As filed with the Securities and Exchange Commission on October
9, 2020.
Registration
No. 333-248822
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT
NO. 1 TO
FORM S-1
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Distoken
Acquisition Corporation
(Exact name of registrant as specified in its charter)
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Cayman
Islands
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6770
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N/A
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(State
or other jurisdiction of
incorporation or organization)
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(Primary
Standard Industrial
Classification Code Number)
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(I.R.S.
Employer
Identification Number)
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Unit
1006, Block C, Jinshangjun Park
No. 2
Xiaoba Road, Panlong District
Kunming,
Yunnan, China
Telephone: +86 871 63624579
(Address, including zip code, and telephone number, including
area code, of registrant’s principal executive offices)
Puglisi &
Associates
850
Library Avenue, Suite 204
Newark,
DE 19711
Telephone: (302) 738-6680
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies
to:
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Richard
I. Anslow, Esq.
Joshua
N. Englard, Esq.
Ellenoff
Grossman & Schole LLP
1345 Avenue of the Americas
New York, New York 10105
Telephone: (212) 370-1300
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David
Alan Miller, Esq.
Jeffrey M. Gallant, Esq.
Graubard Miller
405 Lexington Avenue, 11th Floor
New York, New York 10174
Telephone: (212) 818-8800
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Approximate
date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, check the following box. ¨
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities
Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration
statement for the same offering. ¨
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
¨
If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following
box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
¨
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large
accelerated filer ¨
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Accelerated
filer ¨
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Non-accelerated
filer x
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Smaller
reporting company x
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Emerging
growth company x
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If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act.
¨
CALCULATION
OF REGISTRATION FEE
Title
of Each Class of Security
Being Registered
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Amount
Being
Registered
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Proposed
Maximum
Offering Price
per Security(1)
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Proposed
Maximum
Aggregate Offering
Price(1)
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Amount
of
Registration Fee
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Units,
each consisting of one Class A ordinary share, $0.0001 par value, one right entitling the holder to receive one-tenth
(1/10) of one Class A ordinary share, and one-half of one redeemable warrant(2)
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4,600,000
Units
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$10.00
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$46,000,000
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$5,971
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Class A
ordinary shares included as part of the units(3)
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4,600,000
Shares
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—
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—
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—(4)
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Rights
included as part of the units(3)
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4,600,000
Rights
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—
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—
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—(4)
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Redeemable
warrants included as part of the units(3)
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2,300,000
Warrants
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—
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—
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—(4)
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Shares
underlying rights included as part of the units(3)
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460,000
Shares
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$10.00
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$4,600,000
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$597
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Total
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$50,600,000
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$6,568(5)
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(1)
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Estimated
solely for the purpose of calculating the registration fee.
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(2)
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Includes
600,000 units, consisting of 600,000 Class A ordinary shares, 600,000 rights and 300,000 warrants, which may be issued
upon exercise of a 45-day option granted to the underwriters to cover over-allotments, if any.
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(3)
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Pursuant
to Rule 416, there are also being registered an indeterminable number of additional securities as may be issued to prevent
dilution resulting from share sub-divisions, share dividends or similar transactions.
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(4)
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No
fee pursuant to Rule 457(g).
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(5)
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Previously paid.
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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 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 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 October 9, 2020
PRELIMINARY
PROSPECTUS
$40,000,000
Distoken
Acquisition Corporation
4,000,000
Units
Distoken
Acquisition Corporation is a blank check company incorporated as a Cayman Islands exempted company and incorporated for the purpose
of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or other similar
business combination with one or more businesses or entities, which we refer to as a target business. Our efforts to identify
a prospective target business will not be limited to a particular industry or geographic region although we intend to focus our
search on businesses in the technology industry that have their primary operations located in Asia. We do not have any specific
business combination under consideration and we have not (nor has anyone on our behalf), directly or indirectly, contacted any
prospective target business or had any substantive discussions, formal or otherwise, with respect to such a transaction. If we
are unable to consummate an initial business combination within 15 months from the closing of this offering (or up to 21 months
from the closing of this offering if we extend the period of time to consummate a business combination, as described in more detail
in this prospectus), we will redeem 100% of the public shares for a pro rata portion of the trust account, 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 $50,000 of interest to pay dissolution expenses) divided by the number of then outstanding
public shares, subject to applicable law and as further described herein.
This
is an initial public offering of our securities. Each unit that we are offering has a price of $10.00 and consists of one Class A
ordinary share, one right and one-half of one warrant. Each right entitles the holder thereof to receive one-tenth (1/10) of one
Class A ordinary share upon the consummation of an initial business combination, as described in more detail in this prospectus.
Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share. Each whole
warrant will become exercisable on the later of 30 days after the completion of an initial business combination or 12 months from
the closing of this offering and will expire on the fifth anniversary of our completion of an initial business combination, or
earlier upon redemption or liquidation. We have granted the underwriters a 45-day option to purchase up to an additional 600,000
units to cover over-allotments, if any.
Xiaosen
Sponsor LLC, a Cayman Islands limited liability company, which we refer to throughout this prospectus as our
“sponsor,” has committed that it will purchase from us an aggregate of 250,000 units, or private units, at $10.00
per unit for a total purchase price of $2,500,000 in a private placement that will occur simultaneously with the consummation
of this offering. Our sponsor has also agreed that if the over-allotment option is exercised by the underwriters in full or
in part, it will purchase from us additional private units on a pro rata basis (up to a maximum of 18,000 additional private
units at a price of $10.00 per unit) in an amount that is necessary to maintain in the trust account $10.00 per unit sold to
the public in this offering. These additional private units will be purchased in a private placement that will occur
simultaneously with the purchase of units resulting from the exercise of the over-allotment option. The private units are
identical to the units sold in this offering, subject to certain limited exceptions as described in this
prospectus.
Our
sponsor currently holds 1,150,000 Class B ordinary shares, up to 150,000 of which are subject to forfeiture by our sponsor
depending on the extent to which the underwriters’ over-allotment option is exercised. Holders of Class A ordinary
shares and Class B ordinary shares are entitled to one vote for each share held on all matters to be voted on by our shareholders,
except as required by law; provided that, prior to our initial business combination, only holders of our Class B ordinary
shares will have the right to vote on the appointment of directors, and holders of a majority of our Class B ordinary shares
may remove a member of the board of directors for any reason. With respect to any other matter submitted to a vote of our shareholders,
including any vote in connection with our initial business combination, except as required by law, holders of Class A ordinary
shares and holders of Class B ordinary shares will vote together as a single class. The Class B ordinary shares held
by our initial shareholders will automatically convert into Class A ordinary shares upon the completion of our initial business
combination on a one-for-one basis, subject to adjustment as provided herein.
There
is presently no public market for our units, ordinary shares, rights or warrants. We have applied to have our units listed on
the Nasdaq Capital Market, or Nasdaq, under the symbol “DISTU” on or promptly after the date of this prospectus. The
Class A ordinary shares, rights and warrants comprising the units will begin separate trading on the 90th day
following the date of this prospectus unless EarlyBirdCapital, Inc, the representative of the underwriters, informs us of
its decision to allow earlier separate trading, subject to our filing a Current Report on Form 8-K with the SEC containing
an audited balance sheet reflecting our receipt of the gross proceeds of this offering and issuing a press release announcing
when such separate trading will begin; provided that no fractional warrants will be issued upon separation of the units and only
whole warrants will trade. We cannot guarantee that our securities will be approved for listing. Once the securities comprising
the units begin separate trading, the Class A ordinary shares, rights and warrants will be traded on Nasdaq under the symbols
“DIST,” “DISTR” and “DISTW,” respectively.
We
are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act and will therefore be subject
to reduced public company reporting requirements.
Investing
in our securities involves a high degree of risk. See “Risk Factors” beginning on page 19 of this prospectus for a
discussion of information that should be considered in connection with an investment in our securities.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
No
offer or invitation to subscribe for our securities may be made to the public in the Cayman Islands.
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Per
Unit
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Total
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Public
offering price
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$
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10.000
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$
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40,000,000
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Underwriting
discounts and commissions(1)
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$
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0.30
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$
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1,200,000
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Proceeds,
before expenses, to us
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$
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9.70
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$
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38,800,000
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(1)
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The
underwriters have received and will receive compensation in addition to the underwriting discount, including 100,000 Class B
ordinary shares, which we refer to herein as the representative shares. See “Underwriting” for further information
relating to the underwriting compensation we will pay in this offering.
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Upon
consummation of the offering, an aggregate of $40,000,000 (or $46,000,000 if the over-allotment option is exercised in full) or
$10.00 per unit sold to the public in this offering will be deposited into a United States-based trust account maintained by Continental
Stock Transfer & Trust Company, acting as trustee, with Morgan Stanley acting as investment manager.
Except as described in this prospectus, these funds will not be released to us until the earlier of the completion of a business
combination and our redemption of our public shares.
The
underwriters are offering the units on a firm commitment basis. The underwriters expect to deliver the units to purchasers on
or about ,
2020.
Sole
Book-Running Manager
EarlyBirdCapital, Inc.
,
2020
TABLE
OF CONTENTS
We
are responsible for the information contained in this prospectus. We have not authorized anyone to provide any information or
to make any representations other than those contained in this prospectus. We and the underwriters take no responsibility for,
and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer
to sell only the units offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information
contained in this prospectus is current only as of its date.
SUMMARY
This
summary only highlights the more detailed information appearing elsewhere in this prospectus. You should read this entire prospectus
carefully, including the information under “Risk Factors” and our financial statements and the related notes included
elsewhere in this prospectus, before investing.
Unless
otherwise stated in this prospectus or the context otherwise requires, references to:
• “we,”
“us,” “our,” “company” or “our company” are to Distoken Acquisition Corporation,
a Cayman Islands exempted company;
• “amended
and restated memorandum and articles of association” are to our memorandum and articles of association to be in effect upon
completion of this offering;
• “Class A
ordinary shares” are to our Class A ordinary shares, par value $0.0001 per share;
• “Class B
ordinary shares” are to our Class B ordinary shares, par value $0.0001 per share;
• “Companies
Law” are to the Companies Law (2020 Revision) of the Cayman Islands as the same may be amended from time to time;
• “directors”
are to our current directors and director nominees;
• “founder
shares” are to our Class B ordinary shares initially purchased by our sponsor in a private placement prior to this
offering and the Class A ordinary shares that will be issued upon the automatic conversion of the Class B ordinary shares
at the time of our initial business combination (for the avoidance of doubt, such Class A ordinary shares will not be “public
shares”);
• “initial
shareholders” are to our sponsor and other holders of our founder shares prior to this offering, but excludes EarlyBirdCapital, Inc.
in respect of the representative shares held by it or its designees;
• “letter
agreement” refers to the letter agreement entered into between us and our initial shareholders, directors and officers on
or prior to the date of this prospectus, the form of which is filed as an exhibit to the registration statement of which this
prospectus forms a part;
• “management”
or our “management team” are to our officers and directors and any other advisors described in the “Management”
section of this prospectus;
• “ordinary
shares” are to our Class A ordinary shares and our Class B ordinary shares;
• “private
rights” are to the rights underlying the private units;
• “private
shares” are to the Class A ordinary shares underlying the private units;
• “private
units” are to the units issued to our sponsor in a private placement simultaneously with the closing of this offering;
• “private
warrants” are to the warrants underlying the private units;
• “public
rights” or “rights” are to our rights sold as part of the units in this offering (whether they are purchased
in this offering or thereafter in the open market);
• “public
shares” are to our Class A ordinary shares sold as part of the units in this offering (whether they are purchased in
this offering or thereafter in the open market);
• “public
shareholders” are to the holders of our public shares, including our sponsor, officers and directors to the extent our sponsor,
officers or directors purchase public shares, provided their status as a “public shareholder” shall only exist with
respect to such public shares;
• “representative
shares” are to the 100,000 Class B ordinary shares that we have issued to EarlyBirdCapital, Inc. and its designees,
which representative shares will automatically convert into Class A ordinary shares at the time of our initial business combination;
• “sponsor”
are to Xiaosen Sponsor LLC, a Cayman Islands limited liability company;
• “warrants”
are to our redeemable warrants, which include the warrants sold as part of the units in this offering (whether they are purchased
in this offering or thereafter in the open market), the private warrants and any warrants issued upon conversion of working capital
loans; and
• “$,”
“US$” and “U.S. dollar” each refer to the United States dollar.
Any
conversion of the Class B ordinary shares described in this prospectus will take effect as a redemption of Class B ordinary
shares and an issuance of Class A ordinary shares as a matter of Cayman Islands law. All references in this prospectus 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. Any share dividends described in this prospectus will take effect as a share capitalization as a matter of Cayman
Islands law. Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise
the over-allotment option and the resulting forfeiture by our sponsor of 150,000 founder shares.
General
We
are a newly formed blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger,
amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more
businesses, which we refer to throughout this prospectus as our initial business combination. To date, our efforts have been limited
to organizational activities and activities related to this offering. 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 target business
regarding entering into a business combination with us.
While
we may pursue a business combination target in any business, industry or geographical location, we intend to focus our search
on businesses in the technology industry that have their primary operations located in Asia. We believe that we will add value
to these businesses primarily by providing them with access to the U.S. capital markets.
We
will seek to capitalize on the strength of our management team. Our team consists of experienced professionals and operating executives.
Collectively, our officers and directors have significant experience in mergers and acquisitions, and operating companies, in
the Asian markets. We believe we will benefit from their accomplishments, and specifically their current and recent activities
in the Asian markets, in identifying attractive acquisition opportunities. However, there is no assurance that we will complete
a business combination. Our officers and directors have no prior experience consummating a business combination for a “blank
check” company.
Investment
Criteria
Our
management team intends to focus on creating shareholder value by leveraging its experience in the management, operation and financing
of businesses to improve the efficiency of operations while implementing strategies to scale revenue organically and/or through
acquisitions. We have identified the following general criteria and guidelines, which we believe are important in evaluating prospective
target businesses. While we intend to use these criteria and guidelines in evaluating prospective businesses, we may deviate from
these criteria and guidelines should we see justification to do so.
•
Middle-Market Growth Business. We will primarily seek to acquire one or more growth businesses
with a total enterprise value of between $100 million and $200 million. We believe that there are a substantial number of potential
target businesses within this valuation range that can benefit from new capital for scalable operations to yield significant revenue
and earnings growth. We currently do not intend to acquire either a start-up company (a company that has not yet established commercial
operations) or a company with negative cash flow.
•
Companies in Business Segments that Are Strategically Significant to the Asian Markets. We will
seek to acquire businesses in sectors that are currently strategically significant to the Asian markets. Such sectors include
innovative and cross-border e-commerce and online agricultural trading.
•
Business with Revenue and Earnings Growth Potential. We will seek to acquire one or more businesses
that have the potential for significant revenue and earnings growth through a combination of both existing and new product development,
increased production capacity, expense reduction and synergistic follow-on acquisitions resulting in increased operating leverage.
•
Companies with Potential for Strong Free Cash Flow Generation. We will seek to acquire one or more
businesses that have the potential to generate strong, stable and increasing free cash flow. We intend to focus on one or more
businesses that have predictable revenue streams and definable low working capital and capital expenditure requirements. We may
also seek to prudently leverage this cash flow in order to enhance shareholder value.
•
Benefit from Being a Public Company. We intend to acquire a business or businesses that will benefit
from being publicly traded and which can effectively utilize access to broader sources of capital and a public profile that are
associated with being a publicly traded company.
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 criteria and guidelines as well as other considerations, factors and criteria
that our management team may deem relevant. We believe our management team’s extensive contacts, broad industry knowledge
and highly regarded experience will yield a robust deal flow from which we may select a target. We will seek to acquire the target
on terms and in a manner that leverages our management team’s experience. The potential upside from growth in the target
business and an improved capital structure will be weighed against any identified downside risks designed to balance value creation
with capital preservation. In the event that we decide to enter into an 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 and
guidelines in our shareholder communications related to our initial business combination, which, as discussed in this prospectus,
would be in the form of proxy solicitation or tender offer materials, as applicable, that we would file with the United States
Securities and Exchange Commission, or the SEC. In evaluating a prospective target business, we expect to conduct a due diligence
review which may encompass, among other things, meetings with incumbent ownership, management and employees, document reviews,
interviews of customers and suppliers, inspections of facilities, as well as reviewing financial and other information which will
be made available to us.
Competitive
Strengths
Management
Team
We
believe that our management team’s extensive relationships throughout Asia will enable us to identify business combination
opportunities with significant potential upside. We expect that our management team’s combined experience in a wide variety
of industries, when paired with our management team’s ability to perform under varying economic environments in emerging
markets, will be a differentiating factor that is highly attractive to potential target companies.
Status
as a Public Company
We
believe that 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 a traditional initial public offering through a merger or other business
combination. In this situation, the owners of the target business would exchange their stock, shares or other equity interests
in the target business for our ordinary shares or for a combination of our ordinary shares and cash, allowing us to tailor the
consideration used in the transaction to the specific needs of the sellers. We believe that target businesses might find this
avenue a more certain and cost-effective method to becoming a public company than a typical initial public offering. In a typical
initial public offering, there are additional expenses incurred in marketing, roadshow and public reporting efforts that will
likely not be present to the same extent in connection with a business combination with us. Furthermore, once the business combination
is consummated, the target business will have effectively become a public company, whereas an initial public offering is always
subject to the underwriters’ ability to complete the offering, as well as general market conditions that could prevent the
offering from occurring. Once public, we believe the target business would then have greater access to capital and an additional
means of providing management incentives consistent with shareholders’ interests than it would have as a privately-held
company. Public company status can offer further benefits by enhancing a company’s profile among potential new customers
and vendors and attracting talented employees. While we believe that our status as a public company will make us an attractive
business partner, some potential target businesses may view the inherent limitations in our status as a blank check company as
a deterrent and may prefer to effect a business combination with a more established entity or with a private company. These limitations
include constraints on our available financial resources, which may be inferior to those of other entities pursuing the acquisition
of similar target businesses; the requirement that we seek shareholder approval of a business combination or conduct a tender
offer in relation thereto, which may delay the consummation of a transaction; and the existence of our outstanding warrants, which
may represent a source of future dilution.
Financial
Position
With
funds in the trust account of $40 million (or $46 million if the over-allotment option is exercised in full) available to use
for a business combination (assuming no shareholder seeks redemption of their shares or seeks to sell their shares to us in any
tender offer in relation to such business combination), we offer a target business a variety of options such as providing the
owners of a target business with shares in a public company and a public means to sell such shares, providing capital for the
potential growth and expansion of its operations and strengthening its balance sheet by reducing its debt ratio. Because we are
able to consummate 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, since we have no specific business combination under consideration, we
have not taken any steps to secure third party financing, and there can be no assurance that it will be available to us. Furthermore,
redemptions in connection with our initial business combination could reduce the amount of funds available to be used in connection
with such business combination.
Effecting
a Business Combination
We
will either (1) seek shareholder approval of our initial business combination at a meeting called for such purpose at which
shareholders may seek to convert their shares, regardless of whether they vote for or against the proposed business combination
or don’t vote at all, into their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes
payable), or (2) provide our shareholders with the opportunity to sell their shares to us by means of a tender offer (and
thereby avoid the need for a shareholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit
in the trust account (net of taxes payable), in each case subject to the limitations described herein. The decision as to whether
we will seek shareholder approval of our proposed business combination or allow shareholders to sell their shares to us in a tender
offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction
and whether the terms of the transaction would otherwise require us to seek shareholder approval. If we decide to allow shareholders
to sell their shares to us in a tender offer, we will file tender offer documents with the SEC which will contain substantially
the same financial and other information about the initial business combination as is required under the SEC’s proxy rules.
We will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 either immediately
prior to or upon such consummation and, if we seek shareholder approval, we receive an ordinary resolution under Cayman Islands
law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company.
We
will have up to 15 months from the closing of this offering to consummate an initial business combination. However, if we anticipate
that we may not be able to consummate our initial business combination within 15 months, we may, by resolution of our board if
requested by our sponsor, extend the period of time to consummate a business combination up to two times, each by an additional
three months (for a total of up to 21 months to complete a business combination), subject to the sponsor depositing additional
funds into the trust account as set out below. Our shareholders will not be entitled to vote or redeem their shares in connection
with any such extension. Pursuant to the terms of our memorandum and articles of association and the trust agreement to be entered
into between us and Continental Stock Transfer & Trust Company on the date of this prospectus, in order for the time available
for us to consummate our initial business combination to be extended, our sponsor or its affiliates or designees, upon five days
advance notice prior to the applicable deadline, must deposit into the trust account $400,000, or $460,000 if the underwriters’
over-allotment option is exercised in full ($0.10 per unit in either case, up to an aggregate of $800,000 or $920,000 if the underwriters’
over-allotment option is exercised in full) on or prior to the date of the applicable deadline, for each three month extension.
In the event that we receive notice from our sponsor five days prior to the applicable deadline of its wish for us to effect an
extension, we intend to issue a press release announcing such intention at least three days prior to the applicable deadline.
In addition, we intend to issue a press release the day after the applicable deadline announcing whether or not the funds had
been timely deposited. Our sponsor and its affiliates or designees are not obligated to fund the trust account to extend the time
for us to complete our initial business combination. If we are unable to consummate an initial business combination within such
time period, we will redeem 100% of our issued and outstanding public shares for a pro rata portion of the funds held in the trust
account, 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 $50,000 of interest to pay dissolution expenses),
divided by the number of then outstanding public shares, subject to applicable law and as further described herein, and then seek
to dissolve and liquidate. We expect the pro rata redemption price to be approximately $10.00 per Class A ordinary share (regardless
of whether or not the underwriters exercise their over-allotment option), without taking into account any interest earned on such
funds. However, we cannot assure you that we will in fact be able to distribute such amounts as a result of claims of creditors
which may take priority over the claims of our public shareholders.
Nasdaq
listing rules 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 taxes payable on the income earned on the trust account)
at the time of the execution of a definitive agreement for our initial business combination. Notwithstanding the foregoing, if
we are not then listed on Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% fair market value
test. The fair market value of the target will be determined by our board of directors based upon one or more standards generally
accepted by the financial community (such as actual and potential sales, earnings, cash flow and/or book value). The proxy solicitation
materials or tender offer documents used by us in connection with any proposed transaction will provide public shareholders with
our analysis of the fair market value of the target business, as well as the basis for our determinations. If our board is not
able to independently determine that the target business has a sufficient fair market value, we will obtain an opinion from an
unaffiliated, independent investment banking firm, or another independent entity that commonly renders valuation opinions, with
respect to the satisfaction of such criteria. Additionally, pursuant to Nasdaq rules, any initial business combination must be
approved by a majority of our independent directors.
We
currently anticipate structuring a business combination to acquire 100% of the equity interests or assets of the target business
or businesses. We may, however, structure our initial business combination where we merge directly with the target business or
where we acquire less than 100% of such interests or assets of the target business in order to meet certain objectives of the
target management team or shareholders or for other reasons, but we will only complete such business combination if the post-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. Even
if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to
the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed
to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial
number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this
case, we could acquire a 100% controlling interest in the target; however, as a result of the issuance of a substantial number
of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our issued
and outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of
a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses
that is owned or acquired is what will be valued for purposes of the 80% of trust account balance test.
Prior
to the effectiveness of the registration statement of which this prospectus forms a part, we will file a Registration Statement
on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we
will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a
Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the completion of our
initial business combination.
Potential
Conflicts
Members
of our management team will directly or indirectly own ordinary shares, or other instruments, such as warrants, linked to our
ordinary 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 and directors was included by a target business as a condition to any agreement with respect
to our initial business combination.
Our
officers and directors have agreed to present to us all target business opportunities that have a fair market value of at least
80% of the assets held in the trust account (excluding taxes payable on the income accrued in the trust account), subject to any
pre-existing fiduciary or contractual obligations. As more fully discussed in “Management — Conflicts of Interest,”
if any of our officers or directors becomes aware of an initial business combination opportunity that may be attractive to any
entity to which he has pre-existing fiduciary or contractual obligations, he will be required to present such initial business
combination opportunity to such entity prior to presenting such initial business combination opportunity to us. Certain of our
officers and directors currently have certain relevant pre-existing fiduciary duties or contractual obligations. Accordingly,
they will be required to present all suitable business combination opportunities to such entities prior to presenting them to
our company for consideration. For more information on the relevant pre-existing fiduciary duties or contractual obligations of
our management team, see the section titled “Management — Conflicts of Interest.”
JOBS
Act and Other Corporate Information
We
are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (which we refer to herein as the
JOBS Act) and will remain such for up to five years. However, if our annual gross revenue is $1.07 billion or more, if our non-convertible
debt issued within a three year period exceeds $1 billion or the market value of our ordinary shares that are held by non-affiliates
exceeds $700 million on the last day of the second fiscal quarter of any given fiscal year, we would cease to be an emerging growth
company as of the following fiscal year. As an emerging growth company, we have elected, under Section 107(b) of the
JOBS Act, to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of
1933, as amended, or the Securities Act, for complying with new or revised accounting standards.
Exempted
companies are Cayman Islands companies wishing to conduct business outside the Cayman Islands and, as such, are exempted from
complying with certain provisions of the Companies Law. As an exempted company, we have applied for and received a tax exemption
undertaking from the Cayman Islands government that, in accordance with Section 6 of the Tax Concessions Law (2018 Revision)
of the Cayman Islands, for a period of 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands
imposing any tax to be levied on profits, income, gains or appreciations shall apply to us or our operations and, in addition,
that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax
shall be payable (1) on or in respect of our shares, debentures or other obligations or (2) by way of the withholding
in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment
of principal or interest or other sums due under a debenture or other obligation of us.
We
are a Cayman Islands exempted company incorporated on July 1, 2020. Our executive offices are located at Unit 1006, Block
C, Jinshangjun Park, No. 2 Xiaoba Road, Panlong District, Kunming, Yunnan, China and our telephone number is +86 871 63624579.
Private
Placements
In
July 2020, our sponsor paid $25,000 to cover certain of our offering costs in consideration for 1,150,000 Class B ordinary
shares, which we refer to throughout this prospectus as the “founder shares”. The founder shares held by our initial
shareholders includes an aggregate of up to 150,000 shares subject to forfeiture to the extent that the underwriters’ over-allotment
option is not exercised in full or in part, so that our initial shareholders will own 20.0% of our issued and outstanding shares
after this offering (not including the private shares underlying the private units and the representative shares and assuming
the initial shareholders do not purchase units in this offering).
We
have also issued to EarlyBirdCapital, Inc. and its designees an aggregate of 100,000 Class B ordinary shares, which
we refer to throughout this prospectus as the “representative shares.” The representative shares will automatically
convert into Class A ordinary shares upon completion of our initial business combination. The representative shares are deemed
to be underwriters’ compensation by FINRA pursuant to Rule 5110 of the FINRA Manual. See the section titled “Underwriting”
for further information related to these arrangements.
In
addition, our sponsor has committed that it will purchase from us an aggregate of 250,000 private units at $10.00 per unit
for a total purchase price of $2,500,000 in a private placement that will occur simultaneously with the consummation of this
offering. Our sponsor has also agreed that if the over-allotment option is exercised by the underwriters in full or in part,
it will purchase from us additional private units on a pro rata basis (up to a maximum of 18,000 additional private units at
a price of $10.00 per unit) in an amount that is necessary to maintain in the trust account $10.00 per unit sold to the
public in this offering. These additional private units will be purchased in a private placement that will occur
simultaneously with the purchase of units resulting from the exercise of the over-allotment option. The private units are
identical to the units sold in this offering, subject to certain limited exceptions as described in this prospectus. The
proceeds from the private placement of the private units will be added to the proceeds of this offering and placed in a
United States-based trust account maintained by Continental Stock Transfer & Trust Company, as trustee. If we do not
complete an initial business combination within 15 months from the closing of this offering (or up to 21 months from the
closing of this offering if we extend the period of time to consummate a business combination, as described in more detail in
this prospectus), the proceeds from the sale of the private units will be included in the liquidating distribution to our
public shareholders and the private units will be worthless.
THE
OFFERING
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Securities
offered
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4,000,000
units, at $10.00 per unit, each unit consisting of one Class A ordinary share, one right and one-half of one warrant,
each whole warrant to purchase one Class A ordinary share. Each right entitles the holder thereof to receive one-tenth
(1/10) of one Class A ordinary share upon the consummation of an initial business combination, as described in more detail
in this prospectus.
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Listing
of our securities and symbols
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We
anticipate that the units, and the Class A ordinary shares, rights and warrants once they begin separate trading, will
be listed on Nasdaq under the symbols “DISTU,” “DIST,” “DISTR” and “DISTW,”
respectively.
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Trading
commencement and separation of Class A ordinary shares, rights and warrants
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The
units will begin trading on or promptly after the date of this prospectus. The Class A
ordinary shares, rights and warrants comprising the units will begin separate trading
on the 90th day following the date of this prospectus unless EarlyBirdCapital, Inc.
informs us of its decision to allow earlier separate trading, subject to our having filed
the Current Report on Form 8-K described below and having issued a press release
and filed a Current Report on Form 8-K announcing when such separate trading will
begin; provided that no fractional warrants will be issued upon separation of the units
and only whole warrants will trade.
Once
the Class A ordinary shares, rights and warrants commence separate trading, holders will have the option to continue
to hold units or separate their units into the component pieces. Holders will need to have their brokers contact our transfer
agent in order to separate the units into Class A ordinary shares, rights and warrants.
In
no event will the Class A ordinary shares, rights and warrants be traded separately until we have filed a Current
Report on Form 8-K with the SEC containing an audited balance sheet reflecting our receipt of the gross proceeds
at the closing of this offering. We will file the Current Report on Form 8-K promptly after the closing of this offering,
which is anticipated to take place on the second business day after the date the units commence trading. If the underwriters’
over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended
Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the
underwriters’ over-allotment option. We will also include the Form 8-K, or amendment thereto, or in a subsequent
Form 8-K, information indicating if EarlyBirdCapital, Inc. has allowed separate trading of the Class A
ordinary shares, rights and warrants prior to the 90th day after the date of this prospectus.
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Units:
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Number
outstanding before this offering and the private placement
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0
units
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Number
outstanding after this offering and the private placement
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4,250,000
units(1)
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Ordinary
shares:
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Number
outstanding before this offering and the private placement
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1,250,000
shares(2)
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Number
to be outstanding after this offering and the private placement
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5,350,000
shares(3)
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Rights:
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Number
outstanding before this offering and the private placement
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0
rights
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Number
outstanding after this offering and the private placement
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4,250,000
rights (1)
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Warrants:
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Number
outstanding before this offering and the private placement
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0
warrants
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Number
to be outstanding after this offering and the private placement
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2,125,000
warrants(1)
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Exercisability
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Each
whole warrant is exercisable for one ordinary share at a price of $11.50 per share. The warrants will become exercisable on
the later of 30 days after the completion of an initial business combination and 12 months from the date of this prospectus.
The warrants will expire at 5:00 p.m., New York City time, on the fifth anniversary of our completion of an initial business
combination, or earlier upon redemption.
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Exercise
price
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$11.50
per share, subject to adjustment as described herein. In addition, if (x) we issue additional ordinary shares or equity-linked
securities for capital raising purposes in connection with the closing of our initial business combination at an issue price
or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price
to be determined in good faith by our board of directors, and in the case of any such issuance to our sponsor, initial shareholders
or their affiliates, without taking into account any founder shares held by them prior to such issuance) (the “Newly
Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity
proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation
of our initial business combination (net of redemptions), and (z) the volume weighted average trading price of our Class A
ordinary shares during the 20 trading day period starting on the trading day prior to the day on which we consummate our initial
business combination (such price, the “Market Value”) is below $9.20 per share, then the exercise price of the
warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of (i) the Market Value or (ii) the
Newly Issued Price and the $18.00 per share redemption trigger price described below under “Redemption” will be
adjusted (to the nearest cent) to be equal to 180% of the greater of (i) the Market Value or (ii) the Newly Issued
Price.
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1
Our sponsor has agreed to purchase an aggregate of 250,000
private units (or 268,000 private units if the over-allotment option is exercised in full) at a price of $10.00 per unit, for
a purchase price of $2,500,000 (or $2,680,000 if the over-allotment option is exercised in full). Each private unit will be identical
to the units sold in this offering, except as described in this prospectus.
2
Represents 1,150,000 founders’ shares and 100,000
representative shares. The founders’ shares includes an aggregate of up to 150,000 founders’ shares that are subject
to forfeiture if the over-allotment option is not exercised by the underwriters in full.
3
Assumes the over-allotment option has not been exercised
and an aggregate of 150,000 founders’ shares have been forfeited.
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No
warrants will be exercisable for cash unless we have an effective and current registration statement covering the Class A
ordinary shares issuable upon exercise of the warrants and a current prospectus relating to such Class A ordinary
shares.
Notwithstanding
the foregoing, if a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants
is not effective within 60 business days following the consummation of our initial business combination, warrant holders
may, until such time as there is an effective registration statement and during any period when we shall have failed to
maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided
by Section 3(a)(9) of the Securities Act of 1933, as amended, or the Securities Act, provided that such exemption
is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants
on a cashless basis.
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Redemption
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We
may redeem the outstanding warrants (excluding the private warrants, and any warrants
underlying additional units issued to our sponsor, officers, directors, initial shareholders
or their affiliates in payment of working capital loans made to us) in whole and not
in part, at a price of $0.01 per warrant at any time after the warrants become exercisable,
upon a minimum of 30 days’ prior written notice of redemption, if, and only if,
(i) the last sales price of our Class A ordinary shares equals or exceeds $18.00
per share (as adjusted for share sub-divisions, share dividends, reorganizations and
recapitalizations or as described above under “Exercise price”) for any 20
trading days within a 30 trading day period commencing after the warrants become exercisable
and ending three business days before we send the notice of redemption; and (ii) there
is a current registration statement in effect with respect to the Class A ordinary
shares underlying such warrants.
If
the foregoing conditions are satisfied and we issue a notice of redemption, each warrant holder can exercise his, her
or its warrant prior to the scheduled redemption date. However, the price of the Class A ordinary shares may fall
below the $18.00 trigger price as well as the $11.50 warrant exercise price after the redemption notice is issued.
If
we call the warrants for redemption as described above, our management will have the option to require all holders that
wish to exercise warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise
price by surrendering the warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing
(x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the difference
between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair
market value. The “fair market value” shall mean the average reported last sale price of the Class A
ordinary shares for the five trading days ending on the third trading day prior to the date on which the notice of redemption
is sent to the holders of warrants.
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Terms
of the Rights
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Each
holder of a right will receive one-tenth (1/10) of one Class A ordinary share upon consummation
of our initial business combination. In the event we will not be the survivor upon completion
of our initial business combination, each holder of a right will be required to affirmatively
convert his, her or its rights in order to receive the 1/10 share underlying each right
(without paying any additional consideration) upon consummation of the business combination.
If we are unable to complete an initial business combination within the required time
period and we liquidate the funds held in the trust account, holders of rights will not
receive any of such funds for their rights and the rights will expire worthless. It is
not our intent to issue fractional shares upon conversion of any rights. Any rounding
down and extinguishment may be done with or without any in lieu cash payment or other
compensation being made to the holder of the relevant rights.
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Securities
purchased, or being purchased, by insiders and others in connection with this offering
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Our
sponsor paid $25,000 to cover certain of our offering costs in consideration for 1,150,000
founder shares. The 1,150,000 founder shares held by our initial shareholders includes
an aggregate of up to 150,000 founder shares subject to forfeiture to the extent that
the over-allotment option is not exercised by the underwriters in full or in part. Our
initial shareholders will be required to forfeit only a number of Class B ordinary
shares necessary to own 20.0% of our issued and outstanding ordinary shares after giving
effect to the offering and exercise, if any, of the underwriters’ over-allotment
option (excluding any units they may purchase in this offering, the private shares underlying
the private units and the representative shares). The founder shares are identical to
the Class A ordinary shares included in the units being sold in this offering, subject
to certain limited exceptions as described in this prospectus.
We
have also issued to EarlyBirdCapital, Inc. and its designees an aggregate of 100,000 Class B representative
shares. The representative shares will automatically convert into Class A ordinary shares upon completion of our
initial business combination.
Simultaneously
with the consummation of this offering, our sponsor has committed that it will purchase an aggregate of 250,000 private units
at $10.00 per unit for a total purchase price of $2,500,000 pursuant to a subscription agreement with us. Our sponsor has
also agreed that if the over-allotment option is exercised by the underwriters in full or in part, it will purchase from us
additional private units on a pro rata basis (up to a maximum of 18,000 additional private units at a price of $10.00 per
unit) in an amount that is necessary to maintain in the trust account $10.00 per unit sold to the public in this offering.
These additional private units will be purchased in a private placement that will occur simultaneously with the purchase of
units resulting from the exercise of the over-allotment option. The amounts to be paid upon consummation of the private
placement will be placed in an escrow account prior to the consummation of this offering. The private units are identical to
the units sold in this offering subject to certain limited exceptions as described in this prospectus.
Our
initial shareholders, officers and directors, and EarlyBirdCapital, Inc. have agreed (A) to vote the founder
shares and representative shares in favor of any proposed business combination, (B) not to convert any founder shares
or representative shares in connection with a shareholder vote to approve a proposed initial business combination or sell
any private shares to us in a tender offer in connection with a proposed initial business combination and (C) that
the founder shares and representative shares shall not participate in any liquidating distribution from our trust account
upon winding up if a business combination is not consummated. In the event of a liquidation prior to our initial business
combination, the private units will likely be worthless.
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Restrictions
on transfer of founder shares, private units and representative shares
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The
founder shares will be subject to a lock-up agreement. Subject to certain limited exceptions,
these shares will not be transferred, assigned or sold (subject to certain limited exceptions)
for a period ending on the earlier of the one-year anniversary of the date of the consummation
of our initial business combination and, with respect to 50% of the shares, the date
on which the closing price of our Class A ordinary shares equals or exceeds $12.50
per share (as adjusted for share sub-divisions, share dividends, reorganizations and
recapitalizations) for any 20 trading days within a 30-trading day period following 150
days after the consummation of our initial business combination. The limited exceptions
include transfers, assignments or sales (i) to our or our sponsor’s officers,
directors, consultants or their affiliates, (ii) to an entity’s members upon
its liquidation, (iii) to relatives and trusts for estate planning purposes, (iv) by
virtue of the laws of descent and distribution upon death, (v) pursuant to a qualified
domestic relations order, (vi) to us for no value for cancellation in connection
with the consummation of our initial business combination, or (vii) in connection
with the consummation of a business combination at prices no greater than the price at
which the shares were originally purchased, in each case (except for clause (vi) or
with our prior consent) where the transferee agrees to be bound by these transfer restrictions.
The
purchasers of the private units have also agreed not to transfer, assign or sell any of the private units (except in connection
with the same limited exceptions that the founder shares may be transferred as described above), until 30 days after the
completion of our initial business combination.
The
holders of the representative shares have agreed not to transfer, assign or sell any such shares without our prior consent
until 30 days after the completion of our initial business combination.
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Founder
shares conversion and anti-dilution rights
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The
founder shares are designated as Class B ordinary shares and will automatically convert into Class A ordinary shares
on the first business day following the completion of our initial business combination on a one-for-one basis, subject to
adjustment as provided herein. In the case that additional Class A ordinary shares, or equity-linked securities convertible
or exercisable for Class A ordinary shares, are issued or deemed issued in excess of the amounts issued in this offering
and related to the closing of our initial business combination, the ratio at which founder shares will convert into Class A
ordinary shares will be adjusted (subject to waiver by holders of a majority of the Class B ordinary shares then in issue)
so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal,
in the aggregate, on an as-converted basis, 20% of the sum of our ordinary shares issued and outstanding upon the completion
of this offering plus the number of Class A ordinary shares and equity-linked securities issued or deemed issued in connection
with our initial business combination (net of redemptions), excluding the private shares underlying the private units, the
representative shares, any shares underlying units issued upon conversion of working capital loans and any Class A ordinary
shares or equity-linked securities issued, or to be issued, to any seller in our initial business combination. Any conversion
of Class B ordinary shares described herein will take effect as a redemption of Class B ordinary shares and an issuance
of Class A ordinary shares as a matter of Cayman Islands law. The term “equity-linked securities” refers
to any debt or equity securities that are convertible, exercisable or exchangeable for our Class A ordinary shares issued
in a financing transaction in connection with our initial business combination, including but not limited to a private placement
of equity or debt.
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Appointment
of directors; voting rights
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Prior
to our initial business combination, only holders of our founder shares will have the right to vote on the appointment of
directors. Holders of our public shares will not be entitled to vote on the appointment of directors during such time. In
addition, prior to our initial business combination, holders of a majority of our founder shares may remove a member of the
board of directors for any reason. These provisions of our amended and restated memorandum and articles of association may
only be amended by a special resolution passed by at least 90% of our ordinary shares voting in a general meeting. With respect
to any other matter submitted to a vote of our shareholders, including any vote in connection with our initial business combination,
except as required by law, holders of our founder shares and holders of our public shares will vote together as a single class,
with each share entitling the holder to one vote.
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Offering
proceeds to be held in trust
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An
aggregate of $10.00 per unit sold to the public in this offering (regardless of whether
or not the over-allotment option is exercised) will be placed in a United States-based
trust account maintained by Continental Stock Transfer & Trust Company, acting
as trustee pursuant to an agreement to be signed on the date of this prospectus. Except
as set forth below, the proceeds held in the trust account will not be released until
the earlier of the completion of an initial business combination and our redemption of
100% of the outstanding public shares if we have not completed a business combination
in the required time period. Therefore, except as set forth below, unless and until an
initial business combination is consummated, the proceeds held in the trust account will
not be available for our use for any expenses related to this offering or expenses which
we may incur related to the investigation and selection of a target business and the
negotiation of an agreement to acquire a target business.
Notwithstanding
the foregoing, there can be released to us from the trust account any interest earned on the funds in the trust account
that we need to pay our income or other tax obligations, and, if applicable, up to $50,000 of interest to pay dissolution
expenses (which interest shall be net of taxes payable). Aside from these exceptions, expenses incurred by us may be paid
prior to a business combination only from the net proceeds of this offering not held in the trust account (initially estimated
to be $750,000). Additionally, in order to meet our working capital needs following the consummation of this offering
if the funds not held in the trust account are insufficient, our sponsor, officers, directors, initial shareholders or
their affiliates may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they
deem reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes would either be
paid upon consummation of our initial business combination, without interest, or, at the holder’s discretion, up
to $1,500,000 of the notes may be converted into units at a price of $10.00 per unit. These units would be identical to
the private units. 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.
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None
of the warrants may be exercised until the later of 30 days after the consummation of a business combination or 12 months
from the closing of this offering and, thus, after the proceeds of the trust account have been disbursed. Accordingly, the
warrant exercise price will be paid directly to us and not placed in the trust account.
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Ability
to extend time to complete business combination
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If we anticipate that we may not be able to consummate our initial
business combination within 15 months, we may, by resolution of our board if requested by our sponsor, extend the period of
time to consummate a business combination up to two times, each by an additional three months (for a total of up to 21 months
to complete a business combination), subject to the sponsor depositing additional funds into the trust account as set out
below. Our shareholders will not be entitled to vote or redeem their shares in connection with any such extension. Pursuant
to the terms of our memorandum and articles of association and the trust agreement to be entered into between us and Continental
Stock Transfer & Trust Company on the date of this prospectus, in order for the time available for us to consummate our
initial business combination to be extended, our sponsor or its affiliates or designees, upon five days advance notice prior
to the applicable deadline, must deposit into the trust account $400,000, or $460,000 if the underwriters’ over-allotment
option is exercised in full ($0.10 per unit in either case), on or prior to the date of the applicable deadline, for each
of the available three month extensions providing a total possible business combination period of 21 months at a total payment
value of $800,000, or $920,000 if the underwriters’ over-allotment option is exercised in full ($0.10 per unit in either
case). Any such payments would be made in the form of a non-interest bearing loan. If we complete our initial business combination,
we would repay such loaned amounts out of the proceeds of the trust account released to us. If we do not complete a business
combination, we will not repay such loans. Furthermore, the letter agreement with our initial shareholders contains a provision
pursuant to which our sponsor has agreed to waive its right to be repaid for such loans in the event that we do not complete
a business combination. Our sponsor and its affiliates or designees are not obligated to fund the trust account to extend
the time for us to complete our initial business combination.
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Limited
payments to insiders
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There
will be no fees, reimbursements or other cash payments paid to our sponsor, officers,
directors, initial shareholders or their affiliates for any services they render prior
to, or in order to effectuate the consummation of, an initial business combination (regardless
of the type of transaction that it is) other than the following payments, none of which
will be made from the proceeds of this offering held in the trust account prior to the
completion of our initial business combination:
· repayment
at the closing of this offering of an aggregate of $150,000 of non-interest bearing loans made by our sponsor;
· payment
of $10,000 per month to our sponsor for office space and related services;
· payment
of consulting, success or finder fees to our sponsor, officers, directors, initial shareholders or their affiliates in
connection with the consummation of our initial business combination;
· reimbursement
of out-of-pocket expenses incurred by them in connection with certain activities on our behalf, such as identifying and
investigating possible target businesses and business combinations; and
· repayment
of any future loans as described above 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 units, at a price of $10.00 per unit, at the option of the lender.
There
is no limit on the amount of out-of-pocket expenses reimbursable by us. Our audit committee will review and approve all
reimbursements and payments made to our sponsor, officers, directors, initial shareholders or our or their respective
affiliates, with any interested director abstaining from such review and approval.
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Shareholder
approval of, or tender offer in connection with, initial business combination
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In
connection with any proposed initial business combination, we will either (1) seek shareholder approval of such initial
business combination at a meeting called for such purpose at which shareholders may seek to convert their shares, regardless
of whether they vote for or against the proposed business combination or don’t vote at all, into their pro rata share
of the aggregate amount then on deposit in the trust account (net of taxes payable), or (2) provide our shareholders
with the opportunity to sell their shares to us by means of a tender offer (and thereby avoid the need for a shareholder vote)
for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable),
in each case subject to the limitations described herein. If we determine to engage in a tender offer, such tender offer will
be structured so that each shareholder may tender all of his, her or its shares rather than some pro rata portion of his,
her or its shares. The decision as to whether we will seek shareholder approval of a proposed business combination or will
allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be
based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise
require us to seek shareholder approval. If we determine to allow shareholders to sell their shares to us in a tender offer,
we will file tender offer documents with the SEC which will contain substantially the same financial and other information
about the initial business combination as is required under the SEC’s proxy rules. We will consummate our initial business
combination only if we have net tangible assets of at least $5,000,001 either immediately prior to or upon such consummation
and, if we seek shareholder approval, we receive an ordinary resolution under Cayman Islands law, which requires the affirmative
vote of a majority of the shareholders who attend and vote at a general meeting of the company.
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We
chose our net tangible asset threshold of $5,000,001 to ensure that we would avoid being
subject to Rule 419 promulgated under the Securities Act. However, if we seek to
consummate an initial business combination with a target business that imposes any type
of working capital closing condition or requires us to have a minimum amount of funds
available from the trust account upon consummation of such initial business combination,
we may need to have more than $5,000,001 in net tangible assets either immediately prior
to or upon consummation and this may force us to seek third party financing which may
not be available on terms acceptable to us or at all. As a result, we may not be able
to consummate such initial business combination and we may not be able to locate another
suitable target within the applicable time period, if at all.
Our
initial shareholders and officers and directors and their affiliates have agreed (i) to vote any shares owned by
them in favor of any proposed business combination, (ii) not to convert any shares in connection with a shareholder
vote to approve a proposed initial business combination and (iii) not to sell any shares to us in a tender offer
in connection with any proposed business combination.
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None
of our sponsor, initial shareholders, officers, directors or their affiliates has indicated any intention to purchase units
in this offering or any units or Class A ordinary shares from persons in the open market or in private transactions.
However, if we hold a meeting to approve a proposed business combination and a significant number of shareholders vote, or
indicate an intention to vote, against a proposed business combination, our sponsor, initial shareholders, officers, directors
or their affiliates could make such purchases in the open market or in private transactions in order to influence any vote
held to approve a proposed initial business combination. Notwithstanding the foregoing, our officers, directors, sponsor and
their affiliates will not make purchases of Class A ordinary shares if the purchases would violate Section 9(a)(2) or
Rule 10b-5 of the Exchange Act, which are rules designed to stop potential manipulation of a company’s stock.
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Conversion
rights
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In
connection with any general meeting called to approve a proposed initial business combination,
each public shareholder will have the right, regardless of whether he is voting for or
against such proposed business combination or does not vote at all, to demand that we
convert his, her or its shares into a pro rata share of the trust account.
We
may require public shareholders, whether they are a record holder or hold their shares in “street name,” to
either (i) physically tender their certificates to our transfer agent 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 each case prior to a date set forth in the tender offer documents or proxy materials sent in connection with
the proposal to approve the business combination. There is a nominal cost associated with this 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 $45 and it would be up to the broker whether or not to pass this cost on to the converting holder.
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Limitation
on redemption rights of shareholders holding more than 15% of the shares sold in this offering if we hold shareholder vote
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Notwithstanding
the foregoing redemption rights, if we seek shareholder approval of our initial business combination and we do not conduct
redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated
memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder
or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13
of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the
shares sold in this offering, without our prior consent. We believe the restriction described above will discourage shareholders
from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to redeem their shares
as a means to force us or our sponsor or its affiliates to purchase their shares at a significant premium to the then-current
market price or on other undesirable terms. By limiting our shareholders’ ability to redeem to no more than 15% of the
shares sold in this offering, we believe we will limit the ability of a small group of shareholders to unreasonably attempt
to block our ability to complete our initial business combination, particularly in connection with a business combination
with a target that requires a certain amount of cash as a closing condition.
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However,
we would not be restricting our shareholders’ ability to vote all of their shares (including all shares held by those
shareholders that hold more than 15% of the shares sold in this offering) for or against our initial business combination.
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Liquidation
if no business combination
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If
we are unable to complete an initial business combination by 15 months from the closing of this offering (or up to 21 months
from the closing of this offering if we extend the period of time to consummate a business combination, as described in more
detail in this prospectus), 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 outstanding public shares, at a
per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest
not previously released to us (less up to $50,000 of interest to pay liquidation expenses, and which interest shall be net
of taxes payable), divided by the number of then outstanding public shares, which redemption will completely extinguish public
shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), subject
to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of
our remaining shareholders and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above)
to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
We cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims. Although we are
required to have all third parties (including any vendors or other entities we engage after this offering) and any prospective
target businesses enter into agreements with us waiving any right, title, interest or claim of any kind in or to any monies
held in the trust account, there is no guarantee that they will execute such agreements. There is also no guarantee that the
third parties would not challenge the enforceability of these waivers and bring claims against the trust account for monies
owed them. Our sponsor has agreed that it will be liable to ensure that the proceeds in the trust account are not reduced
below (1) $10.00 per share or (2) such lesser amount per share as of the date of the liquidation of the trust account
due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes,
by the claims of target businesses or claims of vendors or other entities that are owed money by us for services rendered
or contracted for or products sold to us. The agreement entered into by our sponsor specifically provides for two exceptions
to the indemnity it has given: it will have no liability (1) as to any claimed amounts owed to a target business or vendor
or other entity who has executed an agreement with us waiving any right, title, interest or claim of any kind they may have
in or to any monies held in the trust account, or (2) as to any claims for indemnification by the underwriters of this
offering against certain liabilities, including liabilities under the Securities Act. Marcum LLP, our independent registered
public accounting firm, and the underwriters of the offering, will not execute agreements with us waiving such claims to the
monies held in the trust account. 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 believe it is unlikely that our sponsor will be able
to satisfy its indemnification obligations if it is required to do so.
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The
holders of the founder shares and representative shares will not participate in any redemption
distribution from our trust account with respect to such shares.
If
we are unable to consummate an initial business combination and we expend all of the net proceeds of this offering not
deposited in the trust account, we expect that the initial per-share redemption price will be approximately $10.00 (which
is equal to the anticipated aggregate amount then on deposit in the trust account excluding interest earned on the funds
held in the trust account). The proceeds deposited in the trust account could, however, become subject to claims of our
creditors that are in preference to the claims of our shareholders. In addition, if we are forced to file a bankruptcy
case or an involuntary bankruptcy case 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 shareholders. Therefore, we cannot assure you that the actual per-share
redemption price will not be less than approximately $10.00.
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We
will pay the costs of any subsequent liquidation from our remaining assets outside of
the trust account, and up to $50,000 of net interest from the trust account 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.
Our
sponsor, initial shareholders, officers and directors have agreed that they will not propose any amendment to our amended
and restated memorandum and articles of association that would affect our public shareholders’ ability to convert
or sell their shares to us in connection with a business combination as described herein or affect the substance or timing
of our obligation to redeem 100% of our public shares if we do not complete a business combination within 15 months (or
within 21 months from the closing of this offering if we extend the period of time to consummate a business combination)
from the closing of this offering unless we provide our public shareholders with the opportunity to convert their Class
A ordinary 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 us but net of franchise and
income taxes payable, divided by the number of then outstanding public shares. This redemption right shall apply in the
event of the approval of any such amendment, whether proposed by our sponsor, initial shareholders, executive officers,
directors or any other person.
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Risks
In
making your decision on whether to invest in our securities, you should take into account the special risks we face as a blank
check company, as well as the fact that this offering is not being conducted in compliance with Rule 419 promulgated under
the Securities Act, and, therefore, 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.”
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.
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Balance
Sheet Data:
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As
of
July 8,
2020
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Working
capital (deficiency)
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$
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(40,000
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)
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Total
assets
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55,927
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Total
liabilities
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40,000
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Shareholders’
equity
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15,927
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If
our initial business combination is not completed within 15 months from the closing of this offering (or up to 21 months from
the closing of this offering if we extend the period of time to consummate a business combination), the proceeds then on deposit
in the trust account, including interest (less up to $50,000 of interest to pay dissolution expenses and which interest shall
be net of taxes payable), will be used to fund the redemption of our public shares. Our initial shareholders have entered into
a letter agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust
account with respect to their founder shares if we fail to complete our initial business combination within such 15-month (or
21-month) time period.
RISK
FACTORS
An
investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together
with the other information contained in this prospectus, before making a decision to invest in our units. If any of the following
events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the
trading price of our securities could decline, and you could lose all or part of your investment.
Risks
Relating to the Offering
We
are a newly incorporated company with no operating history and no revenues, and you have no basis on which to evaluate our ability
to achieve our business objective.
We
are a newly incorporated company incorporated under the laws of the Cayman Islands with no operating results, and we will not
commence operations until obtaining funding through this offering. Because we lack an operating history, you have no basis upon
which to evaluate our ability to achieve our business objective of completing our initial business combination with one or more
target businesses. We have no plans, arrangements or understandings with any prospective target business concerning a business
combination and may be unable to complete our initial business combination. If we fail to complete our initial business combination,
we will never generate any operating revenues.
Our
independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt
about our ability to continue as a “going concern.”
As
of July 8, 2020, we had no cash and a working capital deficiency of $40,000. Further, we have incurred and expect to continue
to incur significant costs in pursuit of our financing and acquisition plans. Management’s plans to address this need for
capital through this offering are discussed in the section of this prospectus titled “Management’s Discussion and
Analysis of Financial Condition and Results of Operations.” We cannot assure you that our plans to raise capital or to consummate
an initial business combination will be successful. These factors, among others, raise substantial doubt about our ability to
continue as a going concern. The financial statements contained elsewhere in this prospectus do not include any adjustments that
might result from our inability to consummate this offering or our inability to continue as a going concern.
Our
search for a business combination, and any target business with which we ultimately consummate a business combination, may be
materially adversely affected by the recent coronavirus (COVID-19) pandemic.
The
COVID-19 pandemic has resulted in a widespread health crisis that has adversely affected the economies and financial markets worldwide,
and the business of any potential target business with which we consummate a business combination could be materially and adversely
affected. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict
travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors and services
providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our
search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including
new information which may emerge concerning the severity of 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.
Our
public shareholders may not be afforded an opportunity to vote on our proposed business combination, which means we may complete
our initial business combination even though a majority of our public shareholders do not support such a combination.
We
will either (1) seek shareholder approval of our initial business combination at a meeting called for such purpose at which
public shareholders may elect to redeem their public shares without voting, and if they do vote, irrespective of whether they
vote for or against the proposed business combination, or (2) provide our public shareholders with the opportunity to redeem
all or a portion of their public shares upon the completion of our initial business combination by means of a tender offer (and
thereby avoid the need for a shareholder vote), in each in cash, for an amount payable in cash equal to the aggregate amount then
on deposit in the trust account as of two business days prior to the completion of our initial business combination, including
interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, subject
to the limitations described herein. Accordingly, it is possible that we will consummate our initial business combination even
if holders of a majority of our public shares do not approve of the business combination we consummate. The decision as to whether
we will seek shareholder approval of a proposed business combination or will allow shareholders to sell their shares to us in
a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the
transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval. For instance, Nasdaq
rules currently allow us to engage in a tender offer in lieu of a general meeting but would still require us to obtain shareholder
approval if we were seeking to issue more than 20% of our issued and outstanding shares to a target business as consideration
in any business combination. Therefore, if we were structuring a business combination that required us to issue more than 20%
of our issued and outstanding shares, we would seek shareholder approval of such business combination instead of conducting a
tender offer.
Your
only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise
of your right to redeem your shares from us for cash, unless we seek shareholder approval of such business combination.
At
the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of any
target businesses. Additionally, since our board of directors may complete a business combination without seeking shareholder
approval, public shareholders may not have the right or opportunity to vote on the business combination, unless we seek such shareholder
approval. Accordingly, if we do not seek shareholder approval, your only opportunity to affect the investment decision regarding
a potential business combination may be limited to exercising your redemption rights within the period of time (which will be
at least 20 business days) set forth in our tender offer documents mailed to our public shareholders in which we describe our
initial business combination.
The
ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential
business combination targets, which may make it difficult for us to enter into a business combination with a target.
We
may seek to enter into a business combination transaction agreement with a prospective target that requires a certain amount of
cash as a closing condition. If too many public shareholders exercise their redemption rights, we would not be able to meet such
closing condition and, as a result, would not be able to proceed with the business combination. Furthermore, in no event will
we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 either immediately
prior to or upon completion of our initial business combination (so that we do not then become subject to the SEC’s “penny
stock” rules), or any greater net tangible asset or cash requirement that may be contained in the agreement relating to
our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible
assets to be less than $5,000,001 either immediately prior to or upon completion of our initial business combination or less than
such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption of
our public shares and the related business combination, and we instead may search for an alternate business combination. Prospective
targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.
The
ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us
to complete the most desirable business combination or optimize our capital structure.
At
the time we enter into an agreement for our initial business combination, we will not know how many shareholders may exercise
their redemption rights and, therefore, we will need to structure the transaction based on our expectations as to the number of
shares that will be submitted for redemption. If our initial business combination agreement requires us to use a portion of the
cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need
to reserve a portion of the cash in the trust account to meet such requirements, or arrange for third-party financing. In addition,
if a larger number of shares is submitted for redemption than we initially expected, we may need to restructure the transaction
to reserve a greater portion of the cash in the trust account or arrange for third-party financing.
Raising
additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable
levels. The above considerations may limit our ability to complete the most desirable business combination available to us or
optimize our capital structure.
The
ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the
probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order
to redeem your shares.
If
our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price,
or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful
increases. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account
until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your shares in the
open market; however, at such time our shares may trade at a discount to the pro rata amount per share in the trust account. In
either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our
redemption until we liquidate or you are able to sell your shares in the open market.
The
requirement that we complete our initial business combination within the prescribed time frame may give potential target businesses
leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential
business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete
our initial business combination on terms that would produce value for our shareholders.
Any
potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete
our initial business combination within 15 months (or up to 21 months) from the closing of this offering. Consequently, such target
business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial business
combination with that particular target business, we may be unable to complete our initial business combination with any target
business. This risk will increase as we get closer to the end of the 15-month period (or 21-month period). 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 complete our initial business combination within the prescribed time frame, in which case we would cease all
operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public
shareholders may receive only $10.00 per share, or less than such amount in certain circumstances, and our rights and warrants
will expire worthless.
Our
sponsor, officers and directors have agreed that we must complete our initial business combination within 15 months (or up to
21 months) from the closing of this offering. We may not be able to find a suitable target business and complete our initial business
combination within such time period. Our ability to complete our initial business combination may be negatively impacted by general
market conditions, volatility in the capital and debt markets and the other risks described herein.
If
we are unable to complete our initial business combination within such 15-month period (or 21-month period), we will: (1) cease
all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10 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 $50,000 of interest to pay dissolution expenses and which interest shall be
net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish
public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any);
and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and
our board of directors, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to provide for
claims of creditors and the requirements of other applicable law. In such case, our public shareholders may receive only $10.00
per share, or less than $10.00 per share, on the redemption of their shares, and our rights and warrants will expire worthless.
See “—If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share
redemption amount received by shareholders may be less than $10.00 per share” and other risk factors herein.
Our
sponsor may decide not to extend the term we have to consummate our initial business combination, in which case we would cease
all operations except for the purpose of winding up and we would redeem our public shares and liquidate, and the rights and warrants
will be worthless.
We
will have until 15 months from the closing of this offering to consummate our initial business combination. However, if we anticipate
that we may not be able to consummate our initial business combination within 15 months, we may, by resolution of our board if
requested by our sponsor, extend the period of time to consummate a business combination up to two times, each by an additional
three months (for a total of up to 21 months to complete a business combination), subject to the sponsor depositing additional
funds into the trust account as set out below. Our shareholders will not be entitled to vote or redeem their shares in connection
with any such extension. In order for the time available for us to consummate our initial business combination to be extended,
our sponsor or its affiliates or designees must deposit into the trust account $400,000, or $460,000 if the underwriters’
over-allotment option is exercised in full ($0.10 per unit in either case), up to an aggregate of $800,000 (or $920,000 if the
underwriters’ over-allotment option is exercised in full), or $0.20 per unit, on or prior to the date of the applicable
deadline, for each three month extension. Any such payments would be made in the form of a non-interest bearing loan. Our sponsor
and its affiliates or designees are not obligated to fund the trust account to extend the time for us to complete our initial
business combination. If we are unable to consummate our initial business combination within the applicable time period, we will,
as promptly as reasonably possible but not more than five business days thereafter, redeem the public shares for a pro rata portion
of the funds held in the trust account and as promptly as reasonably possible following such redemption, subject to the approval
of our remaining shareholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under
Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In such event, the rights
and warrants will be worthless.
If
we seek shareholder approval of our initial business combination, our sponsor, directors, officers, advisors or any of their affiliates
may elect to purchase shares, rights or warrants from public holders, which may influence a vote on a proposed business combination
and reduce the public “float” of our securities.
If
we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our initial shareholders, directors, officers, advisors or any of their
affiliates may purchase public shares, public rights or public warrants or a combination thereof in privately negotiated transactions
or in the open market either prior to or following the completion of our initial business combination, although they are under
no obligation or duty to do so. Please see “Proposed Business—Permitted purchases of our securities” for a description
of how such persons will determine from which shareholders to seek to acquire securities. Such a purchase may include a contractual
acknowledgement that such shareholder, although still the record holder of our shares, is no longer the beneficial owner thereof
and therefore agrees not to exercise its redemption rights. In the event that our sponsor, directors, officers, advisors or any
of their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to
exercise their redemption rights or submitted a proxy to vote against our initial business combination, such selling shareholders
would be required to revoke their prior elections to redeem their shares and any proxy to vote against our initial business combination.
The price per share paid in any such transaction may be different than the amount per share a public shareholder would receive
if it elected to redeem its shares in connection with our initial business combination. The purpose of such purchases could be
to vote such shares in favor of our initial business combination and thereby increase the likelihood of obtaining shareholder
approval of our initial 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. The purpose of any such purchases of public rights or public warrants could be to
reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for
approval in connection with our initial business combination. This may result in the completion of our initial business combination
that may not otherwise have been possible.
In
addition, if such purchases are made, the public “float” of our Class A ordinary shares, public rights or public warrants
and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the
quotation, listing or trading of our securities on a national securities exchange.
If
a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination,
or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
We
will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our
initial business combination. Despite our compliance with these rules, if a shareholder fails to receive our tender offer or proxy
materials, as applicable, such shareholder may not become aware of the opportunity to redeem its shares. In addition, the tender
offer documents or proxy 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 tender or redeem
public shares. In the event that a shareholder fails to comply with these procedures, its shares may not be redeemed. See “Proposed
Business—Effecting Our Initial Business Combination—Tendering share certificates in connection with a tender offer
or redemption rights.”
You
will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate
your investment, therefore, you may be forced to sell your public shares, rights or warrants, potentially at a loss.
Our
public shareholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (1) the completion
of our initial business combination, and then only in connection with those Class A ordinary shares that such shareholder properly
elected to redeem, subject to the limitations described herein, (2) the redemption of any public shares properly submitted in
connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the
substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination
within 15 months (or up to 21 months) from the closing of this offering or (B) with respect to any other provision relating to
shareholders’ rights or pre-initial business combination activity and (3) the redemption of our public shares if we are
unable to complete our initial business combination within 15 months (or up to 21 months) from the closing of this offering, subject
to applicable law and as further described herein. In no other circumstances will a shareholder have any right or interest of
any kind in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect
to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares, rights or warrants,
potentially at a loss.
Nasdaq
may delist our securities from its exchange, which could limit investors’ ability to make transactions in our securities
and subject us to additional trading restrictions.
We
have applied to have our units listed on Nasdaq. We expect that our units will be listed on Nasdaq on or promptly after the date
of this prospectus. Following the date that our Class A ordinary shares, rights and warrants are eligible to trade separately,
we anticipate that our Class A ordinary shares, rights and warrants will be listed separately on Nasdaq. Although, after giving
effect to this offering, we expect to meet on a pro forma basis Nasdaq’s minimum initial listing standards, which generally
only require that we meet certain requirements relating to shareholders’ equity, market capitalization, aggregate market
value of publicly held shares and distribution requirements, we cannot assure you that our securities will be, or will continue
to be, listed on Nasdaq in the future or prior to our initial business combination. In order to continue listing our securities
on Nasdaq prior to our initial business combination, we must maintain certain financial, distribution and share price levels.
Additionally, in connection with our initial business combination, it is likely that Nasdaq will require us to file a new initial
listing application and meet its initial listing requirements as well as certain qualitative 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 any of our securities from trading on its exchange and we are not able to list such securities on another national
securities exchange, we expect such securities could be quoted on an over-the-counter market. If this were to occur, we could
face significant material adverse consequences, including:
• a
limited availability of market quotations for our securities;
• reduced
liquidity with respect to such securities;
• a
determination that our Class A ordinary shares are a “penny stock” which will require brokers trading in our
Class A ordinary shares to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the
secondary trading market for our securities;
• 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.
The
National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating
the sale of certain securities, which are referred to as “covered securities.” Because we expect that our units and
eventually our Class A ordinary shares, rights and warrants will be listed on Nasdaq, our units, Class A ordinary shares, rights
and warrants will qualify as covered securities under such statute. Although the states are preempted from regulating the sale
of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and,
if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular
case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank
check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and
might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states.
Further, if we were no longer listed on Nasdaq, our securities would not qualify as covered securities under such statute and
we would be subject to regulation in each state in which we offer our securities.
You
will not be entitled to protections normally afforded to investors of many other blank check companies.
Since
the net proceeds of this offering and the sale of the private units are intended to be used to complete an initial business combination
with a target business that has not been identified, we may be deemed to be a “blank check” company under the U.S.
securities laws. However, because we will have net tangible assets in excess of $5,000,000 upon the successful completion of this
offering and the sale of the private units and will file a Current Report on Form 8-K, including an audited balance sheet
of the Company demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check
companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among
other things, this means our units will be immediately tradable and we may have a longer period of time to complete our initial
business combination than do companies subject to Rule 419. Moreover, if this offering were subject to Rule 419, that
rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds
in the trust account were released to us in connection with our completion of an initial business combination. For a more detailed
comparison of our offering to offerings that comply with Rule 419, please see “Proposed Business—Comparison of
This Offering to Those of Blank Check Companies Subject to Rule 419.”
If
we seek shareholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer
rules, and if you or a “group” of shareholders are deemed to hold in excess of 15% of our Class A ordinary shares,
you will lose the ability to redeem all such shares in excess of 15% of our Class A ordinary shares.
If
we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provide
that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting
in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming
its shares with respect to more than an aggregate of 15% of the shares sold in this offering, which we refer to as the “Excess
Shares,” without our prior consent. However, we would not be restricting our shareholders’ ability to vote all of
their shares (including Excess Shares) for or against our initial business combination. Your inability to redeem the Excess Shares
will reduce your influence over our ability to complete our initial business combination and you could suffer a material loss
on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption
distributions with respect to the Excess Shares if we complete our initial business combination. And as a result, you will continue
to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in
open market transactions, potentially at a loss.
Because
of our limited resources and the significant competition for business combination opportunities, it may be more difficult for
us to complete our initial business combination. If we are unable to complete our initial business combination, our public shareholders
may receive only approximately $10.00 per share, or less in certain circumstances, on our redemption of their shares, and our
rights and warrants will expire worthless.
We
expect to encounter intense competition from other entities having a business objective similar to ours, including private investors
(which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international,
competing for the types of businesses we intend to acquire. Many of these individuals and entities are well established and have
extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing
services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry
knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors.
While we believe there are numerous target businesses we could potentially acquire with the net proceeds of this offering and
the sale of the private units, our ability to compete with respect to the acquisition of certain target businesses that are sizable
will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing
the acquisition of certain target businesses. Furthermore, in the event we seek shareholder approval of our initial business combination
and we are obligated to pay cash for our Class A ordinary shares, it will potentially reduce the resources available to us for
our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating
a business combination. If we are unable to complete our initial business combination, our public shareholders may receive only
approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our rights and warrants
will expire worthless. See “—If third parties bring claims against us, the proceeds held in the trust account could
be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per share” and other risk
factors herein.
If
the funds not being held in the trust account are insufficient to allow us to operate for at least the 15 months (or up to 21
months) following the closing of this offering, we may be unable to complete our initial business combination.
Of
the net proceeds of this offering and the sale of the private units, only $750,000 will be available to us initially outside the
trust account to fund our working capital requirements. In the event that our offering expenses exceed our estimate of $550,000,
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 $550,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding
amount. The funds available to us outside of the trust account may not be sufficient to allow us to operate for at least the 15
months (or up to 21 months) following the closing of this offering, assuming that our initial business combination is not completed
during that time. We expect to incur significant costs in pursuit of our acquisition plans. If we are required to seek additional
capital, we would need to borrow funds from our sponsor, management team or other third parties to operate or may be forced to
liquidate. Neither our sponsor, members of our management team nor any of their affiliates is under any obligation to loan funds
to, or invest in, us in such circumstances. Any such loans may be repaid only from funds held outside the trust account or from
funds released to us upon completion of our initial 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.
In such case, our public shareholders may receive only $10.00 per share, or less in certain circumstances, and our rights and
warrants will expire worthless. See “—If third parties bring claims against us, the proceeds held in the trust account
could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per share” and other
risk factors herein.
Subsequent
to our completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and
impairment or other charges that could have a significant negative effect on our financial condition, results of operations and
the price of our securities, which could cause you to lose some or all of your investment.
Even
if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will
identify all material issues that may be present with a particular target business, that it would be possible to uncover all material
issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control
will not later arise. As a result of these factors, we may be forced to later write down or write off assets, restructure our
operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully
identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with
our preliminary risk analysis. Although these charges may be non-cash items and not have an immediate impact on our liquidity,
the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In
addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of
assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly,
any shareholder or warrant holder who chooses to remain a shareholder or warrant holder following our initial business combination
could suffer a reduction in the value of their securities. Such shareholders and warrant holders are unlikely to have a remedy
for such reduction in value.
If
third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount
received by shareholders may be less than $10.00 per share.
Our
placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek to
have all vendors, service providers (other than our independent auditors), 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 any monies held
in the trust account for the benefit of our public shareholders, such parties may not execute such agreements, or even if they
execute such agreements they may not be prevented from bringing claims against the trust account, including, but not limited to,
fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability
of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in
the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account,
our management will perform an analysis of the alternatives available to it and will enter into an agreement with a third party
that has not executed a waiver only 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 we are 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 are unable to complete our initial business combination within the prescribed
timeframe, 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 shareholders could be less than the $10.00 per share
initially held in the trust account, due to claims of such creditors.
Our
sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors)
for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction
agreement, reduce the amount of funds in the trust account to below (1) $10.00 per public share or (2) such lesser amount
per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value
of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third
party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity
of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in
the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to
the extent of any liability for such third-party claims. We have not independently verified whether our sponsor has sufficient
funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Accordingly,
our sponsor may not have sufficient funds available to satisfy those obligations. We have not asked our sponsor to reserve for
such obligations, and therefore, no funds are currently set aside to cover any such obligations. As a result, if any such claims
were successfully made against the trust account, the funds available for our initial business combination and redemptions could
be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business combination,
and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers
or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target
businesses.
Our
directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of
funds in the trust account available for distribution to our public shareholders.
In
the event that the proceeds in the trust account are reduced below the lesser of (1) $10.00 per public share or (2) such
lesser amount per share held in the trust account as of the date of the liquidation of the trust account due to reductions in
the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and our sponsor asserts that
it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent
directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we
currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so
in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of
funds in the trust account available for distribution to our public shareholders may be reduced below $10.00 per share.
If,
after we distribute the proceeds in the trust account to our public shareholders, we file a winding-up or bankruptcy or insolvency
petition or an involuntary winding-up or bankruptcy or insolvency petition is filed against us that is not dismissed, a bankruptcy
court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary
duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.
If,
after we distribute the proceeds in the trust account to our public shareholders, we file a winding-up or bankruptcy or insolvency
petition or an involuntary winding-up or bankruptcy or insolvency petition is filed against us that is not dismissed, any distributions
received by shareholders could be viewed under applicable debtor/creditor and/or insolvency laws as a voidable performance. As
a result, a liquidator could seek to recover some or all amounts received by our shareholders. In addition, our board of directors
may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith by paying public shareholders
from the trust account prior to addressing the claims of creditors, thereby exposing itself and us to claims of punitive damages.
If,
before distributing the proceeds in the trust account to our public shareholders, we file a winding-up or bankruptcy or insolvency
petition or an involuntary winding-up or bankruptcy or insolvency petition is filed against us that is not dismissed, the claims
of creditors in such proceeding may have priority over the claims of our shareholders and the per-share amount that would otherwise
be received by our shareholders in connection with our liquidation may be reduced.
If,
before distributing the proceeds in the trust account to our public shareholders, we file a winding-up or bankruptcy or insolvency
petition or an involuntary winding-up or bankruptcy or insolvency petition is filed against us that is not dismissed, the proceeds
held in the trust account could be subject to applicable insolvency law, and may be included in our liquidation estate and subject
to the claims of third parties with priority over the claims of our shareholders. To the extent any liquidation claims deplete
the trust account, the per-share amount that would otherwise be received by our shareholders in connection with our liquidation
would be reduced.
The
securities in which we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the
value of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than $10.00
per share.
The
proceeds held in the trust account will be held as cash or invested only in U.S. government treasury bills with a maturity of
180 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under
the Investment Company Act. 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 shareholders are entitled to receive
their pro-rata share of the proceeds held in the trust account, plus any interest income, net of taxes paid or payable (less,
in the case we are unable to complete our initial business combination, $50,000 of interest). Negative interest rates could reduce
the value of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than
$10.00 per share.
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 with the SEC;
• adoption
of a specific form of corporate structure; and
• reporting,
record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject
to.
We
do not believe that our anticipated principal activities will subject us to the Investment Company Act. The proceeds held in the
trust account may be invested by the trustee only in U.S. government treasury bills with a maturity of 180 days or less or in
money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment
Company Act. Because the investment of the proceeds will be restricted to these instruments, we believe we will meet the requirements
for the exemption provided in Rule 3a-1 promulgated under 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 are unable to complete our initial
business combination, our public shareholders may receive only approximately $10.00 per share, or less in certain circumstances,
on the liquidation of our trust account and our rights and warrants will expire worthless.
Changes
in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our
ability to negotiate and complete our initial business combination, and results of operations.
We
are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to
comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may
be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from
time to time and those changes could have a material adverse effect on our business, investments and results of operations. In
addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect
on our business, including our ability to negotiate and complete our initial business combination, and results of operations.
If
we are unable to consummate our initial business combination within 15 months (or up to 21 months) of the closing of this offering,
our public shareholders may be forced to wait beyond such 15 months (or up to 21 months) before redemption from our trust account.
If
we are unable to consummate our initial business combination within 15 months (or up to 21 months) from the closing of this offering,
we will distribute the aggregate amount then on deposit in the trust account, including interest (less up to $50,000 of interest
to pay dissolution expenses and which interest shall be net of taxes payable), pro rata to our public shareholders by way of redemption
and cease all operations except for the purposes of winding up of our affairs, as further described herein. Any redemption of
public shareholders from the trust account shall be effected automatically by function of our amended and restated memorandum
and articles of association prior to any voluntary winding up. If we are required to windup, liquidate the trust account and distribute
such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and
distribution must comply with the applicable provisions of the Companies Law. In that case, investors may be forced to wait beyond
the initial 15 months (or up to 21 months) before the redemption proceeds of our trust account become available to them and they
receive the return of their pro rata portion of the proceeds from our trust account. We have no obligation to return funds to
investors prior to the date of our redemption or liquidation unless, prior thereto, we consummate our initial business combination
or amend certain provisions of our amended and restated memorandum and articles of association and then only in cases where investors
have properly sought to redeem their Class A ordinary shares. Only upon our redemption or any liquidation will public shareholders
be entitled to distributions if we are unable to complete our initial business combination and do not amend certain provisions
of our amended and restated memorandum and articles of association prior thereto.
Our
shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption
of their shares.
If
we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful
payment if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts
as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover some or all amounts received
by our shareholders. Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors
and/or may have acted in bad faith, and thereby exposing themselves and our company to claims, by paying public shareholders from
the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us
for these reasons. We and our directors and officers who knowingly and willfully authorized or permitted any distribution to be
paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business
would be guilty of an offence and may be liable to a fine of up to $18,293 and to imprisonment for five years in the Cayman Islands.
We
may not hold an annual general meeting until after the completion of our initial business combination. Our public shareholders
will not have the right to appoint directors prior to the consummation of our Business Combination.
In
accordance with Nasdaq corporate governance requirements, we are not required to hold an annual general meeting until one year
after our first fiscal year end following our listing on Nasdaq. There is no requirement under the Companies Law for us to hold
annual or extraordinary general meetings to appoint directors. Until we hold an annual general meeting, public shareholders may
not be afforded the opportunity to discuss company affairs with management. As holders of our Class A ordinary shares, our
public shareholders also will not have the right to vote on the appointment of directors prior to completion of our initial business
combination. In addition, holders of a majority of our founder shares may remove a member of the board of directors for any reason.
We
are not registering the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or any state
securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding
such investor from being able to exercise its warrants except on a cashless basis and potentially causing such warrants to expire
worthless.
We
are not registering the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or any state
securities laws at this time. However, under the terms of the warrant agreement, we have agreed, as soon as practicable, but in
no event later than 15 business days after the closing of our initial business combination, to use our reasonable best efforts
to file a registration statement under the Securities Act covering the issuance of such shares, to use our reasonable best efforts
to cause the same to become effective within 60 business days after the closing of our initial business combination and to maintain
the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until
the warrants expire or are redeemed. We cannot assure you that we will be able to do so if, for example, any facts or events arise
which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements
contained or incorporated by reference therein are not current, complete or correct or the SEC issues a stop order. If the shares
issuable upon exercise of the warrants are not registered under the Securities Act, we will be required to permit holders to exercise
their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and we will not be
obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise
is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration
is available. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange
for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under applicable state
securities laws and no exemption is available. If the issuance of the shares upon exercise of the warrants is not so registered
or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant
and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase
of units will have paid the full unit purchase price solely for the Class A ordinary shares included in the units. If and
when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the
underlying Class A ordinary shares for sale under all applicable state securities laws.
Our
warrant agreement will designate the courts of the State of New York or the United States District Court for the Southern District
of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our
warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.
Our
warrant agreement will provide that, subject to applicable law, (i) any action, proceeding or claim against us arising out of
or relating in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts
of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably
submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will
waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
Notwithstanding
the foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created
by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and
exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to
have notice of and to have consented to the forum provisions in our warrant agreement. If any action, the subject matter of which
is within the scope the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New
York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of
any holder of our warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal
courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions
(an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement
action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder. We note, however,
that there is uncertainty as to whether a court would enforce this provision and that investors cannot waive compliance with the
federal securities laws and the rules and regulations thereunder.
This
choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable
for disputes with our company, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our
warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings,
we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely
affect our business, financial condition and results of operations and result in a diversion of the time and resources of our
management and board of directors.
The
grant of registration rights to our shareholders and their permitted transferees may make it more difficult to complete our initial
business combination, and the future exercise of such rights may adversely affect the market price of our Class A ordinary
shares.
The
holders of the founder shares, representative shares, private units and any units that may be issued on conversion of working
capital loans (and any securities underlying the private units or units issued upon conversion of the working capital loans and
Class A ordinary shares that may be issued upon conversion of the founder shares) will be entitled to registration rights
pursuant to a registration rights agreement to be signed prior to or on the effective date of this offering requiring us to register
such securities for resale. We will bear the cost of registering these securities. The registration and availability of such a
significant number of securities for trading in the public market may have an adverse effect on the market price of our Class A
ordinary shares. In addition, the existence of the registration rights may make our initial business combination more costly or
difficult to conclude. This is because the shareholders of the target business may increase the equity stake they seek in the
combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A ordinary
shares that is expected when the Class A ordinary shares owned by our initial shareholders or their permitted transferees,
our private units or units issued in connection with working capital loans are registered for resale.
Because
we are not limited to a particular industry 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’s operations.
We
may consummate a business combination with a company in any industry we choose and are not limited to any particular industry
or type of business. Accordingly, there is no current basis for you to evaluate the possible merits or risks of the particular
industry in which we may ultimately operate or the target business which we may ultimately acquire. To the extent we complete
a business combination with a financially unstable company or an entity in its early stages of development or growth, we may be
affected by numerous risks inherent in the business operations of those entities. If we complete a business combination with an
entity in an industry characterized by a high level of risk, we may be affected by the currently unascertainable risks of that
industry. Although our management will endeavor to evaluate the risks inherent in a particular industry or target business, we
cannot assure you that we will properly ascertain or assess all of the significant risk factors. We also cannot assure you that
an investment in our units will not ultimately prove to be less favorable to investors in this offering than a direct investment,
if an opportunity were available, in a target business.
Although
we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses,
we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result,
the target business with which we enter into our initial business combination may not have attributes entirely consistent with
our general criteria and guidelines.
Although
we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target
business with which we enter into our initial business combination will not have all of these positive attributes. If we complete
our initial business combination with a target that does not meet some or all of these criteria and guidelines, such combination
may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition,
if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater
number of shareholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition
with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if shareholder approval
of the transaction is required by applicable law or stock exchange listing requirement, or we decide to obtain shareholder approval
for business or other reasons, it may be more difficult for us to attain shareholder approval of our initial business combination
if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination,
our public shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation
of our trust account and our rights and warrants will expire worthless.
We
may seek acquisition opportunities with an early stage company, a financially unstable business or an entity lacking an established
record of revenue or earnings.
To
the extent we complete our initial business combination with an early stage company, a financially unstable business or an entity
lacking an established record of sales or earnings, we may be affected by numerous risks inherent in the operations of the business
with which we combine. These risks include investing in a business without a proven business model and with limited historical
financial data, volatile revenues or earnings, intense competition and difficulties in obtaining and retaining key personnel.
Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may not be
able to properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence.
Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that
those risks will adversely impact a target business.
We
are not required to obtain an opinion from an independent investment banking firm or from another independent entity that commonly
renders valuation opinions, and consequently, you may have no assurance from an independent source that the price we are paying
for the business is fair to our company from a financial point of view.
Unless
we complete our initial business combination with an affiliated entity, we are not required to obtain an opinion from an independent
investment banking firm, or from another independent entity that commonly renders valuation opinions, that the price we are paying
is fair to our company from a financial point of view. If no opinion is obtained, our shareholders will be relying on the judgment
of our board of directors, who will determine fair market value based on standards generally accepted by the financial community.
Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to
our initial business combination.
We
may issue additional Class A ordinary shares or preference shares to complete our initial business combination or under an
employee incentive plan after completion of our initial business combination. We may also issue Class A ordinary shares upon
the conversion of the founder shares at a ratio greater than one-to-one at the time of our initial business combination as a result
of the anti-dilution provisions contained in our amended and restated memorandum and articles of association. Any such issuances
would substantially dilute the interest of our shareholders and likely present other risks.
Our
amended and restated memorandum and articles of association authorize the issuance of ordinary shares, including 200,000,000 Class A
ordinary shares, par value $0.0001 per share, and 20,000,000 Class B ordinary shares, par value $0.0001 per share, as well
as 1,000,000 preference shares, par value $0.0001. Immediately after this offering, there will be 193,200,000 and 18,900,000 (assuming
that the underwriters have not exercised their over-allotment option and an aggregate of 150,000 founder shares have been forfeited)
authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available for issuance, which
amount takes into account shares reserved for issuance upon exercise of outstanding warrants and conversion of rights, and 1,000,000
authorized but unissued preference shares available for issuance.
We
may issue a substantial number of additional Class A ordinary shares, and may issue preference shares, in order to complete
our initial business combination or under an employee incentive plan after completion of our initial business combination. We
may also issue Class A ordinary shares upon conversion of the Class B ordinary shares at a ratio greater than one-to-one
at the time of our initial business combination as a result of the anti-dilution provisions as set forth herein. However, our
amended and restated memorandum and articles of association provide, among other things, that prior to our initial business combination,
we may not issue additional shares that would entitle the holders thereof to (1) receive funds from the trust account or
(2) vote as a class with our public shares (a) on any initial business combination or (b) to approve an amendment
to our amended and restated memorandum and articles of association to (x) extend the time we have to consummate a business
combination beyond 15 months (or up to 21 months) from the closing of this offering or (y) amend the foregoing provisions.
The issuance of additional ordinary shares or preference shares:
• may
significantly dilute the equity interest of investors in this offering;
• may
subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those
afforded our Class A ordinary shares;
• could
cause a change in control if a substantial number of Class A ordinary shares are issued, which may affect, among other things,
our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present
officers and directors; and
• may
adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants.
Unlike
certain other blank check companies, our initial shareholder will receive additional Class A ordinary shares if we issue
shares to consummate an initial business combination.
The
founder shares will automatically convert into Class A ordinary shares on the first business day following the completion
of our initial business combination on a one-for-one basis, subject to adjustment as provided herein. In the case that additional
Class A ordinary shares, or equity-linked securities convertible or exercisable for Class A ordinary shares, are issued
or deemed issued in excess of the amounts issued in this offering and related to the closing of our initial business combination,
the ratio at which founder shares will convert into Class A ordinary shares will be adjusted (subject to waiver by holders
of a majority of the Class B ordinary shares then in issue) so that the number of Class A ordinary shares issuable upon
conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of our ordinary
shares issued and outstanding upon the completion of this offering plus the number of Class A ordinary shares and equity-linked
securities issued or deemed issued in connection with our initial business combination (net of redemptions), excluding the private
shares underlying the private units, the representative shares, any shares underlying units issued upon conversion of working
capital loans and any Class A ordinary shares or equity-linked securities issued, or to be issued, to any seller in our initial
business combination. This is different than certain other blank check companies in which the initial shareholder will only be
issued an aggregate of 20% of the total number of shares to be outstanding prior to our initial business combination.
We
may be a passive foreign investment company, or “PFIC,” which could result in adverse United States federal income
tax consequences to U.S. investors.
If
we are a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder (as defined in
the section of this prospectus captioned “Income Tax Considerations—United States Federal Income Taxation—General”)
of our Class A ordinary shares, rights or warrants, the U.S. Holder may be subject to adverse U.S. federal income tax consequences
and may be subject to additional reporting requirements. Our PFIC status for our current and subsequent taxable years may depend
on whether we qualify for the PFIC start-up exception (see the section of this prospectus captioned “Income Tax Considerations—United
States Federal Income Taxation—U.S. Holders—Passive Foreign Investment Company Rules”). Depending on the particular
circumstances, the application of the start-up exception may be subject to uncertainty, and there cannot be any assurance that
we will qualify for the start-up exception. Accordingly, there can be no assurances with respect to our status as a PFIC for our
current taxable year or any subsequent taxable year. Our actual PFIC status for any taxable year, moreover, will not be determinable
until after the end of such taxable year. If we determine we are a PFIC for any taxable year (of which there can be no assurance),
we will endeavor to provide to a U.S. Holder such information as the Internal Revenue Service (“IRS”) may require,
including a PFIC annual information statement, in order to enable the U.S. Holder to make and maintain a “qualified electing
fund” election, but there can be no assurance that we will timely provide such required information, and such election would
be unavailable with respect to our warrants in all cases. We urge U.S. investors to consult their own tax advisors regarding the
possible application of the PFIC rules. For a more detailed discussion of the tax consequences of PFIC classification to U.S.
Holders, see the section of this prospectus captioned “Income Tax Considerations —United States Federal Income Taxation—U.S.
Holders—Passive Foreign Investment Company Rules.”
We
may reincorporate in another jurisdiction in connection with our initial business combination and such reincorporation may result
in taxes imposed on shareholders.
We
may, in connection with our initial business combination and subject to requisite shareholder approval under the Companies Law,
reincorporate in the jurisdiction in which the target company or business is located or in another jurisdiction. The transaction
may require a shareholder to recognize taxable income in the jurisdiction in which the shareholder is a tax resident or in which
its members are resident if it is a tax transparent entity. We do not intend to make any cash distributions to shareholders to
pay such taxes. Shareholders may be subject to withholding taxes or other taxes with respect to their ownership of us after the
reincorporation.
Resources
could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts
to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public
shareholders may receive only approximately $10.00 per share, or less than such amount in certain circumstances, on the liquidation
of our trust account and our rights and warrants will expire worthless.
We
anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements,
disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants,
attorneys and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point
for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target
business, we may fail to complete our initial business combination for any number of reasons including those beyond our control.
Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts
to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public
shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust
account and our rights and warrants will expire worthless.
We
are dependent upon our officers and directors and their departure could adversely affect our ability to operate.
Our
operations are dependent upon a relatively small group of individuals. 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 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. Moreover, certain of our officers and directors have time and attention requirements for investment
funds of which affiliates of our sponsor are the investment managers. 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.
Our
ability to successfully effect our initial business combination and to be successful thereafter will be dependent upon the efforts
of our key personnel, some of whom may join us following our initial business combination. The loss of key personnel could negatively
impact the operations and profitability of our post-combination business.
Our
ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of
our key personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain
with the target business in senior management or advisory positions following our initial business combination, it is likely that
some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals
we engage after our initial business combination, we cannot assure you that our assessment of these individuals will prove to
be correct. 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.
In
addition, the officers and directors of an acquisition candidate may resign upon completion of our initial business combination.
The departure of a business combination target’s key personnel could negatively impact the operations and profitability
of our post-combination business. The role of an acquisition candidate’s key personnel upon the completion of our initial
business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s
management team will remain associated with the acquisition candidate following our initial business combination, it is possible
that members of the management of an acquisition candidate will not wish to remain in place. The loss of key personnel could negatively
impact the operations and profitability of our post-combination business.
Our
key personnel 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 initial business combination and as a
result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.
Our
key personnel may be able to remain with the company after the completion of our initial business combination only if they are
able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take
place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation
in the form of cash payments and/or our securities for services they would render to us after the completion of our initial business
combination. The personal and financial interests of such individuals may influence their motivation in identifying and selecting
a target business, subject to their fiduciary duties under Cayman Islands law. However, we believe the ability of such individuals
to remain with us after the completion of our initial 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 of our
key personnel will remain with us after the completion of our initial business combination. We cannot assure you that any of our
key personnel will remain in senior management or advisory positions with us. The determination as to whether any of our key personnel
will remain with us will be made at the time of our initial business combination.
We
may have limited ability to assess the management of a prospective target business and, as a result, may effect our initial business
combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.
When
evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess
the target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities
of the target’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. Accordingly,
shareholders or warrant holders who choose to remain shareholders or warrant holders following our initial business combination
could suffer a reduction in the value of their securities. Such shareholders or warrant holders are unlikely to have a remedy
for such reduction in value.
The
officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The departure
of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination
business. The role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot
be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s management team
will remain associated with the acquisition candidate following our initial business combination, it is possible that members
of the management of an acquisition candidate will not wish to remain in place.
Our
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
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 officers
is engaged in several other business endeavors for which he may be entitled to substantial compensation and our officers are not
obligated to contribute any specific number of hours per week to our affairs. Our independent directors may also serve as officers
and board members for other entities. If our 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 officers’ and directors’ other business affairs, please see “Management—Directors, Director
Nominees and Executive Officers.”
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 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. Our sponsor and officers and directors are, or may in the future become,
affiliated with entities that are engaged in a similar business, and they are not prohibited from sponsoring, or otherwise becoming
involved with, other blank check companies prior to us completing our initial business combination. Moreover, certain of our officers
and directors have time and attention requirements for investment funds of which affiliates of our sponsor are the investment
managers.
Our
officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the
other entities 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 other entities prior to its presentation to us, subject to their fiduciary
duties under Cayman Islands law.
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 “Management—Directors, Director Nominees and Executive Officers,” “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, we may enter into a business combination with a target business that is affiliated
with our sponsor, directors or officers, although we do not intend to do so. 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, affiliates of our sponsor have invested in industries as diverse as wireless communication, e-commerce, block-chain
technology and social media. 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 such other affiliates.
Past
performance by our management team and advisors may not be indicative of future performance of an investment in us.
Past
performance by our management team and advisors is not a guarantee either (i) of success with respect to any business combination
we may consummate or (ii) that we will be able to locate a suitable candidate for our initial business combination. You should
not rely on the historical record of our management team’s or advisors’ performance as indicative of our future performance
of an investment in the company or the returns the company will, or is likely to, generate going forward. None of our officers
or directors has any experience with blank check companies or special purpose acquisition companies. Additionally, in the course
of their respective careers, members of our management team have been involved in businesses and deals that were unsuccessful.
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 or directors 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 and directors. Our officers and 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 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 “Proposed Business—Effecting
Our Initial Business Combination—Selection 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.
Since
our initial shareholders will lose their entire investment in us if our initial business combination is not completed (other than
with respect to any public shares they may acquire), a conflict of interest may arise in determining whether a particular business
combination target is appropriate for our initial business combination.
In
July 2020, our sponsor paid $25,000 to cover certain of our offering costs in consideration for 1,150,000 founder shares.
As such, our initial shareholders will collectively own 20% of our issued and outstanding shares after this offering (assuming
they do not purchase any units in this offering and excluding the private shares underlying the private units, the representative
shares and any shares underlying units issued upon conversion of working capital loans and any Class A ordinary shares or
equity-linked securities issued, or to be issued, to any seller in our initial business combination). If we increase or decrease
the size of this offering, we will effect a capitalization or share repurchase or redemption or other appropriate mechanism, as
applicable, 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 ordinary shares upon the consummation of this offering (excluding
the private shares underlying the private units, the representative shares and any shares underlying units issued upon conversion
of working capital loans and any Class A ordinary shares or equity-linked securities issued, or to be issued, to any seller
in our initial business combination). 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 250,000 private units at $10.00 per unit (or 268,000 if the
underwriters’ over-allotment option is exercised in full), for a purchase price of $2,500,000 in the aggregate (or $2,680,000
in the aggregate if the underwriters’ over-allotment option is exercised in full), that will also be worthless if we do
not complete a business combination.
The
founder shares are identical to the ordinary shares included in the units being sold in this offering except that: (1) prior
to our initial business combination, only holders of the founder shares have the right to vote on the appointment of directors
and holders of a majority of our founder shares may remove a member of the board of directors for any reason; (2) the founder
shares are subject to certain transfer restrictions; (3) our initial shareholders have entered into a letter agreement with
us, pursuant to which they have agreed to waive: (x) their redemption rights with respect to their founder shares and any
public shares held by them in connection with the completion of our initial business combination (and not seek to sell its shares
to us in any tender offer we undertake in connection with our initial business combination); (y) their redemption rights
with respect to their founder shares and any public shares held by them in connection with a shareholder vote to approve an amendment
to our amended and restated memorandum and articles of association (A) that would affect our public shareholders’ ability
to convert or sell their shares to us in connection with a business combination as described herein or 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
15 months (or up to 21 months) from the closing of this offering or (B) with respect to any other provision relating
to shareholders’ rights or pre-initial business combination activity; and (z) their rights to liquidating distributions
from the trust account with respect to any founder shares they hold if we fail to complete our initial business combination within
15 months (or up to 21 months) from the closing of this offering (although they will be entitled to liquidating distributions
from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within
the prescribed time frame); (4) the founder shares will automatically convert into our Class A ordinary shares on the
first business day following the completion of our initial business combination on a one-for-one basis subject to adjustment pursuant
to certain anti-dilution rights and (5) the founder shares are entitled to registration rights. Our directors and officers
have also entered into the letter agreement with respect to public shares acquired by them, if any.
The
personal and financial interests of our sponsor, officers and directors may influence their motivation in identifying and selecting
a target business combination, completing an initial business combination and influencing the operation of the business following
the initial business combination. This risk may become more acute as the 15-month (or up to 21-month) deadline following the closing
of this offering nears, which is the deadline for the completion of our initial business combination.
We
may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely
affect our leverage and financial condition and thus negatively impact the value of our shareholders’ investment in us.
Although
we have no commitments as of the date of this prospectus to issue any notes or other debt securities, or to otherwise incur outstanding
debt following this offering, we may choose to incur substantial debt to complete our initial business combination. We have agreed
that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim
of any kind in or to the monies held in the trust account. As such, no issuance of debt will affect the per-share amount available
for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:
• default
and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt
obligations;
• acceleration
of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain
covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
• our
immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
• our
inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing
while the debt security is outstanding;
• our
inability to pay dividends on our Class A ordinary shares;
• using
a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends
on our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
• limitations
on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
• increased
vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
and
• limitations
on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution
of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
We
may be able to complete only one business combination with the proceeds of this offering and the sale of the private units, 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.
We
may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or
within a short period of time. However, we may not be able to effectuate our initial business combination with more than one target
business because of various factors, including the existence of complex accounting issues and the requirement that we prepare
and file pro forma financial statements with the SEC that present operating results and the financial condition of several target
businesses as if they had been operated on a combined basis. By completing our initial business combination with only a single
entity our lack of diversification may subject us to numerous economic, competitive and regulatory risks. 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, processes or services.
This
lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a
substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
We
may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to
complete our initial business combination and give rise to increased costs and risks that could negatively impact our operations
and profitability.
If
we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers
to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which
may make it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business
combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations
and due diligence 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 complete our initial business combination with a private company about which little information is available, which
may result in a business combination with a company that is not as profitable as we suspected, if at all.
In
pursuing our acquisition strategy, we may seek to effectuate our initial business combination with a privately held company. Very
little public information generally exists about private companies, and we could be required to make our decision on whether to
pursue a potential initial business combination on the basis of limited information, which may result in a business combination
with a company that is not as profitable as we suspected, if at all.
We
expect to need to comply with the rules of Nasdaq that require our initial business combination to occur with one or more
target businesses having an aggregate fair market value equal to at least 80% of the assets held in the trust account at the time
of the agreement to enter into the initial business combination.
The
rules of Nasdaq require that our initial business combination occur with one or more target businesses that together have
an aggregate fair market value of at least 80% of the assets held in the trust account (excluding taxes payable on the income
earned on the trust account) at the time of the agreement to enter into the 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, our public shareholders may receive only approximately $10.00 per share,
or less in certain circumstances, on the liquidation of our trust account, and our rights and warrants will expire worthless.
If we are not then listed on Nasdaq for whatever reason, we would not be required to satisfy the foregoing 80% fair market value
test and could complete a business combination with a target business having a fair market value substantially below 80% of the
balance in the trust account. Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority
of our independent directors.
EarlyBirdCapital
may have a conflict of interest in rendering services to us in connection with our initial business combination.
We
have engaged EarlyBirdCapital to assist us in connection with our initial business combination. We will pay EarlyBirdCapital a
cash fee for such services upon the consummation of our initial business combination in an aggregate amount equal to 4.0% of the
total gross proceeds raised in the offering. The representative shares will also be worthless if we do not consummate an initial
business combination. These financial interests may result in EarlyBirdCapital having a conflict of interest when providing the
services to us in connection with an initial business combination.
Our
management may not be able to maintain control of a target business after our initial business combination. We cannot provide
assurance that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities
necessary to profitably operate such business.
We
may structure our initial business combination so that the post-transaction company in which our public shareholders own shares
will own less than 100% of the equity interests or assets of a target business, but we will complete such business combination
only if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target
or otherwise acquires a controlling interest in the target business sufficient for us not to be required to register as an investment
company under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-transaction
company owns 50% or more of the voting securities of the target, our shareholders prior to our initial business combination may
collectively own a minority interest in the post business combination company, depending on valuations ascribed to the target
and us in our initial business combination transaction. For example, we could pursue a transaction in which we issue a substantial
number of new Class A ordinary shares in exchange for all of the issued and outstanding capital stock, shares or other equity
interests of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a
substantial number of new Class A ordinary shares, our shareholders immediately prior to such transaction could own less
than a majority of our issued and outstanding Class A ordinary shares subsequent to such transaction. In addition, other
minority shareholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of
the company’s shares than we initially acquired. Accordingly, this may make it more likely that our management will not
be able to maintain our control of the target business.
We
do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to
complete a business combination with which a substantial majority of our shareholders do not agree.
Our
amended and restated memorandum and articles of association will not provide a specified maximum redemption threshold, except
that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001
either immediately prior to or upon completion of our initial business combination (such that we do not then become subject to
the SEC’s “penny stock” rules), or any greater net tangible asset or cash requirement that may be contained
in the agreement relating to our initial business combination. As a result, we may be able to complete our initial business combination
even though a substantial majority of our public shareholders do not agree with the transaction and have redeemed their shares
or, if we seek shareholder approval of our initial business combination and do not conduct redemptions in connection with our
initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their
shares to our sponsor, officers, directors, advisors or any of their affiliates. In the event the aggregate cash consideration
we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required
to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available
to us, we will not complete the business combination or redeem any shares, all Class A ordinary shares submitted for redemption
will be returned to the holders thereof, and we instead may search for an alternate business combination.
