As filed with the U.S. Securities and Exchange Commission on January 13, 2021
Registration No. 333-250188
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2
To
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
Liberty Media Acquisition Corporation
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of
incorporation or organization)
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6770
(Primary Standard Industrial
Classification Code Number)
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85-3809075
(I.R.S. Employer
Identification Number)
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12300 Liberty Boulevard
Englewood, CO 80112
Telephone: (720) 875-5800
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Renee L. Wilm, Esq.
Liberty Media Acquisition Corporation
12300 Liberty Boulevard
Englewood, CO 80112
Telephone: (720) 875-5800
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
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Gregg A. Noel, Esq.
P. Michelle Gasaway, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, CA 90071
(213) 687-5000
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Samantha H. Crispin, Esq.
Travis J. Wofford, Esq.
Baker Botts L.L.P.
2001 Ross Avenue, Suite 900
Dallas, Texas 75201
(214) 953-6500
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Paul D. Tropp, Esq.
Christopher J. Capuzzi, Esq.
Ropes & Gray LLP
1211 Avenue of the Americas
New York, NY 10036
(212) 596-9000
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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 ☒
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Smaller reporting company ☐
Emerging growth company ☒
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
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Title of Each Class of
Security Being Registered
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Amount Being
Registered
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Proposed Maximum
Offering Price
per Security(1)
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Proposed Maximum
Aggregate Offering
Price(1)
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Amount of
Registration Fee
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Units, each consisting of one share of Series A common stock, $0.0001 par
value per share, and one-fifth of one redeemable warrant(2)
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57,500,000 Units
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$
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10.00
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$
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575,000,000
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$
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62,732.50
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Shares of Series A common stock included as part of the units(3)
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57,500,000 Shares
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—
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—
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—(4)
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Redeemable warrants included as part of the units(3)
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11,500,000 Warrants
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—
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—
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—(4)
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Total
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$
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575,000,000
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$
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62,732.50(5)
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(1)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended, or the Securities Act.
(2)
Includes 7,500,000 units, consisting of 7,500,000 shares of Series A common stock and 1,500,000 redeemable warrants, which may be issued upon exercise of a 45-day option granted to the underwriters to cover over-allotments, if any.
(3)
Pursuant to Rule 416 under the Securities Act, there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions.
(4)
No fee pursuant to Rule 457(g) under the Securities Act.
(5)
Previously paid.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JANUARY 13, 2021
P R E L I M I N A R Y P R O S P E C T U S
$500,000,000
Liberty Media Acquisition Corporation
50,000,000 Units
Liberty Media Acquisition Corporation, which we refer to as our “company” or “LMAC” throughout this prospectus, is a newly incorporated blank check company, incorporated as a Delaware corporation, formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. We have not selected any business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us. Although we may pursue an acquisition in any industry or geography, we intend to capitalize on the ability of our management team and our sponsor, to identify, acquire and operate a business that may provide opportunities for attractive risk-adjusted returns in the media, digital media, music, entertainment, communications, telecommunications and technology industries.
(Prospectus cover continued on the following page.)
We are an “emerging growth company” under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in our securities involves risks. See “Risk Factors” on page 40. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings.
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Price to Public
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Underwriting
Discounts and
Commissions(1)
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Proceeds, before
expenses, to us
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Per Unit
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$
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10.00
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$
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0.55
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$
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9.45
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Total
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$
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500,000,000
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$
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27,500,000
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$
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472,500,000
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(1)
Includes $0.35 per unit, or $17,500,000 (or up to $20,125,000 if the underwriters’ over-allotment option is exercised in full) in the aggregate, payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States as described herein. The deferred commissions will be released only on completion of an initial business combination, in an amount equal to $0.35 multiplied by the number of shares of Series A common stock sold as part of the units in this offering, as described in this prospectus. Does not include certain fees and expenses payable to the underwriters in connection with this offering. See also “Underwriting” for a description of compensation and other items of value payable to the underwriters.
Of the proceeds we receive from this offering and the sale of the private placement warrants described in this prospectus, $500.0 million, or $575.0 million if the underwriters’ over-allotment option is exercised in full ($10.00 per unit), will be deposited into a U.S.-based trust account with Continental Stock Transfer & Trust Company acting as trustee. 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, the funds held in the trust account will not be released from the trust account until the earliest of: (1) the completion of our initial business combination; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering (or 27 months from the closing of this offering if we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 24 months from the closing of this offering, which we refer to as an “agreement in principle event” throughout this prospectus) or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) the redemption of all of our public shares if we have not completed our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred), subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.
The underwriters have reserved up to 2,500,000, or 5% (or 4.3%, assuming full exercise of the underwriters’ over-allotment option), of our units being offered for sale, at the initial public offering price, to directors, officers, business associates and related persons of LMAC. See “Underwriting — Directed Unit Program.”
The underwriters are offering the units for sale on a firm commitment basis. Delivery of the units will be made on or about , 2021.
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.
Book-Running Managers
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Citigroup
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Morgan Stanley
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Credit Suisse
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Goldman Sachs & Co. LLC
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The date of this prospectus is , 2021
(Prospectus cover continued from preceding page.)
This is an initial public offering of our securities. Each unit has an offering price of $10.00 and consists of one share of our Series A common stock and one-fifth of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one share of our Series A common stock at a price of $11.50 per share, subject to adjustment as described in this prospectus, and only whole warrants are exercisable. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. The warrants will become exercisable on the later of 30 days after the completion of our initial business combination and 12 months from the closing of this offering, and will expire five years after the completion of our initial business combination or earlier upon redemption or liquidation, as described in this prospectus. Subject to the terms and conditions described in this prospectus, we may redeem the warrants once the warrants become exercisable. We have also granted the underwriters a 45-day option to purchase up to an additional 7,500,000 units to cover over-allotments, if any.
We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of our Series A common stock upon the completion of our initial business combination at a per-share price described in this prospectus, payable in cash, subject to the limitations described herein. If we have not completed our initial business combination within 24 months from the closing of this offering, or 27 months if an agreement in principle event has occurred, as such period may be extended, we will redeem 100% of the public shares at a per-share price described in this prospectus, payable in cash, subject to applicable law.
Our sponsor, Liberty Media Acquisition Sponsor LLC, a Delaware limited liability company (which we refer to as our “sponsor” throughout this prospectus), is a wholly owned subsidiary of Liberty Media Corporation, a Delaware corporation (which we refer to as “LMC” throughout this prospectus), and LMC has initially attributed its interest in our sponsor to the Formula One Group, a tracking stock group of LMC listed on The Nasdaq Stock Market (“Nasdaq”) under the symbols “FWONA” and “FWONK.” Our sponsor will commit to purchase an aggregate of 9,000,000 warrants (or 10,000,000 warrants if the underwriters’ over-allotment option is exercised in full) at a price of $1.50 per warrant ($13,500,000 in the aggregate, or $15,000,000 in the aggregate if the underwriters’ over-allotment option is exercised in full) in a private placement that will close simultaneously with the closing of this offering. Each private placement warrant entitles the holder thereof to purchase one share of our Series A common stock at $11.50 per share, subject to adjustment as described in this prospectus.
Our sponsor will enter into a forward purchase agreement to acquire forward purchase units for $250,000,000, in the aggregate, in connection with our initial business combination. Each forward purchase unit will consist of one share of Series B common stock, or a forward purchase share, and one-fifth of one warrant to purchase one share of Series A common stock, or a forward purchase warrant, at a purchase price of $10.00 per unit, and will be sold in a private placement that will close substantially concurrently with the consummation of our initial business combination. The terms of the forward purchase warrants will generally be identical to the terms of the redeemable warrants included in the units being issued in this offering. In addition, our sponsor will have the right, but is not required, to provide, or cause LMC or any of its wholly owned subsidiaries to provide, incremental funding to us in connection with our initial business combination by purchasing additional shares of Series B common stock at a purchase price of $10.00 per share, which shares would also be sold in a private placement substantially concurrently with the consummation of our initial business combination.
As of the date of this prospectus, our sponsor holds 14,375,000 shares of Series F common stock (which we refer to as our “founder shares” throughout this prospectus), up to 1,875,000 of which are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised. The shares of Series F common stock will automatically convert into shares of Series B common stock at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis. Prior to and following our initial business combination, each share of Series B common stock is convertible, at the option of the holder, into one share of our Series A common stock.
Prior to the completion of our initial business combination, only holders of our Series F common stock will have the right to elect our directors and may remove members of our board of directors for any reason. On any vote to approve our initial business combination or on any other matter submitted to a vote of our stockholders prior to our initial business combination, holders of our Series A common stock, holders of our Series B common stock, if any, and holders of our Series F common stock will generally vote together as a single class, except as required by Delaware law or stock exchange rule, with each share of our common stock entitling the holder to one vote. Following our initial business combination, holders of our Series A common stock and holders of our Series B common stock will generally vote together as a single class on all matters presented for a stockholder vote, except as required by Delaware law or stock exchange rule, with each share of Series A common stock entitling the holder to one vote per share and each share of Series B common stock entitling the holder to ten votes per share. This high vote feature of our Series B common stock differs from the typical capital structure of many other special purpose acquisition companies, in which the number of votes for founder shares and public shares remain the same after the initial business combination.
Prior to this offering, there has been no public market for our units, Series A common stock or warrants. We have applied to list our units on the Nasdaq Capital Market, under the symbol “LMACU” on or promptly after the date of this prospectus. We cannot guarantee that our securities will be approved for listing on Nasdaq. The Series A common stock and warrants constituting the units will begin separate trading on the 52nd day following the date of this prospectus (or, if such date is not a business day, the following business day), unless Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC inform us of their decision to allow earlier separate trading, subject to certain conditions. Once the securities constituting the units begin separate trading, we expect that the Series A common stock and warrants will be listed on Nasdaq under the symbols “LMACA” and “LMACW,” respectively.
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.
TABLE OF CONTENTS
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Page
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1
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38
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40
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77
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82
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83
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85
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87
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93
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123
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134
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138
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141
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161
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170
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178
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178
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178
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F-1
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Trademarks
This prospectus contains references to trademarks and service marks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
SUMMARY
This summary only highlights the more detailed information appearing elsewhere in this prospectus. As this is a summary, it does not contain all of the information that you should consider in making an investment decision. You should read this entire prospectus carefully, including the information under “Risk Factors” and our financial statements and the related notes included elsewhere in this prospectus, before investing.
Unless otherwise stated in this prospectus or the context otherwise requires, references to:
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“agreement in principle event” are to when we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 24 months from the closing of this offering but have not completed the initial business combination within such 24-month period;
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“amended and restated bylaws” are to our bylaws to be in effect upon the completion of this offering;
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“amended and restated certificate of incorporation” are to our certificate of incorporation to be in effect upon the completion of this offering;
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“common stock” are to our Series A common stock, our Series B common stock, our Series C common stock and our Series F common stock;
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“company,” “our company” or “LMAC” are to Liberty Media Acquisition Corporation, a Delaware corporation;
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“directors” are to our current directors and director nominees;
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“equity-linked securities” are to any debt or equity securities that are convertible, exercisable or exchangeable for shares of our common stock issued in a financing transaction in connection with our initial business combination, including but not limited to a private placement of equity or debt;
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“Formula One Group” are to the Formula One Group of LMC to which LMC’s subsidiary, Delta Topco Limited, the parent company of Formula 1 (“Formula 1”), is attributed, among other assets and liabilities;
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“forward purchase agreement” are to the agreement providing for the purchase of 25,000,000 forward purchase units at a price of $10.00 per unit, each consisting of one forward purchase share and one-fifth of a forward purchase warrant, by our sponsor in a private placement that will close substantially concurrently with the consummation of our initial business combination;
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“forward purchase shares” are to the Series B shares of common stock included in the forward purchase units;
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“forward purchase units” are to the units to be acquired by LMC or its wholly owned subsidiaries in connection with our initial business combination;
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“forward purchase warrants” are to the warrants to purchase our shares of Series A common stock included in the forward purchase units;
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“founder shares” are to shares of our Series F common stock initially purchased by our sponsor in a private placement prior to this offering, shares of our Series B common stock issued upon the conversion of such shares of Series F common stock and shares of our Series A common stock issued upon the conversion of such shares of Series B common stock;
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“LMC” are to Liberty Media Corporation, the parent of our sponsor;
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“management” or our “management team” are to our officers and directors;
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“private placement warrants” are to the warrants to purchase shares of our Series A common stock issued to our sponsor in a private placement simultaneously with the closing of this offering and warrants that may be issued upon conversion of working capital loans;
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“public shares” are to shares of our Series A common stock sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market);
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“public stockholders” 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 that each of their status as a “public stockholder” shall only exist with respect to such public shares;
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“public warrants” are to our warrants sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market) and to any private placement warrants sold to our sponsor that are subsequently resold to third parties following the consummation of our initial business combination;
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“related companies” are to LMC, Qurate Retail, Inc., Liberty Broadband Corporation, Liberty TripAdvisor Holdings, Inc. and their subsidiaries and certain other entities with an executive management team that may from time to time include one or more members of our management team;
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“sponsor” are to Liberty Media Acquisition Sponsor LLC, a Delaware limited liability company and wholly-owned subsidiary of LMC;
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“warrants” are to the public warrants, the forward purchase warrants and the private placement warrants; and
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“we,” “us” and “our” are to Liberty Media Acquisition Corporation, a Delaware corporation, or, where applicable, members of its management team.
Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option and the forfeiture by our sponsor of an aggregate of 1,875,000 founder shares.
General
Liberty Media Acquisition Corporation (“LMAC”) is a newly incorporated blank check company, incorporated as a Delaware corporation, formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our “initial business combination.” We have not selected any business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us. Although we may pursue an acquisition in any industry or geography, we intend to capitalize on the ability of our management team and our sponsor, to identify, acquire and operate a business that may provide opportunities for attractive risk-adjusted returns in the media, digital media, music, entertainment, communications, telecommunications and technology industries.
We intend to identify and acquire a business that could benefit from a creative, forward-thinking owner with extensive operational expertise and that presents potential for an attractive risk-adjusted return profile under our stewardship. Even companies with solid fundamentals often under-perform their potential due to underinvestment, ineffective business strategies, sub-optimal capital allocation and capital structures, excessive cost structures, or incomplete management teams. Our management team has extensive experience in identifying and executing acquisitions that are ripe for change across industry sectors and business cycles. In addition, our management has hands-on experience working with companies as active owners and directors by working closely with these companies to continue their transformation and help create value.
Rather than offering a one-time service of going public, LMAC aims to act as a long-term partner to its target companies. Our objective is to provide a target company an efficient path to go public with a significant degree of ongoing funding certainty, while creating value for our stockholders by assisting management with strategy, business planning, capital structure optimization, team building, and synergistic opportunities. LMC has successfully applied this approach over the past decades across a wide range of media and entertainment companies such as Formula 1, Sirius XM Holdings Inc. (“Sirius XM Holdings”), Live Nation Entertainment, Inc. (“Live Nation”) and others. We believe through LMAC we can bring LMC’s full range of capabilities including LMC’s business operation track record, investment experience and long-term capital, and fundamentally enhance the value of the target business.
Liberty Media Corporation and Our Sponsor
Our sponsor is a wholly owned subsidiary of LMC. LMC owns interests in subsidiaries and other companies, which are engaged in the global media and entertainment industries. LMC’s principal businesses
and assets include its consolidated subsidiaries Sirius XM Holdings, Formula 1, Braves Holdings, LLC (“Braves Holdings”) and equity affiliate Live Nation.
LMC’s publicly traded equity consists of three groups of tracking stocks: Formula One Group, Liberty SiriusXM Group, and Braves Group. A tracking stock is a type of common stock that the issuing company intends to reflect or “track” the economic performance of a particular business or “group,” rather than the economic performance of the company as a whole. While the Formula One Group, Liberty SiriusXM Group, and Braves Group have separate collections of businesses, assets and liabilities attributed to them, no group is a separate legal entity and therefore cannot own assets, issue securities or enter into legally binding agreements. Therefore, the Formula One Group, Liberty SiriusXM Group, and Braves Group do not represent separate legal entities, but rather represent those businesses, assets and liabilities that have been attributed to each respective group. Holders of tracking stock have no direct claim to the group’s stock or assets and therefore, do not own, by virtue of their ownership of a LMC tracking stock, any equity or voting interest in a public company, such as Sirius XM Holdings or Live Nation, in which LMC holds an interest and that is attributed to a LMC tracking stock group, such as the Liberty SiriusXM Group. Holders of tracking stock are also not represented by separate boards of directors. Instead, holders of tracking stock are stockholders of the parent corporation, with a single board of directors and subject to all of the risks and liabilities of the parent corporation. LMC’s ownership of LMAC and our sponsor has initially been attributed to the Formula One Group.
The Liberty Formula One common stock is intended to track and reflect the separate economic performance of the businesses, assets and liabilities attributed to the Formula One Group. The Formula One Group is comprised of all of the businesses, assets and liabilities of LMC, other than those specifically attributed to the Braves Group or the Liberty SiriusXM Group, including LMC’s interest in Formula 1, an intergroup interest in the Braves Group, corporate cash, LMC’s 1% Cash Convertible Notes due 2023 and LMC’s 2.25% Exchangeable Senior Debentures due 2046.
The Liberty SiriusXM common stock is intended to track and reflect the separate economic performance of the businesses, assets and liabilities attributed to the Liberty SiriusXM Group. The Liberty SiriusXM Group is comprised of LMC’s interests in Sirius XM Holdings and Live Nation, corporate cash, LMC’s 1.375% Cash Convertible Notes due 2023 and related financial instruments, LMC’s 2.125% Exchangeable Senior Debentures due 2048, LMC’s 2.25% Exchangeable Senior Debentures due 2048, LMC’s 2.75% Exchangeable Senior Debentures due 2049 and margin loan obligations incurred by wholly-owned special purpose subsidiaries of LMC. The Liberty SiriusXM Group holds intergroup interests in the Formula One Group and the Braves Group as of September 30, 2020.
The Liberty Braves common stock is intended to track and reflect the separate economic performance of the businesses, assets and liabilities attributed to the Braves Group. The Braves Group is comprised primarily of Braves Holdings, which indirectly owns the Atlanta Braves Major League Baseball Club and certain assets and liabilities associated with its stadium and mixed use development project and corporate cash.
Immediately prior to this offering our sponsor owned 100% of our capital stock, consisting of Series F shares which will automatically convert at the time of our initial business combination, or earlier at the option of the holder, into shares of Series B common stock on a one-for-one basis. In connection with our initial business combination, our sponsor has agreed to purchase 25,000,000 forward purchase units consisting of one share of Series B common stock and one-fifth of a forward purchase warrant and has reserved the right to provide us with incremental funding by purchasing additional shares of Series B common stock. Following our initial business combination, each share of Series B common stock entitles the holder to ten votes per share which differs from the typical capital structure of many other special purpose acquisition companies. Assuming that the underwriters do not exercise their over-allotment option, that our sponsor forfeits an aggregate of 1,875,000 founder shares, that there are 62,500,000 shares of our common stock outstanding after this offering and that the issuance of 25,000,000 forward purchase units to our sponsor pursuant to the forward purchase agreement are the only additional equity securities issued in connection with our initial business combination, our sponsor is expected to own approximately 43% of the outstanding shares of our common stock and approximately 88% of the voting power of our outstanding common stock immediately following the closing of our initial business combination. We anticipate that our sponsor's voting power and equity ownership may be substantially diluted in connection with our initial business
combination, either from the issuance of new shares of common stock in exchange for the capital stock of the target, the issuance of our capital stock to third-party investors providing additional funding to our company in connection with the initial business combination, or both.
