except by a written instrument executed by all parties hereto. |
| 14. | No party hereto may assign either this Letter Agreement
or any of its rights, interests, or obligations hereunder without the prior written consent of the other parties. Any purported
assignment in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest
or title to the purported assignee. This Letter Agreement shall be binding on the Sponsor and each Insider and their respective
successors, heirs and assigns and permitted transferees. |
| 15. | Nothing in this Letter Agreement shall be construed to
confer upon, or give to, any person or corporation other than the parties hereto any right, remedy or claim under or by reason
of this Letter Agreement or of any covenant, condition, stipulation, promise or agreement hereof. All covenants, conditions, stipulations,
promises and agreements contained in this Letter Agreement shall be for the sole and exclusive benefit of the parties hereto and
their successors, heirs, personal representatives and assigns and permitted transferees. |
| 16. | This Letter Agreement may be executed in any number of
original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument. |
| 17. | This Letter Agreement shall be deemed severable, and
the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Letter
Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision,
the parties hereto intend that there shall be added as a part of this Letter Agreement a provision as similar in terms to such
invalid or unenforceable provision as may be possible and be valid and enforceable. |
| 18. | This Letter Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York. The parties hereto (i) all agree that any action, proceeding,
claim or dispute arising out of, or relating in any way to, this Letter Agreement shall be brought and enforced in the courts
of New York City or in the State of New York, and irrevocably submit to such jurisdiction and venue, which jurisdiction and venue
shall be exclusive and (ii) waive any objection to such exclusive jurisdiction and venue or that such courts represent an
inconvenient forum. |
| 19. | Any notice, consent or request to be given in connection
with any of the terms or provisions of this Letter Agreement shall be in writing and shall be sent by express mail or similar
private courier service, by certified mail (return receipt requested), by hand delivery or facsimile transmission. |
| 20. | [Each party hereto shall not be liable for any breaches
or misrepresentations contained in this Letter Agreement by any other party to this Letter Agreement, and no party shall be liable
or responsible for the obligations of another party, including, without limitation, indemnification obligations and notice obligations.]2 |
| 21. | This Letter Agreement shall terminate on the earlier of (i) the expiration of the Lock-up Periods or (ii) the liquidation
of the Company; provided, however, that this Letter Agreement shall earlier terminate in the event that the Public Offering is
not consummated and closed by December 31, 2021; provided further that paragraph 4 of this Letter Agreement shall survive
such liquidation. |
[Signature Page Follows]
2
Note to Goodwin: Consider adding.
| |
Sincerely, |
| |
|
| |
|
| |
FIFTH WALL ACQUISITION SPONSOR, LLC |
| |
|
|
| |
|
|
| |
By: |
|
| |
|
Name: |
| |
|
Title: Manager |
| |
|
| |
|
| |
|
| |
|
Acknowledged and Agreed:
FIFTH WALL ACQUISITION CORP. I
| |
|
|
| By: |
|
|
| |
Name: |
|
| |
Title: Chief Executive Officer |
|
[Signature Page to Letter Agreement]
Exhibit 10.5
Fifth Wall Acquisition Corp. I
December 2, 2020
Fifth Wall Acquisition Sponsor, LLC
| RE: Securities Subscription Agreement |
|
Gentlemen:
This agreement (this
“Agreement”) is entered into on December 2, 2020 by and between Fifth Wall Acquisition Sponsor, LLC, a Delaware
limited liability company (the “Subscriber” or “you”), and Fifth Wall Acquisition Corp. I,
a Delaware corporation (the “Company”). Pursuant to the terms hereof, the Company hereby accepts the offer the
Subscriber has made to subscribe for and purchase 7,187,500 Class B ordinary shares, $0.0001 par value per share (the “Shares”),
up to 937,500 of which are subject to forfeiture by you if the underwriters of the initial public offering (“IPO”)
of units (“Units”) of the Company do not fully exercise their over-allotment option (the “Over-allotment
Option”). The Company and the Subscriber’s agreements regarding such Shares are as follows:
1. Subscription and Purchase of Securities. For the sum
of $25,000 (the “Purchase Price”), which the Company acknowledges receiving in cash, the Company hereby issues
the Shares to the Subscriber, and the Subscriber hereby subscribes for and purchases the Shares from the Company, 937,500 of which
are subject to forfeiture, on the terms and subject to the conditions set forth in this Agreement. All references in this Agreement
to shares of the Company being forfeited shall take effect as surrenders for no consideration of such shares as a matter of Cayman
Islands law. Upon the issuance of the Shares, the Subscriber hereby surrenders for no consideration the one Class B ordinary share
of the Company held by it following the incorporation of the Company.
2. Representations, Warranties and Agreements.
2.1 Subscriber’s
Representations, Warranties and Agreements. To induce the Company to issue the Shares to the Subscriber, the Subscriber hereby
represents and warrants to the Company and agrees with the Company as follows:
2.1.1 No Government
Recommendation or Approval. The Subscriber understands that no federal or state agency has passed upon or made any recommendation
or endorsement of the offering of the Shares.
2.1.2 No Conflicts.
The execution, delivery and performance of this Agreement and the consummation by the Subscriber of the transactions contemplated
hereby do not violate, conflict with or constitute a default under (i) the limited liability company agreement of the Subscriber,
(ii) any agreement, indenture or instrument to which the Subscriber is a party or (iii) any law, statute, rule or regulation to
which the Subscriber is subject, or any agreement, order, judgment or decree to which the Subscriber is subject.
2.1.3 Registration
and Authority. The Subscriber is a Cayman Islands limited liability company, formed and registered, validly existing and possessing
all requisite power and authority necessary to carry out the transactions contemplated by this Agreement. Upon execution and delivery
by you, this Agreement will be a legal, valid and binding agreement of Subscriber, enforceable against Subscriber in accordance
with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance or similar
laws affecting the enforcement of creditors’ rights generally and subject to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity).