In
order to effectuate an initial business combination, blank check companies have, in the past, amended various provisions of their
charters and modified governing instruments. We cannot assure you that we will not seek to amend our amended and restated memorandum
and articles of association or governing instruments, in a manner that will make it easier for us to complete our initial business
combination that some of our shareholders may not support.
In
order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions
of their charters and modified governing instruments. For example, blank check companies have amended the definition of business
combination, increased redemption thresholds and extended the time to consummate an initial business combination. Amending our
amended and restated memorandum and articles of association require at least a special resolution of our shareholders as a matter
of Cayman Islands law. A resolution is deemed to be a special resolution as a matter of Cayman Islands law where it has been approved
by either (1) at least two-thirds (or any higher threshold specified in a company’s articles of association) of a company’s
shareholders at a general meeting for which notice specifying the intention to propose the resolution as a special resolution
has been given or (2) if so authorized by a company’s articles of association, by a unanimous written resolution of
all of the company’s shareholders. Our amended and restated memorandum and articles of association provide that special
resolutions must be approved either by at least two-thirds of our shareholders who attend and vote at a general meeting (i.e.,
the lowest threshold permissible under Cayman Islands law) (other than amendments relating to the appointment or removal of directors
prior to our initial business combination, which require the approval of at least 90% of our ordinary shares voting in a general
meeting), or by a unanimous written resolution of all of our shareholders. We cannot assure you that we will not seek to amend
our amended and restated memorandum and articles of association or governing instruments or extend the time to consummate an initial
business combination in order to effectuate our initial business combination.
The
provisions of our amended and restated memorandum and articles of association that relate to our pre-business combination activity
(and corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the
approval of holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting, which is a lower amendment
threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated
memorandum and articles of association and the trust agreement to facilitate the completion of an initial business combination
that some of our shareholders may not support.
Some
other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including
those which relate to a company’s pre-business combination activity, without approval by holders of a certain percentage
of the company’s shares. In those companies, amendment of these provisions typically requires approval by holders holding
between 90% and 100% of the company’s public shares. Our amended and restated memorandum and articles of association provide
that any of its provisions, including those related to pre-business combination activity (including the requirement to deposit
proceeds of this offering and the private placement of warrants into the trust account and not release such amounts except in
specified circumstances), may be amended if approved by holders of at least two-thirds of our ordinary shares who attend and vote
in a general meeting, and corresponding provisions of the trust agreement governing the release of funds from our trust account
may be amended if approved by holders of 65% of our ordinary shares (other than amendments relating to the appointment or removal
of directors prior to our initial business combination, which require the approval of at least 90% of our ordinary shares voting
in a general meeting). Our initial shareholders, who will collectively beneficially own 20% of our ordinary shares upon the closing
of this offering (excluding the private shares underlying the private units, the representative shares and any shares underlying
units issued upon conversion of working capital loans and any Class A ordinary shares or equity-linked securities issued,
or to be issued, to any seller in our initial business combination, and assuming they do not purchase any units in this offering),
may participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and
will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended
and restated memorandum and articles of association which govern our pre-business combination behavior more easily than some other
blank check companies, and this may increase our ability to complete our initial business combination with which you do not agree.
However, our amended and restated memorandum and articles of association prohibits any amendment of its provisions (A) that
would affect our public shareholders’ ability to convert or sell their shares to us in connection with a business combination
as described herein or 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 15 months (or up to 21 months) from the closing of this offering or (B) with
respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless we
provide public shareholders with the opportunity to redeem their public shares. Furthermore, our sponsor, officers and directors
have agreed, pursuant to a written agreement with us, that they will not propose such an amendment unless we provide our public
shareholders with the opportunity to redeem their public shares. In certain circumstances, our shareholders may pursue remedies
against us for any breach of our amended and restated memorandum and articles of association.
We
may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders
of at least a majority of the then outstanding public warrants.
Our
warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company,
as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of
any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least a majority
of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public
warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least a
majority of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public
warrants with the consent of at least a majority of the then outstanding public warrants is unlimited, examples of such amendments
could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease
the number of Class A ordinary shares purchasable upon exercise of a warrant.
We
may amend the terms of the rights in a way that may be adverse to holders with the approval by the holders of a majority of the
then outstanding rights.
Our
rights will be issued in registered form under a rights agreement between Continental Stock Transfer & Trust Company, as rights
agent, and us. The rights agreement provides that the terms of the rights may be amended without the consent of any holder to
cure any ambiguity or correct any defective provision. The rights agreement requires the approval by the holders of a majority
of the then outstanding rights (including the private rights) in order to make any change that adversely affects the interests
of the registered holders. Accordingly, we may amend the terms of the rights in a manner adverse to a holder if holders of at
least a majority of the then outstanding public rights approve of such amendment.
Certain
agreements related to this offering may be amended without shareholder approval.
Each
of the agreements related to this offering to which we are a party, other than the warrant agreement and the investment management
trust agreement, may be amended without shareholder approval. These agreements contain various provisions that our public shareholders
might deem to be material. For example, our letter agreement and the underwriting agreement contain certain lock-up provisions
with respect to the founder shares, private units and other securities held by our initial shareholders, officers and directors.
Amendments
to such agreements would require the consent of the applicable parties thereto and would need to be approved by our board of directors,
which may do so for a variety of reasons, including to facilitate our initial business combination. While we do not expect our
board of directors to approve any amendment to any of these agreements prior to our initial business combination, it may be possible
that our board of directors, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or
more amendments to any such agreement. Any material amendment entered into in connection with the completion of our initial business
combination will be disclosed in our proxy solicitation or tender offer materials, as applicable, related to such initial business
combination, and any other material amendment to any of our material agreements will be disclosed in a filing with the SEC. Any
such amendments would not require approval from our shareholders, may result in the completion of our initial business combination
that may not otherwise have been possible, and may have an adverse effect on the value of an investment in our securities. For
example, amendments to the lock-up provision discussed above may result in our initial shareholders selling their securities earlier
than they would otherwise be permitted, which may have an adverse effect on the price of our securities.
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.
Although
we believe that the net proceeds of this offering and the sale of the private units will be sufficient to allow us to complete
our initial business combination, because we have not yet selected any target business we cannot ascertain the capital requirements
for any particular transaction. If the net proceeds of this offering and the sale of the private units prove to be insufficient,
either because of the size of our initial business combination, the depletion of the available net proceeds in search of a target
business, the obligation to redeem for cash a significant number of shares from shareholders who elect redemption in connection
with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial
business combination, we may be required to seek additional financing or to abandon the proposed business combination. We cannot
assure you that such financing will be available on acceptable terms, if at all. To the extent that additional financing proves
to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure the transaction
or abandon that particular business combination and seek an alternative target business candidate. In addition, even if we do
not need additional financing to complete our initial business combination, we may require such financing to fund the operations
or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued
development or growth of the target business. None of our officers, directors or shareholders is required to provide any financing
to us in connection with or after our initial business combination. If we are unable to complete our initial business combination,
our public shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation
of our trust account, and our rights and warrants will expire worthless.
Our
initial shareholders will control the election of our board of directors until completion of our initial business combination
and will hold a substantial interest in us. As a result, they will appoint all of our directors prior to our initial business
combination and may exert a substantial influence on actions requiring shareholder vote, potentially in a manner that you do not
support.
Upon
the closing of this offering, our initial shareholders will own 20% of our issued and outstanding ordinary shares (excluding the
private shares underlying the private units, the representative shares and any shares underlying units issued upon conversion
of working capital loans and any Class A ordinary shares or equity-linked securities issued, or to be issued, to any seller
in our initial business combination and assuming they do not purchase any units in this offering). In addition, prior to our initial
business combination, only the founder shares, all of which are held by our initial shareholders, will have the right to vote
on the appointment of directors, and holders of a majority of our founder shares may remove a member of the board of directors
for any reason.
Neither
our initial shareholders nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional
securities, other than as disclosed in this prospectus. Factors that would be considered in making such additional purchases would
include consideration of the current trading price of our Class A ordinary shares. In addition, as a result of their substantial
ownership in our company, our initial shareholders may exert a substantial influence on other actions requiring a shareholder
vote, potentially in a manner that you do not support, including amendments to our amended and restated memorandum and articles
of association and approval of major corporate transactions. If our initial shareholders purchase any Class A ordinary shares
in this offering or in the aftermarket or in privately negotiated transactions, this would increase their influence over these
actions. Accordingly, our initial shareholders will exert significant influence over actions requiring a shareholder vote at least
until the completion of our initial business combination.
Our
sponsor paid an aggregate of $25,000, or $0.022 per founders’ share (assuming the over-allotment option is exercised in
full and thus no forfeiture by our sponsor of any founder shares), and, accordingly, you will experience immediate and substantial
dilution upon the purchase of our Class A ordinary shares.
The
difference between the public offering price per share (allocating all of the unit purchase price to the Class A ordinary shares
and none to the right or warrant included in the unit) and the pro forma net tangible book value per Class A ordinary share after
this offering constitutes the dilution to you and the other investors in this offering. Our sponsor acquired the founder shares
at a nominal price, significantly contributing to this dilution. Upon the closing of this offering, and assuming no value is ascribed
to the rights or warrants included in the units, you and the other public shareholders will incur an immediate and substantial
dilution of approximately 75.03% (or $6.82 per share, assuming no exercise of the underwriters’ over-allotment option),
the difference between the pro forma net tangible book value per share of $2.27 and the initial offering price of $9.09 per unit
(including the ordinary shares issuable upon conversion of the rights). This dilution would increase to the extent that the anti-dilution
provisions of the founder shares result in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion
of the founder shares at the time of our initial business combination. In addition, because of the anti-dilution protection in
the founder shares, any equity or equity-linked securities issued in connection with our initial business combination would be
disproportionately dilutive to our Class A ordinary shares.
Our
unit structure may cause our units to be worth less than units of other blank check companies.
Each
unit contains one-half of one redeemable warrant and one right to receive one-tenth of a share. No fractional warrants will be
issued upon separation of the units and only whole warrants will trade. The foregoing is different from other offerings similar
to ours whose units include shares and whole warrants. This unit structure may cause our units to be worth less than if they included
a warrant to purchase one whole share but did not include a right.
A
provision of our warrant agreement may make it more difficult for us to consummate an initial business combination.
If:
(i) we
issue additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the
closing of our initial business combination at a Newly Issued Price of less than $9.20 per Class A ordinary share;
(ii) the
aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available
for the funding of our initial business combination on the date of the completion of our initial business combination (net of
redemptions), and
(iii) the
Market Value is below $9.20 per share,
then
the exercise price of the warrants will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued
Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher
of the Market Value and the Newly Issued Price. This may make it more difficult for us to consummate an initial business combination
with a target business.
We
may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants
worthless.
We
have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a
price of $0.01 per warrant; provided that the last reported sales price of our Class A ordinary shares equals or exceeds
$18.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, reorganizations, recapitalizations and
the like or as indicated above) for any 20 trading days within a 30 trading-day period commencing on the date they become exercisable
and ending on the third trading day prior to the date we send the notice of redemption to the warrant holders. If and when the
warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying
securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force you to: (1) exercise
your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so; (2) sell your
warrants at the then-current market price when you might otherwise wish to hold your warrants; or (3) accept the nominal
redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than
the market value of your warrants. None of the private warrants will be redeemable by us so long as they are held by our sponsor
or its permitted transferees.
Our
rights, warrants and founder shares may have an adverse effect on the market price of our Class A ordinary shares and make
it more difficult to effectuate our initial business combination.
We
will be issuing rights to receive 400,000 Class A ordinary shares (or up to 460,000 Class A ordinary shares if the underwriters’
over-allotment option is exercised in full) and warrants to purchase 2,000,000 Class A ordinary shares (or up to 2,300,000
Class A ordinary shares if the underwriters’ over-allotment option is exercised in full) at a price of $11.50 per share
(subject to adjustment as provided herein), as part of the units offered by this prospectus. Simultaneously with the closing of
this offering, we will be issuing in a private placement an aggregate of 250,000 (or 268,000 if the underwriters’ over-allotment
option is exercised in full) private units, each unit consisting of one private share, one private right and one-half of one private
warrant. Each right entitles the holder thereof to receive one-tenth (1/10) of one Class A ordinary share upon the consummation
of an initial business combination. Each private warrant is exercisable to purchase one Class A ordinary share at a price
of $11.50 per share, subject to adjustment as provided herein. Our initial shareholders currently hold 1,150,000 founder shares
(up to 150,000 of which are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment
option is exercised). In addition, if our sponsor, an affiliate of our sponsor or certain of our officers and directors make any
working capital loans, up to $1,500,000 of such loans may be converted into units, at the price of $10.00 per unit, at the option
of the lender. Such units would be identical to the private units. To the extent we issue ordinary shares to effectuate a business
transaction, the potential for the issuance of a substantial number of additional Class A ordinary shares upon exercise of
these warrants could make us a less attractive acquisition vehicle to a target business. Any such issuance will increase the number
of issued and outstanding Class A ordinary shares and reduce the value of the Class A ordinary shares issued to complete
the business transaction. Therefore, our rights, warrants and founder shares may make it more difficult to effectuate a business
combination or increase the cost of acquiring the target business.
The
warrants underlying the private units are identical to the units sold as part of the units in this offering except that, so long
as the warrants underlying such units are held by our sponsor or its permitted transferees: (1) they will not be redeemable
by us; (2) they (including the ordinary shares issuable upon exercise of these warrants) may not, subject to certain limited
exceptions, be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial business combination;
(3) they may be exercised by the holders on a cashless basis; and (4) they (including the ordinary shares issuable upon
exercise of these warrants) are entitled to registration rights.
The
determination of the offering price of our units and the size of this offering is more arbitrary than the pricing of securities
and size of an offering of an operating company in a particular industry. You may have less assurance, therefore, that the offering
price of our units properly reflects the value of such units than you would have in a typical offering of an operating company.
Prior
to this offering there has been no public market for any of our securities. The public offering price of the units and the terms
of the rights and warrants were negotiated between us and the representative of 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 the units, including
the Class A ordinary shares, rights and warrants underlying the units, 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.
There
is currently no market for our securities. Shareholders therefore have no access to information about prior market history on
which to base their investment decision. Following this offering, the price of our securities may vary significantly due to one
or more potential business combinations and general market or economic conditions. Furthermore, an active trading market for our
securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market
can be established and sustained.
Because
we must furnish our shareholders with target business financial statements, we may lose the ability to complete an otherwise advantageous
initial business combination with some prospective target businesses.
The
federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial
significance tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the
same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the
tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting
principles generally accepted in the United States of America, or U.S. GAAP, or international financing reporting standards as
issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the historical financial statements
may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States),
or PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some
targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance
with federal proxy rules and complete our initial business combination within the prescribed time frame.
U.S.
laws in the future may restrict or eliminate our ability to complete a business combination with certain companies.
Future
developments in U.S. laws may restrict our ability or willingness to complete certain business combinations with companies. For
instance, the federal government has recently proposed legislation that would restrict our ability to consummate a business combination
with a target business unless that business met certain standards of the PCAOB and would require delisting of a company from national
securities exchanges if it failed to retain an accounting firm that the PCAOB has inspected to the satisfaction of the SEC. Such
proposed legislation would also would require public companies to disclose whether they are owned or controlled by a foreign government,
specifically, those based in the People's Republic of China, or the PRC. We may not be able to consummate a business combination
with a favored target business due to these laws. Furthermore, the documentation we may be required to submit to the SEC proving
certain beneficial ownership requirements and establishing that we are not owned or controlled by a foreign government in the
event that we use a foreign public accounting firm not subject to inspection by the PCAOB or where the PCAOB is unable to completely
inspect or investigate our accounting practices or financial statements because of a position taken by an authority in the foreign
jurisdiction could be onerous and time consuming to prepare.
Enhanced
scrutiny over acquisition transactions by the PRC tax authorities may have a negative impact on potential acquisitions we may
pursue in the future.
The
PRC tax authorities have enhanced their scrutiny over the direct or indirect transfer of certain taxable assets, including, in
particular, equity interests in a PRC resident enterprise, by a non-resident enterprise by promulgating and implementing SAT Circular
59 and Circular 698, which became effective in January 2008, and Circular 7 in replacement of some of the existing rules in
Circular 698, which became effective in February 2015.
Under
Circular 698, where a non-resident enterprise conducts an “indirect transfer” by transferring the equity interests
of a PRC “resident enterprise” indirectly by disposing of the equity interests of an overseas holding company, the
non-resident enterprise, being the transferor, may be subject to PRC corporate income tax, if the indirect transfer is considered
to be an abusive use of company structure without reasonable commercial purposes. As a result, gains derived from such indirect
transfer may be subject to PRC tax at a rate of up to 10%. Circular 698 also provides that, where a non-PRC resident enterprise
transfers its equity interests in a PRC resident enterprise to its related parties at a price lower than the fair market value,
the relevant tax authority has the power to make a reasonable adjustment to the taxable income of the transaction.
In
February 2015, the SAT issued Circular 7 to replace the rules relating to indirect transfers in Circular 698. Circular
7 has introduced a new tax regime that is significantly different from that under Circular 698. Circular 7 extends its tax jurisdiction
to not only indirect transfers set forth under Circular 698 but also transactions involving transfer of other taxable assets,
through the offshore transfer of a foreign intermediate holding company. In addition, Circular 7 provides clearer criteria than
Circular 698 on how to assess reasonable commercial purposes and has introduced safe harbors for internal group restructurings
and the purchase and sale of equity through a public securities market. Circular 7 also brings challenges to both the foreign
transferor and transferee (or other person who is obligated to pay for the transfer) of the taxable assets. Where a non-resident
enterprise conducts an “indirect transfer” by transferring the taxable assets indirectly by disposing of the equity
interests of an overseas holding company, the non-resident enterprise being the transferor, or the transferee, or the PRC entity
which directly owned the taxable assets may report to the relevant tax authority such indirect transfer. Using a “substance
over form” principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable
commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived
from such indirect transfer may be subject to PRC corporate income tax, and the transferee or other person who is obligated to
pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests
in a PRC resident enterprise.
We
face uncertainties on the reporting and consequences on future private equity financing transactions, share exchange or other
transactions involving the transfer of shares in our company by investors that are non-PRC resident enterprises. The PRC tax authorities
may pursue such non-resident enterprises with respect to a filing or the transferees with respect to withholding obligation, and
request our PRC subsidiaries to assist in the filing. As a result, we and non-resident enterprises in such transactions may become
at risk of being subject to filing obligations or being taxed, under Circular 59 or Circular 698 and Circular 7, and may be required
to expend valuable resources to comply with Circular 59, Circular 698 and Circular 7 or to establish that we and our non-resident
enterprises should not be taxed under these circulars, which may have a material adverse effect on our financial condition and
results of operations.
The
PRC tax authorities have the discretion under SAT Circular 59, Circular 698 and Circular 7 to make adjustments to the taxable
capital gains based on the difference between the fair value of the taxable assets transferred and the cost of investment. If
we are considered a non-resident enterprise under the PRC corporate income tax law and if the PRC tax authorities make adjustments
to the taxable income of the transactions under SAT Circular 59 or Circular 698 and Circular 7, our income tax costs associated
with potential acquisitions will be increased, which may have an adverse effect on our financial condition and results of operations.
We
are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage
of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this
could make our securities less attractive to investors and may make it more difficult to compare our performance with other public
companies.
We
are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may
take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are
not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic
reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation
and shareholder approval of any golden parachute payments not previously approved. As a result, our shareholders may not have
access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances
could cause us to lose that status earlier, including if the market value of our ordinary shares held by non-affiliates exceeds
$700 million as of the end of any second quarter of a fiscal year, in which case we would no longer be an emerging growth company
as of the end of such fiscal year. We cannot predict whether investors will find our securities less attractive because we will
rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions,
the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for
our securities and the trading prices of our securities may be more volatile.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised
financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement
declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new
or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition
period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.
We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it
has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised
standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements
with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of
using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Additionally,
we are a “smaller reporting company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies
may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited
financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market
value of our ordinary shares held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter,
or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our ordinary shares
held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter. To the extent we take advantage
of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult
or impossible.
Compliance
obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate 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 requires that we evaluate and report on our system of internal controls beginning with our Annual Report
on Form 10-K for the year ending December 31, 2021. Only in the event we are deemed to be a large accelerated filer
or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent
registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are
a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared
to other public companies because a target business with which we seek to complete our initial business combination may not be
in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the
internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary
to complete any such acquisition.
Because
we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability
to protect your rights through the U.S. Federal courts may be limited.
We
are an exempted company incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect
service of process within the United States upon our directors or officers, or enforce judgments obtained in the United States
courts against our directors or officers.
Our
corporate affairs will be governed by our amended and restated memorandum and articles of association, the Companies Law and the
common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders
and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common
law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent
in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not
binding on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under
Cayman Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions in the United
States. In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and certain
states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law. In addition, Cayman
Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the United States.
We
have been advised by Maples and Calder, our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (1) to
recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the
federal securities laws of the United States or any state; and (2) in original actions brought in the Cayman Islands, to
impose liabilities against us predicated upon the civil liability provisions of the federal securities laws of the United States
or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there
is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands
will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits
based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the
sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman
Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or
penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained
in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands
(awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement
proceedings if concurrent proceedings are being brought elsewhere.
As
a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions
taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a
United States company.
Provisions
in our amended and restated memorandum and articles of association may inhibit a takeover of us, which could limit the price investors
might be willing to pay in the future for our Class A ordinary shares and could entrench management.
Our
amended and restated memorandum and articles of association will contain provisions that may discourage unsolicited takeover proposals
that shareholders may consider to be in their best interests. These provisions include two-year director terms and the ability
of the board of directors to designate the terms of and issue new series of preference shares, which may make more difficult the
removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market
prices for our securities.
After
our initial business combination, it is possible that a majority of our directors and officers will live outside the United States
and all or substantially all of our assets will be located outside the United States; therefore investors may not be able to enforce
federal securities laws or their other legal rights.
It
is possible that after our initial business combination, a majority of our directors and officers will reside outside of the United
States and all or substantially all of our assets will be located outside of the United States. As a result, it may be difficult,
or in some cases not possible, for investors in the United States to enforce their legal rights, to effect service of process
upon all of our directors or officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal
penalties on our directors and officers under United States laws.
If
we effect a business combination with a company located in Asia or outside of the United States, we would be subject to a variety
of additional risks that may negatively impact our operations.
If
we effect a business combination with a company located in Asia or outside of the United States, the laws of the country in which
such company operates will likely govern almost all of the material agreements relating to its operations. We cannot assure you
that the target business will be able to enforce any of its material agreements or that remedies will be available in this new
jurisdiction. The system of laws and the enforcement of existing laws in such jurisdiction may not be as certain in implementation
and interpretation as in the United States. The inability to enforce or obtain a remedy under any of our future agreements could
result in a significant loss of business, business opportunities or capital.
If
our management following our initial business combination is unfamiliar with U.S. securities laws, they may have to expend time
and resources becoming familiar with such laws, which could lead to various regulatory issues.
Following
our initial business combination, any or all of our management could resign from their positions as officers of the Company, and
the management of the target business at the time of the business combination could remain in place. Management of the target
business may not be familiar with U.S. securities laws. If new management is unfamiliar with U.S. securities laws, they may have
to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various
regulatory issues which may adversely affect our operations.
After
our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of
our revenue may be derived from our operations in such country. Accordingly, our results of operations and prospects will be subject,
to a significant extent, to the economic, political, social and government policies, developments and conditions in the country
in which we operate.
The
economic, political and social conditions, as well as government policies, of the country in which our operations are located
could affect our business. Economic growth could be uneven, both geographically and among various sectors of the economy and such
growth may not be sustained in the future. If in the future such country’s economy experiences a downturn or grows at a
slower rate than expected, there may be less demand for spending in certain industries. A decrease in demand for spending in certain
industries could materially and adversely affect our ability to find an attractive target business with which to consummate our
initial business combination and if we effect our initial business combination, the ability of that target business to become
profitable.
We
will be subject to changing law and regulations regarding regulatory matters, corporate governance and public disclosure that
have increased both our costs and the risk of non-compliance.
We
will be subject to rules and regulations of various governing bodies, including, for example, the SEC, which are charged
with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving
regulatory measures under applicable law. Our efforts to comply with new and changing laws and regulations are likely to continue
to result in increased general and administrative expenses and a diversion of management time and attention from our search for
a business combination target to compliance activities.
Moreover,
because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve
over time as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters
and additional costs necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply
with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed.
Risks
Associated with Acquiring and Operating a Business Outside the United States
If
we effect a business combination with a company located in Asia or outside the United States, we would be subject to a variety
of additional risks that may negatively impact our operations.
If
we are successful in consummating a business combination with a target business in Asia, or if we effect a business combination
with a company located in another foreign country, 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 conversion or corporate withholding taxes on individuals;
• 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;
• challenges
in collecting accounts receivable;
• cultural
and language differences;
• employment
regulations;
• crime,
strikes, riots, civil disturbances, terrorist attacks and wars; and
• deterioration
of political relations with the United States, which could result in uncertainty and/or changes in or to existing trade treaties.
In
particular, if we acquire a target business in Asia, we would be subject to the risk of changes in economic conditions, social
conditions and political conditions inherent in Asia, including changes in laws and policies that govern foreign investment, as
well as changes in United States laws and regulations relating to foreign trade and investment.
We
cannot assure you that we would be able to adequately address these additional risks. If we were unable to do so, our operations
might suffer.
Because
of the costs and difficulties inherent in managing cross-border business operations, our results of operations may be negatively
impacted.
Managing
a business, operations, personnel or assets in another country is challenging and costly. Any management that we may have (whether
based abroad or in the U.S.) may be inexperienced in cross-border business practices and unaware of significant differences in
accounting rules, legal regimes and labor practices. Even with a seasoned and experienced management team, the costs and difficulties
inherent in managing cross-border business operations, personnel and assets can be significant (and much higher than in a purely
domestic business) and may negatively impact our financial and operational performance.
We
may re-incorporate in another jurisdiction in connection with our initial business combination, and the laws of such jurisdiction
will likely govern all of our material agreements and we may not be able to enforce our legal rights.
In
connection with our initial business combination, we may relocate the home jurisdiction of our business from the Cayman Islands
to a country located in Asia or another jurisdiction. If we determine to do this, the laws of such jurisdiction would likely govern
all of our material agreements. The system of laws and the enforcement of existing laws in such jurisdiction may not be as certain
in implementation and interpretation as in the United States or the Cayman Islands. The inability to enforce or obtain a remedy
under any of our future agreements could result in a significant loss of business, business opportunities or capital. Any such
reincorporation may subject us to foreign regulations that could materially and adversely affect our business.
There
may be tax consequences to our business combinations that may adversely affect us.
While
we expect to undertake any merger or acquisition so as to minimize taxes both to the acquired business and/or asset and us, such
business combination might not meet the statutory requirements of a tax-free reorganization, or the parties might not obtain the
intended tax-free treatment upon a transfer of shares or assets. A non-qualifying reorganization could result in the imposition
of substantial taxes.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some
statements contained in this prospectus are forward-looking in nature. Our forward-looking statements include, but are not limited
to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the
future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances,
including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,”
“continue,” “could,” “estimate,” “expect,” “intends,” “may,”
“might,” “plan,” “possible,” “potential,” “predict,” “project,”
“should,” “would” and similar expressions may identify forward-looking statements, but the absence of
these words does not mean that a statement is not forward-looking. Forward-looking statements in this prospectus may include,
for example, statements about:
• our
ability to select an appropriate target business or businesses;
• our
ability to complete our initial business combination;
• our
expectations around the performance of a prospective target business or businesses;
• our
success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business
combination;
• our
officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business
or in approving our initial business combination;
• our
potential ability to obtain additional financing to complete our initial business combination;
• our
pool of prospective target businesses;
• the
ability of our officers and directors to generate a number of potential business combination opportunities;
• our
public securities’ potential liquidity and trading;
• the
lack of a market for our securities;
• the
use of proceeds not held in the trust account or available to us from interest income on the trust account balance;
• the
trust account not being subject to claims of third parties; or
• our
financial performance following this offering or following our initial business combination.
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 4,000,000 units at an offering price of $10.00 per unit. We estimate that the net proceeds of this offering together
with the funds we will receive from the sale of the private units will be used as set forth in the following table.
|
|
|
Without
Over-
Allotment Option
|
|
|
Over-Allotment
Option Exercised
|
|
|
Gross
proceeds
|
|
|
|
|
|
|
|
|
|
Gross
proceeds from units offered to public
|
|
$
|
40,000,000
|
|
|
$
|
46,000,000
|
|
|
Gross
proceeds from private units offered in the private placement
|
|
|
2,500,000
|
|
|
|
2,680,000
|
|
|
Total
gross proceeds
|
|
$
|
42,500,000
|
|
|
$
|
48,680,000
|
|
|
Estimated
offering expenses(1)
|
|
|
|
|
|
|
|
|
|
Underwriting
commissions (3.0% of gross proceeds from units offered to public)
|
|
$
|
1,200,000
|
|
|
$
|
1,380,000
|
|
|
Legal
fees and expenses
|
|
|
250,000
|
|
|
|
250,000
|
|
|
Accounting
fees and expenses
|
|
|
35,000
|
|
|
|
35,000
|
|
|
Printing
and engraving expenses
|
|
|
30,000
|
|
|
|
30,000
|
|
|
SEC
expenses
|
|
|
6,568
|
|
|
|
6,568
|
|
|
FINRA
expenses
|
|
|
7,400
|
|
|
|
7,400
|
|
|
Nasdaq
listing and filing fees (including deferred amount)
|
|
|
75,000
|
|
|
|
75,000
|
|
|
Miscellaneous
expenses(2)
|
|
|
146,032
|
|
|
|
146,032
|
|
|
Total
estimated offering expenses (other than underwriting commissions)
|
|
$
|
550,000
|
|
|
$
|
550,000
|
|
|
Proceeds
after estimated offering expenses
|
|
$
|
40,750,000
|
|
|
$
|
46,750,000
|
|
|
Held
in trust account(3)(4)
|
|
$
|
40,000,000
|
|
|
$
|
46,000,000
|
|
|
%
of public offering size
|
|
|
100
|
%
|
|
|
100
|
%
|
|
Not
held in trust account(1)
|
|
$
|
750,000
|
|
|
$
|
750,000
|
|
The
following table shows the use of the $750,000 of net proceeds not held in the trust account(4).
|
|
|
Amount
|
|
|
%
of Total
|
|
|
Legal,
accounting, due diligence, travel and other expenses in connection with any business combination
|
|
$
|
300,000
|
|
|
|
40.0
|
%
|
|
Legal
and accounting fees related to regulatory reporting obligations
|
|
|
150,000
|
|
|
|
20.0
|
%
|
|
Nasdaq
continued listing fees
|
|
|
75,000
|
|
|
|
10.0
|
%
|
|
Administrative
and support services(5)
|
|
|
150,000
|
|
|
|
20.0
|
%
|
|
General
working capital
|
|
|
75,000
|
|
|
|
10.0
|
%
|
|
Total
|
|
$
|
750,000
|
|
|
|
100.00
|
%
|
(1) A
portion of the offering expenses have been paid from the proceeds of loans from our sponsor of up to $150,000 as described in
this prospectus. As of July 8, 2020, we had borrowed $15,000 under the promissory note with our sponsor to be used for a portion
of the expenses of this offering. These loans will be repaid upon completion of this offering out of the $550,000 of offering
proceeds that has been allocated for the payment of offering expenses (other than underwriting commissions) not held in the trust
account. These expenses are estimates only. In the event that offering expenses are less than as set forth in this table, any
such amounts will be used for post-closing working capital expenses. In the event that the offering expenses are more than as
set forth in this table, we may fund such excess with funds not held in the trust account.
(2) Includes
organizational and administrative expenses as well as initial premiums for directors and officers insurance, and may include amounts
related to above-listed expenses in the event actual amounts exceed estimates.
(3) We
are obligated to pay to EarlyBirdCapital a fee in an amount equal to 4.0% of the gross proceeds of this offering for serving as
an advisor in connection with our business combination. Accordingly, upon completion of our initial business combination, $1,600,000
(or up to $1,840,000 if the underwriters’ over-allotment option is exercised in full) will be paid to EarlyBirdCapital from
the funds held in the trust account.
(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 a business combination based upon the level of complexity of such business combination. In the event we identify an
acquisition 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.
(5) On
or prior to the date of this prospectus, we will enter into an administrative services agreement pursuant to which we will pay
our sponsor up to $10,000 per month for office space, administrative and support services. Upon completion of our initial business
combination or our liquidation, we will cease paying these monthly fees.
Of
the net proceeds of this offering and the sale of the private units, $40,000,000 (or $46,000,000 if the underwriters’ over-allotment
option is exercised in full) will, upon the consummation of this offering, be placed in a United States-based trust account with
Continental Stock Transfer & Trust Company acting as trustee. The funds in the trust account will be held as cash or
invested only in U.S. government treasury bills with a maturity of 180 days or less or in money market funds investing solely
in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. Based on current interest
rates, we estimate that the interest earned on the trust account will be approximately $80,000 per year, assuming an interest
rate of 0.2% per year. We will not be permitted to withdraw any of the principal or interest held in the trust account except
for the withdrawal of interest to pay taxes, if any, and up to $50,000 of interest to pay dissolution expenses and which interest
shall be net of taxes payable. The funds held in the trust account will not be released from the trust account until the earliest
to occur of: (1) the completion of our initial business combination; (2) the redemption of any public shares properly
submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) that
would affect our public shareholders’ ability to convert or sell their shares to us in connection with a business combination
as described herein or 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 15 months (or up to 21 months) from the closing of this offering or (B) with respect
to any other provision relating to shareholders’ rights or pre-initial business combination activity; and (3) the redemption
of our public shares if we are unable to complete our initial business combination within 15 months (or up to 21 months) from
the closing of this offering, subject to applicable law. Based on current interest rates, we expect that interest earned on the
trust account will be sufficient to pay taxes.
The
net proceeds held in the trust account may be used as consideration to pay the sellers of a target business with which we ultimately
complete our initial business combination. If our initial business combination is paid for using equity or debt, or not all of
the funds released from the trust account are used for payment of the consideration in connection with our initial business combination
or the redemption of our public shares, we may apply the balance of the cash released 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
believe that amounts not held in trust will be sufficient to pay the costs and expenses to which such proceeds are allocated.
This belief is based on the fact that while we may begin preliminary due diligence of a target business in connection with an
indication of interest, we intend to undertake in-depth due diligence, depending on the circumstances of the relevant prospective
acquisition, only after we have negotiated and signed a letter of intent or other preliminary agreement that addresses the terms
of a business combination. However, if our estimate of the costs of undertaking in-depth due diligence and negotiating a business
combination is less than the actual amount necessary to do so, we may be required to raise additional capital, the amount, availability
and cost of which is currently unascertainable. If we are required to seek additional capital, we could seek such additional capital
through loans or additional investments from our sponsor, members of our management team or any of their affiliates, but such
persons are not under any obligation to loan funds to, or invest in, us.
We
may use substantially all of the net proceeds of this offering, including the funds held in the trust account, to acquire a target
business and to pay our expenses relating thereto, including a fee payable to EarlyBirdCapital equal to 4.0% of the gross proceeds
raised in this offering (exclusive of any applicable finders’ fees which might become payable) upon consummation of our
initial business combination for assisting us in connection with our initial business combination, as described under the section
titled “Underwriting — Business Combination Marketing Agreement.” To the extent that our share
capital is used in whole or in part as consideration to effect a business combination, the proceeds held in the trust account
which are not used to consummate a business combination will be disbursed to the combined company and will, along with any other
net proceeds not expended, be used as working capital to finance the operations of the target business. Such working capital funds
could be used in a variety of ways including continuing or expanding the target business’ operations, for strategic acquisitions
and for marketing, research and development of existing or new products.
Prior
to the closing of this offering, our sponsor has agreed to loan us up to $150,000 under an unsecured promissory note to be used
for a portion of the expenses of this offering. As of July 8, 2020, we had borrowed $15,000 under the promissory note with our
sponsor to be used for a portion of the expenses of this offering. These loans are non-interest bearing, unsecured and are due
at the earlier of December 31, 2020 or the closing of this offering. These loans will be repaid upon completion of this offering
out of the $550,000 of offering proceeds that has been allocated for the payment of offering expenses (other than underwriting
commissions) not held in the trust account.
In
addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an
affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required.
Any such loans would be on an interest-free basis and would be repaid only from funds held outside the trust account or from funds
released to us upon completion of our initial business combination. Up to $1,500,000 of such loans may be convertible into units
at a price of $10.00 per unit, at the option of the lender. The units would be identical to the private units issued to our sponsor.
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.
If
we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or any of their affiliates
may also purchase shares in privately negotiated transactions or in the open market either prior to or following the completion
of our initial business combination. Please see “Proposed Business—Permitted purchases of our securities” for
a description of how such persons will determine from which shareholders to seek to acquire shares. The price per share paid in
any such transaction may be different than the amount per share a public shareholder would receive if it elected to redeem its
shares in connection with our initial business combination. However, such persons have no current commitments, plans or intentions
to engage in such transactions and have not formulated any terms or conditions for any such transactions. If they engage in such
transactions, they will be restricted from making any such purchases when they are in possession of any material non-public information
not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. 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.
We
may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 either immediately
prior to or upon completion of our initial business combination (so that we do not then become subject to the SEC’s “penny
stock” rules) and the agreement for our initial business combination may require as a closing condition that we have a minimum
net worth or a certain amount of cash. If too many public shareholders exercise their redemption rights so that we cannot satisfy
the net tangible asset requirement or any net worth or cash requirements, we would not proceed with such redemption of our public
shares and the related business combination, and we instead may search for an alternate business combination.
A
public shareholder will be entitled to receive funds from the trust account only upon the earliest to occur of: (1) the completion
of our initial business combination; (2) the redemption of any public shares properly submitted in connection with a shareholder
vote to amend our amended and restated memorandum and articles of association (A) that would affect our public shareholders’
ability to convert or sell their shares to us in connection with a business combination as described herein or 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
15 months (or within 21 months) from the closing of this offering or (B) with respect to any other provision relating to
shareholders’ rights or pre-initial business combination activity; and (3) the redemption of our public shares if we
are unable to complete our initial business combination within 15 months (or within 21 months) from the closing of this offering,
subject to applicable law. In no other circumstances will a shareholder have any right or interest of any kind to or in the trust
account.
Our
initial shareholders have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption
rights with respect to their founder shares and any public shares held by them in connection with the completion of our initial
business combination. Our directors and officers have also entered into the letter agreement, imposing similar obligations on
them with respect to public shares acquired by them, if any. In addition, our initial shareholders have agreed to waive their
rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial
business combination within the prescribed time frame. However, if our sponsor or any of our officers, directors or affiliates
acquires public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with
respect to such public shares if we fail to complete our initial business combination within the prescribed time frame.
DIVIDEND
POLICY
We
have not paid any cash dividends on our ordinary shares to date and do not intend to pay cash dividends prior to the completion
of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings,
if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The
payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors
at such time. In addition, our board of directors is not currently contemplating and does not anticipate declaring any share dividends
in the foreseeable future, except if we increase the size of this offering, in which case we will effect a capitalization or other
appropriate mechanism 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 ordinary shares upon the consummation of this offering (assuming they do not purchase
any units in this offering and excluding the private shares underlying the private units, the representative shares and any shares
underlying units issued upon conversion of working capital loans and any Class A ordinary shares or equity-linked securities
issued, or to be issued, to any seller in our initial business combination). Further, if we incur any indebtedness in connection
with our initial business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to
in connection therewith.
DILUTION
The
difference between the public offering price per Class A ordinary share, assuming no value is attributed to the rights or
warrants included in the units we are offering pursuant to this prospectus or the private warrants, and the pro forma net tangible
book value per ordinary share after this offering constitutes the dilution to investors in this offering. Such calculation does
not reflect any dilution associated with the sale and exercise of warrants, including the private warrants, which would cause
the actual dilution to the public shareholders to be higher, particularly where a cashless exercise is utilized. Net tangible
book value per share is determined by dividing our net tangible book value, which is our total tangible assets less total liabilities
(including the value of Class A ordinary shares which may be redeemed for cash), by the number of issued and outstanding
ordinary shares.
At July 8, 2020, our net tangible book value was a deficiency
of $(40,000), or approximately $(0.03) per ordinary share. For purposes of the dilution calculation, in order to present the maximum
estimated dilution as a result of this offering, we have assumed (i) the issuance of 0.10 of a share for each right outstanding,
as such issuance will occur upon a business combination without the payment of additional consideration and (ii) the number of
shares included in the units offered hereby will be deemed to be 4,400,000 (consisting of 4,000,000 shares included in the units
we are offering by this prospectus and 400,000 shares for the outstanding rights), and the price per share in this offering will
be deemed to be $9.09. After giving effect to the sale of 4,000,000 Class A ordinary shares included in the units we are offering
by this prospectus, the sale of the private units and the deduction of underwriting commissions and estimated expenses of this
offering, our pro forma net tangible book value at July 8, 2020 would have been $5,000,007, or $2.27 per share, representing an
immediate increase in net tangible book value (as decreased by the value of 3,576,592 Class A ordinary shares that may be redeemed
for cash and assuming no exercise of the underwriters’ over-allotment option) of $2.30 per share to our initial shareholders
as of the date of this prospectus and an immediate dilution of $6.82 per share or 75.0% to our public shareholders not exercising
their redemption rights. The dilution to new investors if the underwriters exercise the over-allotment option in full would be
an immediate dilution of $7.03 per share or 77.3%.
The
following table illustrates the dilution to the public shareholders on a per-share basis, assuming no value is attributed to the rights or warrants included in the units or the private
units:
|
|
|
Without
Over-allotment
|
|
|
With
Over-allotment
|
|
|
Public
offering price
|
|
$
|
9.09
|
|
|
$
|
9.09
|
|
|
Net
tangible book deficit before this offering
|
|
$
|
(0.03
|
)
|
|
$
|
(0.03
|
)
|
|
Increase
attributable to public shareholders
|
|
|
2.30
|
|
|
|
2.09
|
|
|
Pro
forma net tangible book value after this offering and the sale of the private units
|
|
$
|
2.27
|
|
|
$
|
2.06
|
|
|
Dilution
to public shareholders
|
|
$
|
6.82
|
|
|
$
|
7.03
|
|
|
Percentage
of dilution to new investors
|
|
|
75.0
|
%
|
|
|
77.3
|
%
|
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 $35,765,920 because holders of up to approximately 89.4% of our public shares may
redeem their shares for a pro rata share of the aggregate amount then on deposit in the trust account at a per-share redemption
price equal to the amount in the trust account as set forth in our tender offer or proxy materials (initially anticipated to be
the aggregate amount held in trust two days prior to the commencement of our tender offer or shareholders meeting, including interest
(which interest shall be net of taxes payable), divided by the number of Class A ordinary shares sold in this offering).
The actual number of shares that may be redeemed could be higher than the above amount provided that we meet the requirement to
have net tangible assets of at least $5,000,001 immediately prior to or upon consummation of our initial business combination.
The
following table sets forth information with respect to our initial shareholders and the public shareholders:
|
|
|
Shares
Purchased
|
|
|
Total
Consideration
|
|
|
Average
Price
per
Share
|
|
|
|
|
Number
|
|
|
Percentage
|
|
|
Amount
|
|
|
Percentage
|
|
|
|
|
|
Initial
Shareholders(1)
|
|
|
1,000,000
|
|
|
|
17.32
|
%
|
|
$
|
25,000
|
|
|
|
0.06
|
%
|
|
$
|
0.025
|
|
|
Private
Shares (2)
|
|
|
275,000
|
|
|
|
4.76
|
%
|
|
|
2,500,000
|
|
|
|
5.88
|
%
|
|
|
9.09
|
|
|
Representative
Shares
|
|
|
100,000
|
|
|
|
1.73
|
%
|
|
|
10
|
|
|
|
0.00
|
%
|
|
|
0.0001
|
|
|
Public
Shareholders (3)
|
|
|
4,400,000
|
|
|
|
76.19
|
%
|
|
|
40,000,000
|
|
|
|
94.06
|
%
|
|
|
9.09
|
|
|
|
|
|
5,775,000
|
|
|
|
100.00
|
%
|
|
$
|
42,525,010
|
|
|
|
100.00
|
%
|
|
|
|
|
|
|
(1)
|
Assumes
no exercise of the over-allotment option and forfeiture by our sponsor of 150,000 founder
shares.
|
|
|
(2)
|
Includes
the issuance of an additional 25,000 shares underlying the rights contained in the private
shares.
|
|
|
(3)
|
Includes
the issuance of an additional 400,000 shares underlying the rights contained in the public
shareholders.
|
The
pro forma net tangible book value per share after this offering is calculated as follows:
|
|
|
Without
Over-allotment
|
|
|
With
Over-allotment
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
Net
tangible book deficit before this offering
|
|
$
|
(40,000
|
)
|
|
$
|
(40,000
|
)
|
|
Net
proceeds from this offering and sale of the private units
|
|
|
40,750,000
|
|
|
|
46,750,000
|
|
|
Plus:
Offering costs paid in advance, excluded from tangible book value
|
|
|
55,927
|
|
|
|
55,927
|
|
|
Less:
Proceeds held in trust subject to redemption
|
|
|
(35,765,920
|
)
|
|
|
(41,765,920
|
)
|
|
|
|
$
|
5,000,007
|
|
|
$
|
5,000,007
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
Class B
ordinary shares outstanding prior to this offering
|
|
|
1,150,000
|
|
|
|
1,150,000
|
|
|
Class B
ordinary shares forfeited if over-allotment is not exercised
|
|
|
(150,000
|
)
|
|
|
—
|
|
|
Class A
ordinary shares included in the private units
|
|
|
250,000
|
|
|
|
268,000
|
|
|
Class
A ordinary shares underlying the rights included in the private units
|
|
|
25,000
|
|
|
|
26,800
|
|
|
Class A
ordinary shares included in the units offered
|
|
|
4,000,000
|
|
|
|
4,600,000
|
|
|
Class
A ordinary shares underlying the rights included in the units offered
|
|
|
400,000
|
|
|
|
460,000
|
|
|
Representative
shares
|
|
|
100,000
|
|
|
|
100,000
|
|
|
Less:
Ordinary shares subject to redemption/tender
|
|
|
(3,576,592
|
)
|
|
|
(4,176,592
|
)
|
|
|
|
|
2,198,408
|
|
|
|
2,428,208
|
|
CAPITALIZATION
The
following table sets forth our capitalization at July 8, 2020, and as adjusted to give effect to the sale of our 4,000,000
units in this offering for $40,000,000 (or $10.00 per unit) and the sale of 250,000 private units for $2,500,000 (or $10.00 per
unit) and the application of the estimated net proceeds derived from the sale of such securities:
|
|
|
July 8,
2020
|
|
|
|
|
Actual
|
|
|
As
Adjusted(2)
|
|
|
Note
payable to related party(1)
|
|
$
|
15,000
|
|
|
$
|
—
|
|
|
Class A
ordinary shares, subject to redemption; no shares actual and 3,576,592 shares as adjusted(3)
|
|
|
—
|
|
|
|
35,765,920
|
|
|
Shareholders’
equity:
|
|
|
|
|
|
|
|
|
|
Preference
shares, $0.0001 par value, 1,000,000 shares authorized; none issued and outstanding, actual and as adjusted
|
|
|
—
|
|
|
|
—
|
|
|
Class A
ordinary shares, $0.0001 par value, 200,000,000 shares authorized; no shares issued and outstanding, actual; 673,408 shares
issued and outstanding (excluding 3,576,592 shares subject to possible redemption), as adjusted
|
|
|
—
|
|
|
|
67
|
|
|
Class B
ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 1,150,000 and 1,000,000 shares issued and outstanding, actual
and as adjusted, respectively(4)
|
|
|
115
|
|
|
|
110
|
|
|
Additional
paid-in capital(5)
|
|
|
24,885
|
|
|
|
5,008,903
|
|
|
Accumulated
deficit
|
|
|
(9,073
|
)
|
|
|
(9,073
|
)
|
|
Total
shareholders’ equity
|
|
$
|
15,927
|
|
|
$
|
5,000,007
|
|
|
Total
capitalization
|
|
$
|
30,927
|
|
|
$
|
40,765,927
|
|
(1) Our
sponsor has agreed to loan us up to $150,000 under an unsecured promissory note to be used for a portion of the expenses of this
offering. As of July 8, 2020, we had borrowed $15,000 under the promissory note with our sponsor to be used for a portion
of the expenses of this offering.
(2) Assumes
the full forfeiture of 150,000 shares that are subject to forfeiture by our sponsor depending on the extent to which the underwriters’
over-allotment option is exercised. The proceeds of the sale of such shares will not be deposited into the trust account, the
shares will not be eligible for redemption from the trust account nor will they be eligible to vote upon the initial business
combination.
(3) Upon
the completion of our initial business combination, we will provide our public shareholders with the opportunity to redeem their
public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account as of two business
days prior to the consummation of the initial business combination, including interest (which interest shall be net of taxes payable),
subject to the limitations described herein whereby our net tangible assets will be maintained at a minimum of $5,000,001 upon
our initial business combination and any limitations (including, but not limited to, cash requirements) created by the terms of
the proposed business combination. The “as adjusted” amount of Class A ordinary shares, subject to redemption
equals the “as adjusted” total assets of $40,765,927, less the “as adjusted” total shareholders’
equity. The value of Class A ordinary shares that may be redeemed is equal to $10.00 per share (which is the assumed redemption
price) multiplied by 3,576,592 Class A ordinary shares, which is the estimated maximum number of Class A ordinary shares
that may be redeemed for a $10.00 purchase price per share and still maintain at least $5,000,001 of net tangible assets. The
actual number of Class A ordinary shares that may be redeemed may be above the foregoing figure provided we maintain at least
$5,000,001 of net tangible assets.
(4) Actual
share amount is prior to any forfeiture of founder shares by our sponsor and as adjusted share amount assumes full forfeiture
of 150,000 shares and no exercise of the underwriters’ over-allotment option.
(5) The
“as adjusted” additional paid-in capital calculation is equal to the “as adjusted” total shareholders’
equity of $5,000,007, minus Class A and Class B ordinary shares (par value) of $177 minus the accumulated deficit of
$(9,073).
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Overview
We
are a blank check company incorporated as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger,
amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more
businesses. We have not selected any business combination target and we have not, nor has anyone on our behalf, 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 sale of the private units, our shares, debt or a combination
of cash, shares 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
of the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis
upon conversion of the Class B ordinary shares;
• may
subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those
afforded our Class A ordinary shares;
• could
cause a change of control if a substantial number of our ordinary shares are issued, which may affect, among other things, our
ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers
and directors;
• may
have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person
seeking to obtain control of us; and
• may
adversely affect prevailing market prices for our Class A ordinary shares and/or warrants.
Similarly,
if we issue debt securities or otherwise incur significant indebtedness, it could result in:
• default
and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt
obligations;
• acceleration
of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain
covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
• our
immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
• our
inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing
while the debt is outstanding;
• our
inability to pay dividends on our Class A ordinary shares;
• using
a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends
on our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
• limitations
on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
• increased
vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
and
• limitations
on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution
of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
• default
and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt
obligations;
• acceleration
of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain
covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
• our
immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
• our
inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing
while the debt is outstanding;
• our
inability to pay dividends on our Class A ordinary shares;
• using
a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends
on our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
• limitations
on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
• increased
vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
and
• limitations
on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution
of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
As
indicated in the accompanying financial statements, at July 8, 2020, we had deferred offering costs of $55,927. Further,
we expect to continue to incur significant costs in the pursuit of our acquisition plans.
We
cannot assure you that our plans to raise capital or to complete our initial business combination will be successful.
Results
of Operations and Known Trends or Future Events
We
have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational
activities and those necessary to prepare for this offering. Following this offering, we will not generate any operating revenues
until after completion of our initial business combination. We will generate non-operating income in the form of interest income
on cash and cash equivalents after this offering. There has been no significant change in our financial or trading position and
no material adverse change has occurred since the date of our audited financial statements. After this offering, we expect to
incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance),
as well as for due diligence expenses. We expect our expenses to increase substantially after the closing of this offering.
Liquidity
and Capital Resources
Our
liquidity needs have been satisfied prior to the completion of this offering from the receipt of $25,000 from our sponsor
to cover certain of our offering costs in consideration for 1,150,000 Class B ordinary shares and from the availability of
up to $150,000 in loans from our sponsor under an unsecured promissory note. As of July 8, 2020, we had borrowed $15,000 under
the promissory note. Further, we have incurred and expect to continue to incur significant costs in pursuit of our financing and
acquisition plans. Management’s plans to address this uncertainty through this offering are discussed above. We cannot assure
you that our plans to raise capital or to consummate an initial business combination will be successful. These factors, among
others, raise substantial doubt about our ability to continue as a going concern.
We
estimate that the net proceeds from (1) the sale of the units in this offering, after deducting offering expenses of $550,000
and underwriting commissions of $1,200,000 ($1,380,000 if the underwriters’ over-allotment option is exercised in full),
and (2) the sale of the private units for a purchase price of $2,500,000 (or $2,680,000 if the underwriters’ over-allotment
option is exercised in full), will be $40,750,000 (or $46,750,000 if the underwriters’ over-allotment option is exercised
in full). Of this amount, $40,000,000 or $46,000,000 if the underwriters’ over-allotment option is exercised in full will
be deposited into the trust account. The funds in the trust account will be held as cash or invested only in U.S. government treasury
bills with a maturity of 180 days or less or in money market funds investing solely in U.S. Treasuries. The remaining $750,000
will not be held in the trust account. In the event that our offering expenses exceed our estimate of $550,000 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 $550,000, 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 (which interest shall be net of taxes payable) to complete our initial business combination. We may withdraw
interest to pay 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 earned on the amount in the trust account will be sufficient
to pay our taxes. We expect the only taxes payable by us out of the funds in the trust account will be income taxes. To the extent
that our ordinary shares 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 $750,000 of proceeds held outside the trust
account. We will use these funds primarily to 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, structure, negotiate and complete
a business combination, and to pay taxes to the extent the interest earned on the trust account is not sufficient to pay our taxes.
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. Any such loans would be on an interest-free basis and would be repaid only from funds held outside the trust
account or from funds released to us upon completion of our initial business combination. Up to $1,500,000 of such loans may be
convertible into units at a price of $10.00 per unit, at the option of the lender. The units would be identical to the private
units issued to our sponsor. 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 $300,000 for legal, accounting, due diligence, travel
and other expenses in connection with any business combinations; $150,000 for legal and accounting fees related to regulatory
reporting requirements; $75,000 for Nasdaq continued listing fees; $150,000 as administrative fees that shall be provided for
in the administrative services agreement that we will enter into with our sponsor; and $75,000 for general working capital that
will be used for miscellaneous expenses, including overhead, and reserves.
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. 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. Moreover, we may need to obtain additional financing
either to complete our initial business combination or because we become obligated to redeem a significant number of our public
shares upon completion of our initial business combination, in which case we may issue additional securities or incur debt in
connection with such business combination.
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, and no longer
qualify as an emerging growth company, 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 internal controls.
We expect to assess the internal controls of our target business or businesses prior to the completion of our initial business
combination and, if necessary, to implement and test additional controls as we may determine are necessary in order to state that
we maintain an effective system of internal controls. A target business may not be in compliance with the provisions of the Sarbanes-Oxley
Act regarding the adequacy of internal controls. Many small and mid-sized target businesses we may consider for our initial business
combination may have internal controls that need improvement in areas such as:
• staffing
for financial, accounting and external reporting areas, including segregation of duties;
• reconciliation
of accounts;
• proper
recording of expenses and liabilities in the period to which they relate;
• evidence
of internal review and approval of accounting transactions;
• documentation
of processes, assumptions and conclusions underlying significant estimates; and
• documentation
of accounting policies and procedures.
Because
it will take time, management involvement and perhaps outside resources to determine what internal control improvements are necessary
for us to meet regulatory requirements and market expectations for our operation of a target business, we may incur significant
expenses in meeting our public reporting responsibilities, particularly in the areas of designing, enhancing, or remediating internal
and disclosure controls. Doing so effectively may also take longer than we expect, thus increasing our exposure to financial fraud
or erroneous financing reporting.
Once
our management’s report on internal controls is complete, we will retain our independent auditors to audit and render an
opinion on such report when required by Section 404 of the Sarbanes-Oxley Act. The independent auditors may identify additional
issues concerning a target business’s internal controls while performing their audit of internal control over financial
reporting.
Quantitative
and Qualitative Disclosures about Market Risk
The
net proceeds of this offering and the sale of the private units held in the trust account will be invested in U.S. government
treasury bills with a maturity of 180 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain
conditions under Rule 2a-7 under the Investment Company Act. Due to the short-term nature of these investments, we believe
there will be no associated material exposure to interest rate risk.
Related
Party Transactions
In
July 2020, our sponsor paid $25,000 to cover certain of our offering costs in consideration for 1,150,000 founder shares.
Our initial shareholders will collectively own 20% of our issued and outstanding shares after this offering (excluding the private
shares underlying the private units, the representative shares and any shares underlying units issued upon conversion of working
capital loans and any Class A ordinary shares or equity-linked securities issued, or to be issued, to any seller in our initial
business combination, and assuming our initial shareholders do not purchase any units in this offering). If we increase or decrease
the size of this offering, we will effect a capitalization or share repurchase or redemption or other appropriate mechanism, as
applicable, 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 ordinary shares upon the consummation of this offering (excluding
the private shares underlying the private units , the representative shares and any shares underlying units issued upon conversion
of working capital loans and any Class A ordinary shares or equity-linked securities issued, or to be issued, to any seller
in our initial business combination).
On
or prior to the date of this prospectus, we will enter into an administrative services agreement pursuant to which we will pay
our sponsor up to $10,000 per month for office space, administrative and support services. Upon completion of our initial business
combination or our liquidation, we will cease paying any of these monthly fees.
Our
sponsor, 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, officers,
directors or our or any of 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 has agreed to loan us up to $150,000 under an unsecured promissory note to be used for a portion of the expenses of this
offering. As of July 8, 2020, we had borrowed $15,000 under the promissory note with our sponsor to be used for a portion of the
expenses of this offering. These loans are non-interest bearing, unsecured and are due at the earlier of December 31, 2020
or the closing of this offering. These loans will be repaid upon completion of this offering out of the $550,000 of offering proceeds
that has been allocated for the payment of offering expenses (other than underwriting commissions) not held in the trust account.
In
addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an
affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required.
Any such loans would be on an interest-free basis and would be repaid only from funds held outside the trust account or from funds
released to us upon completion of our initial business combination. Up to $1,500,000 of such loans may be convertible into units
at a price of $10.00 per unit, at the option of the lender. The units would be identical to the private units issued to our sponsor.
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.
Our
sponsor has committed to purchase an aggregate of 250,000 (or 268,000 if the underwriters’ over-allotment option is exercised
in full) private units at a price of $10.00 per unit ($2,500,000 in the aggregate or $2,680,000 in the aggregate if the underwriters’
over-allotment option is exercised in full) in a private placement that will occur simultaneously with the closing of this offering.
Our sponsor will be permitted to transfer the private units held by it to certain permitted transferees, including our officers
and directors and other persons or entities affiliated with or related to them, but the transferees receiving such securities
will be subject to the same agreements with respect to such securities as our sponsor. Otherwise, these warrants will not, subject
to certain limited exceptions, be transferable or salable until 30 days after the completion of our initial business combination.
The private warrants underlying the private units will be non-redeemable so long as they are held by our sponsor or its permitted
transferees. The private warrants may also be exercised by our sponsor or its permitted transferees for cash or on a cashless
basis and our sponsor and its permitted transferees will also have certain registration rights related to the private units, as
described below. Otherwise, the private units have terms and provisions that are identical to those of the units being sold in
this offering.
Pursuant
to a registration rights agreement that we will enter into with our initial shareholders on or prior to the closing of this offering,
we may be required to register certain securities for sale under the Securities Act. These holders, and holders of the representative
shares and the units issued upon conversion of working capital loans, if any, are entitled under the registration rights agreement
to make up to three demands that we register certain of our securities held by them for sale under the Securities Act and to have
the securities covered thereby registered for resale pursuant to Rule 415 under the Securities Act. In addition, these holders
have the right to include their securities in other registration statements filed by us. However, the registration rights agreement
provides that we will not permit any registration statement filed under the Securities Act to become effective until the securities
covered thereby are released from their lock-up restrictions, as described herein. We will bear the costs and expenses of filing
any such registration statements. See “Principal Shareholders—Registration Rights.”
Off-Balance
Sheet Arrangements; Commitments and Contractual Obligations
As
of July 8, 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.
JOBS
Act
On
April 5, 2012, the JOBS Act was signed into law. 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: (1) provide an auditor’s attestation report on our system
of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act; (2) 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; (3) 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 (4) 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
General
We
are a newly formed blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger,
amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more
businesses, which we refer to throughout this prospectus as our initial business combination. To date, our efforts have been limited
to organizational activities and activities related to this offering. 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 target business
regarding entering into a business combination with us.
While
we may pursue a business combination target in any business, industry or geographical location, we intend to focus our search
on businesses in the technology industry that have their primary operations located in Asia. We believe that we will add value
to these businesses primarily by providing them with access to the U.S. capital markets.
We
will seek to capitalize on the strength of our management team. Our team consists of experienced professionals and operating executives.
Collectively, our officers and directors have significant experience in mergers and acquisitions, and operating companies, in
the Asian markets. We believe we will benefit from their accomplishments, and specifically their current and recent activities
in the Asian markets, in identifying attractive acquisition opportunities. However, there is no assurance that we will complete
a business combination. Our officers and directors have no prior experience consummating a business combination for a “blank
check” company.
Investment
Criteria
Our
management team intends to focus on creating shareholder value by leveraging its experience in the management, operation and financing
of businesses to improve the efficiency of operations while implementing strategies to scale revenue organically and/or through
acquisitions. We have identified the following general criteria and guidelines, which we believe are important in evaluating prospective
target businesses. While we intend to use these criteria and guidelines in evaluating prospective businesses, we may deviate from
these criteria and guidelines should we see justification to do so.
•
Middle-Market Growth Business. We will primarily seek to acquire one or more growth businesses
with a total enterprise value of between $100 million and $200 million. We believe that there are a substantial number of potential
target businesses within this valuation range that can benefit from new capital for scalable operations to yield significant revenue
and earnings growth. We currently do not intend to acquire either a start-up company (a company that has not yet established commercial
operations) or a company with negative cash flow.
•
Companies in Business Segments that Are Strategically Significant to the Asian Markets. We will
seek to acquire businesses in sectors that are currently strategically significant to the Asian markets. Such sectors include
innovative and cross-border e-commerce and online agricultural trading.
•
Business with Revenue and Earnings Growth Potential. We will seek to acquire one or more businesses
that have the potential for significant revenue and earnings growth through a combination of both existing and new product development,
increased production capacity, expense reduction and synergistic follow-on acquisitions resulting in increased operating leverage.
•
Companies with Potential for Strong Free Cash Flow Generation. We will seek to acquire one or more
businesses that have the potential to generate strong, stable and increasing free cash flow. We intend to focus on one or more
businesses that have predictable revenue streams and definable low working capital and capital expenditure requirements. We may
also seek to prudently leverage this cash flow in order to enhance shareholder value.
•
Benefit from Being a Public Company. We intend to acquire a business or businesses that will benefit
from being publicly traded and which can effectively utilize access to broader sources of capital and a public profile that are
associated with being a publicly traded company.
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 criteria and guidelines as well as other considerations, factors and criteria
that our management team may deem relevant. We believe our management team’s extensive contacts, broad industry knowledge
and highly regarded experience will yield a robust deal flow from which we may select a target. We will seek to acquire the target
on terms and in a manner that leverages our management team’s experience. The potential upside from growth in the target
business and an improved capital structure will be weighed against any identified downside risks designed to balance value creation
with capital preservation. In the event that we decide to enter into an 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 and
guidelines in our shareholder communications related to our initial business combination, which, as discussed in this prospectus,
would be in the form of proxy solicitation or tender offer materials, as applicable, that we would file with the United States
Securities and Exchange Commission, or the SEC. In evaluating a prospective target business, we expect to conduct a due diligence
review which may encompass, among other things, meetings with incumbent ownership, management and employees, document reviews,
interviews of customers and suppliers, inspections of facilities, as well as reviewing financial and other information which will
be made available to us.
Competitive
Strengths
Management
Team
We
believe that our management team’s extensive relationships throughout Asia will enable us to identify business combination
opportunities with significant potential upside. We expect that our management team’s combined experience in a wide variety
of industries, when paired with our management team’s ability to perform under varying economic environments in emerging
markets, will be a differentiating factor that is highly attractive to potential target companies.
Status
as a Public Company
We
believe that 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 a traditional initial public offering through a merger or other business
combination. In this situation, the owners of the target business would exchange their stock, shares or other equity interests
in the target business for our ordinary shares or for a combination of our ordinary shares and cash, allowing us to tailor the
consideration used in the transaction to the specific needs of the sellers. We believe that target businesses might find this
avenue a more certain and cost-effective method to becoming a public company than a typical initial public offering. In a typical
initial public offering, there are additional expenses incurred in marketing, roadshow and public reporting efforts that will
likely not be present to the same extent in connection with a business combination with us. Furthermore, once the business combination
is consummated, the target business will have effectively become a public company, whereas an initial public offering is always
subject to the underwriters’ ability to complete the offering, as well as general market conditions that could prevent the
offering from occurring. Once public, we believe the target business would then have greater access to capital and an additional
means of providing management incentives consistent with shareholders’ interests than it would have as a privately-held
company. Public company status can offer further benefits by enhancing a company’s profile among potential new customers
and vendors and attracting talented employees. While we believe that our status as a public company will make us an attractive
business partner, some potential target businesses may view the inherent limitations in our status as a blank check company as
a deterrent and may prefer to effect a business combination with a more established entity or with a private company. These limitations
include constraints on our available financial resources, which may be inferior to those of other entities pursuing the acquisition
of similar target businesses; the requirement that we seek shareholder approval of a business combination or conduct a tender
offer in relation thereto, which may delay the consummation of a transaction; and the existence of our outstanding warrants, which
may represent a source of future dilution.
Financial
Position
With
funds in the trust account of $40 million (or $46 million if the over-allotment option is exercised in full) available to use
for a business combination (assuming no shareholder seeks redemption of their shares or seeks to sell their shares to us in any
tender offer in relation to such business combination), we offer a target business a variety of options such as providing the
owners of a target business with shares in a public company and a public means to sell such shares, providing capital for the
potential growth and expansion of its operations and strengthening its balance sheet by reducing its debt ratio. Because we are
able to consummate 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, since we have no specific business combination under consideration, we
have not taken any steps to secure third party financing, and there can be no assurance that it will be available to us. Furthermore,
redemptions in connection with our initial business combination could reduce the amount of funds available to be used in connection
with such business combination.
Effecting
a Business Combination
General
We
are not presently engaged in, and we will not engage in, any substantive commercial business for an indefinite period of time
following this offering. We intend to utilize cash derived from the proceeds of this offering and the private placement of private
units, our equity, debt or a combination of these in effecting a business combination which has not yet been identified. Accordingly,
investors in this offering are investing without first having an opportunity to evaluate the specific merits or risks of any one
or more business combinations. A business combination may involve the acquisition of, or merger with, a company which does not
need substantial additional capital but which desires to establish a public trading market for its shares, while avoiding what
it may deem to be adverse consequences of undertaking a public offering itself. These include time delays, significant expense,
loss of voting control and compliance with various federal and state securities laws. In the alternative, we may seek to consummate
a business combination with a company that may be financially unstable or in its early stages of development or growth. While
we may seek to effect simultaneous business combinations with more than one target business, we will probably have the ability,
as a result of our limited resources, to effect only a single business combination.
We
will have up to 15 months from the closing of this offering to consummate an initial business combination. However, if we anticipate
that we may not be able to consummate our initial business combination within 15 months, we may, by resolution of our board if
requested by our sponsor, extend the period of time to consummate a business combination up to two times, each by an additional
three months (for a total of up to 21 months to complete a business combination), subject to the sponsor depositing additional
funds into the trust account as set out below. Our shareholders will not be entitled to vote or redeem their shares in connection
with any such extension. Pursuant to the terms of our memorandum and articles of association and the trust agreement to be entered
into between us and Continental Stock Transfer & Trust Company on the date of this prospectus, in order for the time available
for us to consummate our initial business combination to be extended, our sponsor or its affiliates or designees, upon five days
advance notice prior to the applicable deadline, must deposit into the trust account $400,000, or $460,000 if the underwriters’
over-allotment option is exercised in full ($0.10 per unit in either case, up to an aggregate of $800,000 or $920,000 if the underwriters’
over-allotment option is exercised in full) on or prior to the date of the applicable deadline, for each three month extension.
In the event that we receive notice from our sponsor five days prior to the applicable deadline of its wish for us to effect an
extension, we intend to issue a press release announcing such intention at least three days prior to the applicable deadline.
In addition, we intend to issue a press release the day after the applicable deadline announcing whether or not the funds had
been timely deposited. Our sponsor and its affiliates or designees are not obligated to fund the trust account to extend the time
for us to complete our initial business combination. If we are unable to consummate an initial business combination within such
time period, we will redeem 100% of our issued and outstanding public shares for a pro rata portion of the funds held in the trust
account, 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 $50,000 of interest to pay dissolution expenses),
divided by the number of then outstanding public shares, subject to applicable law and as further described herein, and then seek
to dissolve and liquidate. We expect the pro rata redemption price to be approximately $10.00 per Class A ordinary share (regardless
of whether or not the underwriters exercise their over-allotment option), without taking into account any interest earned on such
funds. However, we cannot assure you that we will in fact be able to distribute such amounts as a result of claims of creditors
which may take priority over the claims of our public shareholders.
We
Have Not Identified a Target Business
To
date, we have not selected any target business on which to concentrate our search for a business combination. None of our sponsor,
officers, directors, promoters and other affiliates has engaged in any substantive discussions on our behalf with representatives
of other companies regarding the possibility of a potential merger, share exchange, asset acquisition or other similar business
combination with us. Additionally, we have not engaged or retained any agent or other representative to identify or locate such
companies. As a result, we cannot assure you that we will be able to locate a target business or that we will be able to engage
in a business combination with a target business on favorable terms or at all.
Subject
to our management team’s pre-existing fiduciary obligations and the fair market value requirement described below, we will
have virtually unrestricted flexibility in identifying and selecting a prospective acquisition candidate. We have not established
any specific attributes or criteria (financial or otherwise) for prospective target businesses other than as described above.
Accordingly, there is no basis for investors in this offering to evaluate the possible merits or risks of the target business
with which we may ultimately complete a business combination. Although our management will endeavor to evaluate the risks inherent
in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
Sources
of Target Businesses
While
we have not yet selected a target business with which to consummate our initial business combination, we believe based on our
management’s business knowledge and past experience that there are numerous potential candidates. We expect that our principal
means of identifying potential target businesses will be through the extensive contacts and relationships of our sponsor, initial
shareholders, officers and directors. While our officers and directors are not required to commit any specific amount of time
in identifying or performing due diligence on potential target businesses, our officers and directors believe that the relationships
they have developed over their careers and their access to our sponsor’s contacts and resources will generate a number of
potential business combination opportunities that will warrant further investigation. We also anticipate that target business
candidates will be brought to our attention from various unaffiliated sources, including investment bankers, venture capital funds,
private equity funds, leveraged buyout funds, management buyout funds and other members of the financial community. 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 they think we may be interested in 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 must present to us all target business opportunities that have a fair market value of at least 80% of the
assets held in the trust account (excluding taxes payable on the income accrued in the trust account) at the time of the agreement
to enter into the initial business combination, subject to any pre-existing fiduciary or contractual obligations. While we do
not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions
on any formal basis (other than EarlyBirdCapital, Inc. as described elsewhere in this prospectus), 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. In no event, however, will our sponsor,
initial shareholders, officers, directors or their respective affiliates be paid any finder’s fee, consulting fee or other
compensation prior to, or for any services they render in order to effectuate, the consummation of an initial business combination
(regardless of the type of transaction that it is) other than the $10,000 administrative services fee, the payment of consulting,
success or finder fees to our sponsor, officers, directors, initial shareholders or their affiliates in connection with the consummation
of our initial business combination, the repayment of the $150,000 loan and reimbursement of any out-of-pocket expenses. Our audit
committee will review and approve all reimbursements and payments made to our sponsor, officers, directors or our or their respective
affiliates, with any interested director abstaining from such review and approval. We have no present intention to enter into
a business combination with a target business that is affiliated with any of our officers, directors or sponsor. However, we are
not restricted from entering into any such transactions and may do so if (i) such transaction is approved by a majority of
our disinterested independent directors and (ii) we obtain an opinion from an independent investment banking firm, or another
independent entity that commonly renders valuation opinions, that the business combination is fair to our unaffiliated shareholders
from a financial point of view.
Selection
of a Target Business and Structuring of a Business Combination
Subject
to our management team’s pre-existing fiduciary obligations and the limitations that a target business have a fair market
value of at least 80% of the balance in the trust account (excluding taxes payable on the income earned on the trust account)
at the time of the execution of a definitive agreement for our initial business combination, as described below in more detail,
and that we must acquire a controlling interest in the target business, our management will have virtually unrestricted flexibility
in identifying and selecting a prospective target business. We have not established any specific attributes or criteria (financial
or otherwise) for prospective target businesses. In evaluating a prospective target business, our management may consider a variety
of factors, including one or more of the following:
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financial
condition and results of operation;
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brand
recognition and potential;
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experience
and skill of management and availability of additional personnel;
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stage
of development of the products, processes or services;
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existing
distribution and potential for expansion;
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degree
of current or potential market acceptance of the products, processes or services;
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proprietary
aspects of products and the extent of intellectual property or other protection for products
or formulas;
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impact
of regulation on the business;
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regulatory
environment of the industry;
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the
target business’s compliance with U.S. federal law;
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costs
associated with effecting the business combination;
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industry
leadership, sustainability of market share and attractiveness of market industries in
which a target business participates; and
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macro
competitive dynamics in the industry within which the company competes.
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These
criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular business combination will be
based, to the extent relevant, on the above factors as well as other considerations deemed relevant by our management in effecting
a business combination consistent with our business objective. In evaluating a prospective target business, we will conduct an
extensive due diligence review which will encompass, among other things, meetings with incumbent management and inspection of
facilities, as well as review of financial and other information which is made available to us. This due diligence review will
be conducted either by our management or by unaffiliated third parties we may engage, although we have no current intention to
engage any such third parties.
The
time and costs required to select and evaluate a target business and to structure and complete the business combination cannot
presently be ascertained with any degree of certainty. Any costs incurred with respect to the identification and evaluation of
a prospective target business with which a business combination is not ultimately completed will result in a loss to us and reduce
the amount of capital available to otherwise complete a business combination.
Fair
Market Value of Target Business
Nasdaq
listing rules 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 taxes payable on the income earned on the trust account)
at the time of the execution of a definitive agreement for our initial business combination. Notwithstanding the foregoing, if
we are not then listed on Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% fair market value
test.
We
currently anticipate structuring a business combination to acquire 100% of the equity interests or assets of the target business
or businesses. We may, however, structure our initial business combination where we merge directly with the target business or
where we acquire less than 100% of such interests or assets of the target business in order to meet certain objectives of the
target management team or shareholders or for other reasons, but we will only complete such business combination if the post-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. Even
if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to
the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed
to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial
number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this
case, we could acquire a 100% controlling interest in the target; however, as a result of the issuance of a substantial number
of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our issued
and outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of
a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses
that is owned or acquired is what will be valued for purposes of the 80% of trust account balance test.
The
fair market value of the target will be determined by our board of directors based upon one or more standards generally accepted
by the financial community (such as actual and potential sales, earnings, cash flow and/or book value). The proxy solicitation
materials or tender offer documents used by us in connection with any proposed transaction will provide public shareholders with
our analysis of the fair market value of the target business, as well as the basis for our determinations. If our board is not
able to independently determine that the target business has a sufficient fair market value, we will obtain an opinion from an
unaffiliated, independent investment banking firm, or another independent entity that commonly renders valuation opinions, with
respect to the satisfaction of such criteria.
We
will not be required to obtain an opinion from an investment banking firm as to the fair market value if our board of directors
independently determines that the target business complies with the 80% threshold. Additionally, pursuant to Nasdaq rules, any
initial business combination must be approved by a majority of our independent directors.
Lack
of Business Diversification
We
may seek to effect a business combination with more than one target business, although we expect to complete our business combination
with just one business. Therefore, at least initially, the prospects for our success may be entirely dependent upon the future
performance of a single business operation. Unlike other entities which may have the resources to complete several business combinations
of entities operating in multiple industries or multiple areas of a single industry, it is probable that we will not have the
resources to diversify our operations or benefit from the possible spreading of risks or offsetting of losses. By consummating
a business combination with only a single entity, our lack of diversification may:
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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 a business combination, and
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result
in our dependency upon the performance of a single operating business or the development
or market acceptance of a single or limited number of products, processes or services.
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If
we determine to simultaneously acquire several businesses and such businesses 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 acquisitions,
which may make it more difficult for us, and delay our ability, to complete the business combination. With multiple acquisitions,
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.
Limited
Ability to Evaluate the Target Business’ Management
Although
we intend to scrutinize the management of a prospective target business when evaluating the desirability of effecting a business
combination, we cannot assure you that our assessment of the target business’ management will prove to be correct. In addition,
we cannot assure you that the future management will have the necessary skills, qualifications or abilities to manage a public
company. Furthermore, the future role of our officers and directors, if any, in the target business following a business combination
cannot presently be stated with any certainty. While it is possible that some of our key personnel will remain associated in senior
management or advisory positions with us following a business combination, it is unlikely that they will devote their full time
efforts to our affairs subsequent to a business combination. Moreover, they would only be able to remain with the company after
the consummation of a business combination 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 them to receive compensation in the form of cash payments and/or our securities for services they would render
to the company after the consummation of the business combination. While the personal and financial interests of our key personnel
may influence their motivation in identifying and selecting a target business, their ability to remain with the company after
the consummation of a business combination will not be the determining factor in our decision as to whether or not we will proceed
with any potential business combination. Additionally, we cannot assure you that our officers and directors will have significant
experience or knowledge relating to the operations of the particular target business.
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 any such additional managers we do
recruit will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Shareholders
May Not Have the Ability to Approve an Initial Business Combination
In
connection with any proposed business combination, we will either (1) seek shareholder approval of our initial business combination
at a meeting called for such purpose at which shareholders may seek to convert their shares, regardless of whether they vote for
or against the proposed business combination or don’t vote at all, into their pro rata share of the aggregate amount then
on deposit in the trust account (net of taxes payable), or (2) provide our shareholders with the opportunity to sell their
shares to us by means of a tender offer (and thereby avoid the need for a shareholder vote) for an amount equal to their pro rata
share of the aggregate amount then on deposit in the trust account (net of taxes payable), in each case subject to the limitations
described herein. The decision as to whether we will seek shareholder approval of a proposed business combination or will allow
shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a
variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require us to
seek shareholder approval. If we determine to engage in a tender offer, such tender offer will be structured so that each shareholder
may tender all of his, her or its shares rather than some pro rata portion of his, her or its shares. In that case, we will file
tender offer documents with the SEC which will contain substantially the same financial and other information about the initial
business combination as is required under the SEC’s proxy rules. Whether we seek shareholder approval or engage in a tender
offer, we will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 either immediately
prior to or upon such consummation and, if we seek shareholder approval, we receive an ordinary resolution under Cayman Islands
law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company.
We
chose our net tangible asset threshold of $5,000,001 to ensure that we would avoid being subject to Rule 419 promulgated under
the Securities Act of 1933, as amended. However, if we seek to consummate an initial business combination with a target business
that imposes any type of working capital closing condition or requires us to have a minimum amount of funds available from the
trust account upon consummation of such initial business combination, we may need to have more than $5,000,001 in net tangible
assets either immediately prior to or upon consummation and this may force us to seek third party financing which may not be available
on terms acceptable to us or at all. As a result, we may not be able to consummate such initial business combination and we may
not be able to locate another suitable target within the applicable time period, if at all. Public shareholders may therefore
have to wait 15 months (or up to 21 months) from the closing of this offering in order to be able to receive a pro rata share
of the trust account. Our sponsor, initial shareholders, officers and directors have agreed (1) to vote any ordinary shares owned
by them in favor of any proposed business combination, (2) not to convert any ordinary shares in connection with a shareholder
vote to approve a proposed initial business combination and (3) not sell any ordinary shares in any tender in connection with
a proposed initial business combination.
None
of our officers, directors, sponsor, initial shareholders or their affiliates has indicated any intention to purchase units or
Class A ordinary shares in this offering or from persons in the open market or in private transactions. However, if we hold
a meeting to approve a proposed business combination and a significant number of shareholders vote, or indicate an intention to
vote, against such proposed business combination or that they wish to have their shares redeemed, our officers, directors, sponsor,
initial shareholders or their affiliates could make such purchases in the open market or in private transactions in order to influence
the vote and reduce the number of redemptions. Notwithstanding the foregoing, our officers, directors, sponsor, initial shareholders
and their affiliates will not make purchases of Class A ordinary shares if the purchases would violate Section 9(a)(2) or
Rule 10b-5 of the Exchange Act, which are rules designed to stop potential manipulation of a company’s stock.
Conversion
Rights
At
any meeting called to approve an initial business combination, public shareholders may seek to convert their shares, regardless
of whether they vote for or against the proposed business combination or do not vote at all, into their pro rata share of the
aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business
combination, less any taxes then due but not yet paid. Alternatively, we may provide our public shareholders with the opportunity
to sell their Class A ordinary shares to us through a tender offer (and thereby avoid the need for a shareholder vote) for
an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account, less any taxes then due
but not yet paid.
Our
sponsor, initial shareholders and our officers and directors will not have conversion rights with respect to any ordinary shares
owned by them, directly or indirectly, whether acquired prior to this offering or purchased by them in this offering or in the
aftermarket. Additionally, the holders of the representative shares will not have conversion rights with respect to the representative
shares.
We
may require public shareholders, whether they are a record holder or hold their shares in “street name,” to either
(i) tender their certificates to our transfer agent 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 each case
prior to a date set forth in the proxy materials sent in connection with the proposal to approve the business combination.
There
is a nominal cost associated with the above-referenced delivery process and the act of certificating the shares or delivering
them through the DWAC System. The transfer agent will typically charge the tendering broker $45.00 and it would be up to the broker
whether or not to pass this cost on to the holder. However, this fee would be incurred regardless of whether or not we require
holders seeking to exercise conversion rights. The need to deliver shares is a requirement of exercising conversion rights regardless
of the timing of when such delivery must be effectuated. However, in the event we require shareholders seeking to exercise conversion
rights prior to the consummation of the proposed business combination and the proposed business combination is not consummated
this may result in an increased cost to shareholders.
Any
proxy solicitation materials we furnish to shareholders in connection with a vote for any proposed business combination will indicate
whether we are requiring shareholders to satisfy such certification and delivery requirements. Accordingly, a shareholder would
have from the time the shareholder received our proxy statement up until two business days prior to the scheduled vote on the
proposal to approve the business combination to deliver his, her or its shares if he, she or it wishes to seek to exercise his
conversion rights. This time period varies depending on the specific facts of each transaction. However, as the delivery process
can be accomplished by the shareholder, whether or not he, she or it is a record holder or his, her or its shares are held in
“street name,” in a matter of hours by simply contacting the transfer agent or his broker and requesting delivery
of his, her or its shares through the DWAC System, we believe this time period is sufficient for an average investor. However,
we cannot assure you of this fact. Please see the risk factor titled “In connection with any general meeting called to
approve a proposed initial business combination, we may require shareholders who wish to convert their shares in connection with
a proposed business combination to comply with specific requirements for conversion that may make it more difficult for them to
exercise their conversion rights prior to the deadline for exercising their rights” for further information on the risks
of failing to comply with these requirements.
Any
request to convert such shares once made, may be withdrawn at any time up to the vote on the proposed business combination or
the expiration of the tender offer. Furthermore, if a holder of Class A ordinary shares delivered his certificate in connection
with an election of their conversion and subsequently decides prior to the applicable date not to elect to exercise such rights,
he or she may simply request that the transfer agent return the certificate (physically or electronically).
If
the initial business combination is not approved or completed for any reason, then our public shareholders who elected to exercise
their conversion rights would not be entitled to convert their shares for the applicable pro rata share of the trust account.
In such case, we will promptly return any shares delivered by public holders.
Redemption
of Public Shares and Liquidation if No Initial Business Combination
Our
sponsor, officers and directors have agreed that we will have only 15 months from the closing of this offering (or up to 21 months
from the closing of this offering if we extend the period of time to consummate a business combination) to complete our initial
business combination. If we are unable to complete our initial business combination within such 15-month period (or 21-month period),
we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not
more than 10 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 $50,000 of interest to pay dissolution expenses and
which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption
will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating
distributions, if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of
our remaining shareholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Cayman
Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights
or liquidating distributions with respect to our rights or warrants, which will expire worthless if we fail to complete our initial
business combination within the 15-month time period (or 21-month time period).
Our
initial shareholders have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating
distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination
within 15 months (or within 21 months) from the closing of this offering. However, if our initial shareholders acquire public
shares, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail
to complete our initial business combination within the allotted 15-month time frame (or 21-month time frame).
Our
sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment
to our amended and restated memorandum and articles of association (A) that would affect our public shareholders’ ability
to convert or sell their shares to us in connection with a business combination as described herein or 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
15 months (or up to 21 months) from the closing of this offering or (B) with respect to any other provision relating to shareholders’
rights or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem
their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then
on deposit in the trust account, including interest (which interest shall be net of taxes payable), divided by the number of then
issued and 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 either immediately prior to or upon completion of our initial business combination (so that
we do not then become subject to the SEC’s “penny stock” rules).
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 $750,000 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, to the extent that there is any interest accrued in the trust account not
required to pay taxes, we may request the trustee to release to us an additional amount of up to $50,000 of such accrued interest
to pay those costs and expenses.
If
we were to expend all of the net proceeds of this offering and the sale of the private units, other than the proceeds deposited
in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption
amount received by shareholders upon our dissolution would be approximately $10.00. The proceeds deposited in the trust account
could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public shareholders.
We cannot assure you that the actual per-share redemption amount received by shareholders will not be substantially 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 (other than our independent auditors), 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
any monies held in the trust account for the benefit of our public shareholders, there is no guarantee that they will execute
such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account
including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims
challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets,
including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies
held in the trust account, our management will perform an analysis of the alternatives available to it and will enter into an
agreement with a third party that has not executed a waiver only 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 we are 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 are unable to complete our initial business combination within the prescribed time frame, 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. Our sponsor has agreed that it will be
liable to us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products
sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount
of funds in the trust account to below (1) $10.00 per public share or (2) such lesser amount per public share held in
the trust account as of the date of the liquidation of the trust account, due to reductions in the value of the trust assets,
in each case net of the amount of interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed
a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters
of this offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver
is deemed to be unenforceable against a third party, then our sponsor will not be responsible to the extent of any liability for
such third-party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity
obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not
be able to satisfy those obligations. We have not asked our sponsor to reserve for such obligations. None of our other officers
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 (1) $10.00 per public share or (2) such lesser amount
per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in the value
of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, 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 substantially 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 (other than our independent auditors), 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 $750,000 from the proceeds
of this offering and the sale of the private units, 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 $50,000). In the event that
we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, shareholders who received
funds from our trust account could be liable for claims made by creditors. In the event that our offering expenses exceed our
estimate of $550,000, 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 $550,000, the amount of funds we intend to be held outside the trust
account would increase by a corresponding amount.
If
we file a winding-up or bankruptcy or insolvency petition or an involuntary winding-up or bankruptcy or insolvency petition is
filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable insolvency law,
and may be included in our insolvency estate and subject to the claims of third parties with priority over the claims of our shareholders.
To the extent any insolvency claims deplete the trust account, we cannot assure you we will be able to return $10.00 per share
to our public shareholders. Additionally, if we file a winding-up or bankruptcy or insolvency petition or an involuntary winding-up
or bankruptcy or insolvency petition is filed against us that is not dismissed, any distributions received by shareholders could
be viewed under applicable debtor/creditor and/or insolvency laws as a voidable performance. As a result, a bankruptcy court could
seek to recover some or all amounts received by our shareholders. Furthermore, our board may be viewed as having breached its
fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive
damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you
that claims will not be brought against us for these reasons.
Our
public shareholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (1) the
completion of our initial business combination, and then only in connection with those Class A ordinary shares that such
shareholder properly elected to redeem, subject to the limitations described herein, (2) the redemption of any public shares
properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association
(A) that would affect our public shareholders’ ability to convert or sell their shares to us in connection with a business
combination as described herein or 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 15 months (or up to 21 months) from the closing of this offering or
(B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity
and (3) the redemption of our public shares if we are unable to complete our initial business combination within 15 months
(or up to 21 months) from the closing of this offering, subject to applicable law and as further described herein. In no other
circumstances will a shareholder have any right or interest of any kind to or in the trust account. In the event we seek shareholder
approval in connection with our initial business combination, a shareholder’s voting in connection with our initial business
combination alone will not result in a shareholder’s redeeming its shares to us for an applicable pro rata share of the
trust account. Such shareholder must have also exercised its redemption rights described above.
Amended
and Restated Memorandum and Articles of Association
Our
amended and restated memorandum and articles of association will contain certain requirements and restrictions relating to this
offering that will apply to us until the completion of our initial business combination. Our amended and restated memorandum and
articles of association contains a provision which provides that, if we seek to amend our amended and restated memorandum and
articles of association (A) that would affect our public shareholders’ ability to convert or sell their shares to us
in connection with a business combination as described herein or 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 15 months from the closing of this offering
(or up to 21 months from the closing of this offering if we extend the period of time to consummate a business combination) or
(B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity,
we will provide public shareholders with the opportunity to redeem their public shares in connection with any such amendment.
Specifically, our amended and restated memorandum and articles of association provide, among other things, that:
• prior
to the completion of our initial business combination, we shall either (1) seek shareholder approval of our initial business
combination at a meeting called for such purpose at which public shareholders may elect to redeem their public shares without
voting, and if they do vote, irrespective of whether they vote for or against the proposed business combination, or (2) provide
our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial
business combination by means of a tender offer (and thereby avoid the need for a shareholder vote), in each in cash, for an amount
payable in cash equal to the aggregate amount then on deposit in the trust account as of two business days prior to the completion
of our initial business combination, including interest (which interest shall be net of taxes payable), divided by the number
of then issued and outstanding public shares, subject to the limitations described herein;
• we
will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 either immediately
prior to or upon completion of our initial business combination and, solely if we seek shareholder approval, we receive an ordinary
resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote
at a general meeting of the company;
• if
our initial business combination is not consummated within 15 months (or up to 21 months) from the closing of this offering, then
our existence will terminate and we will distribute all amounts in the trust account; and
• prior
to our initial business combination, we may not issue additional shares that would entitle the holders thereof to (1) receive
funds from the trust account or (2) vote as a class with our public shares (a) on any initial business combination or
(b) to approve an amendment to our amended and restated memorandum and articles of association to (x) extend the time
we have to consummate a business combination beyond 15 months (or up to 21 months) from the closing of this offering or (y) amend
the foregoing provisions.
These
provisions cannot be amended without the approval of holders of at least two-thirds of our ordinary shares. In the event we seek
shareholder approval in connection with our initial business combination, our amended and restated memorandum and articles of
association provide that we may consummate our initial business combination only if approved by a majority of the ordinary shares
voted by our shareholders at a duly held general meeting.
Additionally,
our amended and restated memorandum and articles of association provides that, prior to our initial business combination, only
holders of our founder shares will have the right to vote on the appointment of directors and that holders of a majority of our
founder shares may remove a member of the board of directors for any reason. These provisions of our amended and restated memorandum
and articles of association may only be amended by a special resolution passed by at least 90% of our ordinary shares voting in
a general meeting. With respect to any other matter submitted to a vote of our shareholders, including any vote in connection
with our initial business combination, except as required by law, holders of our founder shares and holders of our public shares
will vote together as a single class, with each share entitling the holder to one vote
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 complete our initial business combination within 15
months from the closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time
to consummate a business combination).
|
|
|
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 pursuant to a tender offer or in connection with a shareholder
vote. The redemption price will be the same whether we conduct redemptions pursuant to a tender offer or in connection with
a shareholder vote. In either case, our public shareholders may redeem their public shares for cash equal to the aggregate
amount then on deposit in the trust account 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 (which interest shall be net of taxes payable),
divided by the number of then issued and 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 either immediately prior to
or upon completion of our initial business combination and any limitations (including, but not limited to, cash requirements)
agreed to in connection with the negotiation of terms of a proposed business combination.
|
|
If
we seek shareholder approval of our initial business combination, our sponsor, directors, officers, advisors or any of 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. None of the funds in the trust account will be used to purchase shares in
such transactions.
|
|
If
we are unable to complete our initial business combination within 15 months from the
closing of this offering (or within 21 months from the closing of this offering if we
extend the period of time to consummate a business combination), we will redeem all public
shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit
in the trust account (which is initially anticipated to be $10.00 per share), including
interest (less up to $50,000 of interest to pay dissolution expenses and which interest
shall be net of taxes payable), divided by the number of then issued and outstanding
public shares.
|
|
|
|
|
|
|
|
|
|
Impact
to remaining shareholders
|
|
The
redemptions in connection with our initial business combination will reduce the book value per share for our remaining shareholders,
who will bear the burden of interest withdrawn in order to pay taxes (to the extent not paid from amounts accrued as interest
on the funds held in the trust account).
|
|
If
the permitted purchases described above are made, there will be no impact to our remaining shareholders 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 initial shareholders, who will be our only remaining shareholders 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 the 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
|
|
$40,000,000
of the proceeds of this offering and the sale of the private units will be deposited into a United States-based trust account
at with Continental Stock Transfer & Trust Company acting as trustee
|
|
Approximately
$34,920,000 of the offering proceeds, representing the gross proceeds of this offering less allowable underwriting commissions,
expenses and company deductions under Rule 419, 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
|
|
$40,000,000
of the proceeds of this offering and the sale of the private units held in trust will be held as cash or invested only in
U.S. government treasury bills with a maturity of 180 days or less or in money market funds investing solely in U.S. Treasuries
and meeting certain conditions under Rule 2a-7 under the Investment Company Act.
|
|
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
on proceeds from the trust account to be paid to shareholders is reduced by (1) any taxes paid or payable and (2) in
the event of our liquidation for failure to complete our initial business combination within the allotted time, up to $50,000
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
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
|
|
Our
initial business combination must occur with one or more target businesses that together have an aggregate fair market value
of at least 80% of the assets held in the trust account (excluding taxes payable on the income earned on the trust account)
at the time of the agreement to enter into the initial business combination. Notwithstanding the foregoing, if we are not
then listed on Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% fair market value test.
|
|
The
fair value or net assets of a target business must represent at least 80% of the maximum offering proceeds.
|
|
Trading
of securities issued
|
|
The
units will begin trading on or promptly after the date of this prospectus. The Class A ordinary shares, rights and warrants
constituting the units will begin separate trading on the 90th day following the date of this prospectus
unless EarlyBirdCapital, Inc. informs us of its decision to allow earlier separate trading, subject to our having filed
the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading
will begin; provided that no fractional warrants will be issued upon separation of the units and only whole warrants will
trade. We will file the Current Report on Form 8-K promptly after the closing of this offering. If the underwriters’
over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended
Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriters’
over-allotment option
|
|
No
trading of the units or the underlying Class A ordinary shares, rights and warrants would be permitted until the completion
of a business combination. During this period, the securities would be held in the escrow or trust account.
|
|
|
|
|
|
|
|
Exercise
of the warrants
|
|
The
warrants cannot be exercised until the later of 30 days after the completion of our initial business combination or 12 months
from the closing of this offering.
|
|
The
warrants could be exercised prior to the completion of a business combination, but securities received and cash paid in connection
with the exercise would be deposited in the escrow or trust account.
|
|
Election
to remain an investor
|
|
We
will provide our public shareholders with the opportunity to redeem their public shares for cash equal to their pro rata share
of the aggregate amount then on deposit in the trust account as of two business days prior to the completion of our initial
business combination, including interest, which interest shall be net of taxes payable, upon the completion of our initial
business combination, subject to the limitations described herein. We may not be required by applicable law or stock exchange
rules to hold a shareholder vote. If we are not required by applicable law or stock exchange rules and do not otherwise
decide to hold a shareholder vote, we will, pursuant to our amended and restated memorandum and articles of association, conduct
the redemptions pursuant to the tender offer rules of the SEC and file tender offer documents with the SEC which will
contain substantially the same financial and other information about the initial business combination and the redemption rights
as is required under the SEC’s proxy rules. If, however, we hold a shareholder vote, we will, like many blank check
companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant
to the tender offer rules. Pursuant to the tender offer rules, the tender offer period will be not less than 20 business days
and, in the case of a shareholder vote, a final proxy statement would be mailed to public shareholders at least 10 days
prior to the shareholder vote. However, we expect that a draft proxy statement would be made available to such shareholders
well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy
solicitation. If we seek shareholder approval, we will complete our initial business combination only if we receive an ordinary
resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and
vote at a general meeting of the company. Additionally, each public shareholder may elect to redeem its public shares without
voting and, if they do vote, irrespective of whether they vote for or against the proposed business combination.
|
|
A
prospectus containing information pertaining to the business combination required by the SEC would be sent to each investor.
Each investor would be given the opportunity to notify the company in writing, within a period of no less than 20 business
days and no more than 45 business days from the effective date of a post-effective amendment to the company’s registration
statement, to decide if he, she or it elects to remain a shareholder of the company or require the return of his, her or its
investment. If the company has not received the notification by the end of the 45th business
day, funds and interest or dividends, if any, held in the trust or escrow account are automatically returned to the shareholder.
Unless a sufficient number of investors elect to remain investors, all funds on deposit in the escrow account must be returned
to all of the investors and none of the securities are issued.
|
|
|
|
Terms
of Our Offering
|
|
Terms
Under a Rule 419 Offering
|
|
Business
combination deadline
|
|
If
we are unable to complete an initial business combination within 15 months from the closing of this offering (or up to 21
months from the closing of this offering if we extend the period of time to consummate a business combination), we will (1) cease
all operations except for the purpose of winding up, (2) as promptly as reasonably possible but not more than 10 business
days thereafter, redeem 100% of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then
on deposit in the trust account, including interest (less up to $50,000 of interest to pay dissolution expenses and which
interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption
will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating
distributions, if any) and (3) as promptly as reasonably possible following such redemption, subject to the approval
of our remaining shareholders and our board of directors, dissolve and liquidate, subject in each case to our obligations
under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
|
|
If
an acquisition has not been completed within 15 months after the effective date of the company’s registration statement,
funds held in the trust or escrow account are returned to investors.
|
|
|
|
Terms
of Our Offering
|
|
Terms
Under a Rule 419 Offering
|
|
Release
of funds
|
|
Except
with respect to interest earned on the funds held in the trust account that may be released to us to pay our taxes, if any,
and up to $50,000 of interest that may be needed to pay dissolution expenses, the funds held in the trust account will not
be released from the trust account until the earliest to occur of: (1) the completion of our initial business combination;
(2) the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended
and restated memorandum and articles of association (A) that would affect our public shareholders’ ability to convert
or sell their shares to us in connection with a business combination as described herein or 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 15 months
from the closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time to
consummate a business combination) or (B) with respect to any other provision relating to shareholders’ rights
or pre-initial business combination activity; and (3) the redemption of our public shares if we are unable to complete
our initial business combination within 15 months (or up to 21 months) from the closing of this offering, subject to applicable
law.
|
|
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.
|
|
|
|
|
|
|
|
Limitation
on redemption rights of shareholders holding more than 15% of the shares sold in this offering if we hold a shareholder vote
|
|
If
we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our
initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association
provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder
is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted
from redeeming its shares with respect Excess Shares (more than an aggregate of 15% of the shares sold in this offering),
without our prior consent. Our public shareholders’ inability to redeem Excess Shares will reduce their influence over
our ability to complete our initial business combination and they could suffer a material loss on their investment in us if
they sell Excess Shares in open market transactions.
|
|
Since
blank check companies provide no restrictions on the ability of shareholders to redeem shares based on the number of shares
held by such shareholders in connection with an initial business combination.
|
|
|
|
Terms
of Our Offering
|
|
Terms
Under a Rule 419 Offering
|
|
Tendering
share certificates in connection with redemption rights
|
|
We
may require our public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their
shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth
in the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the scheduled
vote on the proposal to approve our initial business combination in the event we distribute proxy materials, 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. The proxy materials, as applicable, that we will furnish to holders of our public shares
in connection with our initial business combination will indicate whether we are requiring public shareholders to satisfy
such delivery requirements. Accordingly, a public shareholder would 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.
|
|
In
order to perfect redemption rights in connection with their business combinations, holders could vote against a proposed business
combination and check a box on the proxy card indicating such holders were seeking to exercise their redemption rights. After
the business combination was approved, the company would contact such shareholders to arrange for them to deliver their certificate
to verify ownership.
|
Competition
We
expect to encounter intense competition from other entities having a business objective similar to ours, including private investors
(which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international,
competing for the types of businesses we intend to acquire. Many of these individuals and entities are well established and have
extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing
services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry
knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors.
While we believe there are numerous target businesses we could potentially acquire with the net proceeds of this offering and
the sale of the private units, our ability to compete with respect to the acquisition of certain target businesses that are sizable
will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing
the acquisition of certain target businesses. Furthermore, in the event we seek shareholder approval of our initial business combination
and we are obligated to pay cash for our Class A ordinary shares, it will potentially reduce the resources available to us
for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating
a business combination.