Investment Track Record
LMC (including its predecessors) has generated significant returns for investors principally through the acquisition and operational improvement of high quality businesses across the media, digital media, music, entertainment, communications, telecommunications and technology industries and tax efficiently rearranging, optimizing and monetizing the LMC portfolio to maximize value creation.
Historically, LMC (including its predecessors) has invested and owned or continues to own businesses and assets across the media and communications ecosystem including in pay-TV and broadband (Charter, DirecTV), sports (Formula 1, the Atlanta Braves), entertainment content (Starz), digital broadcast (SIRIUS XM), travel (Tripadvisor, Expedia), video and e-commerce (QVC) and live events (Formula 1, Live Nation), among others.
As the sole member and manager of our sponsor, LMC will be providing us with differentiated expertise as a result of its track record of identifying high potential businesses as well as its differentiated access to a deep network of investors worldwide. Additionally, LMC’s franchise strength brings capital, credibility, and institutional know-how to execute the transaction quickly.
Not all of the companies in which our team has invested have achieved the same level of value creation. Past performance by any member or members of our management team, any of their respective related parties, or LMC is not a guarantee either (1) that we will be able to identify a suitable candidate for our initial business combination or (2) of success with respect to any business combination we may consummate. You should not rely on the historical record of any member or members of our management team, any of their respective related parties, or LMC, or any related investment’s performance, as indicative of the future performance of an investment in the company or the returns the company will, or is likely to, generate going forward.
Our Management Team
We believe that the experience of our management team will allow us to source, identify and execute an attractive transaction for our stockholders. Our management team is led by Gregory B. Maffei as President and Chief Executive Officer, Albert E. Rosenthaler as Chief Corporate Development Officer, Brian J. Wendling as Chief Accounting Officer and Principal Financial Officer, and Renee L. Wilm as Chief Legal Officer and Chief Administrative Officer.
•
Gregory B. Maffei — President and Chief Executive Officer: Mr. Maffei serves as a director and the President and Chief Executive Officer of LMC (including its predecessor) and Liberty Broadband Corporation (“Liberty Broadband”). He serves as the President and Chief Executive Officer as well as the Chairman of Liberty TripAdvisor Holdings, Inc. (“Liberty TripAdvisor”) and Chairman of the Board of Qurate Retail, Inc. (“Qurate Retail”). Mr. Maffei also serves as Chairman of the Board of Live Nation, SiriusXM Holdings and Tripadvisor, Inc. (“Tripadvisor”). Mr. Maffei has over 30 years of experience in the media, digital media, music, entertainment, communications, telecommunications and technology industries. Prior to joining LMC (including its predecessor) in 2005, Mr. Maffei served as President and Chief Financial Officer of Oracle Corporation, President and CEO of 360networks Corporation, and Chief Financial Officer of Microsoft Corporation. He has a Master of Business Administration from Harvard Business School and a Bachelor of Arts degree from Dartmouth College.
Mr. Maffei serves as a director of Zillow Group, Inc. and Charter Communications, Inc. Mr. Maffei has also served as a director of DIRECTV and its predecessors, Electronic Arts, Inc. and Barnes & Noble, Inc. Mr. Maffei served as a director and the President and Chief Executive Officer of GCI Liberty, Inc. (“GCI Liberty”), and as the Chairman of the Board of Starz and Pandora Media, Inc.
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Albert E. Rosenthaler — Chief Corporate Development Officer: Mr. Rosenthaler serves as Chief Corporate Development Officer of LMC, Qurate Retail, Liberty TripAdvisor and Liberty
Broadband. As Chief Corporate Development Officer, Mr. Rosenthaler is responsible for identifying and pursuing investment and other opportunities and assists in setting strategic direction to maximize stockholder value. Mr. Rosenthaler has been with these companies since April 2002. Mr. Rosenthaler most recently served as Chief Tax Officer before taking on his current role in October 2016, and previously served as Chief Corporate Development Officer of GCI Liberty. Mr. Rosenthaler serves as a director of Liberty TripAdvisor and Tripadvisor. He holds a Bachelor of Arts degree from Olivet College and a Master of Accounting Science from the University of Illinois.
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Brian J. Wendling — Chief Accounting Officer and Principal Financial Officer: Mr. Wendling is the Chief Accounting Officer and Principal Financial Officer of LMC, Qurate Retail and Liberty Broadband. He is also Senior Vice President and Chief Financial Officer of Liberty TripAdvisor. Mr. Wendling has held various positions with these companies and their predecessors since 1999. Prior to joining these companies, he worked in the assurance practice of the accounting firm, KPMG. Mr. Wendling has previously served as Chief Accounting Officer and Principal Financial Officer of GCI Liberty, and on the boards of Fun Technologies Inc. and CommerceHub, Inc. Mr. Wendling received his Bachelor of Science degree in accounting from Indiana University.
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Renee L. Wilm — Chief Legal Officer and Chief Administrative Officer: Ms. Wilm has served as Chief Legal Officer of LMC, Qurate Retail, Liberty TripAdvisor and Liberty Broadband since September 2019, Chief Administrative Officer of such companies since January 2021, served as Chief Legal Officer of GCI Liberty from September 2019 to December 2020 and has agreed to serve on our Board following completion of this offering. Previously, Ms. Wilm was a Senior Partner with the law firm Baker Botts L.L.P., where she represented LMC, Qurate Retail, Liberty TripAdvisor, Liberty Broadband and GCI Liberty and their predecessors for over twenty years, specializing in mergers and acquisitions, complex capital structures and shareholder arrangements, as well as securities offerings and matters of corporate governance and securities law compliance. At Baker Botts, Ms. Wilm was a member of the Executive Committee, the East Coast Corporate Department Chair and Partner-in-Charge of the New York office. Ms. Wilm holds a Bachelor of Business Administration, Finance from Hofstra University and a Juris Doctorate from St. John’s University School of Law.
Our Committed Capital
We believe our ability to complete our initial business combination will be enhanced by our entry into a forward purchase agreement pursuant to which our sponsor will acquire forward purchase units for $250,000,000, in the aggregate, in connection with our initial business combination. Each forward purchase unit will consist of one share of Series B common stock, or a forward purchase share, and one-fifth of one warrant to purchase one share of Series A common stock, or a forward purchase warrant, at a purchase price of $10.00 per unit. Such forward purchase units will be sold in a private placement that will close substantially concurrently with the consummation of our initial business combination. The terms of the forward purchase warrants will generally be identical to the terms of the redeemable warrants included in the units being issued in this offering. In addition, our sponsor will have the right, but is not required, to provide, or cause LMC or any of its wholly owned subsidiaries to provide, incremental funding to us in connection with our initial business combination by purchasing additional shares of Series B common stock at a purchase price of $10.00 per share, which shares would also be sold in a private placement substantially concurrently with the consummation of our initial business combination.
We believe our committed capital will make us more attractive to a potential business combination target.
In addition, we expect that third-party investors, including certain prior investors in the related companies who have experienced the strong returns provided by an investment in the related companies, may be interested in providing additional, incremental funding to our company in connection with an initial business combination. Any such third-party investors would likely subscribe for shares of Series A common stock at a purchase price of $10.00 per share, which shares would be sold substantially concurrently with the consummation of our initial business combination.
Our Business Strategy
While our efforts to identify a prospective target business will not necessarily be limited to a particular industry, sector or region, we intend to capitalize on our expertise in the media, digital media, music, entertainment, communications, telecommunications and technology industries.
Our acquisition and value creation strategy is to identify, acquire and, after our initial business combination, fundamentally enhance a company in the public markets. We intend to seek a company in an industry that complements the experience and expertise of our management team and is a business to which we believe we can add value.
We are committed to delivering attractive returns to all stakeholders. Our sponsor is foregoing anti-dilution adjustments on the founder shares in connection with an initial business combination thereby effectively reducing the cost of capital for any third-party investors at such time. We believe this, together with our committed capital through the forward purchase agreement, will enhance our access to additional third-party capital in connection with our initial business combination and create a competitive advantage in consummating an initial business combination.
Our management team is deeply familiar with the trends of our target industries and brings an investing approach that offers multiple competitive advantages in sourcing, evaluating and executing on opportunities, including:
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Stockholder Centric: We think like owners and are focused on long-term gains rather than short-term results. At LMC, the compensation structure of the management team is closely tied to the long-term performance of the stock. In fact, the LMC executive leadership team has a significant portion of its respective net worth tied to LMC.
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Forward Looking: We are deeply familiar with the trends of the industries in which we plan to invest and can evaluate the opportunities and risks presented by ongoing secular changes and temporary market disruptions.
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Nimble: Our team is structured to allow it to move quickly when opportunities arise, and we can be creative in our deal structures.
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Financially Sophisticated: Our management team has extensive experience in mergers, capital restructuring, divestitures, investing, capital deployment, credit analysis and setting capital structures.
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Long-Term Focused: We take a long-term, strategic view in our various operating businesses and are less concerned with short-term bouts of volatility.
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Proprietary Sourcing Channels and Leading Industry Relationships: We believe the capabilities and connections associated with our management team, in combination with those of LMC, will provide us with a differentiated pipeline of acquisition opportunities that would be difficult for other participants in the market to replicate. We expect these sourcing capabilities will be further bolstered by our management team and LMC’s reputation and deep industry relationships.
Acquisition Criteria
We have identified the following general criteria and guidelines, which we believe are important in evaluating prospective target businesses:
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Strong Growth Trajectory: We will seek to acquire a business with attractive growth aspects.
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Need for Scale: We will seek to acquire a business where the global network, scale and capabilities of our management and sponsor can be leveraged to improve reach and promote exponential growth of the target.
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Generate Stable Free Cash Flow: We will seek to acquire a business that has historically generated, or has the near-term potential to generate, strong and sustainable free cash flow.
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Potential Industry Consolidator: Industry leader with barriers to entry; well-positioned to participate in sector consolidation or would benefit from a public acquisition currency.
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Drives Stockholder Return: Offer an attractive risk-adjusted return for our stockholders, weighing potential growth opportunities and operational improvements in the target business against any identified downside risks.
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Inefficient Capital Structure: Have inefficient capital structure or offer potential to improve the efficiency of the capital structure.
These criteria and guidelines are not intended to be exhaustive. Further, we intend to use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines. 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 deemed relevant by our management in effecting our initial business combination consistent with our business objectives. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our shareholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of tender offer documents or proxy solicitation materials that we would file with the Securities and Exchange Commission (the “SEC”).
Our Acquisition Process
In evaluating a prospective target business, we expect to conduct a thorough due diligence review which may encompass, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial, operational, legal and other information that will be made available to us.
Members of our management team may directly or indirectly own our securities following this offering, and accordingly, they may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. 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.
Mr. Maffei, other members of our management team and our sponsor and LMC are from time to time made aware of potential business opportunities, one or more of which we may desire to pursue, for a business combination, but we have not selected any business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us.
As described under “Proposed Business — Conflicts of Interest” and “Management — Conflicts of Interest,” each of our officers and directors has, and any of them in the future may have, additional fiduciary or contractual obligations to one or more other entities pursuant to which such officer or director may be required to present a business combination opportunity to such entities before he or she presents such opportunity to us. Also, none of LMC, our sponsor or any of our directors and officers is prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity to which he or she has then-current fiduciary or contractual obligations to present such opportunity to another entity, he or she may only present such opportunity to us if such other entity rejects the opportunity. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company; such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue; and such person has no fiduciary or contractual obligation to present the opportunity to any other person or entity. Additionally, none of LMC, our sponsor or any other entity currently has any obligation or duty to provide us with any potential business combination opportunity.
In addition, LMC will adopt a policy pursuant to which any business combination opportunity that is a corporate opportunity of LMC that may also be a business combination opportunity for our company
will first be presented to a standing committee of the board of directors of LMC for consideration as to whether LMC desires to pursue such business combination opportunity as a direct investment or to present such opportunity to our company for consideration. John C. Malone, Chairman of the Board of LMC, will be the sole member of that committee and will not serve in any fiduciary capacity at our company.
For more information, including a list of our executive officers and directors and entities for which a conflict of interest may or does exist between such officers and the company, see “Proposed Business — Conflicts of Interest” and “Management — Conflicts of Interest.”
We do not believe, however, that the fiduciary, contractual or other obligations or duties of our officers or directors or the LMC policy described above will materially affect our ability to complete our initial business combination.
We are not prohibited from pursuing an initial business combination with a business that is owned by our sponsor or any of the related companies, or making the acquisition through a joint venture or other form of shared ownership with any of them.
You should not rely on the historical record or performance of LMC, Mr. Maffei or other members of our management team as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. See “Risk Factors — General Risk Factors — Past performance by LMC, Mr. Maffei and other members of our management team may not be indicative of future performance of an investment in us.”
Initial Business Combination
Nasdaq listing rules require that our initial business combination must be with one or more target businesses that have an aggregate fair market value equal to at least 80% of the value of the trust account (excluding any deferred underwriting commissions and taxes payable on interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. We refer to this as the 80% of net assets test. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case.
We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own or acquire shares will own or acquire 100% of the outstanding equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting power of the outstanding capital stock of the target or otherwise acquires an 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”). Even if the post-transaction company owns or acquires 50% or more of the outstanding voting power of the outstanding capital stock of the target, our stockholders prior to our initial business combination may collectively own a minority interest (economic and/or voting) in the post-business combination company, depending on, among other things, 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 shares of common stock in exchange for all of the outstanding capital stock of a target, issue a substantial number of new shares to third-parties in connection with financing our initial business combination. In such cases, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new shares of common stock or other changes to our capital structure, our stockholders immediately prior to such transaction (including our sponsor) could own less than a majority of our outstanding shares of common stock subsequent to such transaction and therefore a minority interest (economic and/or voting) in the post-transaction company. If less than 100% of the outstanding 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 by us is what will be valued for purposes of the 80% of net assets test. If our initial business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses. 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% of net assets 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 Securities Exchange Act of 1934, as amended (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.
Corporate Information
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the end of that 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” have the meaning associated with it in the JOBS Act.
Our executive offices are located at 12300 Liberty Boulevard, Englewood, CO 80112 and our telephone number is (720) 875-5800. Upon completion of this offering, our corporate website address will be . Our website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this prospectus or the registration statement of which this prospectus forms a part. You should not rely on any such information in making your decision whether to invest in our securities.
The Offering
In making your decision whether to invest in our securities, you should take into account not only the identity of our sponsor and the experience of our management team, but also the special risks we face as a blank check company and the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. You will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. You should carefully consider these and the other risks set forth in the section below entitled “Risk Factors” in this prospectus.
50,000,000 units (or 57,500,000 units if the underwriters’ over-allotment option is exercised in full), at $10.00 per unit, each unit consisting of:
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one share of Series A common stock; and
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one-fifth of one redeemable warrant to purchase one share of Series A common stock.
Units: “LMACU”
Series A Common Stock: “LMACA”
Warrants: “LMACW”
Trading commencement and separation of Series A common stock and warrants
The units will begin trading on or promptly after the date of this prospectus. The Series A common stock and warrants constituting the units will begin separate trading on the 52nd day following the date of this prospectus (or, if such date is not a business day, the following business day), unless Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC inform us of their decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. Once the shares of Series A common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into shares of Series A common stock and warrants. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you are separating a multiple of five units, the number of warrants issuable to you upon separation of the units will be rounded down to the nearest whole number of warrants.
Additionally, the units will automatically separate into their component parts and will not be traded after completion of our initial business combination.
Separate trading of the Series A common stock and warrants is prohibited until we have filed a Current Report on Form 8-K
In no event will the Series A common stock 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 of our company 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. If the underwriters’ over-allotment option is exercised following the
initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriters’ over-allotment option.
Units:
Number outstanding before this offering
0
Number outstanding after this offering
50,000,000(1)
Common stock:
Number outstanding before this offering
14,375,000(2)(4)
Number outstanding after this offering
62,500,000(1)(3)(4)
Warrants:
Number of private placement warrants to be sold in a private placement simultaneously with this offering
9,000,000(1)
Number of warrants to be outstanding after this offering and the sale of private placement warrants
19,000,000(1)
Each whole warrant entitles the holder thereof to purchase one share of our Series A common stock, subject to adjustment as provided herein, and only whole warrants are exercisable. No fractional warrants will be issued upon separation of the units and only whole warrants will trade.
We structured each unit to contain one-fifth of one warrant, with each whole warrant exercisable for one share of Series A common stock, as compared to units issued by some other similar blank check companies which contain whole warrants exercisable for one whole share, in order to reduce the dilutive effect of the warrants upon completion of our initial business combination as compared to units that each contain a warrant to purchase one whole share, thus making us, we believe, a more attractive business combination partner for target businesses.
(1)
Assumes no exercise of the underwriters’ over-allotment option and the forfeiture by our sponsor of an aggregate of 1,875,000 founder shares.
(2)
Consists solely of founder shares and includes up to an aggregate of 1,875,000 founder shares that are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised.
(3)
Includes 50,000,000 public shares and 12,500,000 founder shares. No shares of Series B common stock or Series C common stock will be issued or outstanding immediately after the completion of this offering.
(4)
Founder shares are classified as shares of Series F common stock. Shares of Series F common stock will automatically convert into shares of Series B common stock at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis, as described below adjacent to the caption “Founder shares conversion.” Prior to and following our initial business combination, each share of Series B common stock is convertible, at the option of the holder, into one share of our Series A common stock. No shares of Series B common stock or Series C common stock will be issued or outstanding immediately after the completion of this offering.
$11.50 per share of Series A common stock, subject to adjustment as described herein.
In addition, if (x) we issue additional shares of common stock or equity-linked securities, excluding forward purchase units, for capital raising purposes in connection with the consummation of our initial business combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our sponsor or LMC or its other subsidiaries, without taking into account any founder shares held by our sponsor or LMC or its other subsidiaries, as applicable) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances, excluding the forward purchase units, 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 (z) the volume weighted average trading price of our Series A common stock during the 20 trading day period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price described below under “Redemption of warrants when the price per share of Series A common stock equals or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described below under “Redemption of warrants when the price per share of Series A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
The warrants will become exercisable on the later of:
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30 days after the completion of our initial business combination; and
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12 months from the closing of this offering;
provided in each case that we have an effective registration statement under the Securities Act covering the issuance of the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement).
We are not registering the shares of Series A common stock issuable upon exercise of the warrants at this time. However, we have agreed that as soon as practicable, but in no event later than 20 business days after the consummation of our initial
business combination, we will use our commercially reasonable efforts to file with the SEC, and within 60 business days following our initial business combination to have declared effective, a registration statement covering the issuance of the shares of Series A common stock issuable upon exercise of the warrants and to maintain a current prospectus relating to those shares of Series A common stock until the warrants expire or are redeemed; provided that, if our Series A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
The warrants will expire at 5:00 p.m., New York City time, five years after the completion of our initial business combination or earlier upon redemption or liquidation. On the exercise of any warrant, the warrant exercise price will be paid directly to us and not placed in the trust account.
Redemption of warrants when the price per share of Series A common stock equals or exceeds $18.00
Once the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private placement warrants):
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in whole and not in part;
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at a price of $0.01 per warrant;
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upon a minimum of 30 days’ prior written notice of redemption, which we refer to as the 30-day redemption period; and
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if, and only if, the last reported sale price of our Series A common stock equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities — Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments”) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders.
We will not redeem the warrants for cash unless a registration statement under the Securities Act covering the issuance of the shares of Series A common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of common stock is available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from
registration under the Securities Act. 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.