2.1.4 Experience,
Financial Capability and Suitability. Subscriber is: (i) sophisticated in financial matters and is able to evaluate the
risks and benefits of the investment in the Shares and (ii) able to bear the economic risk of its investment in the Shares
for an indefinite period of time because the Shares have not been registered under the Securities Act (as defined below) and
therefore cannot be sold unless subsequently registered under the Securities Act or an exemption from such registration is
available. Subscriber is capable of evaluating the merits and risks of its investment in the Company and has the capacity to
protect its own interests. Subscriber must bear the economic risk of this investment until the Shares are sold pursuant to:
(i) an effective registration statement under the Securities Act or (ii) an exemption from registration available with
respect to such sale. Subscriber is able to bear the economic risks of an investment in the Shares and to afford a complete
loss of Subscriber’s investment in the Shares.
2.1.5 Access to Information;
Independent Investigation. Prior to the execution of this Agreement, the Subscriber has had the opportunity to ask questions
of and receive answers from representatives of the Company concerning an investment in the Company, as well as the finances, operations,
business and prospects of the Company, and the opportunity to obtain additional information to verify the accuracy of all information
so obtained. In determining whether to make this investment, Subscriber has relied solely on Subscriber’s own knowledge and
understanding of the Company and its business based upon Subscriber’s own due diligence investigation and the information
furnished pursuant to this paragraph. Subscriber understands that no person has been authorized to give any information or to make
any representations which were not furnished pursuant to this Section 2 and Subscriber has not relied on any other representations
or information in making its investment decision, whether written or oral, relating to the Company, its operations and/or its prospects.
2.1.6 Regulation D
Offering. Subscriber represents that it is an “accredited investor” as such term is defined in Rule 501(a) of Regulation
D under the Securities Act of 1933, as amended (the “Securities Act”) and acknowledges the sale contemplated
hereby is being made in reliance on a private placement exemption to “accredited investors” within the meaning of Section
501(a) of Regulation D under the Securities Act or similar exemptions under federal and state law.
2.1.7 Investment Purposes.
The Subscriber is purchasing the Shares solely for investment purposes, for the Subscriber’s own account and not for the
account or benefit of any other person, and not with a view towards the distribution or dissemination thereof. The Subscriber did
not decide to enter into this Agreement as a result of any general solicitation or general advertising within the meaning of Rule
502 under the Securities Act.
2.1.8 Restrictions
on Transfer; Shell Company. Subscriber understands the Shares are being offered in a transaction not involving a public offering
within the meaning of the Securities Act. Subscriber understands the Shares will be “restricted securities” within
the meaning of Rule 144(a)(3) under the Securities Act, and Subscriber understands that the certificates representing the Shares
will contain a legend in respect of such restrictions. If in the future the Subscriber decides to offer, resell, pledge or otherwise
transfer the Shares, such Shares may be offered, resold, pledged or otherwise transferred only pursuant to: (i) registration under
the Securities Act, or (ii) an available exemption from registration. Subscriber agrees that if any transfer of its Shares or any
interest therein is proposed to be made, as a condition precedent to any such transfer, Subscriber may be required to deliver to
the Company an opinion of counsel satisfactory to the Company. Absent registration or an exemption, the Subscriber agrees not to
resell the Shares. Subscriber further acknowledges that because the Company is a shell company, Rule 144 may not be available to
the Subscriber for the resale of the Shares until one year following consummation of the initial business combination of the Company,
despite technical compliance with the requirements of Rule 144 and the release or waiver of any contractual transfer restrictions.
2.1.9 No Governmental
Consents. No governmental, administrative or other third party consents or approvals are required or necessary on the part
of Subscriber in connection with the transactions contemplated by this Agreement.
2.2 Company’s
Representations, Warranties and Agreements. To induce the Subscriber to subscribe for and purchase the Shares, the Company
hereby represents and warrants to the Subscriber and agrees with the Subscriber as follows:
2.2.1 Incorporation
and Corporate Power. The Company is a Cayman Islands exempted company incorporated, validly existing and is qualified to
do business in every jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse
effect on the financial condition, operating results or assets of the Company. The Company possesses all requisite corporate
power and authority necessary to carry out the transactions contemplated by this Agreement. Upon execution and delivery by
the Company, this Agreement will be a legal, valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance or similar laws affecting the enforcement of creditors’ rights generally and subject to general principles
of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).
2.2.2 No Conflicts.
The execution, delivery and performance of this Agreement and the consummation by the Company of the transactions contemplated
hereby do not violate, conflict with or constitute a default under (i) the memorandum and articles of association of the Company,
(ii) any agreement, indenture or instrument to which the Company is a party or (iii) any law, statute, rule or regulation to which
the Company is subject, or any agreement, order, judgment or decree to which the Company is subject.
2.2.3 Title to Securities.
Upon issuance in accordance with, and payment pursuant to, the terms hereof, and registration in the Company’s register of
members, the Shares will be duly and validly issued, fully paid and nonassessable. Upon issuance in accordance with, and payment
pursuant to, the terms hereof, and registration in the Company’s register of members, the Subscriber will have or receive
good title to the Shares, free and clear of all liens, claims and encumbrances of any kind, other than (a) transfer restrictions
hereunder and other agreements to which the Shares may be subject, (b) transfer restrictions under federal and state securities
laws, and (c) liens, claims or encumbrances imposed due to the actions of the Subscriber.
2.2.4 No Adverse Actions.
There are no actions, suits, investigations or proceedings pending, threatened against or affecting the Company which: (i) seek
to restrain, enjoin, prevent the consummation of or otherwise affect the transactions contemplated by this Agreement or (ii) question
the validity or legality of any transactions or seeks to recover damages or to obtain other relief in connection with any transactions.