Conflicts
of Interest
All
of our executive officers and certain of our directors have or may have fiduciary and contractual duties to certain companies
in which they have invested. These entities may compete with us for acquisition opportunities. If these entities decide to pursue
any such opportunity, we may be precluded from pursuing it. However, we do not expect these duties to present a significant conflict
of interest with our search for an initial business combination.
Our
officers and directors have agreed to present to us all target business opportunities that have a fair market value of at least
80% of the assets held in the trust account (excluding taxes payable on the income accrued in the trust account), subject to any
pre-existing fiduciary or contractual obligations. If any of our officers or directors becomes aware of an initial business combination
opportunity that may be attractive to any entity to which he has pre-existing fiduciary or contractual obligations, he will be
required to present such initial business combination opportunity to such entity prior to presenting such initial business combination
opportunity to us. Certain of our officers and directors presently have, and any of them in the future may have additional, fiduciary
or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business
combination opportunity to such entity. Accordingly, they will be required to present all suitable business combination opportunities
to such entities prior to presenting them to our company for consideration.
We
do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect
our ability to complete our initial business combination.
Indemnity
Our
sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors)
for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction
agreement, reduce the amount of funds in the trust account to below (1) $10.00 per public share or (2) such lesser amount
per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value
of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third
party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity
of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in
the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to
the extent of any liability for such third-party claims. We have not independently verified whether our sponsor has sufficient
funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company and,
therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such obligations.
Facilities
We
currently maintain our executive offices at Unit 1006, Block C, Jinshangjun Park, No. 2 Xiaoba Road, Panlong District, Kunming,
Yunnan, China. The cost for the space is included in the up to $10,000 monthly fee that we will pay our sponsor for office space,
administrative and support services. We consider our current office space adequate for our current operations.
Employees
We
currently have three executive officers and do not intend to have any full-time employees prior to the completion of our initial
business combination. Members of our management team 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 that any such person will devote in any time period may vary based on whether a target business
has been selected for our initial business combination and the current stage of the business combination process.
Periodic
Reporting and Financial Information
We
will register our units, Class A ordinary shares, rights and warrants under the Exchange Act and have reporting obligations,
including the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements
of the Exchange Act, our annual reports will contain financial statements audited and reported on by our independent registered
public auditors.
We
will provide shareholders with audited financial statements of the prospective target business as part of the tender offer materials
or proxy solicitation materials sent to shareholders to assist them in assessing the target business. These financial statements
may be required to be prepared in accordance with, or be reconciled to, U.S. GAAP or IFRS, depending on the circumstances and
the historical financial statements may be required to be audited in accordance with PCAOB standards. These financial statement
requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such
financial statements in time for us to disclose such financial statements in accordance with federal proxy rules and complete
our initial business combination within the prescribed time frame. While this may limit the pool of potential business combination
candidates, we do not believe that this limitation will be material.
We
will be required to evaluate our internal control procedures for the fiscal year ending December 31, 2021 as required by
the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer
qualify as an emerging growth company, will we 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 effectiveness of the registration statement of which this prospectus forms a part, we will file a Registration Statement
on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we
will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a
Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the completion of our
initial business combination.
We
are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS
Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable
to other public companies that are not “emerging growth companies” including, but not limited to, not being required
to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations
regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding
a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously
approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our
securities and the prices of our securities may be more volatile.
In
addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the
extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting
standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until
those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition
period.
We
will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth
anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion,
or (c) in which we are deemed to be a large accelerated filer, which means the market value of our ordinary shares that is
held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter, and (2) the
date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References
herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.
Additionally,
we are a “smaller reporting company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies
may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited
financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market
value of our ordinary shares held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter,
or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our ordinary shares
held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter.
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, and we and the members of our management team have not been subject to any such proceeding in
the 12 months preceding the date of this prospectus.
MANAGEMENT
Directors,
Director Nominees and Executive Officers
|
Name
|
|
Age
|
|
Title
|
|
Jian
Zhang
|
|
38
|
|
Chief
Executive Officer and Chairman
|
|
Jirong
Lyu
|
|
38
|
|
Chief
Financial Officer and Director Nominee
|
|
Yiwen
Ma
|
|
35
|
|
Chief
Technology Officer
|
|
John
Wallace
|
|
70
|
|
Director
|
|
Joseph
Valenza
|
|
63
|
|
Director
|
|
Ning
Wang
|
|
65
|
|
Director
|
Our
directors, director nominees and executive officers are as follows:
Jian
Zhang has served as our Chairman and Chief Executive Officer
since inception. He has significant experience in designing, developing and operating message platforms and investing in the informational,
biological, block-chain and consumer technology industries. He is currently a director of many technology and investment firms,
including Yunnan Jimaoxin Information Technology Co., Ltd., Chongqing Wangwang Supply Chain Management Co., Ltd., Shenzhen
Zenyi Tonglian Technology Co., Ltd. and Zhuhai Meining Technology Co., Ltd. Since August 2015, he has been the
Chief Executive Officer and the Managing Partner of Yunnan Xiaosen Venture Capital Co., Ltd., a fund active in angel-round
capital raising for the Internet and social media startups. Since August 2017, Mr. Zhang has also been the Chief Executive
Officer and Director of Hangzhou Hechuang Investment Management Co., Ltd., a fund investing in the processing, supply chain
and retail channel related to agricultural products. Since August 2018, Mr. Zhang has also been the Chief Executive
Officer of Tongzheng Huilian Technology (Beijing) Co., Ltd., a high-tech company focusing on the research of blockchain technology
and the development, operation and maintenance of alliance chain. From January 2005 to August 2018, he served as the
Chief Executive Officer at Kunming Limit Technology Company Limited, a high-tech company mainly engaged in the development of
the mobile communication protocol and the application gateway. Mr. Zhang graduated from Guangdong Ocean University with a
Bachelor’s degree in Engineering. We believe he is well qualified to serve on our board of directors due to his extensive
investment and operational experience in the Internet and communication industry.
Jirong
Lyu has served as our Chief Financial Officer and will serve
as one of our directors as of the effective date of the registration statement of which this prospectus forms a part. Since March 2016,
he has served as a Managing Partner of Dongguan Taihua Tax Accountant Firm, an accounting firm, and Chief Financial Officer at
Shanghai Shengkai Technology Co., Ltd., a company focusing on providing technical and operational services to Chinese e-commerce
enterprises with cross-border operations. Mr. Lyu served as the Head of the Financial Securities Market at Guangdong Vocational
College of Innovation and Technology, School of Finance and Economics from July 2011 to March 2016, during which time
he led the editing of three academic textbooks focused on computerized accounting published by major Chinese universities. From
July 2006 to June 2011, Mr. Lyu served as the Manager of the Tax Department at Dongguan Wabisen Certified Public
Accountants Co., Ltd., an accounting firm. Mr. Lyu graduated from Zhengzhou University of Aeronautics with a Bachelor’s
degree in Management. We believe he is well qualified to serve on our board of directors due to his extensive experience
and academic expertise in financial counseling, international taxation and securities transactions.
Yiwen
Ma has served as our Chief Technology Officer since inception.
Mr. Ma has substantial experience researching and developing the systems and programs related to instant messaging and big
data technology. Since September 2009, he has been serving as the Software Manager of Kunming Limit Technology Company Limited,
a high-tech company engaged in the development of the mobile communication protocol and the application gateway. Mr. Ma graduated
from Kunming University of Science and Technology with a Bachelor’s degree in Engineering.
John Wallace, who will serve as one of our
directors as of the effective date of the registration statement of which this prospectus forms a part, has served as the
Chairman and Chief Executive Officer of the Delaware Board of Trade, a subsidiary of Ideanomics,Inc. (NASDAQ: IDEX) that is a
broker-dealer operating an Alternative Trading System (ATS) for equities not listed on a stock exchange, since December 2015.
From July 2019 to September 2020, he served as a director of Ideanomics, Inc. and from January 2015 to May 2020, he served as
a director of Gene Biotherapeutics, Inc. (OTCMKTS: CRMX), a company that manages a portfolio of investments in medical
technologies. Since September 2006, Mr. Wallace has also served as the President and Chief Executive Officer of Philadelphia
Financial Services, LLC, a company providing consulting services to firms in the financial services industry. From August
2008 to October 2011, he served as the President and Chief Executive Officer of Miami International Holdings, Inc., a company
that builds exchange technology. From January 1981 to July 2008, Mr. Wallace served in various managerial positions,
including the Chairman and Chief Executive Officer, of the Philadelphia Stock Exchange before its acquisition by the NASDAQ
OMX Group Inc. in July 2008. Mr. Wallace graduated from Franklin & Marshall College in Lancaster, Pennsylvania with a
Bachelor’s degree in Economics and retired honorably from the United States Army, holding the rank of Lieutenant
Colonel. We believe he is well qualified to serve on our board of directors due to his extensive managerial and
entrepreneurial experience in securities transactions and the U.S. capital markets.
Joseph
Valenza will serve as one of our directors as of the effective
date of the registration statement of which this prospectus forms a part. From June 2019 to April 2020, he served as
the President and Chief Revenue Officer of the Delaware Board of Trade. From September 2015 to May 2017, Mr. Valenza
worked as a NASDAQ Equity Market Maker at Canacord Genuity Group Inc. (TSX: CF), a financial services firm. From June 2017
to May 2019, Mr. Valenza worked primarily on his real estate business. From May 2011 to August 2015, he served
as the Vice President of Sales Retail Liquidity at The Goldman Sachs Group, Inc. (NYSE: GS). From October 2009 to April 2011,
Mr. Valenza served as the Head of Sales at Surge Trading, a company that was a market maker in NYSE and NASDAQ securities.
From May 2008 to September 2009, he was the President of Drexel Hamilton, LLC, an institutional broker-dealer. Mr. Valenza
served as Senior Vice President of the Sales and Development at Lehman Brothers, Inc. from February 2006 to April 2008.
He is a former member of the American Stock Exchange Retail Advisory Committee and the Chicago Board of Options Managing Directors
Committee. Mr. Valenza attended St. Francis College with a Bachelor’s degree in History and was honorably discharged
from the United States Coast Guard Reserve. We believe he is well qualified to serve on our board of directors due to his extensive
managerial and entrepreneurial experience in securities transactions and the U.S. capital markets.
Ning
Wang will serve as one of our directors as of the effective
date of the registration statement of which this prospectus forms a part. Since December 2014, he has served as the President
of China Electronics Chamber of Commerce, or the CECC, an organization comprised of companies, groups and industry organizations
engaged in the production, distribution, research of electronic products, and has also served in various managerial positions
including the Secretary General and Vice Executive President at the CECC since 1993. He is an independent director at both Jiu
Rong Holdings Ltd. (2358.HK), an investment holding company principally engaged in the manufacture and sale of digital televisions,
and Fibocom Wireless Inc. (SHE: 300638), a Shenzhen-based wireless communication module and Internet-of-Things solution provider.
From January1990 to March 1992, he served as the director of the Management Division of the National Household Appliances
Management Center. Mr. Wang graduated from Remin University of China with a Bachelor’s degree in political economics.
We believe he is well qualified to serve on our board of directors due to his substantial experience in the marketing and distribution
of electronic products and public company management.
Number,
Terms of Office and Election of Officers and Directors
Upon
the effectiveness of the registration statement of which this prospectus forms a part, we expect that our board of directors will
consist of five members. Our board of directors is divided into two classes with only one class of directors being elected in
each year and each (except for those directors appointed prior to our first annual general meeting) serving a two-year term. The
term of office of the first class of directors will expire at our first annual general meeting and the term of office of the second
class of directors will expire at our second annual general meeting. We may not hold an annual general meeting until after we
consummate our initial business combination (unless required by Nasdaq). Subject to any other special rights applicable to the
shareholders, any vacancies on our board of directors may be filled by the affirmative vote of a majority of the directors present
and voting at the meeting of our board or by a majority of the holders of our ordinary shares (or, prior to our initial business
combination, holders of our founder shares).
Our
officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific
terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our amended and restated
memorandum and articles of association as it deems appropriate. Our amended and restated memorandum and articles of association
provide that our officers may consist of a Chairman, a Chief Executive Officer, a President, a Chief Operating Officer, a Chief
Financial Officer, Vice Presidents, a Secretary, Assistant Secretaries, a Treasurer and such other offices as may be determined
by the board of directors.
Director
Independence
Nasdaq
listing standards require that a majority of our board of directors be independent within one year of our initial public offering.
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. We expect
that our board of directors will determine that each of John Wallace, Joseph Valenza and Ning Wang is an “independent director”
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 present.
Officer
and Director Compensation
None
of our officers or directors have received or, prior to our initial business combination, will receive any cash compensation for
services rendered to us. We will pay our sponsor up to $10,000 per month for office space, administrative and support services.
Our sponsor, 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,
officers, directors or our or any of their affiliates.
After
the completion of our initial business combination, directors or members of our management team who remain with us may be paid
consulting, management or other compensation from the combined company. All compensation will be fully disclosed to shareholders,
to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our shareholders in connection
with a proposed business combination. It is unlikely the amount of such compensation will be known at the time, 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 officers after the completion of our initial business combination will be determined by a compensation committee
constituted solely by independent directors.
We
are not party to any agreements with our executive officers and directors that provide for benefits upon termination of employment.
The existence or terms of any such employment or consulting arrangements may influence our management’s motivation in identifying
or selecting a target business, and we do not believe that the ability of our management to remain with us after the completion
of our initial business combination should be a determining factor in our decision to proceed with any potential business combination.
Committees
of the Board of Directors
Pursuant
to Nasdaq listing rules we will establish two standing committees - an audit committee in compliance with Section 3(a)(58)(A) of
the Exchange Act and a compensation committee. Subject to phase-in rules and a limited exception, Nasdaq rules and Rule 10A-3
of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors, and Nasdaq
rules require that the compensation committee of a listed company be comprised solely of independent directors.
Audit
Committee
Upon
the effectiveness of the registration statement of which this prospectus forms a part, we will establish an audit committee of
the board of directors. John Wallace, Joseph Valenza and Ning Wang will serve as members of our audit committee, and John Wallace
will chair the audit committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have at least
three members of the audit committee, all of whom must be independent. We believe that each of John Wallace, Joseph Valenza and
Ning Wang will meet the independent director standard under Nasdaq listing standards and under Rule 10-A-3(b)(1) of
the Exchange Act.
Each
member of the audit committee is or will be financially literate and our board of directors has determined that Mr. Wallace
qualifies as an “audit committee financial expert” as defined in applicable SEC rules and has accounting or related
financial management expertise.
We
will adopt an audit committee charter, which will detail the purpose and principal functions of the audit committee, including:
• assisting
board oversight of (1) the integrity of our financial statements, (2) our compliance with legal and regulatory requirements,
(3) our independent auditor’s qualifications and independence and (4) the performance of our internal audit function
and independent auditors;
• the
appointment, compensation, retention, replacement and oversight of the work of the independent auditors and any other independent
registered public accounting firm engaged by us;
• pre-approving
all audit and non-audit services to be provided by the independent auditors or any other registered public accounting firm engaged
by us and establishing pre-approval policies and procedures;
• reviewing
and discussing with the independent auditors all relationships the auditors have with us in order to evaluate their continued
independence;
• setting
clear hiring policies for employees or former employees of the independent auditors;
• setting
clear policies for audit partner rotation in compliance with applicable laws and regulations;
• obtaining
and reviewing a report, at least annually, from the independent auditors describing (1) the independent auditor’s internal
quality-control procedures and (2) any material issues raised by the most recent internal quality-control review, or peer
review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding
five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues;
• meeting
to review and discuss our annual audited financial statements and quarterly financial statements with management and the independent
auditor, including reviewing our specific disclosures under “Management’s Discussion and Analysis of Financial Condition
and Results of Operations”;
• reviewing
and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the
SEC prior to us entering into such transaction; and
• reviewing
with management, the independent auditors, and our legal advisors, as appropriate, any legal, regulatory or compliance matters,
including any correspondence with regulators or government agencies and any employee complaints or published reports that raise
material issues regarding our financial statements or accounting policies and any significant changes in accounting standards
or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.
Compensation
Committee
Upon
the effectiveness of the registration statement of which this prospectus forms a part, we will establish a compensation committee
of the board of directors. John Wallace, Joseph Valenza and Ning Wang will serve as members of our compensation committee. Under
the Nasdaq listing standards and applicable SEC rules, we are required to have at least two members of the compensation committee,
all of whom must be independent. John Wallace, Joseph Valenza and Ning Wang are independent and Mr. Valenza chairs the compensation
committee.
We
will adopt a compensation committee charter, which will detail the purpose and responsibility 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 making recommendations to our board of directors with respect to the compensation and any incentive-compensation and equity-based
plans that are subject to board approval of all of our other 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 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, independent 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.
Director
Nominations
We
do not have a standing nominating committee though we intend to form a corporate governance and nominating committee as and when
required to do so by law or Nasdaq rules. In accordance with Rule 5605 of the Nasdaq rules, a majority of the independent
directors may recommend a director nominee for selection by the board of directors. The board of directors believes that the independent
directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation
of a standing nominating committee. The directors who will participate in the consideration and recommendation of director nominees
are John Wallace, Joseph Valenza and Ning Wang. In accordance with Rule 5605 of the Nasdaq rules, all such directors are
independent. As there is no standing nominating committee, we do not have a nominating committee charter in place.
The
board of directors will also consider director candidates recommended for nomination by our shareholders during such times as
they are seeking proposed nominees to stand for election at the next annual general meeting (or, if applicable, an extraordinary
general meeting). Our shareholders that wish to nominate a director for election to our board of directors should follow the procedures
set forth in our memorandum and articles of association.
We
have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors
to possess. In general, in identifying and evaluating nominees for director, the board of directors considers educational background,
diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and
the ability to represent the best interests of our shareholders.
Compensation
Committee Interlocks and Insider Participation
None
of our officers currently serves, and in the past year has not served, as a member of the board of directors or compensation committee
of any entity that has one or more officers serving on our board of directors.
Code
of Ethics
Prior
to the effectiveness of the registration statement of which this prospectus is a part, we will have adopted a Code of Ethics applicable
to our directors, officers and employees. Our Code of Ethics will be available on our website upon the completion of this offering.
Our Code of Ethics is a “code of ethics,” as defined in Item 406(b) of Regulation S-K. We will make any legally
required disclosures regarding amendments to, or waivers of, provisions of our Code of Ethics on our website.
Conflicts
of Interest
All
of our executive officers and certain of our directors have or may have fiduciary and contractual duties to certain companies
in which they have invested. These entities may compete with us for acquisition opportunities. If these entities decide to pursue
any such opportunity, we may be precluded from pursuing it. However, we do not expect these duties to present a significant conflict
of interest with our search for an initial business combination.
Under
Cayman Islands law, directors and officers owe the following fiduciary duties:
• duty
to act in good faith in what the director or officer believes to be in the best interests of the company as a whole;
• duty
to exercise authority for the purpose for which it is conferred;
• duty
to not improperly fetter the exercise of future discretion;
• duty
not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests;
and
• duty
to exercise independent judgment.
In
addition to the above, directors also owe a duty of care, which is not fiduciary in nature. This duty has been defined as a requirement
to act as a reasonably diligent person having both the general knowledge, skill and experience that may reasonably be expected
of a person carrying out the same functions as are carried out by that director in relation to the company and the general knowledge,
skill and experience which that director has.
Our
officers and directors have agreed to present to us all target business opportunities that have a fair market value of at least
80% of the assets held in the trust account (excluding taxes payable on the income accrued in the trust account), subject to any
pre-existing fiduciary or contractual obligations. If any of our officers or directors becomes aware of an initial business combination
opportunity that may be attractive to any entity to which he has pre-existing fiduciary or contractual obligations, he will be
required to present such initial business combination opportunity to such entity prior to presenting such initial business combination
opportunity to us. Certain of our officers and directors presently have, and any of them in the future may have additional, fiduciary
or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business
combination opportunity to such entity. Accordingly, they will be required to present all suitable business combination opportunities
to such entities prior to presenting them to our company for consideration.
We
do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect
our ability to complete our initial business combination.
Potential
investors should also be aware of the following potential conflicts of interest:
• None
of our officers or directors is required to commit his or her full time to our affairs and, accordingly, may have conflicts of
interest in allocating his or her time among various business activities.
• In
the course of their other business activities, our officers and directors may become aware of investment and business opportunities
that 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. For a complete
description of our management’s other affiliations, see “—Directors, Director Nominees and Executive Officers.”
• Our
initial shareholders have agreed to waive their redemption rights with respect to their founder shares and any public shares held
by them in connection with the completion of our initial business combination. Our directors and officers have also entered into
the letter agreement, imposing similar obligations on them with respect to public shares acquired by them, if any. Additionally,
our initial shareholders have agreed to waive their redemption rights with respect to their founder shares if we fail to consummate
our initial business combination within 15 months after the closing of this offering (or up to 21 months from the closing of this
offering if we extend the period of time to consummate a business combination). However, if our initial shareholders or any of
our officers, directors or affiliates 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 our initial business combination within the
prescribed time frame. If we do not complete our initial business combination within such applicable time period, the proceeds
of the sale of the private units held in the trust account will be used to fund the redemption of our public shares, and the private
units will expire worthless. With certain limited exceptions, the founder shares will not be transferable, assignable or salable
by our initial shareholders until the earlier of (1) one year after the completion of our initial business combination and
(2) the date on which we consummate a liquidation, merger, amalgamation, share exchange, reorganization, or other similar
transaction after our initial business combination that results in all of our public shareholders having the right to exchange
their ordinary shares for cash, securities or other property. Notwithstanding the foregoing, if the last reported sale price of
our Class A ordinary shares equals or exceeds $12.50 per share (as adjusted for share sub-divisions, share dividends, rights
issuances, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing
at least 150 days after our initial business combination, 50% of the founder shares will be released from the lock-up. With certain
limited exceptions, the private units and the Class A ordinary shares, rights and warrants underlying such units, will not
be transferable, assignable or salable by our sponsor until 30 days after the completion of our initial business combination.
Since our sponsor and officers and directors may directly or indirectly own ordinary shares, rights and warrants 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 effectuate our initial business combination.
• Our
officers have agreed not to become an officer or director of any other special purpose acquisition company with a class of securities
registered under the Exchange Act, until we have entered into a definitive agreement regarding our initial business combination
or we have failed to complete our initial business combination within 15 months after the closing of this offering (or up to 21
months from the closing of this offering if we extend the period of time to consummate a business combination).
• Our
officers and directors 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 initial business combination
and as a result, may cause them to have conflicts of interest in determining whether to proceed with a particular 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.
The
conflicts described above may not be resolved in our favor.
Accordingly,
as a result of multiple business affiliations, our officers and directors have similar legal obligations relating to presenting
business opportunities meeting the above-listed criteria to multiple entities.
Below
is a table summarizing the entities to which our executive officers and directors currently have fiduciary duties or contractual
obligations:
|
Individual
|
|
Entity
|
|
Entity’s
Business
|
|
Affiliation
|
|
Jian
Zhang
|
|
Yunnan
Jimaoxin information Technology Co., Ltd.
|
|
Recruitment
Information Services
|
|
Director
|
|
|
|
Chongqing
Wangwang Supply Chain Management Co., Ltd.
|
|
Agricultural
products
|
|
Director
|
|
|
|
Shenzhen
Zenyi Tonglian Technology Co., Ltd.
|
|
Payment
technology
|
|
Director
|
|
|
|
Zhuhai
Meining Technology Co., Ltd
|
|
Distributed
storage technology
|
|
Director
|
|
|
|
Yunnan
Xiaosen Venture Capital Co., Ltd.
|
|
Internet
and social media
|
|
CEO &
Partner
|
|
|
|
Hangzhou
Hechuang Investment Management Co., Ltd.
|
|
Supply
chain
|
|
CEO
and Director
|
|
|
|
Tongzheng
Huilian Technology (Beijing) Co., Ltd.
|
|
Blockchain
tech
|
|
CEO
|
|
|
|
|
|
|
|
|
|
Jirong
Lyu
|
|
Dongguan
Taihua Tax Accountant Firm
|
|
Accounting
|
|
Partner and CFO
|
|
|
|
Shanghai
Shengkai Technology Co., Ltd.
|
|
E-commerce
|
|
CFO &
Manager
|
|
|
|
|
|
|
|
|
|
Yiwen
Ma
|
|
Kunming
Limit Technology Co., Ltd.
|
|
Mobile
communications
|
|
Software
Manager
|
|
|
|
|
|
|
|
|
|
John
Wallace
|
|
The
Delaware Board of Trade
|
|
Broker-dealer
|
|
Chairman &
CEO & President
|
|
|
|
Philadelphia
Financial Services, LLC
|
|
Financial
consulting
|
|
President &
CEO & Owner
|
|
|
|
Wallace
Securities Corp.
|
|
Financial
consulting
|
|
Owner
|
|
|
|
|
|
|
|
|
|
Ning
Wang
|
|
China
Electronics Chamber of Commerce
|
|
Electronic
information products
|
|
President
|
|
|
|
Jiu
Rong Holdings Ltd.
|
|
Investments
|
|
Director
|
|
|
|
Fibocom
Wireless Inc.
|
|
Wireless
services
|
|
Director
|
Accordingly,
if any of the above officers or directors become aware of a business combination opportunity which is suitable for any of the
above entities to which he or she has then-current fiduciary or contractual obligations, he or she may need to honor his or her
fiduciary or contractual obligations to present such business combination opportunity to such entity, and only present it to us
if such entity chooses not to pursue the opportunity, subject to their fiduciary duties under Cayman Islands law. We do not believe,
however, that any of the foregoing fiduciary duties or contractual obligations will materially affect our ability to complete
our initial business combination.
We
are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers
or directors. In the event we seek to complete our initial business combination with such a company, we would obtain an opinion
from an independent investment banking firm or from another independent entity that commonly renders valuation opinions, that
such an initial business combination is fair to our company from a financial point of view.
In
addition, our sponsor or any of its affiliates may make additional investments in the company in connection with the initial business
combination, although our sponsor and its affiliates have no obligation or current intention to do so. If our sponsor or any of
its affiliates elects to make additional investments, such proposed investments could influence our sponsor’s motivation
to complete an initial business combination.
In
the event that we submit our initial business combination to our public shareholders for a vote, our initial shareholders have
agreed, pursuant to the terms of a letter agreement entered into with us, to vote their founder shares (and their permitted transferees
will agree) and any public shares held by them in favor of our initial business combination. Our directors and officers have also
entered into the letter agreement, imposing similar obligations on them with respect to public shares acquired by them, if any.
Limitation
on Liability and Indemnification of Officers and Directors
Cayman
Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification
of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to
public policy, such as to provide indemnification against willful default, fraud or the consequences of committing a crime. Our
amended and restated memorandum and articles of association provide for indemnification of our officers and directors to the maximum
extent permitted by law, including for any liability incurred in their capacities as such, except through their own actual fraud,
willful default or willful neglect.
We
may purchase a policy of directors’ and officers’ liability insurance that insures our officers and directors against
the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify
our officers and directors. We also intend to enter into indemnity agreements with them.
Our
officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account,
and have agreed to waive any right, title, interest or claim of any kind they may have in the future as a result of, or arising
out of, any services provided to us and will not seek recourse against the trust account for any reason whatsoever. Accordingly,
any indemnification provided will only be able to be satisfied by us if we (i) have sufficient funds outside of the trust
account or (ii) consummate an initial business combination. Furthermore, a shareholder’s investment may be adversely
affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification
provisions.
We
believe that these provisions, the insurance and the indemnity agreements are necessary to attract and retain talented and experienced
officers and directors.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors and officers or persons controlling
us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable.
PRINCIPAL
SHAREHOLDERS
The
following table sets forth information regarding the beneficial ownership of our ordinary shares as of the date of this prospectus,
and as adjusted to reflect the sale of our Class A ordinary shares included in the units offered by this prospectus, and
assuming no purchase of units in this offering, by:
|
|
·
|
each
person known by us to be the beneficial owner of more than 5% of our issued and outstanding
ordinary shares;
|
|
|
·
|
each
of our officers, directors and director nominees; and
|
|
|
·
|
all
our officers, directors and director nominees 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
ordinary shares beneficially owned by them. The following table does not reflect record or beneficial ownership of any Class A
ordinary shares issuable upon conversion of rights or exercise of warrants, as the rights are not convertible, and the warrants
are not exercisable, within 60 days of the date of this prospectus.
The
post-offering ownership percentage column below assumes that the underwriters do not exercise the over-allotment option, that
our sponsor forfeits 150,000 founder shares and that there are 5,350,000 ordinary shares issued and outstanding after this offering.
|
|
|
Prior to Offering
|
|
|
After Offering
|
|
|
Name and Address of Beneficial Owner(1)
|
|
Amount and
Nature of
Beneficial
Ownership
|
|
|
Approximate
Percentage of
Outstanding
Ordinary
Shares(2)
|
|
|
Amount and
Nature of
Beneficial
Ownership(3)
|
|
|
Approximate
Percentage of
Outstanding
Ordinary
Shares
|
|
|
Xiaosen
Sponsor LLC (4)
|
|
|
1,150,000
|
|
|
|
100.0
|
%
|
|
|
1,250,000
|
|
|
|
23.4
|
%
|
|
Jian
Zhang (4)
|
|
|
1,150,000
|
|
|
|
100.0
|
%
|
|
|
1,250,000
|
|
|
|
23.4
|
%
|
|
Joseph
Valenza
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
John
Wallace
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Ning
Wang
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Jirong
Lyu
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Yiwen
Ma
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
All
directors and officers as a group (5 individuals)
|
|
|
1,150,000
|
|
|
|
100.0
|
%
|
|
|
1,250,000
|
|
|
|
23.4
|
%
|
*
Less than one percent.
(1) Unless
otherwise indicated, the business address of each of the individuals is Unit
1006, Block C, Jinshangjun Park, No. 2 Xiaoba Road, Panlong District, Kunming, Yunnan, China.
(2) Based
on 1,150,000 ordinary shares immediately prior to this offering.
(3) Includes
the 250,000 private units to be purchased by our sponsor simultaneously with the consummation of this offering.
(4) Represents
shares held by our sponsor. The shares held by our sponsor are beneficially owned by Jian
Zhang, our chief executive officer, who, as the manager of our sponsor, has voting and dispositive power over the shares held
by our sponsor.
Immediately
after this offering, our initial shareholders will beneficially own 20.0% of the then issued and outstanding ordinary shares (excluding
the private shares underlying the private units, the representative shares and any shares underlying units issued upon conversion
of working capital loans and any Class A ordinary shares or equity-linked securities issued, or to be issued, to any seller
in our initial business combination, and assuming our initial shareholders do not purchase any other units in this offering).
Prior to our initial business combination, only holders of our founder shares will have the right to vote on the appointment of
directors, and holders of a majority of our founder shares may remove a member of the board of directors for any reason. In addition,
because of their ownership block, our initial shareholders may be able to effectively influence the outcome of all other matters
requiring approval by our shareholders, including amendments to our amended and restated memorandum and articles of association
and approval of significant corporate transactions. If we increase or decrease the size of this offering, we will effect a capitalization
or share repurchase or redemption or other appropriate mechanism, as applicable, 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 ordinary shares upon the consummation of this offering (excluding the private shares underlying the private units,
the representative shares and any shares underlying units issued upon conversion of working capital loans and any Class A
ordinary shares or equity-linked securities issued, or to be issued, to any seller in our initial business combination).
Our
sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 250,000 (or 268,000 if the underwriters’
over-allotment option is exercised in full) private units at a price of $10.00 per unit ($2,500,000 in the aggregate or $2,680,000
in the aggregate if the underwriters’ over-allotment option is exercised in full) in a private placement that will occur
simultaneously with the closing of this offering. The purchase price of the private units will be added to the proceeds from this
offering to be held in the trust account. If we do not complete our initial business combination within 15 months from the closing
of this offering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business
combination), the proceeds of the sale of the private units held in the trust account will be used to fund the redemption of our
public shares, and the private units will expire worthless. The private units are subject to the transfer restrictions described
below. The warrants underlying the private units will not be redeemable by us so long as they are held by our sponsor or its permitted
transferees. If the warrants underlying the private units are held by holders other than our sponsor or its permitted transferees,
such warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units
being sold in this offering. Otherwise, the private warrants have terms and provisions that are identical to those of the warrants
being sold as part of the units in this offering.
Our
sponsor and our officers and directors are deemed to be our “promoters” as such term is defined under the federal
securities laws. See “Certain Relationships and Related Party Transactions” for additional information regarding our
relationships with our promoters.
Transfers
of Founder Shares and Private Warrants
The
founder shares, private units and any Class A ordinary shares issued upon conversion or exercise thereof are each subject
to transfer restrictions pursuant to lock-up provisions in the letter agreement with us to be entered into by our initial shareholders.
Those lock-up provisions provide that such securities are not transferable or salable (1) in the case of the founder shares,
until the earlier of (A) one year after the completion of our initial business combination or (B) subsequent to our
initial business combination, (x) for 50% of the founder shares, if the last reported sale price of the Class A ordinary
shares equals or exceeds $12.50 per share (as adjusted for share sub-divisions, share dividends, rights issuances, reorganizations,
recapitalizations and the like and as otherwise described in this prospectus) 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 following the completion of our
initial business combination on which we complete a liquidation, merger, amalgamation, share exchange, reorganization or other
similar transaction that results in all of our public shareholders having the right to exchange their Class A ordinary shares
for cash, securities or other property, and (2) in the case of the private units and the underlying securities, 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, any partners of our sponsor, or any affiliates of our sponsor,
(b) in the case of an individual, by gift to a member of the individual’s immediate family or to a trust, the beneficiary
of which is a member of the individual’s immediate family or 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 securities were originally purchased;
(f) in the event of our liquidation prior to our completion of our initial business combination; (g) by virtue of the
laws of the Cayman Islands or our sponsor’s limited liability company agreement, as amended, upon liquidation of our sponsor;
or (h) in the event of our completion of a liquidation, merger, amalgamation, share exchange, reorganization or other similar
transaction which results in all of our public shareholders having the right to exchange their Class A ordinary shares for
cash, securities or other property subsequent to our completion of our initial business combination; provided, however, that in
the case of clauses (a) through (e) and (g) these permitted transferees must enter into a written agreement agreeing
to be bound by these transfer restrictions.
Registration
Rights
The
holders of the founder shares, representative shares, private units and any warrants that may be issued on conversion of working
capital loans (and any securities underlying the private units or units issued upon conversion of the working capital loans and
Class A ordinary shares that may be issued upon conversion of the founder shares) will be entitled to registration rights
pursuant to a registration rights agreement to be signed prior to or on the effective date of this offering requiring us to register
such securities for resale. The holders of these securities will be entitled to make up to three demands, excluding short form
registration 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 and rights
to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration
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 (1) in the case of the founder shares, until the earlier
of (A) one year after the completion of our initial business combination or (B) subsequent to our initial business combination,
(x) for 50% of the founder shares, if the last reported sale price of the Class A ordinary shares equals or exceeds
$12.50 per share (as adjusted for share sub-divisions, share dividends, rights issuances, reorganizations, recapitalizations and
the like and as otherwise described in this prospectus) 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 following the completion of our initial business combination
on which we complete a liquidation, merger, amalgamation, share exchange, reorganization or other similar transaction that results
in all of our public shareholders having the right to exchange their Class A ordinary shares for cash, securities or other
property, and (2) in the case of the representative shares, private units and the securities underlying such units, 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
In
July 2020, our sponsor paid $25,000 to cover certain of our offering costs in consideration for 1,150,000 founder shares.
Our initial shareholders will collectively own 20% of our issued and outstanding shares after this offering (assuming our initial
shareholders do not purchase any other units in this offering and excluding the private shares underlying the private units, the
representative shares and any shares underlying units issued upon conversion of working capital loans and any Class A ordinary
shares or equity-linked securities issued, or to be issued, to any seller in our initial business combination). If we increase
or decrease the size of this offering, we will effect a capitalization or share repurchase or redemption or other appropriate
mechanism, as applicable, 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 ordinary shares upon the consummation of this
offering (excluding the private shares underlying the private units, the representative shares and any shares underlying units
issued upon conversion of working capital loans and any Class A ordinary shares or equity-linked securities issued, or to
be issued, to any seller in our initial business combination).
Our
sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 250,000 (or 268,000 if the underwriters’
over-allotment option is exercised in full) private units for a purchase price of $10.00 per unit in a private placement that
will occur simultaneously with the closing of this offering. The private units (including the securities underlying the private
units) may not, subject to certain limited exceptions, be transferred, assigned or sold by it until 30 days after the completion
of our initial business combination.
On
or prior to the date of this prospectus, we will enter into an administrative services agreement pursuant to which we will pay
our sponsor up to $10,000 per month for office space, administrative and support services. Upon completion of our initial business
combination or our liquidation, we will cease paying any of these monthly fees. Accordingly, in the event the consummation of
our initial business combination takes the maximum 15 months, our sponsor will be paid up to $10,000 per month ($150,000 in the
aggregate) for office space, administrative and support services and will be entitled to be reimbursed for any out-of-pocket expenses.
Our
sponsor, 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, officers,
directors or our or any of 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 has agreed to loan us up to $150,000 under an unsecured promissory note to be used for a portion of the expenses of this
offering. As of July 8, 2020, we had borrowed $15,000 under the promissory note with our sponsor to be used for a portion of the
expenses of this offering. These loans are non-interest bearing, unsecured and are due at the earlier of December 31, 2020
or the closing of this offering. These loans will be repaid upon completion of this offering out of the $550,000 of offering proceeds
that has been allocated for the payment of offering expenses (other than underwriting commissions) not held in the trust account.
The value of our sponsor’s interest in this loan transaction corresponds to the principal amount outstanding under any such
loan.
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.
Any such loans would be on an interest-free basis and would be repaid only from funds held outside the trust account or from funds
released to us upon completion of our initial business combination. Up to $1,500,000 of such loans may be convertible into units
at a price of $10.00 per unit, at the option of the lender. The units would be identical to the private units issued to our sponsor.
We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties
will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
After
our initial business combination, members of our management team who remain with us may be paid consulting, management or other
fees from the combined company with any and all amounts being fully disclosed to our shareholders, to the extent then known, in
the tender offer or proxy solicitation materials, as applicable, furnished to our shareholders. It is unlikely the amount of such
compensation will be known at the time of distribution of such tender offer materials or at the time of a general meeting held
to consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business
to determine executive and director compensation.
We
have entered into a registration rights agreement with respect to the founder shares, representative shares, private units and
units issued upon conversion of working capital loans (if any), which is described under the heading “Principal Shareholders—Registration
Rights.”
Related
Party Policy
We
have not yet adopted a formal policy for the review, approval or ratification of related party transactions. Accordingly, the
transactions discussed above were not reviewed, approved or ratified in accordance with any such policy.
Prior
to the consummation of this offering, we will adopt our Code of Ethics requiring us to avoid, wherever possible, all conflicts
of interests, except under guidelines or resolutions approved by our board of directors (or the appropriate committee of our board)
or as disclosed in our public filings with the SEC. Under our Code of Ethics, conflict of interest situations will include any
financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) involving the company.
In
addition, our audit committee, pursuant to a written charter that we will adopt prior to the consummation of this offering, will
be responsible for reviewing and approving related party transactions to the extent that we enter into such transactions. An affirmative
vote of a majority of the members of the audit committee present at a meeting at which a quorum is present will be required in
order to approve a related party transaction. A majority of the members of the entire audit committee will constitute a quorum.
Without a meeting, the unanimous written consent of all of the members of the audit committee will be required to approve a related
party transaction. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers or
directors, or our or any of their affiliates.
These
procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents
a conflict of interest on the part of a director, employee or officer.
To
further minimize conflicts of interest, we have agreed not to consummate an initial business combination with an entity that is
affiliated with any of our sponsor, officers or directors unless we, or a committee of independent and disinterested directors,
have obtained an opinion from an independent investment banking firm or another independent entity that commonly renders valuation
opinions that our initial business combination is fair to our company from a financial point of view.
Furthermore,
no finder’s fees, reimbursements or cash payments will be made by us to our sponsor, officers or directors, or our or any
of 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 units
held in the trust account prior to the completion of our initial business combination:
• Repayment
of an aggregate of up to $150,000 in loans that may be made to us by our sponsor to cover offering-related and organizational
expenses;
• Payment
to our sponsor of up to $10,000 per month for office space, administrative and support services;
• Payment
of consulting, success or finder fees to our sponsor, officers, directors, initial shareholders or their affiliates in connection
with the consummation of our initial business combination;
• Reimbursement
for any out-of-pocket expenses related to identifying, investigating 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 units,
at a price of $10.00 per unit, at the option of the lender.
The
above payments may be funded using the net proceeds of this offering and the sale of the private units not held in the trust account
or, upon completion of the initial business combination, from any amounts remaining from the proceeds of the trust account released
to us in connection therewith.
DESCRIPTION
OF SECURITIES
We
are a Cayman Islands exempted company (company number 363925) and our affairs will be governed by our amended and restated memorandum
and articles of association, the Companies Law and common law of the Cayman Islands. Pursuant to our amended and restated memorandum
and articles of association which will be adopted upon the consummation of this offering, we will be authorized to issue ordinary
shares, including 200,000,000 Class A ordinary shares, $0.0001 par value each, and 20,000,000 Class B ordinary shares,
par value $0.0001 per share, as well as 1,000,000 undesignated preference shares, $0.0001 par value each. The following description
summarizes the material terms of our shares as set out more particularly in our amended and restated memorandum and articles of
association. Because it is only a summary, it may not contain all the information that is important to you.
Units
Each
unit consists of one Class A ordinary share, one right and one-half of one warrant. Each right entitles the holder thereof
to receive one-tenth (1/10) of one Class A ordinary share upon the consummation of an initial business combination. Each
whole warrant entitles the holder to purchase one Class A ordinary share. Pursuant to the warrant agreement, a warrant holder
may exercise its warrants only for a whole number of Class A ordinary shares. This means that only a warrant may be exercised
at any given time by a warrant holder.
The
Class A ordinary shares, rights and warrants will begin to trade separately on the 90th day after the date of
this prospectus unless EarlyBirdCapital, Inc. informs us of its decision to allow earlier separate trading, provided that
in no event may the Class A ordinary shares, rights and warrants be traded separately until we have filed with the SEC a
Current Report on Form 8-K which includes an audited balance sheet reflecting our receipt of the gross proceeds of this offering.
Once the Class A ordinary shares, rights and warrants commence separate trading, holders will have the option to continue
to hold units or separate their units into the component pieces.
We
will file a Current Report on Form 8-K which includes an audited balance sheet promptly upon the consummation of this offering.
The audited balance sheet will reflect proceeds we receive from the exercise of the over-allotment option, if the over-allotment
option is exercised on the date of this prospectus. If the over-allotment option is exercised after the date of this prospectus,
we will file an amendment to the Form 8-K to provide updated financial information to reflect the exercise of the over-allotment
option. We will also include in this Form 8-K, an amendment thereto, or in a subsequent Form 8-K information indicating
if EarlyBirdCapital, Inc. has allowed separate trading of the Class A ordinary shares, rights and warrants prior to
the 90th day after the date of this prospectus.
Ordinary
Shares
Prior
to the date of this prospectus, there were 1,250,000 Class B ordinary shares issued and outstanding, 1,150,000 of which were
held of record by our sponsor. Our sponsor will forfeit up to 150,000 Class B ordinary shares depending on the extent to
which the underwriters’ over-allotment is not exercised so that our sponsor will own 20% of our issued and outstanding shares
after this offering (excluding the private shares underlying the private units, the representative shares and any shares underlying
units issued upon conversion of working capital loans and any Class A ordinary shares or equity-linked securities issued,
or to be issued, to any seller in our initial business combination, and assuming our initial shareholder does not purchase any
units in this offering). Upon the closing of this offering, 5,350,000 ordinary shares will be issued and outstanding (assuming
no exercise of the underwriters’ over-allotment option and forfeiture of 150,000 Class B ordinary shares by our sponsor)
including:
• 4,250,000
Class A ordinary shares underlying the units being offered in this offering and the private placement;
• 1,000,000
Class B ordinary shares held by our initial shareholders; and
• 100,000
Class B ordinary shares held by EarlyBirdCapital, Inc. and its designees.
If
we increase or decrease the size of this offering, we will effect a capitalization or share repurchase or redemption or other
appropriate mechanism, as applicable, 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 ordinary shares upon the consummation
of this offering (excluding the private shares underlying the private units, the representative shares and any shares underlying
units issued upon conversion of working capital loans and any Class A ordinary shares or equity-linked securities issued,
or to be issued, to any seller in our initial business combination).
Class A
ordinary shareholders and Class B ordinary shareholders of record are entitled to one vote for each share held on all matters
to be voted on by shareholders, except as required by law; provided that, prior to our initial business combination, only holders
of our Class B ordinary shares will have the right to vote on the appointment of directors, and holders of a majority of
our Class B ordinary shares may remove a member of the board of directors for any reason. With respect to any other matter
submitted to a vote of our shareholders, including any vote in connection with our initial business combination, except as required
by law, holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class.
Unless specified in the Companies Law, our amended and restated memorandum and articles of association or applicable stock exchange
rules, the affirmative vote of a majority of our ordinary shares that are voted is required to approve any such matter voted on
by our shareholders. Approval of certain actions will require a special resolution under Cayman Islands law and pursuant to our
amended and restated memorandum and articles of association; such actions include amending our amended and restated memorandum
and articles of association and approving a statutory merger or consolidation with another company. Directors are appointed for
a term of two years. There is no cumulative voting with respect to the appointment of directors, with the result that the holders
of more than 50% of the founder shares voted for the appointment of directors can elect all of the directors prior to our initial
business combination. Our shareholders are entitled to receive ratable dividends when, as and if declared by the board of directors
out of funds legally available therefor.
Because
our amended and restated memorandum and articles of association authorize the issuance of up to 200,000,000 Class A ordinary
shares, if we were to enter into a business combination, we may (depending on the terms of such a business combination) be required
to increase the number of Class A ordinary shares which we are authorized to issue at the same time as our shareholders vote
on the business combination to the extent we seek shareholder approval in connection with our initial business combination.
In
accordance with Nasdaq corporate governance requirements, we are not required to hold an annual general meeting until one year
after our first fiscal year end following our listing on Nasdaq. There is no requirement under the Companies Law for us to hold
annual or extraordinary general meetings to appoint directors. Until we hold an annual general meeting, public shareholders may
not be afforded the opportunity to discuss company affairs with management.
We
will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion
of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the
trust account as of two business days prior to the consummation of our initial business combination, including interest (which
interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, subject to the limitations
described herein. At the completion of our initial business combination, we will be required to purchase any Class A ordinary
shares properly delivered for redemption and not withdrawn. The amount in the trust account is initially anticipated to be $10.00
per public share. Additionally, each public shareholder may elect to redeem its public shares without voting and, if they do vote,
irrespective of whether they vote for or against the proposed business combination. Our initial shareholders have entered into
a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder
shares and any public shares held by them in connection with the completion of our initial business combination. Our directors
and officers have also entered into the letter agreement, imposing similar obligations on them with respect to public shares acquired
by them, if any. Permitted transferees of our initial shareholders, officers or directors will be subject to the same obligations.
If
we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provide
that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting
in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming
its shares with respect to more than an aggregate of 15% of the ordinary shares sold in this offering, which we refer to as the
“Excess Shares,” without our prior consent. However, we would not be restricting our shareholders’ ability to
vote all of their shares (including Excess Shares) for or against our initial business combination. Our shareholders’ inability
to redeem the Excess Shares will reduce their influence over our ability to complete our initial business combination, and such
shareholders could suffer a material loss in their investment if they sell such Excess Shares on the open market. Additionally,
such shareholders will not receive redemption distributions with respect to the Excess Shares if we complete the business combination.
As a result, such shareholders will continue to hold that number of shares exceeding 15% and, in order to dispose such shares
would be required to sell their shares in open market transactions, potentially at a loss.
If
we seek shareholder approval in connection with our initial business combination, our initial shareholders have agreed (and their
permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, to vote their founder shares
and any public shares held by them in favor of our initial business combination. As a result, in addition to our initial shareholders’
founder shares and private shares and the representative shares, we would need 1,325,001, or 33.1%, of the 4,000,000 public shares
sold in this offering to be voted in favor of a transaction (assuming all issued and outstanding shares are voted and the over-allotment
option is not exercised), subject to any higher threshold as is required by Cayman Islands or other applicable law, in order to
have such initial business combination approved. Our directors and officers have also entered into the letter agreement, imposing
similar obligations on them with respect to public shares acquired by them, if any.
Pursuant
to our amended and restated memorandum and articles of association, if we are unable to complete our initial business combination
within 15 months from the closing of this offering (or up to 21 months from the closing of this offering if we extend the period
of time to consummate a business combination), we will (1) cease all operations except for the purpose of winding up, (2) as
promptly as reasonably possible but not more than 10 business days thereafter, redeem 100% of the public shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $50,000
of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued
and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including
the right to receive further liquidating distributions, if any) and (3) as promptly as reasonably possible following such
redemption, subject to the approval of our remaining shareholders and our board of directors, dissolve and liquidate, subject
in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable
law. Our initial shareholders have entered into a letter agreement with us, pursuant to which they have agreed to waive their
rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial
business combination within 15 months (or up to 21 months) from the closing of this offering. However, if our initial shareholders
acquire public shares after this offering, they will be entitled to liquidating distributions from the trust account with respect
to such public shares if we fail to complete our initial business combination within the prescribed time period.
In
the event of a liquidation, dissolution or winding up of the company after a business combination, our shareholders at such time
will be entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and
after provision is made for each class of shares, if any, having preference over the ordinary shares. Our shareholders have no
preemptive or other subscription rights. There are no sinking fund provisions applicable to the ordinary shares, except that we
will provide our shareholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the
aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable), upon
the completion of our initial business combination, subject to the limitations described herein.
Founder
Shares and Private Shares
The
founder shares are designated as Class B ordinary shares and are identical to the Class A ordinary shares included in
the units being sold in this offering, and holders of founder shares and private shares have the same shareholder rights as public
shareholders, except that: (1) prior to our initial business combination, only holders of the founder shares have the right
to vote on the appointment of directors and holders of a majority of our founder shares may remove a member of the board of directors
for any reason; (2) the founder shares and private shares are subject to certain transfer restrictions, as described in more
detail below; (3) our initial shareholders have entered into a letter agreement with us, pursuant to which they have agreed
to waive: (x) their redemption rights with respect to their founder shares, private shares and any public shares held by
them in connection with the completion of our initial business combination (and not seek to sell its shares to us in any tender
offer we undertake in connection with our initial business combination); (y) their redemption rights with respect to their
founder shares, private shares and any public shares held by them in connection with a shareholder vote to approve an amendment
to our amended and restated memorandum and articles of association (A) that would affect our public shareholders’ ability
to convert or sell their shares to us in connection with a business combination as described herein or 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
15 months from the closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time
to consummate a business combination) or (B) with respect to any other provision relating to shareholders’ rights or
pre-initial business combination activity; and (z) their rights to liquidating distributions from the trust account with
respect to any founder shares or private shares they hold if we fail to complete our initial business combination within 15 months
(or up to 21 months) from the closing of this offering (although they will be entitled to liquidating distributions from the trust
account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed
time frame); (4) the founder shares will automatically convert into our Class A ordinary shares as described below and
(5) the founder shares and private shares are entitled to registration rights. In addition, our directors and officers have
also entered into the letter agreement with respect to public shares acquired by them, if any.
The
founder shares will automatically convert into Class A ordinary shares on the first business day following the completion
of our initial business combination on a one-for-one basis, subject to adjustment as provided herein. In the case that additional
Class A ordinary shares, or equity-linked securities convertible or exercisable for Class A ordinary shares, are issued
or deemed issued in excess of the amounts issued in this offering and related to the closing of our initial business combination,
the ratio at which founder shares will convert into Class A ordinary shares will be adjusted (subject to waiver by holders
of a majority of the Class B ordinary shares then in issue) so that the number of Class A ordinary shares issuable upon
conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of our ordinary
shares issued and outstanding upon the completion of this offering plus the number of Class A ordinary shares and equity-linked
securities issued or deemed issued in connection with our initial business combination (net of redemptions), excluding the private
shares underlying the private units, the representative shares, any shares underlying units issued upon conversion of working
capital loans and any Class A ordinary shares or equity-linked securities issued, or to be issued, to any seller in our initial
business combination.
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) for 50% of the founder shares, if the last reported sale price of the Class A ordinary shares
equals or exceeds $12.50 per share (as adjusted for share sub-divisions, share dividends, rights issuances, reorganizations, recapitalizations
and the like and as otherwise described in this prospectus) 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 following the completion of our initial business
combination on which we complete a liquidation, merger, amalgamation, share exchange, reorganization or other similar transaction
that results in all of our public shareholders having the right to exchange their Class A ordinary shares for cash, securities
or other property.
Register
of Members
Under
Cayman Islands law, we must keep a register of members and there will be entered therein:
• the
names and addresses of the members, a statement of the shares held by each member, and of the amount paid or agreed to be considered
as paid, on the shares of each member and the voting rights of shares of each member;
• whether
voting rights are attached to the share in issue;
• the
date on which the name of any person was entered on the register as a member; and
• the
date on which any person ceased to be a member.
Under
Cayman Islands law, the register of members of our company is prima facie evidence of the matters set out therein (i.e., the register
of members will raise a presumption of fact on the matters referred to above unless rebutted) and a member registered in the register
of members will be deemed as a matter of Cayman Islands law to have legal title to the shares as set against its name in the register
of members. Upon the closing of this public offering, the register of members will be immediately updated to reflect the issue
of shares by us. Once our register of members has been updated, the shareholders recorded in the register of members will be deemed
to have legal title to the shares set against their name. However, there are certain limited circumstances where an application
may be made to a Cayman Islands court for a determination on whether the register of members reflects the correct legal position.
Further, the Cayman Islands court has the power to order that the register of members maintained by a company should be rectified
where it considers that the register of members does not reflect the correct legal position. If an application for an order for
rectification of the register of members were made in respect of our ordinary shares, then the validity of such shares may be
subject to re-examination by a Cayman Islands court.
Preference
Shares
Our
amended and restated memorandum and articles of association authorize 1,000,000 preference shares and will provide that preference
shares may be issued from time to time in one or more series. Our board of directors will be authorized to fix the voting rights,
if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications,
limitations and restrictions thereof, applicable to the shares of each series. Our board of directors will be able to, without
shareholder approval, issue preference shares with voting and other rights that could adversely affect the voting power and other
rights of the holders of the ordinary shares and could have anti-takeover effects. The ability of our board of directors to issue
preference shares without shareholder approval could have the effect of delaying, deferring or preventing a change of control
of us or the removal of existing management. We have no preference shares issued and outstanding at the date hereof. Although
we do not currently intend to issue any preference shares, we cannot assure you that we will not do so in the future. No preference
shares are being issued or registered in this offering.
Rights
Each
holder of a right will receive one-tenth (1/10) of one Class A ordinary share upon consummation of our initial business combination,
even if the holder of such right redeemed all Class A ordinary shares held by him, her or it in connection with the initial business
combination or an amendment to our Memorandum and Articles of Association with respect to our pre-business combination activities.
No additional consideration will be required to be paid by a holder of rights in order to receive his, her or its additional Class A
ordinary shares upon consummation of an initial business combination as the consideration related thereto has been included in
the unit purchase price paid for by investors in this offering. The shares issuable upon exchange of the rights will be freely
tradable (except to the extent held by affiliates of ours).
If
we enter into a definitive agreement for a business combination in which we will not be the surviving entity, the definitive agreement
will provide for the holders of rights to receive the same per share consideration the holders of the Class A ordinary share
will receive in the transaction on an as-converted into ordinary share basis, and each holder of a right will be required to affirmatively
convert his, her or its rights in order to receive the 1/10 share underlying each right (without paying any additional consideration)
upon consummation of the business combination. More specifically, the right holder will be required to indicate his, her or its
election to convert the rights into underlying shares as well as to return the original rights certificates to us. If we are unable
to complete an initial business combination within the required time period and we liquidate the funds held in the trust account,
holders of rights will not receive any of such funds with respect to their rights, nor will they receive any distribution from
our assets held outside of the trust account with respect to such rights, and the rights will expire worthless.
As
soon as practicable upon the consummation of our initial business combination, we will direct registered holders of the rights
to return their rights to our rights agent. Upon receipt of the rights, the rights agent will issue to the registered holder of
such right(s) the number of full Class A ordinary shares to which he, she or it is entitled. We will notify registered holders
of the rights to deliver their rights to the rights agent promptly upon consummation of such business combination and have been
informed by the rights agent that the process of exchanging their rights for ordinary shares should take no more than a matter
of days. The foregoing exchange of rights is solely ministerial in nature and is not intended to provide us with any means of
avoiding our obligation to issue the shares underlying the rights upon consummation of our initial business combination. Other
than confirming that the rights delivered by a registered holder are valid, we will have no ability to avoid delivery of the shares
underlying the rights. Nevertheless, there are no contractual penalties for failure to deliver securities to the holders of the
rights upon consummation of an initial business combination. Additionally, in no event will we be required to net cash settle
the rights. Accordingly, the rights may expire worthless.
Although
a company incorporated in the Cayman Islands may issue fractional shares, it is not our intention to issue any fractional shares
upon conversions of the rights. In the event that any holder would otherwise be entitled to any fractional share upon exchange
of his, her or its rights, we will reserve the option, to the fullest extent permitted by the Memorandum and Articles of Association,
the Act and other applicable law, to deal with any such fractional entitlement at the relevant time as we see fit, which would
include the rounding down of any entitlement to receive ordinary shares to the nearest whole share (and in effect extinguishing
any fractional entitlement), or the holder being entitled to hold any remaining fractional entitlement (without any share being
issued) and to aggregate the same with any future fractional entitlement to receive shares in the Company until the holder is
entitled to receive a whole number. Any rounding down and extinguishment may be done with or without any in lieu cash payment
or other compensation being made to the holder of the relevant rights, such that value received on exchange of the rights may
be considered less than the value that the holder would otherwise expect to receive. All holders of rights shall be treated in
the same manner with respect to the issuance of shares upon conversions of the rights
Warrants
No
warrants are currently outstanding. Each whole warrant entitles the registered holder to purchase one Class A ordinary share
at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing on the later of 30 days after
the completion of an initial business combination or 12 months from the closing of this offering. However, no warrants will be
exercisable for cash unless we have an effective and current registration statement covering the Class A ordinary shares
issuable upon exercise of the warrants and a current prospectus relating to such Class A ordinary shares. Notwithstanding
the foregoing, if a registration statement covering the Class A ordinary shares issuable upon exercise of the public warrants
is not effective within 60 business days following the consummation of our initial business combination, warrant holders may,
until such time as there is an effective registration statement and during any period when we shall have failed to maintain an
effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of
the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders
will not be able to exercise their warrants on a cashless basis. In such event, each holder would pay the exercise price by surrendering
the warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of
the number of Class A ordinary shares underlying the warrants, multiplied by the difference between the exercise price of
the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market
value” for this purpose will mean the average reported last sale price of the Class A ordinary shares for the 5 trading
days ending on the trading day prior to the date of exercise. The warrants will expire on the fifth anniversary of our completion
of an initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
The
private warrants, as well as any warrants underlying additional units we issue to our sponsor, officers, directors or their affiliates
in payment of working capital loans made to us, will be identical to the warrants underlying the units being offered by this prospectus
except that such private warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and will
not be redeemable by us, in each case so long as they are still held by our sponsor or its permitted transferees.
We
may call the warrants for redemption (excluding the warrants underlying the private units and any additional units issued to our
sponsor, initial shareholders, officers, directors or their affiliates in payment of working capital loans made to us), in whole
and not in part, at a price of $0.01 per warrant,
• at
any time after the warrants become exercisable,
• upon
not less than 30 days’ prior written notice of redemption to each warrant holder,
• if,
and only if, the reported last sale price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted
for share sub-divisions, share dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading
day period commencing after the warrants become exercisable and ending on the third business day prior to the notice of redemption
to warrant holders; and
• if,
and only if, there is a current registration statement in effect with respect to the Class A ordinary shares underlying such
warrants.
The
right to exercise will be forfeited unless the warrants are exercised prior to the date specified in the notice of redemption.
On and after the redemption date, a record holder of a warrant will have no further rights except to receive the redemption price
for such holder’s warrant upon surrender of such warrant.
The
redemption criteria for our warrants have been established at a price which is intended to provide warrant holders a reasonable
premium to the initial exercise price and provide a sufficient differential between the then-prevailing share price and the warrant
exercise price so that if the share price declines as a result of our redemption call, the redemption will not cause the share
price to drop below the exercise price of the warrants.
If
we call the warrants for redemption as described above, our management will have the option to require all holders that wish to
exercise warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering
the warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of
the number of Class A ordinary shares underlying the warrants, multiplied by the difference between the exercise price of
the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market
value” shall mean the average reported last sale price of the Class A ordinary shares for the 5 trading days ending
on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants.
The
warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company,
as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of
any holder to cure any ambiguity or correct any defective provision, but requires the approval, by written consent or vote, of
the holders of at least 50% of the then outstanding public warrants in order to make any change that adversely affects the interests
of the registered holders.
The
exercise price and number of Class A ordinary shares issuable on exercise of the warrants may be adjusted in certain circumstances
including in the event of a share dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation.
However, the warrants will not be adjusted for issuances of Class A ordinary shares at a price below their respective exercise
prices.
In
addition, if (x) we issue additional Class A ordinary shares or equity-linked securities for capital raising purposes
in connection with the closing of our initial business combination at a Newly Issued Price of less than $9.20 per Class A
ordinary share, (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds,
and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial
business combination (net of redemptions), and (z) the Market Value is below $9.20 per share, then the exercise price of
the warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of (i) the Market Value or (ii) the
Newly Issued Price and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180%
of the greater of (i) the Market Value or (ii) the Newly Issued Price.
The
warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant
agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied
by full payment of the exercise price, by certified or official bank check payable to us, for the number of warrants being exercised.
The warrant holders do not have the rights or privileges of holders of Class A ordinary shares and any voting rights until
they exercise their warrants and receive Class A ordinary shares. After the issuance of Class A ordinary shares upon
exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on
by shareholders.
Under
the terms of the warrant agreement, we have agreed to use our best efforts to have declared effective a prospectus relating to
the Class A ordinary shares issuable upon exercise of the warrants and keep such prospectus current until the expiration
of the warrants. However, we cannot assure you that we will be able to do so and, if we do not maintain a current prospectus relating
to the Class A ordinary shares issuable upon exercise of the warrants, holders will be unable to exercise their warrants
for cash and we will not be required to net cash settle or cash settle the warrant exercise.
Warrant
holders may elect to be subject to a restriction on the exercise of their warrants such that an electing warrant holder would
not be able to exercise their warrants to the extent that, after giving effect to such exercise, such holder would beneficially
own in excess of 9.8% of the Class A ordinary shares outstanding.
No
fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled
to receive a fractional interest in a share, we will, upon exercise, round up to the nearest whole number the number of Class A
ordinary shares to be issued to the warrant holder.
We
have agreed that, subject to applicable law, any action, proceeding or claim against us arising out of or relating in any way
to the warrant agreement will be brought and enforced in the courts of the State of New York or the United States District Court
for the Southern District of New York, and we irrevocably submit to such jurisdiction, which jurisdiction will be the exclusive
forum for any such action, proceeding or claim. See “Risk Factors — Our warrant agreement will designate the courts
of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum
for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of
warrant holders to obtain a favorable judicial forum for disputes with our company.” This provision applies to claims under
the Securities Act but does not apply to claims under the Exchange Act or any claim for which the federal district courts of the
United States of America are the sole and exclusive forum. We note, however, that there is uncertainty as to whether a court would
enforce this provision and that investors cannot waive compliance with the federal securities laws and the rules and regulations
thereunder.
Dividends
We
have not paid any cash dividends on our Class A ordinary shares to date and do not intend to pay cash dividends prior to
the completion of a business combination. The payment of cash dividends in the future will be dependent upon our revenues and
earnings, if any, capital requirements and general financial condition subsequent to completion of a business combination. The
payment of any dividends subsequent to a business combination will be within the discretion of our then board of directors. It
is the present intention of our board of directors to retain all earnings, if any, for use in our business operations and, accordingly,
our board does not anticipate declaring any dividends in the foreseeable future.
Our
Transfer Agent, Rights Agent and Warrant Agent
The
transfer agent for our ordinary shares, the rights agent for our rights and warrant agent for our warrants is Continental Stock
Transfer & Trust Company. We have agreed to indemnify Continental Stock Transfer & Trust Company in its roles
as transfer agent, rights agent and warrant agent, its agents and each of its shareholders, directors, officers and employees
against all liabilities, including judgments, costs and reasonable counsel fees that may arise out of acts performed or omitted
for its activities in that capacity, except for any liability due to any gross negligence, willful misconduct or bad faith of
the indemnified person or entity.
Certain
Differences in Corporate Law
Cayman
Islands companies are governed by the Companies Law. The Companies Law is modeled on English Law but does not follow recent English
Law statutory enactments and differs from laws applicable to United States corporations and their shareholders. Set forth below
is a summary of the material differences between the provisions of the Companies Law applicable to us and the laws applicable
to companies incorporated in the United States and their shareholders.
Mergers
and Similar Arrangements. In certain circumstances, the Companies
Law allows for mergers or consolidations between two Cayman Islands companies, or between a Cayman Islands exempted company and
a company incorporated in another jurisdiction (provided that is facilitated by the laws of that other jurisdiction).
Where
the merger or consolidation is between two Cayman Islands companies, the directors of each company must approve a written plan
of merger or consolidation containing certain prescribed information. That plan of merger or consolidation must then be authorized
by (a) a special resolution (at least a majority of 66 2/3% in value who attend and vote at a general meeting) of the shareholders
of each company; and (b) such other authorization, if any, as may be specified in such constituent company’s articles
of association. No shareholder resolution is required for a merger between a parent company (i.e., a company that owns at least
90% of the issued shares of each class in a subsidiary company) and its subsidiary company. The consent of each holder of a fixed
or floating security interest of a constituent company must be obtained, unless the court waives such requirement. If the Cayman
Islands Registrar of Companies is satisfied that the requirements of the Companies Law (which includes certain other formalities)
have been complied with, the Registrar of Companies will register the plan of merger or consolidation.
Where
the merger or consolidation involves a foreign company, the procedure is similar, save that with respect to the foreign company,
the directors of the Cayman Islands exempted company are required to make a declaration to the effect that, having made due enquiry,
they are of the opinion that the requirements set out below have been met: (1) that the merger or consolidation is permitted
or not prohibited by the constitutional documents of the foreign company and by the laws of the jurisdiction in which the foreign
company is incorporated, and that those laws and any requirements of those constitutional documents have been or will be complied
with; (2) that no petition or other similar proceeding has been filed and remains outstanding or order made or resolution
adopted to wind up or liquidate the foreign company in any jurisdictions; (3) that no receiver, trustee, administrator or
other similar person has been appointed in any jurisdiction and is acting in respect of the foreign company, its affairs or its
property or any part thereof; and (4) that no scheme, order, compromise or other similar arrangement has been entered into
or made in any jurisdiction whereby the rights of creditors of the foreign company are and continue to be suspended or restricted;
and (5) there is no other reason why it would be against the public interest to permit the merger or consolidation.
Where
the surviving company is the Cayman Islands exempted company, the directors of the Cayman Islands exempted company are further
required to make a declaration to the effect that, having made due enquiry, they are of the opinion that the requirements set
out below have been met: (1) that the foreign company is able to pay its debts as they fall due and that the merger or consolidated
is bona fide and not intended to defraud unsecured creditors of the foreign company; (2) that in respect of the transfer
of any security interest granted by the foreign company to the surviving or consolidated company (a) consent or approval
to the transfer has been obtained, released or waived; (b) the transfer is permitted by and has been approved in accordance
with the constitutional documents of the foreign company; and (c) the laws of the jurisdiction of the foreign company with
respect to the transfer have been or will be complied with; and (3) that the foreign company will, upon the merger or consolidation
becoming effective, cease to be incorporated, registered or exist under the laws of the relevant foreign jurisdiction.
The
Companies Law provides for a right of dissenting shareholders to be paid a payment of the fair value of his or her shares upon
their dissenting to the merger or consolidation in certain circumstances if they follow a prescribed procedure. In essence, where
such rights apply, that procedure is as follows: (a) the shareholder must give his or her written objection to the merger
or consolidation to the constituent company before the vote on the merger or consolidation, including a statement that the shareholder
proposes to demand payment for his or her shares if the merger or consolidation is authorized by the vote; (b) within 20
days following the date on which the merger or consolidation is approved by the shareholders, the constituent company must give
written notice to each shareholder who made a written objection; (c) a shareholder must within 20 days following receipt
of such notice from the constituent company, give the constituent company a written notice of his or her intention to dissent
including, among other details, a demand for payment of the fair value of his or her shares; (d) within seven days following
the date of the expiration of the period set out in paragraph (b) above or seven days following the date on which the plan
of merger or consolidation is filed, whichever is later, the constituent company, the surviving company or the consolidated company
must make a written offer to each dissenting shareholder to purchase his or her shares at a price that the company determines
is the fair value and if the company and the shareholder agrees to the price within 30 days following the date on which the offer
was made, the company must pay the shareholder such amount; and (e) if the company and the shareholder fails to agree to
a price within such 30-day period, within 20 days following the date on which such 30-day period expires, the company (and any
dissenting shareholder) must file a petition with the Cayman Islands Grand Court to determine the fair value and such petition
must be accompanied by a list of the names and addresses of the dissenting shareholders with whom agreements as to the fair value
of their shares have not been reached by the company. At the hearing of that petition, the court has the power to determine the
fair value of the shares together with a fair rate of interest, if any, to be paid by the company upon the amount determined to
be the fair value. Any dissenting shareholder whose name appears on the list filed by the company may participate fully in all
proceedings until the determination of fair value is reached. These rights of a dissenting shareholder are not to be available
in certain circumstances, for example, to dissenters holding shares of any class in respect of which an open market exists on
a recognized stock exchange or recognized interdealer quotation system at the relevant date or where the consideration for such
shares to be contributed are shares of any company listed on a national securities exchange or shares of the surviving or consolidated
company, or in the context of a parent and subsidiary merger.
Moreover,
Cayman Islands law also has separate statutory provisions that facilitate the reconstruction or amalgamation of companies in certain
circumstances, such schemes of arrangement will generally be more suited for complex mergers or other transactions involving widely
held companies, commonly referred to in the Cayman Islands as a “scheme of arrangement” which may be tantamount to
a merger. In the event that a merger was sought pursuant to a scheme of arrangement (the procedures of which are more rigorous
and take longer to complete than the procedures typically required to consummate a merger in the United States), the arrangement
in question must be approved by a majority in number of each class of shareholders and creditors with whom the arrangement is
to be made and who must in addition represent three-fourths in value of each such class of shareholders or creditors, as the case
may be, that are present and voting either in person or by proxy at a meeting, or meeting summoned for that purpose. The convening
of the meetings and subsequently the terms of the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While
a dissenting shareholder would have the right to express to the court the view that the transaction should not be approved, the
court can be expected to approve the arrangement if it is satisfied that:
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we
are not proposing to act illegally or beyond the scope of our corporate authority and
we have complied with the statutory provisions as to majority vote;
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the
shareholders have been fairly represented at the meeting in question;
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the
arrangement is such as a business-person would reasonably approve; and
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the
arrangement is not one that would more properly be sanctioned under some other provision
of the Companies Law or that would amount to a “fraud on the minority.”
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If
a scheme of arrangement or takeover offer (as described below) is approved, any dissenting shareholder would have no rights comparable
to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of U.S. corporations, providing
rights to receive payment in cash for the judicially determined value of the shares.
Squeeze-out
Provisions. When a takeover offer is made and accepted by
holders of 90% of the shares to whom the offer relates within four months, the offeror may, within a two-month period, require
the holders of the remaining shares to transfer such shares on the terms of the offer. An objection can be made to the Grand Court
of the Cayman Islands, but this is unlikely to succeed unless there is evidence of fraud, bad faith, collusion or inequitable
treatment of the shareholders.
Further,
transactions similar to a merger, reconstruction and/or an amalgamation may in some circumstances be achieved through other means
to these statutory provisions, such as a share capital exchange, asset acquisition or control, through contractual arrangements,
of an operating business.
Shareholders’
Suits. Maples and Calder, our Cayman Islands legal counsel,
is not aware of any reported class action having been brought in a Cayman Islands court. Derivative actions have been brought
in the Cayman Islands courts, and the Cayman Islands courts have confirmed the availability of such actions. In most cases, we
will be the proper plaintiff in any claim based on a breach of duty owed to us, and a claim against (for example) our officers
or directors usually may not be brought by a shareholder. However, based both on Cayman Islands authorities and on English authorities,
which would in all likelihood be of persuasive authority and applied by a court in the Cayman Islands, exceptions to the foregoing
principle apply in circumstances in which:
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a
company is acting, or proposing to act, illegally or beyond the scope of its authority;
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the
act complained of, although not beyond the scope of the authority, could be effected
if duly authorized by more than the number of votes that have actually been obtained;
or
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those
who control the company are perpetrating a “fraud on the minority.”
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A
shareholder may have a direct right of action against us where the individual rights of that shareholder have been infringed or
are about to be infringed.
Enforcement
of Civil Liabilities. The Cayman Islands has a different body
of securities laws as compared to the United States and provides less protection to investors. Additionally, Cayman Islands companies
may not have standing to sue before the federal courts of the United States.
We
have been advised by Maples and Calder, our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (1) to
recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the
federal securities laws of the United States or any state and (2) in original actions brought in the Cayman Islands, to impose
liabilities against us predicated upon the civil liability provisions of the federal securities laws of the United States or any
state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no
statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will
recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based
on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for
which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands,
such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty,
inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in
a manner, and or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands
(awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement
proceedings if concurrent proceedings are being brought elsewhere.
Special
Considerations for Exempted Companies
We are an exempted company with limited liability under the Companies Law. The Companies Law distinguishes between ordinary resident
companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside of
the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially
the same as for an ordinary company except for the exemptions and privileges listed below:
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an
exempted company does not have to file an annual return of its shareholders with the
Registrar of Companies;
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an
exempted company’s register of members is not open to inspection;
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an
exempted company does not have to hold an annual general meeting;
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an
exempted company may issue shares with no par value;
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an
exempted company may obtain an undertaking against the imposition of any future taxation
(such undertakings are usually given for 20 years in the first instance);
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an
exempted company may register by way of continuation in another jurisdiction and be deregistered
in the Cayman Islands;
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an
exempted company may register as a limited duration company; and
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an
exempted company may register as a segregated portfolio company.
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“Limited
liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares
of the company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an
illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).
Our
Amended and Restated Memorandum and Articles of Association
Our
amended and restated memorandum and articles of association will contain 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
a special resolution. As a matter of Cayman Islands law, a resolution is deemed to be a special resolution where it has been approved
by either (1) at least two-thirds (or any higher threshold specified in a company’s articles of association) of a company’s
shareholders at a general meeting for which notice specifying the intention to propose the resolution as a special resolution
has been given or (2) if so authorized by a company’s articles of association, by a unanimous written resolution of
all of the company’s shareholders. Our amended and restated memorandum and articles of association provide that special
resolutions must be approved either by at least two-thirds of our shareholders who attend and vote at a general meeting (i.e.,
the lowest threshold permissible under Cayman Islands law) (other than amendments relating to the appointment or removal of directors
prior to our initial business combination, which require the approval of at least 90% of our ordinary shares voting in a general
meeting), or by a unanimous written resolution of all of our shareholders.
Our
initial shareholders, who collectively will beneficially own 20% of our ordinary shares upon the closing of this offering (excluding
the private shares underlying the private units, the representative shares and any shares underlying units issued upon conversion
of working capital loans and any Class A ordinary shares or equity-linked securities issued, or to be issued, to any seller
in our initial business combination, and assuming they do not purchase any units in this offering), may participate in any vote
to amend our amended and restated memorandum and articles of association and will have the discretion to vote in any manner they
choose. Specifically, our amended and restated memorandum and articles of association provide, among other things, that:
• if
we are unable to complete our initial business combination within 15 months from the closing of this offering (or up to 21 months
from the closing of this offering if we extend the period of time to consummate a business combination), we will: (1) cease
all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10 business
days thereafter, redeem 100% of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on
deposit in the trust account, including interest (less up to $50,000 of interest to pay dissolution expenses and which interest
shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely
extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions,
if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders
and our board of directors, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to provide
for claims of creditors and the requirements of other applicable law;
• prior
to our initial business combination, we may not issue additional shares that would entitle the holders thereof to (1) receive
funds from the trust account or (2) vote as a class with our public shares (a) on any initial business combination or
(b) to approve an amendment to our amended and restated memorandum and articles of association to (x) extend the time
we have to consummate a business combination beyond 15 months from the closing of this offering (or up to 21 months from the closing
of this offering if we extend the period of time to consummate a business combination) or (y) amend the foregoing provisions;
• in
the event we enter into a business combination with a target business that is affiliated with our sponsor, our directors or our
officers (which we currently do not intend to do), we, or a committee of independent and disinterested directors, will obtain
an opinion from an independent investment banking firm, or from an independent accounting firm, that such a business combination
is fair to our company from a financial point of view;
• if
a shareholder vote on our initial business combination is not required by law and we do not decide to hold a shareholder vote
for business or other 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;
• in
the event our units are listed on Nasdaq, our initial business combination must be with one or more operating businesses or assets
with a fair market value equal to at least 80% of the assets held in the trust account (excluding taxes payable on the income
earned on the trust account) at the time of the agreement to enter into the initial business combination;
• if
our shareholders approve an amendment to our amended and restated memorandum and articles of association (A) that would affect
our public shareholders’ ability to convert or sell their shares to us in connection with a business combination as described
herein or 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 15 months from the closing of this offering (or up to 21 months from the closing of this offering
if we extend the period of time to consummate a business combination) or (B) with respect to any other provision relating
to shareholders’ rights or pre-initial business combination activity, we will provide our public shareholders with the opportunity
to redeem all or a portion of their ordinary shares upon such approval at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable), divided by the
number of then issued and outstanding public shares; and
• we
will not effectuate our initial business combination with another blank check company or a similar company with nominal operations.
In
addition, our amended and restated memorandum and articles of association provide that under no circumstances will we redeem our
public shares in an amount that would cause our net tangible assets to be less than $5,000,001 either immediately prior to or
upon completion of our initial business combination.
The
Companies Law permits a company incorporated in the Cayman Islands to amend its memorandum and articles of association with the
approval of the holders of at least two-thirds of such company’s issued and outstanding ordinary shares. A company’s
articles of association may specify that the approval of a higher majority is required. Accordingly, although we could amend any
of the provisions relating to our proposed offering, structure and business plan which are contained in our amended and restated
memorandum and articles of association, we view all of these provisions as binding obligations to our shareholders and neither
we, nor our officers or directors, will take any action to amend or waive any of these provisions unless we provide dissenting
public shareholders with the opportunity to redeem their public shares.
Anti-Money
Laundering—Cayman Islands
If
any person in the Cayman Islands knows or suspects or has reasonable grounds for knowing or suspecting that another person is
engaged in criminal conduct or money laundering or is involved with terrorism or terrorist financing and property and the information
for that knowledge or suspicion came to their attention in the course of business in the regulated sector, or other trade, profession,
business or employment, the person will be required to report such knowledge or suspicion to (i) the Financial Reporting
Authority of the Cayman Islands, pursuant to the Proceeds of Crime Law (2020 Revision) of the Cayman Islands if the disclosure
relates to criminal conduct or money laundering, or (ii) a police officer of the rank of constable or higher, or the Financial
Reporting Authority, pursuant to the Terrorism Law (2018 Revision) of the Cayman Islands, if the disclosure relates to involvement
with terrorism or terrorist financing and property. Such a report shall not be treated as a breach of confidence or of any restriction
upon the disclosure of information imposed by any enactment or otherwise.
Cayman
Islands Data Protection
We
have certain duties under the Data Protection Law, 2017 of the Cayman Islands (the “DPL”) based on internationally
accepted principles of data privacy.
Privacy
Notice
Introduction
This
privacy notice puts our shareholders on notice that through your investment in the company you will provide us with certain personal
information which constitutes personal data within the meaning of the DPL (“personal data”).
In
the following discussion, the “company” refers to us and our affiliates and/or delegates, except where the context
requires otherwise.
Investor
Data
We
will collect, use, disclose, retain and secure personal data to the extent reasonably required only and within the parameters
that could be reasonably expected during the normal course of business. We will only process, disclose, transfer or retain personal
data to the extent legitimately required to conduct our activities of on an ongoing basis or to comply with legal and regulatory
obligations to which we are subject. We will only transfer personal data in accordance with the requirements of the DPL, and will
apply appropriate technical and organizational information security measures designed to protect against unauthorized or unlawful
processing of the personal data and against the accidental loss, destruction or damage to the personal data.
In
our use of this personal data, we will be characterized as a "data controller" for the purposes of the DPL, while our
affiliates and service providers who may receive this personal data from us in the conduct of our activities may either act as
our "data processors" for the purposes of the DPL or may process personal information for their own lawful purposes
in connection with services provided to us.
We
may also obtain personal data from other public sources. Personal data includes, without limitation, the following information
relating to a shareholder and/or any individuals connected with a shareholder as an investor: name, residential address, email
address, contact details, corporate contact information, signature, nationality, place of birth, date of birth, tax identification,
credit history, correspondence records, passport number, bank account details, source of funds details and details relating to
the shareholder's investment activity.
Who
this Affects
If
you are a natural person, this will affect you directly. If you are a corporate investor (including, for these purposes, legal
arrangements such as trusts or exempted limited partnerships) that provides us with personal data on individuals connected to
you for any reason in relation your investment in the Company, this will be relevant for those individuals and you should transmit
the content of this Privacy Notice to such individuals or otherwise advise them of its content.
How
the Company May Use Your Personal Data
The
company, as the data controller, may collect, store and use personal data for lawful purposes, including, in particular:
(i) where
this is necessary for the performance of our rights and obligations under any purchase agreements;
(ii) where
this is necessary for compliance with a legal and regulatory obligation to which we are subject (such as compliance with anti-money
laundering and FATCA/CRS requirements); and/or
(iii) where
this is necessary for the purposes of our legitimate interests and such interests are not overridden by your interests, fundamental
rights or freedoms.
Should
we wish to use personal data for other specific purposes (including, if applicable, any purpose that requires your consent), we
will contact you.
Why
We May Transfer Your Personal Data
In
certain circumstances, we may be legally obliged to share personal data and other information with respect to your shareholding
with the relevant regulatory authorities such as the Cayman Islands Monetary Authority or the Tax Information Authority. They,
in turn, may exchange this information with foreign authorities, including tax authorities.
We
anticipates disclosing personal data to persons who provide services to us and their respective affiliates (which may include
certain entities located outside the US, the Cayman Islands or the European Economic Area), who will process your personal data
on our behalf.
The
Data Protection Measures We Take
Any
transfer of personal data by us or our duly authorized affiliates and/or delegates outside of the Cayman Islands shall be in accordance
with the requirements of the DPL.
We
and our duly authorized affiliates and/or delegates shall apply appropriate technical and organizational information security
measures designed to protect against unauthorized or unlawful processing of personal data, and against accidental loss or destruction
of, or damage to, personal data.
We
shall notify you of any personal data breach that is reasonably likely to result in a risk to your interests, fundamental rights
or freedoms or those data subjects to whom the relevant personal data relates.
Certain
Anti-Takeover Provisions of Our Amended and Restated Memorandum and Articles of Association
Our
authorized but unissued Class A ordinary shares and preference shares are available for future issuances without shareholder
approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions
and employee benefit plans. The existence of authorized but unissued and unreserved Class A ordinary shares and preference
shares could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer,
merger or otherwise.
Shares
Eligible for Future Sale
Immediately
after this offering, we will have 5,350,000 ordinary shares outstanding, or 6,118,000 shares if the over-allotment option is exercised
in full. Of these shares, the 4,000,000 Class A ordinary shares sold in this offering, or 4,600,000 Class A ordinary
shares if the over-allotment option is exercised in full, will be freely tradable without restriction or further registration
under the Securities Act, except for any shares purchased by one of our affiliates within the meaning of Rule 144 under the
Securities Act. All of the remaining shares are restricted securities under Rule 144, in that they were issued in private
transactions not involving a public offering. All of those shares will not be transferable until they are released except in limited
circumstances described elsewhere in this prospectus.
Rule 144
A
person who has beneficially owned restricted Class A ordinary shares, rights or warrants for at least six months would be entitled
to sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at
any time during the three months preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements
for at least three months before the sale. Persons who have beneficially owned restricted Class A ordinary shares, rights or warrants
for at least six months but who are our affiliates at the time of, or 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 a number of
shares that does not exceed the greater of either of the following:
• 1%
of the number of the total number of ordinary shares then outstanding, which will equal 53,500 shares immediately after this offering
(or 61,180 if the over-allotment option is exercised in full); and
• the
average weekly trading volume of the Class A ordinary shares during the four calendar weeks preceding the filing of a notice
on Form 144 with respect to the sale.
Sales
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
Historically,
the SEC staff had taken the position that Rule 144 is not available for the resale of securities initially issued by companies
that are, or previously were, blank check companies, like us. The SEC has codified and expanded this position in the amendments
discussed above by prohibiting the use of Rule 144 for resale of securities issued by any shell companies (other than business
combination related shell companies) or any issuer that has been at any time previously a shell company. The SEC has provided
an important exception to this prohibition, however, 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, it is likely that pursuant to Rule 144, our sponsor will be able to sell its founder shares freely without registration
one year after we have completed our initial business combination assuming it is not an affiliate of ours at that time.
Registration
Rights
The
holders of the founder shares issued and outstanding on the date of this prospectus, as well as the holders of the representative
shares, private units and any units our sponsor, officers, directors or their affiliates may be issued in payment of working capital
loans made to us (and all underlying securities), will be entitled to registration rights pursuant to an agreement to be signed
prior to or on the effective date of this offering. The holders of a majority of these securities are entitled to make up to three
demands that we register such securities. The holders of the majority of the founder shares can elect to exercise these registration
rights at any time commencing three months prior to the date on which these Class B ordinary shares are to be released from
their transfer restrictions. The holders of a majority of the representative shares, private units and units issued to our sponsor,
officers, directors or their affiliates in payment of working capital loans made to us (or underlying securities) can elect to
exercise these registration rights at any time after we consummate a business combination. Notwithstanding anything to the contrary,
EarlyBirdCapital, Inc. may only make a demand on one occasion and only during the five-year period beginning on the effective
date of the registration statement of which this prospectus forms a part. In addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to our consummation of a business combination; provided,
however, that EarlyBirdCapital, Inc. may participate in a “piggy-back” registration only during the seven-year
period beginning on the effective date of the registration statement of which this prospectus forms a part. We will bear the expenses
incurred in connection with the filing of any such registration statements.
Listing
of Securities
We
have applied to list our units, Class A ordinary shares, rights and warrants on Nasdaq under the symbols “DISTU,”
“DIST,” “DISTR” and “DISTW,” respectively. We expect that our units will be listed on Nasdaq
promptly on or after the effective date of the registration statement. Following the date the Class A ordinary shares, rights
and warrants are eligible to trade separately, we anticipate that the Class A ordinary shares, rights and warrants will be listed
separately and as a unit on Nasdaq. We cannot guarantee that our securities will be approved for listing on Nasdaq.
INCOME
TAX CONSIDERATIONS
The
following summary of certain Cayman Islands and U.S. federal income tax considerations relevant to an investment in our units,
Class A ordinary shares, rights and warrants is based upon laws and relevant interpretations thereof in effect as of the date
of this prospectus, all of which are subject to change. This summary does not deal with all possible tax consequences relating
to an investment in our ordinary shares, rights and warrants, such as the tax consequences under state, local and other tax laws.
Prospective
investors should consult their professional advisors on the possible tax consequences of buying, holding or selling any securities
under the laws of their country of citizenship, residence or domicile.
Cayman
Islands Taxation
The
following is a discussion on certain Cayman Islands income tax consequences of an investment in our securities. The discussion
is a general summary of present law, which is subject to prospective and retroactive change. It is not intended as tax advice,
does not consider any investor’s particular circumstances and does not consider tax consequences other than those arising
under Cayman Islands law.
Under
Existing Cayman Islands Laws
Payments
of dividends and capital in respect of our securities will not be subject to taxation in the Cayman Islands and no withholding
will be required on the payment of a dividend or capital to any holder of the securities nor will gains derived from the disposal
of the securities be subject to Cayman Islands income or corporate tax. The Cayman Islands currently has no income, corporation
or capital gains tax and no estate duty, inheritance tax or gift tax.
No
stamp duty is payable in respect of the issue of the warrants. An instrument of transfer in respect of a warrant is stampable
if executed in or brought into the Cayman Islands.
No
stamp duty is payable in respect of the issue of our securities or on an instrument of transfer in respect of our securities.
The
Company has been incorporated under the laws of the Cayman Islands as an exempted company with limited liability and, as such,
has applied for and received an undertaking from the Financial Secretary of the Cayman Islands in the following form:
The
Tax Concessions Law
(2018 Revision)
Undertaking as to Tax Concessions
In
accordance with the provision of section 6 of The Tax Concessions Law (2018 Revision), the Financial Secretary undertakes with
Distoken Acquisition Corporation (“the Company”).
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1.
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That
no law which is hereafter enacted in the Cayman Islands imposing any tax to be levied
on profits, income, gains or appreciations shall apply to the Company or its operations;
and
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2.
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In
addition, that no tax to be levied on profits, income, gains or appreciations or which
is in the nature of estate duty or inheritance tax shall be payable:
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2.1
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on
or in respect of the shares, debentures or other obligations of the Company;
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OR
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2.2
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by
way of the withholding in whole or part, of any relevant payment as defined in Section 6(3) of
the Tax Concessions Law (2018 Revision).
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3.
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These
concessions shall be for a period of 20 years from the date hereof.
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United
States Federal Income Taxation
General
The
following discussion summarizes certain United States federal income tax considerations generally applicable to the acquisition,
ownership and disposition of our units, each consisting of one Class A ordinary share, one right and one-half of one warrant,
which we refer to collectively as our securities, that are purchased in this offering by U.S. Holders (as defined below) and Non-U.S.
Holders (as defined below)). Because the components of a unit are generally separable at the option of the holder, the holder
of a unit generally should be treated, for United States federal income tax purposes, as the owner of the underlying Class A ordinary
share, right and one-half of one warrant components of the unit. As a result, the discussion below with respect to holders of
Class A ordinary shares, rights and warrants should also apply to holders of units (as the deemed owners of the underlying Class
A ordinary share, rights and warrants that constitute the units).
This
discussion is limited to certain United States federal income tax considerations to beneficial owners of our securities who are
initial purchasers of a unit pursuant to this offering and hold the unit and each component of the unit as a capital asset under
the U.S. Internal Revenue Code of 1986, as amended (the “Code”). This discussion assumes that the Class A ordinary
shares, rights and warrants will trade separately and that any distributions made (or deemed made) by us on our Class A ordinary
shares and any consideration received (or deemed received) by a holder in consideration for the sale or other disposition of our
securities will be in U.S. dollars. This discussion is a summary only and does not consider all aspects of United States federal
income taxation that may be relevant to the acquisition, ownership and disposition of a unit by a prospective investor in light
of its particular circumstances, including:
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financial
institutions or financial services entities;
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taxpayers
that are subject to the mark-to-market accounting rules;
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governments
or agencies or instrumentalities thereof;
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regulated
investment companies;
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real
estate investment trusts;
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persons
liable for alternative minimum tax;
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expatriates
or former long-term residents of the United States;
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persons
that actually or constructively own five percent or more of our voting shares or the
total value of our shares;
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persons
that acquired our securities pursuant to an exercise of employee share options, in connection
with employee share incentive plans or otherwise as compensation or in connection with
services;
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persons
that hold our securities as part of a straddle, constructive sale, hedging, conversion
or other integrated or similar transaction; or
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U.S.
Holders (as defined below) whose functional currency is not the U.S. dollar.
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Moreover,
the discussion below is based upon the provisions of the Code, the Treasury regulations promulgated thereunder and administrative
and judicial interpretations thereof, all as of the date hereof, and such provisions may be repealed, revoked, modified or subject
to differing interpretations, possibly on a retroactive basis, so as to result in United States federal income tax consequences
different from those discussed below. Furthermore, this discussion does not address any aspect of United States federal non-income
tax laws, such as gift, estate or Medicare contribution tax laws, or state, local or non-U.S. tax laws.
We
have not sought, and will not seek, a ruling from the IRS as to any United States 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.
As
used herein, the term “U.S. Holder” means a beneficial owner of units, Class A ordinary shares, rights or warrants
who or that is for United States federal income tax purposes: (i) an individual citizen or resident of the United States, (ii)
a corporation (or other entity treated as a corporation for United States federal income tax purposes) that is created or organized
(or treated as created or organized) in or under the laws of the United States, any state thereof or the District of Columbia,
(iii) an estate the income of which is subject to United States federal income taxation regardless of its source or (iv) a trust
if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and one or
more U.S. persons have the authority to control all substantial decisions of the trust, or (B) it has in effect a valid election
to be treated as a U.S. person.
This
discussion does not consider the tax treatment of partnerships or other pass-through entities or persons who hold our securities
through such entities. If a partnership (or other entity or arrangement classified as a partnership for United States federal
income tax purposes) is the beneficial owner of our securities, the United States federal income tax treatment of a partner in
the partnership generally will depend on the status of the partner and the activities of the partnership. Partnerships holding
our securities and partners in such partnerships are urged to consult their own tax advisors.
THIS
DISCUSSION IS ONLY A SUMMARY OF CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS ASSOCIATED WITH THE ACQUISITION, OWNERSHIP
AND DISPOSITION OF OUR SECURITIES. EACH PROSPECTIVE INVESTOR IN OUR SECURITIES IS URGED TO CONSULT ITS OWN TAX ADVISOR WITH RESPECT
TO THE PARTICULAR TAX CONSEQUENCES TO SUCH INVESTOR OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES, INCLUDING
THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, AND NON-U.S. TAX LAWS.
Allocation
of Purchase Price and Characterization of a Unit
No
statutory, administrative or judicial authority directly addresses the treatment of a unit or instruments similar to a unit for
United States federal income tax purposes, and therefore, that treatment is not entirely clear. The acquisition of a unit should
be treated for United States federal income tax purposes as the acquisition of one share of our Class A ordinary shares, one right
and one-half of one warrant, with each whole warrant exercisable to acquire one share of our Class A ordinary shares. For United
States federal income tax purposes, each holder of a unit must allocate the purchase price paid by such holder for such unit among
the one Class A ordinary share, one right and one-half of one warrant based on the relative fair market value of each at the time
of issuance. The price allocated to each Class A ordinary share, one right and one-half of one warrant should be the shareholder’s
tax basis in such share, right or one-half warrant. Any disposition of a unit should be treated for United States federal income
tax purposes as a disposition of the Class A ordinary share, right and one-half of one warrant comprising the unit, and the amount
realized on the disposition should be allocated among the Class A ordinary share, right and one-half warrant based on their respective
relative fair market values. The separation of the Class A ordinary share, right and the one-half of one warrant constituting
a unit should not be a taxable event for United States federal income tax purposes.
The
foregoing treatment of the Class A ordinary shares, rights and warrants and a holder’s purchase price allocation are not
binding on the IRS or the courts. Because there are no authorities that directly address instruments that are similar to the units,
no assurance can be given that the IRS or the courts will agree with the characterization described above or the discussion below.
Accordingly, each prospective investor is urged to consult its tax advisors regarding the tax consequences of an investment in
a unit (including alternative characterizations of a unit). The balance of this discussion assumes that the characterization of
the units described above is respected for United States federal income tax purposes.
U.S.
Holders
Taxation
of Distributions
Subject
to the passive foreign investment company (“PFIC”) rules discussed below, a U.S. Holder generally will be required
to include in gross income as dividends the amount of any cash distribution paid on our Class A ordinary shares to the extent
the distribution is paid out of our current or accumulated earnings and profits (as determined under United States federal income
tax principles). Such dividends paid by us will be taxable to a corporate U.S. Holder at regular rates and will not be eligible
for the dividends-received deduction generally allowed to domestic corporations in respect of dividends received from other domestic
corporations. Subject to the PFIC rules discussed below, distributions in excess of such earnings and profits generally will
be applied against and reduce the U.S. Holder’s basis in its Class A ordinary shares (but not below zero) and, to the
extent in excess of such basis, will be treated as gain from the sale or exchange of such Class A ordinary shares.
With
respect to non-corporate U.S. Holders, under tax laws currently in effect, dividends generally will be taxed at the lower applicable
long-term capital gains rate (see “Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Ordinary
Shares, Rights and Warrants” below) only if our Class A ordinary shares are readily tradable on an established securities
market in the United States and certain other requirements are met, including that we are not classified as a PFIC during the
taxable year in which the dividend is paid or the preceding taxable year and, perhaps, until after the close of the first two
taxable years following our start-up year (within the meaning of the start-up exception). U.S. Holders should consult their tax
advisors regarding the availability of such lower rate for any dividends paid with respect to our Class A ordinary shares.
Gain
or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Ordinary Shares, Rights and Warrants
Subject
to the PFIC rules discussed below, a U.S. Holder generally will recognize capital gain or loss on the sale or other taxable disposition
of our Class A ordinary shares, rights or warrants (including on our dissolution and liquidation if we do not consummate an initial
business combination within the required time period). Any such capital gain or loss generally will be long-term capital gain
or loss if the U.S. Holder’s holding period for such Class A ordinary share, rights or warrants exceeds one year. It is
unclear, however, whether certain redemption rights described in this prospectus may suspend the running of the applicable holding
period of the ordinary shares for this purpose.
The
amount of gain or loss recognized on a sale or other taxable disposition generally will be equal to the difference between (i)
the sum of the amount of cash and the fair market value of any property received in such disposition (or, if the Class A ordinary
shares, rights or warrants are held as part of units at the time of the disposition, the portion of the amount realized on such
disposition that is allocated to the Class A ordinary shares, rights or warrants based upon the then fair market values of the
Class A ordinary shares, rights and the warrants included in the units) and (ii) the U.S. Holder’s adjusted tax basis in
its Class A ordinary shares, rights or warrants so disposed of. A U.S. Holder’s adjusted tax basis in its Class A ordinary
shares, rights or warrants generally will equal the U.S. Holder’s acquisition cost (that is, the portion of the purchase
price of a unit allocated to the ordinary share, one right or one-half of one warrant, as described above under “—
Allocation of Purchase Price and Characterization of a Unit”) reduced by any prior distributions treated as a return of
capital. Long-term capital gain realized by a non-corporate U.S. Holder is currently eligible to be taxed at reduced rates. See
“— Exercise or Lapse of a Warrant” and “— Acquisition of Class A Ordinary Shares Pursuant to Rights”
below for a discussion regarding a U.S. Holder’s basis in a Class A ordinary share acquired pursuant to the exercise of
a warrant or a right, respectively. The deduction of capital losses is subject to certain limitations.
Redemption
of Class A Ordinary Shares
Subject
to the PFIC rules discussed below, in the event that a U.S. Holder’s Class A ordinary shares are redeemed pursuant to the
redemption provisions described in this prospectus under “Description of Securities — Ordinary Shares” or if
we purchase a U.S. Holder’s Class A ordinary shares in an open market transaction (each of which we refer to as a “redemption”),
the treatment of the transaction for United States federal income tax purposes will depend on whether the redemption qualifies
as a sale of the Class A ordinary shares under Section 302 of the Code. If the redemption qualifies as a sale of Class A ordinary
shares, the U.S. Holder will be treated as described under “Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition
of Class A Ordinary Shares, Rights and Warrants” above. If the redemption does not qualify as a sale of Class A ordinary
shares, the U.S. Holder will be treated as receiving a corporate distribution with the tax consequences described above under
“Taxation of Distributions.” Whether a redemption qualifies for sale treatment will depend largely on the total number
of our shares treated as held by the U.S. Holder (including any Class A ordinary shares constructively owned by the U.S. Holder
as a result of owning warrants and, possibly, rights) relative to all of our shares outstanding both before and after such redemption
or purchase. The redemption of Class A ordinary shares generally will be treated as a sale of the Class A ordinary shares (rather
than as a corporate distribution) if such redemption or purchase (i) is “substantially disproportionate” with respect
to the U.S. Holder, (ii) results in a “complete termination” of the U.S. Holder’s interest in us or (iii) is
“not essentially equivalent to a dividend” with respect to the U.S. Holder. These tests are explained more fully below.
In
determining whether any of the foregoing tests are satisfied, a U.S. Holder takes into account not only our shares actually owned
by the U.S. Holder, but also our shares that are constructively owned by such holder. A U.S. Holder may constructively own, in
addition to shares owned directly, shares owned by certain related individuals and entities in which the U.S. Holder has an interest
or that have an interest in such U.S. Holder, as well as any shares the U.S. Holder has a right to acquire by exercise of an option,
which would generally include Class A ordinary shares which could be acquired pursuant to the exercise of the warrants (and
possibly Class A ordinary shares which could be acquired pursuant to the rights). In order to meet the substantially disproportionate
test, the percentage of our issued and outstanding voting shares actually and constructively owned by the U.S. Holder immediately
following the redemption of Class A ordinary shares must, among other requirements, be less than 80 percent of the percentage
of our issued and outstanding voting shares actually and constructively owned by the U.S. Holder immediately before the redemption.
Prior to our initial business combination the Class A ordinary shares may not be treated as voting shares for this purpose
and, consequently, this substantially disproportionate test may not be applicable. There will be a complete termination of a U.S.
Holder’s interest if either (i) all of our shares actually and constructively owned by the U.S. Holder are redeemed
or (ii) all of our shares actually owned by the U.S. Holder are redeemed and the U.S. Holder is eligible to waive, and effectively
waives in accordance with specific rules, the attribution of shares owned by certain family members and the U.S. Holder does not
constructively own any other shares of ours. The redemption of the Class A ordinary shares will not be essentially equivalent
to a dividend if such redemption results in a “meaningful reduction” of the U.S. Holder’s proportionate interest
in us. Whether the redemption will result in a meaningful reduction in a U.S. Holder’s proportionate interest in us will
depend on the particular facts and circumstances. However, the IRS has indicated in a published ruling that even a small reduction
in the proportionate interest of a small minority shareholder in a publicly held corporation who exercises no control over corporate
affairs may constitute such a “meaningful reduction.” A U.S. Holder should consult its own tax advisors as to the
tax consequences of a redemption.