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 determining whether to require all holders to exercise their warrants on a “cashless basis,” our management will consider, among other factors, our cash position, the number of warrants that are outstanding and the dilutive effect on our stockholders of issuing the maximum number of shares of Series A common stock issuable upon the exercise of our warrants. In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of Series A common stock equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of shares of Series A common stock underlying the warrants, multiplied by the excess of the “fair market value” of our Series A common stock (defined below) over the exercise price of the warrants by (y) the fair market value and (B) the product of 0.361 and the number of shares of Series A common stock underlying the warrants. See “Description of Securities — Warrants — Public Stockholders’ Warrants” for additional information.
The “fair market value” of our Series A common stock for this purpose shall mean the volume weighted average price of our Series A common stock during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. We will provide our warrant holders with the final fair market value no later than one business day after the 10-trading day period described above ends.
Redemption of warrants when the price per share of Series A common stock equals or exceeds $10.00
Once the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private placement warrants):
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in whole and not in part;
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at a price of $0.10 per warrant provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares of Series A common stock to be determined by reference to the table set forth under “Description of Securities — Warrants — Public Stockholders’ Warrants” based on the redemption date and the “fair market value” of our Series A common stock (as defined below) except as otherwise described in “Description of Securities — Warrants — Public Stockholders’ Warrants”;
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upon a minimum of 30 days’ prior written notice of redemption;
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if, and only if, the last reported sale price of our Series A common stock equals or exceeds $10.00 per share (as
adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities — Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments”) on the trading day prior to the date on which we send the notice of redemption to the warrant holders; and
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if, and only if, there is an effective registration statement covering the issuance of the shares of Series A common stock issuable upon exercise of the warrants and a current prospectus relating thereto available throughout the 30-day period after written notice of redemption is given.
The “fair market value” of our Series A common stock for the above purpose shall mean the volume weighted average price of our Series A common stock during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. This redemption feature differs from the typical warrant redemption features used in other blank check offerings. We will provide our warrant holders with the final fair market value no later than one business day after the 10-trading day period described above ends. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361 shares of Series A common stock per warrant (subject to adjustment).
No fractional shares of Series A common stock will be issued upon redemption. If, upon redemption, a holder would be entitled to receive a fractional interest in a share, we will round down to the nearest whole number of the number of shares of Series A common stock to be issued to the holder. See “Description of Securities — Warrants — Public Stockholders’ Warrants” for additional information.
Pursuant to the warrant agreement, references above to Series A common stock shall include a security other than Series A common stock into which the Series A common stock has been converted or exchanged for in the event we are not the surviving company in our initial business combination.
Forward Purchase Agreement
Prior to this offering, we will enter into a forward purchase agreement pursuant to which our sponsor will agree to acquire forward purchase units for $250,000,000, in the aggregate, in connection with our initial business combination. Each forward purchase unit will consist of one share of Series B common stock, or a forward purchase share, and one-fifth of one warrant to purchase one share of Series A common stock, or a forward purchase warrant, at a purchase price of $10.00 per unit, and will be sold in a private placement that will close substantially concurrently with the consummation of our initial business combination. The terms of the forward purchase warrants will generally be identical to the terms of the redeemable warrants included in the units being issued in this offering. In addition, our sponsor will have the right, but is not required, to provide, or cause LMC or any of its wholly owned subsidiaries to provide, incremental funding to us in connection with our initial business combination by purchasing additional shares of Series B
common stock at a purchase price of $10.00 per share, which shares would be sold in a private placement substantially concurrently with the consummation of our initial business combination.
The investor rights agreement will provide that our sponsor and LMC will be entitled to registration rights with respect to the private placement warrants, the forward purchase warrants, warrants that may be issued upon conversion of working capital loans, warrants purchased by them in the open market and the shares of Series A common stock purchased by them in the open market or issuable upon (1) conversion of the founder shares, (2) exercise of the private placement warrants, (3) conversion of the forward purchase shares and additional shares of Series B common stock purchased by LMC or our sponsor in connection with our initial business combination (if any), (4) exercise of the forward purchase warrants, and (5) exercise of warrants issued upon conversion of working capital loans (if any) and such registration rights will be incorporated in the forward purchase agreement. Our sponsor, LMC and/or their permitted transferees can also demand that we register securities we may issue by way of a stock dividend, recapitalization, merger or similar transaction. Please see “Description of Securities — Registration and Preemptive Rights” for additional information.
The proceeds from the sale of the forward purchase units and shares of Series B common stock sold in connection with our initial business combination (if any) may be used as part of the consideration to the sellers in our initial business combination, for expenses in connection with our initial business combination or for working capital in the post-business combination company. Our sponsor will be required to purchase the forward purchase units regardless of whether any shares of Series A common stock are redeemed by our public stockholders and are intended to provide us with a minimum funding level for our initial business combination. The forward purchase units will be issued only in connection with the consummation of the initial business combination.
Election and removal of directors; voting rights
Prior to the completion of our initial business combination, only holders of our Series F common stock will have the right to vote on the election of directors. Holders of our Series A common stock and holders of our Series B common stock, if any, will not be entitled to vote on the election of directors during such time. In addition, prior to our initial business combination, only holders of a majority of the outstanding shares of our Series F common stock may remove members of our board of directors for any reason. These provisions of our amended and restated certificate of incorporation may only be amended if approved by holders of more than 50% of the total voting power of the outstanding shares of our common stock entitled to vote thereon as well as more than 50% of the outstanding Series F common stock, voting as a separate class. On any vote to approve our initial business combination or any other matter submitted to a vote of our stockholders prior to our initial business combination other than the matters addressed
above in this paragraph, holders of our Series A common stock, holders of our Series B common stock, if any, and holders of our Series F common stock will generally vote together as a single class, except as required by Delaware law or stock exchange rule, with each share of our common stock entitling the holder to one vote.
Following our initial business combination, holders of our Series A common stock and holders of our Series B common stock will generally vote together as a single class on matters presented for a stockholder vote, except as required by Delaware law or stock exchange rule, with each share of Series A common stock entitling the holder to one vote per share and each share of Series B common stock entitling the holder to ten votes per share. Holders of our Series C common stock will not be entitled to any voting powers, except as (and then only to the extent) otherwise required by Delaware law. The high-vote nature of our Series B common stock differs from the typical capital structure of many other special purpose acquisition companies and will significantly dilute the voting power of the investors in this offering following our initial business combination and may make completing our initial business combination more difficult or costly.
In November 2020, our sponsor purchased an aggregate of 17,250,000 shares of Series F common stock, par value $0.0001 per share, for an aggregate purchase price of $25,000. In November 2020, our sponsor contributed an aggregate of 2,875,000 founder shares to our capital for no consideration, resulting in our sponsor holding an aggregate of 14,375,000 founder shares, with an effective purchase price of approximately $0.0017 per share. The number of founder shares issued was determined based on the expectation that the founder shares would represent 20% of the outstanding shares of common stock upon the completion of this offering. Prior to the initial investment in the company of $25,000 by our sponsor, the company had no assets, tangible or intangible. If we increase or decrease the size of this offering, we will effect a stock dividend or share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Series F common stock immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of the outstanding shares of our common stock upon the consummation of this offering. Up to an aggregate of 1,875,000 founder shares are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised.
The founder shares are identical to the shares of Series A common stock included in the units being sold in this offering, except that:
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prior to our initial business combination, only holders of the Series F common stock have the right to vote on the election of directors and only holders of a majority of the outstanding shares of our Series F common stock may remove members of our board of directors for any reason.
Such rights as provided by our amended and restated certificate of incorporation may be amended only if approved by holders of more than 50% of the total voting power of the outstanding shares of our common stock entitled to vote thereon as well as more than 50% of the outstanding Series F common stock, voting as a separate class;
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prior to our initial business combination and so long as any shares of Series F common stock remain outstanding, the rights, powers and preferences provided by our amended and restated certificate of incorporation to the Series B common stock may be amended only if approved by the holders of a majority of the outstanding Series F common stock;
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on any vote to approve our initial business combination or any other matter submitted to a vote of our stockholders prior to our initial business combination other than the matters set forth in the previous two bullets, holders of our Series A common stock, holders of our Series B common stock, if any, and holders of our Series F common stock will generally vote together as a single class, except as required by Delaware law or stock exchange rule, with each share of our common stock entitling the holder to one vote;
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following our initial business combination, holders of our Series A common stock and holders of our Series B common stock will generally vote together as a single class on matters presented for a stockholder vote, except as required by Delaware law or stock exchange rule, with each share of Series A common stock entitling the holder to one vote per share and each share of Series B common stock entitling the holder to ten votes per share;
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the founder shares are subject to certain transfer restrictions, as described in more detail below;
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our sponsor, executive officers and directors will enter into a letter agreement with us, pursuant to which they will agree to waive: (1) their redemption rights with respect to our common stock held by them in connection with the completion of our initial business combination; (2) their redemption rights with respect to our common stock held by them in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we have not consummated our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) 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 24 months from the
closing of this offering (or 27 months if an agreement in principle event has occurred) or during any extended time that we have to consummate a business combination beyond 24 months (or 27 months if an agreement in principle event has occurred) as a result of a stockholder vote to amend our amended and restated certificate of incorporation (an “Extension Period”) (although our sponsor, officers and directors will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame). If we submit our initial business combination to our public stockholders for a vote, our sponsor, executive officers and directors will agree to vote all shares of our common stock held by them in favor of our initial business combination. As a result, in addition to our sponsor’s founder shares, we would need 18,750,001, or 37.5% (assuming all outstanding shares are voted and the over-allotment option is not exercised), or 3,125,001, or 6.25% (assuming only the minimum number of shares representing a quorum are voted and the over-allotment option is not exercised), of the 50,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have such initial business combination approved;
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shares of our Series F common stock are automatically convertible into shares of our Series B common stock at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis, as described in more detail below, and, prior to and following our initial business combination, each share of Series B common stock is convertible, at the option of the holder, into one share of our Series A common stock; and
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the holders of founder shares are entitled to registration and pre-emptive rights.
Transfer restrictions on founder
shares
Our sponsor, executive officers and directors will agree not to transfer, assign or sell any founder shares held by them until the earlier to occur of: (1) one year after the completion of our initial business combination; and (2) subsequent to our initial business combination, (x) the date on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property or (y) if the last reported sale price of our Series A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations, and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, subject to certain exceptions described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants.” Any permitted transferees as described herein under “Principal Stockholders — Transfers of Founder
Shares and Private Placement Warrants” would be subject to the same restrictions and other agreements as our sponsor with respect to any founder shares. We refer to such transfer restrictions throughout this prospectus as the lock-up.
Founder shares conversion
We have 14,375,000 shares of Series F common stock, par value $0.0001 per share, issued and outstanding. Shares of Series F common stock will automatically convert into shares of Series B common stock at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis.
Prior to and following our initial business combination, each share of Series B common stock is convertible, at the option of the holder, into one share of our Series A common stock.
Founder preemptive rights
Following the consummation of our initial business combination, our sponsor will have certain rights (which may be exercised in whole or in part) to maintain its proportionate interest in our then outstanding common stock or voting stock by purchasing additional securities as a result of certain issuances by our company. In the event our company issues and sells equity securities or securities convertible, exercisable or exchangeable for equity securities following the consummation of our initial business combination (each such issuance, a “Triggering Event”), our sponsor will have the right to purchase (in whole or in part) its pro rata share of such securities issuable in connection with the Triggering Event or, alternatively, if the issuance is (1) voting common stock, its pro rata share in shares of our Series B common stock, (2) voting preferred stock, its pro rata share in preferred stock with per share voting rights proportionate to a share of Series B common stock in the same proportion as a share of the new voting preferred has to a share of Series A common stock and, if applicable, conversion or exchange rights into Series B common stock instead of Series A common stock or (3) other securities convertible, exercisable or exchangeable for voting stock, its pro rata share in such securities but convertible, exercisable or exchangeable for our Series B common stock as and to the extent of the conversion, exercise or exchange by the third-party holders. Such preemptive rights will not be applicable to the issuance of equity incentive plan awards (rather, our sponsor’s preemptive rights as to such awards are described below) or to shares issued upon the exercise of public warrants, private placement warrants or forward purchase warrants that are outstanding prior to or issued in connection with our initial business combination.
The price per security to be paid by our sponsor pursuant to the exercise of its preemptive rights in connection with a Triggering Event will be (1) the same price per security at which the securities are issued or sold in the relevant Triggering Event (for example, based on the transaction price in connection with an acquisition transaction or the sale price (net of any underwriting discounts, commissions or similar sale expenses) in the case of a financing transaction), with the fair market value of any non-cash consideration to be determined in good faith by our board of directors (but without giving effect to the
taxability of the underlying transaction) or (2) in the event our sponsor elects to receive shares of Series B common stock in lieu of a new series of voting common stock, the volume weighted average price of our Series A common stock during the 10 trading days immediately prior to the issuance of securities in connection with the Triggering Event.
In addition, our sponsor may defer its preemptive rights described above in connection with the issuance of nonstock securities convertible, exercisable or exchangeable for any series of our stock until the third-party holders of such securities have converted, exercised or exchanged for our stock. Furthermore, our sponsor will have preemptive rights following the consummation of our initial business combination to account for the exercise or exchange of employee stock options or other equity incentive awards or the vesting of restricted shares under any of our equity incentive plans (including any assumed by our company in connection with its initial business combination) and for other stock issuances upon the conversion, exercise or exchange of any other securities assumed by our company in connection with its initial business combination. The preemptive rights described in this paragraph provide our sponsor with a quarterly right to purchase (in whole or in part) its pro rata share of the stock issued during such quarter pursuant to the conversion, exercise or exchange of securities described in this paragraph or, if such stock is a new series of voting stock, its pro rata share in shares of our Series B common stock.
The price per share to be paid by our sponsor pursuant to the exercise of its quarterly preemptive rights will be (1) the volume weighted average price during the 10 trading days immediately prior to the end of the applicable quarter for the applicable stock issued (or, if such stock is not then listed or traded on a national securities exchange, the fair market value of such equity security as determined in good faith by our board of directors (but without giving effect to the taxability of the underlying transaction)), or (2) in the event our sponsor elects to receive Series B common stock in lieu of a new series of voting common stock, the volume weighted average price of our Series A common stock during the 10 trading days immediately prior to the end of the applicable quarter.
Our sponsor’s pro rata share in connection with the exercise of its preemptive rights will be an amount sufficient to maintain the percentage ownership of outstanding voting stock by our sponsor and LMC and its permitted transferees in the case of issuances of voting stock and other securities convertible, exercisable or exchangeable for voting stock, and an amount sufficient to maintain the percentage ownership of our outstanding common stock by our sponsor and LMC and its permitted transferees in the case of issuances of nonvoting stock or other securities convertible, exercisable or exchangeable for nonvoting stock.
Private placement warrants
Our sponsor expects to purchase an aggregate of 9,000,000 private placement warrants (or 10,000,000 if the underwriters’ over-allotment option is exercised in full) at a price of $1.50 per warrant ($13,500,000 in the aggregate, or $15,000,000 in the aggregate if the underwriters’ over-allotment option is exercised in full) in a private placement that will close simultaneously with the closing of this offering. Each private placement warrant entitles the holder thereof to purchase one share of Series A common stock at a price of $11.50 per share, subject to adjustment as provided herein. A portion of the purchase price of the private placement warrants 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 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or during any Extension Period, the proceeds of the sale of the private placement warrants held in the trust account will be used to fund the redemption of our public shares (subject to the requirements of applicable law) and the private placement warrants will expire worthless. The private placement warrants will not be redeemable by us so long as they are held by our sponsor or its permitted transferees. If the private placement warrants are held by holders other than our sponsor or its permitted transferees, the private placement warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering. Our sponsor, as well as its permitted transferees, have the option to exercise the private placement warrants on a cashless basis.
Transfer restrictions on private placement warrants
The private placement warrants (including the Series A common stock issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business combination, except as described below under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants.”
Proceeds to be held in trust account
Nasdaq listing rules provide that at least 90% of the gross proceeds from this offering and the sale of the private placement warrants be deposited in a trust account. Of the net proceeds we will receive from this offering and the sale of the private placement warrants described in this prospectus, $500.0 million ($10.00 per unit), or $575.0 million ($10.00 per unit) if the underwriters’ over-allotment option is exercised in full (including $17,500,000 (or up to $20,125,000 if the underwriters’ over-allotment option is exercised in full) in deferred underwriting commissions), will be deposited into a U.S.-based trust account with Continental Stock Transfer & Trust Company acting as trustee, and $3,500,000 will be used to pay expenses in connection with the closing of this offering and for working capital following this offering. The funds in the trust account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries.
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, the funds held in the trust account will not be released from the trust account until the earliest of: (1) the completion of our initial business combination; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) the redemption of all of our public shares if we have not completed our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred), subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.
Anticipated expenses and funding sources
Unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use, except the withdrawal of interest to pay taxes or to redeem our public shares in connection with an amendment to our amended and restated certificate of incorporation, as described above. The funds in the trust account will be invested only in U.S. government treasury bills with a maturity of 185 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 upon current interest rates, we expect the trust account to generate approximately $350,000 of interest annually (assuming an interest rate of 0.07% per year). Unless and until we complete our initial business combination, we may pay our expenses only from:
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the net proceeds of this offering and the sale of the private placement warrants not held in the trust account, which will be approximately $1,750,000 in working capital after the payment of approximately $1,750,000 in expenses relating to this offering; and
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any loans or additional investments from our sponsor, members of our management team or LMC or any of its subsidiaries or other third parties, although they are under no obligation or other duty to loan funds to, or invest in, us, and provided that any such loans will not have any claim on the proceeds held in the trust account unless such proceeds are released to us upon completion of our initial business combination. If we complete our initial business combination, we expect to repay such loaned amounts out of the proceeds of the trust account released to us. In the event that our initial business combination does not close, we may use a portion of the working capital held
outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $2,500,000 of such loans made to us by our sponsor, LMC or its subsidiaries may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor.
Conditions to completing our initial business combination
There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination. Nasdaq listing rules require that our initial business combination must be with one or more target businesses that have an aggregate fair market value equal to at least 80% of the value of the trust account (excluding any deferred underwriting commissions and taxes payable on interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case.
If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. We will complete our initial business combination only if the post-transaction company owns or acquires 50% or more of the outstanding voting power of the outstanding capital stock of the target or otherwise acquires an interest in the target business 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 outstanding voting power of the outstanding capital stock of the target, our stockholders prior to our initial business combination may collectively own a minority interest (economic and/or voting) in the post-transaction company, depending on valuations ascribed to the target and us in our initial business combination transaction. If less than 100% of the outstanding 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 by us is what will be valued for purposes of the 80% of net assets test; provided that in the event that our initial business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses.
Permitted purchases and other transactions with respect to our securities by our sponsor, insiders and the related companies
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, or advisors or any of
the related companies and their directors, officers and advisors may purchase public shares 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 other duty to do so. There is no limit on the number of securities such persons may purchase, or any restriction on the price that they may pay. Any such price per share may be different than the amount per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. Additionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), our sponsor, directors, officers, or advisors or any of the related companies and their directors, officers and advisors may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares. However, such persons have no current commitments, plans or intentions to engage in such purchases or other transactions and have not formulated any terms or conditions for any such purchases or other transactions. None of the funds in the trust account will be used to purchase public shares or public warrants in such transactions. Such persons will be subject to restrictions in making any such purchases when they are in possession of any material non-public information or if such purchases are prohibited by Regulation M under the Exchange Act. See “Proposed Business — Permitted purchases and other transactions with respect to our securities” for a description of how such persons will determine from which stockholders to enter into transactions with.