3. Forfeiture of Shares.
3.1 Partial or No
Exercise of the Over-allotment Option. In the event the Over-allotment Option granted to the representative(s) of the underwriters
of the Company’s IPO is not exercised in full, the Subscriber acknowledges and agrees that it shall forfeit any and all rights
to such number of Shares (up to an aggregate of 937,500 Shares and pro rata based upon the percentage of the Over-allotment Option
exercised) such that immediately following such forfeiture, the Subscriber (and all other initial shareholders prior to the IPO,
if any) will own an aggregate number of Shares (not including ordinary shares issuable upon exercise of any warrants or any ordinary
shares purchased by Subscriber in the Company’s IPO or in the aftermarket) equal to 20% of the issued and outstanding ordinary
shares of the Company immediately following the IPO.
3.2 Termination
of Rights as Shareholder. If any of the Shares are forfeited in accordance with this Section 3, then after such time the Subscriber
(or successor in interest), shall no longer have any rights as a holder of such Shares, and the Company shall take such action
as is appropriate to cancel such Shares.
4. Waiver of Liquidation Distributions;
Redemption Rights. In connection with the Shares purchased pursuant to this Agreement, the Subscriber hereby waives any and
all right, title, interest or claim of any kind in or to any distributions by the Company from the trust account which will be
established for the benefit of the Company’s public shareholders and into which substantially all of the proceeds of the
IPO will be deposited (the “Trust Account”), in the event of a liquidation of the Company upon the Company’s
failure to timely complete an initial business combination. For purposes of clarity, in the event the Subscriber purchases ordinary
shares in the IPO or in the aftermarket, any additional Shares so purchased shall be eligible to receive any liquidating distributions
by the Company. However, in no event will the Subscriber have the right to redeem any ordinary shares into funds held in the Trust
Account upon the successful completion of an initial business combination.
5. Restrictions on Transfer.
5.1 Securities
Law Restrictions. In addition to any restrictions to be contained in that certain letter agreement (commonly known as an
“Insider Letter”) to be dated as of the closing of the IPO by and between Subscriber and the Company,
Subscriber agrees not to sell, transfer, pledge, hypothecate or otherwise dispose of all or any part of the Shares unless,
prior thereto (a) a registration statement on the appropriate form under the Securities Act and applicable state securities
laws with respect to the Shares proposed to be transferred shall then be effective or (b) the Company has received an opinion
from counsel reasonably satisfactory to the Company, that such registration is not required because such transaction is
exempt from registration under the Securities Act and the rules promulgated by the Securities and Exchange Commission
thereunder and with all applicable state securities laws.
5.2 Restrictive
Legends. Any certificates representing the Shares shall have endorsed thereon legends substantially as follows:
“THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE
SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE
OPINION OF COUNSEL, IS AVAILABLE.”
“THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO A LOCKUP AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED DURING THE TERM OF
THE LOCKUP.”
5.3 Additional Shares
or Substituted Securities. In the event of the declaration of a share capitalization, the declaration of an extraordinary dividend
payable in a form other than Shares, a spin-off, a share sub-division, an adjustment in conversion ratio, a recapitalization or
a similar transaction affecting the Company’s outstanding Shares without receipt of consideration, any new, substituted or
additional securities or other property which are by reason of such transaction distributed with respect to any Shares subject
to this Section 5 or into which such Shares thereby become convertible shall immediately be subject to this Section 5 and Section
3. Appropriate adjustments to reflect the distribution of such securities or property shall be made to the number and/or class
of Shares subject to this Section 5 and Section 3.
5.4 Registration
Rights. Subscriber acknowledges that the Shares are being purchased pursuant to an exemption from the registration requirements
of the Securities Act and will become freely tradable only after certain conditions are met or they are registered pursuant to
a Registration Rights Agreement to be entered into with the Company prior to the closing of the IPO.
6. Other Agreements.
6.1 Further Assurances.
Subscriber agrees to execute such further instruments and to take such further action as may reasonably be necessary to carry out
the intent of this Agreement.
6.2 Notices.
All notices, statements or other documents which are required or contemplated by this Agreement shall be: (i) in writing and delivered
personally or sent by first class registered or certified mail, overnight courier service or facsimile or electronic transmission
to the address designated in writing, (ii) by facsimile to the number most recently provided to such party or such other address
or fax number as may be designated in writing by such party and (iii) by electronic mail, to the electronic mail address most recently
provided to such party or such other electronic mail address as may be designated in writing by such party. Any notice or other
communication so transmitted shall be deemed to have been given on the day of delivery, if delivered personally, on the business
day following receipt of written confirmation, if sent by facsimile or electronic transmission, one (1) business day after delivery
to an overnight courier service or five (5) days after mailing if sent by mail.
6.3 Entire Agreement.
This Agreement, together with that certain Insider Letter to be entered into between Subscriber and the Company, substantially
in the form to be filed as an exhibit to the Registration Statement on Form S-1 associated with the Company’s IPO, embodies
the entire agreement and understanding between the Subscriber and the Company with respect to the subject matter hereof and supersedes
all prior oral or written agreements and understandings relating to the subject matter hereof. No statement, representation, warranty,
covenant or agreement of any kind not expressly set forth in this Agreement shall affect, or be used to interpret, change or restrict,
the express terms and provisions of this Agreement.
6.4 Modifications
and Amendments. The terms and provisions of this Agreement may be modified or amended only by written agreement executed by
all parties hereto.
6.5 Waivers and
Consents. The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by
a written document executed by the party entitled to the benefits of such terms or provisions. No such waiver or consent shall
be deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether
or not similar. Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was
given, and shall not constitute a continuing waiver or consent.
6.6 Assignment.
The rights and obligations under this Agreement may not be assigned by either party hereto without the prior written consent of
the other party.
6.7 Benefit.
All statements, representations, warranties, covenants and agreements in this Agreement shall be binding on the parties hereto
and shall inure to the benefit of the respective successors and permitted assigns of each party hereto. Nothing in this Agreement
shall be construed to create any rights or obligations except among the parties hereto, and no person or entity shall be regarded
as a third-party beneficiary of this Agreement.
6.8 Governing Law.
This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by the
laws of New York applicable to contracts wholly performed within the borders of such state, without giving effect to the conflict
of law principles thereof.