If
none of the foregoing tests are satisfied, then the redemption will be treated as a corporate distribution and the tax effects
will be as described under “Taxation of Distributions”
above. After the application of those rules, any remaining tax basis of the U.S. Holder in the redeemed Class A ordinary
shares will be added to the U.S. Holder’s adjusted tax basis in its remaining shares. If there are no remaining shares,
a U.S. Holder is urged to consult its tax advisor as to the allocation of any remaining tax basis.
Exercise
or Lapse of a Warrant
Subject
to the PFIC rules discussed below and except as discussed below with respect to the cashless exercise of a warrant, a U.S.
Holder generally will not recognize gain or loss upon the acquisition of a Class A ordinary share on the exercise of a warrant
for cash. A U.S. Holder’s tax basis in a Class A ordinary share received upon exercise of the warrant generally will
equal the sum of the U.S. Holder’s initial investment in the warrant (that is, the portion of the U.S. Holder’s purchase
price for the units that is allocated to the warrant, as described above under “— Allocation of Purchase Price and
Characterization of a Unit”) and the exercise price. It is unclear whether a U.S. Holder’s holding period for the
Class A ordinary share will commence on the date of exercise of the warrant or the day following the date of exercise of
the warrant; in either case, the holding period will not include the period during which the U.S. Holder held the warrant. If
a warrant is allowed to lapse unexercised, a U.S. Holder generally will recognize a capital loss equal to such holder’s
tax basis in the warrant.
The
tax consequences of a cashless exercise of a warrant are not clear under current law. Subject to the PFIC rules discussed
below, a cashless exercise may not be taxable, either because the exercise is not a realization event or because the exercise
is treated as a recapitalization for United States federal income tax purposes. In either situation, a U.S. Holder’s tax
basis in the Class A ordinary shares received generally would equal the U.S. Holder’s tax basis in the warrants. If
the cashless exercise was not a realization event, it is unclear whether a U.S. Holder’s holding period for the Class A
ordinary share will commence on the date of exercise of the warrant or the day following the date of exercise of the warrant.
If the cashless exercise were treated as a recapitalization, the holding period of the Class A ordinary shares would include
the holding period of the warrants.
It
is also possible that a cashless exercise may be treated as a taxable exchange in which gain or loss would be recognized. In such
event, a U.S. Holder may be deemed to have surrendered warrants with an aggregate fair market value equal to the exercise price
for the total number of warrants to be exercised. Subject to the PFIC rules discussed below, the U.S. Holder would recognize
capital gain or loss in an amount equal to the difference between the fair market value of the warrants deemed surrendered and
the U.S. Holder’s tax basis in such warrants. In this case, a U.S. Holder’s tax basis in the Class A ordinary
shares received would equal the sum of the U.S. Holder’s initial investment in the warrants exercised (i.e., the portion
of the U.S. Holder’s purchase price for the units that is allocated to the warrant, as described above under “—
Allocation of Purchase Price and Characterization of a Unit”) and the exercise price of such warrants. It is unclear whether
a U.S. Holder’s holding period for the Class A ordinary shares would commence on the date of exercise of the warrant
or the day following the date of exercise of the warrant.
Due
to the absence of authority on the United States federal income tax treatment of a cashless exercise, there can be no assurance
which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court
of law. Accordingly, U.S. Holders should consult their tax advisors regarding the tax consequences of a cashless exercise.
Possible
Constructive Distributions
The
terms of each warrant provide for an adjustment to the number of Class A ordinary shares for which the warrant may be exercised
or to the exercise price of the warrant in certain events, as discussed in the section of this prospectus captioned “Description
of Securities — Warrants.” An adjustment which has the effect of preventing dilution generally is not taxable. The
U.S. Holders of the warrants would, however, be treated as receiving a constructive distribution from us if, for example, the
adjustment increases the U.S. Holders’ proportionate interest in our assets or earnings and profits (e.g., through an increase
in the number of Class A ordinary shares that would be obtained upon exercise) as a result of a distribution of cash to the
holders of our Class A ordinary shares which is taxable to the U.S. Holders of such Class A ordinary shares as described
under “— Taxation of Distributions” above. Such constructive distribution would be subject to tax as described
under that section in the same manner as if the U.S. Holders of the warrants received a cash distribution from us equal to the
fair market value of the increase in the interest. For certain information reporting purposes, we are required to determine the
date and amount of any such constructive distributions. Proposed Treasury regulations, which we may rely on prior to the issuance
of final regulations, specify how the date and amount of constructive distributions are determined.
Acquisition
of Class A Ordinary Shares Pursuant to Rights
The
treatment of the rights to acquire Class A ordinary shares is uncertain. The rights may be viewed as a forward contract, derivative
security or similar interest in our company (analogous to a warrant or option with no exercise price), and thus the holder of
the rights would not be viewed as owning the Class A ordinary shares issuable pursuant to the rights until such Class A ordinary
shares are actually issued. There may be other alternative characterizations of the rights that the IRS may successfully assert,
including that the rights are treated as equity in our company at the time the rights are issued.
The
tax consequences of an acquisition of our Class A ordinary shares pursuant to rights are unclear and will depend on the treatment
of any initial business combination. Accordingly, U.S. Holders should consult their tax advisors regarding the tax consequences
of an acquisition of Class A ordinary shares pursuant to rights and the consequences of any initial business combination.
Passive
Foreign Investment Company Rules
A
non-U.S. corporation will be classified as a PFIC for United States federal income tax purposes if either (i) at least 75%
of its gross income in a taxable year, including its pro rata share of the gross income of any corporation in which it is considered
to own at least 25% of the shares by value, is passive income or (ii) at least 50% of its assets in a taxable year (ordinarily
determined based on fair market value and averaged quarterly over the year), including its pro rata share of the assets of any
corporation in which it is considered to own at least 25% of the shares by value, are held for the production of, or produce,
passive income. Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived
from the active conduct of a trade or business) and gains from the disposition of passive assets.
Because
we are a blank check company, with no current active business, we believe that it is likely that we will meet the PFIC asset or
income test for our current taxable year. However, pursuant to a startup exception, a corporation will not be a PFIC for the first
taxable year the corporation has gross income (the “startup year”), if (1) no predecessor of the corporation
was a PFIC; (2) the corporation satisfies the IRS that it will not be a PFIC for either of the first two taxable years following
the startup year; and (3) the corporation is not in fact a PFIC for either of those years. The applicability of the startup
exception to us will not be known until after the close of our current taxable year and, perhaps, until after the close of the
first two taxable years following our current taxable year. Further, after the acquisition of a company or assets in a business
combination, we may still meet one of the PFIC tests depending on the timing of the acquisition and the amount of our passive
income and assets as well as the passive income and assets of the acquired business. If the company that we acquire in a business
combination is a PFIC, then we will likely not qualify for the startup exception and will be a PFIC for our current taxable year.
Our actual PFIC status for our current taxable year or any subsequent taxable year will not be determinable until after the end
of such taxable year. Accordingly, there can be no assurance with respect to our status as a PFIC for our current taxable year
or any future taxable year.
Although
our PFIC status is determined annually, an initial determination that our company is a PFIC will generally apply for subsequent
years to a U.S. Holder who held ordinary shares, rights or warrants while we were a PFIC, whether or not we meet the test for
PFIC status in those subsequent years. If we are determined to be a PFIC for any taxable year (or portion thereof) that is included
in the holding period of a U.S. Holder of our Class A ordinary shares, rights or warrants and, in the case of our Class A ordinary
shares, the U.S. Holder did not make either a timely qualified electing fund (“QEF”) election or a mark-to-market
election for our first taxable year as a PFIC in which the U.S. Holder held (or was deemed to hold) Class A ordinary shares, as
described below, such U.S. Holder generally will be subject to special rules with respect to (i) any gain recognized by the U.S.
Holder on the sale or other disposition of its Class A ordinary shares, rights or warrants and (ii) any “excess distribution”
made to the U.S. Holder (generally, any distributions to such U.S. Holder during a taxable year of the U.S. Holder that are greater
than 125% of the average annual distributions received by such U.S. Holder in respect of the Class A ordinary shares during the
three preceding taxable years of such U.S. Holder or, if shorter, such U.S. Holder’s holding period for the Class A ordinary
shares).
Under
these rules:
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the
U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S.
Holder’s holding period for the Class A ordinary shares, rights or warrants;
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the
amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized
the gain or received the excess distribution, or to the period in the U.S. Holder’s
holding period before the first day of our first taxable year in which we are a PFIC,
will be taxed as ordinary income;
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the
amount allocated to other taxable years (or portions thereof) of the U.S. Holder and
included in its holding period will be taxed at the highest tax rate in effect for that
year and applicable to the U.S. Holder; and
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an
additional tax equal to the interest charge generally applicable to underpayments of
tax will be imposed on the U.S. Holder with respect to the tax attributable to each such
other taxable year of the U.S. Holder.
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In
general, if we are determined to be a PFIC, a U.S. Holder may avoid the PFIC tax consequences described above in respect to our
Class A ordinary shares (but not our warrants and possibly not our rights) by making a timely and valid QEF election (if
eligible to do so) to include in income its pro rata share of our net capital gains (as long-term capital gain) and other earnings
and profits (as ordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S.
Holder in which or with which our taxable year ends. A U.S. Holder generally may make a separate election to defer the payment
of taxes on undistributed income inclusions under the QEF rules, but if deferred, any such taxes will be subject to an interest
charge. In the alternative, a U.S. Holder may avoid the PFIC tax consequences described above by making a “mark-to-markup”
election. The QEF election and mark-to-market election are described further below.
The
treatment of the rights to acquire our Class A ordinary shares is unclear. For example, the rights may be viewed as a forward
contract, derivative security or similar interest in our company (analogous to a warrant or option with no exercise price), and
thus the holder of the rights would not be viewed as owning the Class A ordinary shares issuable pursuant to the rights until
such Class A ordinary shares are actually issued. There may be other alternative characterizations of the rights that the IRS
may successfully assert, including that the rights are treated as equity in our company at the time the rights are issued, that
would reach different conclusions regarding the tax treatment of the rights under the PFIC rules. In any case, depending on which
characterization is successfully applied to the rights, different PFIC consequences may result for U.S. Holders of the rights.
It is also possible that a U.S. Holder of rights would not be able to make a QEF or mark-to-market election (discussed below)
with respect to such U.S. Holder’s rights. Due to the uncertainty of the application of the PFIC rules to the rights, all
potential investors are strongly urged to consult with their own tax advisors regarding an investment in the rights offered hereunder
as part of the units offering and the subsequent consequences to holders of such rights in any initial business combination.
It
is not entirely clear how various aspects of the PFIC rules apply to the warrants. However, a U.S. Holder may not make a
QEF election with respect to its warrants to acquire our Class A ordinary shares and possibly not with respect to the rights.
As a result, if a U.S. Holder sells or otherwise disposes of such warrants (other than upon exercise of such warrants) and we
were a PFIC at any time during the U.S. Holder’s holding period of such warrants, any gain recognized generally will be
treated as an excess distribution, taxed as described above. If a U.S. Holder that exercises such warrants properly makes a QEF
election with respect to the newly acquired Class A ordinary shares (or has previously made a QEF election with respect to
our Class A ordinary shares), the QEF election will apply to the newly acquired Class A ordinary shares. Notwithstanding
the foregoing, the adverse tax consequences relating to PFIC shares, adjusted to take into account the current income inclusions
resulting from the QEF election, will continue to apply with respect to such newly acquired Class A ordinary shares (which
generally will be deemed to have a holding period for purposes of the PFIC rules that includes the period the U.S. Holder
held the warrants), unless the U.S. Holder makes a purging election under the PFIC rules. Under the purging election, the U.S.
Holder will be deemed to have sold such shares at their fair market value and any gain recognized on such deemed sale will be
treated as an excess distribution, as described above. As a result of the purging election, the U.S. Holder will have a new basis
and holding period in the Class A ordinary shares acquired upon the exercise of the warrants for purposes of the PFIC rules.
U.S. Holders are urged to consult their tax advisors as to the application of the rules governing purging elections to their
particular circumstances.
The
QEF election is made on a shareholder-by-shareholder basis and, once made, can be revoked only with the consent of the IRS. A
U.S. Holder generally makes a QEF election by attaching a completed IRS Form 8621 (Information Return by a Shareholder of
a Passive Foreign Investment Company or Qualified Electing Fund), including the information provided in a PFIC annual information
statement, to a timely filed United States federal income tax return for the tax year to which the election relates. Retroactive
QEF elections generally may be made only by filing a protective statement with such return and if certain other conditions are
met or with the consent of the IRS. U.S. Holders should consult their tax advisors regarding the availability and tax consequences
of a retroactive QEF election under their particular circumstances.
In
order to comply with the requirements of a QEF election, a U.S. Holder must receive a PFIC annual information statement from us.
If we determine we are a PFIC for any taxable year (of which there can be no assurance), we will endeavor to provide to a U.S.
Holder such information as the IRS may require, including a PFIC annual information statement, in order to enable the U.S. Holder
to make and maintain a QEF election, but there is no assurance that we will timely provide such required information. There is
also no assurance that we will have timely knowledge of our status as a PFIC in the future or of the required information to be
provided.
If
a U.S. Holder has made a QEF election with respect to our Class A ordinary shares, and the excess distribution rules discussed
above do not apply to such shares (because of a timely QEF election for our first taxable year as a PFIC in which the U.S. Holder
holds (or is deemed to hold) such shares or a purge of the PFIC taint pursuant to a purging election, as described above), any
gain recognized on the sale of our Class A ordinary shares generally will be taxable as capital gain and no additional tax
charge will be imposed under the PFIC rules. As discussed above, if we are a PFIC for any taxable year, a U.S. Holder of our Class A
ordinary shares that has made a QEF election will be currently taxed on its pro rata share of our earnings and profits, whether
or not distributed for such year. A subsequent distribution of such earnings and profits that were previously included in income
generally should not be taxable when distributed to such U.S. Holder. The tax basis of a U.S. Holder’s shares in a QEF will
be increased by amounts that are included in income, and decreased by amounts distributed but not taxed as dividends, under the
above rules. In addition, if we are not a PFIC for any taxable year, such U.S. Holder will not be subject to the QEF inclusion
regime with respect to our Class A ordinary shares for such a taxable year.
If
we are a PFIC and our Class A ordinary shares constitute “marketable stock,” a U.S. Holder may avoid the adverse
PFIC tax consequences discussed above if such U.S. Holder, at the close of the first taxable year in which it holds (or is deemed
to hold) our Class A ordinary shares, makes a mark-to-market election with respect to such shares for such taxable year.
Such U.S. Holder generally will include for each of its taxable years as ordinary income the excess, if any, of the fair market
value of its Class A ordinary shares at the end of such year over its adjusted basis in its Class A ordinary shares.
The U.S. Holder also will recognize an ordinary loss in respect of the excess, if any, of its adjusted basis of its Class A
ordinary shares over the fair market value of its Class A ordinary shares at the end of its taxable year (but only to the
extent of the net amount of previously included income as a result of the mark-to-market election). The U.S. Holder’s basis
in its Class A ordinary shares will be adjusted to reflect any such income or loss amounts, and any further gain recognized
on a sale or other taxable disposition of its Class A ordinary shares will be treated as ordinary income. Currently, a mark-to-market
election may not be made with respect to warrants and possibly may not be made with respect to our rights.
The
mark-to-market election is available only for “marketable stock,” generally, stock that is regularly traded on a national
securities exchange that is registered with the Securities and Exchange Commission, including Nasdaq (on which we intend to list
the Class A ordinary shares), or on a foreign exchange or market that the IRS determines has rules sufficient to ensure
that the market price represents a legitimate and sound fair market value. U.S. Holders should consult their own tax advisors
regarding the availability and tax consequences of a mark-to-market election in respect to our ordinary shares under their particular
circumstances.
If
we are a PFIC and, at any time, have a foreign subsidiary that is classified as a PFIC, U.S. Holders generally would be deemed
to own a portion of the shares of such lower-tier PFIC, and generally could incur liability for the deferred tax and interest
charge described above if we receive a distribution from, or dispose of all or part of our interest in, the lower-tier PFIC or
the U.S. Holders otherwise were deemed to have disposed of an interest in the lower-tier PFIC. We will endeavor to cause any lower-tier
PFIC to provide to a U.S. Holder the information that may be required to make or maintain a QEF election with respect to the lower-tier
PFIC. There can be no assurance that we will have timely knowledge of the status of any such lower-tier PFIC. In addition, we
may not hold a controlling interest in any such lower-tier PFIC and thus there can be no assurance we will be able to cause the
lower-tier PFIC to provide such required information. U.S. Holders are urged to consult their tax advisors regarding the tax issues
raised by lower-tier PFICs.
A
U.S. Holder that owns (or is deemed to own) shares in a PFIC during any taxable year of the U.S. Holder, may have to file an IRS
Form 8621 (whether or not a QEF or mark-to-market election is made) and such other information as may be required by the
U.S. Treasury Department. Failure to do so, if required, will extend the statute of limitations until such required information
is furnished to the IRS.
The
rules dealing with PFICs and with the QEF and mark-to-market elections are very complex and are affected by various factors in
addition to those described above. Accordingly, U.S. Holders of our Class A ordinary shares, rights or warrants should consult
their own tax advisors concerning the application of the PFIC rules to our securities under their particular circumstances.
Tax
Reporting
Certain
U.S. Holders may be required to file an IRS Form 926 (Return by a U.S. Transferor of Property to a Foreign Corporation) to report
a transfer of property (including cash) to us. Substantial penalties may be imposed on a U.S. Holder that fails to comply with
this reporting requirement. Furthermore, certain U.S. Holders who are individuals and certain entities will be required to report
information with respect to such U.S. Holder’s investment in “specified foreign financial assets” on IRS Form
8938 (Statement of Specified Foreign Financial Assets), subject to certain exceptions. Persons who are required to report specified
foreign financial assets and fail to do so may be subject to substantial penalties. Potential investors are urged to consult their
tax advisors regarding the foreign financial asset and other reporting obligations and their application to an investment in our
Class A ordinary shares, rights and warrants.
Non-U.S.
Holders
This
section applies to you if you are a “Non-U.S. Holder.” As used herein, the term “Non-U.S. Holder” means
a beneficial owner of our units, Class A ordinary shares, rights or warrants that is for U.S. federal income tax purposes:
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a
non-resident alien individual (other than certain former citizens and residents of the
United States subject to U.S. tax as expatriates);
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a
foreign corporation; or
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an
estate or trust that is not a U.S. Holder;
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but
generally does not include an individual who is present in the United States for 183 days or more in the taxable year of disposition.
If you are such an individual, you should consult your tax advisor regarding the U.S. federal income tax consequences of the sale
or other disposition of our securities.
Dividends
(including constructive distributions treated as dividends) paid or deemed paid to a Non-U.S. Holder in respect of our Class A
ordinary shares generally will not be subject to United States federal income tax, unless the dividends are effectively connected
with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income
tax treaty, are attributable to a permanent establishment or fixed base that such Non-U.S. Holder maintains in the United States).
In addition, a Non-U.S. Holder generally will not be subject to United States federal income tax on any gain attributable to a
sale or other disposition of our Class A ordinary shares, rights or warrants unless such gain is effectively connected with its
conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a
permanent establishment or fixed base that such Non-U.S. Holder maintains in the United States).
Dividends
(including constructive distributions treated as dividends) and gains that are effectively connected with the Non-U.S. Holder’s
conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, are attributable to
a permanent establishment or fixed base in the United States) generally will be subject to United States federal income tax at
the same regular United States federal income tax rates applicable to a comparable U.S. Holder and, in the case of a Non-U.S.
Holder that is a corporation for United States federal income tax purposes, also may be subject to an additional branch profits
tax at a 30% rate or a lower applicable tax treaty rate.
The
United States federal income tax treatment of a Non-U.S. Holder’s exercise of a warrant, or the lapse of a warrant held
by a Non-U.S. Holder, generally will correspond to the United States federal income tax treatment of the exercise or lapse of
a warrant by a U.S. Holder, as described under “U.S. Holders — Exercise or Lapse of a Warrant,” above, although
to the extent a cashless exercise results in a taxable exchange, the consequences would be similar to those described in the preceding
paragraphs above for a Non-U.S. Holder’s gain on the sale or other disposition of our Class A ordinary shares, rights and
warrants.
The
treatment of the rights to acquire Class A ordinary shares is uncertain. The rights may be viewed as a forward contract, derivative
security or similar interest in our company (analogous to a warrant or option with no exercise price), and thus the holder of
the rights would not be viewed as owning the Class A ordinary shares issuable pursuant to the rights until such Class A ordinary
shares are actually issued. There may be other alternative characterizations of the rights that the IRS may successfully assert,
including that the rights are treated as equity in our company at the time the rights are issued. The tax consequences of an acquisition
of our Class A ordinary shares pursuant to rights are unclear and will depend on the treatment of any initial business combination.
Accordingly, Non-U.S. Holders should consult their tax advisors regarding the tax consequences of an acquisition of Class A ordinary
shares pursuant to rights and the consequences of any initial business combination.
Information
Reporting and Backup Withholding
Dividend
payments with respect to our Class A ordinary shares and proceeds from the sale, exchange or redemption of our securities
may be subject to information reporting to the IRS and possible United States backup withholding. Backup withholding will not
apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes other required certifications,
or who is otherwise exempt from backup withholding and establishes such exempt status. A Non-U.S. Holder generally will eliminate
the requirement for information reporting and backup withholding by providing certification of its foreign status, under penalties
of perjury, on a duly executed applicable IRS Form W-8 or by otherwise establishing an exemption.
Backup
withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a holder’s U.S. federal
income tax liability, and a holder generally may obtain a refund of any excess amounts withheld under the backup withholding rules by
timely filing the appropriate claim for refund with the IRS and furnishing any required information. Holders are urged to consult
their own tax advisors regarding the application of backup withholding and the availability of and procedure for obtaining an
exemption from backup withholding in their particular circumstances.
UNDERWRITING
We
are offering the units described in this prospectus through the underwriters named below. EarlyBirdCapital, Inc. is acting
as representative of the underwriters. We have entered into an underwriting agreement with the representative. Subject to the
terms and conditions of the underwriting agreement, the underwriters have agreed to purchase, and we have agreed to sell to the
underwriters, the number of units listed next to each of its name in the following table:
|
Underwriter
|
|
Number
of Units
|
|
|
EarlyBirdCapital, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
4,000,000
|
|
The
underwriting agreement provides that the underwriters must buy all of the units if they buy any of them. However, the underwriters
are not required to purchase the units covered by the option to purchase additional units as described below.
Our
units are offered subject to a number of conditions, including:
• receipt
and acceptance of our units by the underwriters; and
• the
underwriters’ right to reject orders in whole or in part.
In
connection with this offering, the underwriters or securities dealers may distribute prospectuses electronically.
Option
to Purchase Additional Units
We
have granted the underwriters an option to buy up to an aggregate of 600,000 additional units. The underwriters have 45 days from
the date of this prospectus to exercise this option. If the underwriters exercise this option, they will purchase additional units
approximately in proportion to the amounts specified in the table above.
Underwriting
Discount
Units
sold by the underwriters to the public will initially be offered at the initial offering price set forth on the cover of this
prospectus. Any units sold by the underwriters to securities dealers may be sold at a discount of up to $
per unit from the initial public offering price and the dealers may reallow a concession not in excess of $
per unit to other dealers. Sales of units made outside of the United States may be made by affiliates of the underwriters. After
completion of this offering, if the underwriters still hold any units sold by us to them in this offering, the representative
may change the offering price and the other selling terms. Upon execution of the underwriting agreement, the underwriters will
be obligated to purchase the units at the prices and upon the terms stated therein.
The
following table shows the per unit and total underwriting discount we will pay to the underwriters assuming both no exercise and
full exercise of the underwriters’ option to purchase up to 600,000 additional units.
|
|
|
No
Exercise
|
|
|
Full
Exercise
|
|
|
Per
Unit
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
Total
|
|
$
|
1,200,000
|
|
|
$
|
1,380,000
|
|
We
have agreed to pay for the FINRA-related fees and expenses of the underwriters’ legal counsel, not to exceed $15,000, and
the expenses of certain investigations and background checks not to exceed $3,500 per individual. We estimate that the total expenses
of the offering payable by us, including the foregoing but not including the underwriting discount, will be $550,000.
Business
Combination Marketing Agreement
We
have engaged EarlyBirdCapital as an advisor in connection with our business combination to assist us in holding meetings with
our shareholders to discuss the potential business combination and the target business’ attributes, introduce us to potential
investors that are interested in purchasing our securities in connection with our initial business combination, assist us in obtaining
shareholder approval for the business combination and assist us with our press releases and public filings in connection with
the business combination. We will pay EarlyBirdCapital a cash fee for such services upon the consummation of our initial business
combination in an amount equal to 4.0% of the gross proceeds of this offering (exclusive of any applicable finders’ fees
which might become payable). We will also pay EarlyBirdCapital a cash fee in an amount equal to 1.0% of the total consideration
payable in the initial business combination if it introduces us to the target business with whom we complete our initial business
combination.
Representative
Shares
We
have issued to EarlyBirdCapital, Inc. and its designees the 100,000 representative shares for nominal consideration. The
holders of the representative shares have agreed not to transfer, assign or sell any such shares without our prior consent until
30 days after the completion of our initial business combination. In addition, the holders of the representative shares have agreed
(i) to waive their conversion rights (or right to participate in any tender offer) with respect to such shares in connection
with the completion of our initial business combination and (ii) to waive their rights to liquidating distributions from
the trust account with respect to such shares if we fail to complete our initial business combination within 15 months from the
closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a
business combination).
The
representative shares have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately
following the date of the effectiveness of the registration statement of which this prospectus forms a part pursuant to Rule 5110(g)(1) of
the FINRA Manual. Pursuant to FINRA Rule 5110(g)(1), these securities will not be sold during the offering, or sold, transferred,
assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put or call transaction that would
result in the economic disposition of the securities by any person for a period of 180 days immediately following the effective
date of the registration statement of which this prospectus forms a part or commencement of sales of the public offering, except
to any underwriter and selected dealer participating in the offering and their bona fide officers or partners, provided that all
securities so transferred remain subject to the lockup restriction above for the remainder of the time period.
We
have granted the holders of these shares the registration rights as described under the section “Shares Eligible for
Future Sale — Registration Rights.”
Indemnification
We
have agreed to indemnify the underwriters against certain liabilities, including certain liabilities under the Securities Act.
If we are unable to provide this indemnification, we have agreed to contribute to payments the underwriters may be required to
make in respect of those liabilities.
Nasdaq
Listing
We
have applied to have our units listed on the Nasdaq Capital Market under the symbol “DISTU” and, once the Class A
ordinary shares, rights and warrants begin separate trading, under the symbols “DIST,” “DISTR” and “DISTW,”
respectively.
Price
Stabilization, Short Positions
In
connection with this offering, the underwriters may engage in activities that stabilize, maintain or otherwise affect the price
of units during and after this offering, including:
• stabilizing
transactions;
• short
sales;
• purchases
to cover positions created by short sales;
• imposition
of penalty bids; and
• syndicate
covering transactions.
Stabilizing
transactions consist of bids or purchases made for the purpose of preventing or retarding a decline in the market price of our
units while this offering is in progress. Stabilization transactions permit bids to purchase the underlying security so long as
the stabilizing bids do not exceed a specified maximum. These transactions may also include making short sales of our units, which
involve the sale by the underwriters of a greater number of units than they are required to purchase in this offering and purchasing
units on the open market to cover short positions created by short sales. Short sales may be “covered short sales,”
which are short positions in an amount not greater than the underwriters’ option to purchase additional units referred to
above, or may be “naked short sales,” which are short positions in excess of that amount.
The
underwriters may close out any covered short position by either exercising their option, in whole or in part, or by purchasing
units in the open market. In making this determination, the underwriters will consider, among other things, the price of units
available for purchase in the open market as compared to the price at which they may purchase units through the over-allotment
option.
Naked
short sales are short sales made in excess of the over-allotment option. The underwriters must close out any naked short position
by purchasing units in the open market. A naked short position is more likely to be created if the underwriters are concerned
that there may be downward pressure on the price of the units in the open market that could adversely affect investors who purchased
in this offering.
The
underwriters also may impose a penalty bid. This occurs when a particular underwriter repays to the representative of the underwriters
a portion of the underwriting discount received by it because the representative has repurchased units sold by or for the account
of that underwriter in stabilizing or short covering transactions.
These
stabilizing transactions, short sales, purchases to cover positions created by short sales, the imposition of penalty bids and
syndicate covering transactions may have the effect of raising or maintaining the market price of our units or preventing or retarding
a decline in the market price of our units. As a result of these activities, the price of our units may be higher than the price
that otherwise might exist in the open market. The underwriters may carry out these transactions on the Nasdaq, in the over-the-counter
market or otherwise. Neither we nor the underwriters make any representation or prediction as to the effect that the transactions
described above may have on the price of the units. Neither we, nor the underwriters, make any representation that the underwriters
will engage in these stabilization transactions or that any transaction, once commenced, will not be discontinued without notice.
Determination
of Offering Price
Prior
to this offering, there was no public market for our units. The initial public offering price will be determined by negotiation
between us and the representative of the underwriters. The principal factors to be considered in determining the initial public
offering price include:
• the
information set forth in this prospectus and otherwise available to the representative;
• our
history and prospects and the history and prospects for the industry in which we compete;
• our
past and present financial performance;
• our
prospects for future earnings and the present state of our development;
• the
general condition of the securities market at the time of this offering;
• the
recent market prices of, and demand for, publicly traded units of generally comparable companies; and
• other
factors deemed relevant by the underwriters and us.
Neither
we nor the underwriters can assure investors that an active trading market will develop for our units, warrants or Class A
ordinary shares or that the units will trade in the public market at or above the initial public offering price.
Affiliations
EarlyBirdCapital
is a full service financial institution engaged in various activities, which may include securities trading, commercial and investment
banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage
activities. EarlyBirdCapital and its affiliates may from time to time in the future engage with us and perform services for us
or in the ordinary course of their business for which they will receive customary fees and expenses. In the ordinary course of
their various business activities, the underwriters and their respective affiliates may also 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, and such investment and securities activities may involve securities
and/or instruments of us. The underwriters and their affiliates may also make investment recommendations and/or publish or express
independent research views in respect of these securities or instruments and may at any time hold, or recommend to clients that
they acquire, long and/or short positions in these securities and instruments.
Additional
Future Arrangements
Except
as described above, we are not under any contractual obligation to engage any of 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 any underwriter and no fees for such services will be paid to any underwriter
prior to the date that is 90 days from the date of this prospectus, unless FINRA determines that such payment would not be deemed
underwriters’ compensation in connection with this offering.
Electronic
Distribution
A
prospectus in electronic format may be made available on the Internet sites or through other online services maintained by the
underwriters participating in this offering, or by their affiliates. In those cases, prospective investors may view offering terms
online and, depending upon the particular underwriter, prospective investors may be allowed to place orders online. The underwriters
may agree with us to allocate a specific number of units for sale to online brokerage account holders. Any such allocation for
online distributions will be made by the underwriters on the same basis as other allocations. Other than the prospectus in electronic
format, the information on any underwriters’ website and any information contained in any other website maintained by an
underwriter is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved
and/or endorsed by us or any underwriter in its capacity as underwriter and should not be relied upon by investors.
Selling
Restrictions
Canada
Resale
Restrictions
We
intend to distribute our securities in the Province of Ontario, Canada (the “Canadian Offering Jurisdiction”) by way
of a private placement and exempt from the requirement that we prepare and file a prospectus with the securities regulatory authorities
in such Canadian Offering Jurisdiction. Any resale of our securities in Canada must be made under applicable securities laws that
will vary depending on the relevant jurisdiction, and which may require resales to be made under available statutory exemptions
or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Canadian resale restrictions
in some circumstances may apply to resales of interests made outside of Canada. Canadian purchasers are advised to seek legal
advice prior to any resale of our securities. We may never be a “reporting issuer”, as such term is defined under
applicable Canadian securities legislation, in any province or territory of Canada in which our securities will be offered and
there currently is no public market for any of the securities in Canada, and one may never develop. Canadian investors are advised
that we have no intention to file a prospectus or similar document with any securities regulatory authority in Canada qualifying
the resale of the securities to the public in any province or territory in Canada.
Representations
of Purchasers
A
Canadian purchaser will be required to represent to us and the dealer from whom the purchase confirmation is received that:
• the
purchaser is entitled under applicable provincial securities laws to purchase our securities without the benefit of a prospectus
qualified under those securities laws;
• where
required by law, that the purchaser is purchasing as principal and not as agent;
• the
purchaser has reviewed the text above under Resale Restrictions; and
• the
purchaser acknowledges and consents to the provision of specified information concerning its purchase of our securities to the
regulatory authority that by law is entitled to collect the information.
Rights
of Action — Ontario Purchasers Only
Under
Ontario securities legislation, certain purchasers who purchase a security offered by this prospectus during the period of distribution
will have a statutory right of action for damages, or while still the owner of our securities, for rescission against us in the
event that this prospectus contains a misrepresentation without regard to whether the purchaser relied on the misrepresentation.
The right of action for damages is exercisable not later than the earlier of 180 days from the date the purchaser first had knowledge
of the facts giving rise to the cause of action and three years from the date on which payment is made for our securities. The
right of action for rescission is exercisable not later than 180 days from the date on which payment is made for our securities.
If a purchaser elects to exercise the right of action for rescission, the purchaser will have no right of action for damages against
us. In no case will the amount recoverable in any action exceed the price at which our securities were offered to the purchaser
and if the purchaser is shown to have purchased the securities with knowledge of the misrepresentation, we will have no liability.
In the case of an action for damages, we will not be liable for all or any portion of the damages that are proven to not represent
the depreciation in value of our securities as a result of the misrepresentation relied upon. These rights are in addition to,
and without derogation from, any other rights or remedies available at law to an Ontario purchaser. The foregoing is a summary
of the rights available to an Ontario purchaser. Ontario purchasers should refer to the complete text of the relevant statutory
provisions.
Enforcement
of Legal Rights
All
of our directors and officers as well as the experts named herein are located outside of Canada and, as a result, it may not be
possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All of our assets and the
assets of those persons are located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us
or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons outside of Canada.
Collection
of Personal Information
If
a Canadian purchaser is resident in or otherwise subject to the securities laws of the Province of Ontario, the Purchaser authorizes
the indirect collection of personal information pertaining to the Canadian purchaser by the Ontario Securities Commission (the
“OSC”) and each Canadian purchaser will be required to acknowledge and agree that the Canadian purchaser has been
notified by us (i) of the delivery to the OSC of personal information pertaining to the Canadian purchaser, including, without
limitation, the full name, residential address and telephone number of the Canadian purchaser, the number and type of securities
purchased and the total purchase price paid in respect of the securities, (ii) that this information is being collected indirectly
by the OSC under the authority granted to it in securities legislation, (iii) that this information is being collected for
the purposes of the administration and enforcement of the securities legislation of Ontario, and (iv) that the title, business
address and business telephone number of the public official in Ontario who can answer questions about the OSC’s indirect
collection of the information is the Administrative Assistant to the Director of Corporate Finance, the Ontario Securities Commission,
Suite 1903, Box 5520, Queen Street West, Toronto, Ontario, M5H 3S8, Telephone: (416) 593-8086, Facsimile: (416) 593-8252.
Notice
to Prospective Investors in Australia
No
placement document, prospectus, product disclosure statement or other disclosure document has been lodged with the Australian
Securities and Investments Commission (“ASIC”), in relation to the offering. This prospectus does not constitute a
prospectus, product disclosure statement or other disclosure document under the Corporations Act 2001 (the “Corporations
Act”), and does not purport to include the information required for a prospectus, product disclosure statement or other
disclosure document under the Corporations Act.
Any
offer in Australia of the shares may only be made to persons (the “Exempt Investors”) who are “sophisticated
investors” (within the meaning of section 708(8) of the Corporations Act), “professional investors” (within
the meaning of section 708(11) of the Corporations Act) or otherwise pursuant to one or more exemptions contained in section 708
of the Corporations Act so that it is lawful to offer the shares without disclosure to investors under Chapter 6D of the Corporations
Act.
The
shares applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of 12 months after
the date of allotment under the offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations
Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is
pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring shares must observe
such Australian on-sale restrictions.
This
prospectus contains general information only and does not take account of the investment objectives, financial situation or particular
needs of any particular person. It does not contain any securities recommendations or financial product advice. Before making
an investment decision, investors need to consider whether the information in this prospectus is appropriate to their needs, objectives
and circumstances, and, if necessary, seek expert advice on those matters.
Notice
to Prospective Investors in the Dubai International Financial Centre
This
prospectus relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority
(“DFSA”). This prospectus is intended for distribution only to persons of a type specified in the Offered Securities
Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing
or verifying any documents in connection with Exempt Offers. The DFSA has not approved this prospectus nor taken steps to verify
the information set forth herein and has no responsibility for the prospectus. The shares to which this prospectus relates may
be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the shares offered should conduct their
own due diligence on the shares. If you do not understand the contents of this prospectus you should consult an authorized financial
advisor.
Notice
to Prospective Investors in the European Economic Area
In
relation to each member state of the European Economic Area that has implemented the Prospectus Directive (each, a “relevant
member state”), with effect from and including the date on which the Prospectus Directive is implemented in that relevant
member state (the “relevant implementation date”), an offer of units described in this prospectus may not be made
to the public in that relevant member state prior to the publication of a prospectus in relation to the units that has been approved
by the competent authority in that relevant member state or, where appropriate, approved in another relevant member state and
notified to the competent authority in that relevant member state, all in accordance with the Prospectus Directive, except that,
with effect from and including the relevant implementation date, an offer of our units may be made to the public in that relevant
member state at any time:
• to
any legal entity which is a qualified investor as defined in the Prospectus Directive;
• to
fewer than 100, or, if the relevant member state has implemented the relevant provisions of the 2010 PD Amending Directive, 150,
natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus
Directive, subject to obtaining the prior consent of the relevant Dealer or Dealers nominated by the issuer for any such offer;
or natural or legal persons (other than qualified investors as defined below) subject to obtaining the prior consent of the underwriter
for any such offer; or
• in
any other circumstances that do not require the publication by us of a prospectus pursuant to Article 3 of the Prospectus
Directive.
Each
purchaser of units described in this prospectus located within a relevant member state will be deemed to have represented, acknowledged
and agreed that it is a “qualified investor” within the meaning of Article 2(1)(e) of the Prospectus Directive.
For
the purpose of this provision, the expression an “offer to the public” in any relevant member state means the communication
in any form and by any means of sufficient information on the terms of the offer and the units to be offered so as to enable an
investor to decide to purchase or subscribe for the units, as the expression may be varied in that member state by any measure
implementing the Prospectus Directive in that member state, and the expression “Prospectus Directive” means Directive
2003/71/EC (and amendments thereto, including the PD 2010 Amending Directive to the extent implemented by the relevant member
state) and includes any relevant implementing measure in each relevant member state, and the expression 2010 PD Amending Directive
means Directive 2010/73/EU.
We
have not authorized and do not authorize the making of any offer of securities through any financial intermediary on their behalf,
other than offers made by the underwriters with a view to the final placement of the units as contemplated in this prospectus.
Accordingly, no purchaser of the units, other than the underwriters, is authorized to make any further offer of the units on behalf
of us or the underwriters.
Notice
to Prospective Investors in Switzerland
The
shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or on any
other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure
standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards
for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange
or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating to the
shares or the offering may be publicly distributed or otherwise made publicly available in Switzerland.
Neither
this document nor any other offering or marketing material relating to the offering, the Company or the shares have been or will
be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer
of shares will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA (FINMA), and the offer of shares has
not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes (“CISA”). The investor
protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of
shares.
Notice
to Prospective Investors in the United Kingdom
This
prospectus is only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors within
the meaning of Article 2(1)(e) of the Prospectus Directive that are also (i) investment professionals falling within
Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”)
or (ii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to
(d) of the Order (all such persons together being referred to as a “relevant person”). The units are only available
to, and any invitation, offer or agreement to purchase or otherwise acquire such units will be engaged in only with, relevant
persons. This prospectus and its contents are confidential and should not be distributed, published or reproduced (in whole or
in part) or disclosed by recipients to any other persons in the United Kingdom. Any person in the United Kingdom that is not a
relevant person should not act or rely on this document or any of its contents.
Notice
to Prospective Investors in France
Neither
this prospectus nor any other offering material relating to the units described in this prospectus has been submitted to the clearance
procedures of the Autorité des Marchés Financiers or by the competent authority of another member state of the European
Economic Area and notified to the Autorité des Marchés Financiers. The units have not been offered or sold and will
not be offered or sold, directly or indirectly, to the public in France. Neither this prospectus nor any other offering material
relating to the units has been or will be:
|
|
·
|
released,
issued, distributed or caused to be released, issued or distributed to the public in
France; or
|
|
|
·
|
used
in connection with any offer for subscription or sale of the units to the public in France.
|
Such
offers, sales and distributions will be made in France only:
|
|
·
|
to
qualified investors (investisseurs qualifiés) and/or to a restricted circle of
investors (cercle restreint d’investisseurs), in each case investing for their
own account, all as defined in, and in accordance with, Article L.411-2, D.411-1,
D.411-2, D.734-1, D.744-1, D.754-1 and D.764-1 of the French Code monétaire et
financier;
|
|
|
·
|
to
investment services providers authorized to engage in portfolio management on behalf
of third parties; or
|
|
|
·
|
in
a transaction that, in accordance with article L.411-2-II-1°-or-2°-or 3°
of the French Code monétaire et financier and article 211-2 of the General Regulations
(Règlement Général) of the Autorité des Marchés Financiers,
does not constitute a public offer (appel public à l’épargne).
|
The
units may be resold directly or indirectly, only in compliance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 through L.621-8-3
of the French Code monétaire et financier.
Notice
to Prospective Investors in Hong Kong
The
units 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), (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 units
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 units 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 Prospective Investors in Japan
The
units 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 Prospective Investors in 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 units
may not be circulated or distributed, nor may the units 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 units are subscribed or purchased under Section 275 of the SFA by a relevant person that is:
• a
corporation (which is not an accredited investor (as defined in Section 14A of the SFA)) the sole business of which is to
hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor,
or
• a
trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the
trust is an individual who is an accredited investor, shares, debentures and units 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, debentures and units of 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.
LEGAL
MATTERS
Ellenoff
Grossman & Schole LLP, New York, New York, is acting as counsel in connection with the registration of our securities
under the Securities Act, and as such, will pass upon the validity of the securities offered in this prospectus with respect to
units and warrants. Maples and Calder will pass upon the validity of the securities offered in this prospectus with respect to
the ordinary shares and matters of Cayman Islands law. In connection with this offering, Graubard Miller, New York, New York,
is acting as counsel to the underwriter.
EXPERTS
The
financial statements of Distoken Acquisition Corporation as of July 8, 2020 and for the period from July 1, 2020 (inception)
through July 8, 2020 appearing in this prospectus have been audited by Marcum LLP, independent registered public accounting
firm, as set forth in their report thereon (which contains an explanatory paragraph relating to substantial doubt about the ability
of Distoken Acquisition Corporation to continue as a going concern as described in Note 1 to the financial statements), 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.
DISTOKEN
ACQUISITION CORPORATION
INDEX
TO FINANCIAL STATEMENTS
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Shareholder and the Board of Directors of
Distoken Acquisition Corporation
Opinion
on the Financial Statement
We
have audited the accompanying balance sheet of Distoken Acquisition Corporation (the “Company”) as of July 8, 2020,
the related statements of operations, changes in shareholder’s equity and cash flows for the period from July 1, 2020 (inception)
through July 8, 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 July 8, 2020 and
the results of its operations and its cash flows for the period from July 1, 2020 (inception) through July 8, 2020, in conformity
with accounting principles generally accepted in the United States of America.
Explanatory
Paragraph — Going Concern
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully
described in Note 1 to the financial statements, the Company’s ability to execute its business plan is dependent upon its
completion of the proposed initial public offering described in Note 3 to the financial statements. The Company has a working
capital deficiency as of July 8, 2020 and lacks the financial resources it needs to sustain operations for a reasonable period
of time, which is considered to be one year from the issuance date of the financial statements. These conditions raise substantial
doubt about the Company’s ability to continue as a going concern. Management’s plans with regard to these matters
are also described in Notes 1 and 3. The financial statements do not include any adjustments that might become necessary should
the Company be unable to continue as a going concern.
Basis
for Opinion
These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company
Accounting Oversight Board (United States) (the “PCAOB”) and are required to be independent with respect to the Company
in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.
We
conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error
or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not
for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion.
Our
audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audit provides a reasonable basis for our opinion.
/s/
Marcum LLP
Marcum
LLP
We have served as the Company’s auditor since 2020.
New
York, NY
July 31, 2020
DISTOKEN
ACQUISITION CORPORATION
BALANCE SHEET
JULY
8, 2020
|
ASSETS
|
|
|
|
|
Deferred
offering costs
|
|
$
|
55,927
|
|
|
TOTAL
ASSETS
|
|
$
|
55,927
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDER’S EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accrued
expenses
|
|
$
|
9,073
|
|
|
Accrued
offering costs
|
|
|
15,927
|
|
|
Promissory
note – related party
|
|
|
15,000
|
|
|
Total
Current Liabilities
|
|
|
40,000
|
|
|
|
|
|
|
|
|
Commitments
|
|
|
|
|
|
|
|
|
|
|
|
Shareholder’s
Equity
|
|
|
|
|
|
Preference
shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
|
|
|
—
|
|
|
Class
A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; none issued and outstanding
|
|
|
—
|
|
|
Class
B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 1,150,000 shares issued and outstanding (1)
|
|
|
115
|
|
|
Additional
paid in capital
|
|
|
24,885
|
|
|
Accumulated
deficit
|
|
|
(9,073
|
)
|
|
Total
Shareholder’s Equity
|
|
|
15,927
|
|
|
TOTAL
LIABILITIES AND SHAREHOLDER’S EQUITY
|
|
$
|
55,927
|
|
|
|
(1)
|
Includes
an aggregate of up to 150,000 shares subject to forfeiture if the over-allotment option
is not exercised in full or in part by the underwriter (see Note 5).
|
The
accompanying notes are an integral part of these financial statements.
DISTOKEN
ACQUISITION CORPORATION
STATEMENT OF OPERATIONS
FOR
THE PERIOD FROM JULY 1, 2020 (INCEPTION) THROUGH JULY 8, 2020
|
Formation
and operating costs
|
|
$
|
9,073
|
|
|
Net
Loss
|
|
$
|
(9,073
|
)
|
|
|
|
|
|
|
|
Weighted
average shares outstanding, basic and diluted (1)
|
|
|
1,000,000
|
|
|
|
|
|
|
|
|
Basic
and diluted net loss per ordinary share
|
|
$
|
(0.01
|
)
|
|
|
(1)
|
Excludes
an aggregate of up to 150,000 shares subject to forfeiture if the over-allotment option
is not exercised in full or in part by the underwriter (see Note 5).
|
The
accompanying notes are an integral part of these financial statements.
DISTOKEN
ACQUISITION CORPORATION
STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY
FOR
THE PERIOD FROM JULY 1, 2020 (INCEPTION) THROUGH JULY 8, 2020
|
|
|
Ordinary
Shares
|
|
|
Additional
Paid in
Capital
|
|
|
Accumulated
Deficit
|
|
|
Total
Shareholder’s
Equity
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
|
Balance –
July 1, 2020 (inception)
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of Class B ordinary shares to Sponsor (1)
|
|
|
1,150,000
|
|
|
|
115
|
|
|
|
24,885
|
|
|
|
—
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(9,073
|
)
|
|
|
(9,073
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
– July 8, 2020
|
|
|
1,150,000
|
|
|
$
|
115
|
|
|
$
|
24,885
|
|
|
$
|
(9,073
|
)
|
|
$
|
15,927
|
|
|
|
(1)
|
Includes
an aggregate of up to 150,000 shares subject to forfeiture if the over-allotment option
is not exercised in full or in part by the underwriter (see Note 5).
|
The
accompanying notes are an integral part of these financial statements.
DISTOKEN
ACQUISITION CORPORATION
STATEMENT OF CASH FLOWS
FOR
THE PERIOD FROM JULY 1, 2020 (INCEPTION) THROUGH JULY 8, 2020
|
Cash Flows
from Operating Activities:
|
|
|
|
|
Net
loss
|
|
$
|
(9,073
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
Accrued
expenses
|
|
|
9,073
|
|
|
Net
cash used in operating activities
|
|
|
—
|
|
|
|
|
|
|
|
|
Cash
Flows from Financing Activities:
|
|
|
|
|
|
Proceeds
from promissory note – related party
|
|
|
15,000
|
|
|
Payment
of offering costs
|
|
|
(15,000
|
)
|
|
Net
cash used in financing activities
|
|
|
—
|
|
|
|
|
|
|
|
|
Net
Change in Cash
|
|
|
—
|
|
|
Cash
– Beginning
|
|
|
—
|
|
|
Cash
– Ending
|
|
$
|
—
|
|
|
|
|
|
|
|
|
Non-cash
investing and financing activities:
|
|
|
|
|
|
Deferred
offering costs paid directly by Sponsor in exchange for the issuance of Class B ordinary shares
|
|
$
|
25,000
|
|
|
Offering
costs included in accrued offering costs
|
|
$
|
15,927
|
|
The
accompanying notes are an integral part of these financial statements.
DISTOKEN
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
NOTE
1 — ORGANIZATION AND PLAN OF BUSINESS OPERATIONS
Distoken
Acquisition Corporation (the “Company”) is a newly organized blank check company incorporated as a Cayman Islands
exempted company on July 1, 2020. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition,
share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities (“Business
Combination”).
Although
the Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination,
the Company intends to focus on businesses in the technology industry that have their primary operations located in Asia. The
Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with
early stage and emerging growth companies.
As
of July 8, 2020, the Company had not commenced any operations. All activity for the period from July 1, 2020 (inception) through
July 8, 2020 relates to the Company’s formation and the proposed initial public offering (“Proposed Offering”),
which is described below. The Company will not generate any operating revenues until after the completion of a Business Combination,
at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from
the Proposed Offering. The Company has selected December 31 as its fiscal year end.
The
Company’s ability to commence operations is contingent upon obtaining adequate financial resources through a Proposed Offering
of 4,000,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units being offered,
the “Public Shares”) at $10.00 per Unit (or 4,600,000 Units if the underwriter’s over-allotment option is exercised
in full), which is discussed in Note 3 and the sale of 250,000 units (or 268,000 units if the underwriter’s over-allotment
option is exercised on full) (the “Private Units”) at a price of $10.00 per Private Unit in a private placement to
the Company’s sponsor, Xiaosen Sponsor LLC (the “Sponsor”), that will close simultaneously with the Proposed
Offering.
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Proposed Offering
and the sale of the Private Units, although substantially all of the net proceeds are intended to be applied generally toward
consummating a Business Combination. Nasdaq rules provide that the Business Combination must be with one or more target businesses
that together have an aggregate fair market value of at least 80% of the assets held in the Trust Account (as defined below) (excluding
taxes payable on the income earned on the Trust Account) at the time of the agreement to enter into a Business Combination. The
Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the
issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient
for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment
Company Act”). There is no assurance that the Company will be able to successfully effect a Business Combination. Upon the
closing of the Proposed Offering, management has agreed that $10.00 per Unit sold in the Proposed Offering, including proceeds
of the sale of the Private Units, will be held in a trust account (“Trust Account”) and invested in U.S. government
securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 180 days or less,
or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the
Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii)
the distribution of the funds in the Trust Account to the Company’s shareholders, as described below.
The
Company will provide its shareholders with the opportunity to redeem all or a portion of their Public Shares upon the completion
of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii)
by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or
conduct a tender offer will be made by the Company, solely in its discretion. The shareholders will be entitled to redeem their
shares for a pro rata portion of the amount held in the Trust Account (initially $10.00 per share) as of two business days prior
to the completion of a Business Combination, including any pro rata interest earned on the funds held in the Trust Account and
not previously released to the Company to pay its tax obligations. There will be no redemption rights upon the completion of a
Business Combination with respect to the Company’s warrants. The Class A ordinary shares will be recorded at redemption
value and classified as temporary equity upon the completion of the Proposed Offering, in accordance with Accounting Standards
Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”
The
Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 upon such
completion of a Business Combination and, if the Company seeks shareholder approval, it receives an ordinary resolution under
Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who
attend and vote at a general meeting of the Company. If a shareholder vote is not required and the Company does not decide to
hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Memorandum
and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission
(“SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy
statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with
a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5), the Class A ordinary shares
included in the Private Units (the “Private Shares”) and any Public Shares purchased in or after the Proposed Offering
in favor of approving a Business Combination and to waive its redemption rights with respect to any such shares in connection
with a shareholder vote to approve a Business Combination or seek to sell any shares to the Company in a tender offer in connection
with a Business Combination. Additionally, subject to the immediately succeeding paragraph, each public shareholder may elect
to redeem their Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed
Business Combination.
DISTOKEN
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
Notwithstanding
the foregoing, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant
to the tender offer rules, the Company’s Amended and Restated Memorandum and Articles of Association provides that a public
shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert
or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)), will be restricted from redeeming its shares with respect to 15% or more of the Public Shares without the Company’s
prior written consent.
The
Sponsor has agreed (a) to waive its redemption rights with respect to any Founder Shares, Private Shares and Public Shares held
by it in connection with the completion of a Business Combination (and not seek to sell its shares to the Company in any tender
offer the Company undertakes in connection with a Business Combination) and (b) not to propose an amendment to the Amended and
Restated Memorandum and Articles of Association (i) that would affect the ability of holders of Public Shares to convert or sell
their shares to the Company in connection with a Business Combination or 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 15 months from the
closing of the Proposed Offering (or up to 21 months from the closing of the Proposed Offering if the Company extends the period
of time to consummate a Business Combination) or (ii) with respect to any other provision relating to shareholders’ rights
or pre-initial business combination activity, unless the Company provides the public shareholders with the opportunity to redeem
their Public Shares in conjunction with any such amendment and (c) that the Founder Shares shall not participate in any liquidating
distributions upon winding up if a Business Combination is not consummated. However, the Sponsor will be entitled to liquidating
distributions from the Trust Account with respect to any Public Shares purchased during or after the Proposed Offering if the
Company fails to complete its Business Combination.
The
Company will have until 15 months from the closing of the Proposed Offering to consummate a Business Combination. However, if
the Company anticipates that it may not be able to consummate a Business Combination within 15 months, it may, by resolution of
the Company’s board of directors if requested by the Sponsor, extend the the period of time to consummate a Business Combination
up to two times, each by an additional three months (for a total of up to 21 months) (the “Combination Period”), subject
to the Sponsor depositing additional funds into the Trust Account. If the Company is unable to complete a Business Combination
within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly
as reasonably possible but no more than 10 business days thereafter, redeem 100% of the outstanding Public Shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned (less up
to $50,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of
then outstanding Public Shares, which redemption will completely extinguish public shareholders’ rights as shareholders
(including the right to receive further liquidation distributions, if any), and (iii) as promptly as reasonably possible following
such redemption, subject to the approval of the remaining shareholders and the Company’s board of directors, dissolve and
liquidate, subject in each case to its obligations under Cayman Islands law to provide for claims of creditors and the requirements
of other applicable law.
The
Sponsor has agreed that it will be liable to the Company, if and to the extent any claims by a third party (other than the Company’s
independent auditors) for services rendered or products sold to the Company, or a prospective target business with which the Company
has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public
Share or (2) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account
due to reductions in the value of trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as
to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to
any claims under the Company’s indemnity of the underwriter of the Proposed Offering against certain liabilities, including
liabilities under the Securities Act of 1933, as amended (the “Securities Act”). In the event that an executed waiver
is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such
third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account
due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent auditors),
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.
Going
Concern Consideration
At
July 8, 2020, the Company had no cash and a working capital deficit of $40,000. The Company has incurred and expects to continue
to incur significant costs in pursuit of its financing and acquisition plans. These conditions raise substantial doubt about the
Company’s ability to continue as a going concern within one year after the date that the financial statements are issued.
Management plans to address this uncertainty through a Proposed Offering as discussed in Note 3. There is no assurance that the
Company’s plans to raise capital or to consummate a Business Combination will be successful or successful within the Combination
Period. The Sponsor has agreed to loan the Company up to an aggregate amount of $150,000 to be used, in part, for transaction
costs incurred in connection with the Proposed Offering (the “Promissory Note”). The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
DISTOKEN
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
NOTE
2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States
of America (“GAAP”) and pursuant to the rules and regulations of the SEC.
Emerging
Growth Company
The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart
Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to,
not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure
obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not
previously approved.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial
accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared
effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised
financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and
comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The
Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and
it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the
new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s
financial statements with another public company which is neither an emerging growth company nor an emerging growth company which
has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting
standards used.
Use
of Estimates
The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period.
Making
estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect
of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered
in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual
results could differ significantly from those estimates.
Cash
and Cash Equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company did not have any cash equivalents as of July 8, 2020.
Deferred
Offering Costs
Deferred
offering costs consist of legal, accounting and other expenses incurred through the balance sheet date that are directly related
to the Proposed Offering and that will be charged to shareholder’s equity upon the completion of the Proposed Offering.
Should the Proposed Offering prove to be unsuccessful, these deferred costs, as well as additional expenses incurred, will be
charged to operations.
Income
Taxes
The
Company accounts for income taxes under ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition
of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis
of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC
740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred
tax assets will not be realized.
DISTOKEN
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
ASC
740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and
prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position
taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not
to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized
tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties
as of July 8, 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
Company is considered an exempted Cayman Islands Company and is presently not subject to income taxes or income tax filing requirements
in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the period presented.
Net
Loss per Share
Net
loss per share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period,
excluding ordinary shares subject to forfeiture. Weighted average shares were reduced for the effect of an aggregate of 150,000
ordinary shares that are subject to forfeiture if the over-allotment option is not exercised by the underwriter (see Note 5).
At July 8, 2020, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or
converted into ordinary shares and then share in the earnings of the Company. As a result, diluted loss per share is the same
as basic loss per share for the period presented.
Fair
Value of Financial Instruments
The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair
Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their
short-term nature.
Recently
Issued Accounting Standards
Management
does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material
effect on the Company’s financial statements.
NOTE
3 — PROPOSED OFFERING
Pursuant
to the Proposed Offering, the Company will offer for sale up to 4,000,000 Units (or 4,600,000 Units if the underwriter’s
over-allotment option is exercised in full) at a purchase price of $10.00 per Unit. Each Unit will consist of one Public Share,
one right (“Public Right”) and one-half of one redeemable warrant (“Public Warrant”). Each Public Right
will entitle the holder thereof to receive one-tenth (1/10) of one Class A ordinary share upon the consummation of a Business
Combination (see Note 7). Each whole Public Warrant will entitle the holder to purchase one Class A ordinary share at an exercise
price of $11.50 per share (see Note 7).
NOTE
4 — PRIVATE PLACEMENT
The
Sponsor has committed to purchase an aggregate of 250,000 Private Units (or 268,000 Private Units if the underwriter’s over-allotment
is exercised in full) at a price of $10.00 per Private Unit, for an aggregate purchase price of $2,500,000 (or $2,680,000 if the
underwriter’s over-allotment is exercised in full) from the Company in a private placement that will occur simultaneously
with the closing of the Proposed Offering. Each Private Unit will consist of one Private Share, one right (“Private Right”)
and one-half of one redeemable warrant (“Private Warrant”). Each Private Right will entitle the holder thereof to
receive one-tenth (1/10) of one Class A ordinary share upon the consummation of a Business Combination (see Note 7). Each whole
Private Warrant will be exercisable for one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see
Note 7). The proceeds from the sale of the Private Units will be added to the net proceeds from the Proposed Offering held in
the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the
sale of the Private Units held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements
of applicable law) and the Private Units and all underlying securities will expire worthless.
NOTE
5 — RELATED PARTY TRANSACTIONS
Founder
Shares
On
July 8, 2020, the Sponsor paid $25,000 to cover certain offering costs of the Company in consideration for 1,150,000 Class B
ordinary shares (the “Founder Shares”). The Founder Shares include an aggregate of up to 150,000 shares subject to
forfeiture by the Sponsor to the extent that the underwriter’s over-allotment is not exercised in full or in part, so that
the number of Founder Shares will collectively represent 20% of the Company’s issued and outstanding shares (excluding the
Private Shares and the Representative Shares, as defined in Note 6) upon the completion of the Proposed Offering.
DISTOKEN
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
The
Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier
of (A) one year after the completion of a Business Combination or (B) subsequent to a Business Combination, (x) for 50% of the
Founder Shares, if the last reported sale price of the Class A ordinary shares equals or exceeds $12.50 per share (as adjusted
for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20
trading days within any 30-trading day period commencing at least 150 days after a Business Combination, (y) for 50% of the Founder
Shares, if the last reported sale price of the Class A ordinary shares equals or exceeds $12.50 per share (as adjusted for share
splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days
within any 30-trading day period after a Business Combination, or (z) the date following the completion of a Business Combination
on which the Company completes a liquidation, merger, amalgamation, share exchange, reorganization or other similar transaction
that results in all of the Company’s shareholders having the right to exchange their Class A ordinary shares for cash, securities
or other property.
Promissory
Note — Related Party
On
July 8, 2020, the Company issued an unsecured promissory note to the Sponsor, pursuant to which the Company may borrow up to an
aggregate principal amount of $150,000. The note is non-interest bearing and payable on the earlier of (i) December 31, 2020 and
(ii) the completion of the Proposed Offering. As of July 8, 2020, there was $15,000 outstanding under the Promissory Note.
Administrative
Services Agreement
The
Company will enter into an agreement pursuant to which it will pay the Sponsor or its affiliate up to $10,000 per month for office
space, administrative and support services. Upon completion of a Business Combination or its liquidation, the Company will cease
paying these monthly fees.
Related
Party Loans
In
order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain
of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working
Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion
of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may be converted
upon completion of a Business Combination into units at a price of $10.00 per unit. Such units would be identical to the Private
Units. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust
Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital
Loans.
Related
Party Extension Loans
As
discussed in Note 1, the Company may extend the period of time to consummate a Business Combination up to two times, each by an
additional three months (for a total of 21 months to complete a Business Combination). In order to extend the time available
for the Company to consummate a Business Combination, the Sponsor or its affiliates or designees must deposit into the Trust Account
$400,000, or $460,000 if the underwriters’ over-allotment option is exercised in full ($0.10 per Public Share in either
case), up to an aggregate of $800,000 (or $920,000 if the underwriters’ over-allotment option is exercised in full), or
$0.20 per Public Share, on or prior to the date of the applicable deadline, for each three month extension. Any such payments
would be made in the form of a non-interest bearing loan. The terms of the promissory note to be issued in connection with any
such loans have not yet been negotiated. If the Company completes a Business Combination, the Company would repay such loaned
amounts out of the proceeds of the Trust Account released to the Company. If the Company does not complete a Business Combination,
the Company will not repay such loans. The Sponsor and its affiliates or designees are not obligated to fund the Trust Account
to extend the time for the Company to complete a Business Combination.
NOTE
6 — COMMITMENTS
Registration
Rights
The
holders of the Founder Shares, Representative Shares, Private Units and any units that may be issued on conversion of the Working
Capital Loans (and any securities underlying the Private Units or units issued upon conversion of Working Capital Loans and the
Class A ordinary shares that may be issued upon conversion of the Founder Shares) will be entitled to registration rights pursuant
to a registration rights agreement to be signed prior to or on the effective date of the Proposed Offering requiring the Company
to register such securities for resale. The holders of these securities will be entitled to make up to three demands, excluding
short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights
to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration
rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become
effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the
filing of any such registration statements.
Underwriting
Agreement
The
Company will grant the underwriter a 45-day option to purchase up to 600,000 additional Units to cover over-allotments at the
Proposed Offering price, less the underwriting discounts and commissions.
The
underwriter will be entitled to a cash underwriting discount of $0.30 per Unit, or $1,200,000 in the aggregate (or $1,380,000
in the aggregate if the underwriter’s over-allotment option is exercised in full), payable upon the closing of the Proposed
Offering.
DISTOKEN
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
Business
Combination Marketing Agreement
The
Company will engage EarlyBirdCapital, Inc. (“EarlyBirdCapital”), the underwriter in the Proposed Offering, as an advisor
in connection with its Business Combination to assist in holding meetings with the Company shareholders to discuss the potential
Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested
in purchasing its securities in connection with its initial Business Combination, assist in obtaining shareholder approval for
the Business Combination and assist with press releases and public filings in connection with the Business Combination. The Company
will pay EarlyBirdCapital a cash fee for such services upon the consummation of its initial business combination in an amount
equal to 4.0% of the gross proceeds of the Proposed Offering (exclusive of any applicable finders’ fees which might become
payable). The Company will also pay EarlyBirdCapital a cash fee in an amount equal to 1.0% of the gross proceeds of the Initial
Public Offering if it introduces the Company to the target business with whom the Company completes its initial Business Combination.
NOTE
7 — SHAREHOLDER’S EQUITY
Preference
Shares — The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001. The Company’s
board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating,
optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each
series. The board of directors will be able to, without shareholder approval, issue preferred shares with voting and other rights
that could adversely affect the voting power and other rights of the holders of the ordinary shares and could have anti-takeover
effects. At July 8, 2020, there were no preference shares issued or outstanding.
Class
A Ordinary Shares — The Company is authorized to issue 200,000,000 Class A ordinary shares, with a par value of
$0.0001 per share. Holders of Class A ordinary shares are entitled to one vote for each share. At July 8, 2020, there were no
Class A ordinary shares issued or outstanding.
Class
B Ordinary Shares — The Company is authorized to issue 20,000,000 Class B ordinary shares, with a par value of $0.0001
per share. Holders of the Class B ordinary shares are entitled to one vote for each share. At July 8, 2020, there were 1,150,000
Class B ordinary shares issued and outstanding, of which an aggregate of up to 150,000 shares are subject to forfeiture to the
extent that the underwriter’s over-allotment option is not exercised in full or in part so that the Sponsor will own 20%
of the Company’s issued and outstanding ordinary shares after the Proposed Offering (assuming the Sponsor does not purchase
any Public Shares in the Proposed Offering and excluding the Private Shares and the Representative Shares).
Only
holders of the Class B ordinary shares will have the right to vote on the election of directors prior to the Business Combination.
Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters
submitted to a vote of our shareholders except as otherwise required by law.
The
Class B Shares will automatically convert into Class A ordinary shares on the first business day following the completion of the
Business Combination, on a one-for-one basis, subject to adjustment. In the case that additional Class A ordinary shares, or equity-linked
securities, are issued or deemed issued in excess of the amounts issued in the Proposed Offering and related to the closing of
a Business Combination, the ratio at which Founder Shares will convert into Class A ordinary shares will be adjusted (subject
to waiver by holders of a majority of the Class B ordinary shares) so that the number of Class A ordinary shares issuable upon
conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of the ordinary shares
issued and outstanding upon completion of the Proposed Offering plus the number of Class A ordinary shares and equity-linked securities
issued or deemed issued in connection with a Business Combination (net of redemptions), excluding the Private Shares underlying
the Private Units, the Representative Shares and any Class A ordinary shares or equity-linked securities issued, or to be issued,
to any seller in a Business Combination and any Private Units issued to the Sponsor, an affiliate of the Sponsor or any of the
Company’s officers or directors.
Rights
— Each holder of a right will receive one-tenth (1/10) of one Class A ordinary share upon consummation of a
Business Combination, even if the holder of such right redeemed all shares held by it in connection with a Business Combination.
No fractional shares will be issued upon exchange of the rights. No additional consideration will be required to be paid by a
holder of rights in order to receive its additional shares upon consummation of a Business Combination as the consideration related
thereto has been included in the Unit purchase price paid for by investors in the Proposed Offering. If the Company enters into
a definitive agreement for a Business Combination in which the Company will not be the surviving entity, the definitive agreement
will provide for the holders of rights to receive the same per share consideration the holders of the ordinary shares will receive
in the transaction on an as-converted into ordinary share basis and each holder of a right will be required to affirmatively convert
its rights in order to receive 1/10 share underlying each right (without paying additional consideration). The shares issuable
upon exchange of the rights will be freely tradable (except to the extent held by affiliates of the Company).
If
the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held
in the Trust Account, holders of rights will not receive any of such funds with respect to their rights, nor will they receive
any distribution from the Company’s assets held outside of the Trust Account with respect to such rights, and the rights
will expire worthless. Further, there are no contractual penalties for failure to deliver securities to the holders of the rights
upon consummation of a Business Combination. Additionally, in no event will the Company be required to net cash settle the rights.
Accordingly, the rights may expire worthless.
Warrants
—The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination
and (b) 12 months from the closing of the Proposed Offering. The Public Warrants will expire five years from the completion of
a Business Combination or earlier upon redemption or liquidation.
No
warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the Class
A ordinary shares issuable upon exercise of the warrants and a current prospectus relating to such Class A ordinary shares. Notwithstanding
the foregoing, if a registration statement covering the Class A ordinary shares issuable upon exercise of the Public Warrants
is not effective within 60 business days following the consummation of a Business Combination, warrant holders may, until such
time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective
registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities
Act, provided that such exemption is available.
DISTOKEN
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
Once
the Public Warrants become exercisable, the Company may redeem the Public Warrants for redemption:
|
|
•
|
in
whole and not in part;
|
|
|
•
|
at
a price of $0.01 per Public Warrant;
|
|
|
•
|
upon
not less than 30 days’ prior written notice of redemption to each warrant holder;
|
|
|
•
|
if,
and only if, the reported last sale price of the Class A ordinary shares equals or exceeds
$18.00 per share (as adjusted for stock splits, stock dividends, reorganizations
and recapitalizations), for any 20 trading days within a 30 trading day period commencing
after the warrants become exercisable and ending on the third business day prior to the
notice of redemption to warrant holders; and
|
|
|
•
|
if,
and only if, there is a current registration statement in effect with respect to the
Class A ordinary shares underlying such warrants.
|
If
the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise
the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and
number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in
the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except
as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price.
Additionally, in no event will the Company be required to net cash settle the Public Rights or Public Warrants. If the Company
is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust
Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive
any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly,
the Public Rights and Public Warrants may expire worthless.
In
addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes
in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class
A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of
directors, and in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares
held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the
aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available
for the funding of a Business Combination on the date of the completion of a Business Combination (net of redemptions), and (z)
the volume weighted average trading price of the Company’s ordinary shares during the 20 trading day period starting on
the trading day prior to the day on which the Company consummates a Business Combination (such price, the “Market Value”)
is below $9.20 per share, the exercise price of the Public Warrants will be adjusted (to the nearest cent) to be equal to 115%
of the greater of the Market Value or the Newly Issued Price, and the $18.00 per share redemption trigger price described above
will be adjusted (to the nearest cent) to be equal to 180% of the greater of the Market Value or the Newly Issued Price.
The
Private Warrants will be identical to the Public Warrants underlying the Units being sold in the Proposed Offering, except that
the Private Warrants and the Class A ordinary shares issuable upon the exercise of the Private Warrants will not be transferable,
assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally,
the Private Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers
or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted
transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public
Warrants.
NOTE
8 — SUBSEQUENT EVENTS
The
Company evaluated subsequent events and transactions that occurred after the balance sheet date up to July 31, 2020, the date
that the financial statements were available to be issued. Other than as described below, the Company did not identify any subsequent
events that would have required adjustment or disclosure in the financial statements.
Representative
Shares
On
July 28, 2020 the Company issued to EarlyBirdCapital and its designees an aggregate of 100,000 Class B ordinary shares (the “Representative
Shares”). The Company will account for the Representative Shares as an offering cost of the Proposed Offering, with a corresponding
credit to shareholder’s equity. The Company estimated the fair value of Representative Shares to be $2,200 based upon the
price of the Founder Shares issued to the Sponsor. The holders of the Representative Shares have agreed not to transfer, assign
or sell any such shares until the completion of a Business Combination. In addition, the holders have agreed (i) to waive conversion
rights (or right to participate in any tender offer) with respect to such shares in connection with the completion of a Business
Combination and (ii) to waive their rights to liquidating distributions from the Trust Account with respect to such shares if
the Company fails to complete a Business Combination within the Combination Period.
DISTOKEN
ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
The
Representative Shares have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately
following the effective date of the registration statement related to the Proposed Offering pursuant to Rule 5110(g)(1) of the
FINRA Manual. Pursuant to FINRA Rule 5110(g)(1), these securities will not be sold during the Proposed Offering, or sold, transferred,
assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put or call transaction that would
result in the economic disposition of the securities by any person for a period of 180 days immediately following the effective
date of the registration statement related to the Proposed Offering or commencement of sales of the Public Offering, except to
any underwriter and selected dealer participating in the Proposed Offering and their bona fide officers or partners.
4,000,000
Units
Distoken
Acquisition Corporation
PRELIMINARY
PROSPECTUS
,
2020
Sole
Book-Running Manager
EarlyBirdCapital, Inc.
Until ,2020
(25 days after the date of this prospectus), all dealers that buy, sell or trade our Class A ordinary shares, whether or
not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation
to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
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
discounts and commissions) will be as follows:
|
Legal
fees and expenses
|
|
$
|
250,000
|
|
|
Accounting
fees and expenses
|
|
|
35,000
|
|
|
SEC
expenses
|
|
|
6,568
|
|
|
FINRA
expenses
|
|
|
7,400
|
|
|
Nasdaq
listing and filing fees (including deferred amount)
|
|
|
75,000
|
|
|
Printing
and engraving expenses
|
|
|
30,000
|
|
|
Miscellaneous
expenses
|
|
|
146,032
|
|
|
Total
offering expenses
|
|
$
|
550,000
|
|
Item
14. Indemnification of Directors and Officers.
Cayman
Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification
of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to
public policy, such as to provide indemnification against willful default, willful neglect, civil fraud or the consequences of
committing a crime. Our amended and restated memorandum and articles of association provide for indemnification of our officers
and directors to the maximum extent permitted by law, including for any liability incurred in their capacities as such, except
through their own actual fraud, willful default or willful neglect.
We
may purchase a policy of directors’ and officers’ liability insurance that insures our officers and directors against
the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify
our officers and directors. We also intend to enter into indemnity agreements with them.
Our
officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account,
and have agreed to waive any right, title, interest or claim of any kind they may have in the future as a result of, or arising
out of, any services provided to us and will not seek recourse against the trust account for any reason whatsoever. Accordingly,
any indemnification provided will only be able to be satisfied by us if we (i) have sufficient funds outside of the trust
account or (ii) consummate an initial business combination. Furthermore, a shareholder’s investment may be adversely
affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification
provisions.
We
believe that these provisions and the insurance are necessary to attract and retain talented and experienced officers and directors.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling
us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable.
Item
15. Recent Sales of Unregistered Securities.
On
July 8, 2020, our sponsor paid $25,000 to cover certain of our offering costs in consideration for 1,150,000 founder shares.
The number of founder shares issued was determined based on the expectation that the founder shares would represent approximately
20% of the issued and outstanding ordinary shares upon completion of this offering (assuming the sponsor does not purchase any
units in this offering and excluding the private shares underlying the private units, the representative shares and any shares
underlying units issued upon conversion of working capital loans and any Class A ordinary shares or equity-linked securities
issued, or to be issued, to any seller in our initial business combination). Such transactions were exempt from registration as
a result of Section 4(a)(2) of the Securities Act. These entities are accredited investors for purposes of Rule 501
of Regulation D.
On
July 28, 2020, we also issued to EarlyBirdCapital, Inc. and its designees an aggregate of 100,000 Class B representative
shares at a purchase price of $0.0001 per share. In addition, our sponsor has committed, pursuant to a written agreement, to purchase
from us an aggregate of 250,000 (or 268,000 if the underwriters’ over-allotment option is exercised in full) private units
at $10.00 per unit (for an aggregate purchase price of $2,500,000 or $2,680,000 if the underwriters’ over-allotment option
is exercised in full). This purchase will take place on a private placement basis simultaneously with the completion of our initial
public offering. This issuance will be made pursuant to the exemption from registration contained in Section 4(a)(2) of
the Securities Act.
No
underwriting discounts or commissions were paid with respect to such sales.
Item
16. Exhibits and Financial Statement Schedules.
(a) Exhibits.
*
Filed herewith.
**
Previously filed.
(b) Financial
Statements. See page F-1 for an index to the financial
statements and schedules included in the registration statement.
Item
17. Undertakings.
(a) The
undersigned registrant 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.
(b) 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.
(c) 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.
(3) 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.
(4) For
the purpose of determining liability of a registrant under the Securities Act of 1933 to any purchaser in the initial distribution
of the securities, the undersigned registrant undertakes that in a primary offering of securities of an 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 an 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.
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, on the 9th day of October, 2020.
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Distoken
Acquisition Corporation
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By:
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/s/
Jian Zhang
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Name:
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Jian
Zhang
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Title:
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Chief
Executive Officer and Chairman
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POWER
OF ATTORNEY
KNOW
ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Jian Zhang and Jirong Lyu his
true and lawful attorney-in-fact, with full power of substitution and resubstitution for him and in his name, place and stead,
in any and all capacities to sign any and all amendments including pre- and post-effective amendments to this registration statement,
any subsequent registration statement for the same offering which may be filed pursuant to Rule 462(b) under the Securities
Act of 1933, as amended, and pre- or post-effective amendments thereto, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said
attorney-in-fact or his substitute, each acting alone, may lawfully do or cause to be done by virtue thereof.
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.
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Name
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Position
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Date
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/s/
Jian Zhang
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Chief
Executive Officer and Chairman (Principal Executive Officer)
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October
9, 2020
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Jian
Zhang
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/s/
Jirong Lyu
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Chief
Financial Officer (Principal Financial and Accounting Officer)
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October 9, 2020
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Jirong
Lyu
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Exhibit 1.1
4,000,000 Units
DISTOKEN ACQUISITION CORPORATION
UNDERWRITING
AGREEMENT
New York, New York
,
2020
EarlyBirdCapital, Inc.
366 Madison Avenue
New York, New York 10017
As Representative of the Underwriters
named on Schedule
A hereto
Ladies and Gentlemen:
Distoken Acquisition
Corporation, a Cayman Islands company (the “Company”), hereby confirms its agreement with EarlyBirdCapital, Inc.
(the “Representative”) and with the other underwriters named on Schedule A hereto (if any), for
which the Representative is acting as representative (the Representative and such other underwriters being collectively referred
to herein as the “Underwriters” or, each underwriter individually, an “Underwriter”) as
follows (provided that to the extent there is only one Underwriter, then all references to Representative and Underwriters shall
mean EarlyBirdCapital, as the Underwriter):
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1.
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Purchase and Sale of Securities.
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1.1.1. Purchase
of Units. On the basis of the representations and warranties herein contained, but subject to the terms and conditions herein
set forth, the Company agrees to issue and sell to the several Underwriters, severally and not jointly, an aggregate of 4,000,000
units of the Company (the “Firm Units”) at a purchase price (net of discounts and commissions) of $9.70 per
Firm Unit. Each Firm Unit consists of one Class A ordinary share of the Company, par value $0.0001 per share (the “Ordinary
Shares”), one right each to receive 1/10 of one Ordinary Share (“Right(s)”), and one-half of one
redeemable warrant (the “Warrant(s)”), each whole Warrant to purchase one Ordinary Share for $11.50 per share.
The Ordinary Shares, Rights and Warrants included in the Firm Units will not be separately tradable until 90 days after the date
hereof unless the Representative informs the Company of its decision to allow earlier separate trading, subject to the Company
filing a Current Report on Form 8-K with the Securities and Exchange Commission (the “Commission”) containing
an audited balance sheet reflecting the Company’s receipt of the gross proceeds of the Offering (defined below) and the
sale of the Private Units (defined below) and issuing a press release announcing when such separate trading will begin. The Underwriters,
severally and not jointly, agree to purchase from the Company the number of Firm Units set forth opposite their respective names
on Schedule A. The Firm Units are to be offered initially to the public (the “Offering”) at the offering
price of $10.00 per Firm Unit.
EarlyBirdCapital, Inc.
, 2020
Page 2 of 40
1.1.2. Payment
and Delivery. Delivery and payment for the Firm Units shall be made at 10:00 A.M., New York time, on the second (2nd) Business
Day following the commencement of trading of the Firm Units, or at such earlier time as shall be agreed upon by the Representative
and the Company at the offices of the Representative or at such other place as shall be agreed upon by the Representative and
the Company. The closing of the Offering is referred to herein as the “Closing” and the hour and date of delivery
and payment for the Firm Units is referred to herein as the “Closing Date.” Payment for the Firm Units shall
be made on the Closing Date through the facilities of Depository Trust Company (“DTC”) by wire transfer in
Federal (same day) funds. An aggregate of $40,000,000 of net proceeds from the sale of the Firm Units and the Private Units shall
be deposited on the Closing Date into the trust account (the “Trust Account”) established by the Company for
the benefit of the Public Shareholders, as described in the Registration Statement (as defined in Section 2.1.1 below) and
pursuant to the terms of an Investment Management Trust Agreement (the “Trust Agreement”) between the Company
and Continental Stock Transfer & Trust Company (“CST&T”) substantially in the form annexed as
an exhibit to the Registration Statement. The remaining proceeds (less actual expense payments or other fees payable pursuant
to this Agreement) shall be paid to the order of the Company upon delivery of certificates (in form and substance reasonably satisfactory
to the Representative) representing the Firm Units (or through the facilities of the DTC for the account of the Representative).
The Firm Units shall be registered in such name or names and in such authorized denominations as the Representative may request
in writing at least two (2) Business Days (defined below) prior to the Closing Date. The Company will permit the Representative
to examine and package the Firm Units for delivery at least one (1) full Business Day prior to the Closing Date. The Company
shall not be obligated to sell or deliver the Firm Units except upon tender of payment by the Representative for all the Firm
Units. As used herein, the term “Business Day” shall mean any day other than a Saturday, Sunday or any day
on which national banks in New York, New York are not open for business; provided, however, for clarification, that a Business
Day shall include any day during which such banks are authorized or required by law to remain closed due to “stay at home”,
“shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure
of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems
(including for wire transfers) of commercial banks in The City of New York are generally open for use by customers on such day.
As used herein, the term “Public Shareholders” means the holders of Ordinary Shares sold in the Offering or
acquired in the aftermarket, including any of the Insiders (as defined in Section 1.3.1 below) to the extent they acquire
such Ordinary Shares in the Offering or in the aftermarket (and solely with respect to such shares).
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1.2.
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Over-Allotment Option
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1.2.1. The
Representative shall have the option (the “Over-Allotment Option”) to purchase all or less than all of an additional
600,000 Units (the “Option Units”) solely for the purposes of covering any over-allotments in connection with
the distribution and sale of the Firm Units. Such Option Units shall, at the
Representative’s election, be purchased for each account of the several Underwriters in the same proportion as the number
of Firm Units set forth opposite such Underwriter’s name on Schedule A hereto (subject to adjustment by the Representative
to eliminate fractions). Such Option Units shall be identical in all respects to the Firm Units. The Firm Units and the Option
Units are hereinafter collectively referred to as the “Public Securities.” No Option Units shall be sold or
delivered unless the Firm Units previously have been, or simultaneously are, sold and delivered. The right to purchase the Option
Units, or any portion thereof, may be exercised from time to time and to the extent not previously exercised may be surrendered
and terminated at any time upon notice by the Representative to the Company. The purchase price to be paid for each Option Unit
(net of discounts and commissions) will be $9.70 per Option Unit.
EarlyBirdCapital, Inc.
, 2020
Page 3 of 40
1.2.2. Exercise
of Option. The Over-Allotment Option granted pursuant to Section 1.2.1 hereof may be exercised by the Representative as
to all (at any time) or any part (from time to time) of the Option Units within forty-five (45) days after the Effective Date.
The Representative will not be under any obligation to purchase any Option Units prior to the exercise of the Over-Allotment Option.
The Over-allotment Option granted hereby may be exercised by the giving of oral notice to the Company by the Representative, which
must be confirmed in accordance with Section 10.1 herein setting forth the number of Option Units to be purchased and the
date and time for delivery of and payment for the Option Units, if other than the Closing Date (the “Option Closing Date”),
which shall not be earlier than the Closing Date or be later than ten (10) full Business Days after the date of the notice
or such other time as shall be agreed upon by the Company and the Representative, at the offices of the Representative or at such
other place as shall be agreed upon by the Company and the Representative. Upon exercise of the Over-Allotment Option, the Company
will become obligated to convey to the Representative, and, subject to the terms and conditions set forth herein, the Representative
will become obligated to purchase, the number of Option Units specified in such notice.
1.2.3. Payment
and Delivery. Payment for the Option Units shall be made on the Option Closing Date at the Representative’s election
by wire transfer in Federal (same day) funds or by certified or bank cashier’s check(s) in New York Clearing House funds,
payable as follows: $9.70 per Option Unit shall be deposited in the Trust Fund pursuant to the Trust Agreement upon delivery of
certificates (in form and substance satisfactory to the Representative) representing the Option Units (or through the facilities
of DTC) for the account of the Representative). The certificates representing the Option Units to be delivered will be in such
denominations and registered in such names as the Representative requests not less than two full business days prior to the Closing
Date or the Option Closing Date, as the case may be, and will be made available to the Representative for inspection, checking
and packaging at the aforesaid office of the Company’s transfer agent or correspondent not less than one full business day
prior to such Closing Date.
EarlyBirdCapital, Inc.
, 2020
Page 4 of 40
1.3.1. The
Company issued an aggregate of 1,150,000 Class B ordinary shares, par value $0.0001 per share (the “Founder Shares”),
for aggregate consideration of $25,000, to Xiaosen Sponsor LLC (the “Sponsor”) in a private placement intended
to be exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Act”).
No underwriting discounts, commissions or placement fees have been or will be payable in connection with the sale of the Founder
Shares. The Founder Shares shall be subject to restrictions on transfer as set forth in the Registration Statement. The holders
of the Founder Shares (the “Insiders”) shall have no right to any liquidation distributions with respect to
any portion of the Founder Shares in the event the Company fails to consummate a share exchange, share reconstruction and amalgamation
with, purchasing all or substantially all of the assets of, entering into contractual arrangements with, or engaging in any other
similar business combination with one or more businesses or entities (“Business Combination”) within the required
time period except with respect to any funds held outside of the Trust Account remaining after payment of all fees and expenses.
The Insiders shall not have conversion rights with respect to the Founder Shares nor shall they be entitled to sell such Founder
Shares to the Company in any tender offer in connection with a proposed Business Combination. To the extent that the Over-allotment
Option is not exercised by the Underwriters in full or in part, up to 150,000 of the Founder Shares shall be required to be forfeited
by the holders thereof, as is necessary to maintain the beneficial ownership percentage of the Company’s shares held by
the holders of Founder Shares at 20% after giving effect to the Offering and the exercise, if any, of the Underwriters’
Over-Allotment Option but excluding the Representative’st Shares (defined below), the Private Shares (defined below) and
the purchase of any Firm Units in the Offering by the Insiders.
1.3.2. In
July 2020, the Company issued to the Representative and its designees, at $0.0001 per share, an aggregate of 100,000 Class B
ordinary shares, par value $0.0001 per share (the “Representative’s Shares”), in a private placement
intended to be exempt from registration under Section 4(a)(2) of the Act. No underwriting discounts, commissions or
placement fees have been or will be payable in connection with the sale of the Representative’s Shares. The holders of the
Representative’s Shares have agreed not to transfer, assign or sell any Representative’s Shares without the Company’s
prior consent until 30 days after the completion of an initial Business Combination. The Representative’s Shares are identical
to the Ordinary Shares included in the Firm Units except the holders (i) shall not be entitled to exercise any conversion
rights with respect to such Representative’s Shares and shall not be entitled to sell any such shares to the Company in
any tender offer in connection with a proposed Business Combination or certain amendments to the Charter Documents (as defined
in Section 2.11) as described in the Prospectus (as defined in Section 2.1.1 below) and (ii) will have no right
to any liquidation distributions with respect to any portion of the Representative’s Shares in the event the Company fails
to consummate a Business Combination within the required time period. The holders of the Representative’s Shares will not
sell, transfer, assign, pledge or hypothecate any of the Representative’s Shares for a period of 180 days pursuant to FINRA
Conduct Rule 5110(g)(1) following the effective date of the Registration Statement to anyone other than (i) the
Representative or an Underwriter or selected dealer in connection with the Offering, or (ii) a bona fide officer or partner
of the Representative or of any such Underwriter or selected dealer. Additionally, pursuant to FINRA Conduct Rule 5110(g),
the Representative’s Shares will not be the subject of any hedging, short sale, derivative, put or call transaction
that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the
effective date of the Registration Statement. The certificates for the Representative’s Shares (or book entry positions)
shall contain legends to reflect the above FINRA and contractual transfer restrictions. The holders of the Representative’s
Shares shall have registration rights as provided for in the Registration Rights Agreement (as defined in Section 2.24.5).
EarlyBirdCapital, Inc.
, 2020
Page 5 of 40
1.3.3. Simultaneously
with the Closing Date, the Sponsor will purchase from the Company pursuant to the Subscription Agreement (as defined in Section 2.24.2
below), an aggregate of 250,000 Units (the “Private Units”) at a purchase price of $10.00 per Private Unit in
a private placement (the “Private Placement”) intended to be exempt from registration under the Act. The terms
of the Private Units are as described in the Prospectus (as defined in Section 2.1.1 below). No underwriting discounts, commissions
or placement fees have been or will be payable in connection with the Private Placement. The Sponsor has also agreed that, in the
event the Over-allotment Option is exercised, it will purchase up to 18,000 additional Private Units and the Company shall cause
to be deposited an amount of additional proceeds from the sale of such additional Private Units into the Trust Account such that
the amount of funds in the Trust Account shall be $10.00 per Public Share sold in the Offering.
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1.4.
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Working Capital; Trust Account Proceeds.
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1.4.1. Working
Capital. Upon consummation of the Offering, it is intended that approximately $750,000 of the proceeds from the sale of the
Firm Units and Private Units will be released to the Company to fund the working capital requirements of the Company.
1.4.2. Trust
Account Proceeds. Prior to the liquidation of the Trust Account in the event the Company has not completed a Business Combination
as required by its Charter Documents (the “Termination Date”), interest income on the funds held in the Trust
Account may be released to the Company from the Trust Account in accordance with the terms of the Trust Agreement to pay any taxes
incurred by the Company and up to $50,000 to pay dissolution expenses, all as more fully described in the Prospectus.
2. Representations
and Warranties of the Company. The Company represents and warrants to the Underwriters as follows:
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2.1.
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Filing of Registration Statement.
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2.1.1. Pursuant
to the Act. The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration
statement and an amendment or amendments thereto, on Form S-1 (File No. 333-248822), including any related preliminary
prospectus (the “Preliminary Prospectus”, including any prospectus that is included in the registration statement
immediately prior to the effectiveness of the registration statement), for the registration of the Public Securities under the
Act, which registration statement and amendment or amendments have been prepared by the Company in conformity with the
requirements of the Act, and the rules and regulations (the “Regulations”) of the Commission under the
Act. Except as the context may otherwise require, such registration statement, as amended, on file with the Commission at the
time the registration statement became effective (“Effective Date”) (including the prospectus, financial statements,
schedules, exhibits and all other documents filed as a part thereof or incorporated therein and all information deemed to be a
part thereof as of such time pursuant to Rule 430A of the Regulations), is hereinafter called the “Registration
Statement,” and the form of the final prospectus dated the Effective Date included in the Registration Statement (or,
if applicable, the form of final prospectus containing information permitted to be omitted at the time of effectiveness by Rule 430A
of the Regulations, filed by the Company with the Commission pursuant to Rule 424 of the Regulations), is hereinafter called
the “Prospectus.” For purposes of this Agreement, “Time of Sale,” as used in the Act, means
5:00 p.m. New York City time, on the date of this Agreement. Prior to the Time of Sale, the Company prepared a Preliminary
Prospectus, which was included in the Registration Statement filed on [ • ] 2020, for distribution by the Underwriter (such
Preliminary Prospectus used most recently prior to the Time of Sale, the “Statutory Prospectus”). If the Company
has filed, or is required pursuant to the terms hereof to file, a Registration Statement pursuant to Rule 462(b) under
the Act registering additional securities (a “Rule 462(b) Registration Statement”), then, unless
otherwise specified, any reference herein to the term “Registration Statement” shall be deemed to include such 462(b) Registration
Statement. Other than a Rule 462(b) Registration Statement, which, if filed, becomes effective upon filing, no other
document with respect to the Registration Statement has been filed with the Commission. All of the Public Securities have been
or will be registered under the Act pursuant to the Registration Statement. The Registration Statement has been declared effective
by the Commission on the date hereof. If, subsequent to the date of this Agreement, the Company or the Representative has determined
that at the Time of Sale the Statutory Prospectus included an untrue statement of a material fact or omitted a statement of material
fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading and
have agreed to provide an opportunity to purchasers of the Firm Units to terminate their old purchase contracts and enter into
new purchase contracts, then the Statutory Prospectus will be deemed to include any additional information available to purchasers
at the time of entry into the first such new purchase contract.
EarlyBirdCapital, Inc.
, 2020
Page 6 of 40
2.1.2. Pursuant
to the Exchange Act. The Company has filed with the Commission a Registration Statement on Form 8-A (File Number 001-________)
providing for the registration under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of
the Units, Ordinary Shares, Rights and Warrants. The registration of the Units, Ordinary Shares, Rights and Warrants under the
Exchange Act has been declared effective by the Commission on the date hereof.
2.2. No
Stop Orders, etc. Neither the Commission nor, to the Company’s knowledge, any foreign or state regulatory authority
has issued any order or threatened to issue any order preventing or suspending the use of any Statutory Prospectus or Prospectus
or has instituted or, to the best of the Company’s knowledge, threatened to institute any proceedings with respect to such
an order.
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2.3.
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Disclosures in Registration Statement.
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2.3.1. 10b-5
Representation. At the time of effectiveness of the Registration Statement (or at the effective time of any post-effective
amendment to the Registration Statement) and at all times subsequent thereto up to the Closing Date, the Registration Statement,
the Statutory Prospectus and the Prospectus contained or will contain all material statements that are required to be stated therein
in accordance with the Act and the Regulations, and did or will, in all material respects, conform to the requirements of the Act
and the Regulations. On the Effective Date and at the Time of Sale, the Registration Statement did not, and on the Closing Date
it will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading; on the date of any filing pursuant to Rule 424(b) and
on the Closing Date, the Prospectus (together with any supplement thereto) will not include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; and at the Time of Sale, the Statutory Prospectus does not include any untrue statement of
a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided, however, that the representation and warranty made in this Section 2.3.1
does not apply to statements made or statements omitted in reliance upon and in conformity with written information furnished to
the Company with respect to the Underwriters by the Underwriters expressly for use in the Registration Statement, the Statutory
Prospectus or Prospectus or any amendment thereof or supplement thereto, which information, it is agreed, shall consist solely
of the names of the Underwriters and the subsection titled “Determination of Offering Price,” the second sentence of
the subsection titled “Underwriting Discount,” and the subsections titled “Price Stabilization, Short Positions”
and “Selling Restrictions” included in the section captioned “Underwriting.”
2.3.2. Disclosure
of Agreements. The agreements and documents described in the Registration Statement, the Statutory Prospectus and the
Prospectus conform to the descriptions thereof contained therein and there are no agreements or other documents required to
be described in the Registration Statement, the Statutory Prospectus or the Prospectus or to be filed with the Commission as
exhibits to the Registration Statement, that have not been so described or filed. Each agreement or other instrument (however
characterized or described) to which the Company is a party or by which its property or business is or may be bound or
affected and (i) that is referred to in the Registration Statement or attached as an exhibit thereto, or (ii) is
material to the Company’s business, has been duly and validly executed by the Company, is in full force and effect in
all material respects and is enforceable against the Company and, to the Company’s knowledge, the other parties
thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification
or contribution provision may be limited under the foreign, federal and state securities laws, and (z) that the remedy
of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to
the discretion of the court before which any proceeding therefor may be brought, and none of such agreements or
instruments has been assigned by the Company, and neither the Company nor, to the Company’s knowledge, any other party
is in breach or default thereunder and, to the Company’s knowledge, no event has occurred that, with the lapse of time
or the giving of notice, or both, would constitute a breach or default thereunder. To the Company’s knowledge,
performance by the Company of the material provisions of such agreements or instruments will not result in a violation of any
existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic or
foreign, having jurisdiction over the Company or any of its assets or businesses, including, without limitation, those
relating to environmental laws and regulations.
EarlyBirdCapital, Inc.
, 2020
Page 7 of 40
2.3.3. Prior
Securities Transactions. 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 since the date of the Company’s
formation, except as disclosed in the Registration Statement.
2.3.4. Regulations.
The disclosures in the Registration Statement, the Statutory Prospectus and the Prospectus concerning the effects of foreign, federal,
state and local regulation on the Company’s business as currently contemplated are correct in all material respects and do
not omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they were made,
not misleading.
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2.4.
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Changes After Dates in Registration Statement.
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2.4.1. No
Material Adverse Change. Since the respective dates as of which information is given in the Registration Statement, the Statutory
Prospectus and the Prospectus, except as otherwise specifically stated therein: (i) there has been no material adverse change
in the condition, financial or otherwise, or business prospects of the Company; (ii) there have been no material transactions
entered into by the Company, other than as contemplated pursuant to this Agreement; (iii) no member of the Company’s
board of directors or management has resigned from any position with the Company; and (iv) no event or occurrence has taken
place which materially impairs, or would likely materially impair, with the passage of time, the ability of the members of the
Company’s board of directors or management to act in their capacities with the Company as described in the Registration Statement,
the Statutory Prospectus and the Prospectus.
2.4.2. Recent
Securities Transactions, etc. Subsequent to the respective dates as of which information is given in the Registration
Statement, the Statutory Prospectus and the Prospectus and except as may otherwise be indicated or contemplated herein or therein,
the Company has not: (i) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed
money; or (ii) declared or paid any dividend or made any other distribution on or in respect to its capital stock.
2.5. Independent
Accountants. Marcum LLP (“Marcum”), whose report is filed with the Commission as part of the Registration
Statement and included in the Registration Statement, the Statutory Prospectus and the Prospectus, are independent registered
public accountants as required by the Act, the Regulations and the Public Company Accounting Oversight Board (the “PCAOB”),
including the rules and regulations promulgated by such entity. To the Company’s knowledge, Marcum is duly registered
and in good standing with the PCAOB. Marcum has not, during the periods covered by the financial statements included in the Registration
Statement, the Statutory Prospectus and the Prospectus, provided to the Company any non-audit services, as such term is used in
Section 10A(g) of the Exchange Act.
EarlyBirdCapital, Inc.
, 2020
Page 8 of 40
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2.6.
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Financial Statements; Statistical Data.
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2.6.1. Financial
Statements. The financial statements, including the notes thereto and supporting schedules included in the Registration Statement,
the Statutory Prospectus and the Prospectus, fairly present in all material respects the financial position and the results of
operations of the Company at the dates and for the periods to which they apply; and such financial statements have been prepared
in conformity with United States generally accepted accounting principles (“GAAP”), consistently applied throughout
the periods involved; and the supporting schedules included in the Registration Statement present fairly in all material respects
the information required to be stated therein in conformity with the Regulations. No other financial statements or supporting schedules
are required to be included or incorporated by reference in the Registration Statement, the Statutory Prospectus or the Prospectus.
The Registration Statement, the Statutory Prospectus and the Prospectus disclose all material off- balance sheet transactions,
arrangements, obligations (including contingent obligations), and other relationships of the Company with unconsolidated entities
or other persons that may have a material current or future effect on the Company’s financial condition, changes in financial
condition, results of operations, prospects, liquidity, capital expenditures, capital resources, or significant components of revenues
or expenses. There are no pro forma or as adjusted financial statements which are required to be included in the Registration Statement,
the Statutory Prospectus or the Prospectus in accordance with Regulation S-X of the Regulations which have not been included as
so required.
2.6.2. Statistical
Data. The statistical, industry-related and market-related data included in the Registration Statement, the Statutory Prospectus
and/or the Prospectus are based on or derived from sources which the Company reasonably and in good faith believes are reliable
and accurate, and such data agree with the sources from which they are derived.
2.7. Authorized
Capital; Options, etc. The Company had at the date or dates indicated in each of the Registration Statement, the Statutory
Prospectus and the Prospectus, as the case may be, duly authorized, issued and outstanding capitalization as set forth in the
Registration Statement, the Statutory Prospectus and the Prospectus. Based on the assumptions stated in the Registration Statement,
the Statutory Prospectus and the Prospectus, the Company will have on the Closing Date the adjusted share capitalization set forth
therein. Except as set forth in, or contemplated by, the Registration Statement, the Statutory Prospectus and the Prospectus,
on the Effective Date and on the Closing Date, there will be no options, warrants, or other rights to purchase or otherwise acquire
any authorized, but unissued Ordinary Shares or any security convertible into Ordinary Shares, or any contracts or commitments
to issue or sell Ordinary Shares or any such options, warrants, rights or convertible securities.
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2.8.
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Valid Issuance of Securities, etc.
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2.8.1. Outstanding
Securities. All issued and outstanding Ordinary Shares of the Company, including the Representative’s Shares, have been
duly authorized and validly issued and are fully paid and non-assessable; the holders thereof have no rights of rescission with
respect thereto, and are not subject to personal liability by reason of being such holders; and none of such securities 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 outstanding Ordinary Shares conform in all material respects to the descriptions thereof contained in the Registration
Statement, the Statutory Prospectus and the Prospectus. All offers, sales and any transfers of the outstanding Ordinary Shares
of the Company were at all relevant times either registered under the Act and the applicable state securities or Blue Sky laws
(based in part on the representations and warranties of the purchasers of the Ordinary Shares) or exempt from such registration
requirements.
EarlyBirdCapital, Inc.
, 2020
Page 9 of 40
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2.8.2.
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Securities To Be Sold.
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2.8.2.1. The
Public Securities have been duly authorized and reserved for issuance and when issued and paid for in accordance with this Agreement,
will be validly issued, fully paid and non-assessable; the holders thereof are not and will not be subject to personal liability
by reason of being such holders; the Public Securities are not and will not be subject to the preemptive rights of any holders
of any security of the Company or similar contractual rights granted by the Company; and all corporate action required to be taken
for the authorization, issuance and sale of the Public Securities has been duly and validly taken. The Public Securities conform
in all material respects to the descriptions thereof contained in the Registration Statement, the Statutory Prospectus and the
Prospectus, as the case may be.