We will adopt an insider trading policy which will require insiders to refrain from purchasing securities during certain blackout periods and when they are in possession of any material non-public information. We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as it will be dependent upon several factors, including, but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary.
We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will be required to comply with such rules. Our sponsor, directors, officers, or advisors or any of the related companies and their directors, officers and advisors will be restricted from making purchases if such purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.
We expect that any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent
such purchasers are subject to such reporting requirements. None of the funds held in the trust account will be used in such transactions prior to completion of our initial business combination.
The purpose of any such transaction could be to (1) vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder approval of the initial business combination, (2) 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 or (3) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the consummation of our initial business combination, where it appears that such requirement would otherwise not be met. Any such transactions may result in the completion of our initial business combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our shares of Series A common stock or warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Redemption rights for public stockholders upon completion of our initial business combination
We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, calculated as of two business days prior to the completion of our initial business combination, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Our sponsor, executive officers and directors will enter into a letter agreement with us, pursuant to which they will agree to waive their redemption rights with respect to our common stock held by them in connection with the completion of our initial business combination.
Manner of conducting redemptions
We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either: (1) in connection with a stockholder meeting called to approve the business combination; or (2) by means of a tender offer. Except as required by Delaware law or stock exchange rule, the decision as to whether we will seek stockholder approval of a
proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction. Asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation would typically require stockholder approval. We intend to conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by applicable law or stock exchange rule or we choose to seek stockholder approval for business or other reasons.
If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation:
•
conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and
•
file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we and our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our Series A common stock in the open market, in order to comply with Rule 14e-5 under the Exchange Act.
In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public shares, which number will be based on the requirement that we may not redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions, or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination, and we instead may search for an alternate business combination (including, potentially, with the same target).
If, however, stockholder approval of the transaction is required by applicable law or stock exchange rule or we decide to obtain stockholder approval for business or other reasons, we will:
•
conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and
•
file proxy materials with the SEC.
We expect that a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Although we are not required to do so, we currently intend to comply with the substantive and procedural requirements of Regulation 14A in connection with any stockholder vote even if we are not able to maintain our Nasdaq listing or Exchange Act registration.
If we seek stockholder approval of our initial business combination, holders of our common stock will vote together as a single class with each share entitling the holder to one vote and we will complete our initial business combination only if a majority of the outstanding shares of our common stock voted are voted in favor of the business combination, subject to any other vote required by applicable law. A quorum for such meeting will consist of the holders present in person or by proxy of shares of our outstanding capital stock representing a majority of all outstanding shares of capital stock of the company entitled to vote at such meeting. Shares of common stock held by our sponsor, officers and directors will count towards this quorum and they have agreed to vote our common stock held by them in favor of our initial business combination. We expect that at the time of any stockholder vote relating to our initial business combination, our sponsor and its permitted transferees will own at least 20% of our outstanding shares of common stock entitled to vote thereon. As a result, in addition to our sponsor’s founder shares, we would need 18,750,001, or 37.5% (assuming all outstanding shares are voted and the over-allotment option is not exercised), or 3,125,001, or 6.25% (assuming only the minimum number of shares representing a quorum are voted and the over-allotment option is not exercised), of the 50,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have such initial business combination approved. These quorum and voting thresholds and agreements may make it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public shares without voting, and if it does vote, irrespective of whether it votes for or against the proposed transaction.
Our amended and restated certificate of incorporation will provide that in no event will we redeem our public shares in an
amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions. Redemptions of our public shares may also be subject to a higher net tangible asset test or cash requirement pursuant to an agreement relating to our initial business combination. For example, the proposed business combination may require: (1) cash consideration to be paid to the target or its owners; (2) cash to be transferred to the target for working capital or other general corporate purposes; or (3) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all shares of common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all shares of common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination (including, potentially, with the same target).
Tendering share certificates in connection with a tender offer or redemption rights
We may require our public stockholders 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, rather than simply voting against the initial business combination. The tender offer or 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 stockholders to satisfy such delivery requirements, which will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares.
Limitation on redemption rights of stockholders holding more than 15% of the shares sold in this offering if we hold a stockholder vote
Notwithstanding the foregoing redemption rights, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in this offering, without our prior consent. We believe the restriction described above will discourage stockholders
from accumulating large blocks of shares and subsequent attempts by such holders to use their ability to redeem their shares as a means to force us or our sponsor to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights against a business combination if such holder’s shares are not purchased by us or our sponsor at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem to no more than 15% of the shares sold in this offering, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including all shares held by those stockholders that hold more than 15% of the shares sold in this offering) for or against our initial business combination.
Redemption rights in connection with proposed amendments to our amended and restated certificate of incorporation
Some other blank check companies have a provision in their charter which prohibits the amendment of certain charter provisions. Our amended and restated certificate of incorporation will provide that any of its provisions (other than amendments relating to the appointment or removal of directors prior to our initial business combination, which require the approval of holders of more than 50% of the total voting power of the outstanding shares of our common stock entitled to vote thereon as well as more than 50% of the outstanding Series F common stock) related to pre-business combination activity (including the requirement to deposit proceeds of this offering and the sale of the private placement warrants into the trust account and not release such amounts except in specified circumstances and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of at least 66 2/3% of the total voting power of our outstanding capital stock, subject to applicable law or stock exchange rule, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of at least 66 2/3% of the total voting power of our outstanding capital stock. Our sponsor, who will beneficially own 20% of our outstanding common stock upon the closing of this offering (assuming our sponsor does not purchase any units in this offering), may participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they may choose. Our sponsor, executive officers and directors will agree, pursuant to a letter agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (A) to modify the substance or
timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding public shares. Our sponsor, executive officers and directors will enter into a letter agreement with us, pursuant to which they will agree to waive their redemption rights with respect to our common stock held by them in connection with (x) amendments to our amended and restated certificate of incorporation described above and (y) the completion of our initial business combination. Any permitted transferees as described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants” would be subject to the same restrictions and other agreements as our sponsor with respect to any founder shares.
Release of funds in trust account on consummation of our initial business combination
On the completion of our initial business combination, all amounts held in the trust account will be disbursed directly by the trustee or released to us to pay amounts due to any public stockholders who properly exercise their redemption rights as described above under “Redemption rights for public stockholders upon completion of our initial business combination,” to pay the underwriters their deferred underwriting commissions, to pay all or a portion of the consideration payable to the target or owners of the target of our initial business combination and to pay other expenses associated with our initial business combination. If our initial business combination is paid for using equity or debt or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemption of our public shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other businesses, for share repurchases or for working capital.
Redemption of public shares and distribution and liquidation if no initial business combination
Our sponsor, executive officers and directors will agree that we will have only 24 months from the closing of this offering to complete our initial business combination (or 27 months if an agreement in principle event has occurred). If we have not
completed our initial business combination within such 24-month period (or 27 months if an agreement in principle event has occurred) or during any Extension 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 (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 public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (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 stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within such 24-month period (or 27 months if an agreement in principle event has occurred).
Our sponsor, executive officers and directors will enter into a letter agreement with us, pursuant to which they will waive their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or during any Extension Period (although our sponsor, officers and directors will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame). The underwriters have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not complete our initial business combination and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares.
Our sponsor, executive officers and directors will agree, pursuant to a letter agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Series A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions.
Limited payments to insiders
There will be no finder’s fees, reimbursements or cash payments made by us to our sponsor, LMC or its other subsidiaries, or their officers or directors, for services rendered to us prior to or in connection with the completion of our initial business combination, other than the following payments, none of which will be made from the proceeds of this offering and the sale of the private placement warrants held in the trust account prior to the completion of our initial business combination:
•
repayment of an aggregate of up to $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses;
•
payment to certain subsidiaries of LMC of a total of $91,666 per month for office space, administrative and support services;
•
payment of an annual fee of $75,000, payable in cash, to each of our independent directors for service on our board of directors;
•
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 LMC or its other subsidiaries to finance transaction costs in connection with an intended initial business combination, the terms of which have not been determined nor have any written agreements been executed with respect thereto. Up to $2,500,000 of such loans made to us may be convertible into warrants at a price of $1.50 per warrant at the option of the lender.
These payments may be funded using the net proceeds of this offering and the sale of the private placement warrants, in each case to the extent not held in the trust account or, upon the consummation of the initial business combination, from any amounts remaining from the proceeds of the trust account released to us in connection therewith.
Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers or directors or LMC or its other subsidiaries.
Prior to the effectiveness of this registration statement, we will have established and will maintain an audit committee to, among other things, monitor compliance with the terms described above. If any noncompliance is identified, then the audit committee will be charged with the responsibility to promptly take all action necessary to rectify such noncompliance or otherwise to cause compliance with the terms of this offering.
See “Management — Committees of the Board of Directors — Audit Committee.”
As described under “Proposed Business — Conflicts of Interest” and “Management — Conflicts of Interest,” each of our officers and directors has, and any of them in the future may have, additional fiduciary or contractual obligations to one or more other entities pursuant to which such officer or director may be required to present a business combination opportunity to such entities before he or she presents such opportunity to us. Also, none of LMC, our sponsor or any of our directors and officers is prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity to which he or she has then-current fiduciary or contractual obligations to present such opportunity to another entity, he or she may only present such opportunity to us if such other entity rejects the opportunity. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company; such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue; and such person has no fiduciary or contractual obligation to present the opportunity to any other person or entity. Additionally, none of LMC, our sponsor or any other entity currently has any obligation or duty to provide us with any potential business combination opportunity.
In addition, LMC will adopt a policy pursuant to which any business combination opportunity that is a corporate opportunity of LMC that may also be a business combination opportunity for our company will first be presented to a standing committee of the board of directors of LMC for consideration as to whether LMC desires to pursue such business combination opportunity as a direct investment or to present such opportunity to our company for consideration. John C. Malone, Chairman of the Board of LMC, will be the sole member of that committee and will not serve in any fiduciary capacity at our company.
For more information, including a list of our executive officers and directors and entities for which a conflict of interest may or does exist between such officers and the company, see “Proposed Business — Conflicts of Interest” and “Management — Conflicts of Interest.”
We do not believe, however, that the fiduciary, contractual or other obligations or duties of our officers or directors or the LMC policy described above will materially affect our ability to complete our initial business combination.
Our sponsor will agree that it will be liable to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) 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 the lesser of: (1) $10.00 per public share; and (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. 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, which is a newly formed entity, 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. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 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.
At our request, the underwriters have reserved up to 2,500,000, or 5% (or 4.3%, assuming full exercise of the underwriters’ over-allotment option), of the units offered hereby for sale, at the initial public offering price, to directors, officers, business associates and related persons of LMAC. The number of units available for sale to the general public will be reduced to the extent these individuals purchase reserved units. Any reserved units that are not so purchased will be offered by the underwriters to the general public on the same basis as the other units offered by this prospectus. Except for any units acquired by our directors and executive officers, units purchased pursuant to the directed unit program will not be subject to lock-up agreements with the underwriters. See “Underwriting — Directed Unit Program.”
Risks
We are a newly incorporated company that has conducted no operations and has generated no revenues. Until we complete our initial business combination, we will have no operations and will generate no operating revenues. In making your decision whether to invest in our securities, you should take into account not only the background of our management team, but also the special risks we face as a blank check company. This offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. Accordingly, you will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. For additional information concerning how Rule 419 blank check offerings differ from this offering, 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” in this prospectus.
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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December 31, 2020
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Actual
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|
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As Adjusted
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|
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Balance Sheet Data:
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|
|
|
|
|
|
|
|
|
|
|
|
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Working capital (deficiency)(1)
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|
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$
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(773,779)
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|
|
|
|
$
|
484,273,700
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|
|
|
Total assets(2)
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|
|
|
$
|
797,479
|
|
|
|
|
$
|
501,773,700
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|
|
|
Total liabilities(3)
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|
|
|
$
|
773,779
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|
|
|
|
$
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17,500,000
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Value of common stock that may be redeemed in connection with our
initial business combination ($10.00 per share)(4)
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|
|
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$
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—
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|
|
|
|
$
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479,273,690
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|
|
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Total stockholders’ equity(5)
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|
|
|
$
|
23,700
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|
|
|
|
$
|
5,000,010
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|
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(1)
The “as adjusted” calculation includes $500,000,000 of cash held in trust from the proceeds of this offering and the sale of the private warrants, plus $1,750,000 of cash held outside the trust account, less $17,500,000 of deferred underwriters’ commission, plus $23,700 of actual stockholders’ equity at December 31, 2020.
(2)
The “as adjusted” calculation includes $500,000,000 of cash held in trust from the proceeds of this offering and the sale of the private warrants, plus $1,750,000 of cash held outside the trust account, plus $23,700 of actual stockholders’ equity at December 31, 2020.
(3)
The “as adjusted” calculation includes $17,500,000 of deferred underwriters’ commission.
(4)
The “as adjusted” calculation equals the “as adjusted” total assets, less the “as adjusted” total liabilities, less the “as adjusted” stockholders’ equity, which is set to approximate the minimum net tangible assets threshold of at least $5,000,001 either immediately prior to or upon consummation of our initial business combination.
(5)
Excludes 47,927,369 shares of common stock which are subject to conversion in connection with our initial business combination. The actual number of shares that may be converted may exceed this amount provided that we have net tangible assets of at least $5,000,001 immediately prior to or upon consummation of the business combination. The “as adjusted” calculation equals the “as adjusted” total assets, less the “as adjusted” total liabilities, less the value of shares of common stock that may be converted in connection with our initial business combination ($10.00 per share).
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND RISK FACTOR SUMMARY
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. 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, the following risks, uncertainties and other factors:
•
our being a newly incorporated company with no operating history and no revenues;
•
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 directors and officers allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination;
•
actual and potential conflicts of interest relating to LMC, our sponsor and other entities in which members of our management team are involved;
•
our potential ability to obtain additional financing to complete our initial business combination including from our sponsor, LMC or other third parties;
•
our pool of prospective target businesses, including the location and industry of such target businesses;
•
our ability to consummate an initial business combination due to the uncertainty resulting from the recent COVID-19 pandemic and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases);
•
the ability of our officers and directors to generate a number of potential business combination opportunities;
•
the voting structure of our common stock, including any potential adverse effect on our ability to complete an initial business combination timely or cost effectively, and, following our initial business combination, our status as a controlled company and the ability of our sponsor and LMC to exercise control over our policies and operations, each as a result of the high vote feature of our Series B common stock;
•
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;
•
our financial performance following this offering; and
•
the other risks and uncertainties discussed in “Risk Factors” and elsewhere in this prospectus.
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.
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 Our Search for, and Consummation of or Inability to Consummate, a Business Combination
Our public stockholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination.
We may not hold a stockholder vote to approve our initial business combination unless the business combination would require stockholder approval under applicable law or stock exchange listing requirements or if we decide to hold a stockholder vote for business or other reasons. For example, the Nasdaq rules currently allow us to engage in a tender offer in lieu of a stockholder meeting but would still require us to obtain stockholder approval if we were seeking to issue more than 20% of our 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 outstanding shares, we would seek stockholder approval of such business combination. However, except as required by Delaware law or stock exchange rule, the decision as to whether we will seek stockholder approval of a proposed business combination or will allow stockholders 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. Accordingly, we may consummate our initial business combination even if holders of a majority of our outstanding public shares, or if holders of a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote, do not approve of the business combination we consummate. See “Proposed Business — Stockholders May Not Have the Ability to Approve Our Initial Business Combination” for additional information.
If we seek stockholder approval of our initial business combination, our sponsor, executive officers and directors will agree to vote in favor of such initial business combination, regardless of how our public stockholders vote.
Our sponsor, executive officers and directors will agree (and their permitted transferees will agree) to vote our common stock held by them in favor of our initial business combination. As a result, in addition to our sponsor’s founder shares, we would need 18,750,001, or 37.5% (assuming all outstanding shares are voted and the over-allotment option is not exercised), or 3,125,001, or 6.25% (assuming only the minimum number of shares representing a quorum are voted and the over-allotment option is not exercised), of the 50,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have such initial business combination approved. We expect that our sponsor and its permitted transferees will own at least 20% of our outstanding shares of common stock at the time of any such stockholder vote. Accordingly, if we seek stockholder approval of our initial business combination, it is more likely that the necessary stockholder approval will be received than would be the case if our sponsor agreed to vote its founder shares in accordance with the majority of the votes cast by our public stockholders. In addition, LMC and our sponsor reserve the right but are not required to provide incremental funding to us in connection with our initial business combination by purchasing additional shares of Series B common stock at a purchase price of $10.00 per share, which shares would be sold in a private placement substantially concurrently with the consummation of our initial business combination.
In evaluating a prospective target business for our initial business combination, our management will rely on the availability of all of the funds from the sale of the forward purchase units to be used as part of the consideration to the sellers in the initial business combination. If the sale of some or all of the forward purchase units fails to close, for any reason, we may lack sufficient funds to consummate our initial business combination.
We will enter into a forward purchase agreement pursuant to which our sponsor will agree to acquire forward purchase units for $250,000,000, in the aggregate, in a private placement that will close substantially
concurrently with the consummation of our initial business combination. The proceeds from the sale of the forward purchase units may be used as part of the consideration to the sellers in our initial business combination, for expenses in connection with our initial business combination or for working capital in the post-business combination company. These purchases will be required to be made regardless of whether any shares of Series A common stock are redeemed by our public stockholders and are intended to provide us with a minimum funding level for our initial business combination. The forward purchase units will be issued only in connection with the closing of the initial business combination.
If the sale of some or all of the forward purchase units does not close for any reason, including by reason of the failure by our sponsor to fund the purchase price for their forward purchase units, we may lack sufficient funds to consummate our initial business combination. Additionally, our sponsor’s obligations to purchase the forward purchase units will be subject to termination prior to the closing of the sale of the forward purchase units by mutual written consent of our company and our sponsor. Our sponsor’s obligations to purchase its forward purchase units will be subject to fulfillment of customary closing conditions. In the event of any such failure to fund by the sponsor, any obligation is so terminated or any such closing condition is not satisfied and not waived by our sponsor, we may lack sufficient funds to consummate our initial business combination.
In addition, LMC and our sponsor reserve the right but are not required to provide incremental funding to us in connection with our initial business combination by purchasing additional shares of Series B common stock at a purchase price of $10.00 per share, which shares would be sold in a private placement substantially concurrently with the consummation of our initial business combination. If our sponsor exercises such right, such purchase would be subject to the risks described above.
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 stockholder 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 stockholder approval, public stockholders may not have the right or opportunity to vote on the business combination. Accordingly, if we do not seek stockholder 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 stockholders in which we describe our initial business combination.
The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.
We may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public stockholders 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. The amount of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with a business combination and such amount of deferred underwriting discount is not available for us to use as consideration in an initial 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 following such redemptions or any greater net tangible asset or cash requirement which 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 or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination (including, potentially, with the same target). Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us. If we are able to consummate an initial business combination, the per-share value of shares held by non-redeeming stockholders will reflect our obligation to pay the deferred underwriting commissions.
The ability of our public stockholders 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 stockholders 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 stockholders 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 stock.
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 stock in the open market; however, at such time our stock 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 stock 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 stockholders.
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 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred). 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 timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
We may not be able to 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 stockholders may receive only $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.
Our sponsor will agree that we must complete our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred). 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, including as a result of terrorist attacks, natural disasters or a significant outbreak of infectious diseases. For example, the outbreak of Coronavirus Disease 2019 (“COVID-19”) continues to grow both in the U.S. and globally and, while the extent of the impact of the outbreak on us will depend on future developments, it could limit
our ability to complete our initial business combination, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all. Additionally, the outbreak of COVID-19 and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) may negatively impact businesses we may seek to acquire. It may also have the effect of heightening many of the other risks described in this “Risk Factors” section, such as those related to the market for our securities and cross-border transactions.