6.9 Severability.
In the event that any court of competent jurisdiction shall determine that any provision, or any portion thereof, contained in
this Agreement shall be unreasonable or unenforceable in any respect, then such provision shall be deemed limited to the extent
that such court deems it reasonable and enforceable, and as so limited shall remain in full force and effect. In the event that
such court shall deem any such provision, or portion thereof, wholly unenforceable, the remaining provisions of this Agreement
shall nevertheless remain in full force and effect.
6.10 No Waiver of
Rights, Powers and Remedies. No failure or delay by a party hereto in exercising any right, power or remedy under this Agreement,
and no course of dealing between the parties hereto, shall operate as a waiver of any such right, power or remedy of such party.
No single or partial exercise of any right, power or remedy under this Agreement by a party hereto, nor any abandonment or discontinuance
of steps to enforce any such right, power or remedy, shall preclude such party from any other or further exercise thereof or the
exercise of any other right, power or remedy hereunder. The election of any remedy by a party hereto shall not constitute a waiver
of the right of such party to pursue other available remedies. No notice to or demand on a party not expressly required under this
Agreement shall entitle the party receiving such notice or demand to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the party giving such notice or demand to any other or further action in
any circumstances without such notice or demand.
6.11 Survival of
Representations and Warranties. All representations and warranties made by the parties hereto in this Agreement or in any other
agreement, certificate or instrument provided for or contemplated hereby, shall survive the execution and delivery hereof and any
investigations made by or on behalf of the parties.
6.12 No Broker or
Finder. Each of the parties hereto represents and warrants to the other that no broker, finder or other financial consultant
has acted on its behalf in connection with this Agreement or the transactions contemplated hereby in such a way as to create any
liability on the other. Each of the parties hereto agrees to indemnify and save the other harmless from any claim or demand for
commission or other compensation by any broker, finder, financial consultant or similar agent claiming to have been employed by
or on behalf of such party and to bear the cost of legal expenses incurred in defending against any such claim.
6.13 Headings and
Captions. The headings and captions of the various subdivisions of this Agreement are for convenience of reference only and
shall in no way modify or affect the meaning or construction of any of the terms or provisions hereof.
6.14 Counterparts. This
Agreement may be executed in one or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it
being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or any other form of electronic delivery, such signature shall create a valid and binding obligation
of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature
page were an original thereof.
6.15 Construction.
The parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of
intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties hereto and no presumption
or burden of proof will arise favoring or disfavoring any party hereto because of the authorship of any provision of this Agreement.
The words “include,” “includes,” and “including” will be deemed to be
followed by “without limitation.” Pronouns in masculine, feminine, and neuter genders will be construed to include
any other gender, and words in the singular form will be construed to include the plural and vice versa, unless the context otherwise
requires. The words “this Agreement,” “herein,” “hereof,” “hereby,”
“hereunder,” and words of similar import refer to this Agreement as a whole and not to any particular subdivision
unless expressly so limited. The parties hereto intend that each representation, warranty, and covenant contained herein will have
independent significance. If any party hereto has breached any representation, warranty, or covenant contained herein in any respect,
the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the
relative levels of specificity) which such party hereto has not breached will not detract from or mitigate the fact that such party
hereto is in breach of the first representation, warranty, or covenant.
6.16 Mutual Drafting.
This Agreement is the joint product of the Subscriber and the Company and each provision hereof has been subject to the mutual
consultation, negotiation and agreement of such parties and shall not be construed for or against any party hereto.
7. Voting and Tender of Shares.
Subscriber agrees to vote the Shares in favor of an initial business combination that the Company negotiates and submits for approval
to the Company’s shareholders and shall not seek redemption or repurchase with respect to such Shares. Additionally, the
Subscriber agrees not to tender any Shares in connection with a tender offer presented to the Company’s shareholders in connection
with an initial business combination negotiated by the Company.
[Signature Page Follows]
If the foregoing accurately
sets forth our understanding and agreement, please sign the enclosed copy of this Agreement and return it to us.
| |
Very truly yours, |
| |
|
|
| |
Fifth Wall Acquisition Corp. I |
| |
|
|
| |
By: |
/s/ Andriy Mykhaylovskyy |
| |
|
Name: Andriy Mykhaylovskyy |
| |
|
Title: Chief Financial Officer |
Accepted and agreed as of the date first
written above.
Fifth Wall Acquisition Sponsor, LLC
|
By: |
/s/ Andriy Mykhaylovskyy |
|
| |
Name: Andriy Mykhaylovskyy |
|
| |
Title: Manager |
|
[Signature Page to Subscription Agreement]
Exhibit 10.6
THIS PROMISSORY NOTE (“NOTE”)
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THIS NOTE HAS BEEN ACQUIRED
FOR INVESTMENT ONLY AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF REGISTRATION OF THE RESALE THEREOF UNDER THE
SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY IN FORM, SCOPE AND SUBSTANCE TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED.
PROMISSORY NOTE
| Principal Amount: up to $300,000 |
Dated as of December 2, 2020 |
(as set forth on the Schedule of Borrowings
attached hereto)
Fifth Wall Acquisition
Corp. I, a Delaware corporation and blank check company (the “Maker”), promises to pay to the order of Fifth
Wall Acquisition Sponsor, LLC, a Delaware limited liability company, or its registered assigns or successors in interest (the “Payee”),
or order, the principal sum of up to three hundred thousand U.S. dollars ($300,000) (as set forth on the Schedule of Borrowings
attached hereto) in lawful money of the United States of America, on the terms and conditions described below. All payments on
this Note shall be made by check or wire transfer of immediately available funds or as otherwise determined by the Maker to such
account as the Payee may from time to time designate by written notice in accordance with the provisions of this Note.
1. Principal. The
principal balance of this Note shall be payable on the earlier of: (i) December 31, 2021 or (ii) the date on which Maker consummates
an initial public offering of its securities (the “IPO”). The principal balance may be prepaid at any time.