2.8.2.2. The
Private Units and the Ordinary Shares (the “Private Shares”), the private Rights (“Private Rights”)
and private Warrants (the “Private Warrants”) included within the Private Units have been duly authorized and
reserved for issuance and when issued and paid for in accordance with the Subscription Agreements, will be validly issued, fully
paid and non-assessable; the holders thereof are not and will not be subject to personal liability by reason of being such holders;
the Private Units, Private Shares, Private Rights, and Private Warrants are not and will not be subject to the preemptive rights
of any holders of any security of the Company or similar contractual rights granted by the Company; and all corporate action required
to be taken for the authorization, issuance and sale of the Private Units, Private Shares, Private Rights, and Private Warrants
has been duly and validly taken. The Private Units, Private Shares, Private Rights and Private Warrants conform in all material
respects to the descriptions thereof contained in the Registration Statement, the Statutory Prospectus and the Prospectus, as the
case may be.
2.8.2.3. The
Founder Shares have been duly authorized, duly and validly issued, fully paid and non-assessable; the holders thereof are not and
will not be subject to personal liability by reason of being such holders; the Founder Shares are not and will not be subject to
the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company; and all
corporate action required to be taken for the authorization, issuance and sale of the Founder Shares has been duly and validly
taken. The Founder Shares conform in all material respects to the descriptions thereof contained in the Registration Statement,
the Statutory Prospectus and the Prospectus, as the case may be.
2.8.3. No
Integration. Neither the Company nor any of its affiliates has, prior to the date hereof, made any offer or sale of any securities
which are required to be “integrated” pursuant to the Act or the Regulations with the offer and sale of the Public
Securities pursuant to the Registration Statement.
2.9. Registration
Rights of Third Parties. Except as set forth in the Registration Statement, the Statutory 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.
2.10. Validity
and Binding Effect of Agreements. This Agreement, the Trust Agreement, the Subscription Agreements, the Services Agreement
(as defined in Section 2.24.6 below), the Business Combination Marketing Agreement (as defined in Section 2.26 below),
the Warrant Agreement, the Rights Agreement and the Registration Rights Agreement (collectively, the “Transaction Documents”)
have been duly and validly authorized by the Company and, when executed and delivered by the Company and the other parties thereto,
will constitute valid and binding agreements of the Company, enforceable against the Company in accordance with their respective
terms, except: (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally; (ii) as enforceability of any indemnification or contribution provision may be limited
under foreign, federal and state securities laws; and (iii) that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding
therefor may be brought.
EarlyBirdCapital, Inc.
, 2020
Page 10 of 40
2.11. No
Conflicts, etc. The execution, delivery, and performance by the Company of the Transaction Documents, the
consummation by the Company of the transactions herein and therein contemplated and the compliance by the Company with the
terms hereof and thereof do not and will not, with or without the giving of notice or the lapse of time or both:
(i) result in a breach or violation of, or conflict with any of the terms and provisions of, or constitute a default
under, or result in the creation, modification, termination or imposition of any lien, charge or encumbrance upon any
property or assets of the Company pursuant to the terms of any agreement, obligation, condition, covenant or instrument to
which the Company is a party or bound or to which its property is subject except pursuant to the Trust Agreement; (ii) result in any
violation of the provisions of the Memorandum and Articles of Association of the Company, as amended (collectively, the
“Charter Documents”); or (iii) violate any existing applicable statute, law, rule, regulation,
judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or
any of its properties, business or assets.
2.12. No
Defaults; Violations. No material default or violation exists in the due performance and observance of any term, covenant or condition of any material license,
contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument evidencing an obligation
for borrowed money, or any other material agreement or instrument to which the Company is a party or by which the Company may be bound
or to which any of the properties or assets of the Company is subject. The Company is not in violation of any term or provision of its
Charter Documents or in violation of any franchise, license, permit, applicable law, rule, regulation, judgment or decree of any governmental
agency or court, domestic or foreign, having jurisdiction over the Company or any of its properties or businesses.
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2.13.
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Corporate Power; Licenses; Consents.
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2.13.1. Conduct
of Business. The Company has all requisite corporate power and authority, and has all necessary authorizations, approvals,
orders, licenses, certificates and permits of and from all governmental regulatory officials and bodies that it needs as of the
date hereof to conduct its business for the purposes described in the Registration Statement, the Statutory Prospectus and the
Prospectus. The disclosures in the Registration Statement, the Statutory Prospectus and the Prospectus concerning the effects of
foreign, federal, state and local regulation on this Offering and the Company’s business purpose as currently contemplated
are correct in all material respects and do not omit to state a material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they were made, not misleading. Since its formation and
except as described in the Registration Statement, the Company has conducted no business and has incurred no liabilities other
than in connection with its formation and in furtherance of the Offering.
2.13.2. Transactions
Contemplated Herein. The Company has all corporate power and authority to enter into this Agreement and to carry out the provisions
and conditions hereof, and all consents, authorizations, approvals and orders required in connection therewith have been obtained.
No consent, authorization or order of, and no filing with, any court, government agency or other body, foreign or domestic, is
required for the valid issuance, sale and delivery, of the Public Securities and Representative’s Shares and the consummation
of the transactions and agreements contemplated by the Transaction Documents and as contemplated by the Registration Statement,
the Statutory Prospectus and Prospectus, except with respect to applicable foreign, federal and state securities laws and the rules and
regulations promulgated by the Financial Industry Regulatory Authority, Inc. (“FINRA”).
EarlyBirdCapital, Inc.
, 2020
Page 11 of 40
2.14. D&O
Questionnaires. To the Company’s knowledge, all information contained in the questionnaires (the
“Questionnaires”) completed by each of the Company’s officers, directors, 5% beneficial owners and
owners of unregistered securities acquired within the past 180 days (the “Respondents”) immediately prior
to the initial filing of the Registration Statement and provided to the Representative, as such Questionnaires may have been
updated from time to time and confirmed by each of the Respondents, as well as the biographies previously provided to the
Representative, is true and correct in all material respects and the Company has not become aware of any information which
would cause the information disclosed in the Questionnaires to become inaccurate and incorrect.
2.15. Litigation;
Governmental Proceedings. There is no action, suit, proceeding, inquiry, arbitration, investigation, litigation or governmental
proceeding pending or, to the Company’s knowledge, threatened against, or involving the Company or, to the Company’s
knowledge, any of the Respondents or any of the Insiders, which has not been disclosed in the Registration Statement, the Statutory
Prospectus and the Prospectus.
2.16. Good
Standing. The Company has been duly organized and is validly existing as a business company and is in good standing under the
laws of its jurisdiction of incorporation and is duly qualified to do business and is in good standing as a foreign corporation
in each jurisdiction in which its ownership or lease of property or the conduct of business requires such qualification, except
where the failure to qualify would not have a material adverse effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company, whether or not arising from transactions in the ordinary course of business, except as set
forth in or contemplated in the Statutory Prospectus and the Prospectus (exclusive of any supplement thereto) (a “Material
Adverse Effect”).
2.17. No
Contemplation of a Business Combination. The Company does not have any specific Business Combination under consideration and
it has not (nor has anyone on its behalf), directly or indirectly, contacted any prospective business (each, a “Target
Business”) or had any substantive discussions, formal or otherwise, with respect to such a transaction.
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2.18.
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Transactions Affecting Disclosure to FINRA.
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2.18.1. To
the Company’s knowledge, all information contained in the questionnaires (the “FINRA Questionnaires”)
completed by each of the Respondents and provided to the Representative, as such FINRA Questionnaires may have been updated from
time to time and confirmed by each of the Respondents, is true and correct in all material respects and the Company has not become
aware of any information which would cause the information disclosed in the FINRA Questionnaires to become inaccurate and incorrect.
EarlyBirdCapital, Inc.
, 2020
Page 12 of 40
2.18.2. Except
as described in the Registration Statement, the Statutory Prospectus and the Prospectus, there are no claims, payments,
arrangements, agreements or understandings relating to the payment of a finder’s, consulting or origination fee by the
Company or any Company Affiliate with respect to the sale of the Public Securities hereunder or any other arrangements,
agreements or understandings of the Company or, to the Company’s knowledge, any Insider that may affect the
Underwriters’ compensation, as determined by FINRA.
2.18.3. Except
as described herein or in the Registration Statement, the Statutory Prospectus and the Prospectus, the Company has not made any
direct or indirect payments (in cash, securities or otherwise) to: (i) 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 FINRA member; or
(iii) to any person or entity that
has any direct or indirect affiliation or association with any FINRA member, within the 180-day period prior to the initial filing
date of the Registration Statement with the Commission.
2.18.4. To
the Company’s knowledge, except as set forth in the FINRA Questionnaires, no officer or director or any direct or indirect
beneficial owner of 5% or greater of any class of the Company’s securities, including the Insiders and holders of securities
to be purchased in the Private Placement (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 of FINRA,
or a person associated or affiliated with a member of FINRA.
2.18.5. To
the Company’s knowledge, except as set forth in the FINRA Questionnaires, no Company Affiliate is an owner of stock or other
securities of any member of FINRA (other than securities purchased on the open market).
2.18.6. To
the Company’s knowledge, except as set forth in the FINRA Questionnaires, no Company Affiliate has made a subordinated loan
to any member of FINRA.
2.18.7. No
proceeds from the sale of the Public Securities or Private Units (excluding underwriting compensation) will be paid to any FINRA
member, or any persons associated or affiliated with a member of FINRA, except as specifically authorized herein.
2.18.8. The
Company has not issued any warrants or other securities, or granted any options, directly or indirectly to anyone who is a potential
underwriter in the Offering or a related person (as defined by FINRA rules) of such an underwriter within the 180-day period prior
to the initial filing date of the Registration Statement with the Commission, except as disclosed in the Registration Statement,
the Statutory Prospectus and the Prospectus.
2.18.9. To
the Company’s knowledge, except as set forth in the FINRA Questionnaires, 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 with the Commission
has any relationship or affiliation or association with any member of FINRA.
EarlyBirdCapital, Inc.
,
2020
Page 13 of 40
2.18.10. To
the Company’s knowledge, no FINRA member intending to participate in the Offering has a conflict of interest (as defined
by FINRA rules) with the Company.
2.18.11. Except
with respect to the Representative in connection with the Offering, the Company has not entered into any agreement or arrangement
(including, without limitation, any consulting agreement or any other type of agreement) during the 180-day period prior to the
initial filing date of the Registration Statement with the Commission, which arrangement or agreement provides for the receipt
of any item of value and/or the transfer or issuance of any warrants, options, or other securities from the Company to a FINRA
member, any person associated with a member (as defined by FINRA rules), any potential underwriters in the Offering and/or any
related persons.
2.19.1. There
are no transfer taxes or other similar fees or charges under Cayman Islands law, U.S. federal law or the laws of any U.S. state
or any political subdivision thereof, required to be paid in connection with the execution and delivery of this Agreement or the
issuance or sale by the Company of the Public Securities.
2.19.2. The
Company has filed all non-U.S. and U.S. federal, state and local tax returns that are required to be a filed or has requested
extensions thereof, except in any case in which the failure to so file would not have a Material Adverse Effect, 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 in due and payable, except for any such assessment, fine or penalty that is currently being contested in good faith
or as would not have a Material Adverse Effect.
2.19.3. Assuming
the Company satisfies the "start up exception" (as described in the Registration Statement) to the "passive foreign
investment company" ("PFIC") provisions of the Internal Revenue Code of 1986, as amended, and subject to
the discussion of PFICs and other Federal income tax issues set forth in the Registration Statement under the heading "Income
Tax Considerations - United States Federal Income Taxation", the Company will not be a PFIC for Federal income tax purposes
for its initial taxable year ending December 31, 2020.
2.20. Foreign
Corrupt Practices Act. Neither the Company nor any of the Respondents or any other person acting on behalf of the Company
is aware of or has taken any action, directly or indirectly, that: (i) would result in a violation by such persons of
the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the
“FCPA”) or otherwise subject the Company to any damage or penalty in any civil, criminal or governmental
litigation or proceeding; (ii) if not done in the past, might reasonably be expected to have had a Material Adverse
Effect or (iii) if not continued in the future, might reasonably be expected to materially and adversely affect the
assets, business or operations of the Company, including, without limitation, given or agreed to give any money, gift or
similar benefit (other than legal price concessions to customers in the ordinary course of business) to any customer,
supplier, employee or agent of a customer or supplier, or official
or employee of any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate
for office (domestic or foreign) or any political party or candidate for office (domestic or foreign) or other person who was,
is, or may be in a position to help or hinder the business of the Company (or assist it in connection with any actual or proposed
transaction). The Company’s internal accounting controls and procedures are sufficient to cause the Company to comply with
the FCPA.
EarlyBirdCapital, Inc.
,
2020
Page 14 of 40
2.21. Currency
and Foreign Transactions Reporting Act. The operations of the Company are and have been conducted at all times in material
compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transaction Reporting
Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder
and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (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 best
knowledge of the Company, threatened.
2.22. Bank
Secrecy Act; Money Laundering; Patriot Act. Neither the Company, nor to the Company’s knowledge, any Company Affiliate,
has violated: (i) the Bank Secrecy Act, as amended, (ii) the Money Laundering Laws or (iii) the Uniting and Strengthening
of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, and/or the
rules and regulations promulgated under any such law, or any successor law.
2.23. Officers’
Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to the Representative or to
its counsel shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
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2.24.
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Agreements
With Company Affiliates.
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2.24.1. Insider
Letters. The Company has caused to be duly executed legally binding and enforceable agreements (except (i) as such enforceability
may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, (ii) as
enforceability of any indemnification contribution provision may be limited under foreign, federal and state securities laws,
and (iii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the
equitable defenses and to the discretion of the court before which any proceeding therefor may be brought) in the form annexed
as an exhibit to the Registration Statement (the “Insider Letters”), pursuant to which each of the Respondents
agrees to certain matters, including but not limited to, the voting of Ordinary Shares held by them and certain matters described
as being agreed to by them under the “Proposed Business” section of the Registration Statement, the Statutory Prospectus
and Prospectus.
EarlyBirdCapital, Inc.
,
2020
Page 15 of 40
2.24.2. Subscription
Agreement. The Sponsor has executed and delivered a Sponsor Units Purchase Agreement, the form of which is annexed as an exhibit
to the Registration Statement (the “Subscription Agreement”), pursuant to which the Sponsor has agreed, among
other things, that it will purchase on the Closing Date the Private Units in the Private Placement. Pursuant to the Subscription
Agreement, the Sponsor has waived any and all rights and claims it may have to any proceeds, and any interest thereon, held in
the Trust Account in respect of the Private Shares underlying the Private Units in the event that a Business Combination is not
consummated and the Trust Account is liquidated in accordance with the terms of the Trust Agreement.
2.24.3. Non-Competition/Solicitation.
To the Company’s knowledge, no Respondent is subject to any non-competition agreement or non-solicitation agreement with
any employer or prior employer which could materially affect such Respondent’s ability to be and act in the capacity of
a director or officer of the Company, as applicable.
2.24.4. Loans.
The Sponsor has agreed to make loans to the Company in the aggregate amount of up to $150,000, as described in the Registration
Statement (the “Insider Loan”). The Insider Loan will not bear any interest and will be repayable by the Company
on the consummation of the Offering.
2.24.5. Registration
Rights Agreement. The Company, the Sponsor and the Representative have entered into a registration rights agreement (“Registration
Rights Agreement”) substantially in the form annexed as an exhibit to the Registration Statement, whereby the Insiders
and the Representative will be entitled to certain registration rights with respect to their securities, as set forth in such
Registration Rights Agreement and described more fully in the Registration Statement.
2.24.6. Administrative
Services. The Company has entered into an agreement (“Services Agreement”) with the Sponsor, substantially
in the form annexed as an exhibit to the Registration Statement, pursuant to which the Sponsor will make available to the Company,
on the terms and subject to the conditions set forth therein, certain office space, and administrative and support services for
the Company’s use at no cost until the earlier of the consummation by the Company of a Business Combination or the liquidation
of the Trust Account.
EarlyBirdCapital, Inc.
,
2020
Page 16 of 40
2.25. Investment
Management Trust Agreement. The Company has entered into the Trust Agreement with respect to certain proceeds of the Offering
and the Private Placement substantially in the form filed as an exhibit to the Registration Statement, pursuant to which the funds
held in the Trust Account may be released under limited circumstances. The Trust Agreement shall not be amended, modified or otherwise
changed in any way that modifies the rights or obligations of the Company without the prior written consent of the Representative.
2.26. Business
Combination Marketing Agreement. The Company and the Representative have entered into a separate business combination marketing
agreement substantially in the form filed as an exhibit to the Registration Statement (the “Business Combination Marketing
Agreement”).
2.27. Warrant &
Rights Agreements. The Company has entered into: (i) a warrant agreement with respect to the Warrants, Private Warrants
and any other warrants that may be issued by the Company with CST&T, as well as; (ii) a rights agreement with respect
to the Rights, Private Rights and any other rights that may be issued by the Company with CST&T, each substantially in the
form filed as an exhibit to the Registration Statement (the “Warrant Agreement”).
2.28. Investments.
No more than 45% of the “value” (as defined in Section 2(a)(41) of the Investment Company Act of 1940 (“Investment
Company Act”)) of the Company’s total assets (exclusive of cash items and “Government Securities,”
as defined in Section 2(a)(16) of the Investment Company Act) consist of, and no more than 45% of the Company’s net
income after taxes is derived from, securities other than Government Securities.
2.29. Investment
Company Act. The Company is not required, and upon the issuance and sale of the Public Securities as herein contemplated and
the application of the net proceeds therefrom as described in the Prospectus will not be required, to register as an “investment
company” under the Investment Company Act.
2.30. Subsidiaries.
The Company does not own an interest in any corporation, partnership, limited liability company, joint venture, trust or other
business entity.
2.31. Related
Party Transactions. No relationship, direct or indirect, exists between or among any of the Company or any Company Affiliate,
on the one hand, and any director, officer, customer or supplier of the Company or any Company Affiliate, on the other hand, which
is required by the Act, the Exchange Act or the Regulations to be described in the Registration Statement, the Statutory Prospectus
and the Prospectus, which is not so described as required. There are no outstanding loans, advances or guarantees of indebtedness
by the Company to or for the benefit of any of the officers or directors of the Company or any of their respective family members,
except as disclosed in the Registration Statement, the Statutory 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.
EarlyBirdCapital, Inc.
,
2020
Page 17 of 40
2.32. No
Influence. The Company has not offered, or caused the Underwriters to offer, the Firm Units to any person or entity with the
intention of unlawfully influencing: (a) a customer or supplier of the Company or any affiliate of the Company to alter the
customer’s or supplier’s level or type of business with the Company or such affiliate or (b) a journalist or
publication to write or publish favorable information about the Company or any such affiliate.
2.33. Sarbanes-Oxley.
The Company is in material compliance with the provisions of the Sarbanes-Oxley Act of 2002, as amended (“SOX”),
and the rules and regulations promulgated thereunder and related or similar rules and regulations promulgated by any
governmental or self-regulatory entity or agency, that are applicable to it as of the date hereof.
2.34. Nasdaq
Eligibility. As of the Effective Date, the Public Securities have been approved for listing on the Nasdaq Capital Markets
(“Nasdaq”), subject to official notice of issuance and evidence of satisfactory distribution. There is and
has been no failure on the part of the Company or any of the Company's directors or officers, in their capacities as such, to
comply with (as and when applicable), and immediately following the effectiveness of the Registration Statement the Company will
be in compliance with, the Nasdaq Marketplace Rules, as amended.
2.35. Emerging
Growth Status. From the date of the Company’s formation through the date hereof, the Company has been and is an “emerging
growth company,” as defined in Section 2(a) of the Act (an “Emerging Growth Company”).
2.36. Free-Writing
Prospectus and Testing-the-Waters. The Company has not made any offer relating to the Public Securities that would constitute
an issuer free writing prospectus, as defined in Rule 433 under the Act, or that would otherwise constitute a “free
writing prospectus” as defined in Rule 405. The Company (a) has not engaged in any Testing-the-Waters Communication
other than Testing-the-Waters Communications with the consent of the Representative with entities that are qualified institutional
buyers within the meaning of Rule 144A under the Act or institutions that are accredited investors within the meaning of
Rule 501 under the Act and (b) has not authorized anyone to engage in Testing-the-Waters Communications other than its
officers and the Representative and individuals engaged by the Representative. The Company has not distributed any written Testing-the-Waters
Communications other than those listed on Schedule B hereto. As used herein, “Testing-the-Waters Communication” means any oral
or written communication with potential investors undertaken in reliance on Section 5(d) of the Act.
EarlyBirdCapital, Inc.
,
2020
Page 18 of 40
2.37. Disclosure
Controls and Procedures. The Company maintains effective “disclosure controls and procedures” (as defined under
Rule 13a-15(e) under the Exchange Act to the extent required by such rule).
2.38. Definition
of “Knowledge”. As used in herein, the term “knowledge of the Company” (or similar language)
shall mean the knowledge of the Company’s executive officers and directors, with the assumption that such officers and directors
shall have made reasonable and diligent inquiry of the matters presented.
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3.
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Covenants
of the Company. The Company covenants and agrees as follows:
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3.1. Amendments
to Registration Statement. The Company will deliver to the Representative, prior to filing, any amendment or supplement to
the Registration Statement or Prospectus proposed to be filed after the Effective Date and shall not file any such amendment or
supplement to which the Representative shall reasonably object in writing.
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3.2.
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Federal
Securities Laws.
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3.2.1. Compliance.
During the time when a prospectus is required to be delivered under the Act, the Company will use all reasonable efforts to comply
with all requirements imposed upon it by the Act, the Regulations and the Exchange Act and by the regulations under the Exchange
Act, as from time to time in force, so far as necessary to permit the continuance of sales of or dealings in the Public Securities
in accordance with the provisions hereof and the Prospectus. If at any time when a Prospectus relating to the Public Securities
is required to be delivered under the Act, any event shall have occurred as a result of which, in the opinion of counsel for the
Company or counsel for the Underwriters, the Statutory Prospectus and the Prospectus, as then amended or supplemented includes
an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were made, not misleading, or if it is necessary during
such period to amend the Registration Statement or amend or supplement the Statutory Prospectus and Prospectus to comply with
the Act, the Company will notify the Representative promptly and prepare and file with the Commission, subject to Section 3.1
hereof, an appropriate amendment to the Registration Statement or amendment or supplement to the Statutory Prospectus and Prospectus
(at the expense of the Company) so as to correct such statement or omission or effect such compliance.
3.2.2. Filing
of Final Prospectus. The Company will promptly file the Prospectus (in form and substance satisfactory to the Representative)
with the Commission pursuant to the requirements of Rule 424 of the Regulations.
EarlyBirdCapital, Inc.
,
2020
Page 19 of 40
3.2.3. Exchange
Act Registration. For a period of five years from the Effective Date (except in connection with a going private transaction),
or until such earlier time upon which the Trust Account is to be liquidated if a Business Combination has not been consummated
by the Termination Date: the Company (i) will use its best efforts to maintain the registration of the Ordinary Shares, Rights
and Warrants under the provisions of the Exchange Act and (ii) will not deregister the Ordinary Shares, Rights or Warrants
under the Exchange Act without the prior written consent of the Representative.
3.2.4. Free
Writing Prospectuses. The Company agrees that it will not make any offer relating to the Public Securities that would constitute
an issuer free writing prospectus, as defined in Rule 433 under the Act.
3.2.5. Sarbanes-Oxley
Compliance. As soon as it is legally required to do so, the Company shall take all actions necessary to obtain and thereafter
maintain material compliance with each applicable provision of SOX and the rules and regulations promulgated thereunder and
related or similar rules and regulations promulgated by any other governmental or self-regulatory entity or agency with jurisdiction
over the Company.
3.3. Emerging
Growth Company Status. The Company will promptly notify the Representative if the Company ceases to be an Emerging Growth
Company at any time prior to the earlier of five years after the consummation of the Company’s initial Business Combination,
or the liquidation of the Trust Account if a Business Combination is not consummated by the Termination Date.
3.4. Blue
Sky Filing. The Company will endeavor in good faith, in cooperation with the Representative, at or prior to the time the Registration
Statement becomes Effective to qualify the Public Securities for offering and sale under the securities laws of such jurisdictions
as the Representative 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. In each jurisdiction where such qualification shall be effected, the Company will, unless the Representative
agrees 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 by the laws of such jurisdiction.
3.5. Delivery
of Materials to Underwriters. The Company will deliver to each of the several Underwriters, without charge and from time to
time during the period when a prospectus is required to be delivered under the Act or the Exchange Act, such number of copies
of each Statutory Prospectus, the Prospectus and all amendments and supplements to such documents as such Underwriters may reasonably
request.
3.6. Effectiveness
and Events Requiring Notice to the Representative. The Company will use its best efforts to cause the Registration Statement
to remain effective and will notify the Representative immediately and confirm the notice in writing: (i) of the effectiveness
of the Registration Statement and any amendment thereto; (ii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement, or any post-effective amendment thereto or preventing or suspending the use of
any Preliminary Prospectus or the Prospectus or of the initiation, or the threatening, of any proceeding for that purpose; (iii) of
the issuance by any foreign or state securities commission of any proceedings for the suspension of the qualification of the Public
Securities for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose;
(iv) of the mailing and delivery to the Commission for filing of any amendment or supplement to the Registration Statement
or Prospectus; (v) of the receipt of any comments or request for any additional information from the Commission; and (vi) of
the happening of any event during the period described in this Section 3.6 hereof that, in the judgment of the Company or
its counsel, makes any statement of a material fact made in the Registration Statement, the Statutory Prospectus or the Prospectus
untrue or that requires the making of any changes in the Registration Statement, the Statutory Prospectus and Prospectus in order
to make the statements therein, (with respect to the Prospectus and the Statutory Prospectus and in light of the circumstances
under which they were made), not misleading. If the Commission or any foreign or state securities commission shall enter a stop
order or suspend such qualification at any time, the Company will make every reasonable effort to obtain promptly the lifting
of such order.
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2020
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3.7. Review
of Financial Statements. Until the earlier of five years from the Effective Date, or until the liquidation of the Trust Account
if a Business Combination is not consummated by the Termination Date, the Company, at its expense, shall cause its regularly engaged
independent certified public accountants 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.
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3.8.
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Affiliated
Transactions.
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3.8.1. Business
Combinations. The Company will not consummate a Business Combination with an entity that is affiliated with any Insider unless
in each case the Company obtains an opinion from an independent investment banking firm or another independent entity that commonly
renders valuation opinions that the Business Combination is fair to the Company from a financial point of view and a majority
of the Company’s disinterested and independent directors (if there are any) approve such transaction.
3.8.2. Compensation.
Except as disclosed in the Registration Statement, the Company shall not pay any Insider or Company Affiliate or any of their
affiliates any fees or compensation for services rendered to the Company prior to, or in connection with, either this Offering
or the Business Combination.
3.9. Secondary
Market Trading and Standard & Poor’s. If the Company does not maintain the listing of the Public Securities
on Nasdaq or another national securities exchange, the Company will (i) apply to be included in Standard & Poor’s
Daily News and Corporation Records Corporate Descriptions for a period of five years from the consummation of a Business Combination,
(ii) take such commercially reasonable steps as may be necessary to obtain a secondary market trading exemption for the Company’s
securities in the State of California and (iii) take such other action as may be reasonably requested by the Representative
to obtain a secondary market trading exemption in such other states as may be requested by the Representative; provided that no
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.
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2020
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3.10. Investor
Relations Firm. Promptly after the execution of a definitive agreement for a Business Combination, the Company shall retain
an investor relations firm with the expertise necessary to assist the Company both before and after the consummation of the Business
Combination for a term to be agreed upon by the Company and the Representative.
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3.11.
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Reports
to the Representative.
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3.11.1. Periodic
Reports, etc. For a period of five years from the Effective Date or until such earlier time upon which the Company is
required to be liquidated and dissolved, the Company will furnish to the Representative and its counsel copies of such financial
statements and other periodic and special reports as the Company from time to time furnishes generally to holders of any class
of its securities, and promptly furnish to the Representative: (i) a copy of each periodic report the Company shall be required
to file with the Commission; (ii) a copy of every press release and every news item and article with respect to the Company
or its affairs which was released by the Company; (iii) a copy of each Current Report on Form 8-K and any Schedules
13D, 13G, 14D-1 or 13E-4 received or prepared by the Company; (iv) five copies of each registration statement filed by the
Company with the Commission under the Securities Act; and (v) such additional documents and information with respect to the
Company and the affairs of any future subsidiaries of the Company as the Representative may from time to time reasonably request;
provided that the Representative shall sign, if requested by the Company, a Regulation FD compliant confidentiality agreement
which is reasonably acceptable to the Representative and its counsel in connection with the Representative’s receipt of
such information. Documents filed with the Commission pursuant to Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”)
shall be deemed to have been delivered to the Representative pursuant to this section.
3.11.2. For
a period of five years following the Effective Date or until such earlier time upon which the Company is required to be liquidated,
the Company shall retain a transfer agent and warrant agent acceptable to the Representative. CST&T is acceptable to the Underwriters.
3.12. Payment
of Expenses. The Company hereby agrees to pay on each of the Closing Date and the Option Closing Date, if any, to the extent
not paid at Closing Date, or such later date as may be agreed to by the Representative in its sole discretion, all fees and expenses
incident to the performance of the obligations of the Company under this Agreement, including, but not limited to: (i) the
preparation, printing, filing and mailing (including the payment of postage with respect to such mailing) of the Registration
Statement, the Statutory Prospectus, and the final Prospectus and mailing of this Agreement and related documents, including the
cost of all copies thereof and any amendments thereof or supplements thereto supplied to the Underwriters in quantities as may
be required by the Underwriters; (ii) the printing, engraving, issuance and delivery of the Units, Ordinary Shares, Rights
and Warrants included in the Units, including any transfer or other taxes payable thereon; (iii) Nasdaq filing fees or, if
necessary, the qualification of the Public Securities under state or foreign securities or Blue Sky laws; (iv) fees and expenses
(including legal fees of the Representative’s counsel not to exceed $15,000) incurred in registering the Offering with FINRA;
(v) fees and disbursements of the transfer and warrant agent; (vi) all costs and expenses of the Company associated
with “road show” marketing and “due diligence” trips for the Company’s management to meet with prospective
investors, including without limitation, all travel, food and lodging expenses associated with such trips incurred by the Company
or such management; and (vii) all other costs and expenses customarily borne by an issuer incident to the performance of
its obligations hereunder which are not otherwise specifically provided for in this Section 3.12. The Company also agrees
that it will pay for an investigative search firm of the Representative’s choice to conduct an investigation of the principals
of the Company as shall be mutually selected by the Representative and the Company (not to exceed $3,500 per person). If the Offering
is consummated, the Representative may deduct from the net proceeds of the Offering payable to the Company on the Closing Date
the expenses set forth above (which shall be mutually agreed upon between the Company and the Representative prior to the Closing
Date) to be paid by the Company to the Representative and others. If the Offering is not consummated for any reason (other than
a breach by the Representative of any of its obligations hereunder), then the Company shall reimburse the Representative in full
for its out-of-pocket accountable expenses actually incurred through such date, including, without limitation, reasonable fees
and disbursements of counsel to the Representative.
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2020
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3.13. Application
of Net Proceeds. The Company will apply the net proceeds from this Offering received by it in a manner substantially consistent
with the application described under the caption “Use of Proceeds” in the Prospectus.
3.14. Delivery
of Earnings Statements to Security Holders. The Company will make generally available to its security holders as soon as practicable,
but not later than the first day of the sixteenth full calendar month following the Effective Date, an earnings statement (which
need not be certified by independent public or independent certified public accountants unless required by the Act or the Regulations,
but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of the Act) covering a period of
at least twelve consecutive months beginning after the Effective Date, which may be satisfied by filing pursuant to EDGAR.
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,
2020
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3.15.1. Assistance
with Business Combination. For a period of ninety days following the Effective Date, 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 Business Combination candidate or
to provide any similar Business Combination-related services, the Company will provide the following information (the “Business
Combination Information”) to the Representative: (i) complete details of all services and copies of agreements
governing such services (which details or agreements may be appropriately redacted to account for privilege or confidentiality
concerns); and (ii) justification as to why the person or entity providing the Business Combination-related services should
not be considered an “underwriter and related person” with respect to the Company’s initial public offering,
as such term is defined in Rule 5110 of FINRA’s Conduct Rules. The Company also agrees that proper disclosure of such
arrangement or potential arrangement will be made in the proxy statement which the Company will file for purposes of soliciting
shareholder approval for the Business Combination. Upon the Company’s delivery of the Business Combination Information to
the Representative, the Company hereby expressly authorizes the Representative to provide such information directly to FINRA as
a result of representations the Representative have made to FINRA in connection with the Offering.
3.15.2. Broker/Dealer.
In the event the Company intends to register as a broker/dealer, merge with or acquire a registered broker/dealer, or otherwise
become a member of FINRA, it shall promptly notify the Representative.
3.16. Stabilization.
Neither the Company, nor, to its knowledge, any of its employees, officers, directors or shareholders (without the consent of
the Representative) has taken or will take, directly or indirectly, any action designed to or that has constituted or that might
reasonably be expected to cause or result in, under the Exchange Act, or otherwise, stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the Units.
3.17. Internal
Controls. From and after the Closing Date, the Company will maintain 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.
3.18. Accountants.
For a period of five years from the Effective Date or until such earlier time upon which the Trust Account is required to be liquidated,
the Company shall retain Marcum or other independent public accountants reasonably acceptable to the Representative.
3.19. Form 8-K’s.
The Company has retained Marcum 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 and the Private Placement.
Within four (4) Business Days of the Closing Date, the Company shall file a Current Report on Form 8-K with the
Commission, which Report shall contain the Company’s Audited Balance Sheet. If the Over- Allotment Option has not been
exercised on the Effective Date, the Company will also file an amendment to the Form 8-K, or a new Form 8-K, to
provide updated financial information of the Company to reflect the exercise and consummation of the Over-Allotment
Option.
EarlyBirdCapital, Inc.
,
2020
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3.20. FINRA.
Until the Option Closing Date, if any, the Company shall advise the Representative if it is aware that any 5% or greater shareholder
of the Company becomes an affiliate or associated person of a FINRA member participating in the distribution of the Public Securities.
3.21. Corporate
Proceedings. All corporate proceedings and other legal matters necessary to carry out the provisions of this Agreement and
the transactions contemplated hereby shall have been done to the reasonable satisfaction to counsel for the Underwriters.
3.22. Investment
Company. The Company shall cause the proceeds of the Offering to be held in the Trust Account to be invested only as set forth
in the Trust Agreement as in effect on the date hereof and disclosed in 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
a Business Combination, it will be engaged in a business other than that of investing, reinvesting, owning, holding or trading
securities.
3.23. Press
Releases. The Company agrees that it will not issue press releases or engage in any other publicity, without the Representative’s
prior written consent (not to be unreasonably withheld), for a period of twenty-five (25) days after the Closing Date; provided
that in no event shall the Company be prohibited from issuing any press release or engaging in any other publicity required by
law.
3.24. Electronic
Prospectus. The Company shall cause to be prepared and delivered to the Representative, at its expense, promptly, but in
no event later than two (2) Business Days from the effective date of this Agreement, an Electronic Prospectus to be used
by the Underwriters in connection with the Offering. As used herein, the term “Electronic Prospectus”
means a form of prospectus, and any amendment or supplement thereto, that meets each of the following conditions: (i) it
shall be encoded in an electronic format, satisfactory to the Representative, that may be transmitted electronically by the
other Underwriters to offerees and purchasers of the Ordinary Shares for at least the period during which a Prospectus
relating to the Ordinary Shares is required to be delivered under the Act; (ii) it shall disclose the same information
as the paper prospectus and prospectus filed pursuant to EDGAR, except to the extent that graphic and image material cannot
be disseminated electronically, in which case such graphic and image material shall be replaced in the electronic prospectus
with a fair and accurate narrative description or tabular representation of such material, as appropriate; and (iii) it
shall be in or convertible into a paper format or an electronic format, satisfactory to the Representative, that will allow
recipients thereof to store and have continuously ready access to the prospectus at any future time, without charge to such
recipients (other than any fee charged for subscription to the Internet as a whole and for on-line time). The Company hereby
confirms that it has included or will include in the Prospectus filed pursuant to EDGAR or otherwise with the Commission and
in the Registration Statement at the time it was declared effective an undertaking that, upon receipt of a request by an
investor or his or her representative within the period when a prospectus relating to the Ordinary Shares is required to be
delivered under the Act, the Company shall transmit or cause to be transmitted promptly, without charge, a paper copy of the
Prospectus.
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2020
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3.25. Future
Financings. The Company agrees that neither it, nor any successor or subsidiary of the Company, will consummate any public
or private equity or debt financing prior to or in connection with the consummation of a Business Combination, unless all investors
in such financing expressly waive, in writing, any rights in or claims against the Trust Account.
3.26. NASDAQ
Maintenance. Until the consummation of a Business Combination, the Company will use commercially reasonable efforts to maintain
the listing by NASDAQ of the Units and the Ordinary Shares, Rights and Warrants included within the Units.
3.27. Private
Placement Proceeds. On the Closing Date, the Company shall cause to be deposited $2,500,000 of proceeds from the Private Placement
into the Trust Account. On the Option Closing Date, if any, the Company shall cause to be deposited an amount of additional proceeds
from the additional Private Units sold on the Option Closing Date into the Trust Account such that the amount of funds in the
Trust Account shall be $10.00 per Public Share sold in the Offering.
3.28. Reservation
of Shares. The Company will reserve and keep available that maximum number of its authorized but unissued Ordinary Shares
which are issuable pursuant to the Rights, Warrants, Private Rights and the Private Warrants (as well as any other rights or warrants
that may be issued and covered by the Rights Agreement or Warrant Agreement) outstanding from time to time.
3.29. Testing-the-Waters
Communications. 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 existing at that subsequent time, not misleading, the Company will promptly (i) notify the
Representative 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 Representative in such quantities as may be reasonably requested.
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4.1. Conditions
of Underwriters’ Obligations. The obligations of the several Underwriters to purchase and pay for the Public Securities,
as provided herein, shall be subject to the continuing accuracy of the representations and warranties of the Company as of the
date hereof and as of the Closing Date and the Option Closing Date, if any, to the accuracy of the statements of officers of the
Company made pursuant to the provisions hereof and to the performance by the Company of its obligations hereunder and to the following
conditions:
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4.1.1.
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Regulatory Matters.
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4.1.1.1. Effectiveness
of Registration Statement. The Registration Statement shall have become effective not later than 5:00 p.m., New York time,
on the date of this Agreement or such later date and time as shall be consented to in writing by the Representative, and, at the
Closing Date, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings
for the purpose shall have been instituted or shall be pending or contemplated by the Commission and any request on the part of
the Commission for additional information shall have been complied with.
4.1.1.2. FINRA
Clearance. By the Effective Date, the Representative shall have received clearance from FINRA as to the amount of compensation
allowable or payable to the Underwriters as described in the Registration Statement.
4.1.1.3. No
Commission Stop Order. At the Closing Date, the Commission has not issued any order or threatened to issue any order preventing
or suspending the use of any Preliminary Prospectus, the Prospectus or any part thereof, and has not instituted or, to the Company’s
knowledge, threatened to institute any proceedings with respect to such an order.
4.1.1.4. Nasdaq
Listing. The Public Securities shall have been approved for listing on Nasdaq, subject to official notice of issuance and
evidence of satisfactory distribution.
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4.1.2.
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Company Counsel Matters.
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4.1.2.1. Opinions
of Company Counsel. On each of the Closing Date or the Option Closing Date, if any, the Representative shall have received
the favorable opinions (along with negative assurance letters) of Ellenoff Grossman & Schole LLP, U.S. counsel to the
Company, and Maples and Calder, Cayman Islands counsel to the Company, addressed to the Representative as representative for the
several Underwriters and in form mutually agreed to by the Company and the Representative.
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4.1.2.2. Reliance.
In rendering such opinions, such counsels may rely: (i) as to matters involving the application of laws other than the
laws of the United States and jurisdictions in which they are admitted, to the extent such counsel deems proper and to the
extent specified in such opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory to
the Representative) of other counsel reasonably acceptable to the Representative, familiar with the applicable laws; and
(ii) as to matters of fact, to the extent they deem proper, on certificates or other written statements of officers of
the Company and officers of departments of various jurisdiction having custody of documents respecting the corporate
existence or good standing of the Company, provided that copies of any such statements or certificates shall be delivered to
the Underwriters’ counsel if requested. The opinions of counsels for the Company and any opinion relied upon by such
counsel for the Company shall include a statement to the effect that it may be relied upon by counsel for the Underwriters in
its opinion delivered to the Underwriters.
4.1.3. Cold
Comfort Letter. At the time this Agreement is executed, and at the Closing Date and Option Closing Date, if any, the Representative
shall have received a letter, addressed to the Representative as representative for the several Underwriters and in form and substance
satisfactory in all respects (including the non-material nature of the changes or decreases, if any, referred to in clause (iii) below)
to the Representative from Marcum dated, respectively, as of the date of this Agreement and as of the Closing Date and Option Closing
Date, if any:
(i) Confirming
that they are independent accountants with respect to the Company within the meaning of the Act and the applicable Regulations
and that they have not, during the periods covered by the financial statements included in the Registration Statement and the Prospectus,
provided to the Company any non-audit services, as such term is used in Section 10A(g) of the Exchange Act;
(ii) Stating
that in their opinion the financial statements of the Company included in the Registration Statement and the Prospectus comply
as to form in all material respects with the applicable accounting requirements of the Act and the published Regulations thereunder;
(iii) Stating
that, on the basis of a limited review which included a reading of the latest available unaudited interim financial
statements of the Company (with an indication of the date of the latest available unaudited interim financial statements), a
reading of the latest available minutes of the shareholders and board of directors and the various committees of the board of
directors, consultations with officers and other employees of the Company responsible for financial and accounting matters
and other specified procedures and inquiries, nothing has come to their attention which would lead them to believe that:
(a) the unaudited financial statements of the Company included in the Registration Statement and the Prospectus do not
comply as to form in all material respects with the applicable accounting requirements of the Act and the Regulations or are
not fairly presented in conformity with GAAP applied on a basis substantially consistent with that of the audited financial
statements of the Company included in the Registration Statement, the Statutory Prospectus and the Prospectus; or (b) at
a date immediately prior to the Effective Date or Closing Date, as the case may be, there was any change in the capital stock
or long-term debt of the Company, or any decrease in the shareholders’ equity of the Company
as compared with amounts shown in the July 8, 2020 balance sheet included in the Registration Statement, other than as set
forth in or contemplated by the Registration Statement, or, if there was any decrease, setting forth the amount of such decrease,
and (c) during the period from July 8, 2020 to a specified date immediately prior to the Effective Date or Closing Date,
as the case may be, there was any changes in revenues, net earnings (losses), or net earnings (losses) per Ordinary Share, in each
case as compared with the Statement of Operations for the period from July 1, 2020 (Inception) to July 8, 2020 included
in the Registration Statement, or, if there was any such change, setting forth the amount of such change;
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(iv) Stating that they have compared specific dollar amounts, numbers of shares, percentages of revenues and earnings, statements and other
financial information pertaining to the Company set forth in the Registration Statement in each case to the extent that such amounts,
numbers, percentages, statements and information may be derived from the general accounting records, including work sheets, of the Company
and excluding any questions requiring an interpretation by legal counsel, with the results obtained from the application of specified
readings, inquiries and other appropriate procedures (which procedures do not constitute an examination in accordance with generally accepted
auditing standards) set forth in the letter and found them to be in agreement; and
(v) Statements
as to such other matters incident to the transaction contemplated hereby as the Representative may reasonably request.
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4.1.4.
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Officers’ Certificates.
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4.1.4.1. Officers’
Certificate. As of each of the Closing Date and the Option Closing Date, if any, the Representative shall have received a certificate
of the Company signed by the Chairman of the Board or President (in their capacities as such), respectively, to the effect that
the Company has performed all covenants and complied with all conditions required by this Agreement to be performed or complied
with by the Company prior to and as of the Closing Date and that the conditions set forth in Section 4.1.5 hereof have been
satisfied as of such date and that, as of Closing Date, the representations and warranties of the Company set forth in Section 2
hereof are true and correct. In addition, the Representative will have received such other and further certificates of officers
of the Company as the Representative may reasonably request.
4.1.4.2. Secretary’s
Certificate. As of each of the Closing Date and the Option Closing Date, if any, the Representative shall have received a
certificate of the Company signed by the Secretary of the Company, respectively, certifying: (i) that the Memorandum and
Articles of Association of the Company are true and complete, have not been modified and are in full force and effect; (ii) that
the resolutions relating to the Offering are in full force and effect and have not been modified; (iii) all correspondence
between the Company or its counsel and the Commission; (iv) all correspondence between the Company or its counsel and Nasdaq;
and (v) as to the incumbency of the officers of the Company. The documents referred to in such certificate shall be attached
to such certificate.
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4.1.5. No
Material Changes. Prior to each of the Closing Date and the Option Closing Date, if any: (i) there shall have been no
material adverse change or development involving a material adverse change in the condition or prospects or the business activities,
financial or otherwise, of the Company from the latest dates as of which such condition is set forth in the Registration Statement,
the Statutory Prospectus and Prospectus; (ii) no action suit or proceeding, at law or in equity, shall have been pending or
threatened against the Company or any Company Affiliate before or by any court or foreign, federal or state commission, board or
other administrative agency wherein an unfavorable decision, ruling or finding may materially adversely affect the business, operations,
prospects or financial condition or income of the Company, except as set forth in the Registration Statement, the Statutory Prospectus
and Prospectus; (iii) no stop order shall have been issued under the Act against the Company and no proceedings therefor shall
have been initiated or threatened by the Commission; and (iv) the Registration Statement, the Statutory Prospectus and the
Prospectus and any amendments or supplements thereto shall contain all material statements which are required to be stated therein
in accordance with the Act and the Regulations and shall conform in all material respects to the requirements of the Act and the
Regulations, and none of the Registration Statement, the Statutory Prospectus or the Prospectus, or any amendment or supplement
thereto shall contain any untrue statement of a material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein (in the case of the Statutory Prospectus and Prospectus, in light of the circumstances
under which they were made), not misleading.
4.1.6. Delivery
of Agreements. On the Effective Date, the Company shall have delivered to the Representative executed copies of the Transaction
Documents.
4.1.7. Private
Units. On the Closing Date and the Option Closing Date, as applicable, the Private Units have been purchased as provided for
in the Subscription Agreement and the purchase price for such securities shall be deposited into the Trust Account.
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5.1.
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Indemnification of Underwriters.
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5.1.1. General.
Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless each of the Underwriters and each
dealer selected by the Representative that participates in the offer and sale of the Public Securities (each a “Selected
Dealer”) and each of their respective directors, officers, partners and employees and each person, if any, who controls
any such Underwriter or Selected Dealer (“Controlling Person”) within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, and its counsel, 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, commenced or threatened, or any claim whatsoever, whether arising out of any action between
any of the Underwriters and the Company or between any of the Underwriters and any third party or otherwise) to which they or
any of them may become subject under the Act, the Exchange Act or any other foreign, federal, state or local statute, law, rule,
regulation or ordinance or at common law or otherwise or under the laws, rules and regulation of foreign countries, arising
out of or based upon any untrue statement or alleged untrue statement of a material fact contained in (i) any Preliminary
Prospectus, the Registration Statement, or the Prospectus (as from time to time each may be amended and supplemented); (ii) in
any post-effective amendment or amendments or any new registration statement and prospectus relating to any of the Public Securities;
or (iii) any application or other document or written communication (in this Section 5 collectively called “application”)
executed by the Company or based upon written information furnished by the Company in any jurisdiction in order to qualify the
Public Securities under the securities laws thereof or filed with the Commission, any foreign or state securities commission or
agency, Nasdaq (in each case other than statements contained in the section captioned “Selling Restrictions”); or
the omission or alleged omission therefrom of 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, unless such statement or omission was made
in reliance upon and in conformity with written information furnished to the Company with respect to an Underwriter by or on behalf
of such Underwriter expressly for use in any Preliminary Prospectus, the Registration Statement the Prospectus or any amendment
or supplement thereof, or in any application, as the case may be, which furnished written information, it is expressly agreed,
consists solely of the information described in clause (ii) of the last sentence of Section 2.3.1. With respect to any
untrue statement or omission or alleged untrue statement or omission made in the Preliminary Prospectus, the indemnity agreement
contained in this paragraph shall not inure to the benefit of any Underwriter to the extent that any loss, liability, claim, damage
or expense of such Underwriter results from the fact that a copy of the Prospectus was not given or sent to the person asserting
any such loss, liability, claim or damage at or prior to the written confirmation of sale of the Public Securities to such person
as required by the Act and the Regulations, and if the untrue statement or omission has been corrected in the Prospectus, unless
such failure to deliver the Prospectus was a result of non-compliance by the Company with its obligations under Section 3.4
hereof. The Company agrees promptly to notify the Representative of the commencement of any litigation or proceedings against
the Company or any of its officers, directors or controlling persons in connection with the issue and sale of the Public Securities
or in connection with the Preliminary Prospectus, the Registration Statement or the Prospectus.
EarlyBirdCapital, Inc.
, 2020
Page 31 of 40
5.1.2. Procedure.
If any action is brought against an Underwriter or controlling person in respect of which indemnity may be sought against the
Company pursuant to Section 5.1.1, such Underwriter shall promptly notify the Company in writing of the institution of
such action and the Company shall assume the defense of such action, including the employment and fees of counsel (subject to
the reasonable approval of such Underwriter) and payment of actual expenses. Such Underwriter or controlling person shall
have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the
expense of such Underwriter or such controlling person unless: (i) the employment of such counsel at the expense of the
Company shall have been authorized in writing by the Company in connection with the defense of such action; (ii) the
Company shall not have employed counsel to have charge of the defense of such action; or (iii) counsel to such
indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are
different from or additional to those available to the Company (in which case the Company shall not have the right to direct
the defense of such action on behalf of the indemnified party or parties), in any of which events the reasonable fees and
expenses of not more than one additional firm of attorneys selected by the Underwriter and/or controlling person shall be
borne by the Company. Notwithstanding anything to the contrary contained herein, if the Underwriter or controlling person
shall assume the defense of such action as provided above, the Company shall have the right to approve the terms of any
settlement of such action which approval shall not be unreasonably withheld.
5.2. Indemnification
of the Company. Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company, its directors,
officers, and employees and agents who control the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, and its counsel, against any and all loss, liability, claim, damage and expense described in the foregoing
indemnity from the Company to the several Underwriters, as incurred, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions made in the Registration Statement, any Preliminary Prospectus, the Prospectus or any amendment
or supplement thereto, or in any application, in reliance upon, and in strict conformity with, written information furnished to
the Company with respect to such Underwriter by or on behalf of the Underwriter expressly for use in such Registration Statement,
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto or in any such application, which furnished written
information, it is expressly agreed, consists solely of the information described in clause (ii) of the last sentence of Section 2.3.1.
In case any action shall be brought against the Company or any other person so indemnified based on any Preliminary Prospectus,
the Registration Statement, the Prospectus or any amendment or supplement thereto or any application, and in respect of which indemnity
may be sought against any Underwriter, such Underwriter shall have the rights and duties given to the Company, and the Company
and each other person so indemnified shall have the rights and duties given to the several Underwriters by the provisions of Section 5.1.2.
EarlyBirdCapital, Inc.
, 2020
Page 32 of 40
5.3.1. Contribution
Rights. In order to provide for just and equitable contribution under the Act in any case in which (i) any person
entitled to indemnification under this Section 5 makes claim for indemnification pursuant hereto but it is judicially
determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to
appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding
the fact that this Section 5 provides for indemnification in such case, or (ii) contribution under the Act, the
Exchange Act or otherwise may be required on the part of any such person in circumstances for which indemnification is
provided under this Section 5 but is unavailable, then, and in each such case, the Company and the Underwriters
shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by the Company and the Underwriters, as incurred, in such proportions that the Underwriters are
responsible for that portion represented by the percentage that the underwriting discount appearing on the cover page of
the Prospectus bears to the initial offering price appearing thereon and the Company is responsible for the balance;
provided, that, no person guilty of a 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. Notwithstanding
the provisions of this Section 5.3.1, no Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Public Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has otherwise been required to pay in respect of such losses,
liabilities, claims, damages and expenses. For purposes of this Section, each director, officer and employee of an
Underwriter or the Company, as applicable, and each person, if any, who controls an Underwriter or the Company, as
applicable, within the meaning of Section 15 of the Act shall have the same rights to contribution as the Underwriters
or the Company, as applicable.
5.3.2. Contribution
Procedure. Within fifteen days after receipt by any party to this Agreement (or its representatives) of notice of the commencement
of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made against another
party (“contributing party”), notify the contributing party of the commencement thereof, but the omission to
so notify the contributing party will not relieve it from any liability which it may have to any other party other than for contribution
hereunder. In case any such action, suit or proceeding is brought against any party, and such party notifies a contributing party
or its representatives of the commencement thereof within the aforesaid fifteen days, the contributing party will be entitled to
participate therein with the notifying party and any other contributing party similarly notified. Any such contributing party shall
not be liable to any party seeking contribution on account of any settlement of any claim, action or proceeding effected by such
party seeking contribution on account of any settlement of any claim, action or proceeding effected by such party seeking contribution
without the written consent of such contributing party. The contribution provisions contained in this Section are intended
to supersede, to the extent permitted by law, any right to contribution under the Act, the Exchange Act or otherwise available.
The Underwriters’ obligations to contribute pursuant to this Section 5.3 are several and not joint.
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6.
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Default by an Underwriter.
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6.1. Default
Not Exceeding 10% of Firm Units. If any Underwriter or Underwriters shall default in its or their obligations to purchase the
Firm Units and if the number of the Firm Units with respect to which such default relates does not exceed in the aggregate 10%
of the number of Firm Units that all Underwriters have agreed to purchase hereunder, then such Firm Units to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion to their respective commitments hereunder.
EarlyBirdCapital, Inc.
, 2020
Page 33 of 40
6.2. Default
Exceeding 10% of Firm Units. In the event that the default addressed in Section 6.1 above relates to more than 10% of
the Firm Units, the Representative may, in its discretion, arrange for it or for another party or parties to purchase such Firm
Units to which such default relates on the terms contained herein. If within one (1) Business Day after such default relating
to more than 10% of the Firm Units the Representative does not arrange for the purchase of such Firm Units, then the Company shall
be entitled to a further period of one (1) Business Day within which to procure another party or parties satisfactory to the
Representative to purchase said Firm Units on such terms. In the event that neither the Representative nor the Company arrange
for the purchase of the Firm Units to which a default relates as provided in this Section 6, this Agreement may be terminated
by the Representative or the Company without liability on the part of the Company (except as provided in Sections 3.12 and 5 hereof)
or the several Underwriters (except as provided in Section 5 hereof); provided that nothing herein shall relieve a
defaulting Underwriter of its liability, if any, to the other several Underwriters and to the Company for damages occasioned by
its default hereunder.
6.3. Postponement
of Closing Date. In the event that the Firm Units to which the default relates are to be purchased by the non-defaulting Underwriters,
or are to be purchased by another party or parties as aforesaid, the Representative or the Company shall have the right to postpone
the Closing Date for a reasonable period, but not in any event exceeding five (5) Business Days, in order to effect whatever
changes may thereby be made necessary in the Registration Statement and/or the Prospectus, as the case may be, or in any other
documents and arrangements, and the Company agrees to file promptly any amendment to, or to supplement, the Registration Statement
and/or the Prospectus, as the case may be, that in the reasonable opinion of counsel for the Underwriters may thereby be made necessary.
The term “Underwriter” as used in this Agreement shall include any party substituted under this Section 6
with like effect as if it had originally been a party to this Agreement with respect to such securities.
7.1. Additional
Shares or Options. Except as described in the Registration Statement, the Company hereby agrees that until the Company consummates
a Business Combination, it shall not issue any Ordinary Shares or any options or other securities convertible into Ordinary Shares
or any preferred shares which participate in any manner in the Trust Account or which vote on a Business Combination.
EarlyBirdCapital, Inc.
, 2020
Page 34 of 40
7.2. Trust
Account Waiver Acknowledgments. The Company hereby agrees that, prior to commencing its due diligence investigation of any
Target Business or obtaining the services of any vendor, it will use its best efforts to have such Target Business or vendor acknowledge
in writing, whether through a letter of intent, memorandum of understanding, agreement in principle or other similar document
(and subsequently acknowledges the same in any definitive document replacing any of the foregoing), that (a) it has read
the Prospectus, and understands that the Company has established the Trust Account, initially in an amount of $40,000,000 for
the benefit of the Public Shareholders and that, except for the interest earned on the amounts held in the Trust Account,
the Company may disburse monies from the Trust Account only: (i) to the Public Shareholders in the event of the conversion
of their shares upon consummation of a Business Combination or amendment to the Company’s Amended and Restated Memorandum
and Articles of Association relating to pre-Business Combination activity, (ii) to the Public Shareholders in connection
with the Company’s liquidation in the event the Company is unable to consummate a Business Combination within the required
time period or (iii) to the Company concurrently with, or after it consummates a Business Combination, and (b) for and
in consideration of the Company (1) agreeing to evaluate such Target Business for purposes of consummating a Business Combination
with it or (2) agreeing to engage the services of the vendor, as the case may be, such Target Business or vendor agrees that
it does not have any right, title, interest or claim of any kind in or to any monies of the Trust Account (“Claim”)
and waives any Claim it may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with
the Company and will not seek recourse against the Trust Account for any reason whatsoever. The foregoing letters shall substantially
be in the form attached hereto as Exhibit A and B, respectively.
7.3. Insider
Letters. The Company shall not take any action or omit to take any action which would cause a breach of any of the Insider
Letters executed between each Company Affiliate and the Representative and will not allow any amendments to, or waivers of, such
Insider Letters without the prior written consent of the Representative.
7.4. Tender
Offer, Proxy and Other Information. The Company shall provide the Representative with copies of all proxy or tender offer documentation
and other information and all related material sent to Public Shareholders in connection with a Business Combination.
7.5. Rule 419.
The Company agrees that it will use its best efforts to prevent the Company from becoming subject to Rule 419 under the Act
prior to the consummation of any Business Combination, including, but not limited to, using its best efforts to prevent any of
the Company’s outstanding securities from being deemed to be a “penny stock” as defined in Rule 3a-51-1
under the Exchange Act during such period.
7.6. Presentation
of Potential Target Businesses. The Company shall cause each of the Respondents to agree that, in order to minimize potential
conflicts of interest which may arise from multiple affiliations, the Respondents will present to the Company for its consideration,
prior to presentation to any other person or company, any suitable opportunity to acquire an operating business, until the earlier
of the consummation by the Company of a Business Combination or the liquidation of the Trust Account, subject to any pre-existing
fiduciary obligations the Respondents might have.
7.7. Target
Fair Market Value. The Company agrees that the Target Business that it acquires must have a fair market value equal to at
least 80% of the balance in the Trust Account (excluding any taxes) at the time of signing the definitive agreement for the
Business Combination with such Target Business. The fair market value of such business must be determined by the Board
of Directors of the Company based upon standards generally accepted by the financial community, such as actual and potential
sales, earnings, cash flow and book value. If the Board of Directors of the Company is not able to independently determine
that the target business meets such fair market value requirement, the Company will obtain an opinion from an unaffiliated,
independent investment banking firm, or another independent entity that commonly renders valuation opinions. The Company is
not required to obtain such an opinion as to the fair market value if the Company’s Board of Directors independently
determines that the Target Business does have sufficient fair market value.
EarlyBirdCapital, Inc.
, 2020
Page 35 of 40
8. Representations
and Agreements to Survive Delivery. Except as the context otherwise requires, all representations, warranties and agreements
contained in this Agreement shall be deemed to be representations, warranties and agreements at the Closing Date or Option Closing
Date, as applicable, and such representations, warranties and agreements of the Underwriters and Company, including the indemnity
agreements contained in Section 5 hereof, shall remain operative and in full force and effect regardless of any investigation
made by or on behalf of any Underwriter, the Company or any controlling person, and shall survive termination of this Agreement
or the issuance and delivery of the Public Securities to the several Underwriters until the earlier of the expiration of any applicable
statute of limitations and the seventh (7th) anniversary of the Closing Date, at which time the representations, warranties and
agreements shall terminate and be of no further force and effect.
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9.
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Effective Date of This Agreement and Termination Thereof.
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9.1. Effective
Date. This Agreement shall become effective on the Effective Date at the time the Registration Statement is declared effective
by the Commission.
9.2. Termination.
The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date: (i) if any domestic
or international event or act or occurrence has materially disrupted or, in the Representative’s sole opinion, will in the
immediate future materially disrupt, general securities markets in the United States; or (ii) if trading on the New York
Stock Exchange, the NYSE MKT LLC, Nasdaq or on the OTC Bulletin Board (or successor trading market) shall have been suspended,
or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been fixed,
or maximum ranges for prices for securities shall have been required on the OTC Bulletin Board or by order of the Commission or
any other government authority having jurisdiction, or (iii) if the United States shall have become involved in a war or
an increase in existing major hostilities, or (iv) if a banking moratorium has been declared by a New York State or federal
authority, or (v) if a moratorium on foreign exchange trading has been declared which materially adversely impacts the United
States securities market, or (vi) if the Company shall have sustained a material loss by fire, flood, accident, hurricane,
earthquake, theft, sabotage or other calamity (including without limitation a calamity relating to a public health matter or natural
disaster) or malicious act which, whether or not such loss shall have been insured, will, in the Representative’s sole opinion,
make it inadvisable to proceed with the delivery of the Ordinary Shares, (vii) if any of the Company’s representations,
warranties or covenants hereunder are breached, or (viii) if the Representative shall have become aware after the date hereof
of a Material Adverse Effect on the Company, or such adverse material change in general market conditions, including, without
limitation, as a result of terrorist activities or any other calamity (including without limitation a calamity relating to a public
health matter or natural disaster) or crisis either within or outside the United States after the date hereof, or an increase
in any of the foregoing, as in the Representative’s sole judgment would make it impracticable to proceed with the offering,
sale and/or delivery of the Ordinary Shares or to enforce contracts made by the Underwriters for the sale of the Ordinary Shares.
EarlyBirdCapital, Inc.
, 2020
Page 36 of 40
9.3. Expenses.
In the event that this Agreement shall not be carried out for any reason whatsoever, within the time specified herein or any extensions
thereof pursuant to the terms herein, the obligations of the Company to pay the out of pocket expenses related to the transactions
contemplated herein shall be governed by Section 3.12 hereof.
9.4. Indemnification.
Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement,
and whether or not this Agreement is otherwise carried out, the provisions of Section 5 shall not be in any way effected by,
such election or termination or failure to carry out the terms of this Agreement or any part hereof.
10.1. Notices.
All communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall be mailed by certified
mail (with return receipt), delivered by hand or reputable overnight courier, delivered by facsimile transmission (with printed
confirmation of receipt) and confirmed, or by electronic transmission via PDF and shall be deemed given when so mailed, delivered,
or faxed or transmitted (or if mailed, five days after such mailing):
If to the Representative:
EarlyBirdCapital, Inc. 366 Madison Avenue
New York, New York 10017 Fax No.: (212) 661-4936
Attn: Steven Levine
Email: slevine@ebcap.com
With a copy (which shall not constitute notice) to:
Graubard Miller
405 Lexington Avenue
New York, New York 10174 Fax No.: (212) 818-8881
Attn: David Alan Miller, Esq.
Email: dmiller@graubard.com
EarlyBirdCapital, Inc.
, 2020
Page 37 of 40
If to the Company, to:
Distoken Acquisition Corporation
Unit 1006, Block C, Jinshangjun Park
No. 2 Xiaoba Road, Panlong District
Kunming, Yunnan, China Fax No.:
86-871-63624579
Attn:
Email:
With a copy (which shall not constitute notice) to:
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas New York, NY 10105
Fax No.: (646) 916-1404
Attn: Richard I. Anslow, Esq.
Email: ranslow@egsllp.com
10.2. Headings.
The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.
10.3. Amendment.
This Agreement may only be amended by a written instrument executed by each of the parties hereto.
10.4. Entire
Agreement. This Agreement (together with the other agreements and documents being delivered pursuant to or in connection with
this Agreement) constitute the entire agreement of the parties hereto with respect to the subject matter hereof and thereof, and
supersede all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.
10.5. Binding
Effect. This Agreement shall inure solely to the benefit of and shall be binding upon the Representative, the
Underwriters, the Company and the controlling persons, directors and officers referred to in Section 5 hereof, and their
respective successors, legal representatives and assigns, and no other person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this Agreement or any provisions herein contained.
EarlyBirdCapital, Inc.
, 2020
Page 38 of 40
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10.6.
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Governing Law, Venue, etc.
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10.6.1. In
connection with Section 5-1401 of the General Obligations Law of the State of New York, this Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York without regard to principles of conflicts of law that
would result in the application of the substantive law of another jurisdiction. The parties hereto agree that any action,
proceeding or claim arising out of or relating in any way to this Agreement shall be resolved through final and binding
arbitration in accordance with the International Arbitration Rules of the American Arbitration Association
(“AAA”). The arbitration shall be brought before the AAA International Center for Dispute
Resolution’s offices in New York City, New York, will be conducted in English and will be decided by a panel of three
arbitrators selected from the AAA Commercial Disputes Panel and that the arbitrator panel’s decision shall be final and
enforceable by any court having jurisdiction over the party from whom enforcement is sought. The cost of such arbitrators and
arbitration services, together with the prevailing party’s legal fees and expenses, shall be borne by the
non-prevailing party or as otherwise directed by the arbitrators. The Company hereby appoints, without power of revocation,
Ellenoff Grossman & Schole LLP, as its agent to accept and acknowledge on its behalf service of any and all process
which may be served in any arbitration, action, proceeding or counterclaim in any way relating to or arising out of this
Agreement. The Company further agrees to take any and all action as may be necessary to maintain such designation and
appointment of such agent in full force and effect for a period of seven years from the date of the Effective
Date.
10.6.2. THE
COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF ITS EQUITY HOLDERS AND CREDITORS) HEREBY
WAIVES ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE REGISTRATION STATEMENT AND THE PROSPECTUS.
10.6.3. The
Company agrees that the prevailing party(ies) in any such action shall be entitled to recover from the other party(ies) all of
its reasonable attorneys’ fees and expenses relating to such action or proceeding and/or incurred in connection with the
preparation therefor.
10.7. Execution
in Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered
to each of the other parties hereto. Delivery of a signed counterpart of this Agreement by fax or email/.pdf transmission shall
constitute valid and sufficient delivery thereof.
10.8. Waiver, etc. The
failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the validity of this Agreement or any provision
hereof or the right of any of the parties hereto to thereafter enforce each and every provision of this Agreement. No
waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Agreement shall be effective unless
set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is
sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of
any other or subsequent breach, non-compliance or non-fulfillment.
EarlyBirdCapital, Inc.
, 2020
Page 39 of 40
10.9. No
Fiduciary Relationship. The Company hereby acknowledges that the Underwriters are acting solely as underwriters in connection
with the offering of the Public Securities. The Company further acknowledges that the Underwriters are acting pursuant to a contractual
relationship created solely by this Agreement entered into on an arm's length basis and in no event do the parties intend that
the Underwriters act or be responsible as a fiduciary to the Company, its management, shareholders, creditors or any other person
in connection with any activity that the Underwriters may undertake or have undertaken in furtherance of the offering of the Public
Securities, either before or after the date hereof. The Underwriters hereby expressly disclaim any fiduciary or similar obligations
to the Company, either in connection with the transactions contemplated by this Agreement or any matters leading up to such transactions,
and the Company hereby confirms its understanding and agreement to that effect. The Company and the Underwriters agree that they
are each responsible for making their own independent judgments with respect to any such transactions, and that any opinions or
views expressed by the Underwriters to the Company regarding such transactions, including but not limited to any opinions or views
with respect to the price or market for the Public Securities, do not constitute advice or recommendations to the Company. The
Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against the Underwriters
with respect to any breach or alleged breach of any fiduciary or similar duty to the Company in connection with the transactions
contemplated by this Agreement or any matters leading up to such transactions.
[Signature Page Follows]
EarlyBirdCapital, Inc.
,
2020
Page 40
of 40
If the foregoing correctly
sets forth the understanding between the Underwriters and the Company, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between us.
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Very
Truly Yours,
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DISTOKEN
ACQUISITION CORPORATION
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By:
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Name:
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Title:
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Agreed
to and accepted
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as
of the date first written above:
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EARLYBIRDCAPITAL, INC.,
as Representative of the several Underwriters
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By:
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Name:
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Title:
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[Signature
Page to Underwriting Agreement, dated , 2020]
SCHEDULE A
DISTOKEN ACQUISITION CORPORATION
4,000,000 Units
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Underwriter
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Number of Firm Units
to be Purchased
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EarlyBirdCapital, Inc.
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TOTAL
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4,000,000
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SCHEDULE B
EXHIBIT A
Form of Target Business Letter
Distoken Acquisition Corporation
Ladies and Gentlemen:
Reference is made to the Final Prospectus
of Distoken Acquisition Corporation (the “Company”), dated __________, 2020 (the “Prospectus”).
Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Prospectus.
We have read the Prospectus
and understand that the Company has established the Trust Account, initially in an amount of at least $40,000,000, for the benefit
of the Public Shareholders and that, except for the interest earned on the amounts held in the Trust Account, the Company may disburse
monies from the Trust Account only: (i) to the Public Shareholders in the event of the conversion of their shares upon consummation
of a Business Combination or amendment to the Company’s Amended and Restated Memorandum and Articles of Association relating
to pre- Business Combination activity, (ii) to the Public Shareholders in connection with the Company’s liquidation
in the event the Company is unable to consummate a Business Combination within the required time period or (iii) to the Company
concurrently with, or after it consummates a Business Combination.
For and in consideration
of the Company agreeing to evaluate the undersigned for purposes of consummating a Business Combination with it, the undersigned
hereby agrees that it does not have any right, title, interest or claim of any kind in or to any monies in the Trust Account (each,
a “Claim”) and hereby waives any Claim it may have in the future as a result of, or arising out of, any negotiations,
contracts or agreements with the Company and will not seek recourse against the Trust Account for any reason whatsoever.
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Print
Name of Target Business
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Authorized
Signature of Target Business
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EXHIBIT B
Form of Vendor Letter
Distoken Acquisition Corporation
Ladies and Gentlemen:
Reference
is made to the Final Prospectus of Distoken Acquisition Corporation (the “Company”), dated ,
2020 (the “Prospectus”). Capitalized terms used and not otherwise defined herein shall have the meanings assigned
to them in the Prospectus.
We have read the Prospectus
and understand that the Company has established the Trust Account, initially in an amount of at least $40,000,000, for the benefit
of the Public Shareholders and that, except for the interest earned on the amounts held in the Trust Account, the Company may disburse
monies from the Trust Account only: (i) to the Public Shareholders in the event of the conversion of their shares upon consummation
of a Business Combination or amendment to the Company’s Amended and Restated Memorandum and Articles of Association relating
to pre- Business Combination activity, (ii) to the Public Shareholders in connection with the Company’s liquidation
in the event the Company is unable to consummate a Business Combination within the required time period or (iii) to the Company
concurrently with, or after it consummates a Business Combination.
For and in consideration
of the Company agreeing to use the services of the undersigned, the undersigned hereby agrees that it does not have any right,
title, interest or claim of any kind in or to any monies in the Trust Account (each, a “Claim”) and hereby waives
any Claim it may have in the future as a result of, or arising out of, any services provided to the Company and will not seek recourse
against the Trust Account for any reason whatsoever.
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Print
Name of Vendor
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Authorized
Signature of Vendor
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Exhibit 1.2
EARLYBIRDCAPITAL, INC.
366 Madison Avenue
New York, New York 10017
_____________, 2020
Distoken Acquisition Corporation
Unit 1006, Block C, Jinshangjun Park
No. 2 Xiaoba Road, Panlong District
Kunming, Yunnan, China
Attn: Jian Zhang, Chief Executive Officer
Ladies and Gentlemen:
This is to confirm our agreement (this “Agreement”)
whereby Distoken Acquisition Corporation, a Cayman Islands company (“Company”), has requested EarlyBirdCapital, Inc.
(the “Advisor”) to assist it in connection with the Company merger, share exchange, asset acquisition, stock
purchase, recapitalization, reorganization or similar business combination (in each case, a “Business Combination”)
with one or more businesses or entities (each a “Target”) as described in the Company’s Registration Statement
on Form S-1 (File No. 333-248822) filed with the Securities and Exchange Commission (“Registration Statement”)
in connection with its initial public offering (“IPO”).
1. Services and Fees.
(a) The Advisor will, if requested by the Company:
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(i)
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Assist the Company in the transaction structuring and negotiation of a definitive purchase agreement with respect to the Business Combination;
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(ii)
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Hold meetings with Company shareholders to discuss the Business Combination and the Target’s attributes;
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(iii)
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Introduce the Company to potential investors to purchase the Company’s securities in connection with the Business Combination;
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(iv)
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Assist the Company in trying to obtain shareholder approval for the Business Combination, including assistance with the Company’s proxy statement or tender offer materials; and
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(v)
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Assist the Company with relevant financial analysis, presentations, press releases and filings related to the Business Combination or the Target.
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(b) As compensation for the foregoing
services, the Company will pay the Advisor a cash fee equal to 4.0% of the gross proceeds received by the Company in the IPO (“Transaction
Fee”).
(c) In addition to the Transaction Fee,
the Company shall pay to Advisor a cash fee equal to 1.0% of the Total Consideration (as the term “Total Consideration”
is defined below) in the event Advisor introduces the Company to the Target with which the Company completes a Business Combination
(“Finder Fee” and together with the Transaction Fee, the “Fee”).
(d) The Transaction Fee and any
Finder Fee, if applicable, shall be payable in cash and is due and payable to the Advisor by wire transfer at the closing of
the Business Combination (“Closing”) from the Trust Account (defined below); provided that the Finder Fee
shall not be paid prior to the date that is 90 days from the effective date of the Registration Statement unless the
Financial Industry Regulatory Authority determines that such payment would not be deemed underwriters’ compensation in
connection with the IPO. If a proposed Business Combination is not consummated for any reason, no Fee shall be due or payable
to the Advisor hereunder.
(e) For purposes of this Agreement, “Total
Consideration” shall mean the total value of all cash, securities, or other property paid or transferred at the Closing (or
Closings) by or to the Company, the Target and/or their respective shareholders or to be paid or transferred in the future to such
parties with respect to such Business Combination (other than payments of interest or dividends), including, without limitation,
any value paid in respect of (i) the assets of the Company or Target, (ii) the share capital of the Company or Target
(and any securities convertible into options, warrants or other rights to acquire such shares), and (iii) the assumption,
retirement or defeasance, directly or indirectly (by operation of law or otherwise), of any long-term liabilities of the Company
or Target or repayment of indebtedness, including, without limitation, indebtedness secured by the assets of the Company or Target,
capital leases or preferred shares obligations. Notwithstanding the foregoing, if the Business Combination contemplates the Target
or newly formed holding company being the surviving entity in the Business Combination and issuing its securities to the Company
as consideration, the Total Consideration will be deemed to be the fair market value of the Target as indicated in the Business
Combination’s definitive acquisition agreement and proxy materials. If Total Consideration paid or transferred in the Business
Combination includes non-cash consideration consisting of ordinary shares, options, warrants or rights for which a public trading
market existed prior to the Closing, then the value of such securities shall be determined by the closing or last sales price thereof
on the date that is two business days prior to the record date for the vote on the Business Combination. If all or a portion of
the Total Consideration paid or transferred in the Business Combination is other than cash and securities (as described above),
then the value of such other consideration shall be the fair market value thereof on the Closing as mutually agreed upon in good
faith by the Company and Advisor. Any amounts payable or transferable to the Company or Target, or any affiliate of the Company
or Target or any shareholder of the Company or Target in connection with a non-competition agreement or any employment, consulting,
licensing, supply, transfer, assignment, forbearance or other agreement (whether by separate agreement or in the Transactions documents),
to the extent that such amounts payable are greater than what would customarily be paid on an arms-length basis, shall be deemed
to be part of the consideration paid in the Business Combination. If all or a portion of the Total Consideration payable or transferable
in connection with a Business Combination includes future payments, whether or not in escrow, then the Company shall pay Advisor
any additional cash fee, determined in accordance with this Section 1, when, and if such payments are made.
2. Expenses.
At the Closing, the Company shall reimburse
the Advisor up to $20,000 for its reasonable costs and expenses incurred (including its fees and disbursements of counsel) in connection
with the performance of its services hereunder; provided, however, all expenses in excess of $5,000 in the aggregate shall be subject
to the Company’s prior written approval, which approval will not be unreasonably withheld. Reimbursable expenses shall be
due and payable to the Advisor by wire transfer at the Closing from the Trust Account.
3. Company Cooperation.
The Company will cooperate with the Advisor
including, but not limited to, providing to the Advisor and its counsel, on a timely basis, all documents and information regarding
the Company and Target that the Advisor may reasonably request or that are otherwise relevant to the Advisor’s performance
of its obligations hereunder (collectively, the “Information”); making the Company’s management, auditors,
consultants and advisors available to the Advisor; and, using commercially reasonable efforts to provide the Advisor with reasonable
access to the management, auditors, suppliers, customers, consultants and advisors of Target. The Company will promptly notify
the Advisor of any change in facts or circumstances or new developments affecting the Company or Target or that might reasonably
be considered material to the Advisor’s engagement hereunder.
4. Representations; Warranties and Covenants.
The Company represents, warrants and covenants
to the Advisor that all Information it makes available to the Advisor by or on behalf of the Company in connection with the performance
of its obligations hereunder will not contain any untrue statement of a material fact or omit to state a material fact necessary
in order to make statements made, in light of the circumstances under which they were made, not misleading as of the date thereof
and as of the consummation of the Business Combination.
5. Indemnity.
The Company shall indemnify the Advisor
and its affiliates and their respective directors, officers, employees, shareholders, representatives and agents in accordance
with the indemnification provisions set forth in Annex I hereto, all of which are incorporated herein by reference.
Notwithstanding the foregoing and Annex
I, the Advisor agrees, if there is no Closing, (i) that it does not have any right, title, interest or claim of any kind in
or to any monies in the Company’s trust account established in connection with the IPO (“Trust Account”)
with respect to this Agreement (each, a “Claim”); (ii) to waive any Claim it may have in the future as
a result of, or arising out of, any services provided to the Company hereunder; and (iii) to not seek recourse against the
Trust Account with respect to the Fee.
6. Use of Name and Reports.
Without the Advisor’s prior written
consent, neither the Company nor any of its affiliates (nor any director, officer, manager, partner, member, employee, representative
or agent thereof) shall quote or refer to, in any filings with the Securities and Exchange Commission, any advice rendered by the
Advisor to the Company or any communication from the Advisor, in each case, in connection with performance of the Advisor’s
services hereunder, except as required by applicable federal or state law, regulation or securities exchange rule.
7. Status as Independent Contractor.
Advisor shall perform its services as an
independent contractor and not as an employee of the Company or affiliate thereof. It is expressly understood and agreed to by
the parties that the Advisor shall have no authority to act for, represent or bind the Company or any affiliate thereof in any
manner, except as may be expressly agreed to by the Company in writing. In rendering such services, the Advisor will be acting
solely pursuant to a contractual relationship on an arm’s-length basis. This Agreement is not intended to create a fiduciary
relationship between the parties and neither the Advisor nor any of the Advisor’s officers, directors or personnel will owe
any fiduciary duty to the Company or any other person in connection with any of the matters contemplated by this Agreement.
8. Potential Conflicts.
The Company acknowledges that the Advisor
is a full-service securities firm engaged in securities trading and brokerage activities and providing investment banking and advisory
services from which conflicting interests may arise. Subject to applicable law, in the ordinary course of business, the Advisor
and its affiliates may at any time hold long or short positions, and may trade or otherwise effect transactions, for their own
account or the accounts of customers, in debt or equity securities of the Company, its affiliates or other entities that may be
involved in the transactions contemplated hereby. Nothing in this Agreement shall be construed to limit or restrict the Advisor
or any of its affiliates in conducting such business to the extent permitted by applicable law.
9. Entire Agreement.
This Agreement constitutes the entire understanding
between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written,
with respect thereto. This Agreement may not be modified or terminated orally or in any manner other than by an agreement in writing
signed by the parties hereto.
10. Notices.
Any notices required or permitted to be
given hereunder shall be in writing and shall be deemed given when mailed by certified mail or private courier service, return
receipt requested, addressed to each party at its respective addresses set forth above, or such other address as may be given by
a party in a notice given pursuant to this Section.
11. Successors and Assigns.
This Agreement may not be assigned by either
party without the written consent of the other. This Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and, except where prohibited, to their successors and assigns.
12. Non-Exclusivity.
Nothing herein shall be deemed to restrict
or prohibit the engagement by the Company of other consultants providing the same or similar services or the payment by the Company
of fees to such other consultants. Except as provided in Section 1(b), the Company’s engagement of any other consultant(s) shall
not affect the Advisor’s right to receive the Fee and reimbursement of expenses pursuant to this Agreement.
13. Applicable Law; Venue.
This Agreement shall be construed and enforced
in accordance with the laws of the State of New York without giving effect to conflict of laws.
In the event of any dispute under this Agreement,
then and in such event, each party hereto agrees that the dispute shall either be (i) resolved through final and binding arbitration
in accordance with the International Arbitration Rules of the American Arbitration Association (“AAA”) or ( ii)
brought and enforced in the courts of the State of New York, County of New York under the accelerated adjudication procedures of
the Commercial Division, or the United States District Court for the Southern District of New York, in each event at the discretion
of the party initiating the dispute. Once a party files a dispute (if arbitration, by sending JAMS a Demand for Arbitration) with
one of the above forums, the parties agree that all issues regarding such dispute or this Agreement must be resolved before such
forum rather than seeking to resolve it through another alternative forum set forth above.
In the event the dispute is brought before
the AAA, the arbitration shall be brought before the AAA International Center for Dispute Resolution’s offices in New York
City, New York, will be conducted in English and will be decided by a panel of three arbitrators selected from the AAA Commercial
Disputes Panel. Each of the parties agrees that the decision and/or award made by the arbitrators shall be final and enforceable
by any court having jurisdiction over the party from whom enforcement is sought. Furthermore, the parties to any such arbitration
shall be entitled to make one motion for summary judgment within 60 days of the commencement of the arbitration, which shall be
decided by the arbitrator[s] prior to the commencement of the hearings.
In the event the dispute is brought by a
party in the courts of the State of New York or the United States District Court for the Southern District of New York, each party
irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. Each party hereby waives any objection to such
exclusive jurisdiction and that such courts represent an inconvenient forum. Any such process or summons to be served upon a party
may be served by transmitting a copy thereof by registered or certified mail, postage prepaid, addressed to such party at the address
set forth at the beginning of this Agreement. Such mailing shall be deemed personal service and shall be legal and binding upon
the party being served in any action, proceeding or claim. The parties agree that the prevailing party(ies) in any such action
shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees and expenses relating to such
action or proceeding and/or incurred in connection with the preparation therefor.
The Company hereby appoints, without
power of revocation, Ellenoff Grossman & Schole LLP, 1345 Avenue of the Americas, New York, NY 10105, Attn: Richard I.
Anslow, Esq., as its agent to accept and acknowledge on its behalf service of any and all process which may be served in
any arbitration, action, proceeding or counterclaim in any way relating to or arising out of this Agreement. The Company further
agrees to take any and all action as may be necessary to maintain such designation and appointment of such agent in full force
and effect for a period of seven years from the date of this Agreement.
14. Counterparts.
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.
If the foregoing correctly
sets forth the understanding between the Advisor and the Company with respect to the foregoing, please so indicate your agreement
by signing in the place provided below, at which time this letter shall become a binding contract.
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EARLYBIRDCAPITAL, INC
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By:
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Name:
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Steven Levine
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Title:
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CEO
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AGREED AND ACCEPTED BY:
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DISTOKEN ACQUISITION CORPORATION
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By:
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Name:
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Title:
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ANNEX I
Indemnification
In connection with the Company’s engagement
of EarlyBirdCapital, Inc. (the “Advisor”) pursuant to that certain letter agreement (“Agreement”)
of which this Annex forms a part, Distoken Acquisition Corporation (the “Company”) hereby agrees, subject to
the second paragraph of Section 5 of the Agreement, to indemnify and hold harmless the Advisor and its affiliates and their
respective directors, officers, shareholders, agents and employees of any of the foregoing (collectively the “Indemnified
Persons”), from and against any and all claims, actions, suits, proceedings (including those of shareholders), damages,
liabilities and expenses incurred by any of them (including the reasonable fees and expenses of counsel), as incurred, (collectively
a “Claim”), that (A) are related to or arise out of (i) any actions taken or omitted to be taken (including
any untrue statements made or any statements omitted to be made) by the Company, or (ii) any actions taken or omitted to be
taken by any Indemnified Person in connection with the Company’s engagement of the Advisor, or (B) otherwise relate
to or arise out of the Advisor’s activities on the Company’s behalf under the Advisor’s engagement, and the Company
shall reimburse any Indemnified Person for all expenses (including the reasonable fees and expenses of counsel) as incurred by
such Indemnified Person in connection with investigating, preparing or defending any such claim, action, suit or proceeding, whether
or not in connection with pending or threatened litigation in which any Indemnified Person is a party.
The Company will not, however, be responsible
for any Claim that is finally judicially determined to have resulted from the gross negligence or willful misconduct of any person
seeking indemnification for such Claim. The Company further agrees that no Indemnified Person shall have any liability to the Company
for or in connection with the Company’s engagement of the Advisor except for any Claim incurred by the Company as a result
of such Indemnified Person’s gross negligence or willful misconduct.
The Company further agrees that it will
not, without the prior written consent of the Advisor which consent may not be unreasonably withheld, settle, compromise or consent
to the entry of any judgment in any pending or threatened Claim in respect of which indemnification may be sought hereunder (whether
or not any Indemnified Person is an actual or potential party to such Claim), unless such settlement, compromise or consent includes
an unconditional, irrevocable release of each Indemnified Person from any and all liability arising out of such Claim.
Promptly upon receipt by an Indemnified
Person of notice of any complaint or the assertion or institution of any Claim with respect to which indemnification is being sought
hereunder, such Indemnified Person shall notify the Company in writing of such complaint or of such assertion or institution but
failure to so notify the Company shall not relieve the Company from any obligation it may have hereunder, except and only to the
extent such failure results in the forfeiture by the Company of substantial rights and defenses. If the Company so elects or is
requested by such Indemnified Person, the Company will assume the defense of such Claim, including the employment of counsel reasonably
satisfactory to such Indemnified Person and the payment of the fees and expenses of such counsel. In the event, however, that legal
counsel to such Indemnified Person reasonably determines that having common counsel would present such counsel with a conflict
of interest or if the defendant in, or target of, any such Claim, includes an Indemnified Person and the Company, and legal counsel
to such Indemnified Person reasonably concludes that there may be legal defenses available to it or other Indemnified Persons different
from or in addition to those available to the Company, then such Indemnified Person may employ its own separate counsel to represent
or defend him, her or it in any such Claim and the Company shall pay the reasonable fees and expenses of such counsel. Notwithstanding
anything herein to the contrary, if the Company fails timely or diligently to defend, contest, or otherwise protect against any
Claim, the relevant Indemnified Party shall have the right, but not the obligation, to defend, contest, compromise, settle, assert
crossclaims, or counterclaims or otherwise protect against the same, and shall be fully indemnified by the Company therefor, including
without limitation, for the reasonable fees and expenses of its counsel and all amounts paid as a result of such Claim or the compromise
or settlement thereof.
In addition, with respect to any Claim in
which the Company assumes the defense, the Indemnified Person shall have the right to participate in such Claim and to retain his,
her or its own counsel therefor at his, her or its own expense.
The Company agrees that if any indemnity
sought by an Indemnified Person hereunder is held by a court to be unavailable for any reason then (whether or not the Advisor
is an Indemnified Person), the Company and the Advisor shall contribute to the Claim for which such indemnity is held unavailable
in such proportion as is appropriate to reflect the relative benefits to the Company, on the one hand, and the Advisor on the other,
in connection with the Advisor’s engagement referred to above, subject to the limitation that in no event shall the amount
of the Advisor’s contribution to such Claim exceed the amount of fees actually received by the Advisor from the Company pursuant
to the Advisor’s engagement. The Company hereby agrees that the relative benefits to the Company, on the one hand, and the
Advisor on the other, with respect to the Advisor’s engagement shall be deemed to be in the same proportion as (a) the
total value paid or proposed to be paid or received by the Company or its shareholders as the case may be, pursuant to the transaction
(whether or not consummated) for which the Advisor is engaged to render services bears to (b) the fee paid or proposed to
be paid to the Advisor in connection with such engagement.
The Company’s indemnity, reimbursement
and contribution obligations under this Agreement (a) shall be in addition to, and shall in no way limit or otherwise adversely
affect any rights that any Indemnified Party may have at law or at equity and (b) shall be effective whether or not the Company
is at fault in any way.
Exhibit
3.2
THE COMPANIES LAW (2020 Revision)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
MEMORANDUM AND ARTICLES OF ASSOCIATION
OF
Distoken
Acquisition Corporation
(adopted
by special resolution dated [Date] and effective on [date])
THE COMPANIES LAW (2020 Revision)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
MEMORANDUM OF ASSOCIATION
OF
Distoken
Acquisition Corporation
(adopted
by special resolution dated [Date] and effective on [date])
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1
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The name of the Company is Distoken Acquisition Corporation
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2
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The Registered Office of the Company shall be at the offices of Maples Corporate Services Limited,
PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, or at such other place within the Cayman Islands as the Directors
may decide.
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3
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The objects for which the Company is established are unrestricted and the Company shall have full
power and authority to carry out any object not prohibited by the laws of the Cayman Islands.
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4
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The liability of each Member is limited to the amount unpaid on such Member's shares.
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5
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The share capital of the Company is US$22,100 divided into 200,000,000 Class A ordinary shares
of a par value of US$0.0001 each, 20,000,000 Class B ordinary shares of a par value of US$0.0001 each and 1,000,000 preference
shares of a par value of US$0.0001 each.
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6
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The Company has power to register by way of continuation as a body corporate limited by shares
under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands.
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7
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Capitalised terms that are not defined in this Amended and Restated Memorandum of Association bear
the respective meanings given to them in the Amended and Restated Articles of Association of the Company.
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THE COMPANIES LAW (2020 Revision)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
OF
Distoken
Acquisition Corporation
(adopted
by special resolution dated [Date] and effective on [date])
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1.1
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In the Articles Table A in the First Schedule to the Statute does not apply and, unless there is
something in the subject or context inconsistent therewith:
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"Affiliate"
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in respect of a person, means any other person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such person, and (a) in the case of a natural person, shall include, without limitation, such person’s spouse, parents, children, siblings, mother-in-law and father-in-law and brothers and sisters-in-law, whether by blood, marriage or adoption or anyone residing in such person’s home, a trust for the benefit of any of the foregoing, a company, partnership or any natural person or entity wholly or jointly owned by any of the foregoing and (b) in the case of an entity, shall include a partnership, a corporation or any natural person or entity which directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such entity.
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"Applicable Law"
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means, with respect to any person, all provisions of laws, statutes, ordinances, rules, regulations, permits, certificates, judgments, decisions, decrees or orders of any governmental authority applicable to such person.
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"Articles"
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means these amended and restated articles of association of the Company.
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"Audit Committee"
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means the audit committee of the board of directors of the Company established pursuant to the Articles, or any successor committee.
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"Auditor"
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means the person for the time being performing the duties of auditor of the Company (if any).
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"Business Combination"
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means a merger, share exchange, asset acquisition, share purchase, reorganisation or similar business combination involving the Company, with one or more businesses or entities (the "target business"), which Business Combination: (a) as long as the securities of the Company are listed on the Nasdaq Capital Market, must occur with one or more target businesses that together have an aggregate fair market value of at least 80 per cent of the assets held in the Trust Account (excluding the taxes payable on the income earned on the Trust Account) at the time of the signing of the definitive agreement to enter into such Business Combination; and (b) must not be solely effectuated with another blank cheque company or a similar company with nominal operations.
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"business day"
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means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorised or obligated by law to close in New York City.
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"Clearing House"
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means a clearing house recognised by the laws of the jurisdiction in which the Shares (or depositary receipts therefor) are listed or quoted on a stock exchange or interdealer quotation system in such jurisdiction.
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"Class A Share"
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means a Class A ordinary share of a par value of US$0.0001 in the share capital of the Company.
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"Class B Share"
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means a Class B ordinary share of a par value of US$0.0001 in the share capital of the Company.
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"Company"
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means the above named company.
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"Company’s Website"
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means the website of the Company and/or its web-address or domain name (if any).
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"Compensation Committee"
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means the compensation committee of the board of directors of the Company established pursuant to the Articles, or any successor committee.
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"Designated Stock Exchange"
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means any United States national securities exchange on which the securities of the Company are listed for trading, including the Nasdaq Capital Market.
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"Directors"
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means the directors for the time being of the Company.
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"Dividend"
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means any dividend (whether interim or final) resolved to be paid on Shares pursuant to the Articles.
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"Electronic Communication"
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means a communication sent by electronic means, including electronic posting to the Company’s Website, transmission to any number, address or internet website (including the website of the Securities and Exchange Commission) or other electronic delivery methods as otherwise decided and approved by the Directors.
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"Electronic Record"
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has the same meaning as in the Electronic Transactions Law.
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"Electronic Transactions Law"
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means the Electronic Transactions Law (2003 Revision) of the Cayman Islands.
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"Equity-linked Securities"
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means any debt or equity securities that are convertible, exercisable or exchangeable for Class A Shares issued in a financing transaction in connection with a Business Combination, including but not limited to a private placement of equity or debt.
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"Exchange Act"
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means the United States Securities Exchange Act of 1934, as amended, or any similar U.S. federal statute and the rules and regulations of the Securities and Exchange Commission thereunder, all as the same shall be in effect at the time.
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"Founders"
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means all Members immediately prior to the consummation of the IPO.
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"Independent Director"
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has the same meaning as in the rules and regulations of the Designated Stock Exchange or in Rule 10A-3 under the Exchange Act, as the case may be.
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"IPO"
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means the Company's initial public offering of securities.
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"Member"
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has the same meaning as in the Statute.
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"Memorandum"
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means the amended and restated memorandum of association of the Company.
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"Officer"
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means a person appointed to hold an office in the Company.
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"Ordinary Resolution"
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means a resolution passed by a simple majority of the Members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting, and includes a unanimous written resolution. In computing the majority when a poll is demanded regard shall be had to the number of votes to which each Member is entitled by the Articles.
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"Over-Allotment Option"
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means the option of the Underwriters to purchase up to an additional 15 per cent of the firm units (as described in the Articles) issued in the IPO at a price equal to US$10 per unit, less underwriting discounts and commissions.
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"Preference Share"
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means a preference share of a par value of US$0.0001 in the share capital of the Company.
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"Public Share"
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means a Class A Share issued as part of the units (as described in the Articles) issued in the IPO.
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"Redemption Notice"
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means a notice in a form approved by the Company by which a holder of Public Shares is entitled to require the Company to redeem its Public Shares, subject to any conditions contained therein.
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"Register of Members"
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means the register of Members maintained in accordance with the Statute and includes (except where otherwise stated) any branch or duplicate register of Members.
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"Registered Office"
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means the registered office for the time being of the Company.
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"Representative"
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means a representative of the Underwriters.
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"Seal"
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means the common seal of the Company and includes every duplicate seal.
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"Securities and Exchange Commission"
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means the United States Securities and Exchange Commission.
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"Share"
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means a Class A Share, a Class B Share or a Preference Share and includes a fraction of a share in the Company.
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"Special Resolution"
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subject to Article 29.4, has the same meaning as in the Statute, and includes a unanimous written resolution.
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"Sponsor"
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means Xiaosen Sponsor LLC, a Cayman Islands limited liability company, and its successors or assigns.
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"Statute"
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means the Companies Law (2020 Revision) of the Cayman Islands.
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"Treasury Share"
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means a Share held in the name of the Company as a treasury share in accordance with the Statute.
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"Trust Account"
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means the trust account established by the Company upon the consummation of its IPO and into which a certain amount of the net proceeds of the IPO, together with a certain amount of the proceeds of a private placement of warrants simultaneously with the closing date of the IPO, will be deposited.
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"Underwriter"
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means an underwriter of the IPO from time to time and any successor underwriter.
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(a)
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words importing the singular number include the plural number and vice versa;
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(b)
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words importing the masculine gender include the feminine gender;
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(c)
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words importing persons include corporations as well as any other legal or natural person;
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(d)
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"written" and "in writing" include all modes of representing or reproducing
words in visible form, including in the form of an Electronic Record;
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(e)
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"shall" shall be construed as imperative and "may" shall be construed as permissive;
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(f)
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references to provisions of any law or regulation shall be construed as references to those provisions
as amended, modified, re-enacted or replaced;
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(g)
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any phrase introduced by the terms "including", "include", "in particular"
or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms;
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(h)
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the term "and/or" is used herein to mean both "and" as well as "or."
The use of "and/or" in certain contexts in no respects qualifies or modifies the use of the terms "and" or
"or" in others. The term "or" shall not be interpreted to be exclusive and the term "and" shall not
be interpreted to require the conjunctive (in each case, unless the context otherwise requires);
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(i)
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headings are inserted for reference only and shall be ignored in construing the Articles;
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(j)
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any requirements as to delivery under the Articles include delivery in the form of an Electronic
Record;
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(k)
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any requirements as to execution or signature under the Articles including the execution of the
Articles themselves can be satisfied in the form of an electronic signature as defined in the Electronic Transactions Law;
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(l)
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sections 8 and 19(3) of the Electronic Transactions Law shall not apply;
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(m)
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the term "clear days" in relation to the period of a notice means that period excluding
the day when the notice is received or deemed to be received and the day for which it is given or on which it is to take effect;
and
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(n)
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the term "holder" in relation to a Share means a person whose name is entered in the
Register of Members as the holder of such Share.
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2
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Commencement of Business
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2.1
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The business of the Company may be commenced as soon after incorporation of the Company as the
Directors shall see fit.
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2.2
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The Directors may pay, out of the capital or any other monies of the Company, all expenses incurred
in or about the formation and establishment of the Company, including the expenses of registration.
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3
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Issue of Shares and other Securities
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3.1
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Subject to the provisions, if any, in the Memorandum (and to any direction that may be given by
the Company in general meeting) and, where applicable, the rules and regulations of the Designated Stock Exchange, the Securities
and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law, and without prejudice
to any rights attached to any existing Shares, the Directors may allot, issue, grant options over or otherwise dispose of Shares
(including fractions of a Share) with or without preferred, deferred or other rights or restrictions, whether in regard to Dividends
or other distributions, voting, return of capital or otherwise and to such persons, at such times and on such other terms as they
think proper, and may also (subject to the Statute and the Articles) vary such rights, save that the Directors shall not allot,
issue, grant options over or otherwise dispose of Shares (including fractions of a Share) to the extent that it may affect the
ability of the Company to carry out a Class B Ordinary Share Conversion set out in the Articles.
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3.2
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The Company may issue rights, options, warrants or convertible securities or securities of similar
nature conferring the right upon the holders thereof to subscribe for, purchase or receive any class of Shares or other securities
in the Company on such terms as the Directors may from time to time determine.
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3.3
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The Company may issue units of securities in the Company, which may be comprised of whole or fractional
Shares, rights, options, warrants or convertible securities or securities of similar nature conferring the right upon the holders
thereof to subscribe for, purchase or receive any class of Shares or other securities in the Company, upon such terms as the Directors
may from time to time determine. The securities comprising any such units which are issued pursuant to the IPO can only be traded
separately from one another on the 90th day following the date of the prospectus relating to the IPO unless the Representative(s)
determines that an earlier date is acceptable, subject to the Company having filed a current report on Form 8-K with the Securities
and Exchange Commission and a press release announcing when such separate trading will begin. Prior to such date, the units can
be traded, but the securities comprising such units cannot be traded separately from one another.
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3.4
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The Company shall not issue Shares to bearer.
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4.1
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The Company shall maintain or cause to be maintained the Register of Members in accordance with
the Statute.
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4.2
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The Directors may determine that the Company shall maintain one or more branch registers of Members
in accordance with the Statute. The Directors may also determine which register of Members shall constitute the principal register
and which shall constitute the branch register or registers, and to vary such determination from time to time.
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5
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Closing Register of Members or Fixing Record Date
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5.1
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For the purpose of determining Members entitled to notice of, or to vote at any meeting of Members
or any adjournment thereof, or Members entitled to receive payment of any Dividend or other distribution, or in order to make a
determination of Members for any other purpose, the Directors may, after notice has been given by advertisement in an appointed
newspaper or any other newspaper or by any other means in accordance with the rules and regulations of the Designated Stock Exchange,
the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law, provide
that the Register of Members shall be closed for transfers for a stated period which shall not in any case exceed forty days.
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5.2
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In lieu of, or apart from, closing the Register of Members, the Directors may fix in advance or
arrears a date as the record date for any such determination of Members entitled to notice of, or to vote at any meeting of the
Members or any adjournment thereof, or for the purpose of determining the Members entitled to receive payment of any Dividend or
other distribution, or in order to make a determination of Members for any other purpose.
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5.3
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If the Register of Members is not so closed and no record date is fixed for the determination of
Members entitled to notice of, or to vote at, a meeting of Members or Members entitled to receive payment of a Dividend or other
distribution, the date on which notice of the meeting is sent or the date on which the resolution of the Directors resolving to
pay such Dividend or other distribution is passed, as the case may be, shall be the record date for such determination of Members.
When a determination of Members entitled to vote at any meeting of Members has been made as provided in this Article, such determination
shall apply to any adjournment thereof.