If we have not completed our initial business combination within such time period or during any Extension 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 (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 public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (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 stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case, our public stockholders may receive only $10.00 per share, or less than $10.00 per share, on the redemption of their shares, and our warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.
Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by COVID-19 outbreak and other events and the status of debt and equity markets.
In December 2019, a novel strain of coronavirus was reported to have surfaced, which has and is continuing to spread throughout parts of the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of COVID-19 a “Public Health Emergency of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020, the World Health Organization characterized the outbreak as a “pandemic.” The COVID-19 outbreak has adversely affected, and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) could adversely affect, economies and financial markets worldwide, business operations and the conduct of commerce generally, and the business of any potential target business with which we consummate a business combination could be, or may already have been, materially and adversely affected. Furthermore, we may be unable to complete a business combination if concerns relating to COVID-19 continue to restrict travel or 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 events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.
In addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases), including as a result of increased market volatility and decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all.
Finally, the outbreak of COVID-19 may also have the effect of heightening many of the other risks described in this “Risk Factors” section, such as those related to the market for our securities and cross border transactions.
If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, or advisors or any of the related companies or their directors, officers or advisors may enter into certain transactions, including purchasing shares or warrants from the public, which may influence the outcome of our proposed business combination and reduce the public “float” of our securities.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules our sponsor, directors, officers, or advisors or any of the related companies or their directors, officers or advisors may purchase public shares 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 other duty to do so. Such a purchase may include a contractual acknowledgement that such public stockholder, 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, or advisors or any of the related companies or their directors, officers or advisors purchase public shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling public stockholders would be required to revoke their prior elections to redeem their shares. The price per share paid in any such transaction may be different than the amount per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. Additionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), our sponsor, directors, officers, or advisors or any of the related companies or their directors, officers or advisors may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares. However, 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. See “Proposed Business — Permitted purchases and other transactions with respect to our securities” for a description of how such persons will determine from which stockholders to enter into transactions with. The purpose of any such transaction could be to (1) vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder approval of the initial business combination, (2) 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 or (3) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the consummation of our initial business combination, where it appears that such requirement would otherwise not be met. Any such transactions 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 Series A common stock or 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 stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
We will comply with the 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 stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder 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. For example, we may require our public stockholders 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 the initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. In the event that a stockholder fails to comply with these procedures, its shares may not be redeemed. See “Proposed Business — Tendering stock certificates in connection with a tender offer or redemption rights.”
You will not be entitled to protections normally afforded to investors of many other blank check companies.
Since the net proceeds of this offering and the sale of the private placement warrants are intended to be used to complete an initial business combination with a business that has not been selected, 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 placement warrants and will file a Current Report on Form 8-K, including an audited balance sheet of our 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 will have a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, if this offering were subject to Rule 419, that rule would prohibit the release of any interest 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 our initial business combination. For a more detailed comparison of our offering to offerings that comply with Rule 419, see “Proposed Business — Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.”
If we seek stockholder 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 stockholders are deemed to hold in excess of 15% of our Series A common stock, you will lose the ability to redeem all such shares in excess of 15% of our Series A common stock.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the 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, our amended and restated certificate of incorporation will not restrict our stockholders’ 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 stock 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 stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on our redemption of their stock, and our warrants will expire worthless.
We expect to encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. Furthermore, our high vote capital structure differs from the typical capital structure of many other special purpose acquisition company competitors and may make us less attractive to an acquisition target or make an acquisition more costly to complete. While we believe there will be numerous target businesses we could potentially acquire with the net proceeds of this offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, our obligation to pay cash in connection with our public stockholders who properly exercise
their redemption rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by target businesses. Any of these factors may place us at a competitive disadvantage in successfully negotiating and completing a business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders 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 24 months following the closing of this offering (or 27 months if an agreement in principle event has occurred), we may be unable to complete our initial business combination.
The funds available to us outside of the trust account may not be sufficient to allow us to operate for at least the 24 months following the closing of this offering (or 27 months if an agreement in principle event has occurred), assuming that our initial business combination is not completed during that time. We expect to incur significant costs in pursuit of our acquisition plans. Management’s plans to address this need for capital through this offering and potential loans from certain entities are discussed in the section of this prospectus titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” However, those entities, including LMC, are not obligated to make loans to us in the future, and we may not be able to raise additional financing from other parties necessary to fund our expenses. Any such event in the future may negatively impact the analysis regarding our ability to continue as a going concern at such time. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.
If the net proceeds of this offering and the sale of the private placement warrants not being held in the trust account are insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination and we will depend on loans from our sponsor or management team to fund our search, to pay our taxes and to complete our initial business combination. If we are unable to obtain such loans, we may be unable to complete our initial business combination.
Of the net proceeds of this offering and the sale of the private placement warrants, only approximately $1,750,000 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 $1,750,000, we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $1,750,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. If we are required to seek additional capital, we would need to borrow funds from our sponsor, LMC or its subsidiaries or other third parties to operate or may be forced to liquidate. None of our sponsor, LMC or its subsidiaries is under any obligation or other duty 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 stockholders may receive only $10.00 per share, or less in certain circumstances, and our warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders 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 subsequently 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. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination could suffer a reduction in the value of their securities. Such stockholders or 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 stockholders 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 registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, 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 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 team will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Making such a request of potential target businesses may make our acquisition proposal less attractive to them and, to the extent prospective target businesses refuse to execute such a waiver, it may limit the field of potential target businesses that we might pursue.
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 have not completed 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 stockholders could be less than the $10.00 per share initially held in the trust account, due to claims of such creditors.
Our sponsor will agree that it will be liable to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) 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 the lesser of: (1) $10.00 per public share; and (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. 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, which is a newly formed entity, 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. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 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 independent 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 stockholders.
In the event that the proceeds in the trust account are reduced below the lesser of: (1) $10.00 per public share; and (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 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 certain instances. For example, the cost of such legal action may be deemed by the independent directors to be too high relative to the amount recoverable or the independent directors may determine that a favorable outcome is not likely. 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 stockholders may be reduced below $10.00 per share.
The securities in which we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.00 per share.
The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act that invest only in direct U.S. government treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that we do not complete our initial business combination allotted time frame or make certain amendments to our amended and restated certificate of incorporation, our public stockholders are entitled to receive their pro-rata share of the proceeds held in the trust account, plus any interest income, net of taxes paid or payable (less, in the case we are unable to complete our initial business combination, $100,000 of interest). Negative interest rates could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.00 per share.
If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy 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 stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to
recover some or all amounts received by our stockholders. 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 stockholders 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 stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share amount that would otherwise be received by our stockholders in connection with any liquidation may be reduced.
If, before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by our public stockholders in connection with any liquidation would be reduced.
If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
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restrictions on the nature of our investments; and
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restrictions on the issuance of securities;
each of which may make it difficult for us to complete our initial business combination.
In addition, we may have imposed upon us burdensome requirements, including:
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registration as an investment company with the SEC;
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adoption of a specific form of corporate structure; and
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reporting, record keeping, voting, proxy and disclosure requirements and compliance with other rules and regulations that we are currently not subject to.
In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business will be to identify and complete a business combination and thereafter to operate the post-transaction business or assets for the long term. We do not plan to buy businesses or assets with a view to resell or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act that invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act. This offering is not intended for persons who are seeking a return on investments in government securities or investment securities. The trust account is intended as a holding place for funds pending the earliest to occur of: (i) the completion of our primary business objective, which is a business combination; (ii) the redemption of any public shares properly submitted in connection
with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (iii) absent a business combination, our return of the funds held in the trust account to our public stockholders as part of our redemption of the public shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to consummate our initial business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their shares. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.
Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination, and results of operations.
We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial business combination, and results of operations.
If we have not completed our initial business combination within 24 months of the closing of this offering or during any subsequent Extension Period, our public stockholders may be forced to wait beyond such 24 months before redemption from our trust account.
If we have not completed our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred), we will distribute the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), pro rata to our public stockholders by way of redemption and cease all operations except for the purposes of winding up of our affairs, as further described herein. Any redemption of public stockholders from the trust account shall be effected automatically by function of our amended and restated certificate of incorporation 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 stockholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the General Corporation Law of the State of Delaware (the “DGCL”). In that case, investors may be forced to wait beyond the initial 24 months (or 27 months if an agreement in principle event has occurred) 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 certificate of incorporation and then only in cases where investors have properly sought to redeem their shares of Series A common stock. Only upon our redemption or any liquidation will public stockholders be entitled to distributions if we have not completed our initial business combination within the required time period or do not amend certain provisions of our amended and restated certificate of incorporation prior thereto.
Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account
distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within the required time period may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is our intention to redeem our public shares as soon as reasonably possible following the 24th month (or 27 months if an agreement in principle event has occurred) from the closing of this offering (or the end of any Extension Period) in the event we do not complete our initial business combination and, therefore, we do not intend to comply with the foregoing procedures.
Because we do not intend to comply with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, consultants, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within the required time period is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution.
We may not hold an annual meeting of stockholders until after the completion of our initial business combination and you will not be entitled to any of the corporate protections provided by such a meeting.
We may not hold an annual meeting of stockholders until after we consummate our initial business combination (unless required by Nasdaq) and thus may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting of stockholders be held for the purposes of electing directors in accordance with a company’s bylaws unless such election is made by written consent in lieu of such a meeting. Therefore, if our stockholders want us to hold an annual meeting prior to our completion of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL. Until we hold an annual meeting of stockholders, public stockholders may not be afforded the opportunity to discuss company affairs with management.
The grant of registration rights to our sponsor, LMC and their permitted transferees and the grant of preemptive rights to our sponsor may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our Series A common stock.
Pursuant to an investor rights agreement and a forward purchase agreement to be entered into on or prior to the closing of this offering, at or after the time of our initial business combination, our sponsor, LMC and/or their permitted transferees can demand that we register the resale of the private placement warrants, the forward purchase warrants, warrants that may be issued upon conversion of working capital loans, warrants purchased by them in the open market and shares of Series A common stock purchased by them in the open market or issuable upon (1) conversion of the founder shares, (2) exercise of the private
placement warrants, (3) conversion of the forward purchase shares and additional shares of Series B common stock purchased by LMC or our sponsor in connection with our initial business combination (if any), (4) exercise of the forward purchase warrants and (5) exercise of warrants issued upon conversion of working capital loans (if any). Our sponsor, LMC and/or the permitted transferees can also demand that we register securities we may issue by way of a stock dividend, recapitalization, merger or similar transaction. 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 Series A common stock.
In addition, the investor rights agreement will provide that upon certain issuances of equity securities by us (other than issuances due to the exercise of warrants), our sponsor will have certain contractual preemptive rights which are intended to allow our sponsor and LMC to maintain their percentage ownership of our outstanding common stock and voting stock. See “Principal Stockholders — Registration and Preemptive Rights.”
The existence of the registration and preemptive rights may make our initial business combination more costly or difficult to complete. This is because the stockholders 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 Series A common stock that is expected when the common stock owned by our sponsor or their permitted transferees, the private placement warrants are registered for resale or warrants issued in connection with working capital loans.
Because we are neither limited to evaluating target businesses in a particular industry, sector or geographic area nor have we selected any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.
Although we expect to focus on the media, digital media, music, entertainment, communications, telecommunications and technology industries, we may seek to complete a business combination with an operating company in any industry, sector or geographic area. However, we will not, under our amended and restated certificate of incorporation, be permitted to effectuate our initial business combination solely with another blank check company or similar company with nominal operations. Because we have not yet selected or approached any specific target business with respect to a business combination, there is no basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.
We may seek acquisition opportunities in industries or sectors that may be outside of our management team’s areas of expertise.
We will consider a business combination outside of our management team’s areas of expertise if such business combination candidate is presented to us and we determine that such candidate offers an attractive acquisition opportunity for our company. In the event we elect to pursue an acquisition outside of the areas of our management team’s expertise, our management team’s expertise may not be directly applicable to its evaluation or operation, and the information contained in this prospectus regarding the areas of our management team’s expertise would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all of the significant
risk factors relevant to such acquisition. Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.
Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not have all of these positive attributes. If we complete our initial business combination with a target that does not meet some or all of these 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 stockholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a business that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval of the transaction is required by applicable law or stock exchange rule, or we decide to obtain stockholder approval for business or other reasons, it may be more difficult for us to attain stockholder approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our 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, which could subject us to volatile revenues or earnings, intense competition and difficulties in obtaining and retaining key personnel.
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. 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 an independent accounting firm regarding fairness, 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.
We are not required to obtain an opinion from an independent investment banking firm or another accounting, valuation or appraisal firm that such initial business combination is fair to our company from a financial point of view. If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination.
We may issue additional shares of common stock or preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. Any such issuances would dilute the interest of our stockholders and likely present other risks.
Our amended and restated certificate of incorporation will authorize the issuance of up to 3,000,000,000 shares of Series A common stock, par value $0.0001 per share, 1,000,000,000 shares of Series B common stock, par value $0.0001 per share, 5,000,000,000 shares of Series C common stock, par value $0.0001 per share, and 200,000,000 shares of Series F common stock, par value $0.0001 per share, and 50,000,000 shares
of undesignated preferred stock, par value $0.0001 per share. Immediately after this offering, there will be 2,931,000,000 and 187,500,000 (assuming in each case, that the underwriters have not exercised their over-allotment option) authorized but unissued shares of Series A and Series F common stock available, respectively, for issuance, which amount takes into account shares reserved for issuance upon exercise of outstanding warrants but not upon the issuance of Series B common stock upon the conversion of the Series F common stock or the issuance of Series A common stock upon the conversion of such Series B common stock or any securities issuable pursuant to the forward purchase agreement (including shares issuable upon exercise of forward purchase warrants). Shares of Series F common stock will automatically convert at the time of our initial business combination, or earlier at the option of the holder, into shares of Series B common stock on a one-for-one basis and following our initial business combination each share of Series B common stock entitles the holder to ten votes per share. Prior to and following our initial business combination, each share of Series B common stock is convertible, at the option of the holder, into one share of our Series A common stock. Immediately after this offering, there will be no shares of Series B common stock, Series C common stock or preferred stock outstanding.
In connection with our initial business combination, we have agreed to issue to our sponsor 25,000,000 forward purchase units consisting of one share of Series B common stock and one-fifth of a forward purchase warrant, and, in the event our sponsor exercises its right to provide, or cause LMC or any of its wholly owned subsidiaries to provide, incremental funding, we will issue additional shares of Series B common stock to our sponsor, LMC or any of its wholly owned subsidiaries, as applicable, for $10.00 per share. We may issue a substantial number of additional shares of common stock or preferred stock in order to complete our initial business combination (including by issuing Series B common stock to our sponsor pursuant to its reserved purchase right) or under an employee incentive plan after completion of our initial business combination. We may also issue shares of Series A common stock in connection with the redemption of warrants as described in “Description of Securities — Warrants — Public Stockholders’ Warrants — Redemption of warrants when the price per share of Series A common stock equals or exceeds $10.00.” However, our amended and restated certificate of incorporation will provide, among other things, that prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (1) receive funds from the trust account or (2) vote pursuant to our amended and restated certificate of incorporation on any initial business combination. The issuance of additional shares of common or preferred stock, including pursuant to the forward purchase agreement:
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may significantly dilute the equity interest and voting power of investors in this offering;
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may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;
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could cause a change of control if a substantial number of shares of our common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
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may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us;
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may adversely affect prevailing market prices for our units, Series A common stock and/or warrants; and
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may not result in adjustment to the exercise price of our warrants.
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 stockholders 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 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 stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.
Our company has overlapping directors and management with multiple entities, each of which may lead to conflicting interests. Additionally, certain of our officers and directors have, and in the future may have, additional fiduciary or contractual obligations to one or more other entities which may lead to additional conflicting interests.
All of our officers also serve as executive officers of one or more of the related companies, and there are overlapping directors with such entities. Our officers and members of our board of directors have fiduciary duties to our stockholders. Likewise, any such persons who serve in similar capacities at any of the related companies have fiduciary duties to that company’s stockholders. Therefore, such persons may have conflicts of interest or the appearance of conflicts of interest with respect to matters involving or affecting us and one or more of the related companies to which they owe fiduciary duties.
Each of our officers and directors has, and any of them in the future may have, additional fiduciary or contractual obligations to one or more other entities (including, without limitation, the entities listed in “Management — Conflicts of Interest”) pursuant to which such officer or director may be required to present a business combination opportunity to such entities before he or she presents such opportunity to us. Also, none of LMC, our sponsor or any of our directors and officers is prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity to which he or she has then-current fiduciary or contractual obligations to present such opportunity to another entity, he or she may only present such opportunity to us if such other entity rejects the opportunity. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company; such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue; and such person has no fiduciary or contractual obligation to present the opportunity to any other person or entity.
One or more of the related companies may compete with us for acquisition opportunities. If these entities decide to pursue any such opportunities, we may be precluded from procuring such opportunities. In addition, investment ideas generated within LMC may be suitable for both us and for one or more other entities and may be directed to such entity rather than to us.
In addition, LMC will adopt a policy pursuant to which any business combination opportunity that is a corporate opportunity of LMC that may also be a business combination opportunity for our company will first be presented to a standing committee of the board of directors of LMC for consideration as to whether LMC desires to pursue such business combination opportunity as a direct investment or to present such opportunity to our company for consideration. John C. Malone, Chairman of the Board of LMC, will be the sole member of that committee and will not serve in any fiduciary capacity at our company.
LMC has direct and indirect interests in subsidiaries and other companies which are engaged in a broad array of industries, including media, digital media, music, entertainment, communications, telecommunications and technology. Conflicts may arise from LMC’s indirect ownership of our company, as well as from actions undertaken by any its subsidiaries. Additionally, LMC may take commercial steps which may have an adverse effect on us, including with respect to any target we acquire in the initial business combination.
Moreover, most of our directors and officers continue to own stock and options to purchase stock in one or more of the related companies. Additionally, our directors or officers could own disproportionate
interests (in percentage or value terms) in any of LMC’s tracking stocks. These ownership interests and/or such disparity could create, or appear to create, potential conflicts of interest when the applicable individuals are faced with decisions that could have different implications for our company and the related companies.
Furthermore, we may enter into transactions with one or more of the related companies. While any potential conflict that qualifies as a “related party transaction” (as defined in Item 404 of Regulation S-K under the Securities Act) is subject to review by an independent committee of the applicable issuer’s board of directors in accordance with its corporate governance guidelines, there can be no assurance that the terms of any such transactions will be as favorable to us as would be the case where there is no overlapping officer or director. See “— We may engage in a business combination with one or more target businesses that may be owned by our sponsor or one or more of the related companies, or its or their officers or directors, which may raise potential conflicts of interest.”
We are dependent upon our executive officers and directors who must allocate their time among our business and other businesses. The departure of our executive officers or directors or conflicts of interest in their determination as to how much time to devote to our affairs could have a negative impact on our ability to complete our initial business combination.
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. 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, including our search for an initial business combination, and these other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination, nor do we have any 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.
In addition, certain of our officers and directors are employed by or otherwise provide service to LMC or other companies that may make investments in, or operate in, industries we may target for our initial business combination. Our independent directors 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, 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, see “Proposed Business — Conflicts of Interest” and “Management — Conflicts of Interest.”
From time to time, we and members of our management team may be subject to legal proceedings, regulatory disputes, and governmental inquiries that could cause us to incur significant expenses, divert our management’s attention, and materially harm our financial condition.