2. Interest. No
interest shall accrue on the unpaid principal balance of this Note.
3. Application of
Payments. All payments shall be applied first to payment in full of any costs incurred in the collection of any sum due under
this Note, including (without limitation) reasonable attorney’s fees, then to the payment in full of any late charges and
finally to the reduction of the unpaid principal balance of this Note.
4. Events of Default.
The following shall constitute an event of default (“Event of Default”):
(a) Failure to Make
Required Payments. Failure by Maker to pay the principal amount due pursuant to this Note within five (5) business days of
the date specified above.
(b) Voluntary Bankruptcy,
Etc. The commencement by Maker of a voluntary case under any applicable bankruptcy, insolvency, reorganization, rehabilitation
or other similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) of Maker or for any substantial part of its property, or the making by it of
any assignment for the benefit of creditors, or the failure of Maker generally to pay its debts as such debts become due, or the
taking of corporate action by Maker in furtherance of any of the foregoing.
(c) Involuntary Bankruptcy,
Etc. The entry of a decree or order for relief by a court having jurisdiction in the premises in respect of Maker in an involuntary
case under any applicable bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of Maker or for any substantial part of its property, or ordering the winding-up or
liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive
days.
5. Remedies.
(a) Upon the occurrence
of an Event of Default specified in Section 4(a) hereof, Payee may, by written notice to Maker, declare this Note to be due immediately
and payable, whereupon the unpaid principal amount of this Note, and all other amounts payable thereunder, shall become immediately
due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, anything
contained herein or in the documents evidencing the same to the contrary notwithstanding.
(b) Upon the occurrence
of an Event of Default specified in Sections 4(b) and 4(c), the unpaid principal balance of this Note, and all other sums payable
with regard to this Note, shall automatically and immediately become due and payable, in all cases without any action on the part
of Payee.
6. Waivers. Maker
and all endorsers and guarantors of, and sureties for, this Note waive presentment for payment, demand, notice of dishonor, protest,
and notice of protest with regard to the Note, all errors, defects and imperfections in any proceedings instituted by Payee under
the terms of this Note, and all benefits that might accrue to Maker by virtue of any present or future laws exempting any property,
real or personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy or sale under execution,
or providing for any stay of execution, exemption from civil process, or extension of time for payment; and Maker agrees that any
real estate that may be levied upon pursuant to a judgment obtained by virtue hereof, on any writ of execution issued hereon, may
be sold upon any such writ in whole or in part in any order desired by Payee.
7. Unconditional
Liability. Maker hereby waives all notices in connection with the delivery, acceptance, performance, default, or enforcement
of the payment of this Note, and agrees that its liability shall be unconditional, without regard to the liability of any other
party, and shall not be affected in any manner by any indulgence, extension of time, renewal, waiver or modification granted or
consented to by Payee, and consents to any and all extensions of time, renewals, waivers, or modifications that may be granted
by Payee with respect to the payment or other provisions of this Note, and agrees that additional makers, endorsers, guarantors,
or sureties may become parties hereto without notice to Maker or affecting Maker’s liability hereunder.
8. Notices. All
notices, statements or other documents which are required or contemplated by this Agreement shall be: (i) in writing and delivered
personally or sent by first class registered or certified mail, overnight courier service or facsimile or electronic transmission
to the address designated in writing, (ii) by facsimile to the number most recently provided to such party or such other address
or fax number as may be designated in writing by such party and (iii) by electronic mail, to the electronic mail address most recently
provided to such party or such other electronic mail address as may be designated in writing by such party. Any notice or other
communication so transmitted shall be deemed to have been given on the day of delivery, if delivered personally, on the business
day following receipt of written confirmation, if sent by facsimile or electronic transmission, one (1) business day after delivery
to an overnight courier service or five (5) days after mailing if sent by mail.
9. Construction.
THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS
THEREOF.
10. Severability. Any
provision contained in this Note which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
11. Trust Waiver.
Notwithstanding anything herein to the contrary, the Payee hereby waives any and all right, title, interest or claim of any
kind (“Claim”) in or to any distribution of or from the trust account to be established in which the proceeds
of the IPO conducted by the Maker (including the deferred underwriters discounts and commissions) and the proceeds of the sale
of the warrants issued in a private placement to occur prior to the consummation of the IPO are to be deposited, as described in
greater detail in the registration statement and prospectus to be filed with the Securities and Exchange Commission in connection
with the IPO, and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the trust account
for any reason whatsoever.
12. Amendment; Waiver.
Any amendment hereto or waiver of any provision hereof may be made with, and only with, the written consent of the Maker and
the Payee.
13. Assignment.
No assignment or transfer of this Note or any rights or obligations hereunder may be made by any party hereto (by operation
of law or otherwise) without the prior written consent of the other party hereto and any attempted assignment without the required
consent shall be void.
[Signature page follows]
IN WITNESS WHEREOF,
Maker, intending to be legally bound hereby, has caused this Note to be duly executed by the undersigned as of the day and year
first above written.
| |
Fifth Wall Acquisition Corp. I |
| |
a Delaware corporation |
| |
|
| |
By: |
/s/ Andriy Mykhaylovskyy |
| |
|
Name: Andriy Mykhaylovskyy |
| |
|
Title: Chief Financial Officer |
SCHEDULE OF BORROWINGS
The following increases or decreases in
this Promissory Note have been made:
Date of Increase or
Decrease |
|
Amount of decrease in
Principal Amount of this
Promissory Note |
|
Amount of increase in
Principal Amount of this
Promissory Note |
|
Principal Amount of this
Promissory Note
following such decrease
or increase |
Exhibit 10.7
PRIVATE PLACEMENT SHARES PURCHASE AGREEMENT
THIS PRIVATE PLACEMENT SHARES PURCHASE AGREEMENT
(as it may from time to time be amended and including all exhibits referenced herein, this “Agreement”),
dated as of , 2021, is entered into by
and between among Fifth Wall Acquisition Corp. I, a Delaware corporation (the “Company”), and Fifth Wall
Acquisition Sponsor, LLC, a Delaware limited liability company (the “Purchaser”).