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6
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Certificates for Shares
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6.1
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A Member shall only be entitled to a share certificate if the Directors resolve that share certificates
shall be issued. Share certificates representing Shares, if any, shall be in such form as the Directors may determine. Share certificates
shall be signed by one or more Directors or other person authorised by the Directors. The Directors may authorise certificates
to be issued with the authorised signature(s) affixed by mechanical process. All certificates for Shares shall be consecutively
numbered or otherwise identified and shall specify the Shares to which they relate. All certificates surrendered to the Company
for transfer shall be cancelled and, subject to the Articles, no new certificate shall be issued until the former certificate representing
a like number of relevant Shares shall have been surrendered and cancelled.
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6.2
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The Company shall not be bound to issue more than one certificate for Shares held jointly by more
than one person and delivery of a certificate to one joint holder shall be a sufficient delivery to all of them.
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6.3
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If a share certificate is defaced, worn out, lost or destroyed, it may be renewed on such terms
(if any) as to evidence and indemnity and on the payment of such expenses reasonably incurred by the Company in investigating evidence,
as the Directors may prescribe, and (in the case of defacement or wearing out) upon delivery of the old certificate.
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6.4
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Every share certificate sent in accordance with the Articles will be sent at the risk of the Member
or other person entitled to the certificate. The Company will not be responsible for any share certificate lost or delayed in the
course of delivery.
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6.5
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Share certificates shall be issued within the relevant time limit as prescribed by the Statute,
if applicable, or as the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or
any other competent regulatory authority or otherwise under Applicable Law may from time to time determine, whichever is shorter,
after the allotment or, except in the case of a Share transfer which the Company is for the time being entitled to refuse to register
and does not register, after lodgement of a Share transfer with the Company.
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7.1
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Subject to the terms of the Articles, any Member may transfer all or any of his Shares by an instrument
of transfer provided that such transfer complies with the rules and regulations of the Designated Stock Exchange, the Securities
and Exchange Commission and/or any other competent regulatory authority
or otherwise under Applicable Law. If the Shares in question were issued in conjunction with rights, options or warrants issued
pursuant to the Articles on terms that one cannot be transferred without the other, the Directors shall refuse to register the
transfer of any such Share without evidence satisfactory to them of the like transfer of such option or warrant.
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7.2
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The instrument of transfer of any Share shall be in writing in the usual or common form or in a
form prescribed by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any
other competent regulatory authority or otherwise under Applicable Law or in any other form approved by the Directors and shall
be executed by or on behalf of the transferor (and if the Directors so require, signed by or on behalf of the transferee) and may
be under hand or, if the transferor or transferee is a Clearing House or its nominee(s), by hand or by machine imprinted signature
or by such other manner of execution as the Directors may approve from time to time. The transferor shall be deemed to remain the
holder of a Share until the name of the transferee is entered in the Register of Members.
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8
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Redemption, Repurchase and Surrender of Shares
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8.1
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Subject to the provisions of the Statute, and, where applicable, the rules and regulations of the
Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise
under Applicable Law, the Company may issue Shares that are to be redeemed or are liable to be redeemed at the option of the Member
or the Company. The redemption of such Shares, except Public Shares, shall be effected in such manner and upon such other terms
as the Company may, by Special Resolution, determine before the issue of such Shares. With respect to redeeming or repurchasing
the Shares:
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(a)
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Members who hold Public Shares are entitled to request the redemption of such Shares in the circumstances
described in the Business Combination Article hereof;
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(b)
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Class B Shares held by the Sponsor shall be surrendered by the Sponsor for no consideration to
the extent that the Over-Allotment Option is not exercised in full so that the Founders will own 20 per cent of the Company's issued
Shares after the IPO (exclusive of any securities issued to the Representative or purchased in a private placement simultaneously
with the IPO); and
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(c)
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Public Shares shall be repurchased by way of tender offer in the circumstances set out in the Business
Combination Article hereof.
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8.2
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Subject to the provisions of the Statute, and, where applicable, the rules and regulations of the
Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise
under Applicable Law, the Company may purchase its own Shares (including any redeemable Shares) in such manner and on such other
terms as the Directors may agree with the relevant Member. For the avoidance of doubt, redemptions, repurchases and surrenders
of Shares in the circumstances described in the Article above shall not require further approval of the Members.
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8.3
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The Company may make a payment in respect of the redemption or purchase of its own Shares in any
manner permitted by the Statute, including out of capital.
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8.4
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The Directors may accept the surrender for no consideration of any fully paid Share.
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9.1
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The Directors may, prior to the purchase, redemption or surrender of any Share, determine that
such Share shall be held as a Treasury Share.
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9.2
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The Directors may determine to cancel a Treasury Share or transfer a Treasury Share on such terms
as they think proper (including, without limitation, for nil consideration).
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10
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Variation of Rights of Shares
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10.1
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Subject to Article 3.1, if at any time the share capital of the Company is divided into different
classes of Shares, all or any of the rights attached to any class (unless otherwise provided by the terms of issue of the Shares
of that class) may, whether or not the Company is being wound up, be varied without the consent of the holders of the issued Shares
of that class where such variation is considered by the Directors not to have a material adverse effect upon such rights; otherwise,
any such variation shall be made only with the consent in writing of the holders of not less than two thirds of the issued Shares
of that class (other than with respect to a waiver of the provisions of the Class B Ordinary Share Conversion Article hereof, which
as stated therein shall only require the consent in writing of the holders of a majority of the issued Shares of that class), or
with the approval of a resolution passed by a majority of not less than two thirds of the votes cast at a separate meeting of the
holders of the Shares of that class. For the avoidance of doubt, the Directors reserve the right, notwithstanding that any such
variation may not have a material adverse effect, to obtain consent from the holders of Shares of the relevant class. To any such
meeting all the provisions of the Articles relating to general meetings shall apply mutatis mutandis, except that the necessary
quorum shall be one person holding or representing by proxy at least one third of the issued Shares of the class and that any holder
of Shares of the class present in person or by proxy may demand a poll.
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10.2
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For the purposes of a separate class meeting, the Directors may treat two or more or all the classes
of Shares as forming one class of Shares if the Directors consider that such class of Shares would be affected in the same way
by the proposals under consideration, but in any other case shall treat them as separate classes of Shares.
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10.3
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The rights conferred upon the holders of the Shares of any class issued with preferred or other
rights shall not, unless otherwise expressly provided by the terms of issue of the Shares of that class, be deemed to be varied
by the creation or issue of further Shares ranking pari passu therewith or Shares issued with preferred or other rights.
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11
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Commission on Sale of Shares
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The Company may, in so far as
the Statute permits, pay a commission to any person in consideration of his subscribing or agreeing to subscribe (whether absolutely
or conditionally) or procuring or agreeing to procure subscriptions (whether absolutely or conditionally) for any Shares. Such
commissions may be satisfied by the payment of cash and/or the issue of fully or partly paid-up Shares. The Company may also on
any issue of Shares pay such brokerage as may be lawful.
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12
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Non Recognition of Trusts
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The Company shall not be bound
by or compelled to recognise in any way (even when notified) any equitable, contingent, future or partial interest in any Share,
or (except only as is otherwise provided by the Articles or the Statute) any other rights in respect of any Share other than an
absolute right to the entirety thereof in the holder.
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13.1
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The Company shall have a first and paramount lien on all Shares (whether fully paid-up or not)
registered in the name of a Member (whether solely or jointly with others) for all debts, liabilities or engagements to or with
the Company (whether presently payable or not) by such Member or his estate, either alone or jointly with any other person, whether
a Member or not, but the Directors may at any time declare any Share to be wholly or in part exempt from the provisions of this
Article. The registration of a transfer of any such Share shall operate as a waiver of the Company's lien thereon. The Company's
lien on a Share shall also extend to any amount payable in respect of that Share.
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13.2
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The Company may sell, in such manner as the Directors think fit, any Shares on which the Company
has a lien, if a sum in respect of which the lien exists is presently payable, and is not paid within fourteen clear days after
notice has been received or deemed to have been received by the holder of the Shares, or to the person entitled to it in consequence
of the death or bankruptcy of the holder, demanding payment and stating that if the notice is not complied with the Shares may
be sold.
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13.3
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To give effect to any such sale the Directors may authorise any person to execute an instrument
of transfer of the Shares sold to, or in accordance with the directions of, the purchaser. The purchaser or his nominee shall be
registered as the holder of the Shares comprised in any such transfer, and he shall not be bound to see to the application of the
purchase money, nor shall his title to the Shares be affected by any irregularity or invalidity in the sale or the exercise of
the Company's power of sale under the Articles.
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13.4
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The net proceeds of such sale after payment of costs, shall be applied in payment of such part
of the amount in respect of which the lien exists as is presently payable and any balance shall (subject to a like lien for sums
not presently payable as existed upon the Shares before the sale) be paid to the person entitled to the Shares at the date of the
sale.
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14.1
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Subject to the terms of the allotment and issue of any Shares, the Directors may make calls upon
the Members in respect of any monies unpaid on their Shares (whether in respect of par value or premium), and each Member shall
(subject to receiving at least fourteen clear days' notice specifying the time or times of payment) pay to the Company at the time
or times so specified the amount called on the Shares. A call may be revoked or postponed, in whole or in part, as the Directors
may determine. A call may be required to be paid by instalments. A person upon whom a call is made shall remain liable for calls
made upon him notwithstanding the subsequent transfer of the Shares in respect of which the call was made.
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14.2
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A call shall be deemed to have been made at the time when the resolution of the Directors authorising
such call was passed.
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14.3
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The joint holders of a Share shall be jointly and severally liable to pay all calls in respect
thereof.
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14.4
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If a call remains unpaid after it has become due and payable, the person from whom it is due shall
pay interest on the amount unpaid from the day it became due and payable until it is paid at such rate as the Directors may determine
(and in addition all expenses that have been incurred by the Company by reason of such non-payment), but the Directors may waive
payment of the interest or expenses wholly or in part.
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14.5
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An amount payable in respect of a Share on issue or allotment or at any fixed date, whether on
account of the par value of the Share or premium or otherwise, shall be deemed to be a call and if it is not paid all the provisions
of the Articles shall apply as if that amount had become due and payable by virtue of a call.
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14.6
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The Directors may issue Shares with different terms as to the amount and times of payment of calls,
or the interest to be paid.
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14.7
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The Directors may, if they think fit, receive an amount from any Member willing to advance all
or any part of the monies uncalled and unpaid upon any Shares held by him, and may (until the amount would otherwise become payable)
pay interest at such rate as may be agreed upon between the Directors and the Member paying such amount in advance.
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14.8
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No such amount paid in advance of calls shall entitle the Member paying such amount to any portion
of a Dividend or other distribution payable in respect of any period prior to the date upon which such amount would, but for such
payment, become payable.
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15.1
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If a call or instalment of a call remains unpaid after it has become due and payable the Directors
may give to the person from whom it is due not less than fourteen clear days' notice requiring payment of the amount unpaid together
with any interest which may have accrued and any expenses incurred by the Company by reason of such non-payment. The notice shall
specify where payment is to be made and
shall state that if the notice is not complied with the Shares in respect of which the call was made will be liable to be forfeited.
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15.2
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If the notice is not complied with, any Share in respect of which it was given may, before the
payment required by the notice has been made, be forfeited by a resolution of the Directors. Such forfeiture shall include all
Dividends, other distributions or other monies payable in respect of the forfeited Share and not paid before the forfeiture.
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15.3
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A forfeited Share may be sold, re-allotted or otherwise disposed of on such terms and in such manner
as the Directors think fit and at any time before a sale, re-allotment or disposition the forfeiture may be cancelled on such terms
as the Directors think fit. Where for the purposes of its disposal a forfeited Share is to be transferred to any person the Directors
may authorise some person to execute an instrument of transfer of the Share in favour of that person.
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15.4
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A person any of whose Shares have been forfeited shall cease to be a Member in respect of them
and shall surrender to the Company for cancellation the certificate for the Shares forfeited and shall remain liable to pay to
the Company all monies which at the date of forfeiture were payable by him to the Company in respect of those Shares together with
interest at such rate as the Directors may determine, but his liability shall cease if and when the Company shall have received
payment in full of all monies due and payable by him in respect of those Shares.
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15.5
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A certificate in writing under the hand of one Director or Officer that a Share has been forfeited
on a specified date shall be conclusive evidence of the facts stated in it as against all persons claiming to be entitled to the
Share. The certificate shall (subject to the execution of an instrument of transfer) constitute a good title to the Share and the
person to whom the Share is sold or otherwise disposed of shall not be bound to see to the application of the purchase money, if
any, nor shall his title to the Share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture,
sale or disposal of the Share.
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15.6
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The provisions of the Articles as to forfeiture shall apply in the case of non payment of any sum
which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the par value of the Share or by
way of premium as if it had been payable by virtue of a call duly made and notified.
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16
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Transmission of Shares
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16.1
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If a Member dies, the survivor or survivors (where he was a joint holder), or his legal personal
representatives (where he was a sole holder), shall be the only persons recognised by the Company as having any title to his Shares.
The estate of a deceased Member is not thereby released from any liability in respect of any Share, for which he was a joint or
sole holder.
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16.2
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Any person becoming entitled to a Share in consequence of the death or bankruptcy or liquidation
or dissolution of a Member (or in any other way than by transfer) may, upon such evidence being produced as may be required by
the Directors, elect, by a notice in writing sent by him to the Company, either to become the holder of such Share or to have some
person nominated by him registered as
the holder of such Share. If he elects to have another person registered as the holder of such Share he shall sign an instrument
of transfer of that Share to that person. The Directors shall, in either case, have the same right to decline or suspend registration
as they would have had in the case of a transfer of the Share by the relevant Member before his death or bankruptcy or liquidation
or dissolution, as the case may be.
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16.3
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A person becoming entitled to a Share by reason of the death or bankruptcy or liquidation or dissolution
of a Member (or in any other case than by transfer) shall be entitled to the same Dividends, other distributions and other advantages
to which he would be entitled if he were the holder of such Share. However, he shall not, before becoming a Member in respect of
a Share, be entitled in respect of it to exercise any right conferred by membership in relation to general meetings of the Company
and the Directors may at any time give notice requiring any such person to elect either to be registered himself or to have some
person nominated by him be registered as the holder of the Share (but the Directors shall, in either case, have the same right
to decline or suspend registration as they would have had in the case of a transfer of the Share by the relevant Member before
his death or bankruptcy or liquidation or dissolution or any other case than by transfer, as the case may be). If the notice is
not complied with within ninety days of being received or deemed to be received (as determined pursuant to the Articles), the Directors
may thereafter withhold payment of all Dividends, other distributions, bonuses or other monies payable in respect of the Share
until the requirements of the notice have been complied with.
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17
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Class B Ordinary Share Conversion
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17.1
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The rights attaching to the Class A Shares and Class B Shares shall rank pari passu in all
respects, and the Class A Shares and Class B Shares shall vote together as a single class on all matters (subject to the Variation
of Rights of Shares Article and the Appointment and Removal of Directors Article hereof) with the exception that the holder of
a Class B Share shall have the conversion rights referred to in this Article.
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17.2
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Class B Shares shall automatically convert into Class A Shares on a one-for-one basis (the "Initial
Conversion Ratio") automatically on the day of the closing of a Business Combination.
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17.3
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Notwithstanding the Initial Conversion Ratio, in the case that additional Class A Shares or
any other Equity-linked Securities, are issued, or deemed issued, by the Company in excess of the amounts offered in the IPO
and related to the closing of a Business Combination, all Class B Shares in issue shall automatically convert into Class A
Shares at the time of the closing of a Business Combination at a ratio for which the Class B Shares shall convert into Class
A Shares will be adjusted (unless the holders of a majority of the Class B Shares in issue agree to waive such anti-dilution
adjustment with respect to any such issuance or deemed issuance) so that the number of Class A Shares issuable upon
conversion of all Class B Shares will equal, on an as-converted basis, in the aggregate, 20 per cent of the sum of all Class
A Shares and Class B Shares in issue upon completion of the IPO plus all Class A Shares and Equity-linked Securities issued
or deemed issued in connection with a Business Combination, excluding any Shares or Equity-linked Securities issued, or to be
issued, to any seller in a Business Combination, any Shares issued to the Representative
or its Affiliates and any private placement units issued to the Sponsor or its Affiliates upon conversion of working capital loans
made to the Company.
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17.4
|
Notwithstanding anything to the contrary contained herein, the foregoing adjustment to the Initial
Conversion Ratio may be waived as to any particular issuance or deemed issuance of additional Class A Shares or Equity-linked
Securities by the written consent or agreement of holders of a majority of the Class B Shares then in issue consenting or agreeing
separately as a separate class in the manner provided in the Variation of Rights of Shares Article hereof.
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17.5
|
The foregoing conversion ratio shall also be adjusted to account for any subdivision (by share
subdivision, exchange, capitalisation, rights issue, reclassification, recapitalisation or otherwise) or combination (by share
consolidation, exchange, reclassification, recapitalisation or otherwise) or similar reclassification or recapitalisation of the
Class A Shares in issue into a greater or lesser number of shares occurring after the original filing of the Articles without a
proportionate and corresponding subdivision, combination or similar reclassification or recapitalisation of the Class B Shares
in issue.
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17.6
|
Each Class B Share shall convert into its pro rata number of Class A Shares pursuant to this Article.
The pro rata share for each holder of Class B Shares will be determined as follows: each Class B Share shall convert into such
number of Class A Shares as is equal to the product of 1 multiplied by a fraction, the numerator of which shall be the total number
of Class A Shares into which all of the Class B Shares in issue shall be converted pursuant to this Article and the denominator
of which shall be the total number of Class B Shares in issue at the time of conversion.
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17.7
|
References in this Article to "converted", "conversion" or "exchange"
shall mean the compulsory redemption without notice of Class B Shares of any Member and, on behalf of such Members, automatic application
of such redemption proceeds in paying for such new Class A Shares into which the Class B Shares have been converted or exchanged
at a price per Class B Share necessary to give effect to a conversion or exchange calculated on the basis that the Class A Shares
to be issued as part of the conversion or exchange will be issued at par. The Class A Shares to be issued on an exchange or conversion
shall be registered in the name of such Member or in such name as the Member may direct.
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17.8
|
Notwithstanding anything to the contrary in this Article, in no event may any Class B Share convert
into Class A Shares at a ratio that is less than one-for-one.
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18
|
Amendments of Memorandum and Articles of Association and Alteration of Capital
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18.1
|
The Company may by Ordinary Resolution:
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(a)
|
increase its share capital by such sum as the Ordinary Resolution shall prescribe and with such
rights, priorities and privileges annexed thereto, as the Company in general meeting may determine;
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(b)
|
consolidate and divide all or any of its share capital into Shares of larger amount than its existing
Shares;
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(c)
|
convert all or any of its paid-up Shares into stock, and reconvert that stock into paid-up Shares
of any denomination;
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(d)
|
by subdivision of its existing Shares or any of them divide the whole or any part of its share
capital into Shares of smaller amount than is fixed by the Memorandum or into Shares without par value; and
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(e)
|
cancel any Shares that at the date of the passing of the Ordinary Resolution have not been taken
or agreed to be taken by any person and diminish the amount of its share capital by the amount of the Shares so cancelled.
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18.2
|
All new Shares created in accordance with the provisions of the preceding Article shall be subject
to the same provisions of the Articles with reference to the payment of calls, liens, transfer, transmission, forfeiture and otherwise
as the Shares in the original share capital.
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18.3
|
Subject to the provisions of the Statute, the provisions of the Articles as regards the matters
to be dealt with by Ordinary Resolution and Article 29.4, the Company may by Special Resolution:
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(b)
|
alter or add to the Articles;
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(c)
|
alter or add to the Memorandum with respect to any objects, powers or other matters specified therein;
and
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(d)
|
reduce its share capital or any capital redemption reserve fund.
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19
|
Offices and Places of Business
|
Subject to the provisions of
the Statute, the Company may by resolution of the Directors change the location of its Registered Office. The Company may, in addition
to its Registered Office, maintain such other offices or places of business as the Directors determine.
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20.1
|
All general meetings other than annual general meetings shall be called extraordinary general meetings.
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20.2
|
The Company may, but shall not (unless required by the Statute) be obliged to, in each year hold
a general meeting as its annual general meeting, and shall specify the meeting as such in the notices calling it. Any annual general
meeting shall be held at such time and place as the Directors shall appoint. At these meetings the report of the Directors (if
any) shall be presented.
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20.3
|
The Directors, the chief executive officer or the chairman of the board of Directors may call general
meetings, and, for the avoidance of doubt, Members shall not have the ability to call general meetings.
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20.4
|
Members seeking to bring business before the annual general meeting or to nominate candidates for
appointment as Directors at the annual general meeting must deliver notice to the principal executive offices of the Company not
less than 120 calendar days before the date of the Company’s proxy statement released to Members in connection with the previous
year’s annual general meeting or, if the Company did not hold an annual general meeting the previous year, or if the date
of the current year's annual general meeting has been changed by more than 30 days from the date of the previous year’s annual
general meeting, then the deadline shall be set by the board of Directors with such deadline being a reasonable time before the
Company begins to print and send its related proxy materials.
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21
|
Notice of General Meetings
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21.1
|
At least five clear days' notice shall be given of any general meeting. Every notice shall specify
the place, the day and the hour of the meeting and the general nature of the business to be conducted at the general meeting and
shall be given in the manner hereinafter mentioned or in such other manner if any as may be prescribed by the Company, provided
that a general meeting of the Company shall, whether or not the notice specified in this Article has been given and whether or
not the provisions of the Articles regarding general meetings have been complied with, be deemed to have been duly convened if
it is so agreed:
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(a)
|
in the case of an annual general meeting, by all of the Members entitled to attend and vote thereat;
and
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(b)
|
in the case of an extraordinary general meeting, by a majority in number of the Members having
a right to attend and vote at the meeting, together holding not less than ninety-five per cent in par value of the Shares giving
that right.
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21.2
|
The accidental omission to give notice of a general meeting to, or the non receipt of notice of
a general meeting by, any person entitled to receive such notice shall not invalidate the proceedings of that general meeting.
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22
|
Proceedings at General Meetings
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22.1
|
No business shall be transacted at any general meeting unless a quorum is present. The holders
of a majority of the Shares being individuals present in person or by proxy or if a corporation or other non-natural person by
its duly authorised representative or proxy shall be a quorum.
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22.2
|
A person may participate at a general meeting by conference telephone or other communications equipment
by means of which all the persons participating in the meeting can communicate with each other. Participation by a person in a
general meeting in this manner is treated as presence in person at that meeting.
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22.3
|
A resolution (including a Special Resolution) in writing (in one or more counterparts) signed by
or on behalf of all of the Members for the time being entitled to receive notice of and to attend and vote at general meetings
(or, being corporations or other non-natural persons, signed by their duly authorised representatives) shall be as valid and effective
as if the resolution had been passed at a general meeting of the Company duly convened and held.
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22.4
|
If a quorum is not present within half an hour from the time appointed for the meeting to commence,
the meeting shall stand adjourned to the same day in the next week at the same time and/or place or to such other day, time and/or
place as the Directors may determine, and if at the adjourned meeting a quorum is not present within half an hour from the time
appointed for the meeting to commence, the Members present shall be a quorum.
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22.5
|
The Directors may, at any time prior to the time appointed for the meeting to commence, appoint
any person to act as chairman of a general meeting of the Company or, if the Directors do not make any such appointment, the chairman,
if any, of the board of Directors shall preside as chairman at such general meeting. If there is no such chairman, or if he shall
not be present within fifteen minutes after the time appointed for the meeting to commence, or is unwilling to act, the Directors
present shall elect one of their number to be chairman of the meeting.
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22.6
|
If no Director is willing to act as chairman or if no Director is present within fifteen minutes
after the time appointed for the meeting to commence, the Members present shall choose one of their number to be chairman of the
meeting.
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22.7
|
The chairman may, with the consent of a meeting at which a quorum is present (and shall if so directed
by the meeting) adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned
meeting other than the business left unfinished at the meeting from which the adjournment took place.
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22.8
|
When a general meeting is adjourned for thirty days or more, notice of the adjourned meeting shall
be given as in the case of an original meeting. Otherwise it shall not be necessary to give any such notice of an adjourned meeting.
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22.9
|
If, prior to a Business Combination, a notice is issued in respect of a general meeting and the
Directors, in their absolute discretion, consider that it is impractical or undesirable for any reason to hold that general meeting
at the place, the day and the hour specified in the notice calling such general meeting, the Directors may postpone the general
meeting to another place, day and/or hour provided that notice of the place, the day and the hour of the rearranged general meeting
is promptly given to all Members. No business shall be transacted at any postponed meeting other than the business specified in
the notice of the original meeting.
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22.10
|
When a general meeting is postponed for thirty days or more, notice of the postponed meeting shall
be given as in the case of an original meeting. Otherwise it shall not be necessary to give any such notice of a postponed meeting. All
proxy forms submitted for the original general meeting shall remain valid for the postponed meeting. The Directors may postpone
a general meeting which has already been postponed.
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22.11
|
A resolution put to the vote of the meeting shall be decided on a poll.
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22.12
|
A poll shall be taken as the chairman directs, and the result of the poll shall be deemed to be
the resolution of the general meeting at which the poll was demanded.
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22.13
|
A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith.
A poll demanded on any other question shall be taken at such date, time and place as the chairman of the general meeting directs,
and any business other than that upon which a poll has been demanded or is contingent thereon may proceed pending the taking of
the poll.
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22.14
|
In the case of an equality of votes the chairman shall be entitled to a second or casting vote.
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23.1
|
Subject to any rights or restrictions attached to any Shares, including as set out at Article 29.4,
every Member present in any such manner shall have one vote for every Share of which he is the holder.
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23.2
|
In the case of joint holders the vote of the senior holder who tenders a vote, whether in person
or by proxy (or, in the case of a corporation or other non-natural person, by its duly authorised representative or proxy), shall
be accepted to the exclusion of the votes of the other joint holders, and seniority shall be determined by the order in which the
names of the holders stand in the Register of Members.
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23.3
|
A Member of unsound mind, or in respect of whom an order has been made by any court, having jurisdiction
in lunacy, may vote by his committee, receiver, curator bonis, or other person on such Member's behalf appointed by that court,
and any such committee, receiver, curator bonis or other person may vote by proxy.
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23.4
|
No person shall be entitled to vote at any general meeting unless he is registered as a Member
on the record date for such meeting nor unless all calls or other monies then payable by him in respect of Shares have been paid.
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23.5
|
No objection shall be raised as to the qualification of any voter except at the general meeting
or adjourned general meeting at which the vote objected to is given or tendered and every vote not disallowed at the meeting shall
be valid. Any objection made in due time in accordance with this Article shall be referred to the chairman whose decision shall
be final and conclusive.
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23.6
|
Votes may be cast either personally or by proxy (or in the case of a corporation or other non-natural
person by its duly authorised representative or proxy). A Member may appoint more than one proxy or the same proxy under one or
more instruments to attend and vote at a meeting. Where a Member appoints more than one proxy the instrument of proxy shall specify
the number of Shares in respect of which each proxy is entitled to exercise the related votes.
|
|
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23.7
|
A Member holding more than one Share need not cast the votes in respect of his Shares in the same
way on any resolution and therefore may vote a Share or some or all such Shares either for or against a resolution and/or abstain
from voting a Share or some or all of the Shares and, subject to the terms of the instrument appointing him, a proxy appointed
under one or more instruments may vote a Share or some or all of the Shares in respect of which he is appointed either for or against
a resolution and/or abstain from voting a Share or some or all of the Shares in respect of which he is appointed.
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|
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24.1
|
The instrument appointing a proxy shall be in writing and shall be executed under the hand of the
appointor or of his attorney duly authorised in writing, or, if the appointor is a corporation or other non natural person, under
the hand of its duly authorised representative. A proxy need not be a Member.
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24.2
|
The Directors may, in the notice convening any meeting or adjourned meeting, or in an instrument
of proxy sent out by the Company, specify the manner by which the instrument appointing a proxy shall be deposited and the place
and the time (being not later than the time appointed for the commencement of the meeting or adjourned meeting to which the proxy
relates) at which the instrument appointing a proxy shall be deposited. In the absence of any such direction from the Directors
in the notice convening any meeting or adjourned meeting or in an instrument of proxy sent out by the Company, the instrument appointing
a proxy shall be deposited physically at the Registered Office not less than 48 hours before the time appointed for the meeting
or adjourned meeting to commence at which the person named in the instrument proposes to vote.
|
|
|
24.3
|
The chairman may in any event at his discretion declare that an instrument of proxy shall be deemed
to have been duly deposited. An instrument of proxy that is not deposited in the manner permitted, or which has not been declared
to have been duly deposited by the chairman, shall be invalid.
|
|
|
24.4
|
The instrument appointing a proxy may be in any usual or common form (or such other form as the
Directors may approve) and may be expressed to be for a particular meeting or any adjournment thereof or generally until revoked.
An instrument appointing a proxy shall be deemed to include the power to demand or join or concur in demanding a poll.
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24.5
|
Votes given in accordance with the terms of an instrument of proxy shall be valid notwithstanding
the previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy was executed,
or the transfer of the Share in respect of which the proxy is given unless notice in writing of such death, insanity, revocation
or transfer was received by the Company at the Registered Office before the commencement of the general meeting, or adjourned meeting
at which it is sought to use the proxy.
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|
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25.1
|
Any corporation or other non-natural person which is a Member may in accordance with its constitutional
documents, or in the absence of such provision by resolution of its directors or other governing body, authorise such person as
it thinks fit to act as its representative at any meeting of the Company or of any class of Members, and the person so authorised
shall be entitled to exercise the same powers on behalf of the corporation which he represents as the corporation could exercise
if it were an individual Member.
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|
|
25.2
|
If a Clearing House (or its nominee(s)), being a corporation, is a Member, it may authorise such
persons as it sees fit to act as its representative at any meeting of the Company or at any meeting of any class of Members provided
that the authorisation shall specify the number and class of Shares in respect of which each such representative is so authorised.
Each person so authorised under the provisions of this Article shall be deemed to have been duly authorised without further evidence
of the facts and be entitled to exercise the same rights and powers on behalf of the Clearing House (or its nominee(s)) as if such
person was the registered holder of such Shares held by the Clearing House (or its nominee(s)).
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26
|
Shares that May Not be Voted
|
Shares in the Company that are
beneficially owned by the Company shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining
the total number of outstanding Shares at any given time.
|
|
27.1
|
There shall be a board of Directors consisting of not less than one person provided however that
the Company may by Ordinary Resolution increase or reduce the limits in the number of Directors.
|
|
|
27.2
|
The Directors shall be divided into two classes: Class I and Class II. The number of Directors
in each class shall be as nearly equal as possible. Upon the adoption of the Articles, the existing Directors shall by resolution
classify themselves as Class I Class II Directors. The Class I Directors shall stand appointed for a term expiring at the Company’s
first annual general meeting and the Class II Directors shall stand appointed for a term expiring at the Company’s second
annual general meeting. Commencing at the Company’s first annual general meeting, and at each annual general meeting thereafter,
Directors appointed to succeed those Directors whose terms expire shall be appointed for a term of office to expire at the two
succeeding annual general meeting after their appointment. Except as the Statute or other Applicable Law may otherwise require,
in the interim between annual general meetings or extraordinary general meetings called for the appointment of Directors and/or
the removal of one or more Directors and the filling of any vacancy in that connection, additional Directors and any vacancies
in the board of Directors, including unfilled vacancies resulting from the removal of Directors for cause, may be filled by the
vote of a majority of the remaining Directors then in office, although less than a quorum (as defined in the Articles), or by the
sole remaining Director. All Directors shall hold office until the expiration of their respective terms of office and until their
successors shall have been appointed and qualified.
A Director appointed to fill a vacancy resulting from the death, resignation or removal of a Director shall serve for the remainder
of the full term of the Director whose death, resignation or removal shall have created such vacancy and until his successor shall
have been appointed and qualified.
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|
|
28.1
|
Subject to the provisions of the Statute, the Memorandum and the Articles and to any directions
given by Special Resolution, the business of the Company shall be managed by the Directors who may exercise all the powers of the
Company. No alteration of the Memorandum or Articles and no such direction shall invalidate any prior act of the Directors which
would have been valid if that alteration had not been made or that direction had not been given. A duly convened meeting of Directors
at which a quorum is present may exercise all powers exercisable by the Directors.
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|
|
28.2
|
All cheques, promissory notes, drafts, bills of exchange and other negotiable or transferable instruments
and all receipts for monies paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed as the case may
be in such manner as the Directors shall determine by resolution.
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|
|
28.3
|
The Directors on behalf of the Company may pay a gratuity or pension or allowance on retirement
to any Director who has held any other salaried office or place of profit with the Company or to his widow or dependants and may
make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.
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|
|
28.4
|
The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge
its undertaking, property and assets (present and future) and uncalled capital or any part thereof and to issue debentures, debenture
stock, mortgages, bonds and other such securities whether outright or as security for any debt, liability or obligation of the
Company or of any third party.
|
|
|
29
|
Appointment and Removal of Directors
|
|
|
29.1
|
Prior to the closing of a Business Combination, the Company may by Ordinary Resolution of the holders
of the Class B Shares appoint any person to be a Director or may by Ordinary Resolution of the holders of the Class B Shares remove
any Director. For the avoidance of doubt, prior to the closing of a Business Combination, holders of Class A Shares shall have
no right to vote on the appointment or removal of any Director.
|
|
|
29.2
|
The Directors may appoint any person to be a Director, either to fill a vacancy or as an additional
Director provided that the appointment does not cause the number of Directors to exceed any number fixed by or in accordance with
the Articles as the maximum number of Directors.
|
|
|
29.3
|
After the closing of a Business Combination, the Company may by Ordinary Resolution appoint any
person to be a Director or may by Ordinary Resolution remove any Director.
|
|
|
29.4
|
Prior to the closing of a Business Combination, Article 29.1 may only be amended by a Special Resolution
passed by at least 90 per cent of such Members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy
at a general meeting of which notice specifying the intention to propose the resolution as a special resolution has been given,
or by way of unanimous written resolution.
|
|
|
30
|
Vacation of Office of Director
|
The office of a Director shall
be vacated if:
|
|
(a)
|
the Director gives notice in writing to the Company that he resigns the office of Director; or
|
|
|
(b)
|
the Director absents himself (for the avoidance of doubt, without being represented by proxy) from
three consecutive meetings of the board of Directors without special leave of absence from the Directors, and the Directors pass
a resolution that he has by reason of such absence vacated office; or
|
|
|
(c)
|
the Director dies, becomes bankrupt or makes any arrangement or composition with his creditors
generally; or
|
|
|
(d)
|
the Director is found to be or becomes of unsound mind; or
|
|
|
(e)
|
all of the other Directors (being not less than two in number) determine that he should be removed
as a Director, either by a resolution passed by all of the other Directors at a meeting of the Directors duly convened and held
in accordance with the Articles or by a resolution in writing signed by all of the other Directors.
|
|
|
31
|
Proceedings of Directors
|
|
|
31.1
|
The quorum for the transaction of the business of the Directors may be fixed by the Directors,
and unless so fixed shall be a majority of the Directors then in office.
|
|
|
31.2
|
Subject to the provisions of the Articles, the Directors may regulate their proceedings as they
think fit. Questions arising at any meeting shall be decided by a majority of votes. In the case of an equality of votes, the chairman
shall have a second or casting vote.
|
|
|
31.3
|
A person may participate in a meeting of the Directors or any committee of Directors by conference
telephone or other communications equipment by means of which all the persons participating in the meeting can communicate with
each other at the same time. Participation by a person in a meeting in this manner is treated as presence in person at that meeting.
Unless otherwise determined by the Directors, the meeting shall be deemed to be held at the place where the chairman is located
at the start of the meeting.
|
|
|
31.4
|
A resolution in writing (in one or more counterparts) signed by all the Directors or all the members
of a committee of the Directors or, in the case of a resolution in writing relating to the removal of any Director or the vacation
of office by any Director, all of the Directors other than the Director who is the subject of such resolution shall be as valid
and effectual as if it had been passed at a meeting of the Directors, or committee of Directors as the case may be, duly convened
and held.
|
|
|
31.5
|
A Director may, or other Officer on the direction of a Director shall, call a meeting of the Directors
by at least two days' notice in writing to every Director which notice shall set forth the general nature of the business to be
considered unless notice is waived by all the Directors either at, before or after the meeting is held. To any such notice of a
meeting of the Directors all the provisions of the Articles relating to the giving of notices by the Company to the Members shall
apply mutatis mutandis.
|
|
|
31.6
|
The continuing Directors (or a sole continuing Director, as the case may be) may act notwithstanding
any vacancy in their body, but if and so long as their number is reduced below the number fixed by or pursuant to the Articles
as the necessary quorum of Directors the continuing Directors or Director may act for the purpose of increasing the number of Directors
to be equal to such fixed number, or of summoning a general meeting of the Company, but for no other purpose.
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|
|
31.7
|
The Directors may elect a chairman of their board and determine the period for which he is to hold
office; but if no such chairman is elected, or if at any meeting the chairman is not present within five minutes after the time
appointed for the meeting to commence, the Directors present may choose one of their number to be chairman of the meeting.
|
|
|
31.8
|
All acts done by any meeting of the Directors or of a committee of the Directors shall, notwithstanding
that it is afterwards discovered that there was some defect in the appointment of any Director, and/or that they or any of them
were disqualified, and/or had vacated their office and/or were not entitled to vote, be as valid as if every such person had been
duly appointed and/or not disqualified to be a Director and/or had not vacated their office and/or had been entitled to vote, as
the case may be.
|
|
|
31.9
|
A Director may be represented at any meetings of the board of Directors by a proxy appointed in
writing by him. The proxy shall count towards the quorum and the vote of the proxy shall for all purposes be deemed to be that
of the appointing Director.
|
A Director who is present at
a meeting of the board of Directors at which action on any Company matter is taken shall be presumed to have assented to the action
taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent from such action
with the person acting as the chairman or secretary of the meeting before the adjournment thereof or shall forward such dissent
by registered post to such person immediately after the adjournment of the meeting. Such right to dissent shall not apply to a
Director who voted in favour of such action.
|
|
33.1
|
A Director may hold any other office or place of profit under the Company (other than the office
of Auditor) in conjunction with his office of Director for such period and on such terms as to remuneration and otherwise as the
Directors may determine.
|
|
|
33.2
|
A Director may act by himself or by, through or on behalf of his firm in a professional capacity
for the Company and he or his firm shall be entitled to remuneration for professional services as if he were not a Director.
|
|
|
33.3
|
A Director may be or become a director or other officer of or otherwise interested in any company
promoted by the Company or in which the Company may be interested as a shareholder, a contracting party or otherwise, and no such
Director shall be accountable to the Company for any remuneration or other benefits received by him as a director or officer of,
or from his interest in, such other company.
|
|
|
33.4
|
No person shall be disqualified from the office of Director or prevented by such office from contracting
with the Company, either as vendor, purchaser or otherwise, nor shall any such contract or any contract or transaction entered
into by or on behalf of the Company in which any Director shall be in any way interested be or be liable to be avoided, nor shall
any Director so contracting or being so interested be liable to account to the Company for any profit realised by or arising in
connection with any such contract or transaction by reason of such Director holding office or of the fiduciary relationship thereby
established. A Director shall be at liberty to vote in respect of any contract or transaction in which he is interested provided
that the nature of the interest of any Director in any such contract or transaction shall be disclosed by him at or prior to its
consideration and any vote thereon.
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33.5
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A general notice that a Director is a shareholder, director, officer or employee of any specified
firm or company and is to be regarded as interested in any transaction with such firm or company shall be sufficient disclosure
for the purposes of voting on a resolution in respect of a contract or transaction in which he has an interest, and after such
general notice it shall not be necessary to give special notice relating to any particular transaction.
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The Directors shall cause minutes
to be made in books kept for the purpose of recording all appointments of Officers made by the Directors, all proceedings at meetings
of the Company or the holders of any class of Shares and of the Directors, and of committees of the Directors, including the names
of the Directors present at each meeting.
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35
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Delegation of Directors' Powers
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35.1
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The Directors may delegate any of their powers, authorities and discretions, including the power
to sub-delegate, to any committee consisting of one or more Directors (including, without limitation, the Audit Committee and the
Compensation Committee). Any such delegation may be made subject to any conditions the Directors may impose and either collaterally
with or to the exclusion of their own powers
and any such delegation may be revoked or altered by the Directors. Subject to any such conditions, the proceedings of a committee
of Directors shall be governed by the Articles regulating the proceedings of Directors, so far as they are capable of applying.
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35.2
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The Directors may establish any committees, local boards or agencies or appoint any person to be
a manager or agent for managing the affairs of the Company and may appoint any person to be a member of such committees, local
boards or agencies. Any such appointment may be made subject to any conditions the Directors may impose, and either collaterally
with or to the exclusion of their own powers and any such appointment may be revoked or altered by the Directors. Subject to any
such conditions, the proceedings of any such committee, local board or agency shall be governed by the Articles regulating the
proceedings of Directors, so far as they are capable of applying.
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35.3
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The Directors may adopt formal written charters for committees. Each of these committees shall
be empowered to do all things necessary to exercise the rights of such committee set forth in the Articles and shall have such
powers as the Directors may delegate pursuant to the Articles and as required by the rules and regulations of the Designated Stock
Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable
Law. Each of the Audit Committee and the Compensation Committee, if established, shall consist of such number of Directors as the
Directors shall from time to time determine (or such minimum number as may be required from time to time by the rules and regulations
of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise
under Applicable Law).
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35.4
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The Directors may by power of attorney or otherwise appoint any person to be the agent of the Company
on such conditions as the Directors may determine, provided that the delegation is not to the exclusion of their own powers and
may be revoked by the Directors at any time.
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35.5
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The Directors may by power of attorney or otherwise appoint any company, firm, person or body of
persons, whether nominated directly or indirectly by the Directors, to be the attorney or authorised signatory of the Company for
such purpose and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under
the Articles) and for such period and subject to such conditions as they may think fit, and any such powers of attorney or other
appointment may contain such provisions for the protection and convenience of persons dealing with any such attorneys or authorised
signatories as the Directors may think fit and may also authorise any such attorney or authorised signatory to delegate all or
any of the powers, authorities and discretions vested in him.
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35.6
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The Directors may appoint such Officers as they consider necessary on such terms, at such remuneration
and to perform such duties, and subject to such provisions as to disqualification and removal as the Directors may think fit. Unless
otherwise specified in the terms of his appointment an Officer may be removed by resolution of the Directors or Members. An Officer
may vacate his office at any time if he gives notice in writing to the Company that he resigns his office.
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36
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No Minimum Shareholding
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The Company in general meeting
may fix a minimum shareholding required to be held by a Director, but unless and until such a shareholding qualification is fixed
a Director is not required to hold Shares.
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37
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Remuneration of Directors
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37.1
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The remuneration to be paid to the Directors, if any, shall be such remuneration as the Directors
shall determine, provided that no cash remuneration shall be paid to any Director by the Company prior to the consummation of a
Business Combination. The Directors shall also, whether prior to or after the consummation of a Business Combination, be entitled
to be paid all travelling, hotel and other expenses properly incurred by them in connection with their attendance at meetings of
Directors or committees of Directors, or general meetings of the Company, or separate meetings of the holders of any class of Shares
or debentures of the Company, or otherwise in connection with the business of the Company or the discharge of their duties as a
Director, or to receive a fixed allowance in respect thereof as may be determined by the Directors, or a combination partly of
one such method and partly the other.
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37.2
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The Directors may by resolution approve additional remuneration to any Director for any services
which in the opinion of the Directors go beyond his ordinary routine work as a Director. Any fees paid to a Director who is also
counsel, attorney or solicitor to the Company, or otherwise serves it in a professional capacity shall be in addition to his remuneration
as a Director.
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38.1
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The Company may, if the Directors so determine, have a Seal. The Seal shall only be used by the
authority of the Directors or of a committee of the Directors authorised by the Directors. Every instrument to which the Seal has
been affixed shall be signed by at least one person who shall be either a Director or some Officer or other person appointed by
the Directors for the purpose.
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38.2
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The Company may have for use in any place or places outside the Cayman Islands a duplicate Seal
or Seals each of which shall be a facsimile of the common Seal of the Company and, if the Directors so determine, with the addition
on its face of the name of every place where it is to be used.
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38.3
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A Director or Officer, representative or attorney of the Company may without further authority
of the Directors affix the Seal over his signature alone to any document of the Company required to be authenticated by him under
seal or to be filed with the Registrar of Companies in the Cayman Islands or elsewhere wheresoever.
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39
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Dividends, Distributions and Reserve
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39.1
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Subject to the Statute and this Article and except as otherwise provided by the rights attached
to any Shares, the Directors may resolve to pay Dividends and other distributions on Shares in issue and authorise payment of the
Dividends or other distributions out of the funds of the Company lawfully available therefor.
A Dividend shall be deemed to be an interim Dividend unless the terms of the resolution pursuant to which the Directors resolve
to pay such Dividend specifically state that such Dividend shall be a final Dividend. No Dividend or other distribution shall be
paid except out of the realised or unrealised profits of the Company, out of the share premium account or as otherwise permitted
by law.
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39.2
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Except as otherwise provided by the rights attached to any Shares, all Dividends and other distributions
shall be paid according to the par value of the Shares that a Member holds. If any Share is issued on terms providing that it shall
rank for Dividend as from a particular date, that Share shall rank for Dividend accordingly.
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39.3
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The Directors may deduct from any Dividend or other distribution payable to any Member all sums
of money (if any) then payable by him to the Company on account of calls or otherwise.
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39.4
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The Directors may resolve that any Dividend or other distribution be paid wholly or partly by the
distribution of specific assets and in particular (but without limitation) by the distribution of shares, debentures, or securities
of any other company or in any one or more of such ways and where any difficulty arises in regard to such distribution, the Directors
may settle the same as they think expedient and in particular may issue fractional Shares and may fix the value for distribution
of such specific assets or any part thereof and may determine that cash payments shall be made to any Members upon the basis of
the value so fixed in order to adjust the rights of all Members and may vest any such specific assets in trustees in such manner
as may seem expedient to the Directors.
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39.5
|
Except as otherwise provided by the rights attached to any Shares, Dividends and other distributions
may be paid in any currency. The Directors may determine the basis of conversion for any currency conversions that may be required
and how any costs involved are to be met.
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39.6
|
The Directors may, before resolving to pay any Dividend or other distribution, set aside such sums
as they think proper as a reserve or reserves which shall, at the discretion of the Directors, be applicable for any purpose of
the Company and pending such application may, at the discretion of the Directors, be employed in the business of the Company.
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39.7
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Any Dividend, other distribution, interest or other monies payable in cash in respect of Shares
may be paid by wire transfer to the holder or by cheque or warrant sent through the post directed to the registered address of
the holder or, in the case of joint holders, to the registered address of the holder who is first named on the Register of Members
or to such person and to such address as such holder or joint holders may in writing direct. Every such cheque or warrant shall
be made payable to the order of the person to whom it is sent. Any one of two or more joint holders may give effectual receipts
for any Dividends, other distributions, bonuses, or other monies payable in respect of the Share held by them as joint holders.
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39.8
|
No Dividend or other distribution shall bear interest against the Company.
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39.9
|
Any Dividend or other distribution which cannot be paid to a Member and/or which remains unclaimed
after six months from the date on which such Dividend or other distribution becomes payable may, in the discretion of the Directors,
be paid into a separate account in the Company's name, provided that the Company shall not be constituted as a trustee in respect
of that account and the Dividend or other distribution shall remain as a debt due to the Member. Any Dividend or other distribution
which remains unclaimed after a period of six years from the date on which such Dividend or other distribution becomes payable
shall be forfeited and shall revert to the Company.
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The Directors may at any time
capitalise any sum standing to the credit of any of the Company's reserve accounts or funds (including the share premium account
and capital redemption reserve fund) or any sum standing to the credit of the profit and loss account or otherwise available for
distribution; appropriate such sum to Members in the proportions in which such sum would have been divisible amongst such Members
had the same been a distribution of profits by way of Dividend or other distribution; and apply such sum on their behalf in paying
up in full unissued Shares for allotment and distribution credited as fully paid-up to and amongst them in the proportion aforesaid.
In such event the Directors shall do all acts and things required to give effect to such capitalisation, with full power given
to the Directors to make such provisions as they think fit in the case of Shares becoming distributable in fractions (including
provisions whereby the benefit of fractional entitlements accrue to the Company rather than to the Members concerned). The Directors
may authorise any person to enter on behalf of all of the Members interested into an agreement with the Company providing for such
capitalisation and matters incidental or relating thereto and any agreement made under such authority shall be effective and binding
on all such Members and the Company.
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41.1
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The Directors shall cause proper books of account (including, where applicable, material underlying
documentation including contracts and invoices) to be kept with respect to all sums of money received and expended by the Company
and the matters in respect of which the receipt or expenditure takes place, all sales and purchases of goods by the Company and
the assets and liabilities of the Company. Such books of account must be retained for a minimum period of five years from the date
on which they are prepared. Proper books shall not be deemed to be kept if there are not kept such books of account as are necessary
to give a true and fair view of the state of the Company's affairs and to explain its transactions.
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41.2
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The Directors shall determine whether and to what extent and at what times and places and under
what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of Members
not being Directors and no Member (not being a Director) shall have any right of inspecting any account or book or document of
the Company except as conferred by Statute or authorised by the Directors or by the Company in general meeting.
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41.3
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The Directors may cause to be prepared and to be laid before the Company in general meeting profit
and loss accounts, balance sheets, group accounts (if any) and such other reports and accounts as may be required by law.
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42.1
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The Directors may appoint an Auditor of the Company who shall hold office on such terms as the
Directors determine.
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42.2
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Without prejudice to the freedom of the Directors to establish any other committee, if the Shares
(or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange, and if required by the rules and regulations
of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise
under Applicable Law, the Directors shall establish and maintain an Audit Committee as a committee of the Directors and shall adopt
a formal written Audit Committee charter and review and assess the adequacy of the formal written charter on an annual basis. The
composition and responsibilities of the Audit Committee shall comply with the rules and regulations of the Designated Stock Exchange,
the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law.
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42.3
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If the Shares (or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange,
the Company shall conduct an appropriate review of all related party transactions on an ongoing basis and shall utilise the Audit
Committee for the review and approval of potential conflicts of interest.
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42.4
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The remuneration of the Auditor shall be fixed by the Audit Committee (if one exists).
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42.5
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If the office of Auditor becomes vacant by resignation or death of the Auditor, or by his becoming
incapable of acting by reason of illness or other disability at a time when his services are required, the Directors shall fill
the vacancy and determine the remuneration of such Auditor.
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42.6
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Every Auditor of the Company shall have a right of access at all times to the books and accounts
and vouchers of the Company and shall be entitled to require from the Directors and Officers such information and explanation as
may be necessary for the performance of the duties of the Auditor.
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42.7
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Auditors shall, if so required by the Directors, make a report on the accounts of the Company during
their tenure of office at the next annual general meeting following their appointment in the case of a company which is registered
with the Registrar of Companies as an ordinary company, and at the next extraordinary general meeting following their appointment
in the case of a company which is registered with the Registrar of Companies as an exempted company, and at any other time during
their term of office, upon request of the Directors or any general meeting of the Members.
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43.1
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Notices shall be in writing and may be given by the Company to any Member either personally or
by sending it by courier, post, cable, telex, fax or e-mail to him or to his address as shown in the Register of Members (or where
the notice is given by e-mail by sending it to the e-mail address provided by such Member). Notice may also be served by Electronic
Communication in accordance with the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission
and/or any other competent regulatory authority or by placing it on the Company’s Website.
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43.2
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Where a notice is sent by:
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(a)
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courier; service of the notice shall be deemed to be effected by delivery of the notice to a courier
company, and shall be deemed to have been received on the third day (not including Saturdays or Sundays or public holidays) following
the day on which the notice was delivered to the courier;
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(b)
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post; service of the notice shall be deemed to be effected by properly addressing, pre paying and
posting a letter containing the notice, and shall be deemed to have been received on the fifth day (not including Saturdays or
Sundays or public holidays in the Cayman Islands) following the day on which the notice was posted;
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(c)
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cable, telex or fax; service of the notice shall be deemed to be effected by properly addressing
and sending such notice and shall be deemed to have been received on the same day that it was transmitted;
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(d)
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e-mail or other Electronic Communication; service of the notice shall be deemed to be effected
by transmitting the e-mail to the e-mail address provided by the intended recipient and shall be deemed to have been received on
the same day that it was sent, and it shall not be necessary for the receipt of the e-mail to be acknowledged by the recipient;
and
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(e)
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placing it on the Company’s Website; service of the notice shall be deemed to have been effected
one hour after the notice or document was placed on the Company’s Website.
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43.3
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A notice may be given by the Company to the person or persons which the Company has been advised
are entitled to a Share or Shares in consequence of the death or bankruptcy of a Member in the same manner as other notices which
are required to be given under the Articles and shall be addressed to them by name, or by the title of representatives of the deceased,
or trustee of the bankrupt, or by any like description at the address supplied for that purpose by the persons claiming to be so
entitled, or at the option of the Company by giving the notice in any manner in which the same might have been given if the death
or bankruptcy had not occurred.
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43.4
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Notice of every general meeting shall be given in any manner authorised by the Articles to every
holder of Shares carrying an entitlement to receive such notice on the record date for such meeting except that in the case
of joint holders the notice shall be sufficient if given to the joint holder first named in the Register of Members and every person
upon whom the ownership of a Share devolves by reason of his being a legal personal representative or a trustee in bankruptcy of
a Member where the Member but for his death or bankruptcy would be entitled to receive notice of the meeting, and no other person
shall be entitled to receive notices of general meetings.
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44.1
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If the Company shall be wound up, the liquidator shall apply the assets of the Company in satisfaction
of creditors' claims in such manner and order as such liquidator thinks fit. Subject to the rights attaching to any Shares, in
a winding up:
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(a)
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if the assets available for distribution amongst the Members shall be insufficient to repay the
whole of the Company's issued share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be
borne by the Members in proportion to the par value of the Shares held by them; or
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(b)
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if the assets available for distribution amongst the Members shall be more than sufficient to repay
the whole of the Company's issued share capital at the commencement of the winding up, the surplus shall be distributed amongst
the Members in proportion to the par value of the Shares held by them at the commencement of the winding up subject to a deduction
from those Shares in respect of which there are monies due, of all monies payable to the Company for unpaid calls or otherwise.
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44.2
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If the Company shall be wound up the liquidator may, subject to the rights attaching to any Shares
and with the approval of a Special Resolution of the Company and any other approval required by the Statute, divide amongst the
Members in kind the whole or any part of the assets of the Company (whether such assets shall consist of property of the same kind
or not) and may for that purpose value any assets and determine how the division shall be carried out as between the Members or
different classes of Members. The liquidator may, with the like approval, vest the whole or any part of such assets in trustees
upon such trusts for the benefit of the Members as the liquidator, with the like approval, shall think fit, but so that no Member
shall be compelled to accept any asset upon which there is a liability.
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45
|
Indemnity and Insurance
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|
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45.1
|
Every Director and Officer (which for the avoidance of doubt, shall not include auditors of the
Company), together with every former Director and former Officer (each an "Indemnified Person") shall be indemnified
out of the assets of the Company against any liability, action, proceeding, claim, demand, costs, damages or expenses, including
legal expenses, whatsoever which they or any of them may incur as a result of any act or failure to act in carrying out their functions
other than such liability (if any) that they may incur by reason of their own actual fraud, wilful neglect or wilful default. No
Indemnified Person shall be liable to the Company for any loss or damage incurred by the Company as a result (whether direct or
indirect) of the carrying out of their functions unless that liability
arises through the actual fraud, wilful neglect or wilful default of such Indemnified Person. No person shall be found to have
committed actual fraud, wilful neglect or wilful default under this Article unless or until a court of competent jurisdiction shall
have made a finding to that effect.
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45.2
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The Company shall advance to each Indemnified Person reasonable attorneys' fees and other costs
and expenses incurred in connection with the defence of any action, suit, proceeding or investigation involving such Indemnified
Person for which indemnity will or could be sought. In connection with any advance of any expenses hereunder, the Indemnified Person
shall execute an undertaking to repay the advanced amount to the Company if it shall be determined by final judgment or other final
adjudication that such Indemnified Person was not entitled to indemnification pursuant to this Article. If it shall be determined
by a final judgment or other final adjudication that such Indemnified Person was not entitled to indemnification with respect to
such judgment, costs or expenses, then such party shall not be indemnified with respect to such judgment, costs or expenses and
any advancement shall be returned to the Company (without interest) by the Indemnified Person.
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45.3
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The Directors, on behalf of the Company, may purchase and maintain insurance for the benefit of
any Director or Officer against any liability which, by virtue of any rule of law, would otherwise attach to such person in respect
of any negligence, default, breach of duty or breach of trust of which such person may be guilty in relation to the Company.
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Unless the Directors otherwise
prescribe, the financial year of the Company shall end on 31st December in each year and, following the year of incorporation,
shall begin on 1st January in each year.
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47
|
Transfer by Way of Continuation
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If the Company is exempted as
defined in the Statute, it shall, subject to the provisions of the Statute and with the approval of a Special Resolution, have
the power to register by way of continuation as a body corporate under the laws of any jurisdiction outside the Cayman Islands
and to be deregistered in the Cayman Islands.
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48
|
Mergers and Consolidations
|
The Company
shall have the power to merge or consolidate with one or more other constituent companies (as defined in the Statute) upon such
terms as the Directors may determine and (to the extent required by the Statute) with the approval of a Special Resolution.
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|
49.1
|
Notwithstanding any other provision of the Articles, this Article shall apply during the period
commencing upon the adoption of the Articles and terminating upon the first to occur of the consummation of a Business Combination
and the full distribution of the Trust Account pursuant to this Article. In the event
of a conflict between this Article and any other Articles, the provisions of this Article shall prevail.
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49.2
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Prior to the consummation of a Business Combination, the Company shall either:
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|
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(a)
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submit such Business Combination to its Members for approval; or
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|
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(b)
|
provide Members with the opportunity to have their Shares repurchased by means of a tender offer
for a per-Share repurchase price payable in cash, equal to the aggregate amount then on deposit in the Trust Account, calculated
as of two business days prior to the consummation of such Business Combination, including interest earned on the Trust Account
(net of taxes paid or payable, if any), divided by the number of then issued Public Shares, provided that the Company shall not
repurchase Public Shares in an amount that would cause the Company's net tangible assets to be less than US$5,000,001 immediately
prior to or upon consummation of such Business Combination. Such obligation to repurchase Shares is subject to the completion of
the proposed Business Combination to which it relates.
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49.3
|
If the Company initiates any tender offer in accordance with Rule 13e-4 and Regulation 14E of the
Exchange Act in connection with a proposed Business Combination, it shall file tender offer documents with the Securities and Exchange
Commission prior to completing such Business Combination which contain substantially the same financial and other information about
such Business Combination and the redemption rights as is required under Regulation 14A of the Exchange Act. If, alternatively,
the Company holds a general meeting to approve a proposed Business Combination, the Company will conduct any redemptions in conjunction
with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, and not pursuant to the tender offer rules, and file
proxy materials with the Securities and Exchange Commission.
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49.4
|
At a general meeting called for the purposes of approving a Business Combination pursuant to this
Article, in the event that such Business Combination is approved by Ordinary Resolution, the Company shall be authorised to consummate
such Business Combination, provided that the Company shall not consummate such Business Combination unless the Company has net
tangible assets of at least US$5,000,001 immediately prior to, or upon such consummation of, or any greater net tangible asset
or cash requirement that may be contained in the agreement relating to, such Business Combination.
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49.5
|
Any Member holding Public Shares who is not the Sponsor, a Founder, Officer or Director may, at
least two business days’ prior to any vote on a Business Combination, elect to have their Public Shares redeemed for cash,
in accordance with any applicable requirements provided for in the related proxy materials (the "IPO Redemption"),
provided that no such Member acting together with any Affiliate of his or any other person with whom he is acting in concert or
as a partnership, limited partnership, syndicate, or other group for the purposes of acquiring, holding, or disposing of Shares
may exercise this redemption right with respect to more than 15 per cent of the Public Shares in the aggregate without the prior
consent of the Company and provided further that any beneficial holder of Public Shares on whose behalf a redemption right is being
exercised must identify itself to the Company
in connection with any redemption election in order to validly redeem such Public Shares. If so demanded, the Company shall pay
any such redeeming Member, regardless of whether he is voting for or against such proposed Business Combination, a per-Share redemption
price payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior
to the consummation of the Business Combination, including interest earned on the Trust Account (such interest shall be net of
taxes payable) and not previously released to the Company to pay its taxes, divided by the number of then issued Public Shares
(such redemption price being referred to herein as the "Redemption Price"), but only in the event that the applicable
proposed Business Combination is approved and consummated. The Company shall not redeem Public Shares that would cause the Company’s
net tangible assets to be less than US$5,000,001 following such redemptions.
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49.6
|
A Member may not withdraw a Redemption Notice once submitted to the Company unless the Directors
determine (in their sole discretion) to permit the withdrawal of such redemption request (which they may do in whole or in part).
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|
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49.7
|
In the event that the Company does not consummate a Business Combination by 15 months from the
consummation of the IPO (or up to 21 months if such date is extended as described in the prospectus relating to the IPO or, if
the Registrar of Companies of the Cayman Islands shall not be open for business (including filing of corporate documents) on such
date the next date upon which the Registrar of Companies of the Cayman Islands shall be open (the "Deadline Date"),
or such later time as the Members may approve in accordance with the Articles, the Company shall:
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(a)
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cease all operations except for the purpose of winding up;
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|
|
(b)
|
as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public
Shares, at a per-Share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest
earned on the funds held in the Trust Account and not previously released to the Company (less taxes payable and up to US$50,000
of interest to pay dissolution expenses), divided by the number of then Public Shares in issue, which redemption will completely
extinguish public Members' rights as Members (including the right to receive further liquidation distributions, if any); and
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|
(c)
|
as promptly as reasonably possible following such redemption, subject to the approval of the Company's
remaining Members and the Directors, liquidate and dissolve,
|
subject in
each case to its obligations under Cayman Islands law to provide for claims of creditors and other requirements of Applicable Law.
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|
49.8
|
In the event that any amendment is made to the Articles:
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|
|
(a)
|
to modify the substance or timing of the Company's obligation to allow redemption in connection
with a Business Combination or redeem 100 per cent of the Public Shares if the Company does not consummate a Business Combination
by the Deadline Date; or
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|
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(b)
|
with respect to any other provision relating to Members’ rights or pre-Business Combination
activity,
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each holder
of Public Shares who is not the Sponsor, a Founder, Officer or Director shall be provided with the opportunity to redeem their
Public Shares upon the approval or effectiveness of any such amendment at a per-Share price, payable in cash, equal to the aggregate
amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously
released to the Company to pay its taxes, divided by the number of then outstanding Public Shares.
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49.9
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A holder of Public Shares shall be entitled to receive distributions from the Trust Account only
in the event of an IPO Redemption, a repurchase of Shares by means of a tender offer pursuant to this Article, or a distribution
of the Trust Account pursuant to this Article. In no other circumstance shall a holder of Public Shares have any right or interest
of any kind in the Trust Account.
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49.10
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After the issue of Public Shares, and prior to the consummation of a Business Combination, the
Company shall not issue additional Shares or any other securities that would entitle the holders thereof to:
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(a)
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receive funds from the Trust Account; or
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(b)
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vote as a class with Public Shares on a Business Combination.
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49.11
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A Director may vote in respect of a Business Combination in which such Director has a conflict
of interest with respect to the evaluation of such Business Combination. Such Director must disclose such interest or conflict
to the other Directors.
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49.12
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As long as the securities of the Company are listed on the Nasdaq Capital Market, the Company must
complete one or more Business Combinations having an aggregate fair market value of at least 80 per cent of the assets held in
the Trust Account (net of amounts previously disbursed to the Company's management for taxes) at the time of the Company's signing
a definitive agreement in connection with a Business Combination. A Business Combination must not be effectuated with another blank
cheque company or a similar company with nominal operations.
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49.13
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The Company may enter into a Business Combination with a target business that is Affiliated with
the Sponsor, a Founder, a Director or an Officer. In the event the Company seeks to consummate a Business Combination with a target
that is Affiliated with the Sponsor, a Founder, a Director or an Officer, the Company, or a committee of Independent Directors,
will obtain an opinion from an independent investment banking firm or another valuation or appraisal firm that regularly renders
fairness opinions on the type of target business the Company is seeking to acquire or an independent accounting firm that such
a Business Combination is fair to the Company from a financial point of view.
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50
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Business Opportunities
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50.1
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To the fullest extent permitted by Applicable Law, no individual serving as a Director or an Officer
("Management") shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging
directly or indirectly in the same or similar business activities or lines of business as the Company. To the fullest extent permitted
by Applicable Law, the Company renounces any interest or expectancy of the Company in, or in being offered an opportunity to participate
in, any potential transaction or matter which may be a corporate opportunity for Management, on the one hand, and the Company,
on the other. Except to the extent expressly assumed by contract, to the fullest extent permitted by Applicable Law, Management
shall have no duty to communicate or offer any such corporate opportunity to the Company and shall not be liable to the Company
or its Members for breach of any fiduciary duty as a Member, Director and/or Officer solely by reason of the fact that such party
pursues or acquires such corporate opportunity for itself, himself or herself, directs such corporate opportunity to another person,
or does not communicate information regarding such corporate opportunity to the Company.
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50.2
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Except as provided elsewhere in this Article, the Company hereby renounces any interest or expectancy
of the Company in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate
opportunity for both the Company and Management, about which a Director and/or Officer who is also a member of Management acquires
knowledge.
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50.3
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To the extent a court might hold that the conduct of any activity related to a corporate opportunity
that is renounced in this Article to be a breach of duty to the Company or its Members, the Company hereby waives, to the fullest
extent permitted by Applicable Law, any and all claims and causes of action that the Company may have for such activities. To the
fullest extent permitted by Applicable Law, the provisions of this Article apply equally to activities conducted in the future
and that have been conducted in the past.
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Exhibit 4.1
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NUMBER
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UNITS
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U-
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SEE REVERSE FOR
CERTAIN
DEFINITIONS
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DISTOKEN ACQUISITION CORPORATION
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CUSIP G27740128
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UNITS CONSISTING OF ONE CLASS A ORDINARY
SHARE, ONE RIGHT AND ONE-HALF OF ONE WARRANT,
EACH RIGHT ENTITLING THE HOLDER TO RECEIVE ONE-TENTH OF ONE CLASS A ORDINARY SHARE
EACH WARRANT ENTITLING THE HOLDER TO
PURCHASE ONE CLASS A ORDINARY SHARE
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THIS CERTIFIES THAT
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is the owner of
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Units.
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Each Unit (“Unit”) consists of one
(1) Class A ordinary share, par value $0.0001 per share (“Class A ordinary shares”), of Distoken Acquisition
Corporation, a Cayman Islands limited liability company (the “Company”), one right (“Right”)
and one warrant (“Warrant”). Each Right entitles the holder to receive one-tenth (1/10) of one Class
A ordinary share, subject to adjustment upon the Company’s completion of an acquisition, share exchange, share reconstruction
and amalgamation, contractual control arrangement or other similar business combination with one or more businesses or entities
(each a “Business Combination”). Each Warrant entitles the holder to purchase one (1) Class A ordinary
share (subject to adjustment) for $11.50 per share (subject to adjustment). Each Warrant will become exercisable on the later of
(i) thirty (30) days after the Company’s completion of a Business Combination, and (ii) twelve (12) months from the closing
of the Company’s initial public offering, and will expire unless exercised before 5:00 p.m., New York City Time, on the date
that is five (5) years after the date on which the Company completes its initial Business Combination, or earlier upon redemption
or liquidation. The Class A ordinary shares, the Rights and Warrants comprising the Units represented by this certificate will
begin separate trading on [●] unless EarlyBirdCapital, Inc. elects to allow earlier separate trading, subject to the Company’s
filing of a Current Report on Form 8-K with the Securities and Exchange Commission containing an audited balance sheet reflecting
the Company’s receipt of the gross proceeds of its initial public offering and issuing a press release announcing when separate
trading will begin. The terms of the Warrants are governed by a Warrant Agreement and a Rights Agreement, dated as of [●],
2020, between the Company and Continental Stock Transfer & Trust Company, as Warrant Agent and Rights Agent, and are subject
to the terms and provisions contained therein, all of which terms and provisions the holder of this certificate consents to by
acceptance hereof. Copies of the Warrant Agreement and Rights Agreement are on file at the office of the Warrant Agent or Right
Agent at One State Street, 30th Floor, New York, New York 10004, and are available to any Warrant holder or Right holder on written
request and without cost.
This certificate is not valid unless countersigned
by the Transfer Agent and Registrar of the Company.
This certificate shall be governed by and construed in accordance with the internal laws of the State of New York.
Witness the facsimile signatures of its duly authorized officers.
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By
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Chief Executive Officer
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DISTOKEN ACQUISITION CORPORATION
The Company will furnish without charge to each unitholder who
so requests, a statement of the powers, designations, preferences and relative, participating, optional or other special rights
of each class of shares or series thereof of the Company and the qualifications, limitations, or restrictions of such preferences
and/or rights.
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:
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TEN COM –
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as tenants in common
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UNIF GIFT MIN ACT -
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Custodian
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TEN ENT –
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as tenants by the entireties
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(Cust)
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(Minor)
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JT TEN –
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as joint tenants with right of
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under Uniform Gifts to Minors
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survivorship
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and not as tenants in common
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Act _________________
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(State)
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Additional abbreviations may also be used though not in the
above list.
For value received, hereby sell, assign and transfer
unto
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PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
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(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS,
INCLUDING ZIP CODE, OF ASSIGNEE)
represented by the within Certificate, and do hereby irrevocably
constitute and appoint
Attorney to transfer the said Units on the register of members
of the within named Company with full power of substitution in the premises.
Dated:
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Notice: The signature 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.
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Signature(s) Guaranteed:
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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 (OR ANY SUCCESSOR RULE) UNDER THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED).
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In each case, as more fully described in the Company’s
final prospectus dated [●], 2020, 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 its initial public offering only in the event that (i) the Company
redeems the Class A ordinary shares sold in its initial public offering and liquidates because it does not consummate an initial
business combination by a date calculated by reference to the Company’s amended and restated memorandum and articles of association,
(ii) the Company redeems the Class A ordinary shares sold in its initial public offering in connection with a shareholder vote
to amend the Company’s amended and restated memorandum and articles of association (a) to modify the substance or timing
of the Company’s obligation to redeem 100% of the Class A ordinary shares if it does not consummate an initial business combination
by a date calculated by reference to the Company’s amended and restated memorandum and articles of association or (b) with
respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, or (iii) if
the holder(s) seek(s) to redeem for cash his, her or its respective Class A ordinary shares in connection with a tender offer (or
proxy solicitation, solely in the event the Company seeks shareholder approval of the proposed initial business combination) setting
forth the details of a proposed initial business combination. In no other circumstances shall the holder(s) have any right or interest
of any kind in or to the trust account.
Exhibit 4.2
DISTOKEN ACQUISITION CORPORATION
INCORPORATED UNDER THE LAWS OF THE CAYMAN
ISLANDS
CLASS A ORDINARY SHARES
SEE REVERSE FOR
CERTAIN DEFINITIONS
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This Certifies that is the owner of
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CUSIP G27740 110
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FULLY PAID AND NON-ASSESSABLE CLASS A
ORDINARY SHARES OF THE PAR VALUE OF
US$0.0001 EACH OF
DISTOKEN ACQUISITION CORPORATION
(THE “COMPANY”)
subject to the Amended and Restated Memorandum
and Articles of Association of the Company and transferable on
the register of members of the Company in person or by duly authorized
attorney upon surrender of this certificate
properly endorsed.
The Company will be forced to redeem
all of its Class A ordinary shares if it is unable to complete a business
combination by a date calculated by reference to the
Company’s amended and restated memorandum and articles of
association, all as more fully described in the Company’s
final prospectus dated [●], 2020.
This certificate is not valid unless
countersigned by the Transfer Agent and registered by the Registrar.
Witness the facsimile seal of the Company
and the facsimile signatures of its duly authorized officers.
Dated:
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:
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TEN COM –
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as tenants in common
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UNIF GIFT MIN ACT -
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Custodian
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TEN ENT –
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as tenants by the entireties
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(Cust)
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(Minor)
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JT TEN –
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as joint tenants with right of
survivorship and not as
tenants in common
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under Uniform Gifts to Minors
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Act_________________
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(State)
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Additional abbreviations may also be used
though not in the above list.
DISTOKEN ACQUISITION CORPORATION
The Company will furnish without charge to each shareholder
who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class
of shares 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 amended and restated memorandum
and articles of association and all amendments thereto and resolutions of the Company’s 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.
For value received, hereby
sell, assign and transfer unto
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(PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE(S))
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(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS(ES),
INCLUDING ZIP CODE, OF ASSIGNEE(S))
represented by the within Certificate, and does hereby irrevocably
constitute and appoint
_________________________________________________________________________________________Attorney
to transfer the said shares on the register of members of the within named Company with full power of substitution in the premises.
Dated
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Notice:
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The
signature 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.
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Signature(s) Guaranteed:
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION PROGRAM,
PURSUANT TO S.E.C. RULE 17Ad-15) (OR ANY SUCCESSOR RULE) UNDER
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED).
In each case, as more fully described in the
Company’s final prospectus dated [●], 2020, 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 its initial public offering only in
the event that (i) the Company redeems the Class A ordinary shares sold in its initial public offering and liquidates because
it does not consummate an initial business combination by a date calculated by reference to the Company’s amended and
restated memorandum and articles of association, (ii) the Company redeems the Class A ordinary shares sold in its initial
public offering in connection with a shareholder vote to amend the Company’s amended and restated memorandum and
articles of association (a) to modify the substance or timing of the Company’s obligation to redeem 100% of the Class A
ordinary shares if it does not consummate an initial business combination by a date calculated by reference to the
Company’s amended and restated memorandum and articles of association or (b) with respect to any other provision
relating to shareholders’ rights or pre-initial business combination activity, or (iii) if the holder(s) seek(s) to
redeem for cash his, her or its respective Class A ordinary shares in connection with a tender offer (or proxy solicitation,
solely in the event the Company seeks shareholder approval of the proposed initial business combination) setting forth the
details of a proposed initial business combination. In no other circumstances shall the holder(s) have any right or interest
of any kind in or to the trust account.
Exhibit
4.3
[Form of Warrant Certificate]
[FACE]
Number
WARRANTS
THIS WARRANT SHALL BE VOID IF NOT EXERCISED PRIOR TO
THE EXPIRATION OF THE EXERCISE PERIOD PROVIDED FOR
IN THE WARRANT AGREEMENT DESCRIBED BELOW
DISTOKEN ACQUISITION CORPORATION
Incorporated Under the Laws of the Cayman Islands
CUSIP G27740 102
Warrant Certificate
This Warrant Certificate certifies that ,
or registered assigns, is the registered holder of warrant(s) evidenced hereby (the “Warrants” and each,
a “Warrant”) to purchase Class A ordinary shares, $0.0001 par value (“Class A ordinary shares”),
of Distoken Acquisition Corporation, a Cayman Islands exempted company (the “Company”). Each Warrant
entitles the holder, upon exercise during the period set forth in the Warrant Agreement referred to below, to receive from the
Company that number of fully paid and non-assessable Class A ordinary shares as set forth below, at the exercise price (the “Exercise
Price”) as determined pursuant to the Warrant Agreement, payable in lawful money (or through “cashless
exercise” as provided for in the Warrant Agreement) of the United States of America upon surrender of this Warrant
Certificate and payment of the Exercise Price at the office or agency of the Warrant Agent referred to below, subject to the conditions
set forth herein and in the Warrant Agreement. Defined terms used in this Warrant Certificate but not defined herein shall have
the meanings given to them in the Warrant Agreement.
Each Warrant is initially exercisable for one fully paid and
non-assessable Class A ordinary share. No fractional shares will be issued upon exercise of any Warrant. If, upon the exercise
of Warrants, a holder would be entitled to receive a fractional interest in a Class A ordinary share, the Company will, upon exercise,
round down to the nearest whole number the number of Class A ordinary shares to be issued to the Warrant holder. The number of
Class A ordinary shares issuable upon exercise of the Warrants is subject to adjustment upon the occurrence of certain events as
set forth in the Warrant Agreement.
The initial Exercise Price per one Class A ordinary share for
any Warrant is equal to $11.50 per share. The Exercise Price is subject to adjustment upon the occurrence of certain events as
set forth in the Warrant Agreement.
Subject to the conditions set forth in the Warrant Agreement,
the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the end of such Exercise Period,
such Warrants shall become void.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof and such further provisions shall for all purposes have the same effect as though fully
set forth at this place.
This Warrant Certificate shall not be valid unless countersigned
by the Warrant Agent, as such term is used in the Warrant Agreement.
This Warrant Certificate shall be governed by and construed
in accordance with the internal laws of the State of New York.
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DISTOKEN ACQUISITION CORPORATION
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By:
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Name:
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Jian Zhang
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Title:
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Chief Executive Officer
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CONTINENTAL STOCK TRANSFER & TRUST COMPANY, AS WARRANT AGENT
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By:
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Name:
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Title:
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[Form of Warrant Certificate]
[Reverse]
The
Warrants evidenced by this Warrant Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise
to receive Class A ordinary shares and are issued or to be issued pursuant to a Warrant Agreement dated as of [·],
2020 (the “Warrant Agreement”), duly executed and delivered by the Company to Continental Stock Transfer
& Trust Company, a New York corporation, as warrant agent (the “Warrant Agent”), which Warrant Agreement
is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the holders (the words
“holders” or “holder” meaning the Registered Holders or Registered Holder,
respectively) of the Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof upon written request to the
Company. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant
Agreement.
Warrants may be exercised at any time during the Exercise Period
set forth in the Warrant Agreement. The holder of Warrants evidenced by this Warrant Certificate may exercise them by surrendering
this Warrant Certificate, with the form of Election to Purchase set forth hereon properly completed and executed, together with
payment of the Exercise Price as specified in the Warrant Agreement (or through “cashless exercise” as
provided for in the Warrant Agreement) at the principal corporate trust office of the Warrant Agent. In the event that upon any
exercise of Warrants evidenced hereby the number of Warrants exercised shall be less than the total number of Warrants evidenced
hereby, there shall be issued to the holder hereof or his, her or its assignee, a new Warrant Certificate evidencing the number
of Warrants not exercised.
Notwithstanding anything else in this Warrant Certificate or
the Warrant Agreement, no Warrant may be exercised unless at the time of exercise (i) a registration statement covering the issuance
of the Class A ordinary shares to be issued upon exercise is effective under the Securities Act and (ii) a prospectus thereunder
relating to the Class A ordinary shares is current, except through “cashless exercise” as provided for
in the Warrant Agreement.
The Warrant Agreement provides that upon the occurrence of certain
events the number of Class A ordinary shares issuable upon exercise of the Warrants set forth on the face hereof may, subject to
certain conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof would be entitled to receive a fractional interest
in a Class A ordinary share, the Company shall, upon exercise, round down to the nearest whole number of Class A ordinary shares
to be issued to the holder of the Warrant.
Warrant Certificates, when surrendered at the principal corporate
trust office of the Warrant Agent by the Registered Holder thereof in person or by legal representative or attorney duly authorized
in writing, may be exchanged, in the manner and subject to the limitations provided in the Warrant Agreement, but without payment
of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor evidencing in the aggregate a like
number of Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in
the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant Certificate, subject
to the limitations provided in the Warrant Agreement, without charge except for any tax or other governmental charge imposed in
connection therewith.
The Company and the Warrant Agent may deem and treat the Registered
Holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of ownership or other writing
hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the holder(s) hereof, and for all other
purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. Neither the Warrants nor
this Warrant Certificate entitles any holder hereof to any rights of a shareholder of the Company.
Election to Purchase
(To Be Executed Upon Exercise of Warrant)
The
undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to receive Class A ordinary
shares and herewith tenders payment for such Class A ordinary shares to the order of Distoken Acquisition Corporation (the “Company”)
in the amount of $[·]
in accordance with the terms hereof. The undersigned requests that a certificate for such Class A ordinary shares be registered
in the name of [·],
whose address is [·]
and that such Class A ordinary shares be delivered to [·]
whose address is [·].
If said number of Class A ordinary shares is less than all of the Class A ordinary shares purchasable hereunder, the undersigned
requests that a new Warrant Certificate representing the remaining balance of such Class A ordinary shares be registered in the
name of [·], whose
address is [·]
and that such Warrant Certificate be delivered to [·],
whose address is [·].
In the event that the Warrant has been called for redemption
by the Company pursuant to Section 6 of the Warrant Agreement and the Company has required cashless exercise pursuant
to Section 6.3 of the Warrant Agreement, the number of Class A ordinary shares that this Warrant is exercisable
for shall be determined in accordance with subsection 3.3.1(b) and Section 6.3 of the Warrant
Agreement.
In the event that the Warrant is a Private Placement Warrant
that is to be exercised on a “cashless” basis pursuant to subsection 3.3.1(c) of the Warrant Agreement,
the number of Class A ordinary shares that this Warrant is exercisable for shall be determined in accordance with subsection
3.3.1(c) of the Warrant Agreement.
In the event that the Warrant is to be exercised on a “cashless”
basis pursuant to Section 7.4 of the Warrant Agreement, the number of Class A ordinary shares that this Warrant
is exercisable for shall be determined in accordance with Section 7.4 of the Warrant Agreement.
In
the event that the Warrant may be exercised, to the extent allowed by the Warrant Agreement, through cashless exercise (i) the
number of Class A ordinary shares that this Warrant is exercisable for would be determined in accordance with the relevant section
of the Warrant Agreement which allows for such cashless exercise and (ii) the holder hereof shall complete the following: The undersigned
hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, through the cashless exercise provisions
of the Warrant Agreement, to receive Class A ordinary shares. If said number of shares is less than all of the Class A ordinary
shares purchasable hereunder (after giving effect to the cashless exercise), the undersigned requests that a new Warrant Certificate
representing the remaining balance of such Class A ordinary shares be registered in the name of [·],
whose address is [·]
and that such Warrant Certificate be delivered to [·],
whose address is [·].
[Signature Page Follows]
Date:
, 20
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(Signature)
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(Address)
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(Tax Identification Number)
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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 (OR ANY SUCCESSOR RULE) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED).
Exhibit 4.4
WARRANT AGREEMENT
between
DISTOKEN ACQUISITION CORPORATION
and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
THIS WARRANT AGREEMENT (this “Agreement”),
dated as of [●], 2020, is by and between Distoken Acquisition Corporation, a Cayman Islands exempted company (the “Company”),
and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (the “Warrant Agent”).
WHEREAS, on [●], 2020 the Company
entered into that certain Sponsor Units Purchase Agreement with Xiaosen Sponsor LLC, a Cayman Islands limited liability company
(the “Sponsor”), pursuant to which the Sponsor agreed to purchase an aggregate of 250,000 units (or up
to 268,000 units if the Over-allotment Option (as defined below) in connection with the Company’s Offering (as defined below)
is exercised in full) simultaneously with the closing of the Offering (and any closing of the Over-allotment Option, if applicable)
(the “Private Placement Units”) at a purchase price of $10.00 per Private Placement Unit, and in connection
therewith, will issue and deliver up to an aggregate of 125,000 warrants (or up to 134,000 units if the Over-allotment Option (as
defined below) in connection with the Company’s Offering (as defined below) is exercised in full) bearing the legend set
forth in Exhibit B hereto. Each Private Unit will consist of one Private Share, one right (“Private
Placement Rights”), one-half of one redeemable warrant (“Private Placement Warrants”) and
one right underlying such Private Placement Units (the “Private Placement Rights”). Each Private Placement
Warrant entitles the holder thereof to purchase one Class A ordinary share (as defined below) at a price of $11.50 per share, subject
to adjustment, terms and limitations as described herein. Each Private Placement Right entitles the holder thereof to receive one-tenth
of one Class A ordinary share upon the consummation of an initial business combination; and
WHEREAS, in order to finance the Company’s
transaction costs in connection with an intended initial Business Combination (as defined below), the Sponsor or an affiliate of
the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as the
Company may require, of which up to $1,500,000 of such loans may be convertible into up to an additional 150,000 Private Placement
Units, including 75,000 warrants (the “Working Capital Warrants”) at a price of $10.00 per Private Placement
Unit; and
WHEREAS, the Company is engaged in an initial
public offering (the “Offering”) of units of the Company’s equity securities (the “Units”),
each such Unit comprised of one Class A ordinary share of the Company, par value $0.0001 per share (“Class A ordinary
shares”), one right that entitles the holder thereof to receive one-tenth (1/10) of one Class A Ordinary Share upon
the Company’s Business Combination (the “Public Right” and, together with the Private Placement
Rights, the “Rights”) and one-half of one warrant (the “Public Warrants” and,
together with the Private Placement Warrants and Working Capital Warrants, the “Warrants”), and, in connection
therewith, has determined to issue and deliver up to 2,300,000 Public Warrants (including up to 300,000 Public Warrants subject
to the Over-allotment Option) to public investors in the Offering. Each Public Warrant entitles the holder thereof to purchase
one Class A ordinary share at a price of $11.50 per share, subject to adjustment, terms and limitations as described herein; and
WHEREAS, the Company has filed with the
Securities and Exchange Commission (the “Commission”) a registration statement on Form S-1, File No.
333-248822 (the “Registration Statement”) and prospectus (the “Prospectus”),
for the registration, under the Securities Act of 1933, as amended (the “Securities Act”), of the Units,
the Public Warrants, the Public Rights and the Class A ordinary shares included in the Units; and
WHEREAS, the Company desires the Warrant
Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration,
transfer, exchange, redemption and exercise of the Warrants; and
WHEREAS, the Company desires to provide
for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights,
limitation of rights, and immunities of the Company, the Warrant Agent and the holders of the Warrants; and
WHEREAS, all acts and things have been done
and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf
of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution
and delivery of this Agreement.
NOW, THEREFORE, in consideration of the
mutual agreements herein contained, the parties hereto agree as follows:
1. Appointment
of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant
Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this
Agreement.
2. Warrants.
2.1. Form
of Warrant. Each Warrant shall initially be issued in registered form only.
2.2. Effect
of Countersignature. If a physical certificate is issued, unless and until countersigned by the Warrant Agent pursuant to this
Agreement, a Warrant shall be invalid and of no effect and may not be exercised by the holder thereof.
2.3. Registration.
2.3.1. Warrant
Register. The Warrant Agent shall maintain books (the “Warrant Register”), for the registration of
original issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants, the Warrant Agent
shall issue and register the Warrants in the names of the respective holders thereof in such denominations and otherwise in accordance
with instructions delivered to the Warrant Agent by the Company. Ownership of beneficial interests in the Public Warrants shall
be shown on, and the transfer of such ownership shall be effected through, records maintained by institutions that have accounts
with The Depository Trust Company (the “Depositary”) (such institution, with respect to a Warrant in
its account, a “Participant”).
If the Depositary subsequently ceases to
make its book-entry settlement system available for the Public Warrants, the Company may instruct the Warrant Agent regarding making
other arrangements for book-entry settlement. In the event that the Public Warrants are not eligible for, or it is no longer necessary
to have the Public Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the Depositary
to deliver to the Warrant Agent for cancellation each book-entry Public Warrant, and the Company shall instruct the Warrant Agent
to deliver to the Depositary definitive certificates in physical form evidencing such Warrants which shall be in the form annexed
hereto as Exhibit A.
Physical certificates, if issued, shall
be signed by, or bear the facsimile signature of, the Chairman of the Board, Chief Executive Officer, Chief Financial Officer,
Chief Operating Officer, Secretary or other principal officer of the Company. In the event the person whose facsimile signature
has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such
Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance.
2.3.2. Registered
Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and
treat the person in whose name such Warrant is registered in the Warrant Register (the “Registered Holder”)
as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other
writing on any physical certificate made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise
thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
2.4. Detachability
of Warrants. The Class A ordinary shares and Public Warrants comprising the Units shall begin separate trading on the 90th
day following the date of the Prospectus or, if such 90th day is not on a day, other than a Saturday, Sunday or federal holiday,
on which banks in New York City are generally open for normal business (a “Business Day”), then on the
immediately succeeding Business Day following such date, or earlier (the “Detachment Date”) with the
consent of EarlyBirdCapital, Inc., but in no event shall the Class A ordinary shares, the Public Rights and the Public Warrants
comprising the Units be separately traded until (A) the Company has filed a current report on Form 8-K with the Commission containing
an audited balance sheet reflecting the receipt by the Company of the gross proceeds of the Offering, including the proceeds then
received by the Company from the exercise by the underwriters of their right to purchase additional Units in the Offering (the
“Over-allotment Option”), if the Over-allotment Option is exercised prior to the filing of the Form 8-K,
and (B) the Company issues a press release announcing when such separate trading shall begin.
2.5. No
Fractional Warrants. The Company shall not issue fractional Warrants. If for any reason a holder of Warrants would be entitled
to receive a fractional Warrant, the Company shall round down to the nearest whole number the number of Warrants to be issued to
such holder.
2.6. Private
Placement Warrants and Working Capital Warrants. The Private Placement Warrants and Working Capital Warrants shall be identical
to the Public Warrants, except that so long as they are held by the initial holders or any of their Permitted Transferees (as defined
below): (i) the Private Placement Warrants and Working Capital Warrants may be exercised for cash or on a “cashless basis,”
pursuant to subsection 3.3.1(c) hereof, (ii) the Private Placement Warrants and Working Capital
Warrants (including the Class A ordinary shares issuable upon exercise thereof) may not be transferred, assigned or sold until
thirty (30) days after the completion by the Company of an initial Business Combination, and (iii) the Private Placement Warrants
and Working Capital Warrants shall not be redeemable by the Company; provided, however, that in the case
of clause (ii), such securities may be transferred by the holders thereof:
(a) to the Company’s
officers or directors, any affiliates or family members of any of the Company’s officers or directors, any members of the
Sponsor or any affiliates of the Sponsor;
(b) in the case of an
individual, by gift to a member of the individual’s immediate family, or to a trust, the beneficiary of which is a member
of the individual’s immediate family or 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 the Company’s Business Combination at prices no greater than the price at which
the securities were originally purchased;
(f) in the event of the
Company’s liquidation prior to the Company’s completion of an initial Business Combination;
(g) by virtue of the
laws of the Cayman Islands or the Sponsor’s limited liability company agreement, as amended from time to time, upon termination,
winding-up and liquidation of the Sponsor; and
(h) in the event of
the Company’s completion of a liquidation, merger, amalgamation, share exchange, reorganization or other similar
transaction which results in all of the Company’s shareholders having the right to exchange their Class A ordinary
shares for cash, securities or other property subsequent to the completion of the Company’s initial Business
Combination; provided, however, that, in the case of clauses (a) through (e) and (g), these permitted
transferees (the “Permitted Transferees”) must enter into a written agreement with the Company
agreeing to be bound by the transfer restrictions in this Agreement.
3. Terms
and Exercise of Warrants.
3.1. Warrant
Price. Each Warrant (if in certificated form, when countersigned by the Warrant Agent), shall entitle the Registered Holder
thereof, subject to the provisions of such Warrant and of this Agreement, to purchase from the Company the number of Class A ordinary
shares stated therein, at the price of $11.50 per share, subject to the adjustments provided in Section 4 hereof
and in the last sentence of this Section 3.1. The term “Warrant Price” as used
in this Agreement shall mean the price per share (including in cash or by payment of Warrants pursuant to a “cashless exercise,”
to the extent permitted hereunder) at which Class A ordinary shares may be purchased at the time a Warrant is exercised. The Company
in its sole discretion may lower the Warrant Price at any time prior to the Expiration Date (as defined below) for a period of
not less than twenty (20) Business Days, provided that the Company shall provide at least twenty (20) days prior written notice
of such reduction to Registered Holders of the Warrants and, provided further that any such reduction shall be identical among
all of the Warrants.
3.2. Duration
of Warrants. A Warrant may be exercised only during the period (the “Exercise Period”) commencing
on the later of: (i) the date that is thirty (30) days after the first date on which the Company completes a merger, amalgamation,
share exchange, asset acquisition, share purchase, reorganization or similar business combination, involving the Company and one
or more businesses (a “Business Combination”), and (ii) the date that is twelve (12) months from the
date of the closing of the Offering, and terminating at 5:00 p.m., New York City time, on the earliest to occur of: (x) the date
that is five (5) years after the date on which the Company completes its initial Business Combination, (y) the liquidation of the
Company in accordance with the Company’s amended and restated memorandum and articles of association, as amended from time
to time, if the Company fails to complete a Business Combination, or (z) other than with respect to the Private Placement Warrants
and the Working Capital Warrants to the extent then held by the Sponsor or any of its Permitted Transferees, the Redemption Date
(as defined below) as provided in Section 6.2 hereof (the “Expiration Date”); provided, however,
that the exercise of any Warrant shall be subject to the satisfaction of any applicable conditions, as set forth in subsection 3.3.2 below
with respect to an effective registration statement. Except with respect to the right to receive the Redemption Price (as defined
below) (other than with respect to a Private Placement Warrant or Working Capital Warrant to the extent then held by the Sponsor
or any of its Permitted Transferees) in the event of a redemption (as set forth in Section 6 hereof),
each outstanding Warrant (other than a Private Placement Warrant or Working Capital Warrant to the extent then held by the Sponsor
or any of its Permitted Transferees in the event of a redemption) not exercised on or before the Expiration Date shall become void,
and all rights thereunder and all rights in respect thereof under this Agreement shall cease at 5:00 p.m., New York City time,
on the Expiration Date. The term “outstanding” as used in this Agreement with respect to any securities shall mean
securities that are issued and outstanding. The Company in its sole discretion may extend the duration of the Warrants by delaying
the Expiration Date; provided, that the Company shall provide at least twenty (20) days prior written notice of any
such extension to Registered Holders of the Warrants and, provided further that any such extension shall be identical in duration
among all the Warrants.
3.3. Exercise
of Warrants.
3.3.1. Payment.
Subject to the provisions of the Warrant and this Agreement, a Warrant, (if in certificated form, when countersigned by the Warrant
Agent), may be exercised by the Registered Holder thereof by surrendering it, at the office of the Warrant Agent, or at the office
of its successor as Warrant Agent, in the Borough of Manhattan, City and State of New York, with the subscription form, as set
forth in the Warrant, duly executed (or, in the case of Warrants held through the Depositary in uncertificated or book-entry only
form, through the applicable procedures of the Depositary), and by paying in full the Warrant Price for each Class A ordinary share
as to which the Warrant is exercised and any and all applicable taxes due in connection with the exercise of the Warrant, the exchange
of the Warrant for the Class A ordinary shares and the issuance of such Class A ordinary shares, as follows:
(a) in lawful money of
the United States, in good certified check or wire payable to the Warrant Agent;
(b) in the event of a redemption
pursuant to Section 6 hereof in which the Company’s board of directors (the “Board”)
has elected to require all holders of the Warrants to exercise such Warrants on a “cashless basis,” by surrendering
the Warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number
of Class A ordinary shares underlying the Warrants, multiplied by the excess of the “Fair Market Value” (as defined
in this subsection 3.3.1(b)) over the exercise price of the Warrants by (y) the Fair Market
Value. Solely for purposes of this subsection 3.3.1(b), the “Fair Market Value”
shall mean the average last reported sale price of the Class A ordinary shares for the five (5) trading days ending on the third
trading day prior to the date on which the notice of redemption is sent to the holders of the Warrants, pursuant to Section 6 hereof;
(c) with respect to any Private
Placement Warrant or the Working Capital Warrants, so long as such Private Placement Warrant or the Working Capital Warrant is
held by the Sponsor or any of its Permitted Transferees, by surrendering the Warrants for that number of Class A ordinary shares
equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the Warrants, multiplied
by the excess of the “Fair Market Value” (as defined in this subsection 3.3.1(c))
over the exercise price of the Warrants by (y) the Fair Market Value. Solely for purposes of this subsection 3.3.1(c),
the “Fair Market Value” shall mean the average last reported sale price of the Class A ordinary shares for the five
(5) trading days ending on the third trading day prior to the date on which notice of exercise of the Private Placement Warrant
is sent to the Warrant Agent; or
(d) as provided in Section
7.4 hereof.
3.3.2. Issuance
of Class A Ordinary Shares on Exercise. As soon as practicable after the exercise of any Warrant and the clearance of the funds
in payment of the Warrant Price (if payment is pursuant to subsection 3.3.1(a)), the Company shall
issue to the Registered Holder of such Warrant a book-entry position or certificate, as applicable, for the number of full Class
A ordinary shares to which he, she or it is entitled, registered in such name or names as may be directed by him, her or it on
the register of members of the Company, and if such Warrant shall not have been exercised in full, a new book-entry position or
countersigned Warrant, as applicable, for the number of shares as to which such Warrant shall not have been exercised. Notwithstanding
the foregoing, the Company shall not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Warrant
and shall have no obligation to settle such Warrant exercise unless a registration statement under the Securities Act covering
the issuance of the Class A ordinary shares underlying the Public Warrants is then effective and a prospectus relating thereto
is current, subject to the Company’s satisfying its obligations under Section 7.4. No Warrant
shall be exercisable and the Company shall not be obligated to issue Class A ordinary shares upon exercise of a Warrant unless
the Class A ordinary shares issuable upon such Warrant exercise have been registered, qualified or deemed to be exempt from registration
or qualification under the securities laws of the state of residence of the Registered Holder of the Warrants. In the event that
the conditions in the two immediately preceding sentences are not satisfied with respect to a Warrant, the holder of such Warrant
shall not be entitled to exercise such Warrant and such Warrant may have no value and expire worthless, in which case the purchaser
of a Unit containing such Public Warrants shall have paid the full purchase price for the Unit solely for the Class A ordinary
shares underlying such Unit. In no event will the Company be required to net cash settle any Warrant. The Company may require holders
of Public Warrants to settle the Warrant on a “cashless basis” pursuant to Section 7.4.
If, by reason of any exercise of Warrants on a “cashless basis”, the holder of any Warrant would be entitled, upon
the exercise of such Warrant, to receive a fractional interest in an Class A ordinary shares, the Company shall round down to the
nearest whole number, the number of Class A ordinary shares to be issued to such holder.
3.3.3. Valid
Issuance. All Class A ordinary shares issued upon the proper exercise of a Warrant in conformity with this Agreement and the
Amended and Restated Memorandum and Articles of Association of the Company, following the necessary updates to the Register of
Members of the Company, shall be validly issued as fully paid and non-assessable.
3.3.4. Date
of Issuance. Each person in whose name any book-entry position or certificate, as applicable, for Class A ordinary shares is
issued and who is registered in the register of members of the Company shall for all purposes be deemed to have become the holder
of record of such Class A ordinary shares on the date on which the Warrant, or book-entry position representing such Warrant, was
surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such certificate in the case of
a certificated Warrant, except that, if the date of such surrender and payment is a date when the register of members of the Company
or book-entry system of the Warrant Agent are closed, such person shall be deemed to have become the holder of such Class A ordinary
shares at the close of business on the next succeeding date on which the share transfer books or book-entry system are open.
3.3.5. Maximum
Percentage. A holder of a Warrant may notify the Company in writing in the event it elects to be subject to the provisions
contained in this subsection 3.3.5; however, no holder of a Warrant shall be subject
to this subsection 3.3.5 unless he, she or it makes such election. If the election is made
by a holder, the Warrant Agent shall not effect the exercise of the holder’s Warrant, and such holder shall not have the
right to exercise such Warrant, to the extent that after giving effect to such exercise, such person (together with such person’s
affiliates), to the Warrant Agent’s actual knowledge, would beneficially own in excess of 9.8% (or such other amount as a
holder may specify) (the “Maximum Percentage”) of the Class A ordinary shares outstanding immediately
after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of Class A ordinary shares beneficially
owned by such person and its affiliates shall include the number of Class A ordinary shares issuable upon exercise of the Warrant
with respect to which the determination of such sentence is being made, but shall exclude Class A ordinary shares that would be
issuable upon (x) exercise of the remaining, unexercised portion of the Warrant beneficially owned by such person and its affiliates
and (y) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned
by such person and its affiliates (including, without limitation, any convertible notes or convertible preferred shares or warrants)
subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set forth in the preceding
sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). For purposes of the Warrant, in determining the
number of issued and outstanding Class A ordinary shares, the holder may rely on the number of issued and outstanding Class A ordinary
shares as reflected in (1) the Company’s most recent annual report on Form 10-K, quarterly report on Form 10-Q, current report
on Form 8-K or other public filing with the Commission as the case may be, (2) a more recent public announcement by the Company
or (3) any other notice by the Company or Continental Stock Transfer & Trust Company, as transfer agent (the “Transfer
Agent”), setting forth the number of Class A ordinary shares outstanding. For any reason at any time, upon the written
request of the holder of the Warrant, the Company shall, within two (2) Business Days, confirm orally and in writing to such holder
the number of Class A ordinary shares then outstanding. In any case, the number of issued and outstanding Class A ordinary shares
shall be determined after giving effect to the conversion or exercise of equity securities of the Company by the holder and its
affiliates since the date as of which such number of issued and outstanding Class A ordinary shares was reported. By written notice
to the Company, the holder of a Warrant may from time to time increase or decrease the Maximum Percentage applicable to such holder
to any other percentage specified in such notice; provided, however, that any such increase shall not be
effective until the sixty-first (61st) day after such notice is delivered to the Company.
4. Adjustments.
4.1. Share
Capitalizations.
4.1.1. Sub-Divisions.
If after the date hereof, and subject to the provisions of Section 4.6 below, the number
of issued and outstanding Class A ordinary shares is increased by a capitalization payable in Class A ordinary shares, or by
a sub-division of Class A ordinary shares or other similar event, then, on the effective date of such share capitalization,
sub-division or similar event, the number of Class A ordinary shares issuable on exercise of each Warrant shall be increased
in proportion to such increase in the issued and outstanding Class A ordinary shares. A rights offering to holders of Class A
ordinary shares entitling holders to purchase Class A ordinary shares at a price less than the “Fair Market
Value” (as defined below) shall be deemed a share capitalization of a number of Class A ordinary shares equal to the
product of (i) the number of Class A ordinary shares actually sold in such rights offering (or issuable under any other
equity securities sold in such rights offering that are convertible into or exercisable for Class A ordinary shares)
multiplied by (ii) one (1) minus the quotient of (x) the price per Class A ordinary shares paid in such rights offering
divided by (y) the Fair Market Value. For purposes of this subsection 4.1.1, (i) if the rights
offering is for securities convertible into or exercisable for Class A ordinary shares, in determining the price payable for
Class A ordinary shares, there shall be taken into account any consideration received for such rights, as well as any
additional amount payable upon exercise or conversion and (ii) “Fair Market Value” means the volume weighted
average price of Class A ordinary shares as reported during the ten (10) trading day period ending on the trading day prior
to the first date on which the Class A ordinary shares trade on the applicable exchange or in the applicable market, regular
way, without the right to receive such rights.