From time to time, we may be subject to claims, lawsuits, government investigations, and other proceedings involving competition and antitrust, securities, tax, commercial disputes, and other matters that could adversely affect our financial condition. Litigation and regulatory proceedings may be protracted and expensive, and the results are difficult to predict. Additionally, such litigation and regulatory proceedings require a great deal of financial resources and attention from us and our management team. Adverse outcomes with respect to litigation or any of these legal proceedings may result in significant settlement costs or judgments, or penalties and fines, and could negatively affect our ability to identify and complete an initial business combination and may have an adverse effect on the price of our securities.
Members of our management team have been involved in a wide variety of businesses. Such involvement has, and may lead to, media coverage and public awareness. As a result, members of our management team and the related companies may from time to time be involved in civil disputes or governmental investigations unrelated to our business. Any such claims or investigations may be detrimental to our reputation and could negatively affect our ability to identify and complete an initial business combination and may have an adverse effect on the price of our securities.
Our officers, directors and security holders 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 any other entities 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 business that is owned by our sponsor or any of the related companies, or its or their officers or directors, or make the acquisition through a joint venture or other form of shared ownership with our sponsor or any of the related companies, or its or their officers or directors, 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, the related companies have invested, and may in the future invest, in a broad array of industries, including media, digital media, music, entertainment, communications, telecommunications and technology. 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 entities.
We may engage in a business combination with one or more target businesses that may be owned by our sponsor or one or more of the related companies, or its or their officers or directors, which may raise potential conflicts of interest.
In light of the involvement of our sponsor, officers and directors with other businesses, we may decide to acquire one or more businesses owned by our sponsor or any of the related companies, or its or their officers or directors, or make the acquisition through a joint venture or other form of shared ownership with our sponsor or any of the related companies, or its or their officers or directors. Any such parties may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the acquisition by making a future issuance to any such parties, which may give rise to certain conflicts of interest. 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 is not currently aware of any specific opportunities for us to complete our initial business combination with any such entities, and we have not, nor has anyone on our behalf, engaged in substantive discussions, directly or indirectly, with any such entity or entities with respect to an initial business combination with us. Although we will not be specifically focusing on, or targeting, any transaction with any such entities, we would pursue such a transaction if we determined that such an 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. While we are not required to obtain an opinion regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international businesses owned by the related companies, or any of their subsidiaries, or our sponsor, or its or their officers or directors, in the event we do not obtain such an opinion, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public stockholders as they would be absent any conflicts of interest.
Since our sponsor 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 hold), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
In November 2020, our sponsor purchased an aggregate of 17,250,000 founder shares for an aggregate purchase price of $25,000. In November 2020, our sponsor contributed an aggregate of 2,875,000 founder shares to our capital for no consideration, resulting in our sponsor holding an aggregate of 14,375,000 founder shares, with an effective purchase price of approximately $0.0017 per share, up to 1,875,000 of which are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised. If we increase or decrease the size of this offering, we will effect a stock dividend or share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Series F common stock immediately prior to the consummation of this offering in such amount as to maintain the number of founder
shares at 20% the outstanding shares of our common stock upon the consummation of this offering. The founder shares will be worthless if we do not complete an initial business combination.
Our sponsor will commit, pursuant to a written agreement, to purchase an aggregate of 9,000,000 private placement warrants (or 10,000,000 if the underwriters’ over-allotment option is exercised in full) at a price of $1.50 per warrant ($13,500,000 in the aggregate or $15,000,000 in the aggregate if the underwriters’ over-allotment option is exercised in full) in a private placement that will close simultaneously with the closing of this offering. Each private placement warrant entitles the holder thereof to purchase one share of our Series A common stock at a price of $11.50 per share, subject to adjustment as provided herein.
Members of our management team may directly or indirectly own securities following this offering, including founder shares, and the personal and financial interests of our officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following the initial business combination. This risk may become more acute as the deadline for completing our initial business combination nears.
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 stockholders’ investment in us.
Although we have no commitments as of the date of this prospectus to issue any notes or other debt securities, or to otherwise incur outstanding debt 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:
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default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
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acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
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our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
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our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;
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our inability to pay dividends on our common stock;
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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
We may only be able to complete one business combination with the proceeds of this offering and the sale of the private placement warrants and forward purchase 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.
The net proceeds from this offering and the sale of the private placement warrants and the sale of the forward purchase units for a purchase price of $250,000,000 will provide us with $751,750,000 (or $826,750,000
if the underwriters’ over-allotment option is exercised in full) that we may use to complete our initial business combination (which includes $17,500,000, or up to $20,125,000 if the underwriters’ over-allotment option is exercised in full, of deferred underwriting commissions being held in the trust account and estimated post-IPO working capital expenses of $1,750,000, and excludes estimated offering expenses of $1,750,000).
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:
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solely dependent upon the performance of a single business, property or asset; or
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dependent upon the development or market acceptance of a single or limited number of products, processes or services.
This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence 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 do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which a substantial majority of our stockholders do not agree.
Our amended and restated certificate of incorporation 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 following such redemptions, 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 stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor or any of the related companies. In the event the aggregate cash consideration we would be required to pay for all shares of common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all shares of common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination (including, potentially, with the same target).
The exercise price for the public warrants is higher than in some other blank check company offerings, and, accordingly, the warrants are more likely to expire worthless.
The exercise price of the public warrants is higher than in some other blank check companies. For example, historically, the exercise price of a warrant was often a fraction of the purchase price of the units in the initial public offering. The exercise price for our public warrants is $11.50 per share, subject to adjustments as provided herein. As a result, the warrants are less likely to ever be in the money and more likely to expire worthless.
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, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation or governing instruments, including our warrant agreement, in a manner that will make it easier for us to complete our initial business combination that some of our stockholders or warrant holders 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, including their warrant agreements. For example, blank check companies have amended the definition of business combination, increased redemption thresholds extended the time to consummate an initial business combination and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. We cannot assure you that we will not seek to amend our charter or governing instruments or extend the time to consummate an initial business combination in order to effectuate our initial business combination.
Certain provisions of our amended and restated certificate of incorporation 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 66 2/3% of the total voting power of our outstanding capital stock, 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 certificate of incorporation and the trust agreement to facilitate the completion of an initial business combination that some of our stockholders 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 stockholders. 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 certificate of incorporation will provide that any of its provisions (other than amendments relating to the appointment or removal of directors prior to our initial business combination, which require the approval of holders of more than 50% of the total voting power of the outstanding shares of our common stock entitled to vote thereon as well as more than 50% of the outstanding Series F common stock) related to pre-business combination activity (including the requirement to deposit proceeds of this offering and the sale of the private placement warrants into the trust account and not release such amounts except in specified circumstances and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of at least 66 2/3% of the total
voting power of our outstanding capital stock, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of at least 66 2/3% of the total voting power of our outstanding capital stock. Prior to our initial business combination, the affirmative vote of holders of a majority of the outstanding shares of our Series F common stock is required to approve the election or removal of directors. Our sponsor, who will beneficially own 20% of our outstanding capital stock upon the closing of this offering (assuming our sponsor does not purchase any units in this offering), may participate in any vote to amend our amended and restated certificate of incorporation 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 certificate of incorporation which will 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.
Our sponsor, executive officers and directors will agree, pursuant to a letter agreement, that they will not propose any amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Series A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, divided by the number of then outstanding public shares. These agreements are contained in a letter agreement that we will enter into with our sponsor, executive officers and directors. Our public stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor for any breach of these agreements.
Certain agreements related to this offering may be amended without stockholder approval.
The underwriting agreement relating to this offering, the letter agreement between us and our sponsor, executive officers and directors, the investor rights agreement among us, our sponsor and LMC, the forward purchase agreement between us and our sponsor, the services agreement between us and LMC and the facilities sharing agreement among us, our sponsor and a subsidiary of LMC, may be amended without stockholder approval. These agreements contain various provisions, including transfer restrictions on our founder shares and preemptive rights held by our sponsor, that our public stockholders might deem to be material.
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 in connection with the completion of our initial business combination. Any such amendments would not require approval from our stockholders, 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.
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, the sale of the private placement warrants and forward purchase 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 placement warrants and forward purchase 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 stockholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the proposed business combination. 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. Other than in connection with the forward purchase agreement, none of our officers, directors or stockholders 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 stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account, and our warrants will expire worthless.
Our sponsor controls the election of our board of directors and holds a substantial interest in us. As a result, the sponsor will elect all of our directors prior to our initial business combination and may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.
Upon the closing of this offering, our sponsor will own 20% of the voting power of our common stock (assuming our sponsor does not purchase units in this offering). In addition, prior to our initial business combination, only holders of our Series F common stock will have the right to appoint, elect and remove our board of directors. Holders of our public shares will have no right to vote on the election of directors during such time. These provisions of our amended and restated certificate of incorporation may only be amended by holders of more than 50% of the total voting power of the outstanding shares of our common stock entitled to vote thereon as well as more than 50% of the outstanding Series F common stock. As a result, you will not have any influence over the election of directors prior to our initial business combination, and will have limited voting rights following our initial business combination.
Our sponsor has no current intention to purchase additional securities, other than pursuant to the forward purchase agreement and as disclosed in this prospectus, which may include participation in a private placement of securities, exercise of warrants or contractual preemptive rights. Factors that would be considered in making such additional purchases would include whether our sponsor will have majority voting power following our initial business combination without such a purchase and consideration of the current trading price of our Series A common stock. For a discussion of risks relating to our capital structure following our initial business combination, see — “The voting structure of our common stock will have the effect of concentrating voting power with our sponsor, which limits an investor’s ability to influence our policies and the outcome of important transactions, including a change in control.” As a result of its substantial ownership in our company, our sponsor may exert a substantial influence on other actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation and approval of major corporate transactions.
Our warrants, founder shares (including the voting rights thereof) and the reserved purchase right and preemptive rights of our sponsor may have an adverse effect on the market price and voting power of our Series A common stock and make it more difficult to effectuate our initial business combination.
We will be issuing warrants to purchase 10,000,000 shares of our Series A common stock (or up to 11,500,000 shares of our Series A common stock if the underwriters’ over-allotment option is exercised in full), at a price of $11.50 per whole share (subject to adjustment as provided herein), as part of the units offered by this prospectus and, simultaneously with the closing of this offering, we will be issuing in a private placement an aggregate of 9,000,000 (or 10,000,000 if the underwriters’ over-allotment option is exercised in full) private placement warrants, each exercisable to purchase one share of Series A common stock at a price of $11.50 per share, subject to adjustment as provided herein. In addition, if our sponsor, LMC or any of its subsidiaries make any working capital loans, up to $2,500,000 of such loans may be converted into warrants, at the price of $1.50 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants. Any issuance of Series A common stock upon exercise of these warrants will increase the number of outstanding shares of our common stock and reduce the value of any common stock we may issue to complete the business combination.
The private placement warrants are identical to the warrants sold as part of the units in this offering except that, so long as they are held by our sponsor or its permitted transferees: (1) they will not be redeemable by us; (2) they (including the Series A common stock issuable upon exercise of these warrants) may not be
transferred, assigned or sold by our sponsor until 30 days after the completion of our initial business combination, except as described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants”; (3) they may be exercised by the holders on a cashless basis; and (4) the holders thereof (including with respect to the shares of common stock issuable upon exercise of these warrants) are entitled to registration rights.
Furthermore, our sponsor currently holds 14,375,000 founder shares (up to 1,875,000 of which are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised). The founder shares are convertible into shares of Series B common stock on a one-for-one basis. In connection with our initial business combination, we have also agreed to issue to our sponsor 25,000,000 forward purchase units consisting of one share of Series B common stock and one-fifth of a forward purchase warrant, and, in the event our sponsor exercises its right to provide, or cause LMC or any of its wholly owned subsidiaries to provide, incremental funding, we will issue additional shares of Series B common stock to our sponsor, LMC or any of its wholly owned subsidiaries, as applicable, for $10.00 per share. The issuance of these shares of Series B common stock and the voting rights related to our Series B common stock could make us a less attractive acquisition vehicle to a target business or make an acquisition more costly or difficult to complete.
In addition, the investor rights agreement provides that, following our initial business combination, our sponsor will have certain contractual preemptive rights to maintain its proportionate interest in our common stock and voting stock by purchasing additional shares of Series B common stock or other equity securities as a result of certain issuances by our company. Our public stockholders will not be entitled to similar preemptive rights with respect to such transactions. As a result, if our sponsor elects to exercise its preemptive rights, (1) our sponsor, LMC and its other subsidiaries may not experience the same dilution experienced by the other holders of our common stock and may in fact increase their relative voting power in us upon such exercise and (2) such other holders of our common stock may experience further dilution of their equity interest and relative voting power in us upon such exercise. See “Principal Stockholders — Registration and Preemptive Rights.”
Shares of Series A common stock issued pursuant to the private placement warrants and shares of Series B common stock issued upon conversion of the founder shares, pursuant to the forward purchase agreement or to our sponsor in connection with the initial business combination or its contractual preemptive rights may significantly dilute the value and/or the voting power of the shares of Series A common stock and may make effectuating our initial business combination more difficult.
Because we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses.
The federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or international financial reporting standards as issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such 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.
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, 2022. 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.
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 December 31, 2020, we had no cash and cash equivalents and a working capital deficit of $773,779. Further, we expect to incur significant costs in pursuit of our 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.” Our plans to raise capital and to consummate our initial business combination may not 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.
Risks Relating to the Post-Business Combination Company
If our management team pursues a company with operations or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection with investigating, agreeing to and completing such combination, and if we effect such initial business combination, we would be subject to a variety of additional risks that may negatively impact our operations.
If our management team pursues a company with operations or opportunities outside of the United States for our initial business combination, we would be subject to risks associated with cross-border business combinations, including in connection with investigating, agreeing to and completing our initial business combination, conducting due diligence in a foreign market, having such transaction approved by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.
If we effect our initial business combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following:
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costs and difficulties inherent in managing cross-border business operations and complying with commercial and legal requirements of overseas markets;
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rules and regulations regarding currency redemption;
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complex corporate withholding taxes on individuals;
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laws governing the manner in which future business combinations may be effected;
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tariffs and trade barriers;
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regulations related to customs and import/export matters;
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longer payment cycles;
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changes in local regulations as part of a response to the COVID-19 outbreak or a significant outbreak of other infectious diseases;
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tax consequences;
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currency fluctuations and exchange controls;
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rates of inflation;
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challenges in collecting accounts receivable;
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cultural and language differences;
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employment regulations;
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crime, strikes, riots, civil disturbances, terrorist attacks and wars;
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deterioration of political relations with the United States;
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obligatory military service by personnel; and
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government appropriation of assets.
We may not be able to adequately address these additional risks. If we were unable to do so, we may be unable to complete such business combination or, if we complete such business combination, our operations might suffer, either of which may adversely impact our results of operations and financial condition.
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 stockholders own or acquire shares will own less than 100% of the outstanding equity interests or assets of a target business, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting power of the outstanding capital stock of the target or otherwise acquires an 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 or acquires 50% or more of the outstanding voting power of the outstanding capital stock of the target, our stockholders prior to our initial business combination (including our sponsor) may collectively own a minority interest (economic and/or voting) in the post business combination company, depending on, among other things, valuations ascribed to the target and us in our initial business combination and any changes in our post business combination capital structure. For example, we could pursue a transaction in which we issue a substantial number of new shares of common stock in exchange for all of the outstanding capital stock of a target, issue a substantial number of new shares to third-parties in connection with financing our initial business combination or our sponsor could convert some or all of its Series B common stock into Series A common stock. In such cases, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new shares of common stock or other changes in our capital structure, our stockholders immediately prior to such transaction (including our sponsor) could own less than a majority of our outstanding shares of common stock subsequent to such transaction, and therefore a minority interest (economic and/or voting) in the post-transaction company. In addition, other minority stockholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s stock than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain our control of the target business.
If our management team, 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 team could resign from their positions as officers of the post-business combination 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.
The officers and directors of a prospective target business may resign upon the completion of our initial business combination, which could negatively impact the operations and profitability of our post-combination business.
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.
Risks Relating to our Securities
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 or warrants, potentially at a loss.
Our public stockholders 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 shares of Series A common stock that such stockholder properly elected to redeem, subject to the limitations described herein; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering (or 27 months following an agreement in principle event) or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) the redemption of all of our public shares if we have not completed our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred), subject to applicable law and as further described herein. In addition, if we have not completed an initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in our trust account. In that case, public stockholders may be forced to wait beyond the end of such period before they receive funds from our trust account. In no other circumstances will a public stockholder have any right or interest of any kind in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
We are not registering the shares of Series A common stock 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 shares of Series A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of the warrant agreement, we have agreed that as soon as practicable, but in no event later than 20 business days after the consummation of our initial business combination, we will use our commercially reasonable efforts to file with the SEC, and within 60 business days following our initial business combination to have declared effective, a registration statement covering the issuance of the shares of Series A common stock issuable upon exercise of the warrants and to maintain a current prospectus relating to those shares of Series A common stock 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, in which case, the number of shares of Series A common stock that you will receive upon cashless exercise will be based on a formula subject to a maximum amount of shares equal to 0.361 shares of Series A common stock per warrant (subject to adjustment). However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder or an exemption from registration is available. Notwithstanding the above, if our Series A common stock is at the time of any exercise of a warrant not listed
on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. 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 shares of Series A common stock included in the units. There may be a circumstance where an exemption from registration exists for holders of our private placement warrants to exercise their warrants while a corresponding exemption does not exist for holders of the public warrants included as part of units sold in this offering. In such an instance, our sponsor and its permitted transferees (which may include our directors and officers) would be able to exercise their warrants and sell the shares of Series A common stock underlying their warrants while holders of our public warrants would not be able to exercise their warrants and sell the underlying shares of Series A common stock. 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 shares of Series A common stock for sale under all applicable state securities laws. As a result, we may redeem warrants even if the holders are otherwise unable to exercise their warrants.
Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
We have applied to have our units listed on Nasdaq on or promptly after the date of this prospectus and our Series A common stock and warrants listed on or promptly after their date of separation. Although after giving effect to this offering we expect to meet the minimum initial listing standards set forth in the Nasdaq listing standards, we cannot assure you that our securities will continue to be listed on Nasdaq prior to our initial business combination. Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements, in order to continue to maintain the listing of our securities on Nasdaq. For example, in order for our Series A common stock to be listed upon the consummation of our initial business combination, among other things, we would be required to have at least 300 round lot holders at such time. We cannot assure you that we will be able to meet those initial listing requirements at that time. Nasdaq will also have discretionary authority to not approve our listing if it determines that the listing of the company to be acquired is against public policy 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:
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a limited availability of market quotations for our securities;
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reduced liquidity for our securities;
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a determination that our Series A common stock is a “penny stock” which will require brokers trading in our Series A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
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a limited amount of news and analyst coverage; and
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a decreased ability to issue additional securities or obtain additional financing in the future.
The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because we expect that our units and eventually our Series A common stock and warrants will be listed on Nasdaq, our units, Series A common stock 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 special purpose acquisition companies, 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.
Our sponsor paid an aggregate of $25,000, or approximately $0.0017 per share after giving effect to the share contribution to our capital described herein, and, accordingly, you will experience immediate and substantial dilution from the purchase of our Series A common stock.