WHEREAS, the Company intends to consummate
an initial public offering (the “Public Offering”) of the Company’s Class A common stock,
par value $0.0001 per share (each, a “Share”), as set forth in the Company’s Registration Statement
on Form S-1, filed with the U.S. Securities and Exchange Commission (the “SEC”), File Number 333-252274
(the “Registration Statement”), under the Securities Act of 1933, as amended (the “Securities
Act”).
WHEREAS, the Purchaser has agreed to purchase
an aggregate of 857,500 Shares (and up to 932,500 Shares if the underwriters in the Public Offering exercise their option to purchase
additional Shares in full) (the “Private Placement Shares”).
NOW THEREFORE, in consideration of the mutual
promises contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement hereby, intending legally to be bound, agree as follows:
AGREEMENT
Section 1. Authorization,
Purchase and Sale; Terms of the Private Placement Shares.
A. Authorization
of the Private Placement Shares. The Company has duly authorized the issuance and sale of the Private Placement Shares to the
Purchaser.
B. Purchase
and Sale of the Private Placement Shares.
(i) On
the date of the consummation of the Public Offering (the “IPO Closing Date”), the Company shall issue
and sell to the Purchaser, and the Purchaser shall purchase from the Company, 857,500 Private Placement Shares at a price of $10.00
per Private Placement Share for an aggregate purchase price of $8,575,000 (the “Purchase Price”). The
Purchaser shall pay the Purchase Price by wire transfer of immediately available funds to the Company at in accordance with the
Company’s wiring instructions, at least one (1) business day prior to the date of effectiveness of the Registration
Statement filed in connection with the Public Offering. On the IPO Closing Date, subject to the receipt of funds pursuant to the
immediately prior sentence, the Company, at its option, shall deliver a certificate evidencing the Private Placement Shares purchased
by the Purchaser on such date duly registered in the Purchaser’s name to the Purchaser or effect such delivery in book-entry
form.
(ii) On
the date of any closing of the option to purchase additional Shares, if any, in connection with the Public Offering or on such
earlier time and date as may be mutually agreed by the Purchaser and the Company (each such date, an “Option Closing
Date”, and each Option Closing Date (if any) and the IPO Closing Date, a “Closing Date”),
the Company shall issue and sell to the Purchaser, and the Purchaser shall purchase from the Company, up to 75,000 Private Placement
Shares (or, to the extent the option to purchase additional Shares is not exercised in full, a lesser number of Private Placement
Shares in proportion to portion of the option that is exercised) at a price of $10.00 per Private Placement Share for an aggregate
purchase price of up to $750,000 (the “Option Purchase Price”). The Purchaser shall pay the Option Purchase
Price in accordance with the Company’s wire instruction by wire transfer of immediately available funds to the Company. On
each Option Closing Date (if any), subject to the receipt of funds pursuant to the immediately prior sentence, the Company shall,
at its option, deliver a certificate evidencing the Private Placement Shares purchased on such date duly registered in the Purchaser’s
name to the Purchaser or effect such delivery in book-entry form.
C. Terms
of the Private Placement Shares.
(i) The
Private Placement Shares are substantially identical to the Shares to be offered in the Public Offering except: (a) as provided
in that letter agreement, dated as of the date hereof (the “Letter Agreement”), by and among the Company,
the Purchaser and each of the Company’s officers, directors and director nominees, and (b) the Private Placement Shares
are being purchased pursuant to an exemption from the registration requirements of the Securities Act and will become freely tradable
only after the expiration of the lockup described above in the Letter Agreement and they are registered pursuant to the Registration
and Shareholder Rights Agreement (as defined below) or an exemption from registration is available, and the restrictions described
above in clause (a) have expired.
(ii) On
the IPO Closing Date, the Company and the Purchaser shall enter into a registration and shareholder rights agreement (the “Registration
and Stockholder Rights Agreement”) pursuant to which the Company will grant certain registration rights to the Purchaser
relating to the Private Placement Shares.
Section 2. Representations
and Warranties of the Company. As a material inducement to the Purchaser to enter into this Agreement and purchase the Private
Placement Shares, the Company hereby represents and warrants to the Purchaser (which representations and warranties shall survive
each Closing Date) that:
A. Incorporation
and Corporate Power. The Company is a corporation duly organized, validly existing and in good standing under the laws of the
State of Delaware and is qualified to do business in every jurisdiction in which the failure to so qualify would reasonably be
expected to have a material adverse effect on the financial condition, operating results or assets of the Company. The Company
possesses all requisite corporate power and authority necessary to carry out the transactions contemplated by this Agreement.
B. Authorization;
No Breach.
(i) The
execution, delivery and performance of this Agreement and the Private Placement Shares have been duly authorized by the Company
as of the Closing Date. This Agreement constitutes the valid and binding obligation of the Company, enforceable in accordance with
its terms. Upon issuance in accordance with, and payment pursuant to, the terms of this Agreement, the Private Placement Shares
will constitute valid and binding obligations of the Company, enforceable in accordance with their terms as of the Closing Date.
(ii) The
execution and delivery by the Company of this Agreement and the Private Placement Shares, the issuance and sale of the Private
Placement Shares and the fulfillment of and compliance with the respective terms hereof and thereof by the Company, do not and
will not as of each Closing Date (a) conflict with or result in a breach of the terms, conditions or provisions of, (b) constitute
a default under, (c) result in the creation of any lien, security interest, charge or encumbrance upon the Company’s
share capital or assets under, (d) result in a violation of, or (e) require any authorization, consent, approval, exemption
or other action by or notice or declaration to, or filing with, any court or administrative or governmental body or agency pursuant
to the amended and restated certificate of incorporation or bylaws of the Company (in effect on the date hereof or as may be amended
prior to completion of the contemplated Public Offering) or any material law, statute, rule or regulation to which the Company
is subject, or any agreement, order, judgment or decree to which the Company is subject, except for any filings required after
the date hereof under federal or state securities laws.