4.1.2. Extraordinary
Dividends. If the Company, at any time while the Warrants are outstanding and unexpired, shall pay a dividend or make a distribution
in cash, securities or other assets to the holders of Class A ordinary shares on account of such Class A ordinary shares (or other
securities into which the Warrants are convertible), other than (a) as described in subsection 4.1.1 above,
(b) Ordinary Cash Dividends (as defined below), (c) to satisfy the redemption rights of the holders of Class A ordinary shares
in connection with a proposed initial Business Combination, (d) to satisfy the redemption rights of the holders of Class A ordinary
shares in connection with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association
(i) to modify the substance or timing of the Company’s obligation to redeem 100% of its public shares if the Company does
not complete its initial Business Combination within the required time period or (ii) with respect to any other provision relating
to shareholders’ rights or pre-initial Business Combination activity or (e) in connection with the redemption of public shares
upon the failure of the Company to complete its initial Business Combination and any subsequent distribution of its assets upon
its liquidation (any such non-excluded event being referred to herein as an “Extraordinary Dividend”),
then the Warrant Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, by the
amount of cash and/or the fair market value (as determined by the Board, in good faith) of any securities or other assets paid
on each Class A ordinary shares in respect of such Extraordinary Dividend. For purposes of this subsection 4.1.2,
“Ordinary Cash Dividends” means any cash dividend or cash distribution which, when combined on a per
share basis, with the per share amounts of all other cash dividends and cash distributions paid on the Class A ordinary shares
during the 365-day period ending on the date of declaration of such dividend or distribution (as adjusted to appropriately reflect
any of the events referred to in other subsections of this Section 4 and excluding cash dividends
or cash distributions that resulted in an adjustment to the Warrant Price or to the number of Class A ordinary shares issuable
on exercise of each Warrant) does not exceed $0.50 (being 5% of the offering price of the Units in the Offering). Solely for purposes of illustration, if the Company, at a time while the Warrants are outstanding and
unexpired, pays a cash dividend of $0.35 and previously paid an aggregate of $0.40 of cash dividends and cash distributions on
the Ordinary Shares during the 365-day period ending on the date of declaration of such $0.35 dividend, then the Warrant Price
will be decreased, effectively immediately after the effective date of such $0.35 dividend, by $0.25 (the absolute value of the
difference between $0.75 (the aggregate amount of all cash dividends and cash distributions paid or made in such 365-day period,
including such $0.35 dividend) and $0.50 (the greater of (x) $0.50 and (y) the aggregate amount of all cash dividends and cash
distributions paid or made in such 365-day period prior to such $0.35 dividend)). Furthermore, solely for the purposes of illustration,
if following the closing of the Company’s initial Business Combination, there were total shares outstanding of 100,000,000
and the Company paid a $1.00 dividend to 17,500,000 of such shares (with the remaining 82,500,000 shares waiving their right to
receive such dividend), then no adjustment to the Warrant Price would occur as a $17.5 million dividend payment divided by 100,000,000
shares equals $0.175 per share which is less than $0.50 per share.
4.2. Aggregation
of Shares. If after the date hereof, and subject to the provisions of Section 4.6 hereof,
the number of issued and outstanding Class A ordinary shares is decreased by a consolidation, combination or reclassification of
Class A ordinary shares or other similar event, then, on the effective date of such consolidation, combination, reclassification
or similar event, the number of Class A ordinary shares issuable on exercise of each Warrant shall be decreased in proportion to
such decrease in issued and outstanding Class A ordinary shares.
4.3. Adjustments
in Exercise Price. Whenever the number of Class A ordinary shares purchasable upon the exercise of the Warrants is
adjusted, as provided
in subsection 4.1.1 or Section 4.2 above, the Warrant
Price shall be adjusted (to the nearest cent) by multiplying such Warrant Price immediately prior to such adjustment by a
fraction (x) the numerator of which shall be the number of Class A ordinary shares purchasable upon the exercise of the
Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of Class A ordinary
shares so purchasable immediately thereafter. In addition, if (x) the Company issues additional Class A ordinary shares or
equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at
an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective
issue price to be determined in good faith by the Board, and in the case of any such issuance to the Sponsor, the initial
shareholders (as defined in the Prospectus) or their respective affiliates, without taking into account any founder shares
(as defined in the Prospectus) held by the Sponsor, the initial shareholders or their respective affiliates, as applicable,
prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such
issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the
initial Business Combination on the date of the completion of a the initial Business Combination (net of redemptions), and
(z) the volume weighted average trading price of the Company’s Class A ordinary shares during the 20 trading day period
starting on the trading day prior to the day on which the Company consummates the initial Business Combination (such price,
the “Market Value”) is below $9.20 per share, the Warrant Price will be adjusted (to the nearest
cent) to be equal to 115% of the greater of: (i) the Market Value and (ii) the Newly Issued Price, and the $18.00 per share
Redemption Trigger Price (as defined in Section 6.1) will be adjusted (to the nearest cent) to be equal to 180%
of the greater of: (i) the Market Value and (ii) the Newly Issued Price.
4.4. Replacement
of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the issued and outstanding
Class A ordinary shares (other than a change under Section 4.1 or Section 4.2 hereof
or that solely affects the par value of such Class A ordinary shares), or in the case of any merger or consolidation of the Company
with or into another entity or conversion of the Company as another entity (other than a consolidation or merger in which the Company
is the continuing corporation and that does not result in any reclassification or reorganization of the issued and outstanding
Class A ordinary shares), or in the case of any sale or conveyance to another corporation or entity of the assets or other property
of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the holders of
the Warrants shall thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified
in the Warrants and in lieu of the Class A ordinary shares of the Company immediately theretofore purchasable and receivable upon
the exercise of the rights represented thereby, the kind and amount of shares or stock or other securities or property (including
cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such
sale or transfer, that the holder of the Warrants would have received if such holder had exercised his, her or its Warrant(s) immediately
prior to such event (the “Alternative Issuance”); provided, however, that (i)
if the holders of the Class A ordinary shares were entitled to exercise a right of election as to the kind or amount of securities,
cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets
constituting the Alternative Issuance for which each Warrant shall become exercisable shall be deemed to be the weighted average
of the kind and amount received per share by the holders of the Class A ordinary shares in such consolidation or merger that affirmatively
make such election, and (ii) if a tender, exchange or redemption offer shall have been made to and accepted by the holders of the
Class A ordinary shares (other than a tender, exchange or redemption offer made by the Company in connection with redemption rights
held by shareholders of the Company as provided for in the Company’s amended and restated memorandum and articles of association
or as a result of the repurchase of Class A ordinary shares by the Company if a proposed initial Business Combination is presented
to the shareholders of the Company for approval) under circumstances in which, upon completion of such tender or exchange offer,
the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act (or any successor
rule)) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2
under the Exchange Act (or any successor rule)) and any members of any such group of which any such affiliate or associate is a
part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act (or any successor rule)) more than 50% of the issued
and outstanding Class A ordinary shares, the holder of a Warrant shall be entitled to receive as the Alternative Issuance, the
highest amount of cash, securities or other property to which such holder would actually have been entitled as a shareholder if
such Warrant holder had exercised the Warrant prior to the expiration of such tender or exchange offer, accepted such offer and
all of the Class A ordinary shares held by such holder had been purchased pursuant to such tender or exchange offer, subject to
adjustments (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments
provided for in this Section 4. If any reclassification or reorganization also results in a
change in Class A ordinary shares covered by subsection 4.1.1, then such adjustment shall be made
pursuant to subsection 4.1.1 or Sections 4.2, 4.3 and
this Section 4.4. The provisions of this Section 4.4 shall similarly
apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other transfers. In no event will the
Warrant Price be reduced to less than the par value per share issuable upon exercise of the Warrant.
4.5. Notices
of Changes in Warrant. Upon every adjustment of the Warrant Price or the number of shares issuable upon exercise of a Warrant,
the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from such
adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of a Warrant,
setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Upon the occurrence
of any event specified in Sections 4.1, 4.2, 4.3 or 4.4,
the Company shall give written notice of the occurrence of such event to each holder of a Warrant, at the last address set forth
for such holder in the Warrant Register, of the record date or the effective date of the event. Failure to give such notice, or
any defect therein, shall not affect the legality or validity of such event.
4.6. No
Fractional Shares. Notwithstanding any provision contained in this Agreement to the contrary, the Company shall not issue fractional
shares upon the exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4,
the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the
Company shall, upon such exercise, round down to the nearest whole number the number of Class A ordinary shares to be issued to
such holder.
4.7. Form
of Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4,
and Warrants issued after such adjustment may state the same Warrant Price and the same number of shares as is stated in the Warrants
initially issued pursuant to this Agreement; provided, however, that the Company may at any time in its
sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance
thereof, and any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or
otherwise, may be in the form as so changed.
4.8. Other
Events. In case any event shall occur affecting the Company as to which none of the provisions of the preceding subsections
of this Section 4 are strictly applicable, but which would require an adjustment to the terms
of the Warrants in order to (i) avoid an adverse impact on the Warrants and (ii) effectuate the intent and purpose of
this Section 4, then, in each such case, the Company shall appoint a firm of independent public
accountants, investment banking or other appraisal firm of recognized national standing, which shall give its opinion as to whether
or not any adjustment to the rights represented by the Warrants is necessary to effectuate the intent and purpose of this Section 4 and,
if they determine that an adjustment is necessary, the terms of such adjustment; provided, however, that
under no circumstances shall the Warrants be adjusted pursuant to this Section 4.8 as a result
of any issuance of securities in connection with a Business Combination. The Company shall adjust the terms of the Warrants in
a manner that is consistent with any adjustment recommended in such opinion.
5. Transfer
and Exchange of Warrants.
5.1. Registration
of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant
Register, upon surrender of such Warrant for transfer, in the case of certificated warrants, properly endorsed with signatures
properly guaranteed and accompanied by appropriate instructions for transfer. Upon any such transfer, a new Warrant representing
an equal aggregate number of Warrants shall be issued and the old Warrant shall be cancelled by the Warrant Agent. In the case
of certificated warrants, the Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon
request.
5.2. Procedure
for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or
transfer, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the Registered
Holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however,
that in the event that a Warrant surrendered for transfer bears a restrictive legend (as in the case of the Private Placement Warrants
and Working Capital Warrants), the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange thereof until
the Warrant Agent has received an opinion of counsel for the Company stating that such transfer may be made and indicating whether
the new Warrants must also bear a restrictive legend.
5.3. Fractional
Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange which shall result in
the issuance of a warrant certificate or book-entry position for a fraction of a Warrant, except as part of the Units.
5.4. Service
Charges. No service charge shall be made for any exchange or registration of transfer of Warrants.
5.5. Warrant
Execution and Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the
terms of this Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5,
and the Company, whenever required by the Warrant Agent, shall supply the Warrant Agent with Warrants duly executed on behalf of
the Company for such purpose.
5.6. Transfer
of Warrants. Prior to the Detachment Date, the Public Warrants may be transferred or exchanged only together with the Unit
in which such Warrant is included, and only for the purpose of effecting, or in conjunction with, a transfer or exchange of such
Unit. Furthermore, each transfer of a Unit on the register relating to such Units shall operate also to transfer the Warrants included
in such Unit. Notwithstanding the foregoing, the provisions of this Section 5.6 shall have
no effect on any transfer of Warrants on and after the Detachment Date.
6. Redemption.
6.1. Redemption.
Subject to Section 6.4 hereof, not less than all of the outstanding Warrants may be redeemed,
at the option of the Company, at any time while they are exercisable and prior to their expiration, at the office of the Warrant
Agent, upon notice to the Registered Holders of the Warrants, as described in Section 6.2 below,
at the price of $0.01 per Warrant (the “Redemption Price”), if and only if: (i) the last sales price
of the Class A ordinary shares reported has been at least $18.00 per share (subject to adjustment in compliance with Section 4 hereof)
(the “Redemption Trigger Price”), for any twenty (20) trading days within the thirty (30) trading-day
period commencing after the Public Warrants become exercisable and ending on the third trading day prior to the date on which notice
of the redemption is given; and (ii) there is an effective registration statement covering the Class A ordinary shares issuable
upon exercise of the Warrants, and a current prospectus relating thereto, available throughout the 30-day Redemption Period (as
defined in Section 6.2 below) or the Company has elected to require the exercise of the Warrants
on a “cashless basis” pursuant to subsection 3.3.1.
6.2. Date
Fixed for, and Notice of, Redemption. In the event that the Company elects to redeem all of the Warrants pursuant to Section 6.1,
the Company shall fix a date for the redemption (the “Redemption Date”). Notice of redemption shall be
mailed by first class mail, postage prepaid, by the Company not less than thirty (30) days prior to the Redemption Date (the “30-day
Redemption Period”) to the Registered Holders of the Public Warrants to be redeemed at their last addresses as they
shall appear on the registration books. Any notice mailed in the manner herein provided shall be conclusively presumed to have
been duly given whether or not the Registered Holder received such notice.
6.3. Exercise
After Notice of Redemption. The Warrants may be exercised, for cash (or on a “cashless basis” in accordance with subsection 3.3.1(b) of
this Agreement) at any time after notice of redemption shall have been given by the Company pursuant to Section 6.2 hereof
and prior to the Redemption Date. In the event that the Company determines to require all holders of Warrants to exercise their
Warrants on a “cashless basis” pursuant to subsection 3.3.1, the notice of redemption
shall contain the information necessary to calculate the number of Class A ordinary shares to be received upon exercise of the
Warrants, including the “Fair Market Value” (as such term is defined in subsection 3.3.1(b) hereof)
in such case. On and after the Redemption Date, the record holder of the Warrants shall have no further rights except to receive,
upon surrender of the Warrants, the Redemption Price.
6.4. Exclusion
of Private Placement Warrants and Working Capital Warrants. The Company agrees that the redemption rights provided in this
Section 6 shall not apply to the Private Placement Warrants and Working Capital Warrants if at the time of the redemption
such Private Placement Warrants or Working Capital Warrants continue to be held by the initial holder or any of their Permitted
Transferees. However, once such Private Placement Warrants or Working Capital Warrants are transferred (other than to Permitted
Transferees under Section 2.6), the Company may redeem the Private Placement Warrants and Working
Capital Warrants pursuant to Section 6.1, provided that the criteria for redemption are met, including
the opportunity of the holder of such Private Placement Warrants or Working Capital Warrants to exercise such securities
prior to redemption pursuant to Section 6.3. Private Placement Warrants or Working Capital Warrants
that are transferred to persons other than Permitted Transferees shall thereafter become Public Warrants under this Agreement.
7. Other
Provisions Relating to Rights of Holders of Warrants.
7.1. No
Rights as Shareholder. A Warrant does not entitle the Registered Holder thereof to any of the rights of a shareholder of the
Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights
to vote or to consent or to receive notice as shareholders in respect of the general meetings of the Company or the appointment
of directors of the Company or any other matter.
7.2. Lost,
Stolen, Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant
Agent may on such terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case of a mutilated
Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant so lost, stolen,
mutilated, or destroyed. Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not
the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.
7.3. Reservation
of Class A Ordinary Shares. The Company shall at all times reserve and keep available a number of its authorized but unissued
Class A ordinary shares that shall be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to
this Agreement.
7.4. Registration
of Class A Ordinary Shares; Cashless Exercise at Company’s Option.
7.4.1. Registration
of the Class A Ordinary Shares. The Company agrees that as soon as practicable, but in no event later than fifteen (15) Business
Days after the closing of its initial Business Combination, it shall use its reasonable best efforts to file with the Commission
a registration statement covering the issuance, under the Securities Act, of the Class A ordinary shares issuable upon exercise
of the Warrants. The Company shall use its reasonable best efforts to cause the same to become effective and to maintain the effectiveness
of such registration statement, and a current prospectus relating thereto, until the expiration of the Warrants in accordance with
the provisions of this Agreement. If any such registration statement has not been declared effective by the 60th Business Day following
the closing of the Business Combination, holders of the applicable Warrants shall have the right, during the period beginning on
the 61st Business Day after the closing of the Business Combination and ending upon such registration statement being declared
effective by the Commission, and during any other period when the Company shall fail to have maintained an effective registration
statement covering the Class A ordinary shares issuable upon exercise of the applicable Warrants, to exercise such Warrants on
a “cashless basis,” by exchanging the Warrants (in accordance with Section 3(a)(9) of the Securities Act (or any successor
rule) or another exemption) for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product
of the number of Class A ordinary shares underlying the Warrants, multiplied by the excess of the “Fair Market Value”
(as defined below) over the exercise price of the Warrants by (y) the Fair Market Value. Solely for purposes of this subsection 7.4.1,
“Fair Market Value” shall mean the volume weighted average price of the Class A ordinary shares as reported during
the five (5) trading day period ending on the third trading day prior to the date that notice of exercise is received by the Warrant
Agent from the holder of such Warrants or its securities broker or intermediary. The date that notice of “cashless exercise”
is received by the Warrant Agent shall be conclusively determined by the Warrant Agent. In connection with the “cashless
exercise” of a Public Warrant, the Company shall, upon request, provide the Warrant Agent with an opinion of counsel for
the Company (which shall be an outside law firm with securities law experience) stating that (i) the exercise of the Warrants on
a “cashless basis” in accordance with this subsection 7.4.1 is not required to
be registered under the Securities Act and (ii) the Class A ordinary shares issued upon such exercise shall be freely tradable
under United States federal securities laws by anyone who is not an affiliate (as such term is defined in Rule 144 under the Securities
Act (or any successor rule)) of the Company and, accordingly, shall not be required to bear a restrictive legend. For the avoidance
of any doubt, unless and until all of the Warrants have been exercised or have expired, the Company shall continue to be obligated
to comply with its registration obligations under the first three sentences of this subsection 7.4.1.
8. Concerning
the Warrant Agent and Other Matters.
8.1. Payment
of Taxes. The Company shall from time to time promptly pay all taxes and charges that may be imposed upon the Company or the
Warrant Agent in respect of the issuance or delivery of Class A ordinary shares upon the exercise of the Warrants, but the Company
shall not be obligated to pay any transfer taxes in respect of the Warrants or such shares.
8.2. Resignation,
Consolidation, or Merger of Warrant Agent.
8.2.1. Appointment
of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be
discharged from all further duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the
Company. If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company
shall appoint in writing a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after it has been notified in writing of such resignation or incapacity by
the Warrant Agent or by the holder of a Warrant (who shall, with such notice, submit his, her or its Warrant for inspection
by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New
York for the appointment of a successor Warrant Agent at the Company’s cost. Any successor Warrant Agent, whether
appointed by the Company or by such court, shall be a corporation organized and existing under the laws of the State of New
York, in good standing and having its principal office in the Borough of Manhattan, City and State of New York, and
authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state
authority. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities,
duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder,
without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent
shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the
authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent
the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually
vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and
obligations.
8.2.2. Notice
of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof
to the predecessor Warrant Agent and the Transfer Agent for the Class A ordinary shares not later than the effective date of any
such appointment.
8.2.3. Merger
or Consolidation of Warrant Agent. Any corporation into which the Warrant Agent may be merged or with which it may be consolidated
or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor
Warrant Agent under this Agreement without any further act.
8.3. Fees
and Expenses of Warrant Agent.
8.3.1. Remuneration.
The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder and shall,
pursuant to its obligations under this Agreement, reimburse the Warrant Agent upon demand for all expenditures that the Warrant
Agent may reasonably incur in the execution of its duties hereunder.
8.3.2. Further
Assurances. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged,
and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for
the carrying out or performing of the provisions of this Agreement.
8.4. Liability
of Warrant Agent.
8.4.1. Reliance
on Company Statement. Whenever in the performance of its duties under this Agreement, the Warrant Agent shall deem it necessary
or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a statement signed by the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer,
Secretary or Chairman of the Board of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement
for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement.
8.4.2. Indemnity.
The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith. The Company agrees
to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, out-of-pocket costs and
reasonable counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Agreement, except as a result
of the Warrant Agent’s gross negligence, willful misconduct or bad faith.
8.4.3. Exclusions.
The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or
execution of any Warrant (except its countersignature thereof). The Warrant Agent shall not be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any Warrant. The Warrant Agent shall not be responsible
to make any adjustments required under the provisions of Section 4 hereof or responsible for
the manner, method, or amount of any such adjustment or the ascertaining of the existence of facts that would require any such
adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation
of any Class A ordinary shares to be issued pursuant to this Agreement or any Warrant or as to whether any Class A ordinary shares
shall, when issued, be valid and fully paid and non-assessable.
8.5. Acceptance
of Agency. The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the
terms and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants exercised
and concurrently account for, and pay to the Company, all monies received by the Warrant Agent for the purchase of Class A ordinary
shares through the exercise of the Warrants.
8.6. Waiver.
The Warrant Agent has no right of set-off or any other right, title, interest or claim of any kind (“Claim”)
in, or to any distribution of, the Trust Account (as defined in that certain Investment Management Trust Agreement, dated as of
the date hereof, by and between the Company and Continental Stock Transfer & Trust Company as trustee thereunder) and hereby
agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the Trust Account for any reason whatsoever.
The Warrant Agent hereby waives any and all Claims against the Trust Account and any and all rights to seek access to the Trust
Account.
9. Miscellaneous
Provisions.
9.1. Successors.
All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure
to the benefit of their respective successors and assigns.
9.2. Notices.
Any notice, statement or demand authorized by this Agreement to be given or made by the Warrant Agent or by the holder of any Warrant
to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail
or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address
is filed in writing by the Company with the Warrant Agent), as follows:
Distoken Acquisition Corporation
Unit 1006, Block C, Jinshangjun Park
No. 2 Xiaoba Road, Panlong District
Kunming, Yunnan, China
Attention: Chief Financial Officer
Any notice, statement or demand authorized by this Agreement
to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given when
so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after
deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company),
as follows:
Continental Stock Transfer & Trust Company
One State Street, 30th Floor
New York, New York 10004
Attention: Compliance Department
In each case, with copies to:
EarlyBirdCapital, Inc.
366 Madison Avenue, 8th Floor
New York, NY 10017
Attn.: Steven Levine and Michael Powell
Email: slevine@ebcap.com
mpowell@ebcap.com
9.3. Applicable
Law. The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all respects
by the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application
of the substantive laws of another jurisdiction. The Company hereby agrees that any action, proceeding or claim against it arising
out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United
States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall
be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient
forum.
9.4. Persons
Having Rights under this Agreement. Nothing in this Agreement shall be construed to confer upon, or give to, any person or
corporation other than the parties hereto and the Registered Holders of the Warrants any right, remedy, or claim under or by reason
of this Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations,
promises, and agreements contained in this Agreement shall be for the sole and exclusive benefit of the parties hereto and their
successors and assigns and of the Registered Holders of the Warrants.
9.5. Examination
of the Warrant Agreement. A copy of this Agreement shall be available at all reasonable times at the office of the Warrant
Agent in the Borough of Manhattan, City and State of New York, for inspection by the Registered Holder of any Warrant. The Warrant
Agent may require any such holder to submit such holder’s Warrant for inspection by the Warrant Agent.
9.6. Counterparts.
This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
9.7. Effect
of Headings. The section headings herein are for convenience only and are not part of this Agreement and shall not affect the
interpretation thereof.
9.8. Amendments.
This Agreement may be amended by the parties hereto without the consent of any Registered Holder for the purpose of curing any
ambiguity, or curing, correcting or supplementing any defective provision contained herein or adding or changing any other provisions
with respect to matters or questions arising under this Agreement as the parties may deem necessary or desirable and that the parties
deem shall not adversely affect the interest of the Registered Holders. All other modifications or amendments, including any amendment
to increase the Warrant Price or shorten the Exercise Period and any amendment to the terms of only the Private Placement Warrants,
shall require the vote or written consent of a majority of the Registered Holders of the then outstanding Public Warrants. Notwithstanding
the foregoing, the Company may lower the Warrant Price or extend the duration of the Exercise Period pursuant to Sections 3.1 and 3.2,
respectively, without the consent of the Registered Holders.
9.9. Severability.
This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid
or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision
as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
Exhibit A Form of Warrant Certificate
Exhibit B Legend
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the date first above written.
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DISTOKEN ACQUISITION CORPORATION
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By:
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Name: Jian Zhang
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Title: Chief Executive Officer
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CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Warrant Agent
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By:
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Name:
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Title:
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[Signature Page - Warrant Agreement]
EXHIBIT A
[Form of Warrant Certificate]
[FACE]
Number
WARRANTS
THIS WARRANT SHALL BE VOID IF NOT EXERCISED PRIOR TO
THE EXPIRATION OF THE EXERCISE PERIOD PROVIDED FOR
IN THE WARRANT AGREEMENT DESCRIBED BELOW
DISTOKEN ACQUISITION CORPORATION
Incorporated Under the Laws of the Cayman Islands
CUSIP G27740 102
Warrant Certificate
This Warrant Certificate certifies that ,
or registered assigns, is the registered holder of warrant(s) evidenced hereby (the “Warrants” and each,
a “Warrant”) to purchase Class A ordinary shares, $0.0001 par value (“Class A ordinary shares”),
of Distoken Acquisition Corporation, a Cayman Islands exempted company (the “Company”). Each Warrant
entitles the holder, upon exercise during the period set forth in the Warrant Agreement referred to below, to receive from the
Company that number of fully paid and non-assessable Class A ordinary shares as set forth below, at the exercise price (the “Exercise
Price”) as determined pursuant to the Warrant Agreement, payable in lawful money (or through “cashless
exercise” as provided for in the Warrant Agreement) of the United States of America upon surrender of this Warrant
Certificate and payment of the Exercise Price at the office or agency of the Warrant Agent referred to below, subject to the conditions
set forth herein and in the Warrant Agreement. Defined terms used in this Warrant Certificate but not defined herein shall have
the meanings given to them in the Warrant Agreement.
Each Warrant is initially exercisable for one fully paid and
non-assessable Class A ordinary share. No fractional shares will be issued upon exercise of any Warrant. If, upon the exercise
of Warrants, a holder would be entitled to receive a fractional interest in a Class A ordinary share, the Company will, upon exercise,
round down to the nearest whole number the number of Class A ordinary shares to be issued to the Warrant holder. The number of
Class A ordinary shares issuable upon exercise of the Warrants is subject to adjustment upon the occurrence of certain events as
set forth in the Warrant Agreement.
The initial Exercise Price per one Class A ordinary share for
any Warrant is equal to $11.50 per share. The Exercise Price is subject to adjustment upon the occurrence of certain events as
set forth in the Warrant Agreement.
Subject to the conditions set forth in the Warrant Agreement,
the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the end of such Exercise Period,
such Warrants shall become void.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof and such further provisions shall for all purposes have the same effect as though fully
set forth at this place.
This Warrant Certificate shall not be valid unless countersigned
by the Warrant Agent, as such term is used in the Warrant Agreement.
This Warrant Certificate shall be governed by and construed
in accordance with the internal laws of the State of New York.
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DISTOKEN ACQUISITION CORPORATION
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By:
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Name:
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Jian Zhang
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Title:
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Chief Executive Officer
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CONTINENTAL STOCK TRANSFER & TRUST COMPANY, AS WARRANT AGENT
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By:
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Name:
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Title:
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[Form of Warrant Certificate]
[Reverse]
The
Warrants evidenced by this Warrant Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise
to receive Class A ordinary shares and are issued or to be issued pursuant to a Warrant Agreement dated as of [·],
2020 (the “Warrant Agreement”), duly executed and delivered by the Company to Continental Stock Transfer
& Trust Company, a New York corporation, as warrant agent (the “Warrant Agent”), which Warrant Agreement
is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the holders (the words
“holders” or “holder” meaning the Registered Holders or Registered Holder,
respectively) of the Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof upon written request to the
Company. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant
Agreement.
Warrants may be exercised at any time during the Exercise Period
set forth in the Warrant Agreement. The holder of Warrants evidenced by this Warrant Certificate may exercise them by surrendering
this Warrant Certificate, with the form of Election to Purchase set forth hereon properly completed and executed, together with
payment of the Exercise Price as specified in the Warrant Agreement (or through “cashless exercise” as
provided for in the Warrant Agreement) at the principal corporate trust office of the Warrant Agent. In the event that upon any
exercise of Warrants evidenced hereby the number of Warrants exercised shall be less than the total number of Warrants evidenced
hereby, there shall be issued to the holder hereof or his, her or its assignee, a new Warrant Certificate evidencing the number
of Warrants not exercised.
Notwithstanding anything else in this Warrant Certificate or
the Warrant Agreement, no Warrant may be exercised unless at the time of exercise (i) a registration statement covering the issuance
of the Class A ordinary shares to be issued upon exercise is effective under the Securities Act and (ii) a prospectus thereunder
relating to the Class A ordinary shares is current, except through “cashless exercise” as provided for
in the Warrant Agreement.
The Warrant Agreement provides that upon the occurrence of certain
events the number of Class A ordinary shares issuable upon exercise of the Warrants set forth on the face hereof may, subject to
certain conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof would be entitled to receive a fractional interest
in a Class A ordinary share, the Company shall, upon exercise, round down to the nearest whole number of Class A ordinary shares
to be issued to the holder of the Warrant.
Warrant Certificates, when surrendered at the principal corporate
trust office of the Warrant Agent by the Registered Holder thereof in person or by legal representative or attorney duly authorized
in writing, may be exchanged, in the manner and subject to the limitations provided in the Warrant Agreement, but without payment
of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor evidencing in the aggregate a like
number of Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in
the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant Certificate, subject
to the limitations provided in the Warrant Agreement, without charge except for any tax or other governmental charge imposed in
connection therewith.
The Company and the Warrant Agent may deem and treat the Registered
Holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of ownership or other writing
hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the holder(s) hereof, and for all other
purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. Neither the Warrants nor
this Warrant Certificate entitles any holder hereof to any rights of a shareholder of the Company.
Election to Purchase
(To Be Executed Upon Exercise of Warrant)
The
undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to receive Class A ordinary
shares and herewith tenders payment for such Class A ordinary shares to the order of Distoken Acquisition Corporation (the “Company”)
in the amount of $[·]
in accordance with the terms hereof. The undersigned requests that a certificate for such Class A ordinary shares be registered
in the name of [·],
whose address is [·]
and that such Class A ordinary shares be delivered to [·]
whose address is [·].
If said number of Class A ordinary shares is less than all of the Class A ordinary shares purchasable hereunder, the undersigned
requests that a new Warrant Certificate representing the remaining balance of such Class A ordinary shares be registered in the
name of [·], whose
address is [·]
and that such Warrant Certificate be delivered to [·],
whose address is [·].
In the event that the Warrant has been called for redemption
by the Company pursuant to Section 6 of the Warrant Agreement and the Company has required cashless exercise pursuant
to Section 6.3 of the Warrant Agreement, the number of Class A ordinary shares that this Warrant is exercisable
for shall be determined in accordance with subsection 3.3.1(b) and Section 6.3 of the Warrant
Agreement.
In the event that the Warrant is a Private Placement Warrant
that is to be exercised on a “cashless” basis pursuant to subsection 3.3.1(c) of the Warrant Agreement,
the number of Class A ordinary shares that this Warrant is exercisable for shall be determined in accordance with subsection
3.3.1(c) of the Warrant Agreement.
In the event that the Warrant is to be exercised on a “cashless”
basis pursuant to Section 7.4 of the Warrant Agreement, the number of Class A ordinary shares that this Warrant
is exercisable for shall be determined in accordance with Section 7.4 of the Warrant Agreement.
In
the event that the Warrant may be exercised, to the extent allowed by the Warrant Agreement, through cashless exercise (i) the
number of Class A ordinary shares that this Warrant is exercisable for would be determined in accordance with the relevant section
of the Warrant Agreement which allows for such cashless exercise and (ii) the holder hereof shall complete the following: The undersigned
hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, through the cashless exercise provisions
of the Warrant Agreement, to receive Class A ordinary shares. If said number of shares is less than all of the Class A ordinary
shares purchasable hereunder (after giving effect to the cashless exercise), the undersigned requests that a new Warrant Certificate
representing the remaining balance of such Class A ordinary shares be registered in the name of [·],
whose address is [·]
and that such Warrant Certificate be delivered to [·],
whose address is [·].
[Signature Page Follows]
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Date:
, 20
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(Signature)
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(Address)
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(Tax Identification Number)
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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 (OR ANY SUCCESSOR RULE) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED).
EXHIBIT B
LEGEND
“THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES
LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. IN ADDITION, SUBJECT TO ANY ADDITIONAL LIMITATIONS ON TRANSFER DESCRIBED IN
THE LETTER AGREEMENT BY AND AMONG DISTOKEN ACQUISITION CORPORATION (THE “COMPANY”), XIAOSEN SPONSOR LLC AND THE OTHER
PARTIES THERETO, THE SECURITIES REPRESENTED HEREBY MAY NOT BE SOLD OR TRANSFERRED PRIOR TO THE DATE THAT IS THIRTY (30) DAYS AFTER
THE DATE UPON WHICH THE COMPANY COMPLETES ITS INITIAL BUSINESS COMBINATION (AS DEFINED IN SECTION 3 OF THE WARRANT
AGREEMENT REFERRED TO HEREIN) EXCEPT TO A PERMITTED TRANSFEREE (AS DEFINED IN SECTION 2 OF THE WARRANT AGREEMENT) WHO AGREES IN
WRITING WITH THE COMPANY TO BE SUBJECT TO SUCH TRANSFER PROVISIONS.
SECURITIES EVIDENCED HEREBY AND CLASS A
ORDINARY SHARES OF THE COMPANY ISSUED UPON EXERCISE OF SUCH SECURITIES SHALL BE ENTITLED TO REGISTRATION RIGHTS UNDER A REGISTRATION
RIGHTS AGREEMENT TO BE EXECUTED BY THE COMPANY.”
Exhibit 4.5
RIGHTS AGREEMENT
This Rights Agreement
(this “Agreement”) is made as of [ ], 2020 between Distoken Acquisition Corporation,
a Cayman Islands exempted company with number 363925, with offices at Unit 1006, Block C, Jinshangjun Park, No. 2 Xiaoba Road,
Panlong District, Kunming, Yunnan, China (the “Company”), and Continental Stock Transfer & Trust Company, a New
York corporation, with offices at One State Street, 30th Floor, New York, New York 10004 (“Rights Agent”).
WHEREAS, the Company
has received binding commitments from its sponsor (as defined in the Registration Statement) to purchase up to 268,000 units, each
unit (“Unit”) comprised of one Class A ordinary share with par value $0.0001 per share in the Company (“Class
A Ordinary Share”), one-half of one warrant to purchase one Class A Ordinary Share (“Warrant”) and one right
to receive one-tenth of one Ordinary, subject to adjustment, upon the happening of the triggering event described herein (“Right”),
and in connection therewith, will issue and deliver up to an aggregate of 268,000 Rights as part of such Units upon consummation
of such private placement (the “Private Offering”); and
WHEREAS, the Company
is engaged in a public offering (“Public Offering”) of Units and, in connection therewith, will issue and deliver up
to 4,600,000 Rights to the public investors; and
WHEREAS, the Company
has filed with the Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-1, File No. 248822
(“Registration Statement”), and related Prospectus (“Prospectus”) for the registration, under the Securities
Act of 1933, as amended (“Act”), of, among other securities, the Rights and the Class A Ordinary Shares issuable to
the holders of the Rights; and
WHEREAS, the Company
desires the Rights Agent to act on behalf of the Company, and the Rights Agent is willing to so act, in connection with the issuance,
registration, transfer and exchange of the Rights; and
WHEREAS, the Company
desires to provide for the form and provisions of the Rights, the terms upon which they shall be issued, and the respective rights,
limitation of rights, and immunities of the Company, the Rights Agent, and the holders of the Rights; and
WHEREAS, all acts and
things have been done and performed which are necessary to make the Rights, when executed on behalf of the Company and countersigned
by or on behalf of the Rights Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize
the execution and delivery of this Agreement.
NOW, THEREFORE, in
consideration of the mutual agreements herein contained, the parties hereto agree as follows:
1. Appointment
of Rights Agent. The Company hereby appoints the Rights Agent to act as agent for the Company for the Rights, and the Rights
Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this
Agreement.
2. Rights.
2.1. Form
of Right. Each Right shall be issued in registered form only, shall be in substantially the form of Exhibit A hereto, the provisions
of which are incorporated herein and shall be signed by, or bear the facsimile signature of, the Chairman of the Board or Chief
Executive Officer and the Secretary of the Company and shall bear a facsimile of the Company’s seal. In the event the person
whose facsimile signature has been placed upon any Right shall have ceased to serve in the capacity in which such person signed
the Right before such Right is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date
of issuance.
2.2. Effect
of Countersignature. Unless and until countersigned by the Rights Agent pursuant to this Agreement, a Right shall be invalid
and of no effect and may not be exchanged for Class A Ordinary Shares.
2.3. Registration.
2.3.1. Right
Register. The Rights Agent shall maintain books (“Right Register”) for the registration of original issuance and
the registration of transfer of the Rights. Upon the initial issuance of the Rights, the Rights Agent shall issue and register
the Rights in the names of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered
to the Rights Agent by the Company.
2.3.2. Registered
Holder. Prior to due presentment for registration of transfer of any Right, the Company and the Rights Agent may deem and treat
the person in whose name such Right shall be registered upon the Right Register (“registered holder”) as the absolute
owner of such Right and of each Right represented thereby (notwithstanding any notation of ownership or other writing on the Right
Certificate made by anyone other than the Company or the Rights Agent), for the purpose of the exchange thereof, and for all other
purposes, and neither the Company nor the Rights Agent shall be affected by any notice to the contrary.
2.4. Detachability
of Rights. The securities comprising the Units, including the Rights, will not be separately transferable until the earlier
to occur of: (i) the 90th day following the date of the Prospectus or (ii) the announcement by EarlyBirdCapital, Inc., as
representative of the underwriters in the Public Offering, of its intention to allow separate earlier trading, except that in no
event will the securities comprising the Units be separately tradeable until the Company files a Current Report on Form 8-K with
the SEC which includes an audited balance sheet reflecting the receipt by the Company of the gross proceeds of the Public Offering
including the proceeds received by the Company from the exercise of the over-allotment option, if the over-allotment option is
exercised by the date thereof and the Company issues a press release and files a Current Report on Form 8-K with the SEC announcing
when such separate trading shall begin.
3. Terms
and Exchange of Rights
3.1. Rights.
Each Right shall entitle the holder thereof to receive one-tenth of one Class A Ordinary Share upon the happening of an Exchange
Event (defined below). No additional consideration shall be paid by a holder of Rights in order to receive his, her or its Class
A Ordinary Shares upon an Exchange Event as the purchase price for such Class A Ordinary Shares has been included in the purchase
price for the Units. In no event will the Company be required to net cash settle the Rights or issue fractional Ordinary Shares.
3.2. Exchange
Event. An “Exchange Event” shall occur upon the Company’s consummation of an initial Business Combination
(as defined in the Company’s Amended and Restated Memorandum and Articles of Association).
3.3. Exchange
of Rights.
3.3.1. Issuance
of Ordinary Shares. As soon as practicable upon the occurrence of an Exchange Event, the Company shall direct holders of the
Rights to return their Rights Certificates to the Rights Agent. Upon receipt of a valid Rights Certificate, the Company shall issue
to the registered holder of such Right(s) the number of full Ordinary Shares to which he, she or it is entitled, registered in
such name or names as may be directed by him, her or it and issue to such registered holder(s) a certificate or book-entry position
for the such shares. Notwithstanding the foregoing, or any provision contained in this Agreement to the contrary, in no event will
the Company be required to net cash settle the Rights. The Company shall not issue fractional shares upon exchange of Rights. In
the event that any holder would otherwise be entitled to any fractional share upon exchange of Rights, at the time of an Exchange
Event, the Company will instruct the Right Agent how any such entitlement will be addressed. To the fullest extent permitted by
the Company's Amended and Restated Memorandum and Articles of Association the Company reserves the right to deal with any such
fractional entitlement at the relevant time in any manner permitted by the Act and the Amended and Restated Memorandum and Articles,
which would include the rounding down of any entitlement to receive Ordinary Shares to the nearest whole share (and in effect extinguishing
any fractional entitlement), or the holder being entitled to hold any remaining fractional entitlement (without any share being
issued) and to aggregate the same with any future fractional entitlement to receive shares in the Company until the holder is entitled
to receive a whole number. Any rounding down and extinguishment may be done with or without any in lieu cash payment or other compensation
being made to the holder of the relevant Rights, such that value received on exchange of the Rights may be considered less than
the value that the holder would otherwise expect to receive.
3.3.2. Valid
Issuance. All Ordinary Shares issued upon an Exchange Event in conformity with this Agreement and the Amended and Restated
Memorandum and Articles of Association of the Company shall be validly issued, fully paid and nonassessable.
3.3.3. Date
of Issuance. Each person in whose name any such certificate or book-entry position for Ordinary Shares is issued shall for
all purposes be deemed to have become the holder of record of such shares on the date of the Exchange Event, irrespective of the
date of delivery of such certificate or entry of position.
3.3.4 Company
Not Surviving Following Exchange Event. Upon an Exchange Event in which the Company does not continue as the publicly held
reporting entity, the definitive agreement will provide for the holders of Rights to receive the same per share consideration the
holders of the Ordinary Shares will receive in such transaction, for the number of shares such holder is entitled to pursuant to
Section 3.3.1 above. If the Company does not continue as the publicly held reporting entity upon an Exchange Event, each holder
of a Right will be required to affirmatively convert his/her or its rights in order to receive the 1/10 share underlying each right
(without paying any additional consideration) upon consummation of the Exchange Event. In such a case, each holder of a Right will
be required to indicate his, her or its election to convert the Rights into underlying shares as well as to return the original
certificates evidencing the Rights to the Company.
3.5 Duration
of Rights. If an Exchange Event does not occur within the time period set forth in the Company’s Amended and Restated
Memorandum and Articles of Association, as the same may be amended from time to time, the Rights shall expire and shall be worthless.
4. Transfer
and Exchange of Rights.
4.1. Registration
of Transfer. The Rights Agent shall register the transfer, from time to time, of any outstanding Right upon the Right Register,
upon surrender of such Right for transfer, properly endorsed with signatures properly guaranteed and accompanied by appropriate
instructions for transfer. Upon any such transfer, a new Right representing an equal aggregate number of Rights shall be issued
and the old Right shall be cancelled by the Rights Agent. The Rights so cancelled shall be delivered by the Rights Agent to the
Company from time to time upon request.
4.2. Procedure
for Surrender of Rights. Rights may be surrendered to the Rights Agent, together with a written request for exchange or transfer,
and thereupon the Rights Agent shall issue in exchange therefor one or more new Rights as requested by the registered holder of
the Rights so surrendered, representing an equal aggregate number of Rights; provided, however, that in the event that a Right
surrendered for transfer bears a restrictive legend and the new Rights to be issued will not bear a restrictive legend, the Rights
Agent shall not cancel such Right and issue new Rights in exchange therefor until the Rights Agent has received an opinion of counsel
for the Company stating that such transfer may be made and indicating no restrictive legend is required.
4.3. Fractional
Rights. The Rights Agent shall not be required to effect any registration of transfer or exchange which will result in the
issuance of a Right Certificate for a fraction of a Right.
4.4. Service
Charges. No service charge shall be made for any exchange or registration of transfer of Rights.
4.5. Right
Execution and Countersignature. The Rights Agent is hereby authorized to countersign and to deliver, in accordance with the
terms of this Agreement, the Rights required to be issued pursuant to the provisions of this Section 4, and the Company, whenever
required by the Rights Agent, will supply the Rights Agent with Rights duly executed on behalf of the Company for such purpose.
5. Other
Provisions Relating to Rights of Holders of Rights.
5.1. No
Rights as Shareholder. Until exchange of a Right for Ordinary Shares as provided for herein, a Right does not entitle the
registered holder thereof to any of the rights of a shareholder of the Company, including, without limitation, the right to
receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as
shareholders in respect of the meetings of shareholders or the election of directors of the Company or any other
matter.
5.2. Lost,
Stolen, Mutilated, or Destroyed Rights. If any Right is lost, stolen, mutilated, or destroyed, the Company and the Rights Agent
may on such terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case of a mutilated
Right, include the surrender thereof), issue a new Right of like denomination, tenor, and date as the Right so lost, stolen, mutilated,
or destroyed. Any such new Right shall constitute a substitute contractual obligation of the Company, whether or not the allegedly
lost, stolen, mutilated, or destroyed Right shall be at any time enforceable by anyone.
5.3. Reservation
of Ordinary Shares. The Company shall at all times reserve and keep available a number of its authorized but unissued Ordinary
Shares that will be sufficient to permit the exchange of all outstanding Rights issued pursuant to this Agreement.
6. Concerning
the Rights Agent and Other Matters.
6.1. Payment
of Taxes. The Company will from time to time promptly pay all taxes and charges that may be imposed upon the Company or the
Rights Agent in respect of the issuance or delivery of Ordinary Shares upon the exchange of Rights, but the Company shall not be
obligated to pay any transfer taxes in respect of the Rights or such Ordinary Shares.
6.2. Resignation,
Consolidation, or Merger of Rights Agent.
6.2.1. Appointment
of Successor Rights Agent. The Rights Agent, or any successor to it hereafter appointed, may resign its duties and be discharged
from all further duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the Company. If the
office of the Rights Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing
a successor Rights Agent in place of the Rights Agent. If the Company shall fail to make such appointment within a period of 30
days after it has been notified in writing of such resignation or incapacity by the Rights Agent or by the holder of the Right
(who shall, with such notice, submit his, her or its Right for inspection by the Company), then the holder of any Right may apply
to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Rights Agent at the
Company’s cost. Any successor Rights Agent, whether appointed by the Company or by such court, shall be a corporation organized
and existing under the laws of the State of New York, in good standing and having its principal office in the Borough of Manhattan,
City and State of New York, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination
by federal or state authority. After appointment, any successor Rights Agent shall be vested with all the authority, powers, rights,
immunities, duties, and obligations of its predecessor Rights Agent with like effect as if originally named as Rights Agent hereunder,
without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Rights Agent shall
execute and deliver, at the expense of the Company, an instrument transferring to such successor Rights Agent all the authority,
powers, and rights of such predecessor Rights Agent hereunder; and upon request of any successor Rights Agent the Company shall
make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming
to such successor Rights Agent all such authority, powers, rights, immunities, duties, and obligations.
6.2.2. Notice
of Successor Rights Agent. In the event a successor Rights Agent shall be appointed, the Company shall give notice thereof
to the predecessor Rights Agent and the transfer agent for the Ordinary Shares not later than the effective date of any such appointment.
6.2.3. Merger
or Consolidation of Rights Agent. Any corporation into which the Rights Agent may be merged or with which it may be consolidated
or any corporation resulting from any merger or consolidation to which the Rights Agent shall be a party shall be the successor
Rights Agent under this Agreement without any further act.
6.3. Fees
and Expenses of Rights Agent.
6.3.1. Remuneration.
The Company agrees to pay the Rights Agent reasonable remuneration for its services as such Rights Agent hereunder and will reimburse
the Rights Agent upon demand for all expenditures that the Rights Agent may reasonably incur in the execution of its duties hereunder.
6.3.2. Further
Assurances. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged,
and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Rights Agent for
the carrying out or performing of the provisions of this Agreement.
6.4. Liability
of Rights Agent.
6.4.1. Reliance
on Company Statement. Whenever in the performance of its duties under this Agreement, the Rights Agent shall deem it necessary
or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a statement signed by the Chief Executive Officer or Chief Financial Officer and delivered to the Rights
Agent. The Rights Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant to the provisions
of this Agreement.
6.4.2. Indemnity.
The Rights Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith. Subject to Section
6.6 below, the Company agrees to indemnify the Rights Agent and save it harmless against any and all liabilities, including judgments,
costs and reasonable counsel fees, for anything done or omitted by the Rights Agent in the execution of this Agreement except as
a result of the Rights Agent’s gross negligence, willful misconduct, or bad faith.
6.4.3. Exclusions.
The Rights Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or
execution of any Right (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right; nor shall it by any act hereunder be deemed to make any representation
or warranty as to the authorization or reservation of any Ordinary Shares to be issued pursuant to this Agreement or any Right
or as to whether any Ordinary Shares will when issued be valid and fully paid and nonassessable.
6.5. Acceptance
of Agency. The Rights Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the
terms and conditions herein set forth.
6.6 Waiver.
The Rights Agent hereby waives any right of set-off or any other right, title, interest or claim of any kind (“Claim”)
in, or to any distribution of, the Trust Account (as defined in that certain Investment Management Trust Agreement, dated as of
the date hereof, by and between the Company and the Rights Agent as trustee thereunder) and hereby agrees not to seek recourse,
reimbursement, payment or satisfaction for any Claim against the Trust Account for any reason whatsoever.
7. Miscellaneous
Provisions.
7.1. Successors.
All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure
to the benefit of their respective successors and assigns.
7.2. Notices.
Any notice, statement or demand authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Right
to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail
or private courier service within five days after deposit of such notice, postage prepaid, addressed (until another address is
filed in writing by the Company with the Rights Agent), as follows:
Distoken Acquisition Corporation
Unit 1006, Block C, Jinshangjun
Park
No. 2 Xiaoba Road, Panlong District
Kunming, Yunnan, China
Attn: Jian Zhang, Chief Executive
Officer
Any notice, statement or demand authorized
by this Agreement to be given or made by the holder of any Right or by the Company to or on the Rights Agent shall be sufficiently
given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five days
after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Rights Agent with the
Company), as follows:
Continental Stock Transfer &
Trust Company
One State Street, 30th
Floor
New York, New York 10004
Attn: Compliance Department
with a copy to:
Ellenoff Grossman & Schole,
LLP
1345 Avenue of the Americas,
New York, NY 10105
Attn: Richard I. Anslow, Esq.
and
Graubard Miller
405 Lexington Avenue,
11th Floor
New York, New York 10174
Attn: David Alan Miller, Esq.
and Jeffrey M. Gallant, Esq.
and
Maples and Calder
PO Box 309, Ugland House
Grand Cayman
KY1-1104
Cayman Islands
Attn: Michael Jones and Michael Lockwood
and
EarlyBirdCapital, Inc.
366 Madison Avenue, 8th
Floor
New York, NY 10017
Attn: Steven Levine and Mike
Powell
7.3. Applicable
Law. The validity, interpretation, and performance of this Agreement and of the Rights shall be governed in all respects by
the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of
the substantive laws of another jurisdiction. The Company hereby agrees that any action, proceeding or claim against it arising
out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United
States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall
be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient
forum. Any such process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or
certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 7.2 hereof. Such
mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim.
7.4. Persons
Having Rights under this Agreement. Nothing in this Agreement expressed and nothing that may be implied from any of the
provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the
parties hereto and the registered holders of the Rights and, for the purposes of Sections 7.4 and 7.8 hereof,
EarlyBirdCapital, any right, remedy, or claim under or by reason of this Agreement or of any covenant, condition,
stipulation, promise, or agreement hereof. EarlyBirdCapital shall be deemed to be a third-party beneficiary of this Agreement
with respect to Sections 7.4 and 7.8 hereof. All covenants, conditions, stipulations, promises, and agreements contained in
this Agreement shall be for the sole and exclusive benefit of the parties hereto (and EarlyBirdCapital with respect to the
Sections 7.4 and 7.8 hereof) and their successors and assigns and of the registered holders of the Rights. The provisions of
this Section 7.4 may not be modified, amended or deleted without the prior written consent of EarlyBirdCapital.
7.5. Examination
of the Right Agreement. A copy of this Agreement shall be available at all reasonable times at the office of the Rights Agent
in the Borough of Manhattan, City and State of New York, for inspection by the registered holder of any Right. The Rights Agent
may require any such holder to submit his, her or its Right for inspection by it.
7.6. Counterparts.
This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
7.7. Effect
of Headings. The Section headings herein are for convenience only and are not part of this Agreement and shall not affect the
interpretation thereof.
7.8 Amendments.
This Agreement may be amended by the parties hereto without the consent of any registered holder for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective provision contained herein or adding or changing any other provisions
with respect to matters or questions arising under this Agreement as the parties may deem necessary or desirable and that the parties
deem shall not adversely affect the interest of the registered holders. All other modifications or amendments shall require the
written consent or vote of the registered holders of a majority of the then outstanding Rights. The provisions of this Section
7.8 may not be modified, amended or deleted without the prior written consent of EarlyBirdCapital.
7.9 Severability.
This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid
or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision
as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
[Signature Page Follows]
IN WITNESS WHEREOF, this Agreement has been
duly executed by the parties hereto as of the day and year first above written.
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DISTOKEN ACQUISITION CORPORATION
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By:
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Name:
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Jian Zhang
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Title:
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Chief Executive Officer
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CONTINENTAL STOCK TRANSFER & TRUST COMPANY
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By:
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Name:
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Title:
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[Signature Page to Right Agreement]
Exhibit 4.6
________R
DISTOKEN ACQUISITION CORPORATION
INCORPORATED UNDER THE LAWS OF THE CAYMAN
ISLANDS
RIGHT
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP G27740 136
THIS CERTIFIES THAT, for value received
_____________is the registered holder of a right or rights (the
“Right” or “Rights,” respectively) to receive one-tenth of one Class A ordinary share, no par value per
share (“Ordinary Shares”), of DISTOKEN ACQUISITION CORPORATION (the “Company”) for each Right evidenced
by this Right Certificate on the Company’s completion of an initial business combination (as defined in the prospectus relating
to the Company’s initial public offering (“Prospectus”) upon surrender of this Right Certificate pursuant to
the Rights Agreement (the “Rights Agreement”) between the Company and Continental Stock Transfer & Trust Company
(the “Rights Agent”). In no event will the Company be required to net cash settle any Right.
Upon liquidation of the Company in the
event an initial business combination is not consummated during the required period as identified in the Company’s Amended
and Restated Certificate of Incorporation, as the same may be amended from time to time, the Right(s) shall expire and be worthless.
The holder of a Right or Rights shall have no right or interest of any kind in the Company’s trust account (as defined in
the Prospectus).
Upon due presentment for registration of
transfer of the Right Certificate at the office or agency of the Rights Agent a new Right Certificate or Right Certificates of
like tenor and evidencing in the aggregate a like number of Rights shall be issued to the transferee in exchange for this Right
Certificate, without charge except for any applicable tax or other governmental charge.
The Company and the Rights Agent may deem
and treat the registered holder as the absolute owner of this Right Certificate (notwithstanding any notation of ownership or other
writing hereon made by anyone), for the purpose of any conversion hereof, of any distribution to the registered holder, and for
all other purposes, and neither the Company nor the Rights Agent shall be affected by any notice to the contrary.
Holders of a Right or Rights are not entitled
to any of the rights of a shareholder of the Company.
Dated:
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Secretary
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[Corporate Seal]
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Chairman of the Board
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2020
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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:
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TEN COM –
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as tenants in common
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UNIF GIFT MIN ACT-_____Custodian_____
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TEN ENT –
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as tenants by the entireties
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(Cust) (Minor)
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JT TEN –
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as joint tenants with right of survivorship
and not as tenants in common Act
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under Uniform Gifts to Minors Act _____________ (State)
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Additional Abbreviations may also be used
though not in the above list.
DISTOKEN ACQUISITION CORPORATION
The Company will furnish without charge
to each shareholder who so requests the powers, designations, preferences and relative, participating, optional or other special
rights of each class of shares or series thereof of the Company and the qualifications, limitations, or restrictions of such preferences
and/or rights. This certificate and the rights represented thereby are issued and shall be held subject to all the provisions of
the Rights Agreement, and all amendments thereto, to all of which the holder of this certificate by acceptance hereof assents.
For value received,___________________________
hereby sell, assign and transfer unto
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PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
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(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
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Rights represented by the within Certificate, and do hereby
irrevocably constitute and appoint
___________________________________________________________________________________________Attorney
to transfer the said Rights on the books of the within named Company will full power of substitution in the premises.
Dated ___________
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Notice:
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The signature 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.
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Signature(s) Guaranteed:
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THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15).
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Exhibit 5.1
Our ref MUL/774526-000001/64064241v1
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Distoken Acquisition Corporation
PO Box 309, Ugland House
Grand Cayman
KY1-1104
Cayman Islands
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9 October 2020
Distoken Acquisition Corporation
We have acted as counsel as to Cayman Islands
law to Distoken Acquisition Corporation (the "Company") in connection with the Company's registration statement
on Form S-1, including all amendments or supplements thereto, filed with the United States Securities and Exchange Commission (the
"Commission") under the United States Securities Act of 1933, as amended (the "Act") (including
its exhibits, the "Registration Statement") for the purposes of, registering with the Commission under the Act,
the offering and sale to the public of:
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(a)
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up to 4,600,000 units (including 600,000 units, which the several underwriters, for whom EarlyBirdCapital,
Inc. is acting as representative ("Representative"), will have a 45-day option to purchase from the Company to
cover over-allotments, if any) ("Units") at an offering price of US$10 per Unit, each Unit consisting of:
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(i)
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one Class A ordinary share of a par value of US$0.0001 of the Company ("Ordinary Shares");
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(ii)
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one-half of one redeemable warrant, each whole warrant exercisable to purchase one Ordinary Share
at a price of US$11.50 per Ordinary Share ("Warrants"); and
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(iii)
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one right to receive one-tenth of an Ordinary Share upon the consummation of an initial business
combination ("Rights");
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(b)
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all Ordinary Shares, Warrants and Rights issued as part of the Units; and
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(c)
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all Ordinary Shares that may be issued upon conversion of the Rights included in the Units.
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This opinion letter is given in accordance
with the terms of the Legal Matters section of the Registration Statement.
We have reviewed originals, copies, drafts
or conformed copies of the following documents:
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1.1
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The certificate of incorporation dated 1 July 2020 and the memorandum and articles of association
of the Company as registered or adopted on 1 July 2020 (the "Memorandum and Articles").
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1.2
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The written resolutions of the board of directors of the Company dated 8 July 2020 (the "Resolutions")
and the corporate records of the Company maintained at its registered office in the Cayman Islands.
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1.3
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A certificate of good standing with respect to the Company issued by the Registrar of Companies
(the "Certificate of Good Standing").
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1.4
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A certificate from a director of the Company a copy of which is attached to this opinion letter
(the "Director's Certificate").
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1.5
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The Registration Statement.
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1.6
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A draft of the form of the unit certificate representing the Units (the "Unit Certificate").
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1.7
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A draft of the form of the warrant agreement and the warrant certificate constituting the Warrants
(the "Warrant Documents").
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1.8
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A draft of the form of the rights agreement and the rights certificate constituting the Rights
(the "Rights Documents").
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1.9
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A draft of the underwriting agreement between the Company and the Representative (the "Underwriting
Agreement").
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The documents listed
in paragraphs 1.6 to 1.9 inclusive above shall be referred to collectively herein as the "Documents".
The following opinions are given only as
to, and based on, circumstances and matters of fact existing and known to us on the date of this opinion letter. These opinions
only relate to the laws of the Cayman Islands which are in force on the date of this opinion letter. In giving the following opinions,
we have relied (without further verification) upon the completeness and accuracy, as at the date of this opinion letter, of the
Director's Certificate and the Certificate of Good Standing. We have also relied upon the following assumptions, which we have
not independently verified:
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2.1
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The Documents have been or will be authorised and duly executed and unconditionally delivered by
or on behalf of all relevant parties in accordance with all relevant laws (other than, with respect to the Company, the laws of
the Cayman Islands).
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2.2
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The Documents are, or will be, legal, valid, binding and enforceable against all relevant parties
in accordance with their terms under the laws of the State of New York (the "Relevant Law") and all other relevant
laws (other than, with respect to the Company, the laws of the Cayman Islands).
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2.3
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The choice of the Relevant Law as the governing law of the Documents has been made in good faith
and would be regarded as a valid and binding selection which will be upheld by the courts of the State of New York and any
other relevant jurisdiction (other than the Cayman Islands) as a matter of the Relevant Law and all other relevant laws (other
than the laws of the Cayman Islands).
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2.4
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Copies of documents, conformed copies or drafts of documents provided to us are true and complete
copies of, or in the final forms of, the originals.
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2.5
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All signatures, initials and seals are genuine.
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2.6
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The capacity, power, authority and legal right of all parties under all relevant laws and regulations
(other than, with respect to the Company, the laws and regulations of the Cayman Islands) to enter into, execute, unconditionally
deliver and perform their respective obligations under the Documents.
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2.7
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No invitation has been or will be made by or on behalf of the Company to the public in the Cayman
Islands to subscribe for any of the Units, the Rights, the Warrants or the Ordinary Shares.
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2.8
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There is no contractual or other prohibition or restriction (other than as arising under Cayman
Islands law) binding on the Company prohibiting or restricting it from entering into and performing its obligations under the Documents.
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2.9
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No monies paid to or for the account of any party under the Documents or any property received
or disposed of by any party to the Documents in each case in connection with the Documents or the consummation of the transactions
contemplated thereby represent or will represent proceeds of criminal conduct or criminal property or terrorist property (as defined
in the Proceeds of Crime Law (2020 Revision) and the Terrorism Law (2018 Revision), respectively).
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2.10
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There is nothing under any law (other than the laws of the Cayman Islands) which would or might
affect the opinions set out below. Specifically, we have made no independent investigation of the Relevant Law.
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2.11
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The Company will receive money or money's worth in consideration for the issue of the Ordinary
Shares and none of the Ordinary Shares were or will be issued for less than par value.
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Save as aforesaid we have not been instructed
to undertake and have not undertaken any further enquiry or due diligence in relation to the transaction the subject of this opinion
letter.
Based upon, and subject to, the foregoing
assumptions and the qualifications set out below, and having regard to such legal considerations as we deem relevant, we are of
the opinion that:
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3.1
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The Company has been duly incorporated as an exempted company with limited liability and is validly
existing and in good standing with the Registrar of Companies under the laws of the Cayman Islands.
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3.2
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The Ordinary Shares to be offered and issued by the Company as contemplated by the Registration
Statement (including the issuance of Ordinary Shares upon the conversion of the Rights in accordance with the Rights Documents)
have been duly authorised for issue, and when issued by the Company against payment in full of the consideration as set out in
the Registration Statement and in accordance with the terms set out in the Registration Statement (including the issuance of Ordinary
Shares upon the conversion of the Rights in accordance with the Rights Documents), such Ordinary Shares
will be validly issued, fully paid and non-assessable. As a matter of Cayman Islands law, a share is only issued when it has been
entered in the register of members (shareholders).
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3.3
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The execution, delivery and performance of the Unit Certificate, the Warrant Documents and the
Rights Documents have been authorised by and on behalf of the Company and, once the Unit Certificate, the Warrant Documents and
the Rights Documents have been executed and delivered by any director or officer of the Company, the Unit Certificate, the Warrant
Documents and the Rights Documents will be duly executed and delivered on behalf of the Company and will constitute the legal,
valid and binding obligations of the Company enforceable in accordance with their terms.
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The opinions expressed above are subject
to the following qualifications:
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4.1
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The term "enforceable" as used above means that the obligations assumed by the
Company under the Documents are of a type which the courts of the Cayman Islands will enforce. It does not mean that those obligations
will necessarily be enforced in all circumstances in accordance with their terms. In particular:
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(a)
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enforcement may be limited by bankruptcy, insolvency, liquidation, reorganisation, readjustment
of debts or moratorium or other laws of general application relating to or affecting the rights of creditors;
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(b)
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enforcement may be limited by general principles of equity. For example, equitable remedies such
as specific performance may not be available, inter alia, where damages are considered to be an adequate remedy;
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(c)
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where obligations are to be performed in a jurisdiction outside the Cayman Islands, they may not
be enforceable in the Cayman Islands to the extent that performance would be illegal under the laws of that jurisdiction; and
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(d)
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some claims may become barred under relevant statutes of limitation or may be or become subject
to defences of set off, counterclaim, estoppel and similar defences.
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4.2
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To maintain the Company in good standing with the Registrar of Companies under the laws of the
Cayman Islands, annual filing fees must be paid and returns made to the Registrar of Companies within the time frame prescribed
by law.
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4.3
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Under Cayman Islands law, the register of members (shareholders) is prima facie evidence
of title to shares and this register would not record a third party interest in such shares. However, there are certain limited
circumstances where an application may be made to a Cayman Islands court for a determination on whether the register of members
reflects the correct legal position. Further, the Cayman Islands court has the power to order that the register of members maintained
by a company should be rectified where it considers that the register of members does not reflect the correct legal position. As
far as we are aware, such applications are rarely made in the Cayman Islands and for the purposes of the opinion given in paragraph
3.2, there are no circumstances or matters of fact known to us on the date of this opinion letter which would properly form the
basis for an application for an order for rectification of the register of members of the Company, but if such an application were
made in respect of the Ordinary Shares, then the validity of such shares may be subject to re-examination by a Cayman Islands court.
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4.4
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Except as specifically stated herein, we make no comment with respect to any representations and
warranties which may be made by or with respect to the Company in any of the documents or instruments cited in this opinion letter
or otherwise with respect to the commercial terms of the transactions the subject of this opinion letter.
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4.5
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In this opinion letter, the phrase "non-assessable" means, with respect to shares in
the Company, that a shareholder shall not, solely by virtue of its status as a shareholder, be liable for additional assessments
or calls on the shares by the Company or its creditors (except in exceptional circumstances, such as involving fraud, the establishment
of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or
lift the corporate veil).
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We hereby consent to the filing of this
opinion letter as an exhibit to the Registration Statement and to the references to our firm under the headings "Legal Matters",
"Risk Factors", "Shareholders' Suits" and "Enforcement of Civil Liabilities" in the prospectus included
in the Registration Statement. In providing our consent, we do not thereby admit that we are in the category of persons whose consent
is required under Section 7 of the Act or the Rules and Regulations of the Commission thereunder.
This opinion letter is addressed to you
and may be relied upon by you, your counsel and purchasers of Units pursuant to the Registration Statement. This opinion letter
is limited to the matters detailed herein and is not to be read as an opinion with respect to any other matter.
Yours faithfully
/s/ Maples and Calder
Maples and Calder
Distoken Acquisition Corporation
PO Box 309, Ugland House
Grand Cayman
KY1-1104
Cayman Islands
9 October 2020
PO Box 309, Ugland
House
Grand Cayman
KY1-1104
Cayman Islands
Distoken Acquisition Corporation
(the "Company")
I, the undersigned, being a director of
the Company, am aware that you are being asked to provide an opinion letter (the "Opinion") in relation to certain
aspects of Cayman Islands law. Unless otherwise defined herein, capitalised terms used in this certificate have the respective
meanings given to them in the Opinion. I hereby certify that:
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1
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The Memorandum and Articles remain in full force and effect and are unamended.
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2
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The Company has not entered into any mortgages or charges over its property or assets other than
those entered in the register of mortgages and charges of the Company.
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3
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The Resolutions were duly passed in the manner prescribed in the Memorandum and Articles (including,
without limitation, with respect to the disclosure of interests (if any) by directors of the Company) and have not been amended,
varied or revoked in any respect.
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4
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The authorised share capital of the Company is US$22,100 divided into 200,000,000 Class A ordinary
shares of a par value of US$0.0001 each, 20,000,000 Class B ordinary shares of a par value of US$0.0001 each and 1,000,000 preference
shares of a par value of US$0.0001 each. The issued share capital of the Company is 1,250,000 Class B ordinary shares, which have
been duly authorised and are validly issued as fully-paid and non-assessable.
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5
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The shareholders of the Company (the "Shareholders") have not restricted the powers
of the directors of the Company in any way.
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6
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The sole director of the Company at the date of the Resolutions and at the date of this certificate
was and is as follows: Jian Zhang.
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7
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The minute book and corporate records of the Company as maintained at its registered office in
the Cayman Islands and made available to you are complete and accurate in all material respects, and all minutes and resolutions
filed therein represent a complete and accurate record of all meetings of the Shareholders and directors (or any committee thereof)
of the Company (duly convened in accordance with the Memorandum and Articles) and all resolutions passed at the meetings or passed
by written resolution or consent, as the case may be.
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8
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Prior to, at the time of, and immediately following the approval of the transactions contemplated
by the Registration Statement, the Company was, or will be, able to pay its debts as they fell, or fall, due and has entered, or
will enter, into the transactions contemplated by the Registration Statement for proper value and not with an intention to defraud
or wilfully defeat an obligation owed to any creditor or with a view to giving a creditor a preference.
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9
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Each director of the Company considers the transactions contemplated by the Registration Statement
to be of commercial benefit to the Company and has acted in good faith in the best interests of the Company, and for a proper purpose
of the Company, in relation to the transactions which are the subject of the Opinion.
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10
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To the best of my knowledge and belief, having made due inquiry, the Company is not the subject
of legal, arbitral, administrative or other proceedings in any jurisdiction. Nor have the directors or Shareholders taken any steps
to have the Company struck off or placed in liquidation, nor have any steps been taken to wind up the Company. Nor has any receiver
been appointed over any of the Company's property or assets.
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11
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To the best of my knowledge and belief, having made due inquiry, there are no circumstances or
matters of fact existing which may properly form the basis for an application for an order for rectification of the register of
members of the Company.
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12
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The Registration Statement has been, or will be, authorised and duly executed and delivered by
or on behalf of all relevant parties in accordance with all relevant laws.
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13
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No invitation has been made or will be made by or on behalf of the Company to the public in the
Cayman Islands to subscribe for any of the Ordinary Shares.
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14
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The Ordinary Shares to be issued pursuant to the Registration Statement have been, or will be,
duly registered, and will continue to be registered, in the Company's register of members (shareholders).
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15
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The Company is not a central bank, monetary authority or other sovereign entity of any state and
is not a subsidiary, direct or indirect, of any sovereign entity or state.
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16
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There is no contractual or other prohibition or restriction (other than as arising under Cayman
Islands law) binding on the Company prohibiting or restricting it from entering into and performing its obligations under the Documents.
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(Signature Page follows)
I confirm that you may continue to rely
on this certificate as being true and correct on the day that you issue the Opinion unless I shall have previously notified you
in writing personally to the contrary.
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Signature:
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/s/ Jian Zhang
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Exhibit 10.2
[●], 2020
Unit 1006, Block C, Jinshangjun Park
No. 2 Xiaoba Road, Panlong District
Kunming, Yunnan, China
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”)
to be entered into by and between Distoken Acquisition Corporation, a Cayman Islands exempted company (the “Company”),
and EarlyBirdCapital, Inc. (the “Representative”), as the representative of the several underwriters
(the “Underwriters”), relating to an underwritten initial public offering (the “Public Offering”)
of 4,600,000 of the Company’s units (including up to 600,000 units that may be purchased to cover over-allotments, if any)
(the “Units”), each comprised of one Class A ordinary share of the Company, par value $0.0001 per share
(the “Class A ordinary shares”), one-half of one warrant (each whole warrant, a “Warrant”)
and one right (the “Right”). Each Warrant entitles the holder thereof to purchase one Class A ordinary
share at a price of $11.50 per share, subject to adjustment. Each Right entitles the holder thereof to receive one-tenth (1/10)
of one Class A ordinary share upon the consummation of the Company’s initial business combination, subject to adjustment.
The Units shall 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 Securities and Exchange Commission (the “Commission”) and the Company shall
apply to have the Units listed on the Nasdaq Capital Market. Certain capitalized terms used herein are defined in paragraph 10
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, Xiaosen Sponsor LLC, a Cayman Islands limited liability company (the
“Sponsor”), and the other undersigned persons (each, an “Insider” and collectively,
the “Insiders”), hereby agrees with the Company as follows:
1. The
Sponsor and each Insider agrees that if the Company seeks shareholder approval of a proposed Business Combination (as defined below),
then in connection with such proposed Business Combination, it, he or she shall (i) vote any Shares owned by it, him or her in
favor of any proposed Business Combination and (ii) not redeem any Shares owned by it, him or her in connection with such shareholder
approval.
2. The
Sponsor and each Insider hereby agrees that in the event that the Company fails to consummate a Business Combination within
15 months from the closing of the Public Offering (or up to 21 months from the closing of the Public Offering if the Company
extends the period of time to consummate a Business Combination, as described in more detail in the Prospectus), or such
later period approved by the Company’s shareholders in accordance with the Company’s amended and restated
memorandum and articles of association, 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
(10) business days thereafter, subject to lawfully available funds therefor, redeem 100% of the Class A ordinary shares sold
as part of the Units 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, including interest (which interest shall be net
of taxes payable and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding
Offering Shares, which redemption will completely extinguish all Public Shareholders’ rights as shareholders (including
the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as
reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and the
Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under
Cayman Islands law to provide for claims of creditors and other requirements of applicable law. The Sponsor and each Insider
agrees to not propose any amendment to the Company’s amended and restated memorandum and articles of association (a)
that would affect the ability of Public Shareholders to exercise redemption rights with respect to the Offering Shares or
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 15 months (or up to 21 months) from the closing of the Public Offering, or (b)
with respect to any other provision relating to shareholders’ rights or pre-initial Business Combination activity,
unless the Company provides its Public Shareholders with the opportunity to redeem their Offering Shares upon approval of any
such amendment at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account,
including interest (which interest shall be net of taxes payable), 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. The Sponsor and each Insider hereby further waives, with respect to any Shares held by it, him or her, if any, any redemption
rights it, he or she may have in connection with the consummation of a Business Combination, including, without limitation, any
such rights available in the context of a shareholder vote to approve such Business Combination or in the context of a tender offer
made by the Company to purchase Class A ordinary shares (although the Sponsor and the Insiders 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 15 months (or up to 21 months) from the closing of the Public Offering, or such later period approved by the Company’s
shareholders in accordance with the Company’s amended and restated memorandum and articles of association).
3. In
the event of the liquidation of the Trust Account, the Sponsor (which for purposes of clarification shall not extend to any other
equity holders, members or managers of the Sponsor) 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, or any claim whatsoever)
to which the Company may become subject as a result of any claim by (i) any third party (other than the Company’s independent
public accountants) for services rendered or products sold to the Company or (ii) a prospective target business with which the
Company has discussed entering into a transaction agreement (a “Target”); provided, however,
that such indemnification of the Company by the Sponsor shall apply only to the extent necessary to ensure that such claims by
a third party for services rendered (other than the Company’s independent public accountants) or products sold to the Company
or a Target do not reduce the amount of funds in the Trust Account to below (i) $10.00 per share of the Offering Shares or (ii)
such lesser amount per share of the Offering Shares held in the Trust Account due to reductions in the value of the trust assets
as of the date of the liquidation of the Trust Account, in each case, net of the amount of interest earned on the property in the
Trust Account which may be withdrawn to pay taxes, except as to any claims by a third party (including a Target) who executed a
waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity
of the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. In the event
that any such executed waiver is deemed to be unenforceable against such third party, the Sponsor shall not be responsible to the
extent of any liability for such third party claims. The Sponsor 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
Sponsor, the Sponsor notifies the Company in writing that it shall undertake such defense.
4. To
the extent that the Underwriters do not exercise their over-allotment option to purchase up to an additional 600,000 Units within
45 days from the date of the Prospectus (and as further described in the Prospectus), the Sponsor agrees that it shall forfeit,
at no cost, a number of Founder Shares in the aggregate equal to 150,000 multiplied by a fraction, (i) the numerator of which is
600,000 minus the number of Units purchased by the Underwriters upon the exercise of their over-allotment option, and (ii) the
denominator of which is 600,000.
All references in this Letter
Agreement to Founder Shares of the Company being forfeited shall take effect as surrenders for no consideration of such
Founder Shares as a matter of Cayman Islands law. 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 Public Offering (assuming the Initial Shareholders do not purchase any units in the
Public Offering and excluding the Representative Shares and Private Shares). The Initial Shareholders further agree that to
the extent that the size of the Public Offering is increased or decreased, the Company will effect a capitalization or share
repurchase or redemption or other appropriate mechanism, 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 the
Company’s issued and outstanding Shares upon the consummation of the Public Offering (assuming the Initial Shareholders
do not purchase any units in the Public Offering and excluding the Representative Shares and Private Shares). In connection
with such increase or decrease in the size of the Public Offering, then (A) the references to 600,000 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
Class A ordinary shares included in the Units issued in the Public Offering and (B) the reference to 150,000 in the formula
set forth in the immediately preceding sentence shall be adjusted to such number of Founder Shares that the Founder Shares
would represent an aggregate of 20.0% of the Company’s issued and outstanding Shares after the Public Offering
(assuming the Initial Shareholders do not purchase any units in the Public Offering and excluding the Representative
Shares).
5. 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 Insider of its, his or her obligations under paragraphs 1, 2, 3, 4, 6(a), 6(b) and
8 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 seek injunctive relief, in addition to any other remedy that such party may have in law or in equity, in the
event of such breach.
6. (a)
The Sponsor and each Insider agrees that it, he or she shall not Transfer (as defined below) any Founder Shares (or Class A ordinary
shares issuable upon conversion thereof) until the earlier of (A) one year after the completion of the Company’s initial
Business Combination or (B) subsequent to the Business Combination, (x) with respect to 50% of the Founder Shares, if the last
reported sale price of the Class A ordinary shares equals or exceeds $12.50 per share (as adjusted for share splits, share dividends,
rights issuances, subdivisions, 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 following the completion
of the Company’s initial Business Combination on which the Company completes a liquidation, merger, amalgamation, share exchange,
reorganization or other similar transaction that results in all of the Company’s shareholders having the right to exchange
their Class A ordinary shares for cash, securities or other property (the “Founder Shares Lock-up Period”).
(b) The
Sponsor and each Insider agrees that it, he or she shall not Transfer any Private Units (including the Private Shares and the Private
Warrants) until 30 days after the completion of a Business Combination (the “Private Placement Units Lock-up Period”,
together with the Founder Shares Lock-up Period, the “Lock-up Periods”).
(c) Notwithstanding
the provisions set forth in paragraphs 6(a) and 6(b), Transfers of the Founder Shares and Private Units (including the Private
Shares and the Private Warrants), are permitted (a) to the Company’s officers or directors, any affiliates or family members
of any of the Company’s officers or directors, any members of the Sponsor or any affiliates of the Sponsor; (b) in the case
of an individual, by gift to a member of the individual’s immediate family, or to a trust, the beneficiary of which is a
member of the individual’s immediate family or 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
the Company’s Business Combination at prices no greater than the price at which the securities were originally purchased;
(f) in the event of the Company’s liquidation prior to the Company’s completion of an initial Business Combination;
(g) by virtue of the laws of the Cayman Islands or the Sponsor’s limited liability company agreement, as amended from time
to time, upon termination or dissolution of the Sponsor; or (h) in the event of the Company’s completion of a liquidation,
merger, amalgamation, share exchange, reorganization or other similar transaction which results in all of the Company’s shareholders
having the right to exchange their Class A ordinary shares for cash, securities or other property subsequent to the completion
of the Company’s initial Business Combination; provided, however, that, except in the case of clause (f) or with the Company’s
prior consent, these permitted transferees (the “Permitted Transferees”) must enter into a written agreement
with the Company agreeing to be bound by the transfer restrictions in this Agreement.
7. 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, if any (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 such Insider’s background. The Sponsor and each Insider’s questionnaire furnished to the Company, if
any, 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.
8. Except
as disclosed in the Prospectus, neither the Sponsor nor any Insider nor any affiliate of the Sponsor or any Insider, nor any director
or officer of the Company, shall receive from the Company any finder’s fee, reimbursement, consulting fee, 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).
9. 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.
10. As
used herein, (i) “Business Combination” shall mean a merger, amalgamation, share exchange, asset acquisition,
share purchase, reorganization or similar business combination, involving the Company and one or more businesses; (ii) “Shares”
shall mean, collectively, the Class A ordinary shares and the Class B ordinary shares; (iii) “Founder Shares”
shall mean the 1,150,000 Class B ordinary shares, par value $0.0001 per share, issued and outstanding immediately prior to the
consummation of the Public Offering; (iv) “Initial Shareholders” shall mean the Sponsor and any Insider
that holds Founder Shares; (v) “Private Units” shall mean the 250,000 units (or up to 268,000 units if
the over-allotment option is exercised in full), each comprised of one Class A ordinary share, one-half of one Warrant and one
Right, that the Sponsor has agreed to purchase for an aggregate purchase price of $2,500,000 in the aggregate (or up to $2,860,000
if the over-allotment option is exercised in full), or a purchase price of $10.00 per Private Unit, in a private placement that
shall occur simultaneously with the consummation of the Public Offering; (vi) “Private Shares” shall
mean the Class A ordinary shares underlying the Private Units, (vii) “Private Warrants” shall mean the
warrants underlying the Private Units, (viii) “Public Shareholders” shall mean the holders of securities
issued in the Public Offering; (ix) “Trust Account” shall mean the trust fund into which a portion of
the net proceeds of the Public Offering shall be deposited; (x) “Representative Shares” shall mean the
100,000 Class B ordinary shares, par value $0.0001 per share, issued to the Representative and outstanding immediately prior to
the consummation of the Public Offering; and (xi) “Transfer” shall mean the (a) sale or assignment of,
offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement
to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to
or decrease of a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended,
(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).
11. 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 the Sponsor and each Insider that is the subject of any such change, amendment modification or
waiver.
12. 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.
13. 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.
14. 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.
15. This
Letter Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without
giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction.
The parties hereto (i) all agree that any action, proceeding, claim or dispute arising out of, or relating in any way to, this
Letter Agreement shall be brought and enforced in the courts of New York City, in the State of New York, and irrevocably submit
to such jurisdiction and venue, which jurisdiction and venue shall be exclusive and (ii) waive any objection to such exclusive
jurisdiction and venue or that such courts represent an inconvenient forum.
16. 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.
17. Each
party hereto shall not be liable for any breaches or misrepresentations contained in this Letter Agreement by any other party to
this Letter Agreement (including, for the avoidance of doubt, any Insider with respect to any other Insider), and no party shall
be liable or responsible for the obligations of another party, including, without limitation, indemnification obligations and notice
obligations.
18. 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, 2020; provided further that paragraph 3 of this Letter Agreement shall survive such liquidation.
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Sincerely,
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Xiaosen Sponsor LLC
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By:
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Name: Jian Zhang
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Title: Managing
Member
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Acknowledged and Agreed:
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DISTOKEN ACQUISITION CORPORATION
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By:
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Name:
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Jian Zhang
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Title:
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Chief Executive Officer
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[Signature Page - Letter Agreement]
Exhibit 10.3
INVESTMENT MANAGEMENT TRUST
AGREEMENT
This Investment Management Trust Agreement
(this “Agreement”) is made effective as of [●], 2020, by and between Distoken Acquisition Corporation,
a Cayman Islands exempted company (the “Company”), and Continental Stock Transfer & Trust Company, a New
York corporation (the “Trustee”).
WHEREAS, the Company’s registration
statement on Form S-1, File No. 333-248822 (the “Registration Statement”) and prospectus (the “Prospectus”)
for the initial public offering of the Company’s units (the “Units”), each of which consists of one of
the Company’s Class A ordinary shares, par value $0.0001 per share (the “Ordinary Shares”), one-half of
one warrant, each warrant entitling the holder thereof to purchase one Ordinary Share, and one right to receive one-tenth (1/10)
of one Ordinary Share upon the consummation of the Company’s initial business combination (such initial public offering hereinafter
referred to as the “Offering”), has been declared effective as of the date hereof by the U.S. Securities and
Exchange Commission; and
WHEREAS, the Company has entered
into an Underwriting Agreement (the “Underwriting Agreement”) with EarlyBirdCapital, Inc., as representative
(the “Representative”) of the several underwriters (the “Underwriters”) named therein; and
WHEREAS, as described in the Prospectus,
$40,000,000 of the gross proceeds of the Offering and sale of the Private Units (as defined in the Underwriting Agreement) (or
$46,000,000 if the Underwriters’ over-allotment option is exercised in full) will be delivered to the Trustee to be deposited
and held in a trust account located at all times in the United States (the “Trust Account”) for the benefit
of the Company and the holders of Ordinary Shares included in the Units issued in the Offering as hereinafter provided (the amount
to be delivered to the Trustee (and any interest subsequently earned thereon) is referred to herein as the “Property,”
the shareholders for whose benefit the Trustee shall hold the Property will be referred to as the “Public Shareholders,”
and the Public Shareholders and the Company will be referred to together as the “Beneficiaries”); and
WHEREAS, the Company and the Trustee
desire to enter into this Agreement to set forth the terms and conditions pursuant to which the Trustee shall hold the Property.
NOW THEREFORE, IT IS AGREED:
1. Agreements
and Covenants of Trustee. The Trustee hereby agrees and covenants to:
(a) Hold
the Property in trust for the Beneficiaries in accordance with the terms of this Agreement in the Trust Account established by
the Trustee in the United States at J.P. Morgan Chase Bank, N.A. and at a brokerage institution selected by the Trustee that is
reasonably satisfactory to the Company;
(b) Manage,
supervise and administer the Trust Account subject to the terms and conditions set forth herein;
(c) In
a timely manner, upon the written instruction of the Company, invest and reinvest the Property in United States government securities
within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, having a maturity of 180 days or less,
or in money market funds meeting the conditions of paragraphs (d)(1), (d)(2), (d)(3) and (d)(4) of Rule 2a-7 promulgated under
the Investment Company Act of 1940, as amended (or any successor rule), which invest only in direct U.S. government treasury obligations,
as determined by the Company; the Trustee may not invest in any other securities or assets, it being understood that the Trust
Account will earn no interest while account funds are uninvested awaiting the Company’s instructions hereunder; while on
deposit, 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 Representative 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 or in connection with the preparation or completing
of the audit of the Company’s financial statements by the Company’s auditors;
(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 or Chairman
of the board of directors of the Company (the “Board”), and in the case of Exhibit A, jointly signed
by the Representative, and complete the liquidation of the Trust Account and distribute the Property in the Trust Account, including
interest (which interest shall be net of any taxes payable and, in the case of a Termination Letter in a form substantially similar
to that attached hereto as Exhibit B, less up to $50,000 of interest to pay dissolution expenses), only as directed
in the Termination Letter and the other documents referred to therein, or (y) upon the date which is the later of (i) 15 months
(or up to 21 months) after the closing of the Offering and (ii) such later date as may be approved by the Company’s
shareholders in accordance with the Company’s amended and restated memorandum and articles of association, if a Termination
Letter has not been received by the Trustee prior to such date, in which case the Trust Account shall be liquidated in accordance
with the procedures set forth in the Termination Letter attached as Exhibit B and the Property in the Trust Account,
including interest (which interest shall be net of any taxes payable and less up to $50,000 of interest to pay dissolution expenses),
shall be distributed to the Public Shareholders of record as of such date; provided, however, that in the
event the Trustee receives a Termination Letter in a form substantially similar to Exhibit B hereto, or if the
Trustee begins to liquidate the Property because it has received no such Termination Letter by the date specified in clause (y)
of this Section 1(i), the Trustee shall keep the Trust Account open until twelve (12) months following
the date the Property has been distributed to the Public Shareholders;
(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, 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, as applicable; 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 so long as there is
no reduction in the principal amount initially deposited in 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, the Trustee shall distribute to the Public Shareholders of record as of such date the
amount requested by the Company to be used to redeem Ordinary Shares from Public Shareholders properly submitted in
connection with a shareholder vote to approve an amendment to the Company’s amended and restated memorandum and
articles of association (i) that would affect the ability of holders of public Ordinary Shares to exercise redemption rights
or modify the substance or timing of the Company’s obligation to redeem 100% of its public Ordinary Shares if the
Company has not consummated an initial Business Combination within such time as is described in the Company’s amended
and restated memorandum and articles of association or (ii) with respect to any other provision
relating to shareholders’ rights or pre-initial Business Combination activity; and
(l) Not
make any withdrawals or distributions from the Trust Account other than pursuant to Sections 1(i), 1(j)
or 1(k) above.
2. Agreements
and Covenants of the Company. The Company hereby agrees and covenants to:
(a) Give
all instructions to the Trustee hereunder in writing, signed by the Company’s Chief Executive Officer or Chairman of the
Board. 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 out-of-pocket 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 or delayed. 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 or delayed. The Company
may participate in such action with its own counsel;
(c) Pay
the Trustee the fees set forth on Schedule A hereto, including an initial acceptance fee, annual administration
fee, and transaction processing fee which fees shall be subject to modification by the parties from time to time. It is expressly
understood that the Property shall not be used to pay such fees unless and until it is distributed to the Company pursuant to Sections 1(i) through 1(k) hereof.
The Company shall pay the Trustee the initial acceptance fee and the first annual administration fee at the consummation of the
Offering. The Company shall not be responsible for any other fees or charges of the Trustee except as set forth in this Section 2(c), Schedule
A and as may be provided in Section 2(b) hereof;
(d) In
connection with any vote of the Company’s shareholders regarding a merger, amalgamation, share exchange, asset acquisition,
share purchase, reorganization or similar business combination involving the Company and one or more businesses (a “Business
Combination”), provide to the Trustee an affidavit or certificate of the inspector of elections for the shareholder meeting
verifying the vote of such shareholders regarding such Business Combination;
(e) Provide
the Representative 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; and
(f) 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.
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, income 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) and 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); or
(c) If
the Offering is not consummated within ten (10) business days of the date of this Agreement, in which case any funds received by
the Trustee from the Company or Xiaosen Sponsor LLC for purposes of funding the Trust Account shall be promptly returned to the
Company or Xiaosen Sponsor LLC, as applicable.
6. Miscellaneous.
(a) The
Company and the Trustee each acknowledge that the Trustee will follow the security procedures set forth below with respect to funds
transferred from the Trust Account. The Company and the Trustee will each restrict access to confidential information relating
to such security procedures to authorized persons. Each party must notify the other party immediately if it has reason to believe
unauthorized persons may have obtained access to such confidential information, or of any change in its authorized personnel. In
executing funds transfers, the Trustee shall rely upon all information supplied to it by the Company, including, account names,
account numbers, and all other identifying information relating to a Beneficiary, Beneficiary’s bank or intermediary bank.
Except for any liability arising out of the Trustee’s gross negligence, fraud or willful misconduct, the Trustee shall not
be liable for any loss, liability or expense resulting from any error in the information or transmission of the funds.
(b) This
Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving
effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction.
(c) This
Agreement contains the entire agreement and understanding of the parties hereto with respect to the subject matter hereof. Except
for Sections 1(i), 1(j) and 1(k) hereof (which
sections may not be modified, amended or deleted without the affirmative vote of sixty five percent (65%) of the then outstanding
Ordinary Shares and Class B ordinary shares, par value $0.0001 per share, of the Company voting together as a single class; provided that
no such amendment will affect any Public Shareholder who has otherwise indicated his, her or its election to redeem his, her or
its Ordinary Shares in connection with a shareholder vote sought to amend this Agreement), this Agreement or any provision hereof
may only be changed, amended or modified (other than to correct a typographical error) by a writing signed by each of the parties
hereto.
(d) The
parties hereto consent to the jurisdiction and venue of any state or federal court located in the City of New York, State of New
York, for purposes of resolving any disputes hereunder. AS TO ANY CLAIM, CROSS-CLAIM OR COUNTERCLAIM IN ANY WAY RELATING
TO THIS AGREEMENT, EACH PARTY WAIVES THE RIGHT TO TRIAL BY JURY.
(e) Any
notice, consent or request to be given in connection with any of the terms or provisions of this Agreement shall be in writing
and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery,
by electronic mail or by facsimile transmission:
if to the Trustee, to:
Continental Stock Transfer & Trust Company
One State Street, 30th Floor
New York, NY 10004
Attn: Francis Wolf and Celeste Gonzalez
Email: fwolf@continentalstock.com
cgonzalez@continentalstock.com
if to the Company, to:
Distoken Acquisition Corporation.
Unit 1006, Block C, Jinshangjun Park
No. 2 Xiaoba Road, Panlong District
Kunming, Yunnan, China
Attn: Jian Zhang
Email: limitcs@139.com
in each case, with copies to:
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas, 11th Floor
New York, NY 10105
Attn: Joshua N. Englard, Esq.
Email: jenglard@egsllp.com
and
EarlyBirdCapital, Inc.
366 Madison Avenue, 8th Floor
New York, NY 10017
Attn.: Steven Levine and Mike Powell
Email: slevine@ebcap.com
mpowell@ebcap.com
and
Graubard Miller
405 Lexington Avenue, 11th Floor
New York, NY 10174
Attn: David Miller, Esq. and Jeffrey M. Gallant,
Esq.
Email: DMiller@graubard.com
JGallant@graubard.com
(f) This
Agreement may not be assigned by the Trustee without the prior consent of the Company.
(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 Representative, 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.
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CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as
Trustee
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By:
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Name:
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Title:
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DISTOKEN ACQUISITION CORPORATION
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By:
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Name:
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Title:
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[Signature Page to Investment Management
Trust Agreement]
SCHEDULE A
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Fee
Item
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Time
and method of payment
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Amount
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Initial acceptance fee
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Initial closing of Offering by wire transfer
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$3,500
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Trustee administration fee
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First year, initial closing of Offering by wire transfer; thereafter on the anniversary of the effective date of the Offering by wire transfer or check
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$10,000
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Transaction processing fee for disbursements to Company under Sections 1(i), 1(j) and 1(k)
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Deduction by Trustee from accumulated income following disbursement made to Company under Section 1
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$250.00
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Paying Agent services as required pursuant to Sections 1(i) and 1(k)
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Billed to Company upon delivery of service pursuant to Sections 1(i) and 1(k)
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Prevailing rates
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EXHIBIT A
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
One State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf and Celeste Gonzalez
Re: Trust Account No. Termination Letter
Mr. Wolf and Ms. Gonzalez:
Pursuant
to Section 1(i) of the Investment Management Trust Agreement between Distoken Acquisition Corporation (the “Company”)
and Continental Stock Transfer & Trust Company (the “Trustee”), dated as of [·],
2020 (the “Trust Agreement”), this is to advise you that the Company has 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 (or such shorter time
as you may agree) of the actual date of the consummation of the Business Combination (the “Consummation Date”).
Capitalized terms used but not defined herein shall have the meanings set forth in the Trust Agreement.
In accordance with the terms of the Trust
Agreement, we hereby authorize you to commence to liquidate all of the assets of the Trust Account and to transfer the proceeds
into 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. It is acknowledged and agreed that while the funds are on deposit in the trust operating account at J.P.
Morgan Chase Bank, N.A. awaiting distribution, the Company will earn no interest or dividends.
On the Consummation Date (i) counsel
for the Company shall deliver to you written notification that the Business Combination has been consummated, or will be
consummated substantially, concurrently with your transfer of funds to the accounts as directed by the Company (the
“Notification”) and (ii) the Company shall deliver to you (a) a certificate of the Chief Executive Officer
or Chief Financial Officer of the Company, which verifies that the Business Combination has been approved by a vote of the
Company’s shareholders, if a vote is held and (b) joint written instruction signed by the Company and EarlyBirdCapital,
Inc., with respect to the transfer of the funds held in 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 written instruction as soon thereafter as possible.
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Very truly yours,
Distoken Acquisition Corporation
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By:
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Name: Jian Zhang
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Title: Chief Executive Officer
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Agreed and acknowledged by:
EarlyBirdCapital, Inc.
EXHIBIT B
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
One State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf and Celeste Gonzalez
Re: Trust Account No. Termination Letter
Mr. Wolf and Ms. Gonzalez:
Pursuant
to Section 1(i) of the Investment Management Trust Agreement between Distoken Acquisition Corporation (the “Company”)
and Continental Stock Transfer & Trust Company (the “Trustee”), dated as of [·],
2020 (the “Trust Agreement”), this is to advise you that the Company has been unable to effect a Business Combination
with a Target Business within the time frame specified in the Company’s amended and restated memorandum and articles of association,
as described in the Company’s Prospectus relating to the Offering. Capitalized terms used but not defined herein shall have
the meanings set forth in the Trust Agreement.
In
accordance with the terms of the Trust Agreement, we hereby authorize you to liquidate all of the assets in the Trust Account and
to transfer the total proceeds into a segregated account held by you on behalf of the Beneficiaries to await distribution to the
Public Shareholders. The Company has selected [·]
as the effective date for the purpose of determining when the Public Shareholders will be entitled to receive their share of the
liquidation proceeds. You agree to be the Paying Agent of record and, in your separate capacity as Paying Agent, agree to distribute
said funds directly to the Company’s Public Shareholders in accordance with the terms of the Trust Agreement and the amended
and restated memorandum and articles of association of the Company. Upon the distribution of all the funds, net of any payments
necessary for reasonable unreimbursed expenses related to liquidating the Trust Account, your obligations under the Trust Agreement
shall be terminated, except to the extent otherwise provided in Section 1(i) of the Trust Agreement.
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Very truly yours,
Distoken Acquisition Corporatin
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By:
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Name: Jian Zhang
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Title: Chief Executive Officer
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cc: EarlyBirdCapital, Inc.
EXHIBIT C
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
One State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf and Celeste Gonzalez
Re: Trust Account No. Tax Payment Instruction
Mr. Wolf and Ms. Gonzalez:
Pursuant
to Section 1(j) of the Investment Management Trust Agreement between Distoken Acquisition Corporation (the “Company”)
and Continental Stock Transfer & Trust Company (the “Trustee”), dated as of [·],
2020 (the “Trust Agreement”), the Company hereby requests that you deliver to the Company $[·]
of the interest income earned on the Property as of the date hereof. Capitalized terms used but not defined herein shall have the
meanings set forth in the Trust Agreement.
The Company needs such funds [to pay for
the tax obligations as set forth on the attached tax return or tax statement]. In accordance with the terms of the Trust Agreement,
you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to
the Company’s operating account at:
[WIRE INSTRUCTION INFORMATION]
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Very truly yours,
Distoken Acquisition Corporation
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By:
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Name: Jian Zhang
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Title: Chief Executive Officer
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cc: EarlyBirdCapital, Inc.
EXHIBIT D
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
One State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf and Celeste Gonzalez
Re: Trust Account No. Shareholder Redemption Withdrawal
Instruction
Mr. Wolf and Ms. Gonzalez:
Pursuant
to Section 1(k) of the Investment Management Trust Agreement between Distoken Acquisition Corporation (the “Company”)
and Continental Stock Transfer & Trust Company (the “Trustee”), dated as of [·],
2020 (the “Trust Agreement”), the Company hereby requests that you deliver to the redeeming Public Shareholders
of the Company $[·]
of the principal and interest income earned on the Property as of the date hereof into a segregated account held by you on behalf
of the Beneficiaries for distribution to the Shareholders who have requested redemption of their Ordinary Shares. Capitalized terms
used but not defined herein shall have the meanings set forth in the Trust Agreement.
The Company needs such funds to pay its
Public Shareholders who have properly elected to have their Ordinary Shares redeemed by the Company in connection with a shareholder
vote to approve an amendment to the provisions of the Company’s amended and restated memorandum and articles of association
(i) that would affect the substance or timing of the Company’s obligation to redeem 100% of its public Ordinary Shares if
the Company does not complete its initial Business Combination within the required time period or (ii) with respect to any other
provision relating to shareholders’ rights or pre-initial Business Combination activity. As such, you are hereby directed
and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter.
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Very truly yours,
Distoken Acquisition Corporation
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By:
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Name: Jian Zhang
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Title: Chief Executive Officer
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cc: EarlyBirdCapital, Inc.
Exhibit 10.4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this
“Agreement”), dated as of [●], 2020, is made and entered into by and among Distoken Acquisition
Corporation, a Cayman Islands exempted company (the “Company”), Xiaosen Sponsor LLC, a Cayman Islands
limited liability company (the “Sponsor”), EarlyBirdCapital, Inc. (the “Representative”,
and the Sponsor, the Representative, together with any other parties listed on the signature pages hereto and any person or entity
who hereafter becomes a party to this Agreement pursuant to Section 5.2 of this Agreement, being referred
to herein as a “Holder” and collectively as the “Holders”).
RECITALS
WHEREAS, the Sponsor and certain
other Holders (if any) collectively own an aggregate of 1,150,000 Class B ordinary shares, par value $0.0001 per share (the “Founder
Shares”), of the Company, issued prior to the date hereof in a private placement and pursuant to certain transfers;
WHEREAS, the Founder Shares will
automatically convert into the Company’s Class A ordinary shares, par value $0.0001 per share (the “Ordinary
Shares”), at the time of the initial Business Combination on a one-for-one basis, subject to adjustment, on the terms
and conditions provided in the Company’s amended and restated memorandum and articles of association, as may be amended from
time to time;
WHEREAS, up to an aggregate of 150,000
Founder Shares are subject to forfeiture by the Sponsor if the over-allotment option in connection with the Company’s initial
public offering is not exercised in full;
WHEREAS, on [●], 2020, the
Company and the Sponsor entered into that certain Sponsor Units Purchase Agreement, pursuant to which the Sponsor agreed to purchase 250,000 units
(or up to 268,000 units if the over-allotment option in connection with the Company’s initial public offering is exercised
in full) (the “Private Units”), in a private placement transaction occurring simultaneously with the
closing of the Company’s initial public offering, each Private Unit consisting of one Private Share, one-half of one redeemable
warrant (“Private Warrant”) and one right (the “Private Right”). Each Private
Warrant entitles the holder thereof to purchase one Class A ordinary share at a price of $11.50 per share. Each Right entitles
the holder thereof to receive one-tenth (1/10) of one Class A ordinary share upon the consummation of the Company’s initial
business combination;
WHEREAS, the Representative or its
designees owns an aggregate of 100,000 Class B ordinary shares, par value $0.0001 per share (the “Representative Shares”),
of the Company, issued prior to the date hereof in a private placement and pursuant to certain transfers;
WHEREAS, the Representative Shares
will automatically convert into Ordinary Shares at the time of the initial Business Combination on a one-for-one basis, subject
to adjustment, on the terms and conditions provided in the Company’s amended and restated memorandum and articles of association,
as may be amended from time to time; 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 any 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, amalgamation, share exchange, asset acquisition, share purchase, reorganization or other similar business
combination with one or more businesses, involving the Company.
“Commission” shall
mean the Securities and Exchange Commission.
“Company” shall
have the meaning given in the Preamble.
“Demand Registration”
shall have the meaning given in subsection 2.1.1.
“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.