The difference between the public offering price per share (allocating all of the unit purchase price to the common stock and none to the warrant included in the unit) and the pro forma net tangible book value per share of our Series A common stock 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 warrants included in the units, you and the other public stockholders will incur an immediate and substantial dilution of approximately 96.60% (or $9.66 per share, assuming no exercise of the underwriters’ over-allotment option), the difference between the pro forma net tangible book value per share of $0.34 and the initial offering price of $10.00 per unit. This dilution would become exacerbated to the extent that public stockholders seek redemptions from the trust.
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 50% of the then outstanding public warrants. As a result, the exercise price of your warrants could be increased, the warrants could be converted into cash or stock, the exercise period could be shortened and the number of shares of our Series A common stock purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that (a) the terms of the warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity or correct any mistake, including to conform the provisions of the warrant agreement to the description of the terms of the warrants and the warrant agreement set forth in this prospectus, or defective provision or (ii) adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of the warrants and (b) all other modifications or amendments require the vote or written consent of at least 50% of the then outstanding public warrants; provided that any amendment that solely affects the terms of the private placement warrants or forward purchase warrants or any provision of the warrant agreement solely with respect to the private placement warrants or forward purchase warrants will also require at least 50% of the then outstanding private placement warrants or forward purchase warrants, respectively. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% 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 50% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash or stock (at a ratio different than initially provided), shorten the exercise period or decrease the number of shares of our common stock purchasable upon exercise of a warrant.
Our warrant agreement will designate the courts of the State of Delaware or the United States District Court for the District of Delaware 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 Delaware located in Wilmington or the United States District Court for the District of Delaware, 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 Delaware located in Wilmington or the United States District Court for the District of Delaware (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 courts located in the State of Delaware and the federal courts in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.
A provision of our warrant agreement may make it more difficult for us to consummate an initial business combination.
Unlike some blank check companies, if
(i) we issue additional shares of common stock or equity-linked securities, excluding forward purchase units, for capital raising purposes in connection with the consummation of our initial business combination at a Newly Issued Price of less than $9.20 per share of common stock,
(ii) the aggregate gross proceeds from such issuances, excluding the forward purchase units, 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, the $18.00 per share redemption trigger price described below under “Description of Securities — Warrants — Public Stockholders’ Warrants — Redemption of warrants when the price per share of Series A common stock equals or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described below under “ Description of Securities — Warrants — Public Stockholders’ Warrants — Redemption of warrants when the price per share of Series A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price. This may make it more difficult for us to consummate an initial business combination with a target business.
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 public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant if, among other things, the last reported sales
price of our Series A common stock equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities — Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments”) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date 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. As a result, we may redeem the public warrants as set forth above even if the holders are otherwise unable to exercise the warrants. Redemption of the outstanding warrants could force you to: (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, we expect would be substantially less than the market value of your warrants.
In addition, we have the ability to redeem outstanding public warrants once they become exercisable and prior to their expiration, at a price of $0.10 per warrant if, among other things, the last reported sale price of our Series A common stock equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities — Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments”) on the trading day prior to the date on which we send the notice of redemption to the warrant holders. In such a case, the holders will be able to exercise their warrants for cash or on a cashless basis prior to redemption and receive that number of shares of Series A common stock determined by reference to the table set forth under “Description of Securities — Warrants — Public Stockholders’ Warrants” based on the redemption date and the “fair market value” of our Series A common stock (as defined under “Description — Warrants — Redemption of warrants when the price per share of Series A common stock equals or exceeds $10.00”) except as otherwise described in “Description of Securities — Warrants — Public Stockholders’ Warrants.” The value received upon exercise of the warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the warrants, including because the number of shares received is capped at 0.361 shares of Series A common stock per warrant (subject to adjustment) irrespective of the remaining life of the warrants.
None of the private placement warrants will be redeemable by us so long as they are held by our sponsor or its permitted transferees.
Because each unit contains one-fifth of one redeemable warrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.
Each unit contains one-fifth of one redeemable warrant. Pursuant to the warrant agreement, no fractional warrants will be issued upon separation of the units, and only whole units will trade. This is different from some other offerings similar to ours whose units include one share of Series A common stock and one whole warrant to purchase one share. We have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants will be exercisable in the aggregate for a fifth of the number of shares compared to units that each contain a whole warrant to purchase one share, thus making us, we believe, a more attractive business combination partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if they included a warrant to purchase one whole share.
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 warrants were negotiated between us and the underwriters. In determining the size of this offering, management held customary organizational meetings with representatives of the underwriters 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 Series A common stock and warrants underlying the units, include:
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the history and prospects of companies whose principal business is the acquisition of other companies;
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prior offerings of those companies;
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our prospects for acquiring an operating business at attractive values;
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a review of debt to equity ratios in leveraged transactions;
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our capital structure;
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an assessment of our management and their experience in identifying suitable business combination opportunities;
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general conditions of the securities markets at the time of this offering; and
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other factors as were deemed relevant.
Although these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities of an operating company in a particular industry since we have no historical operations or financial results.
The voting structure of our common stock will have the effect of concentrating voting power with our sponsor, which will limit an investor’s ability to influence our policies and the outcome of important transactions, including a change in control.
Following our initial business combination, our authorized capital stock will consist of Series A common stock, entitling the holder to one vote per share, Series B common stock entitling the holder to ten votes per share, and Series C common stock, the holder of which will not be entitled to any voting powers except to the extent required by Delaware law. Following our initial business combination, the holders of Series A common stock and Series B common stock will generally vote together as a single class on matters presented for a stockholder vote, except as required by Delaware law or stock exchange rule. In connection with our initial business combination (or earlier at our sponsor’s election), the outstanding shares of Series F common stock held by our sponsor will be converted on a one-for-one basis into shares of Series B common stock, and we have agreed to issue to our sponsor 25,000,000 forward purchase units consisting of one share of Series B common stock and one-fifth of a forward purchase warrant. The high-vote nature of our Series B common stock differs from the typical capital structure of many other special purpose acquisition companies and will significantly dilute the voting power of the investors in this offering following our initial business combination. Assuming that the underwriters do not exercise their over-allotment option, that our sponsor forfeits an aggregate of 1,875,000 founder shares, that there are 62,500,000 shares of our common stock outstanding after this offering and that the issuance of 25,000,000 forward purchase units to our sponsor pursuant to the forward purchase agreement are the only additional equity securities issued in connection with our initial business combination, our sponsor is expected to hold approximately 43% of the outstanding shares of our common stock representing approximately 88% of the outstanding voting power of our common stock immediately following the closing of our initial business combination. As a result, our sponsor and LMC would have the ability to exercise control over our affairs, policies and operations, such as the appointment of management, future issuances of our common stock or other securities, the payment of dividends on our common stock, the incurrence of debt by us and matters requiring stockholder approval, including the election of directors, amendments of our organizational documents and any change of control of our company. In addition, in connection with our initial business combination, in the event our sponsor exercises its right to provide, or cause LMC or any of its wholly owned subsidiaries to provide, incremental funding, we will issue additional shares of Series B common stock to our sponsor, LMC or any of its wholly owned subsidiaries, as applicable. Following our initial business combination, our sponsor will have certain contractual preemptive rights to maintain its proportionate interest in our common stock and voting stock by purchasing additional shares of Series B common stock or other equity securities as a result of certain issuances by our company. Any such issuances of Series B common stock
may further dilute the voting power of the Series A common stock. Our sponsor may have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests.
Our sponsor’s equity ownership may create or appear to create conflicts of interest.
Our sponsor’s ownership, and our officers’ and certain of our directors’ indirect ownership through LMC’s ownership of our sponsor, of our Series B common stock may create or appear to create conflicts of interest when they are faced with decisions that could have different implications for the holders of Series A common stock, including the structure of our initial business combination, any financing or private placement in connection with our initial business combination, the election of directors, amendments of our organizational documents and any merger, consolidation or sale of all or substantially all of our assets.
Since only holders of our founder shares will have the right to vote on the appointment of directors, upon the listing of our shares on Nasdaq, Nasdaq may consider us to be a “controlled company” within the meaning of the Nasdaq rules and, as a result, we may qualify for exemptions from certain corporate governance requirements.
After completion of this offering, only holders of our founder shares will have the right to vote on the appointment of directors until our initial business combination. Additionally, following our initial business combination, Series B common stock will have ten votes per share and Series A common stock will have one vote per share, concentrating voting power with the holders of our founder shares which may at such time exceed 50% of the voting power of the company. As a result, Nasdaq may consider us to be a “controlled company” within the meaning of the Nasdaq corporate governance standards. Under the Nasdaq corporate governance standards, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirements that:
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we have a board that includes a majority of “independent directors,” as defined under the rules of Nasdaq;
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we have a compensation committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and
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we have a nominating and corporate governance committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
We do not intend to utilize these exemptions and intend to comply with the corporate governance requirements of Nasdaq, subject to applicable phase-in rules. However, if we determine in the future to utilize some or all of these exemptions, you will not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.
Our governance structure and the adoption of our amended and restated certificate of incorporation may negatively affect the decision by certain institutional investors to purchase or hold shares of our Series A common stock.
The holding of low-voting stock, such as our Series A common stock, or if it is issued in the future, our non-voting Series C common stock, may not be permitted by the investment policies of certain institutional investors or may be less attractive to the portfolio managers of certain institutional investors. In addition, in July 2017, FTSE Russell and Standard & Poor’s announced that they would cease to allow most newly public companies utilizing dual- or multi-class capital structures to be included in their indices. Affected indices include the Russell 2000 and the S&P 500, S&P MidCap 400, and S&P SmallCap 600, which together make up the S&P Composite 1500. Our multi-class capital structure may make us ineligible for inclusion in any of these and certain other indices following our initial business combination, and as a result, mutual funds, exchange-traded funds, and other investment vehicles that attempt to passively track these indices would not invest in our stock. These policies may depress our valuation compared to those of other similar companies that are included in such indices.
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. Stockholders therefore have no access to information about prior market history on which to base their investment decision. Following this offering, the price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions, including as a result of the COVID-19 outbreak and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases). 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.
Holders of a single series of our common stock may not have any remedies if an action by our directors has an adverse effect on only that series of our common stock.
Principles of Delaware law and the provisions of our amended and restated certificate of incorporation may protect decisions of our board of directors that have a disparate impact upon holders of any single series of our common stock. Under Delaware law, the board of directors has a duty to act with due care and in the best interests of all of our stockholders, including the holders of all series of our common stock. Principles of Delaware law established in cases involving differing treatment of multiple classes or series of stock provide that a board of directors owes an equal duty to all common stockholders regardless of class or series and does not have separate or additional duties to any group of stockholders. As a result, in some circumstances, our directors may be required to make a decision that is viewed as adverse to the holders of one series of our common stock. Under the principles of Delaware law and the business judgment rule, holders may not be able to successfully challenge decisions that they believe have a disparate impact upon the holders of one series of our stock if our board of directors is disinterested and independent with respect to the action taken, is adequately informed with respect to the action taken and acts in good faith and in the honest belief that the board is acting in the best interest of all of our stockholders.
Our amended and restated certificate of incorporation will designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, and also provide that the federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, each of which could limit our stockholders’ ability to choose the judicial forum for disputes with our company or our company’s directors, officers or employees.
Our amended and restated certificate of incorporation will provide that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by applicable law, the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery does not have subject matter jurisdiction, another state court within the State of Delaware or, if no state court in Delaware has subject matter jurisdiction, the federal district courts of the United States of America) shall be the sole and exclusive forum for any stockholder (including a beneficial owner within the meaning of Section 13(d) of the Exchange Act) to bring (1) any derivative action, suit or proceeding brought or purportedly brought on behalf of our company, (2) any action, suit or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former director, stockholder, officer, employee or agent of our company to our company or our stockholders, or any claim of aiding and abetting such breach, (3) any action, suit or proceeding asserting a claim arising pursuant to, or seeking to enforce any right, obligation, or remedy under, any provision of the DGCL or the amended and restated certificate of incorporation or the amended and restated bylaws, (4) any action to interpret, apply, enforce or determine the validity of amended and restated certificate of incorporation or the amended and restated bylaws, (5) any action asserting a claim against our company or any director or officer of our company governed by the internal affairs doctrine, (6) any action, suit, or proceeding as to which the DGCL confers jurisdiction on the Court of Chancery, or (7) any action, suit or proceeding asserting an “internal corporate claim” as defined in Section 115 of the DGCL; in all cases, subject to the court’s having personal jurisdiction over the indispensable parties named as defendants. Notwithstanding the foregoing, the provisions of this paragraph will not apply to any actions arising under the Securities Act or the Exchange Act or otherwise arising under federal securities laws, for which the federal district courts of the United States of America shall be the sole and exclusive forum.
Section 22 of the Securities Act, creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated certificate of incorporation also provides that the federal district courts of the United States of America will, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
Any person or entity purchasing or otherwise acquiring any interest in any shares of our capital stock shall be deemed to have notice of and to have consented to the forum provisions in our amended and restated certificate of incorporation. If any action the subject matter of which is within the scope the forum provisions is filed in a court other than a court located within the State of Delaware or a federal district court of the United States of America (a “foreign action”) in the name of any stockholder, such stockholder shall be deemed to have consented to: (x) the personal jurisdiction of the state courts located within the State of Delaware and the federal courts as applicable 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 stockholder in any such enforcement action by service upon such stockholder’s counsel in the foreign action as agent for such stockholder.
Although we believe these exclusive forum provisions benefit us by providing increased consistency in the application of Delaware law and federal securities laws in the types of lawsuits to which each applies, the exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or any of our directors, officers, stockholders, or other employees, which may discourage lawsuits with respect to such claims against us and our current and former directors, officers, stockholders, or other employees and may result in additional costs for a stockholder seeking to bring a claim. Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder as a result of our exclusive forum provisions. While we believe the risk of a court declining to enforce this forum selection clause is low, if a court were to determine the forum selection clause to be inapplicable or unenforceable in an action, we may incur additional costs in conjunction with our efforts to resolve the dispute in an alternative jurisdiction, which could have a negative impact on our results of operations and financial condition and result in a diversion of time and resources of our management team and board of directors.
We will adopt certain provisions in our amended and restated certificate of incorporation and amended and restated bylaws that we intend to retain following the initial business combination that may make it difficult for a third party to acquire us, even if doing so may be beneficial to our stockholders.
We will adopt certain provisions in our amended and restated certificate of incorporation and amended and restated bylaws that we intend to retain following the initial business combination that may discourage, delay or prevent a change in control of our company that a stockholder may consider favorable. These provisions include:
•
authorizing a capital structure with multiple series of common stock, including Series A common stock that entitles the holder to one vote per share, Series B common stock that entitles the holders to initially one vote per share or, following our initial business combination, ten votes per share, Series C common stock that except as otherwise required by applicable law, entitles the holder to no voting rights and a Series F common stock that, prior to the completion of our initial business combination will be the only shares entitled to vote on the election of directors;
•
from and after our initial business combination, classifying our board of directors with staggered three-year terms, which may lengthen the time required to gain control of our board of directors;
•
limiting who may call special meetings of stockholders;
•
establishing advance notice requirements for nominations of candidates for election to the board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings;
•
requiring stockholder approval by holders of at least 66 2/3% of our total voting power of our outstanding capital stock or approval by at least 80% of our board of directors with respect to certain extraordinary matters, such as a merger or consolidation of our company, a sale of all or
substantially all of our assets or an amendment to our restated charter (except for any stockholder approval in connection with our initial business combination);
•
the existence of authorized and unissued stock, including “blank check” preferred stock, which could be issued by our board of directors, if approved by at least 80% of the members of our board of directors then in office, to persons friendly to our then current management, thereby protecting the continuity of our management, or which could be used to dilute the stock ownership of persons seeking to obtain control of our company;
•
following the completion of our initial business combination, prohibiting stockholders from filling vacancies on our Board of Directors, which will only be able to be filled by our Board of Directors;
•
following the completion of our initial business combination, providing that any or all of our directors may be removed from office at any time, but only for cause and only by the affirmative vote of holders of a majority of the voting power of all then outstanding shares of our capital stock entitled to vote generally in the election of directors, voting together as a single class.
Together these provisions could also make it more difficult for stockholders to elect directors of their choosing and to cause us to take other corporate actions they desire, any of which, under certain circumstances, could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock. These provisions may also affect a target’s desire to enter into an initial business combination with us.
General Risk Factors
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 with no operating results, and we will not commence operations until obtaining funding through this offering. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target businesses. We have no plans, arrangements or understandings with any prospective target business concerning a business combination and may be unable to complete our initial business combination. If we fail to complete our initial business combination, we will never generate any operating revenues.
Past performance by LMC, Mr. Maffei and other members of our management team may not be indicative of future performance of an investment in us.
Information regarding performance by, or businesses associated with, our management team or LMC is presented for informational purposes only. Past experience and performance, including related to acquisitions, of our management team or LMC is not a guarantee either: (1) that we will be able to successfully identify a suitable candidate for our initial business combination; or (2) of any results with respect to any business combination we may consummate. You should not rely on the historical record or performance of LMC, Mr. Maffei or other members of our management team or any related investment’s performance as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. An investment in us is not an investment in LMC or an LMC tracking stock.
We are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth 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 stockholder approval of any golden parachute payments not previously approved. As a
result, our stockholders 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 common stock held by non-affiliates exceeds $700 million as of the end of any second fiscal 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.
Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.
We will depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial loss.
USE OF PROCEEDS
We are offering 50,000,000 units at an offering price of $10.00 per unit. We estimate that the net proceeds of this offering together with the funds we will receive from the sale of the private placement warrants will be used as set forth in the following table.
|
|
|
|
Without
Over-Allotment
Option
|
|
|
Over-Allotment
Option
Exercised
|
|
|
Gross proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross proceeds from units offered to public(1)
|
|
|
|
$
|
500,000,000
|
|
|
|
|
$
|
575,000,000
|
|
|
|
Gross proceeds from private placement warrants offered in the private placement
|
|
|
|
|
13,500,000
|
|
|
|
|
|
15,000,000
|
|
|
|
Total gross proceeds
|
|
|
|
$
|
513,500,000
|
|
|
|
|
$
|
590,000,000
|
|
|
|
Estimated offering expenses(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting commissions (2.0% of gross proceeds from units offered to public, excluding deferred portion)(3)
|
|
|
|
$
|
10,000,000
|
|
|
|
|
$
|
11,500,000
|
|
|
|
Legal fees and expenses
|
|
|
|
|
700,000
|
|
|
|
|
|
700,000
|
|
|
|
Accounting fees and expenses
|
|
|
|
|
60,000
|
|
|
|
|
|
60,000
|
|
|
|
Printing and engraving expenses
|
|
|
|
|
35,000
|
|
|
|
|
|
35,000
|
|
|
|
SEC expenses
|
|
|
|
|
62,733
|
|
|
|
|
|
62,733
|
|
|
|
FINRA expenses
|
|
|
|
|
86,750
|
|
|
|
|
|
86,750
|
|
|
|
Directors and officers liability insurance premiums(4)
|
|
|
|
|
700,000
|
|
|
|
|
|
700,000
|
|
|
|
Nasdaq listing and filing fees
|
|
|
|
|
75,000
|
|
|
|
|
|
75,000
|
|
|
|
Miscellaneous expenses(5)
|
|
|
|
|
30,517
|
|
|
|
|
|
30,517
|
|
|
|
Total estimated offering expenses (other than underwriting commissions)
|
|
|
|
$
|
1,750,000
|
|
|
|
|
$
|
1,750,000
|
|
|
|
Proceeds after estimated offering expenses
|
|
|
|
$
|
501,750,000
|
|
|
|
|
$
|
576,750,000
|
|
|
|
Held in trust account(3)
|
|
|
|
$
|
500,000,000
|
|
|
|
|
$
|
575,000,000
|
|
|
|
% of public offering size
|
|
|
|
|
100%
|
|
|
|
|
|
100%
|
|
|
|
Not held in trust account
|
|
|
|
$
|
1,750,000
|
|
|
|
|
$
|
1,750,000
|
|
|
The following table shows the use of the approximately $1,750,000 of net proceeds not held in the trust account.(6)
|
|
|
|
Amount
|
|
|
% of
Total
|
|
|
Legal, accounting, due diligence, travel and other expenses in connection with any business combination
|
|
|
|
$
|
175,000
|
|
|
|
|
|
10.0%
|
|
|
|
Legal and accounting fees related to regulatory reporting obligations
|
|
|
|
|
150,000
|
|
|
|
|
|
8.6%
|
|
|
|
Payment for office space, administrative and support services
|
|
|
|
|
1,100,000
|
|
|
|
|
|
62.8%
|
|
|
|
Independent director cash compensation
|
|
|
|
|
225,000
|
|
|
|
|
|
12.9%
|
|
|
|
Nasdaq continued listing fees
|
|
|
|
|
77,000
|
|
|
|
|
|
4.3%
|
|
|
|
Other miscellaneous expenses
|
|
|
|
|
23,000
|
|
|
|
|
|
1.4%
|
|
|
|
Total
|
|
|
|
$
|
1,750,000
|
|
|
|
|
|
100.0%
|
|
|
(1)
Includes amounts payable to public stockholders who properly redeem their shares in connection with our successful completion of our initial business combination.