C. Title
to Securities. Upon issuance in accordance with, and payment pursuant to, the terms hereof, the Private Placement Shares will
be duly and validly issued, fully paid and nonassessable. Upon issuance in accordance with, and payment pursuant to, the terms
hereof, the Purchaser will have good title to the Private Placement Shares purchased by it, free and clear of all liens, claims
and encumbrances of any kind, other than (i) transfer restrictions hereunder and under the other agreements contemplated hereby,
(ii) transfer restrictions under federal and state securities laws, and (iii) liens, claims or encumbrances imposed due
to the actions of the Purchaser.
D. Governmental
Consents. No permit, consent, approval or authorization of, or declaration to or filing with, any governmental authority is
required in connection with the execution, delivery and performance by the Company of this Agreement or the consummation by the
Company of any other transactions contemplated hereby.
E. Regulation
D Qualification. Neither the Company nor, to its actual knowledge, any of its affiliates, members, officers, directors or beneficial
shareholders of 20% or more of its outstanding securities, has experienced a disqualifying event as enumerated pursuant to Rule 506(d) of
Regulation D under the Securities Act.
Section 3. Representations
and Warranties of the Purchaser. As a material inducement to the Company to enter into this Agreement and issue and sell the
Private Placement Shares to the Purchaser, the Purchaser hereby represents and warrants to the Company (which representations and
warranties shall survive each Closing Date) that:
A. Organization
and Requisite Authority. The Purchaser possesses all requisite power and authority necessary to carry out the transactions
contemplated by this Agreement.
B. Authorization;
No Breach.
(i) This
Agreement constitutes a valid and binding obligation of the Purchaser, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other laws of general applicability relating to or affecting
creditors’ rights and to general equitable principles (whether considered in a proceeding in equity or law).
(ii) The
execution and delivery by the Purchaser of this Agreement and the fulfillment of and compliance with the terms hereof by the Purchaser
does not and shall not as of each Closing Date conflict with or result in a breach by the Purchaser of the terms, conditions or
provisions of any agreement, instrument, order, judgment or decree to which the Purchaser is subject that would materially impact
its ability to perform its obligations hereunder.
C. Investment
Representations.
(i) The
Purchaser is acquiring the Private Placement Shares for its own account, for investment purposes only and not with a view towards,
or for resale in connection with, any public sale or distribution thereof.
(ii) The
Purchaser is an “accredited investor” as such term is defined in Rule 501(a)(3) of Regulation
D under the Securities Act, and the Purchaser has not experienced a disqualifying event as enumerated pursuant to Rule 506(d) of
Regulation D under the Securities Act.
(iii) The
Purchaser understands that the Private Placement Shares are being offered and will be sold to it in reliance on specific exemptions
from the registration requirements of the United States federal and state securities laws and that the Company is relying upon
the truth and accuracy of, and the Purchaser’s compliance with, the representations and warranties of the Purchaser set forth
herein in order to determine the availability of such exemptions and the eligibility of the Purchaser to acquire such Private Placement
Shares.
(iv) The
Purchaser did not decide to enter into this Agreement as a result of any general solicitation or general advertising within the
meaning of Rule 502(c) of Regulation D under the Securities Act.
(v) The
Purchaser has been furnished with all materials relating to the business, finances and operations of the Company and materials
relating to the offer and sale of the Private Placement Shares which have been requested by the Purchaser. The Purchaser has been
afforded the opportunity to ask questions of the executive officers and directors of the Company. The Purchaser understands that
its investment in the Private Placement Shares involves a high degree of risk and it has sought such accounting, legal and tax
advice as it has considered necessary to make an informed investment decision with respect to the acquisition of the Private Placement
Shares.
(vi) The
Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed on
or made any recommendation or endorsement of the Private Placement Shares or the fairness or suitability of the investment in the
Private Placement Shares by the Purchaser nor have such authorities passed upon or endorsed the merits of the offering of the Private
Placement Shares.
(vii) The
Purchaser understands that: (a) the Private Placement Shares have not been and are not being registered under the Securities
Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (1) subsequently registered
thereunder or (2) sold in reliance on an exemption therefrom; and (b) except as specifically set forth in the Registration
and Shareholder Rights Agreement, neither the Company nor any other person is under any obligation to register the Private Placement
Shares under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.
While the Purchaser understands that Rule 144 under the Securities Act is not available for the resale of securities initially
issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously
a shell company, the Purchaser understands that Rule 144 includes an exception to this prohibition if the following conditions
are met: (i) the issuer of the securities that was formerly a shell company has ceased to be a shell company; (ii) the
issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”); (iii) the issuer of the securities has filed all Exchange Act reports
and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required
to file such reports and materials), other than Form 8-K reports; and (iv) at least one year has elapsed from the time
that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell
company.
(viii) The
Purchaser has such knowledge and experience in financial and business matters, knowledge of the high degree of risk associated
with investments in the securities of companies in the development stage such as the Company, is capable of evaluating the merits
and risks of an investment in the Private Placement Shares and is able to bear the economic risk of an investment in the Private
Placement Shares in the amount contemplated hereunder for an indefinite period of time. The Purchaser has adequate means of providing
for its current financial needs and contingencies and will have no current or anticipated future needs for liquidity which would
be jeopardized by the investment in the Private Placement Shares. The Purchaser can afford a complete loss of its investments in
the Private Placement Shares.
(ix) The
Purchaser understands that the Private Placement Shares shall bear the following legend and appropriate “stop transfer restrictions”:
“THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND NEITHER
THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS
WHICH, IN THE OPINION OF COUNSEL, IS AVAILABLE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO LOCKUP PROVISIONS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF DURING THE TERM
OF THE LOCKUP.”