“Founder Shares Lock-up Period”
shall mean, with respect to the Founder Shares (including the Ordinary Shares issued or issuable upon conversion of any Founder
Shares), the period ending on the earlier of (A) one year after the completion of the Company’s initial Business Combination
or (B) subsequent to the Company’s initial Business Combination, (x) with respect to 50% of the Founder Shares, if the last
reported sale price of Ordinary Shares equals or exceeds $12.50 per share (as adjusted for share subdivisions, share capitalizations,
rights issuances, subdivisions, 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, amalgamation, share exchange, reorganization or other similar transaction that results in all
of the Company’s public shareholders having the right to exchange their Ordinary Shares for cash, securities or other property.
“Holders” shall
have the meaning given in the Preamble.
“Insider Letter”
shall mean that certain letter agreement, dated as of [●], 2020, by and among the Company, the Sponsor, and each of the Company’s
officers, directors and director nominees.
“Maximum Number of Securities”
shall have the meaning given in subsection 2.1.4.
“Misstatement”
shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration
Statement or Prospectus or necessary to make the statements in a Registration Statement or Prospectus (in the case of a Prospectus,
in the light of the circumstances under which they were made) not misleading.
“Ordinary Shares”
shall have the meaning given in the Recitals hereto.
“Permitted Transferees”
shall mean any person or entity to whom a Holder of Registrable Securities is permitted to transfer such Registrable Securities
prior to the expiration of the Founder Shares Lock-up Period or Private Placement Lock-up Period, as the case may be, under the
Insider Letter and any other applicable agreement between such Holder and the Company and to any transferee thereafter.
“Piggyback Registration”
shall have the meaning given in subsection 2.2.1.
“Private Placement Lock-up Period”
shall mean, with respect to Private Units that are held by the initial purchasers of such Private Units or their Permitted Transferees,
Private Shares and any of the Ordinary Shares issued or issuable upon the exercise or conversion of the Private Warrants and the
Private Rights and that are held by the initial purchasers of the Private Warrants and the Private Rights or their Permitted Transferees,
the period ending 30 days after the completion of the Company’s initial Business Combination.
“Private Shares”
shall have the meaning given in the Recitals hereto.
“Private Units”
shall have the meaning given in the Recitals hereto.
“Private Warrants”
shall have the meaning given in the Recitals hereto.
“Prospectus” shall
mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended
by any and all post-effective amendments and including all material incorporated by reference in such prospectus.
“Registrable Security”
shall mean (a) the Founder Shares (including the Ordinary Shares issued or issuable upon conversion of any Founder Shares), (b)
the Private Units (including any Ordinary Shares issued or issuable upon the exercise of any such Private Warrants or the Private
Rights), (c) the Representative Shares (including the Ordinary Shares issued or issuable upon conversion of the Representative
Shares), (d) any outstanding Ordinary Shares or any other equity security (including the Ordinary Shares issued or issuable upon
the exercise of any other equity security) of the Company held by a Holder as of the date of this Agreement, (e) any equity securities
(including the Ordinary Shares issued or issuable upon the exercise of any such equity security) of the Company issuable upon conversion
of any working capital loans in an amount up to $1,500,000 made to the Company by a Holder, and (f) any other equity security of
the Company issued or issuable with respect to any such Ordinary Share by way of a share capitalization or share subdivision or
in connection with a combination of shares, recapitalization, merger, consolidation or reorganization; provided, however,
that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities when: (A) a Registration
Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities
shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (B) such securities
shall have been otherwise transferred, new certificates for such securities not bearing a legend restricting further transfer shall
have been delivered by the Company and subsequent public distribution of such securities shall not require registration under the
Securities Act; (C) such securities shall have ceased to be outstanding; (D) such securities may be sold without registration pursuant
to Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission) (but with no
volume or other restrictions or limitations); or (E) such securities have been sold to, or through, a broker, dealer or underwriter
in a public distribution or other public securities transaction.
“Registration”
shall mean a registration effected by preparing and filing a registration statement or similar document in compliance with the
requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement
becoming effective.
“Registration Expenses”
shall mean the out-of-pocket expenses of a Registration, including, without limitation, the following:
(A) all registration and filing
fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc.) and any
securities exchange on which the Ordinary Shares are then listed;
(B) fees and expenses of compliance
with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters in connection with
blue sky qualifications of Registrable Securities);
(C) printing, messenger, telephone
and delivery expenses;
(D) reasonable fees and disbursements
of counsel for the Company;
(E) reasonable fees and disbursements
of all independent registered public accountants of the Company incurred specifically in connection with such Registration; and
(F) reasonable fees and expenses
of one legal counsel selected by the holders of a majority-in-interest of the Registrable Securities 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.
“Representative” shall
have the meaning given in the Recitals hereto.
“Representative Shares” shall
have the meaning given in the Recitals hereto.
“Representative Shares Lock-up
Period” shall mean, with respect to the Representative Shares that are held by the Representative, the period ending
30 days after the completion of the Company’s initial Business Combination.
“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.
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 initial Business Combination, the Sponsor
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 (i) file a Registration Statement in respect of all Registrable Securities
requested by the Sponsor and Requesting Holder(s) pursuant such Demand Registration, not more than forty five (45) days
immediately after the Company’s receipt of the Demand Registration, and (ii) shall effect the registration thereof as
soon as practicable thereafter. 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) the Sponsor thereafter affirmatively elects to continue with such Registration and accordingly notify the Company in writing,
but in no event later than five (5) days, of such election; provided, further, that the Company shall not
be obligated or required to file another Registration Statement until the Registration Statement that has been previously filed
with respect to a Registration pursuant to a Demand Registration becomes effective or is subsequently terminated.
2.1.3 Underwritten
Offering. Subject to the provisions of subsection 2.1.4 and Section 2.4 hereof,
if the Sponsor so advises the Company as part of its 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 the Sponsor 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 Sponsor.
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 Sponsor and the Requesting Holders (if any) in writing that the
dollar amount or number of Registrable Securities that the Sponsor and the Requesting Holders (if any) desire to sell, taken
together with all other Ordinary Shares or other equity securities that the Company desires to sell and the Ordinary Shares,
if any, as to which a Registration has been requested pursuant to separate written contractual piggy-back registration rights
held by any other shareholders who desire to sell, exceeds the maximum dollar amount or maximum number of equity securities
that can be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the
distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of such
securities, as applicable, the “Maximum Number of Securities”), then the Company shall include in
such Underwritten Offering, as follows: (i) first, the Registrable Securities of the Sponsor and the Requesting Holders (if
any) (pro rata based on the respective number of Registrable Securities that each Sponsor and Requesting Holder (if any) has
requested be included in such Underwritten Registration and the aggregate number of Registrable Securities that the Sponsor
and Requesting Holders have requested be included in such Underwritten Registration) that can be sold without exceeding the
Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the
foregoing clause (i), the Ordinary Shares or other equity securities that the Company desires to sell, which can be sold
without exceeding the Maximum Number of Securities; and (iii) third, to the extent that the Maximum Number of Securities has
not been reached under the foregoing clauses (i) and (ii), the Ordinary Shares or other equity securities of other persons or
entities that the Company is obligated to register in a Registration pursuant to separate written contractual arrangements
with such persons and that can be sold without exceeding the Maximum Number of Securities.
2.1.5 Demand
Registration Withdrawal. The Sponsor or a majority-in-interest of the Requesting Holders (if any), pursuant to a Registration
under subsection 2.1.1 shall have the right to withdraw from a Registration pursuant to such
Demand Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters
(if any) of their intention to withdraw from such Registration prior to the effectiveness of the Registration Statement filed with
the Commission with respect to the Registration of their Registrable Securities pursuant to such Demand Registration. Notwithstanding
anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection
with a Registration pursuant to a Demand Registration prior to its withdrawal under this subsection 2.1.5.
2.2 Piggyback
Registration.
2.2.1 Piggyback
Rights. If, at any time on or after the date the Company consummates a Business Combination, the Company proposes to file a
Registration Statement under the Securities Act with respect to an offering of equity securities, or securities or other obligations
exercisable or exchangeable for, or convertible into equity securities, for its own account or for the account of shareholders
of the Company (or by the Company and by the shareholders of the Company including, without limitation, pursuant to Section 2.1 hereof),
other than a Registration Statement (i) filed in connection with any employee share option or other benefit plan, (ii) for an exchange
offer or offering of securities solely to the Company’s existing shareholders, (iii) for an offering of debt that is convertible
into equity securities of the Company or (iv) for a dividend reinvestment plan, then the Company shall give written notice of such
proposed filing to all of the Holders of Registrable Securities as soon as practicable but not less than ten (10) days before the
anticipated filing date of such Registration Statement, which notice shall (A) describe the amount and type of securities to be
included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters,
if any, in such offering, and (B) offer to all of the Holders of Registrable Securities the opportunity to register the sale of
such number of Registrable Securities as such Holders may request in writing within five (5) days after receipt of such written
notice (such Registration a “Piggyback Registration”). The Company shall, in good faith, cause such Registrable
Securities to be included in such Piggyback Registration and shall use its best efforts to cause the managing Underwriter or Underwriters
of a proposed Underwritten Offering to permit the Registrable Securities requested by the Holders pursuant to this subsection 2.2.1 to
be included in a Piggyback Registration on the same terms and conditions as any similar securities of the Company included in such
Registration and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s)
of distribution thereof. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering
under this subsection 2.2.1 shall enter into an underwriting agreement in customary form with
the Underwriter(s) selected for such Underwritten Offering by the Company.
2.2.2 Reduction
of Piggyback Registration. If the managing Underwriter or Underwriters in an Underwritten Registration that is to be a Piggyback
Registration, in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration
in writing that the dollar amount or number of the Ordinary Shares that the Company desires to sell, taken together with (i) the
Ordinary Shares, if any, as to which Registration has been demanded pursuant to separate written contractual arrangements with
persons or entities other than the Holders of Registrable Securities hereunder (ii) the Registrable Securities as to which registration
has been requested pursuant to Section 2.2 hereof, and (iii) the Ordinary Shares, if any, as
to which Registration has been requested pursuant to separate written contractual piggy-back registration rights of other shareholders
of the Company, exceeds the Maximum Number of Securities, then:
(a) If
the Registration is undertaken for the Company’s account, the Company shall include in any such Registration (A) first,
the Ordinary Shares or other equity securities that the Company desires to sell, which can be sold without exceeding the
Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the
foregoing clause (A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities
pursuant to subsection 2.2.1 hereof, pro rata, based on the respective number of
Registrable Securities that each Holder has so requested, which can be sold without exceeding the Maximum Number of
Securities; and (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing
clauses (A) and (B), the Ordinary Shares, if any, as to which Registration has been requested pursuant to written contractual
piggy-back registration rights of other shareholders of the Company, which can be sold without exceeding the Maximum Number
of Securities; and
(b) If
the Registration is pursuant to a request by persons or entities other than the Holders of Registrable Securities, then the Company
shall include in any such Registration (A) first, the Ordinary Shares or other equity securities, if any, of such requesting persons
or entities, other than the Holders of Registrable Securities, which can be sold without exceeding the Maximum Number of Securities;
(B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable
Securities of Holders exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1,
pro rata, based on the respective number of Registrable Securities that each Holder has requested be included in such Underwritten
Registration and the aggregate number of Registrable Securities that the Holders have requested to be included in such Underwritten
Registration, which can be sold without exceeding the Maximum Number of Securities; (C) third, to the extent that the Maximum Number
of Securities has not been reached under the foregoing clauses (A) and (B), the Ordinary Shares or other equity securities that
the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the extent
that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), the Ordinary Shares or
other equity securities for the account of other persons or entities that the Company is obligated to register pursuant to separate
written contractual arrangements with such persons or entities, which can be sold without exceeding the Maximum Number of Securities.
2.2.3 Piggyback
Registration Withdrawal. Any Holder of Registrable Securities shall have the right to withdraw from a Piggyback Registration
for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of his, her
or its intention to withdraw from such Piggyback Registration prior to the effectiveness of the Registration Statement filed with
the Commission with respect to such Piggyback Registration. The Company (whether on its own good faith determination or as the
result of a request for withdrawal by persons pursuant to separate written contractual obligations) may withdraw a Registration
Statement filed with the Commission in connection with a Piggyback Registration at any time prior to the effectiveness of such
Registration Statement. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration
Expenses incurred in connection with the Piggyback Registration prior to its withdrawal under this subsection 2.2.3.
2.2.4 Unlimited
Piggyback Registration Rights. For purposes of clarity, any Registration effected pursuant to Section 2.2 hereof
shall not be counted as a Registration pursuant to a Demand Registration effected under Section 2.1 hereof.
2.3 Registrations
on Form S-3. The Holders of Registrable Securities may at any time, and from time to time, request in writing that the Company,
pursuant to Rule 415 under the Securities Act (or any successor rule promulgated thereafter by the Commission), register the resale
of any or all of their Registrable Securities on Form S-3 or any similar short-form registration statement that may be available
at such time (“Form S-3”); provided, however, that the Company shall not be obligated
to effect such request through an Underwritten Offering. Within five (5) days of the Company’s receipt of a written request
from a Holder or Holders of Registrable Securities for a Registration on Form S-3, the Company shall promptly give written notice
of the proposed Registration on Form S-3 to all other Holders of Registrable Securities, and each Holder of Registrable Securities
who thereafter wishes to include all or a portion of such Holder’s Registrable Securities in such Registration on Form S-3
shall so notify the Company, in writing, within ten (10) days after the receipt by the Holder of the notice from the Company. As
soon as practicable thereafter, but not more than twelve (12) days after the Company’s initial receipt of such written request
for a Registration on Form S-3, the Company shall register all or such portion of such Holder’s Registrable Securities as
are specified in such written request, together with all or such portion of Registrable Securities of any other Holder or Holders
joining in such request as are specified in the written notification given by such Holder or Holders; provided, however,
that the Company shall not be obligated to effect any such Registration pursuant to Section 2.3 hereof
if (i) a Form S-3 is not available for such offering; or (ii) the Holders of Registrable Securities, together with the Holders
of any other equity securities of the Company entitled to inclusion in such Registration, propose to sell the Registrable Securities
and such other equity securities (if any) at any aggregate price to the public of less than $1,000,000.
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. Notwithstanding anything to the contrary contained in this Agreement,
no Registration shall be effected or permitted and no Registration Statement shall become effective, with respect to any Registrable
Securities held by any Holder, until after the expiration of the Founder Shares Lock-up Period, the Private Placement Lock-up Period,
or the Representative Shares Lock-up Period, as the case may be.
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 reasonably requested by the majority-in-interest of the Holders with Registrable Securities registered
on such Registration Statement or any Underwriter of Registrable Securities or as may be required by the rules, regulations or
instructions applicable to the registration form used by the Company or by the Securities Act or rules and regulations thereunder
to keep the Registration Statement effective until all Registrable Securities covered by such Registration Statement are sold in
accordance with the intended plan of distribution set forth in such Registration Statement or supplement to the Prospectus;
3.1.3 prior
to filing a Registration Statement or Prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters,
if any, and the Holders of Registrable Securities included in such Registration, and such Holders’ legal counsel, copies
of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case
including all exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration Statement
(including each preliminary Prospectus), and such other documents as the Underwriters and the Holders of Registrable Securities
included in such Registration or the legal counsel for any such Holders may request in order to facilitate the disposition of the
Registrable Securities owned by such Holders;
3.1.4 prior
to any public offering of Registrable Securities, use its best efforts to (i) register or qualify the Registrable Securities
covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the
United States as the Holders of Registrable Securities included in such Registration Statement (in light of their intended
plan of distribution) may request and (ii) take such action necessary to cause such Registrable Securities covered by the
Registration Statement to be registered with or approved by such other governmental authorities as may be necessary by virtue
of the business and operations of the Company and do any and all other acts and things that may be necessary or advisable to
enable the Holders of Registrable Securities included in such Registration Statement to consummate the disposition of such
Registrable Securities in such jurisdictions; provided, however, that the Company shall not be
required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify or take
any action to which it would be subject to general service of process or taxation in any such jurisdiction where it is not
then otherwise so subject;
3.1.5 cause
all such Registrable Securities to be listed on each securities exchange or automated quotation system on which similar securities
issued by the Company are then listed;
3.1.6 provide
a transfer agent or warrant agent, as applicable, and registrar for all such Registrable Securities no later than the effective
date of such Registration Statement;
3.1.7 advise
each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance
of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening
of any proceeding for such purpose and promptly use its reasonable best efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such stop order should be issued;
3.1.8 at
least five (5) days prior to the filing of any Registration Statement or Prospectus or any amendment or supplement to such Registration
Statement or Prospectus furnish a copy thereof to each seller of such Registrable Securities or its counsel;
3.1.9 notify
the Holders at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities
Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect,
includes a Misstatement, and then to correct such Misstatement as set forth in Section 3.4 hereof;
3.1.10 permit a representative
of the Holders, the Underwriters, if any, and any attorney or accountant retained by such Holders or Underwriter to participate,
at each such person’s own expense, in the preparation of the Registration Statement, and cause the Company’s officers,
directors and employees to supply all information reasonably requested by any such representative, Underwriter, attorney or accountant
in connection with the Registration; provided, however, that such representatives or Underwriters enter
into a confidentiality agreement, in form and substance reasonably satisfactory to the Company, prior to the release or disclosure
of any such information;
3.1.11 obtain a “cold
comfort” letter from the Company’s independent registered public accountants in the event of an Underwritten Registration,
in customary form and covering such matters of the type customarily covered by “cold comfort” letters as the managing
Underwriter may reasonably request, and reasonably satisfactory to a majority-in-interest of the participating Holders;
3.1.12 on the date
the Registrable Securities are delivered for sale pursuant to such Registration, obtain an opinion, dated such date, of counsel
representing the Company for the purposes of such Registration, addressed to the Holders, the placement agent or sales agent, if
any, and the Underwriters, if any, covering such legal matters with respect to the Registration in respect of which such opinion
is being given as the Holders, placement agent, sales agent, or Underwriter may reasonably request and as are customarily included
in such opinions and negative assurance letters, and reasonably satisfactory to a majority in interest of the participating Holders;
3.1.13 in the event
of any Underwritten Offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form,
with the managing Underwriter of such offering;
3.1.14 make available
to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months
beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement
which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor rule promulgated
thereafter by the Commission);
3.1.15 If the Registration
involves the Registration of Registrable Securities involving gross proceeds in excess of $10,000,000, use its reasonable efforts
to make available senior executives of the Company to participate in customary “road show” presentations that may be
reasonably requested by the Underwriter in any Underwritten Offering; and
3.1.16 otherwise, in
good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the Holders, in connection
with such Registration.
3.2 Registration
Expenses. The Registration Expenses of all Registrations shall be borne by the Company. It is acknowledged by the Holders that
the Holders shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’
commissions and discounts, brokerage fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration
Expenses,” all reasonable fees and expenses of any legal counsel representing the Holders.
3.3 Requirements
for Participation in Underwritten Offerings. No person may participate in any Underwritten Offering for equity securities of
the Company pursuant to a Registration initiated by the Company hereunder unless such person (i) agrees to sell such person’s
securities on the basis provided in any underwriting arrangements approved by the Company and (ii) completes and executes all customary
questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting agreements and other customary documents as may
be reasonably required under the terms of such underwriting arrangements.
3.4 Suspension
of Sales; Adverse Disclosure. Upon receipt of written notice from the Company that a Registration Statement or Prospectus contains
a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until he, she or it has received
copies of a supplemented or amended Prospectus correcting the Misstatement (it being understood that the Company hereby covenants
to prepare and file such supplement or amendment as soon as practicable after the time of such notice), or until he, she or it
is advised in writing by the Company that the use of the Prospectus may be resumed. If the filing, initial effectiveness or continued
use of a Registration Statement in respect of any Registration at any time would require the Company to make an Adverse Disclosure
or would require the inclusion in such Registration Statement of financial statements that are unavailable to the Company for reasons
beyond the Company’s control, the Company may, upon giving prompt written notice of such action to the Holders, delay the
filing or initial effectiveness of, or suspend use of, such Registration Statement for the shortest period of time, but in no event
more than thirty (30) days, determined in good faith by the Company to be necessary for such purpose. In the event the Company
exercises its rights under the preceding sentence, the Holders agree to suspend, immediately upon their receipt of the notice referred
to above, their use of the Prospectus relating to any Registration in connection with any sale or offer to sell Registrable Securities.
The Company shall immediately notify the Holders of the expiration of any period during which it exercised its rights under this Section 3.4.
3.5 Reporting
Obligations. As long as any Holder shall own Registrable Securities, the Company, at all times while it shall be a reporting
company under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the applicable
grace period) all reports required to be filed by the Company after the date hereof pursuant to Sections 13(a) or 15(d) of the
Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings. The Company further covenants
that it shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable
such Holder to sell Ordinary Shares held by such Holder without registration under the Securities Act within the limitation of
the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission),
including providing any legal opinions. Upon the request of any Holder, the Company shall deliver to such Holder a written certification
of a duly authorized officer as to whether it has complied with such requirements.
3.6 Requirements
for Participation in Underwritten Offerings and Limitations on Registration Rights. 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.
Notwithstanding anything herein to the contrary, (i) the Representative
may not exercise its rights under Sections 2.1 and 2.2 hereunder after five (5) and seven (7) years after the effective date of
the Registration Statement relating to the Company’s initial public offering, respectively, and (ii) the Representative may
not exercise its rights under Section 2.1 more than one time.
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 agents and each person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages,
liabilities and expenses (including attorneys’ fees) caused by any untrue or alleged untrue statement of material fact contained
in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission
or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading,
except insofar as the same are caused by or contained in any information furnished in writing to the Company by such Holder expressly
for use therein. The Company shall indemnify the Underwriters, their officers and directors and each person who controls such Underwriters
(within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to the indemnification
of the Holder.
4.1.2 In
connection with any Registration Statement in which a Holder of Registrable Securities is participating, such Holder shall furnish
to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such
Registration Statement or Prospectus and, to the extent permitted by law, shall indemnify the Company, its directors and officers
and agents and each person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages,
liabilities and expenses (including without limitation reasonable attorneys’ fees) resulting from any untrue statement of
material fact contained in the Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement
thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading,
but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing
by such Holder expressly for use therein; provided, however, that the obligation to indemnify shall be
several, not joint and several, among such Holders of Registrable Securities, and the liability of each such Holder of Registrable
Securities shall be in proportion to and limited to the net proceeds received by such Holder from the sale of Registrable Securities
pursuant to such Registration Statement. The Holders of Registrable Securities shall indemnify the Underwriters, their officers,
directors and each person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided
in the foregoing with respect to indemnification of the Company.
4.1.3 Any
person entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to
indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party) and (ii) unless in such
indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist
with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory
to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). An indemnifying party
who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of
more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified
parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry
of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is
so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such
claim or litigation.
4.1.4 The
indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by
or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and shall survive
the transfer of securities. The Company and each Holder of Registrable Securities participating in an offering also agrees to make
such provisions as are reasonably requested by any indemnified party for contribution to such party in the event the Company’s
or such Holder’s indemnification is unavailable for any reason.
4.1.5 If
the indemnification provided under Section 4.1 hereof from the indemnifying party is unavailable
or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred
to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable
by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate
to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations.
The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether
any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, was made by, or relates to information supplied by, such indemnifying party or indemnified party, and the
indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct
or prevent such action; provided, however, that the liability of any Holder under this subsection 4.1.5 shall
be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The amount
paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject
to the limitations set forth in subsections 4.1.1, 4.1.2 and 4.1.3 above,
any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if contribution pursuant to this subsection 4.1.5 were
determined by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations
referred to in this subsection 4.1.5. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this subsection 4.1.5 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: Jian Zhang, Unit 1006, Block C, Jinshangjun Park, No. 2 Xiaoba Road, Panlong District, Kunming, Yunnan,
China, Attention: Chief Executive Officer, and, if to any Holder, at such Holder’s address or facsimile number as set forth
in the Company’s books and records. Any party may change its address for notice at any time and from time to time by written
notice to the other parties hereto, and such change of address shall become effective thirty (30) days after delivery of such notice
as provided in this Section 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, the Private Placement Lock-up Period, or the Representative Shares 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 and other applicable
agreements.
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 THE AGREEMENT SHALL BE ANY STATE OR FEDERAL COURT IN NEW YORK COUNTY IN THE STATE OF NEW YORK.
EACH PARTY HERETO ACKNOWLEDGES AND AGREES
THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND, THEREFORE,
EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH
PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
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 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 without limitation on the amount
of securities sold or the manner of sale. 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.
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DISTOKEN ACQUISITION CORPORATION
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Cayman Islands exempted company
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By:
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Name:
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Title:
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HOLDERS:
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XIAOSEN SPONSOR LLC
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a Cayman Islands limited liability company
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By:
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Name: Jian Zhang
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Title: Managing Member
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EARLYBIRDCAPITAL,
INC.,
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By:
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Name:
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Title:
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[Signature Page - Registration Rights
Agreement]
Exhibit 10.5
SECURITIES SUBSCRIPTION AGREEMENT
This Securities Subscription Agreement (this
“Agreement”), effective as of July 8, 2020, is made and entered into by and between Distoken Acquisition Corporation,
a Cayman Islands exempted company (the “Company”), and Xiaosen Sponsor LLC, a Cayman Islands limited liability company
(the “Buyer”).
RECITALS:
WHEREAS, the Buyer wishes to
subscribe for an aggregate of 1,150,000 Class B ordinary shares (the “Shares”), par value $0.0001 per share, of the
Company, and the Company wishes to issue the Shares to the Buyer, on the terms and subject to the conditions set forth in this
Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration
of the premises, representations, warranties and the mutual covenants contained in this Agreement, and for other good and valuable
consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The terms defined in this Article
I shall have for all purposes of this Agreement the respective meanings set forth below:
“Agreement” shall have the meaning
set forth in the preamble to this Agreement.
“Buyer” shall have the meaning
set forth in the preamble to this Agreement.
“Class B ordinary shares” shall
have the meaning set forth in the recitals to this Agreement.
“Closing” shall have the meaning
set forth in Section 2.3 of this Agreement.
“Closing Date” shall have the
meaning set forth in Section 2.3 of this Agreement.
“Company” shall have the meaning
set forth in the preamble to this Agreement.
“Consent” means any consent,
approval, notification, waiver, or other similar action that is necessary or convenient.
“Governmental Body” shall mean
any legislature, agency, bureau, branch, department, division, commission, court, tribunal or other similar recognized organization
or body of any federal, state, county, municipal, local or foreign government or other similar recognized organization or body
exercising similar powers or authority.
“Law” shall mean any law (statutory,
common or otherwise), constitution, ordinance, rule, regulation, executive order or other similar authority enacted, adopted, promulgated
or applied by any Governmental Body.
“Lien” shall mean a mortgage,
deed of trust, pledge, hypothecation, assignment, encumbrance, charge, restriction, lien (statutory or otherwise, including, without
limitation, any lien for taxes), security interest, preference, participation interest, priority or security agreement or preferential
arrangement of any kind or nature whatsoever, including, without limitation, any conditional sale or other title retention agreement,
any financing lease having substantially the same economic effect as any of the foregoing and the filing of any document under
the law of any applicable jurisdiction to evidence any of the foregoing, other than (i) statutory, mechanics’ or other Liens
incurred in the Company’s ordinary course of business or (ii) Liens for taxes incurred but not yet due.
“Order” shall mean an order,
ruling, decision, award, judgment, injunction or other similar determination or finding by, before or under the supervision of
any Governmental Body or arbitrator.
“Permit” shall mean a permit,
license, certificate, waiver, notice or similar authorization.
“Subscription Price” shall have
the meaning set forth in Section 2.2 of this Agreement.
“SEC” shall mean the United
States Securities and Exchange Commission.
“Securities Act” shall mean
the United States Securities Act of 1933, as amended, or any successor federal statute, and the applicable rules and regulations
promulgated and in effect from time to time thereunder.
“Shares” shall have the meaning
set forth in the recitals to this Agreement.
ARTICLE II
SUBSCRIPTION OF THE SHARES
Section 2.1 Subscription and Issue
of the Shares. Subject to the terms and conditions hereof and in reliance upon the representations and warranties of the parties
contained or incorporated by reference herein, simultaneous with the execution hereof, the Company shall issue to the Buyer, and
the Buyer shall subscribe for the Shares, in consideration of the payment of the Subscription Price noted herein.
Section 2.2 Subscription Price.
As payment in full for the Shares being subscribed for under this Agreement and against issue of such Shares, simultaneous with
the execution hereof, the Buyer shall pay $25,000 on behalf of and at the direction of the Company by wire transfer of immediately
available funds or by such other method as may be reasonably acceptable to the Company (the “Subscription Price”).
Section 2.3 Closing. The closing
of the subscription and issue of the Shares (the “Closing”) shall be held on the date of this Agreement (“Closing
Date”) at the offices of Ellenoff Grossman & Schole LLP, 1345 Avenue of the Americas, New York, New York 10105, or such
other place as may be agreed upon by the parties hereto.
Section 2.4 Closing Deliveries.
All actions taken at the Closing shall be deemed to have been taken simultaneously.
(a) Buyer Deliveries. At the
Closing the Buyer shall deliver to the Company the Subscription Price.
(b) Company Deliveries. At the
Closing, or within a reasonable time after the Closing, the Company shall issue to the Buyer the Shares and make the necessary
entries in the Register of Members of the Company.
Section 2.5 Further Assurances.
The parties hereto shall execute and deliver such additional documents and take such additional actions as any party reasonably
may deem to be practical and necessary in order to consummate the transactions contemplated by this Agreement.
Section 2.6 Legend. Any certificate
evidencing the Shares and any certificate issued in exchange for or upon the transfer of any Shares shall be stamped or otherwise
imprinted with a legend in substantially the following form:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION,
AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT AND LAWS.”
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO ADDITIONAL RESTRICTIONS ON TRANSFER SET FORTH IN THE LETTER AGREEMENT BY AND BETWEEN THE COMPANY AND THE SHAREHOLDER. COPIES
OF SUCH AGREEMENT MAY BE OBTAINED FROM THE COMPANY AT THE COMPANY’S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE.”
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants that the
statements contained in this ARTICLE III are correct and complete as of the date of this Agreement.
Section 3.1 Formation, Registration
and Good Standing. The Buyer is a limited liability company duly formed and registered, validly existing, and in good standing
under the laws of the Cayman Islands.
Section 3.2 Power and Authority;
Enforceability. This Agreement constitutes the legal, valid, and binding obligation of the Buyer, enforceable against the Buyer
in accordance with its terms. The Buyer has full entity power and authority to execute and deliver this Agreement and to perform
its obligations hereunder. The Buyer has taken all actions necessary to authorize the execution and delivery of this Agreement,
the performance of its obligations hereunder and the consummation of the transactions contemplated hereby. This Agreement has been
duly authorized, executed and delivered by, and is enforceable against, the Buyer.
Section 3.3 Investment Representations.
(a) The Buyer is an “accredited investor”
as defined in Rule 501 of Regulation D under the Securities Act.
(b) The Buyer has received, has thoroughly
read, is familiar with and understands the contents of this Agreement.
(c) The Buyer hereby acknowledges that an
investment in the Shares involves certain significant risks. The Buyer acknowledges that there is a substantial risk that it will
lose all or a portion of its investment and that it is financially capable of bearing the risk of such investment for an indefinite
period of time. The Buyer has no need for liquidity in its investment in the Shares for the foreseeable future and is able to bear
the risk of that investment for an indefinite period. The Buyer understands that there presently is no public market for the Shares
and none is anticipated to develop in the foreseeable future. The Buyer’s present financial condition is such that the Buyer
is under no present or contemplated future need to dispose of any portion of the Shares subscribed for hereby to satisfy any existing
or contemplated undertaking, need or indebtedness. The Buyer’s overall commitment to investments which are not readily marketable
is not disproportionate to its net worth and the investment in the Company will not cause such overall commitment to become excessive.
(d) The Buyer acknowledges that the Shares
have not been and will not be registered under the Securities Act, or any state securities act, and are being sold on the basis
of exemptions from registration under the Securities Act and applicable state securities acts, except those state securities acts
that require registration of the Shares thereunder. Reliance on such exemptions, where applicable, is predicated in part on the
accuracy of the Buyer’s representations and warranties set forth herein. The Buyer acknowledges and hereby agrees that the
Shares will not be transferable under any circumstances unless the Buyer either registers the Shares in accordance with federal
and state securities laws or finds and complies with an available exemption under such laws. Accordingly, the Buyer hereby acknowledges
that there can be no assurance that it will be able to liquidate its investment in the Company.
(e) There are substantial risk factors
pertaining to an investment in the Company. The Buyer acknowledges that it has read the information set forth above regarding
certain of such risks and is familiar with the nature and scope of all such risks, including, without limitation, risks arising
from the fact that the Company is an entity with limited operating history and financial resources; and the Buyer is fully
able to bear the economic risks of such investment for an indefinite period, and can afford a complete loss thereof.
(f) The Buyer has been given the opportunity
to (i) ask questions of and receive answers from the Company and its designated representatives concerning the terms and conditions
of the offering, the Company and the business and financial condition of the Company and (ii) obtain any additional information
that the Company possesses or can acquire without unreasonable effort or expense that is necessary to assist the Buyer in evaluating
the advisability of the subscription of the Shares and an investment in the Company. The Buyer further represents and warrants
that, prior to signing this Agreement, it has asked such questions, received such answers and obtained such information as it
has deemed necessary or advisable to evaluate the merits and risks of the subscription of the Shares and an investment in the
Company. The Buyer is not relying on any oral representation made by any person as to the Company or its operations, financial
condition or prospects.
(g) The Buyer understands that no federal,
state or other governmental authority has made any recommendation, findings or determination relating to the merits of an investment
in the Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.1 Incorporation and Good
Standing. The Company is an exempted company duly incorporated, validly existing, and in good standing under the laws of the
Cayman Islands.
Section 4.2 Power and Authority;
Enforceability. This Agreement constitutes the legal, valid, and binding obligation of the Company, enforceable against the
Company in accordance with its terms. The Company has full power and authority to execute and deliver this Agreement and to perform
its obligations hereunder. The Company has taken all actions necessary to authorize the execution and delivery of this Agreement,
the performance of its obligations hereunder, and the consummation of the transactions contemplated hereby. This Agreement has
been duly authorized, executed, and delivered by, and is enforceable against, the Company.
Section 4.3 No Violation; Necessary
Approvals. Neither the execution and delivery of this Agreement by the Company, nor the consummation or performance by the
Company of any of the transactions contemplated hereby, will: (a) with or without notice or lapse of time, constitute, create or
result in a breach or violation of, default under, loss of benefit or right under or acceleration of performance of any obligation
required under any Law, Order, contract or Permit to which the Company is a party or by which it is bound or any of its assets
are subject, or any provision of the Company’s organizational documents as in effect on the Closing Date, (b) result in the
imposition of any lien, claim or encumbrance upon any assets owned by the Company; (c) require any Consent under any contract or
organizational document to which the Company is a party or by which it is bound; or (d) require any Permit under any Law or Order
other than (i) required filings, if any, with the SEC and (ii) notifications or other filings with state or federal regulatory
agencies after the Closing that are necessary or convenient and do not require approval of the agency as a condition to the validity
of the transactions contemplated hereunder; or (e) trigger any rights of first refusal, preferential purchase or similar rights
with respect to any of the Shares.
Section 4.4 Authorization of the
Shares. The Shares have been duly authorized and, when issued in accordance with this Agreement and the memorandum and articles
of association of the Company, the Shares will be duly and validly issued, fully paid and non-assessable Class B ordinary shares
of the Company and will be free and clear of all Liens and claims, other than restrictions on transfer imposed by the Securities
Act and applicable state securities laws.
ARTICLE V
MISCELLANEOUS
Section 5.1 Entire Agreement.
This Agreement, together with any certificates, documents, instruments and writings that are delivered pursuant hereto, constitutes
the entire agreement and understanding of the parties hereto in respect of its subject matter and supersedes all prior understandings,
agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject
matter hereof or the transactions contemplated hereby.
Section 5.2 Successors. All
of the terms, agreements, covenants, representations, warranties, and conditions of this Agreement are binding upon, and inure
to the benefit of and are enforceable by, the parties hereto and their respective successors.
Section 5.3 Assignments. Except
as otherwise provided herein, no party hereto may assign either this Agreement or any of its rights, interests, or obligations
hereunder without the prior written approval of the other party. Any purported assignment in violation of this Section
5.3 shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee.
Section 5.4 Waiver of Jury Trial.
THE PARTIES HERETO EACH HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO JURY TRIAL OF ANY DISPUTE BASED UPON OR ARISING OUT OF
THIS AGREEMENT OR ANY OTHER AGREEMENTS RELATING HERETO OR ANY DEALINGS AMONG THEM RELATING TO THE TRANSACTIONS. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL ACTIONS THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THE TRANSACTIONS, INCLUDING, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS. THE PARTIES HERETO EACH ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP AND
THAT THEY WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER REPRESENTS AND WARRANTS
THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED ORALLY OR IN WRITING, AND THE WAIVER WILL APPLY TO ANY AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING HERETO. IN THE EVENT OF AN ACTION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO TRIAL BY A COURT.
Section 5.5 Counterparts. This
Agreement may be executed in two or more counterparts, each of which will be deemed an original but all of which together will
constitute one and the same instrument.
Section 5.6 Headings. The article
and section headings contained in this Agreement are inserted for convenience only and will not affect in any way the meaning or
interpretation of this Agreement.
Section 5.7 Governing Law. This
Agreement, the entire relationship of the parties hereto, and any litigation between the parties (whether grounded in contract,
tort, statute, law or equity) shall be governed by, construed in accordance with, and interpreted pursuant to the laws of the State
of New York, without giving effect to its choice of laws principles.
Section 5.8 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.
Section
5.9 Severability. The provisions of this Agreement will be deemed severable and the invalidity or unenforceability
of any provision will not affect the validity or enforceability of the other provisions hereof; provided that if any provision
of this Agreement, as applied to any party hereto or to any circumstance, is adjudged by a Governmental Body, arbitrator, or mediator
not to be enforceable in accordance with its terms, the parties hereto agree that the Governmental Body, arbitrator, or mediator
making such determination will have the power to modify the provision in a manner consistent with its objectives such that it is
enforceable, and/or to delete specific words or phrases, and in its reduced form, such provision will then be enforceable and will
be enforced.
Section 5.10 Expenses. Except
as otherwise expressly provided in this Agreement, each party hereto will bear its own costs and expenses incurred in connection
with the preparation, execution and performance of this Agreement and the consummation of the transactions contemplated hereby,
including all fees and expenses of agents, representatives, financial advisors, legal counsel and accountants.
Section 5.11 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.
Any reference to any federal, state, local, or foreign Law will be deemed also to refer to Law as amended and all rules and regulations
promulgated thereunder, unless the context requires otherwise. 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.
Section 5.12 Waiver. No waiver
by any party hereto of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not,
may be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect
in any way any rights arising because of any prior or subsequent occurrence.
Section 5.13 Surrender of Share.
Upon the issue of the Shares, the Buyer hereby irrevocably surrenders to the Company for cancellation and for nil consideration
one Class B ordinary share of the Company standing in its name in the Register of Members of the Company.
[Signature page follows]
IN WITNESS WHEREOF, the undersigned
have executed this Agreement to be effective as of the date first set forth above.
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COMPANY:
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DISTOKEN ACQUISITION CORPORATION
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By:
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/s/ Jian Zhang
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Name:
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Jian Zhang
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Title:
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Chief Executive Officer
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BUYER:
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XIAOSEN SPONSOR LLC
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By:
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/s/Jian Zhang
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Name:
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Jian Zhang
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Title:
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Manager
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Exhibit 10.6
UNIT SUBSCRIPTION AGREEMENT
This UNIT SUBSCRIPTION AGREEMENT (this “Agreement”)
is made as of this [__] day of [________], 2020, by and between Distoken Acquisition Corporation, a Cayman Islands exempted
company (the “Company”), having its principal place of business Unit 1006, Block C, Jinshangjun Park,
No. 2 Xiaoba Road, Panlong District, Kunming, Yunnan, China, and Xiaosen Sponsor LLC (the “Purchaser”).
WHEREAS, the Company desires to sell on a
private placement basis (the “Offering”) an aggregate of 250,000 units (the “Initial Units”)
of the Company, each Initial Unit comprised of one Class A ordinary share of the Company, par value $0.0001 per share , one-half
of one warrant (the “Warrant”) to purchase one Class A ordinary share (the “Warrant Shares”)
to be governed by the Warrant Agreement (defined herein) and one right (the “Right”) to be governed by
the Rights Agreement (defined herein), for a purchase price of $2,500,000, or $10.00 per Initial Unit, and up to 18,000 units (“Additional
Units” and together with the Initial Units, the “Units”), each Additional Unit comprised
of one Class A ordinary share, one-half of one Warrant and one Right, for a purchase price of $180,000, or $10.00 per Additional
Unit. Each Right entitles the holder thereof to receive one-tenth (1/10) of one Class A ordinary share (the “Right
Shares”) upon the consummation of an initial business combination.
WHEREAS, the Purchaser
desires to purchase the Initial Units and the Company wishes to accept such subscription.
NOW, THEREFORE, in consideration of the promises
and the mutual covenants hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company and the Purchaser hereby agree as follows:
1. Agreement
to Subscribe
1.1. Purchase and Issuance of the
Initial Units. For the aggregate sum of $2,500,000 (the “Initial Purchase Price”), upon the terms
and subject to the conditions of this Agreement, the Purchaser hereby agrees to purchase from the Company, and the Company hereby
agrees to sell to the Purchaser, on the Closing Date (as defined in Section 1.2) 250,000 Initial Units at $10.00 per Initial Unit.
In addition to the foregoing, the Purchaser
hereby agrees to purchase up to an additional 18,000 Additional Units at $10.00 per Additional Unit for a purchase price of $180,000
(the “Additional Purchase Price” and together with the Initial Purchase Price, the “Purchase
Price”). The purchase and issuance of the Additional Units shall occur only in the event that the underwriters’
45-day over-allotment option (“Over-Allotment Option”) in the Offering is exercised in full or part.
The total number of Additional Units to be purchased hereunder shall be in the same proportion as the amount of the Over-Allotment
Option that is exercised. Each purchase of Additional Units shall occur simultaneously with the consummation of any portion of
the Over-Allotment Option.
1.2. Closing. The closing (the
“Closing”) of the Offering shall take place at the offices of Ellenoff Grossman & Schole LLP, 1345
Avenue of the Americas, New York, New York, 10105 simultaneously with the consummation of the Company’s initial public offering
(“IPO”) of 4,000,000 Units and the consummation of the exercise of all or any portion of the Over-Allotment
Option (each a “Closing Date”).
1.3. Delivery of the Purchase
Price. At least one business day prior to the effective date of the Company’s registration statement relating to
the IPO (“Registration Statement”), or the date of the exercise of the Over-Allotment Option, if
any, the Purchaser agrees to deliver the Initial Purchase Price or Additional Purchase Price, as the case may be, by
certified bank check or wire transfer of immediately available funds denominated in United States Dollars to Continental
Stock Transfer & Trust Company, a New York corporation (“CST”), which is hereby irrevocably authorized
to deposit such funds on the applicable Closing Date to the trust account which will be established for the benefit of the
Company’s public shareholders, managed pursuant to that certain Investment Management Trust Agreement to be entered
into by and between the Company and CST and into which substantially all of the proceeds of the IPO will be deposited (the
“Trust Account”). If the IPO is not consummated within 14 days of the date the Initial Purchase
Price is delivered to CST, the Initial Purchase Price shall be returned to the Purchaser by certified bank check or wire
transfer of immediately available funds denominated in United States Dollars, without interest or deduction.
1.4. Delivery of Unit Certificate.
Upon the applicable Closing Date after delivery of the Purchase Price in accordance with Section 1.3, the Purchaser shall become
irrevocably entitled to receive a unit certificate representing the Units purchased hereunder.
2. Representations and Warranties
of the Purchaser
The Purchaser represents and warrants to
the Company that:
2.1. No Government Recommendation
or Approval. It understands that no United States federal or state agency or similar agency of any other country has passed
upon or made any recommendation or endorsement of the Company, the Offering, the Units, the Warrants, the Warrant Shares, the Rights,
the Right Shares or the Class A ordinary shares underlying the Units (excluding the Warrant Shares and the Right Shares, the “Unit
Shares” and, collectively with the Units, the Warrant Shares and the Right Shares, the “Securities”).
2.2. Organization. It
is a company, validly existing and in good standing under the laws of its jurisdiction and possesses all requisite power and authority
necessary to carry out the transactions contemplated by this Agreement.
2.3. Private Offering. 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”) or it is not a “U.S. Person” as defined in Rule 902 of Regulation S (“Regulation
S”) under the Securities Act. It acknowledges that 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 and
similar exemptions under state law or a non-U.S. Person under Regulation S.
2.4. Authority. This Agreement
has been validly authorized, executed and delivered by the Purchaser and is a valid and binding agreement enforceable 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).
2.5. No Conflicts. The execution,
delivery and performance of this Agreement and the consummation by the Purchaser of the transactions contemplated hereby do not
violate, conflict with or constitute a default under (i) the Purchaser’s organizational documents, (ii) any agreement,
indenture or instrument to which the Purchaser is a party or (iii) any law, statute, rule or regulation to which the Purchaser
is subject, or any agreement, order, judgment or decree to which the Purchaser is subject.
2.6. No Legal Advice from Company.
It acknowledges it has had the opportunity to review this Agreement and the transactions contemplated by this Agreement and the
other agreements entered into between the parties hereto with its own legal counsel and investment and tax advisors. Except for
any statements or representations of the Company made in this Agreement and the other agreements entered into between the parties
hereto, it is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of
its representatives or agents for legal, tax or investment advice with respect to this investment, the transactions contemplated
by this Agreement or the securities laws of any jurisdiction.
2.7. Access to Information; Independent
Investigation. Prior to the execution of this Agreement, it 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, it has relied solely on its own knowledge and understanding of the Company and
its business based upon its own due diligence investigation and the information furnished pursuant to this paragraph. It 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 it 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.
2.8. Reliance on Representations
and Warranties. It understands the Units are being offered and sold to it in reliance on exemptions from the registration requirements
under the Securities Act, and analogous provisions in the laws and regulations of various states, and that the Company is relying
upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Purchaser
set forth in this Agreement in order to determine the applicability of such provisions.
2.9. No Advertisements. It
is not subscribing for the Units as a result of or subsequent to any advertisement, article, notice or other communication published
in any newspaper, magazine, or similar media or broadcast over television or radio, or presented at any seminar or meeting.
2.10. Legend. It acknowledges
and agrees the certificates evidencing the Units, the Class A ordinary shares, the Warrants and the Rights shall bear a restrictive
legend (the “Legend”), in form and substance as set forth in Section 4 hereof, prohibiting the offer,
sale, pledge or transfer of the securities, except (i) pursuant to an effective registration statement covering these securities
under the Securities Act or (ii) pursuant to any other exemptions from the registration requirements under the Securities
Act and such laws which, in the opinion of counsel for the Company, is available.
2.11. Experience, Financial Capability
and Suitability. It is (i) sophisticated in financial matters and is able to evaluate the risks and benefits of the investment
in the Securities and (ii) able to bear the economic risk of his investment in the Securities for an indefinite period of time
because the Securities have not been registered under the Securities Act and therefore cannot be sold unless subsequently registered
under the Securities Act or an exemption from such registration is available. It has substantial experience in evaluating and investing
in transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its
investment in the Company and has the capacity to protect its own interests. It has substantial experience in evaluating and investing
in transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its
investment in the Company and has the capacity to protect its own interests.
2.12. Investment Purposes.
It is purchasing the Securities solely for investment purposes, for its own account and not for the account or benefit of any other
person, and not with a view towards the distribution or dissemination thereof and it has no present arrangement to sell the interest
in the Securities to or through any person or entity.
2.13. Restrictions on Transfer.
It acknowledges and understands the Units are being offered in a transaction not involving a public offering in the United States
within the meaning of the Securities Act. The Securities have not been registered under the Securities Act, and, if in the future,
it decides to offer, resell, pledge or otherwise transfer the Securities, such Securities may be offered, resold, pledged or otherwise
transferred only (A) pursuant to an effective registration statement filed under the Securities Act, (B) pursuant to
an exemption from registration under Rule 144 promulgated under the Securities Act (“Rule 144”), if available,
or (C) pursuant to any other available exemption from the registration requirements of the Securities Act, and in each case
in accordance with any applicable securities laws of any state or any other jurisdiction. It agrees that if any transfer of its
Securities or any interest therein is proposed to be made, as a condition precedent to any such transfer, it may be required to
deliver to the Company an opinion of counsel satisfactory to the Company. Absent registration or another available exemption from
registration, it agrees it will not resell the Securities. It further acknowledges that because the Company is a shell company,
Rule 144 may not be available to it for the resale of the Securities until the one year anniversary following consummation of the
initial Business Combination (defined below) of the Company, despite technical compliance with the requirements of Rule 144 and
the release or waiver of any contractual transfer restrictions.
3. Representations
and Warranties of the Company
The Company represents
and warrants to the Purchaser that:
3.1. Valid Issuance of Share
Capital. The total number of all classes of share capital which the Company has authority to issue is (i) 200,000,000
Class A ordinary shares, (ii) 20,000,000 Class B ordinary shares and (iii) 1,000,000 preferred shares. As of the date hereof,
the Company has issued 1,250,000 Class B ordinary shares (of which 150,000 Class B ordinary shares are subject to forfeiture
as described in the registration statement related to the IPO) and no preferred shares are issued and outstanding. All of the
issued share capital of the Company has been duly authorized, validly issued, and are fully paid and non-assessable.
3.2. Title to Securities. Upon
issuance in accordance with, and payment pursuant to, the terms hereof and the warrant agreement and rights agreement to be entered
into with CST on or prior to the closing of the IPO (respectively, the “Warrant Agreement” and “Rights
Agreement”) and the Amended and Restated Memorandum and Articles of Association of the Company (as applicable), as
the case may be, each of the Warrants, the Rights and the Class A ordinary shares will be duly and validly issued, fully paid and
non-assessable. On the date of issuance of the Units, the Warrant Shares and the Right Shares shall have been reserved for issuance.
Upon issuance in accordance with the terms hereof, the Warrant Agreement and the Rights Agreement, the Purchaser will have or receive
good title to the Warrant Shares and the Right Shares, free and clear of all liens, claims and encumbrances of any kind other than
(i) transfer restrictions hereunder and pursuant to the insider letter to be entered into on or prior to the closing of the IPO
(the “Insider Letter”) and (ii) transfer restrictions under federal and state securities laws.
3.3. Organization and Qualification.
The Company has been duly incorporated and is validly existing as a Cayman Islands exempted company and has the requisite corporate
power to own its properties and assets and to carry on its business as now being conducted.
3.4. Authorization; Enforcement.
(i) The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement
and to issue the Securities in accordance with the terms hereof, (ii) the execution, delivery and performance of this Agreement
by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary corporate
action and no further consent or authorization of the Company or its Board of Directors or shareholders is required, and (iii) this
Agreement constitutes, and upon the execution and delivery thereof, the Warrants and Warrant Agreement, the Rights and Rights Agreement
will constitute, valid and binding obligations of the Company enforceable against the Company in accordance with their respective
terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, moratorium, reorganization,
or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by equitable principles
of general application and except as enforcement of rights to indemnity and contribution may be limited by federal and state securities
laws or principles of public policy.
3.5. No Conflicts. The execution,
delivery and performance of this Agreement and the consummation by the Company of the transactions contemplated hereby do not (i) result
in a violation of the Company’s Memorandum and Articles of Association, (ii) conflict with, or constitute a default
under any agreement, indenture or instrument to which the Company is a party or (iii) conflict with 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. Other than any federal,
state or foreign securities filings which may be required to be made by the Company subsequent to the Closing, and any registration
statement which may be filed pursuant thereto, the Company is not required under federal, state or local law, rule or regulation
to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency or
self-regulatory entity in order for it to perform any of its obligations under this Agreement or issue the Units, the Warrants,
the Rights or the Class A ordinary shares underlying the Units, Warrants or Rights in accordance with the terms hereof.
4. Legends
4.1. Legend. The Company will
issue the Units, the Warrants, the Rights and the Unit Shares, and when issued, the Warrant Shares and the Right Shares purchased
by the Purchaser, in the name of the Purchaser. The Securities will bear the following Legend and appropriate “stop transfer”
instructions:
THESE SECURITIES (i) HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THESE SECURITIES MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES
ACT, (B) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (C) PURSUANT TO THE RESALE LIMITATIONS SET FORTH IN RULE 905 OF REGULATION S UNDER THE SECURITIES ACT, (D)
PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO
ANY OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES
MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO AN AGREEMENT BETWEEN DISTOKEN ACQUISITION CORPORATION AND XIAOSEN SPONSOR LLC AND MAY ONLY BE OFFERED, SOLD, TRANSFERRED, PLEDGED
OR OTHERWISE DISPOSED DURING THE TERM OF THE LOCKUP PURSUANT TO THE TERMS SET FORTH THEREIN.”
4.2. Purchaser’s Compliance.
Nothing in this Section 4 shall affect in any way the Purchaser’s obligations and agreements to comply with all applicable
securities laws upon resale of the Securities.
4.3. Company’s Refusal to
Register Transfer of the Securities. The Company shall refuse to register any transfer of the Securities, if in the sole judgment
of the Company such purported transfer would not be made (i) pursuant to an effective registration statement filed under the
Securities Act, or (ii) pursuant to an available exemption from the registration requirements of the Securities Act.
4.4. Registration Rights. The
Purchaser will be entitled to certain registration rights which will be governed by a registration rights agreement (“Registration
Rights Agreement”) to be entered into with the Company on or prior to the closing of the IPO.
5. Lockup
The Purchaser acknowledges and agrees that
the Units, the Warrants, the Rights, the Unit Shares, the Warrant Shares and the Right Shares shall not be transferable, saleable
or assignable until thirty (30) days after the consummation of an acquisition, share exchange, purchase of all or substantially
all of the assets of, or any other similar business combination with one or more businesses or entities (a “Business
Combination”), except to permitted transferees (as defined in the Insider Letter).
6. Securities Laws Restrictions
The Purchaser agrees not to sell, transfer,
pledge, hypothecate or otherwise dispose of all or any part of the Securities unless, prior thereto (a) a registration statement
on the appropriate form under the Securities Act and applicable state securities laws with respect to the Securities proposed to
be transferred shall then be effective or (b) the Company shall have received an opinion from counsel reasonably satisfactory
to the Company, that such registration is not required because such transaction complies with the Securities Act and the rules
promulgated by the Securities and Exchange Commission thereunder and with all applicable state securities laws.
7. Waiver
of Distributions from Trust Account
In connection with the Securities purchased
pursuant to this Agreement, the Purchaser hereby waives any and all right, title, interest or claim of any kind in or to any distributions
from the Trust Account.
8. Rescission Right Waiver and
Indemnification
8.1. Rescission Waiver.
The Purchaser understands and acknowledges that an exemption from the registration requirements of the Securities Act
requires there be no general solicitation of purchasers of the Units. In this regard, if the Offering were deemed to be a
general solicitation with respect to the Units, the offer and sale of such Units may not be exempt from registration and, if
not, the Purchaser may have a right to rescind its purchase of the Units. In order to facilitate the completion of the
Offering and in order to protect the Company, its shareholders and the Trust Account from claims that may adversely affect
the Company or the interests of its shareholders, the Purchaser hereby agrees to waive, to the maximum extent permitted by
applicable law, any claims, right to sue or rights in law or arbitration, as the case may be, to seek rescission of its
purchase of the Units as a result of the issuance of the Units being deemed to be in violation of Section 5 of the Securities
Act. The Purchaser acknowledges and agrees this waiver is being made in order to induce the Company to sell the Units to the
Purchaser. The Purchaser agrees the foregoing waiver of rescission rights shall apply to any and all known or unknown
actions, causes of action, suits, claims or proceedings (collectively, “Claims”) and related
losses, costs, penalties, fees, liabilities and damages, whether compensatory, consequential or exemplary, and expenses in
connection therewith, including reasonable attorneys’ and expert witness fees and disbursements and all other expenses
reasonably incurred in investigating, preparing or defending against any Claims, whether pending or threatened, in connection
with any present or future actual or asserted right to rescind the purchase of the Units hereunder or relating to the
purchase of the Units and the transactions contemplated hereby.
8.2. No Recourse Against Trust
Account. The Purchaser agrees not to seek recourse against the Trust Account for any reason whatsoever in connection with its
purchase of the Units or any Claim that may arise now or in the future.
8.3. Section 8 Waiver. The
Purchaser agrees that to the extent any waiver of rights under this Section 8 is ineffective as a matter of law, the Purchaser
has offered such waiver for the benefit of the Company as an equitable right that shall survive any statutory disqualification
or bar that applies to a legal right. The Purchaser acknowledges the receipt and sufficiency of consideration received from the
Company hereunder in this regard.
9. Terms of the Unit
The Units shall be substantially identical
to the Units offered in the IPO as set forth in the Underwriting Agreement, except the Units: (i) will be subject to the transfer
restrictions described herein, and (ii) 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 the resale of the Units is registered
under the Securities Act.
10. Governing Law; Jurisdiction; Waiver
of Jury Trial
This Agreement shall be governed by and
construed in accordance with the laws of the State of New York for agreements made and to be wholly performed within such territory.
The parties hereto hereby waive any right to a jury trial in connection with any litigation pursuant to this Agreement and the
transactions contemplated hereby.
11. Assignment; Entire Agreement;
Amendment
11.1. Assignment. Neither this
Agreement nor any rights hereunder may be assigned by any party to any other person other than by the Purchaser, without the prior
consent of the Company, to one or more persons agreeing to be bound by the terms hereof. Upon such assignment by a Purchaser, the
assignee(s) shall become Purchaser hereunder and have the rights and obligations provided for herein to the extent of such assignment.
11.2. Entire Agreement. This
Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and supersedes
any and all prior discussions, agreements and understandings of any and every nature.
11.3. Amendment. Except as
expressly provided in this Agreement, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated
other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or termination
is sought.
11.4. Binding upon Successors.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives,
successors and permitted assigns.
12. Notices; Indemnity
12.1 Notices. All
notices, requests, consents and other communications hereunder shall be in writing, shall be addressed to the receiving
party’s address set forth herein or to such other address as a party may designate by notice hereunder, and shall be
either (a) delivered by hand, (b) sent by overnight courier, or (c) sent by certified mail, return receipt requested, postage
prepaid. All notices, requests, consents and other communications hereunder shall be deemed to have been given either (i) if
by hand, at the time of the delivery thereof to the receiving party at the address of such party set forth above, (ii) if
sent by overnight courier, on the next business day following the day such notice is delivered to the courier service, or
(iii) if sent by certified mail, on the fifth business day following the day such mailing is made.
12.2 Indemnification. Except
as set forth in Section 8, each party shall indemnify the other party against any loss, cost or damages (including reasonable attorney’s
fees and expenses) incurred as a result of such party’s breach of any representation, warranty, covenant or agreement set
forth in this Agreement.
13. 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.
14. Survival; Severability
14.1. Survival. The representations,
warranties, covenants and agreements of the parties hereto shall survive the Closing until one (1) year following the consummation
of an initial Business Combination.
14.2. Severability. In the
event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable
or void, this Agreement shall continue in full force and effect without said provision; provided that no such
severability shall be effective if it materially changes the economic benefit of this Agreement to any party.
15. Headings
The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or interpreting this Agreement.
16. 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.
[remainder of page intentionally left blank]
This subscription is accepted by the Company as of the date
first written above.
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DISTOKEN ACQUISITION CORPORATION
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By:
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Name:
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Jian Zhang
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Title:
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Chief Executive Officer
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Accepted and agreed this
[__] day of [_______], 2020
XIAOSEN SPONSOR LLC
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By:
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Name:
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Jian Zhang
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Title:
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Managing Member
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Exhibit 10.7
FORM OF INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT (this “Agreement”)
is made as of [●], 2020, by and between Distoken Acquisition Corporation, a Cayman Islands exempted company (the “Company”),
and [ ] (“Indemnitee”).
RECITALS
WHEREAS, highly competent persons have become more
reluctant to serve publicly-held companies as directors, officers or in other capacities unless they are provided with adequate
protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out
of their service to and activities on behalf of such companies;
WHEREAS, the Board of Directors of the Company (the “Board”)
has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis,
at its sole expense, liability insurance to protect persons serving the Company and its Subsidiaries (as defined below) from certain
liabilities;
WHEREAS, while the Amended and Restated Memorandum and
Articles of Association of the Company provide for the indemnification of the officers and directors of the Company, Indemnitee
may also be entitled to indemnification pursuant to applicable Cayman Islands law, and the Amended and Restated Memorandum and
Articles of Association provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate
that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect
to indemnification, hold harmless, exoneration, advancement and reimbursement rights;
WHEREAS, the uncertainties relating to such insurance
and to indemnification have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased
difficulty in attracting and retaining such persons is detrimental to the best interests of the Company’s shareholders and
that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for
the Company contractually to obligate itself to indemnify, hold harmless, exonerate and to advance expenses on behalf of, such
persons to the fullest extent permitted by applicable law and the Amended and Restated Memorandum and Articles of Association of
the Company so that they will serve or continue to serve the Company free from undue concern that they will not be so protected
against liabilities;
WHEREAS, this Agreement is a supplement to and in furtherance
of the Amended and Restated Memorandum and Articles of Association of the Company and any resolutions adopted pursuant thereto,
and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and
WHEREAS, Indemnitee may not be willing to serve as an
officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity, and Indemnitee is
willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he
or she be so indemnified.
NOW, THEREFORE, in consideration of the premises and
the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
TERMS AND CONDITIONS
1. SERVICES TO
THE COMPANY. In consideration of the Company’s covenants and obligations hereunder, Indemnitee will serve or
continue to serve as an officer, director, advisor, key employee or any other capacity of the Company, as applicable, for so
long as Indemnitee is duly elected or appointed or retained or until Indemnitee tenders his or her resignation or until
Indemnitee is removed. The foregoing notwithstanding, this Agreement shall continue in full force and effect after Indemnitee
has ceased to serve as a director, officer, advisor, key employee or in any other capacity of the Company, as provided in
Section 17. This Agreement, however, shall not impose any obligation on Indemnitee or the Company to
continue Indemnitee’s service to the Company beyond any period otherwise required by law or by other agreements or
commitments of the parties, if any.
2. DEFINITIONS. As
used in this Agreement:
(a) References to “agent”
shall mean any person who is or was a director, officer or employee of the Company or a Subsidiary of the Company or other person
authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee,
fiduciary or other official of another company, corporation, partnership, limited liability company, joint venture, trust or other
enterprise at the request of, for the convenience of, or to represent the interests of the Company or a Subsidiary of the Company.
(b) The terms “Beneficial
Owner” and “Beneficial Ownership” shall have the meanings set forth in Rule 13d-3 promulgated
under the Exchange Act (as defined below) as in effect on the date hereof.
(c) “Cayman
Court” shall mean the courts of the Cayman Islands.
(d) A “Change
in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following
events:
(i) Acquisition
of Shares by Third Party. Other than an affiliate of Xiaosen Sponsor LLC, a Cayman Islands limited partnership liability company
(the “Sponsor”), any Person (as defined below) is or becomes the Beneficial Owner, directly or indirectly,
of securities of the Company representing fifteen percent (15%) or more of the combined voting power of the Company’s then
outstanding securities entitled to vote generally in the election of directors, unless (1) the change in the relative Beneficial
Ownership of the Company’s securities by any Person results solely from a reduction in the aggregate number of outstanding
shares of securities entitled to vote generally in the election of directors, or (2) such acquisition was approved in advance by
the Continuing Directors (as defined below) and such acquisition would not constitute a Change in Control under part (iii) of this
definition;
(ii) Change in Board
of Directors. Individuals who, as of the date hereof, constitute the Board, and any new director whose election by the Board
or nomination for election by the Company’s shareholders was approved by a vote of at least two thirds of the directors then
still in office who were directors on the date hereof or whose election for nomination for election was previously so approved
(collectively, the “Continuing Directors”), cease for any reason to constitute at least a majority of
the members of the Board;
(iii) Corporate
Transactions. The effective date of a merger, share exchange, asset acquisition, share purchase, reorganization or similar
business combination, involving the Company and one or more businesses (a “Business Combination”), in
each case, unless, following such Business Combination: (1) all or substantially all of the individuals and entities who were the
Beneficial Owners of securities entitled to vote generally in the election of directors immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding securities of the
Company entitled to vote generally in the election of directors resulting from such Business Combination (including, without limitation,
a company which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either
directly or through one or more Subsidiaries) in substantially the same proportions as their ownership immediately prior to such
Business Combination, of the securities entitled to vote generally in the election of directors; (2) other than an affiliate of
the Sponsor, no Person (excluding any company resulting from such Business Combination) is the Beneficial Owner, directly or indirectly,
of 15% or more of the combined voting power of the then outstanding securities entitled to vote generally in the election of directors
of the surviving company except to the extent that such ownership existed prior to the Business Combination; and (3) at least a
majority of the Board of Directors of the company resulting from such Business Combination were Continuing Directors at the time
of the execution of the initial agreement, or of the action of the Board of Directors, providing for such Business Combination;
(iv) Liquidation.
The approval by the shareholders of the Company of a complete liquidation of the Company or an agreement or series of
agreements for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than
factoring the Company’s current receivables or escrows due (or, if such approval is not required, the decision by the
Board to proceed with such a liquidation, sale, or disposition in one transaction or a series of related transactions);
or
(v) Other Events.
There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A (or any successor rule) (or a response to any similar item on any similar schedule or form) promulgated under the Exchange
Act (as defined below), whether or not the Company is then subject to such reporting requirement.
(e) “Companies
Law” shall mean the Companies Law (2018 Revision) of the Cayman Islands, as amended from time to time.
(f) “Corporate
Status” describes the status of a person who is or was a director, officer, trustee, general partner, manager, managing
member, fiduciary, employee or agent of the Company or of any other Enterprise (as defined below) which such person is or was serving
at the request of the Company.
(g) “Disinterested
Director” shall mean a director of the Company who is not and was not a party to the Proceeding (as defined below)
in respect of which indemnification is sought by Indemnitee.
(h) “Enterprise”
shall mean the Company and any other company, corporation, constituent company or corporation (including any constituent of a constituent)
absorbed in a consolidation or merger to which the Company (or any of its wholly owned Subsidiaries) is a party, limited liability
company, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at
the request of the Company as a director, officer, trustee, general partner, managing member, fiduciary, employee or agent.
(i) “Exchange
Act” shall mean the United States Securities Exchange Act of 1934, as amended.
(j) “Expenses”
shall include all direct and indirect costs, fees and expenses of any type or nature whatsoever, including, without limitation,
all reasonable attorneys’ fees and costs, retainers, court costs, transcript costs, fees of experts, witness fees, travel
expenses, fees of private investigators and professional advisors, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, fax transmission charges, secretarial services and all other disbursements, obligations or expenses
in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness
in, settlement or appeal of, or otherwise participating in, a Proceeding (as defined below), including reasonable compensation
for time spent by the Indemnitee for which he or she is not otherwise compensated by the Company or any third party. Expenses also
shall include Expenses incurred in connection with any appeal resulting from any Proceeding (as defined below), including without
limitation the principal, premium, security for, and other costs relating to any cost bond, supersedes bond, or other appeal bond
or its equivalent. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or
fines against Indemnitee.
(k) References to “fines”
shall include any excise tax assessed on Indemnitee with respect to any employee benefit plan.
(l) References to “serving
at the request of the Company” shall include any service as a director, officer, employee, agent or fiduciary of the
Company or a Subsidiary of the Company which imposes duties on, or involves services by, such director, officer, employee, agent
or fiduciary with respect to an employee benefit plan, its participants or beneficiaries; and if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in the best interests of the participants and beneficiaries of an employee
benefit plan, Indemnitee shall be deemed to have acted in a manner “not opposed to the best interests of the Company”
as referred to in this Agreement.
(m) “Independent
Counsel” shall mean a law firm or a member of a law firm with significant experience in matters of corporation
law and that neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee
in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement,
or of other indemnitees under similar indemnification agreements); or (ii) any other party to the Proceeding (as defined
below) giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent
Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement.
(n) The term “Person”
shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act as in
effect on the date hereof; provided, however, that “Person” shall exclude: (i) the Company; (ii) any Subsidiaries of
the Company; (iii) any employment benefit plan of the Company or of a Subsidiary (as defined below) of the Company or of any corporation
owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of shares
of the Company; and (iv) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or of
a Subsidiary (as defined below) of the Company or of a corporation owned directly or indirectly by the shareholders of the Company
in substantially the same proportions as their ownership of shares of the Company.
(o) The term “Proceeding”
shall include any threatened, pending or completed action, suit, arbitration, mediation, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the
right of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative
or investigative or related nature, in which Indemnitee was, is, will or might be involved as a party or otherwise by reason of
the fact that Indemnitee is or was a director or officer of the Company, by reason of any action (or failure to act) taken by him
or her or of any action (or failure to act) on his or her part while acting as a director or officer of the Company, or by reason
of the fact that he or she is or was serving at the request of the Company as a director, officer, trustee, general partner, managing
member, fiduciary, employee or agent of any other Enterprise, in each case whether or not serving in such capacity at the time
any liability or expense is incurred for which indemnification, reimbursement, or advancement of expenses can be provided under
this Agreement.
(p) The term “Subsidiary,”
with respect to any Person, shall mean any corporation, limited liability company, partnership, joint venture, trust or other entity
of which a majority of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by
that Person.
3. INDEMNITY IN
THIRD-PARTY PROCEEDINGS. To the fullest extent permitted by applicable law and the Amended and Restated Memorandum and
Articles of Association of the Company, the Company shall indemnify, hold harmless and exonerate Indemnitee in accordance with
the provisions of this Section 3 if Indemnitee was, is, or is threatened to be made, a party to or a participant
(as a witness, deponent or otherwise) in any Proceeding, other than a Proceeding by or in the right of the Company to procure a
judgment in its favor by reason of Indemnitee’s Corporate Status. Pursuant to this Section 3, Indemnitee
shall be indemnified, held harmless and exonerated against all Expenses, judgments, liabilities, fines, penalties and amounts paid
in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses,
judgments, fines, penalties and amounts paid in settlement) actually, and reasonably incurred by Indemnitee or on his or her behalf
in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal Proceeding,
had no reasonable cause to believe that his or her conduct was unlawful.
4. INDEMNITY IN
PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. To the fullest extent permitted by applicable law and the Amended and Restated
Memorandum and Articles of Association of the Company, the Company shall indemnify, hold harmless and exonerate Indemnitee in accordance
with the provisions of this Section 4 if Indemnitee was, is, or is threatened to be made, a party to or a participant
(as a witness, deponent or otherwise) in any Proceeding by or in the right of the Company to procure a judgment in its favor by
reason of Indemnitee’s Corporate Status. Pursuant to this Section 4, Indemnitee shall be indemnified,
held harmless and exonerated against all Expenses actually and reasonably incurred by him or her on his or her behalf in connection
with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Company. No indemnification, hold harmless or exoneration for Expenses
shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have
been finally adjudged by a court to be liable to the Company, unless and only to the extent that any court in which the Proceeding
was brought or the Cayman Court shall determine upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification, to be held harmless or to exoneration.
5. INDEMNIFICATION
FOR EXPENSES OF A PARTY WHO IS WHOLLY OR PARTLY SUCCESSFUL. Notwithstanding any other provisions of this Agreement except
for Section 27, to the extent that Indemnitee was or is, by reason of Indemnitee’s Corporate Status, a
party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue
or matter therein, in whole or in part, the Company shall, to the fullest extent permitted by applicable law and the Amended and
Restated Memorandum and Articles of Association of the Company, indemnify, hold harmless and exonerate Indemnitee against all Expenses
actually and reasonably incurred by him or her in connection therewith. If Indemnitee is not wholly successful in such Proceeding
but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding,
the Company shall, to the fullest extent permitted by applicable law and the Amended and Restated Memorandum and Articles of Association
of the Company, indemnify, hold harmless and exonerate Indemnitee against all Expenses actually and reasonably incurred by him
or her or on his or her behalf in connection with each successfully resolved claim, issue or matter. If Indemnitee is not wholly
successful in such Proceeding, the Company also shall, to the fullest extent permitted by applicable law and the Amended and Restated
Memorandum and Articles of Association of the Company, indemnify, hold harmless and exonerate Indemnitee against all Expenses reasonably
incurred in connection with a claim, issue or matter related to any claim, issue, or matter on which Indemnitee was successful.
For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal,
with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
6. INDEMNIFICATION
FOR EXPENSES OF A WITNESS. Notwithstanding any other provision of this Agreement except for Section 27,
to the extent that Indemnitee is, by reason of his or her Corporate Status, a witness or deponent in any Proceeding to which Indemnitee
was or is not a party or threatened to be made a party, he or she shall, to the fullest extent permitted by applicable law and
the Amended and Restated Memorandum and Articles of Association of the Company, be indemnified, held harmless and exonerated against
all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection therewith.
7. ADDITIONAL INDEMNIFICATION,
HOLD HARMLESS AND EXONERATION RIGHTS.
(a) Notwithstanding
any limitation in Sections 3, 4, or 5, except for Section 27,
the Company shall, to the fullest extent permitted by applicable law and the Amended and Restated Memorandum and Articles of Association
of the Company, indemnify, hold harmless and exonerate Indemnitee if Indemnitee is a party to or threatened to be made a party
to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Expenses,
judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable
in connection with or in respect of such Expenses, judgments, fines, penalties and amounts paid in settlement) actually and reasonably
incurred by Indemnitee in connection with the Proceeding. No indemnification, hold harmless or exoneration rights shall be available
under this Section 7(a) on account of Indemnitee’s conduct which constitutes a breach of Indemnitee’s
duty of loyalty to the Company or its shareholders or is an act or omission not in good faith or which involves intentional misconduct
or a knowing violation of the law.
(b) Notwithstanding
any limitation in Sections 3, 4, 5 or 7(a), except
for Section 27, the Company shall, to the fullest extent permitted by applicable law and the Amended and Restated
Memorandum and Articles of Association of the Company, indemnify, hold harmless and exonerate Indemnitee if Indemnitee is a party
to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment
in its favor) against all Expenses, judgments, fines, penalties and amounts paid in settlement (including all interest, assessments
and other charges paid or payable in connection with or in respect of such Expenses, judgments, fines, penalties and amounts paid
in settlement) actually and reasonably incurred by Indemnitee in connection with the Proceeding.
8. CONTRIBUTION
IN THE EVENT OF JOINT LIABILITY.
(a) To the
fullest extent permissible under applicable law, if the indemnification, hold harmless and/or exoneration rights provided for
in this Agreement are unavailable to Indemnitee in whole or in part for any reason whatsoever, the Company, in lieu of
indemnifying, holding harmless or exonerating Indemnitee, shall pay, in the first instance, the entire amount incurred by
Indemnitee, whether for judgments, liabilities, fines, penalties, amounts paid or to be paid in settlement and/or for
Expenses, in connection with any Proceeding without requiring Indemnitee to contribute to such payment, and the Company
hereby waives and relinquishes any right of contribution it may have at any time against Indemnitee.
(b) The Company shall
not enter into any settlement of any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in
such Proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.
(c) The Company hereby
agrees to fully indemnify, hold harmless and exonerate Indemnitee from any claims for contribution which may be brought by officers,
directors or employees of the Company other than Indemnitee who may be jointly liable with Indemnitee.
9. EXCLUSIONS. Notwithstanding
any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnification, advance expenses,
hold harmless or exoneration payment in connection with any claim made against Indemnitee:
(a) for which payment
has actually been received by or on behalf of Indemnitee under any insurance policy or other indemnity or advancement provision
and which payment has not subsequently been returned, except with respect to any excess beyond the amount actually received under
any insurance policy, contract, agreement, other indemnity or advancement provision or otherwise;
(b) for an accounting
of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning
of Section 16(b) of the Exchange Act (or any successor rule) or similar provisions of state statutory law or
common law; or
(c) except as otherwise
provided in Sections 14(f)-(g) hereof, prior to a Change in Control, in connection
with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding)
initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized
the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, hold harmless
or exoneration payment, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
10. ADVANCES OF
EXPENSES; DEFENSE OF CLAIM.
(a) Notwithstanding any provision of this Agreement to the contrary
except for Section 27, and to the fullest extent not prohibited by applicable law, the Company shall pay the Expenses incurred
by Indemnitee (or reasonably expected by Indemnitee to be incurred by Indemnitee within three months) in connection with any Proceeding
within ten (10) days after the receipt by the Company of a statement or statements requesting such advances from time to time,
prior to the final disposition of any Proceeding. Advances shall, to the fullest extent permitted by applicable law and the Amended
and Restated Memorandum and Articles of Association of the Company, be unsecured and interest free. Advances shall, to the fullest
extent permitted by applicable law and the Amended and Restated Memorandum and Articles of Association of the Company, be made
without regard to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s ultimate entitlement
to be indemnified, held harmless or exonerated under the other provisions of this Agreement. Advances shall include any and all
reasonable Expenses incurred pursuing a Proceeding to enforce this right of advancement, including Expenses incurred preparing
and forwarding statements to the Company to support the advances claimed. To the fullest extent required by applicable law, such
payments of Expenses in advance of the final disposition of the Proceeding shall be made only upon the Company’s receipt
of an undertaking, by or on behalf of Indemnitee, to repay the advanced amounts to the extent that it is ultimately determined
that Indemnitee is not entitled to be indemnified by the Company under the provisions of this Agreement, the Amended and Restated
Memorandum and Articles of Association, applicable law or otherwise. This Section 10(a) shall not apply to any claim made by Indemnitee
for which an indemnification, hold harmless or exoneration payment is excluded pursuant to Section 9.
(b) The Company will
be entitled to participate in the Proceeding at its own expense.
(c) The Company shall
not settle any action, claim or Proceeding (in whole or in part) which would impose any Expense, judgment, fine, penalty or limitation
on Indemnitee without Indemnitee’s prior written consent.
11. PROCEDURE FOR
NOTIFICATION AND APPLICATION FOR INDEMNIFICATION.
(a) Indemnitee agrees
to notify promptly the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information
or other document relating to any Proceeding, claim, issue or matter therein which may be subject to indemnification, hold harmless
or exoneration rights, or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not
relieve the Company of any obligation which it may have to Indemnitee under this Agreement, or otherwise.
(b) Indemnitee may
deliver to the Company a written application to indemnify, hold harmless or exonerate Indemnitee in accordance with this Agreement.
Such application(s) may be delivered from time to time and at such time(s) as Indemnitee deems appropriate in his or her sole discretion.
Following such a written application for indemnification by Indemnitee, Indemnitee’s entitlement to indemnification shall
be determined according to Section 12(a) of this Agreement.
12. PROCEDURE UPON
APPLICATION FOR INDEMNIFICATION.
(a) A determination,
if required by applicable law, with respect to Indemnitee’s entitlement to indemnification shall be made in the specific
case by one of the following methods, which shall be at the election of Indemnitee: (i) by a majority vote of the Disinterested
Directors, even though less than a quorum of the Board, (ii) by a committee of such directors designated by majority vote of such
directors, (iii) if there are no Disinterested Directors or if such directors so direct, by Independent Counsel in a written opinion
to the Board, a copy of which shall be delivered to Indemnitee, or (iv) by vote of the shareholders. The Company promptly will
advise Indemnitee in writing with respect to any determination that Indemnitee is or is not entitled to indemnification, including
a description of any reason or basis for which indemnification has been denied. If it is so determined that Indemnitee is entitled
to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall reasonably
cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification,
including providing to such person, persons or entity upon reasonable advance request any documentation or information which is
not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary
to such determination. Any costs or Expenses (including reasonable attorneys’ fees and disbursements) incurred by Indemnitee
in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the
determination as to Indemnitee’s entitlement to indemnification) and the Company hereby agrees to indemnify and to hold Indemnitee
harmless therefrom.
(b) In the event
the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to
Section 12(a) hereof, the Independent Counsel shall be selected as provided in this
Section 12(b). The Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request
that such selection be made by the Board), and Indemnitee shall give written notice to the Company advising it of the
identity of the Independent Counsel so selected and certifying that the Independent Counsel so selected meets the
requirements of “Independent Counsel” as defined in Section 2 of this Agreement. If the
Independent Counsel is selected by the Board, the Company shall give written notice to Indemnitee advising him or her of the
identity of the Independent Counsel so selected and certifying that the Independent Counsel so selected meets the
requirements of “Independent Counsel” as defined in Section 2 of this Agreement. In either
event, Indemnitee or the Company, as the case may be, may, within ten (10) days after such written notice of selection shall
have been received, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection;
provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not
meet the requirements of “Independent Counsel” as defined in Section 2 of this Agreement, and
the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection,
the person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the
Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court
of competent jurisdiction has determined that such objection is without merit. If, within twenty (20) days after submission
by Indemnitee of a written request for indemnification pursuant to Section 11(b) hereof, no Independent
Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Cayman Court for
resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of
Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Cayman Court, and the
person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under
Section (a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to
Section 14(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).
(c) The Company agrees
to pay the reasonable fees and expenses of Independent Counsel and to fully indemnify and hold harmless such Independent Counsel
against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant
hereto.
13. PRESUMPTIONS
AND EFFECT OF CERTAIN PROCEEDINGS.
(a) In making a determination
with respect to entitlement to indemnification hereunder, the person, persons or entity making such determination shall presume
that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 11(b) of this Agreement, and the Company shall have the burden of proof to overcome
that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption.
Neither the failure of the Company (including by the Disinterested Directors or Independent Counsel) to have made a determination
prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because
Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by the Disinterested
Directors or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action
or create a presumption that Indemnitee has not met the applicable standard of conduct.
(b) If the person, persons or entity empowered or selected under
Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination
within thirty (30) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification
shall, to the fullest extent permitted by applicable law and the Amended and Restated Memorandum and Articles of Association of
the Company, be deemed to have been made and Indemnitee 12 shall be entitled to such indemnification, absent (i) a misstatement
by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially
misleading, in connection with the request for indemnification, or (ii) a final judicial determination that any or all such indemnification
is expressly prohibited under applicable law or the Amended and Restated Memorandum and Articles of Association of the Company;
provided, however, that such 30-day period may be extended for a reasonable time, not to exceed an additional fifteen (15) days,
if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires
such additional time for the obtaining or evaluating of documentation and/or information relating thereto.
(c) The termination
of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the
right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which
he or she reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that his or her conduct was unlawful.
(d) For purposes
of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is
based on the records or books of account of the Enterprise, including financial statements, or on information supplied to
Indemnitee by the directors, manager, or officers of the Enterprise in the course of their duties, or on the advice of legal
counsel for the Enterprise, its Board, any committee of the Board or any director, trustee, general partner, manager or
managing member, or on information or records given or reports made to the Enterprise, its Board, any committee of the Board
or any director, trustee, general partner, manager or managing member, by an independent certified public accountant or by an
appraiser or other expert selected by the Enterprise, its Board, any committee of the Board or any director, trustee, general
partner, manager or managing member. The provisions of this Section 13(d) shall not be deemed to be
exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed or found to have met the
applicable standard of conduct set forth in this Agreement.
(e) The knowledge and/or
actions, or failure to act, of any other director, officer, trustee, partner, manager, managing member, fiduciary, agent or employee
of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
14. REMEDIES OF
INDEMNITEE.
(a) In the event that
(i) a determination is made pursuant to Section 12 of this Agreement that Indemnitee is not entitled to indemnification
under this Agreement, (ii) advancement of Expenses, to the fullest extent permitted by applicable law and the Amended and Restated
Memorandum and Articles of Association of the Company, is not timely made pursuant to Section 10 of this Agreement,
(iii) no determination of entitlement to indemnification shall have been made pursuant to Section 12(a) of this
Agreement within thirty (30) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification
is not made pursuant to Section 5, 6, 7 or the last sentence of Section 12(a) of this Agreement
within ten (10) days after receipt by the Company of a written request therefor, (v) a contribution payment is not made in a timely
manner pursuant to Section 8 of this Agreement, (vi) payment of indemnification pursuant to Section 3
or 4 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification,
or (vii) payment to Indemnitee pursuant to any hold harmless or exoneration rights under this Agreement or otherwise is not made
in accordance with this Agreement, Indemnitee shall be entitled to an adjudication by the Cayman Court to such indemnification,
hold harmless, exoneration, contribution or advancement rights. Alternatively, Indemnitee, at his or her option, may seek an award
in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration
Association. Except as set forth herein, the provisions of Cayman Islands law (without regard to its conflict of laws rules) shall
apply to any such arbitration. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in
arbitration.
(b) In the event that
a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled
to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted
in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse
determination.
(c) In any judicial
proceeding or arbitration commenced pursuant to this Section 14, Indemnitee shall be presumed to be entitled
to be indemnified, held harmless, exonerated to receive advancement of Expenses under this Agreement and the Company shall have
the burden of proving Indemnitee is not entitled to be indemnified, held harmless, exonerated and to receive advancement of Expenses,
as the case may be, and the Company may not refer to or introduce into evidence any determination pursuant to Section 12(a)
of this Agreement adverse to Indemnitee for any purpose. If Indemnitee commences a judicial proceeding or arbitration pursuant
to this Section 14, Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 10
until a final determination is made with respect to Indemnitee’s entitlement to indemnification (as to which all rights of
appeal have been exhausted or lapsed).
(d) If a determination
shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification,
the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14,
absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification
under applicable law.
(e) The Company shall
be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14
that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court
or before any such arbitrator that the Company is bound by all the provisions of this Agreement.
(f) The Company shall indemnify and hold harmless
Indemnitee to the fullest extent permitted by applicable law and the Amended and Restated Memorandum and Articles of
Association of the Company against all Expenses and, if requested by Indemnitee, shall (within ten (10) days after the
Company’s receipt of such written request) pay to Indemnitee, to the fullest extent permitted by applicable law and the
Amended and Restated Memorandum and Articles of Association of the Company, such Expenses which are incurred by Indemnitee in
connection with any judicial proceeding or arbitration brought by Indemnitee: (i) to enforce his or her rights under, or to
recover damages for breach of, this Agreement or any other indemnification, hold harmless, exoneration, advancement or
contribution agreement or provision of the Amended and Restated Memorandum and Articles of Association now or hereafter in
effect; or (ii) for recovery or advances under any insurance policy maintained by any person for the benefit of Indemnitee,
regardless of the outcome and whether Indemnitee ultimately is determined to be entitled to such indemnification, hold
harmless or exoneration right, advancement, contribution or insurance recovery, as the case may be (unless such judicial
proceeding or arbitration was not brought by Indemnitee in good faith).
(g) Interest shall
be paid by the Company to Indemnitee at the legal rate under New York law for amounts which the Company indemnifies, holds harmless
or exonerates, or advances, or is obliged to indemnify, hold harmless or exonerate or advance for the period commencing with the
date on which Indemnitee requests indemnification, to be held harmless, exonerated, contribution, reimbursement or advancement
of any Expenses and ending with the date on which such payment is made to Indemnitee by the Company.
15. SECURITY.
Notwithstanding anything herein to the contrary, except for Section 27, to the extent requested by Indemnitee
and approved by the Board, the Company may at any time and from time to time provide security to Indemnitee for the Company’s
obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided
to Indemnitee, may not be revoked or released without the prior written consent of Indemnitee.
16. NON-EXCLUSIVITY;
SURVIVAL OF RIGHTS; INSURANCE; SUBROGATION.
(a) The rights of Indemnitee
as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled
under applicable law, the Amended and Restated Memorandum and Articles of Association, any agreement, a vote of shareholders or
a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall
limit or restrict any right of Indemnitee under this Agreement in respect of any Proceeding (regardless of when such Proceeding
is first threatened, commenced or completed) or claim, issue or matter therein arising out of, or related to, any action taken
or omitted by such Indemnitee in his or her Corporate Status prior to such amendment, alteration or repeal. To the extent that
a change in applicable law, whether by statute or judicial decision, permits greater indemnification, hold harmless or exoneration
rights or advancement of Expenses than would be afforded currently under the Amended and Restated Memorandum and Articles of Association
or this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so
afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every
other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other right or remedy.
(b) The Companies Law
and the Amended and Restated Memorandum and Articles of Association permit the Company to purchase and maintain insurance or furnish
similar protection or make other arrangements including, but not limited to, providing a trust fund, letter of credit, or surety
bond (“Indemnification Arrangements”) on behalf of Indemnitee against any liability asserted against
him or her or incurred by or on behalf of him or her or in such capacity as a director, officer, employee or agent of the Company,
or arising out of his or her status as such, whether or not the Company would have the power to indemnify him or her against such
liability under the provisions of this Agreement or under the Companies Law, as it may then be in effect. The purchase, establishment,
and maintenance of any such Indemnification Arrangement shall not in any way limit or affect the rights and obligations of the
Company or of Indemnitee under this Agreement except as expressly provided herein, and the execution and delivery of this Agreement
by the Company and Indemnitee shall not in any way limit or affect the rights and obligations of the Company or the other party
or parties thereto under any such Indemnification Arrangement.
(c) To the extent
that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, trustees,
partners, managers, managing members, fiduciaries, employees, or agents of the Company or of any other Enterprise which such
person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or
their terms to the maximum extent of the coverage available for any such director, officer, trustee, partner, managers,
managing member, fiduciary, employee or agent under such policy or policies. If, at the time the Company receives notice from
any source of a Proceeding as to which Indemnitee is a party or a participant (as a witness, deponent or otherwise), the
Company has director and officer liability insurance in effect, the Company shall give prompt notice of such Proceeding to
the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all
necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such
Proceeding in accordance with the terms of such policies.
(d) In the event of any payment under this Agreement, the Company,
to the fullest extent permitted by applicable law and the Amended and Restated Memorandum and Articles of Association of the Company,
shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, including with respect to any
insurance. The Indemnitee shall execute all papers required and take all action necessary to secure such 16 rights, including execution
of such documents as are necessary to enable the Company to bring suit to enforce such rights. No such payment by the Company shall
be deemed to relieve any insurer of its obligations.
(e) The Company’s
obligation to indemnify, hold harmless, exonerate or advance Expenses hereunder to Indemnitee who is or was serving at the request
of the Company as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of any other Enterprise
shall be reduced by any amount Indemnitee has actually received as indemnification, hold harmless or exoneration payments or advancement
of expenses from such Enterprise. Notwithstanding any other provision of this Agreement to the contrary except for Section 27,
(i) Indemnitee shall have no obligation to reduce, offset, allocate, pursue or apportion any indemnification, hold harmless, exoneration,
advancement, contribution or insurance coverage among multiple parties possessing such duties to Indemnitee prior to the Company’s
satisfaction and performance of all its obligations under this Agreement, and (ii) the Company shall perform fully its obligations
under this Agreement without regard to whether Indemnitee holds, may pursue or has pursued any indemnification, advancement, hold
harmless, exoneration, contribution or insurance coverage rights against any person or entity other than the Company.
(f) Notwithstanding
anything contained herein, the Company is the primary indemnitor, and any indemnification or advancement obligation of the Sponsor
or its affiliates is secondary.
17. DURATION OF
AGREEMENT. All agreements and obligations of the Company contained herein shall continue during the period Indemnitee serves
as a director or officer of the Company or as a director, officer, trustee, partner, manager, managing member, fiduciary, employee
or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other Enterprise which Indemnitee
serves at the request of the Company and shall continue thereafter so long as Indemnitee shall be subject to any possible Proceeding
(including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant to Section 14 of
this Agreement) by reason of his or her Corporate Status, whether or not he or she is acting in any such capacity at the time any
liability or expense is incurred for which indemnification or advancement can be provided under this Agreement.
18. SEVERABILITY. If
any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever:
(a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each
portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable,
that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable
to the fullest extent permitted by applicable law and the Amended and Restated Memorandum and Articles of Association of the Company;
(b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the
maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including,
without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to
be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect
to the intent manifested thereby.
19. ENFORCEMENT
AND BINDING EFFECT.
(a) The Company expressly
confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce
Indemnitee to serve as a director, officer or key employee of the Company, and the Company acknowledges that Indemnitee is relying
upon this Agreement in serving as a director, officer or key employee of the Company.
(b) Without limiting
any of the rights of Indemnitee under the Amended and Restated Memorandum and Articles of Association of the Company as they may
be amended from time to time, this Agreement constitutes the entire agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with
respect to the subject matter hereof.
(c) The indemnification,
hold harmless, exoneration and advancement of expenses rights provided by or granted pursuant to this Agreement shall be binding
upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor
by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company), shall
continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or a director, officer,
trustee, general partner, manager, managing member, fiduciary, employee or agent of any other Enterprise at the Company’s
request, and shall inure to the benefit of Indemnitee and his or her spouse, assigns, heirs, devisees, executors and administrators
and other legal representatives.
(d) The Company shall
require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially
all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory
to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company
would be required to perform if no such succession had taken place.
(e) The Company and Indemnitee agree herein that a monetary
remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and difficult of proof, and further agree
that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee may, to the fullest
extent permitted by applicable law and the Amended and Restated Memorandum and Articles of Association of the Company, enforce
this Agreement by seeking, among other things, injunctive relief and/or specific performance hereof, without any necessity of showing
actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded
from seeking or obtaining any other relief to which he or she may be entitled. The Company and Indemnitee further agree that Indemnitee
shall, to the fullest extent permitted by applicable law and the Amended and Restated Memorandum and Articles of Association of
the Company, be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary
injunctions and permanent injunctions, without the necessity of posting bonds or other undertaking in connection therewith. The
Company acknowledges that in the absence of a waiver, a bond or undertaking may be required of Indemnitee by a court of competent
jurisdiction, Company hereby waives any such requirement of such a bond or undertaking to the fullest extent permitted by applicable
law and the Amended and Restated Memorandum and Articles of Association of the Company .
20. MODIFICATION
AND WAIVER. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by
the Company and Indemnitee. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.
21. NOTICES. All
notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly
given (i) if delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed,
or (ii) mailed by certified or registered mail with postage prepaid, on the third (3rd) business day after the date on which it
is so mailed:
(a) If to Indemnitee,
at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide in writing
to the Company.
(b) If to the Company,
to:
Distoken Acquisition Corporation
Unit 1006, Block C, Jinshangjun Park
No. 2 Xiaoba Road, Panlong District
Kunming, Yunnan, China
Attention: Chief Executive Officer
With a copy, which shall not constitute notice, to
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas, 11th Floor
New York, New York 10105
Attn: Richard I. Anslow, Esq.
or to any other address as may have been furnished to Indemnitee
in writing by the Company.
22. APPLICABLE LAW
AND CONSENT TO JURISDICTION. This Agreement and the legal relations among the parties shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York, without regard to its conflict of laws rules. Except with respect
to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, to the fullest extent
permitted by applicable law and the Amended and Restated Memorandum and Articles of Association of the Company, the Company and
Indemnitee hereby irrevocably and unconditionally: (a) agree that any action or proceeding arising out of or in connection with
this Agreement shall be brought only in the Cayman Court and not in any other state or federal court in the United States of America
or any court in any other country; (b) consent to submit to the exclusive jurisdiction of the Cayman Court for purposes of any
action or proceeding arising out of or in connection with this Agreement; (c) waive any objection to the laying of venue of any
such action or proceeding in the Cayman Court; and (d) waive, and agree not to plead or to make, any claim that any such action
or proceeding brought in the Cayman Court has been brought in an improper or inconvenient forum, or is subject (in whole or in
part) to a jury trial. To the fullest extent permitted by applicable law and the Amended and Restated Memorandum and Articles of
Association of the Company, the parties hereby agree that the mailing of process and other papers in connection with any such action
or proceeding in the manner provided by Section 21 or in such other manner as may be permitted by applicable law and the Amended
and Restated Memorandum and Articles of Association of the Company, shall be valid and sufficient service thereof.
23. IDENTICAL COUNTERPARTS. This
Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all
of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability
is sought needs to be produced to evidence the existence of this Agreement.
24. MISCELLANEOUS. Use
of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of the paragraphs
of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.
25. PERIOD OF LIMITATIONS. No
legal action shall be brought and no cause of action shall be asserted by or in the right of the Company against Indemnitee, Indemnitee’s
spouse, heirs, executors or personal or legal representatives after the expiration of two years from the date of accrual of such
cause of action, and any claim or cause of action of the Company shall be extinguished and deemed released unless asserted by the
timely filing of a legal action within such two-year period; provided, however, that if any shorter period of limitations is otherwise
applicable to any such cause of action such shorter period shall govern.
26. ADDITIONAL ACTS. If
for the validation of any of the provisions in this Agreement any act, resolution, approval or other procedure is required to the
fullest extent permitted by applicable law and the Amended and Restated Memorandum and Articles of Association of the Company,
the Company undertakes to cause such act, resolution, approval or other procedure to be affected or adopted in a manner that will
enable the Company to fulfill its obligations under this Agreement.
27. WAIVER OF CLAIMS
TO TRUST ACCOUNT. Indemnitee hereby agrees that he or she does not have any right, title, interest or claim of any kind
(each, a “Claim”) in or to any monies in the trust account established in connection with the Company’s
initial public offering for the benefit of the Company and holders of shares issued in such offering, and hereby waives any Claim
he or she may have in the future as a result of, or arising out of, any services provided to the Company and will not seek recourse
against such trust account for any reason whatsoever.
28. MAINTENANCE
OF INSURANCE. The Company shall use commercially reasonable efforts to obtain and maintain in effect during the entire
period for which the Company is obligated to indemnify the Indemnitee under this Agreement, one or more policies of insurance with
reputable insurance companies to provide the officers/directors of the Company with coverage for losses from wrongful acts and
omissions and to ensure the Company’s performance of its indemnification obligations under this Agreement. The Indemnitee
shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available
for any such director or officer under such policy or policies. In all such insurance policies, the Indemnitee shall be named as
an insured in such a manner as to provide the Indemnitee with the same rights and benefits as are accorded to the most favorably
insured of the Company’s directors and officers.
29. INTERPRETATION
In this Agreement:
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(a)
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words importing the singular number include the plural number and vice versa; words importing the masculine gender include the feminine gender; words importing persons include corporations as well as any other legal or natural person;
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(b)
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“written” and “in writing” include all modes of representing or reproducing words in visible form, including in the form of an Electronic Record;
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(e)
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“shall” shall be construed as imperative and “may” shall be construed as permissive;
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(f)
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references to provisions of any law or regulation shall be construed as references to those provisions as amended, modified, re-enacted or replaced;
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(g)
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any phrase introduced by the terms “including”, “include”, “in particular” or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms;
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(h)
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the term “and/or” is used herein to mean both “and” as well as “or.” The use of “and/or” in certain contexts in no respects qualifies or modifies the use of the terms “and” or “or” in others. The term “or” shall not be interpreted to be exclusive and the term "and" shall not be interpreted to require the conjunctive (in each case, unless the context otherwise requires);
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(i)
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headings are inserted for reference only and shall be ignored in construing this Agreement;
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(j)
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any requirements as to delivery under this Agreement include delivery in the form of an electronic record (as defined in the Electronic Transactions Law (2003));
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(k)
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any requirements as to execution or signature under this Agreement including the execution of this Agreement itself can be satisfied in the form of an electronic signature (as defined in the Electronic Transactions Law (2003 Revision));
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(l)
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sections 8 and 19(3) of the Electronic Transactions Law (2003 Revision) shall not apply.
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[Signature Page Follows]
IN WITNESS WHEREOF, the parties
hereto have caused this Indemnity Agreement to be signed as of the day and year first above written.
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DISTOKEN ACQUISITION CORPORATION
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By:
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Name:
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Title:
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INDEMNITEE
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Name:
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Address for notices:
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[Signature page - Indemnity Agreement]
Exhibit 10.8
Distoken Acquisition Corporation
Unit 1006, Block C, Jinshangjun Park
No. 2 Xiaoba Road, Panlong District
Kunming, Yunnan, China
[●], 2020
Ladies and Gentlemen:
This letter will confirm our agreement that, commencing on the
effective date (the “Effective Date”) of the registration statement (the “Registration Statement”)
for the initial public offering (the “IPO”) of the securities of Distoken Acquisition Corporation (the
“Company”) and continuing until the earlier of (i) the consummation by the Company of an initial business
combination and (ii) the Company’s liquidation (in each case as described in the Registration Statement) (such earlier date
hereinafter referred to as the “Termination Date”), Xiaosen Sponsor LLC shall make available to the Company
certain office space and administrative and support services as may be required by the Company from time to time, at Unit 1006,
Block C, Jinshangjun Park No. 2 Xiaoba Road, Panlong District, Kunming, Yunnan, China. In exchange therefore, the Company shall
pay Xiaosen Sponsor LLC $10,000 per month on the Effective Date and continuing monthly thereafter until the Termination Date.
Xiaosen Sponsor LLC hereby agrees that it does not have any
right, title, interest or claim of any kind in or to any monies that may be set aside in a trust account (the “Trust
Account”) that may be established upon the consummation of the IPO and will not seek recourse against the Trust Account
for any reason whatsoever.
This agreement may not be amended, modified or waived as to
any particular provision, except by a written instrument executed by the parties hereto.
No party hereto may assign this agreement or any rights, interests
or contracted obligations hereunder without the prior written approval of the other party. Any purported assignment in violation
of this paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported
assignee.
This agreement shall be governed by, construed in accordance
with, and interpreted pursuant to the laws of the State of New York, without giving effect to its choice of law principles.
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Very truly yours,
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Distoken Acquisition Corporation
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By:
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Name: Jian Zhang
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Title: Chief Executive Officer
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AGREED TO AND ACCEPTED BY:
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Xiaosen Sponsor LLC
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By:
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Name: Jian Zhang
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Title: Managing Member
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[Signature page to Administrative Services
Agreement]
Exhibit 23.1
Independent
Registered Public Accounting Firm’s Consent
We consent to the inclusion in this Registration
Statement of Distoken Acquisition Corporation (the “Company”) on Amendment No. 1 to Form S-1, File No. 333-248822,
of our report dated July 31, 2020, which includes an explanatory paragraph as to the Company’s ability to continue as a going
concern, with respect to our audit of the financial statements of Distoken Acquisition Corporation as of July 8, 2020 and for the
period from July 1, 2020 (inception) through July 8, 2020, which report appears in the Prospectus, which is part of this Registration
Statement. We also consent to the reference to our Firm under the heading “Experts” in such Prospectus.
/s/ Marcum llp
Marcum llp
New York, NY
October 9, 2020