Section 4. Conditions
of the Purchaser’s Obligations. The obligations of the Purchaser to purchase and pay for the Private Placement Shares
are subject to the fulfillment, on or before each Closing Date, of each of the following conditions:
A. Representations
and Warranties. The representations and warranties of the Company contained in Section 2 shall be true and correct at
and as of such Closing Date as though then made.
B. Performance.
The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before such Closing Date.
C. No
Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions
contemplated by this Agreement.
D. Registration
and Stockholder Rights Agreement. The Company shall have entered into the Registration and Stockholder Rights Agreement
on terms satisfactory to the Purchaser.
Section 5. Conditions
of the Company’s Obligations. The obligations of the Company to the Purchaser under this Agreement are subject to the
fulfillment, on or before each Closing Date, of each of the following conditions:
A. Representations
and Warranties. The representations and warranties of the Purchaser contained in Section 3 shall be true and correct at
and as of such Closing Date as though then made.
B. Performance.
The Purchaser shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by the Purchaser on or before such Closing Date.
C. Corporate
Consents. The Company shall have obtained the consent of its board of directors authorizing the execution, delivery and performance
of this Agreement and the issuance and sale of the Private Placement Shares hereunder.
D. No
Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions
contemplated by this Agreement.
Section 6. Termination.
This Agreement may be terminated at any time after [_] upon the election by either the Company or the Purchaser upon written notice
to the other party if the closing of the IPO does not occur prior to such date.
Section 7. Survival
of Representations and Warranties. All of the representations and warranties contained herein shall survive each Closing Date.
Section 8. Definitions.
Terms used but not otherwise defined in this Agreement shall have the meaning assigned to such terms in the registration statement
on Form S-1 the Company plans to file under the Securities Act.
Section 9. Miscellaneous.
A. Successors
and Assigns. Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors of the parties hereto whether
so expressed or not. Notwithstanding the foregoing or anything to the contrary herein, the parties may not assign this Agreement
without the prior written consent of the other party hereto, other than assignments by the Purchaser to its affiliates thereof
(including, without limitation one or more of its members).
B. Severability.
Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.
C. Counterparts.
This Agreement may be executed simultaneously in two or more counterparts, none of which need contain the signatures of more than
one party, but all such counterparts taken together shall constitute one and the same agreement. In the event that any signature
is delivered by via facsimile transmission or by e-mail delivery of a “pdf” format data file, such signature shall
create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force
and effect as if such facsimile or “.pdf” signature page were an original thereof.
D. Descriptive
Headings; Interpretation. The descriptive headings of this Agreement are inserted for convenience only and do not constitute
a substantive part of this Agreement. The use of the word “including” in this Agreement shall be by way of example
rather than by limitation.
E. Governing
Law. This Agreement shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall
be construed in accordance with the internal laws of the State of New York.
F. Amendments.
This Agreement may not be amended, modified or waived as to any particular provision, except by a written instrument executed by
the parties hereto.
[Signature page follows]
IN WITNESS WHEREOF, the undersigned have
duly executed this Agreement as of the date first written above.
| |
COMPANY: |
| |
|
|
|
| |
FIFTH WALL ACQUISITION CORP. I,
a Delaware corporation |
| |
|
|
|
| |
By: |
|
| |
|
Name: |
|
| |
|
Title: |
Chief Executive Officer |
| |
|
|
|
| |
PURCHASER: |
| |
|
|
|
| |
FIFTH WALL ACQUISITION SPONSOR, LLC,
a Delaware limited liability company |
| |
|
|
|
| |
By: |
|
| |
|
Name: |
|
| |
|
Title: |
Manager |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
We hereby consent to the use in the Prospectus
constituting a part of this Registration Statement on Amendment No. 2 to Form S-1 of our report dated January 29,
2021, relating to the financial statements of Fifth Wall Acquisition Corp. I, which is contained in that Prospectus. We also consent
to the reference to us under the caption “Experts” in the Prospectus.
| /s/ WithumSmith+Brown, PC |
|
| |
|
| New York, New York |
|
| January 29, 2021 |
|
Exhibit 99.1
CONSENT
Fifth Wall Acquisition Corp. I is filing a Registration Statement
on Form S-1 (together with any amendments or supplements thereto the “Registration Statement”), registering securities
for issuance in its initial public offering. As required by Rule 438 under the Securities Act of 1933, as amended, the undersigned
hereby consents to being named in the Registration Statement as a Director Nominee.
| /s/ Victor J. Coleman |
|
| Victor J. Coleman |
|
| |
|
| Date: January 29, 2021 |
|
Exhibit 99.2
CONSENT
Fifth Wall Acquisition Corp. I is filing a Registration Statement
on Form S-1 (together with any amendments or supplements thereto the “Registration Statement”), registering securities
for issuance in its initial public offering. As required by Rule 438 under the Securities Act of 1933, as amended, the undersigned
hereby consents to being named in the Registration Statement as a Director Nominee.
| /s/ Alana Beard |
|
| Alana Beard |
|
| |
|
| Date: January 29, 2021 |
|
Exhibit 99.3
CONSENT
Fifth Wall Acquisition Corp. I is filing a Registration Statement
on Form S-1 (together with any amendments or supplements thereto the “Registration Statement”), registering securities
for issuance in its initial public offering. As required by Rule 438 under the Securities Act of 1933, as amended, the undersigned
hereby consents to being named in the Registration Statement as a Director Nominee.
| /s/ Wisdom Lu |
|
| Wisdom Lu |
|
| |
|
| Date: January 29, 2021 |
|
Exhibit 99.4
CONSENT
Fifth Wall Acquisition Corp. I is filing a Registration Statement
on Form S-1 (together with any amendments or supplements thereto the “Registration Statement”), registering securities
for issuance in its initial public offering. As required by Rule 438 under the Securities Act of 1933, as amended, the undersigned
hereby consents to being named in the Registration Statement as a Director Nominee.
| /s/ Angela C. Huang |
|
| Angela C. Huang |
|
| |
|
| Date: January 29, 2021 |
|