(2)
A portion of the offering expenses have been paid from the proceeds of loans from our sponsor of up to $300,000 as described in this prospectus. As of December 31, 2020, we had borrowed $154,483 under the promissory note with our sponsor. These loans will be repaid upon completion of this offering
out of the $1,750,000 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.
(3)
The underwriters have agreed to defer underwriting commissions equal to 3.5% of the gross proceeds of this offering. Upon completion of our initial business combination, $17,500,000, which constitutes the underwriters’ deferred commissions (or up to $20,125,000 if the underwriters’ over-allotment option is exercised in full) will be paid to the underwriters or third parties as described below from the funds held in the trust account and the remaining funds, less amounts used to pay redeeming stockholders, will be released to us and can be used to pay all or a portion of the purchase price of the business or businesses with which our initial business combination occurs or for general corporate purposes, including payment of principal or interest on indebtedness incurred in connection with our initial business combination, to fund the purchases of other companies or for working capital. The underwriters will not be entitled to any interest accrued on the deferred underwriting discounts and commissions.
(4)
This amount represents the approximate amount of annualized director and officer liability insurance premiums we anticipate paying following the completion of this offering and until we complete a business combination.
(5)
Includes organizational and administrative expenses and may include amounts related to above-listed expenses in the event actual amounts exceed estimates.
(6)
These expenses are estimates only and the amounts provided represent applicable fees and expenses for one year following this offering. 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. The amount in the table above does not include interest available to us from the trust account to pay our taxes. Based on current interest rates, we would expect approximately $350,000 to be available to us annually from interest earned on the funds held in the trust account; however, we can provide no assurances regarding this amount. This estimate assumes an interest rate of 0.07% per annum based upon current yields of securities in which the trust account may be invested. In addition, in order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor, LMC or its subsidiaries may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $2,500,000 of such loans made to us may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor, LMC or its subsidiaries, if any, 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.
Nasdaq listing rules provide that at least 90% of the gross proceeds from this offering and the sale of the private placement warrants be deposited in a trust account. Of the net proceeds of this offering and the sale of the private placement warrants, $500,000,000 (or $575,000,000 if the underwriters’ over-allotment option is exercised in full), including $17,500,000 (or up to $20,125,000 if the underwriters’ over-allotment option is exercised in full) of deferred underwriting commissions, will, upon the consummation of this offering, be placed in a U.S.-based trust account with Continental Stock Transfer & Trust Company acting as trustee. The funds in the trust account will be invested only in U.S. government treasury bills with a maturity of 185 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 $350,000 per year, assuming an interest rate of 0.07% 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. The funds held in the trust account will not be released from the trust account until the earliest of: (1) the completion of our initial business combination; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance and timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) the redemption of all of our public shares if we have not completed our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred), 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 used for redemption of our public shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination.
Amounts not held in trust are intended to cover estimated costs and expenses to which such proceeds are allocated. In order to limit expenses, 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. 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, LMC or its subsidiaries, but such persons are not under any obligation or other duty to loan funds to, or invest in, us.
We will enter into a services agreement and facilities sharing agreement pursuant to which we will pay LMC and certain of its subsidiaries a total of $91,666 per month for office space, administrative and support services. Upon completion of our initial business combination or any liquidation, we may cease paying some or all of these monthly fees.
Our sponsor has agreed to loan us up to $300,000 to be used for a portion of the expenses of this offering. As of December 31, 2020, we had borrowed $154,483 under the promissory note with our sponsor. These loans are non-interest bearing, unsecured and are due at the earlier of December 31, 2021 and the closing of this offering. These loans will be repaid upon completion of this offering out of the $1,750,000 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 fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor, LMC or its subsidiaries may, but are not
obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $2,500,000 of such loans made to us may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor, LMC or its subsidiaries, if any, 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 will enter into a forward purchase agreement to acquire forward purchase units for $250,000,000, in the aggregate, in connection with our initial business combination. Each forward purchase unit will consist of one share of Series B common stock, or a forward purchase share, and one-fifth of one warrant to purchase one share of Series A common stock, or a forward purchase warrant, at a purchase price of $10.00 per unit, and will be sold in a private placement that will close substantially concurrently with the consummation of our initial business combination. The terms of the forward purchase warrants will generally be identical to the terms of the redeemable warrants included in the units being issued in this offering. In addition, our sponsor will have the right, but is not required, to provide, or cause LMC or any of its wholly owned subsidiaries to provide incremental funding to us in connection with our initial business combination by purchasing additional shares of Series B common stock at a purchase price of $10.00 per share, which shares would be sold in a private placement substantially concurrently with the consummation of our initial business combination.
The investor rights agreement will provide that our sponsor and LMC will be entitled to registration rights with respect to the private placement warrants, the forward purchase warrants, warrants that may be issued upon conversion of working capital loans, warrants purchased by them in the open market and the shares of Series A common stock purchased by them in the open market or issuable upon (1) conversion of the founder shares, (2) exercise of the private placement warrants, (3) conversion of the forward purchase shares and shares of Series B common stock purchased in connection with our initial business combination (if any), (4) exercise of the forward purchase warrants, and (5) exercise of warrants issued upon conversion of working capital loans (if any) and such registration rights will be incorporated in the forward purchase agreement. Our sponsor, LMC and/or the permitted transferees can also demand that we register securities we may issue by way of a stock dividend, recapitalization, merger or similar transaction. Please see “Description of Securities — Registration and Preemptive Rights” for additional information.
The proceeds from the sale of the forward purchase units may be used as part of the consideration to the sellers in our initial business combination, for expenses in connection with our initial business combination or for working capital in the post-business combination company. These purchases will be required to be made regardless of whether any shares of Series A common stock are redeemed by our public stockholders and are intended to provide us with minimum funding level for our initial business combination. The forward purchase units will be issued only in connection with the consummation of the initial business combination.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers or advisors or any of the related companies or their directors, officers or advisors 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. See “Proposed Business — Permitted purchases and other transactions with respect to our securities” for a description of how such persons will determine from which stockholders to seek to acquire shares. The price per share paid in any such transaction may be different than the amount per share a public stockholder 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 such persons engage in such transactions, they will be subject to restrictions in making any such purchases when they are in possession of any material non-public information 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 be required to 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 following such redemptions 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 stockholders 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 the redemption of our public shares or the business combination, and instead may search for an alternate business combination (including, potentially, with the same target).
A public stockholder 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 public shares that such stockholder has properly elected to redeem, subject to the limitations described in this prospectus; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) the redemption of all of our public shares if we have not completed our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred), subject to applicable law. In no other circumstances will a public stockholder have any right or interest of any kind to or in the trust account. Holders of warrants will not have any rights to proceeds held in the trust account with respect to the warrants.
Our sponsor, executive officers and directors will enter into a letter agreement with us, pursuant to which they will agree to waive: (1) their redemption rights with respect to our common stock held by them in connection with the completion of our initial business combination; (2) their redemption rights with respect to our common stock held by them in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we have not consummated our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) 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 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or during any extended time that we have to consummate a business combination beyond 24 months (or 27 months if an agreement in principle event has occurred) during an Extension Period (although our sponsor, officers and directors will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame).
DIVIDEND POLICY
We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time. In addition, our board of directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future, except if we increase the size of this offering, in which case we will effect a stock dividend or other appropriate mechanism with respect to our Series F common stock immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of the outstanding shares of our common stock upon the consummation of this offering. 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 share of Series A common stock, assuming no value is attributed to the warrants included in the units we are offering pursuant to this prospectus or the private placement warrants, and the pro forma net tangible book value per share of our Series A common stock after this offering constitutes the dilution to investors in this offering. Such calculation does not reflect any dilution associated with the sale and exercise of warrants, including the private placement warrants, which would cause the actual dilution to the public stockholders 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 Series A common stock which may be redeemed for cash), by the number of outstanding shares of our Series A common stock.
At December 31, 2020, our net tangible book value was negative $773,779, or approximately $(0.05) per share of Series F common stock. After giving effect to the sale of 50,000,000 shares of Series A common stock included in the units we are offering by this prospectus, the sale of the private placement warrants and the deduction of underwriting commissions and estimated expenses of this offering, our pro forma net tangible book value at December 31, 2020 would have been $5,000,010 or $0.34 per share, representing an immediate increase in net tangible book value (as decreased by the value of the approximately 47,927,369 shares of Series A common stock that may be redeemed for cash and assuming no exercise of the underwriters’ over-allotment option) of $0.39 per share to our sponsor as of the date of this prospectus and an immediate dilution of $9.66 per share or 96.60% to our public stockholders not exercising their redemption rights. The dilution to new investors if the underwriters exercise their over-allotment option in full would be an immediate dilution of $9.70 per share or 97.0%.
The following table illustrates the dilution to the public stockholders on a per share basis, assuming no value is attributed to the warrants included in the units or the private placement warrants:
|
|
|
|
Without
Over-allotment
|
|
|
With
Over-allotment
|
|
|
Public offering price
|
|
|
|
$
|
10.00
|
|
|
|
|
$
|
10.00
|
|
|
|
Net tangible book value before this offering
|
|
|
|
$
|
(0.05)
|
|
|
|
|
$
|
(0.05)
|
|
|
|
Increase attributable to new investors
|
|
|
|
$
|
0.39
|
|
|
|
|
$
|
0.35
|
|
|
|
Pro forma net tangible book value after this offering and the sale of the private placement warrants
|
|
|
|
$
|
0.34
|
|
|
|
|
$
|
0.30
|
|
|
|
Dilution to public stockholders
|
|
|
|
$
|
9.66
|
|
|
|
|
$
|
9.70
|
|
|
|
Percentage of dilution to new investors
|
|
|
|
|
96.6%
|
|
|
|
|
|
97.0%
|
|
|
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 $479,273,690 because holders of up to approximately 95.85% 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, calculated 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 shares of Series A common stock sold in this offering.
The following table sets forth information with respect to our sponsor and the public stockholders:
|
|
|
|
Shares Purchased
|
|
|
Total Consideration
|
|
|
Average Price
per Share
|
|
|
|
|
|
Number
|
|
|
Percentage
|
|
|
Amount
|
|
|
Percentage
|
|
|
Sponsor(1)
|
|
|
|
|
12,500,000
|
|
|
|
|
|
20.00%
|
|
|
|
|
$
|
25,000
|
|
|
|
|
|
0.01%
|
|
|
|
|
$
|
0.002
|
|
|
|
Public Stockholders
|
|
|
|
|
50,000,000
|
|
|
|
|
|
80.00%
|
|
|
|
|
|
500,000,000
|
|
|
|
|
|
99.99%
|
|
|
|
|
$
|
10.000
|
|
|
|
|
|
|
|
|
62,500,000
|
|
|
|
|
|
100.00%
|
|
|
|
|
$
|
500,025,000
|
|
|
|
|
|
100.00%
|
|
|
|
|
|
|
|
|
(1)
Assumes the full forfeiture of an aggregate of 1,875,000 shares that are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised.
The pro forma net tangible book value per share as of December 31, 2020, after giving effect to this offering is calculated as follows:
|
|
|
|
Without
Over-allotment
|
|
|
With
Over-allotment
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net tangible book value before this offering
|
|
|
|
$
|
(773,779)
|
|
|
|
|
$
|
(773,779)
|
|
|
|
Proceeds from this offering and sale of the private placement warrants,
net of expenses (including non-deferred underwriting commissions)
|
|
|
|
|
501,750,000
|
|
|
|
|
|
576,750,000
|
|
|
|
Offering costs accrued for and paid in advance, excluded from net tangible book value before this offering
|
|
|
|
|
797,479
|
|
|
|
|
|
797,479
|
|
|
|
Less: deferred underwriters’ commissions payable
|
|
|
|
|
(17,500,000)
|
|
|
|
|
|
(20,125,000)
|
|
|
|
Less: amount of Series A common stock subject to redemption to maintain net tangible assets of $5,000,001
|
|
|
|
|
(479,273,690)
|
|
|
|
|
|
(551,648,690)
|
|
|
|
|
|
|
|
$
|
5,000,010
|
|
|
|
|
$
|
5,000,010
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of Series F common stock outstanding prior to this offering
|
|
|
|
|
14,375,000
|
|
|
|
|
|
14,375,000
|
|
|
|
Shares forfeited if over-allotment is not exercised
|
|
|
|
|
(1,875,000)
|
|
|
|
|
|
—
|
|
|
|
Shares of Series A common stock included in the units offered
|
|
|
|
|
50,000,000
|
|
|
|
|
|
57,500,000
|
|
|
|
Less: shares subject to redemption to maintain net tangible assets of $5,000,001
|
|
|
|
|
(47,927,369)
|
|
|
|
|
|
(55,164,869)
|
|
|
|
|
|
|
|
|
14,572,631
|
|
|
|
|
|
16,710,131
|
|
|
CAPITALIZATION
The following table sets forth our capitalization as of December 31, 2020 on a historical basis and as adjusted to give effect to the filing of our amended and restated certificate of incorporation, the sale of our 50,000,000 units in this offering for $500,000,000 (or $10.00 per unit) and the sale of 9,000,000 private placement warrants for $13,500,000 (or $1.50 per warrant) and the application of the estimated net proceeds derived from the sale of such securities (and excludes gross proceeds from the sale of forward purchase units that may close substantially simultaneously with the consummation of our initial business combination):
|
|
|
|
As of December 31, 2020
|
|
|
|
|
|
Actual(1)
|
|
|
As Adjusted(2)
|
|
|
Note payable to related party(1)
|
|
|
|
$
|
154,483
|
|
|
|
|
$
|
—
|
|
|
|
Deferred underwriting commissions
|
|
|
|
|
—
|
|
|
|
|
|
17,500,000
|
|
|
|
Series A common stock, subject to redemption(3)
|
|
|
|
|
—
|
|
|
|
|
|
479,273,690
|
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value, 50,000,000 shares authorized; no shares
issued or outstanding (actual); 50,000,000 shares authorized; no shares issued
or outstanding (as adjusted)
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A common stock, $0.0001 par value, 2,000,000,000 shares authorized; no
shares issued or outstanding (actual); 3,000,000,000 shares authorized;
2,072,631(4) shares issued and outstanding (excluding 47,927,369 shares
subject to redemption) (as adjusted)
|
|
|
|
|
—
|
|
|
|
|
|
207
|
|
|
|
Series B common stock, $0.0001 par value, 300,000,000 shares authorized (actual); no shares issued or outstanding (actual); 1,000,000,000 shares authorized (as adjusted); no shares issued or outstanding (as adjusted)
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Series C common stock, $0.0001 par value, 5,000,000,000 shares authorized (actual); no shares issued or outstanding (actual); 5,000,000,000 shares authorized (as adjusted); no shares issued or outstanding (as adjusted)
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Series F common stock, $0.0001 par value, 200,000,000 shares authorized (actual); 14,375,000(4) shares issued and outstanding (actual); 200,000,000 shares authorized (as adjusted); 12,500,000(4) shares issued and outstanding (as adjusted)
|
|
|
|
|
1,438
|
|
|
|
|
|
1,250
|
|
|
|
Additional paid-in capital(5)
|
|
|
|
|
23,562
|
|
|
|
|
|
4,999,853
|
|
|
|
Accumulated deficit
|
|
|
|
|
(1,300)
|
|
|
|
|
|
(1,300)
|
|
|
|
Total stockholders’ equity
|
|
|
|
|
23,700
|
|
|
|
|
|
5,000,010
|
|
|
|
Total capitalization
|
|
|
|
$
|
178,183
|
|
|
|
|
$
|
501,773,700
|
|
|
(1)
Our sponsor has agreed to loan us up to $300,000 under an unsecured promissory note to be used for a portion of the expenses of this offering. As of December 31, 2020, we had borrowed $154,483 under the promissory note with our sponsor.
(2)
Assumes the full forfeiture of an aggregate of 1,875,000 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 stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account, calculated 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 and any limitations (including, but not limited to, cash requirements) created by the terms of the proposed business combination. The value of Series A common stock that may be redeemed is equal to $10.00 per share (which is the assumed redemption price) multiplied by 47,927,369 shares of Series A common stock, which is the maximum number of shares of Series A common stock that may be redeemed for a $10.00 purchase price per share and still 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. The “as adjusted” share amount assumes no exercise of the underwriters’ over-allotment option and the forfeiture of 1,875,000 founder shares by our sponsor.
(5)
The “as adjusted” additional paid-in capital calculation is equal to the “as adjusted” total stockholders’ equity of $5,000,010, less common stock (par value) of $1,457, less the accumulated deficit of ($1,300).
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
We are a newly incorporated blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We have not selected any business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the sale of the private placement warrants and forward purchase units, our capital stock, debt or a combination of cash, stock and debt.
The issuance of additional shares of our stock in a business combination, including pursuant to the forward purchase agreement:
•
may significantly dilute the equity interest of investors in this offering;
•
may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;
•
could cause a change of control if a substantial number of shares of our common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
•
may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us;
•
may adversely affect prevailing market prices for our units, Series A common stock and/or warrants; and
•
may not result in adjustment to the exercise price of our 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 common stock;
•
using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
•
limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
•
increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
•
limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
As indicated in the accompanying financial statements, as of December 31, 2020, we had $0 in cash, a working capital deficit of $773,779 and deferred offering costs of $797,479. 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. These factors, among others, raise substantial doubt about our ability to continue as a going concern.
Results of Operations and Known Trends or Future Events
We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for this offering. Following this offering, we will not generate any operating revenues until after completion of our initial business combination. We will generate non-operating income in the form of interest income on cash and cash equivalents after this offering. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements. After this offering, we expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially after the closing of this offering.
Liquidity and Capital Resources
Our liquidity needs have been satisfied prior to the completion of this offering through receipt of $25,000 from the sale of the founder shares to our sponsor and up to $300,000 in loans from our sponsor under an unsecured promissory note. As of December 31, 2020, we had borrowed $154,483 under the promissory note with our sponsor. We estimate that the net proceeds from (1) the sale of the units in this offering, after deducting offering expenses of approximately $1,750,000 and underwriting commissions of $10,000,000 ($11,500,000 if the underwriters’ over-allotment option is exercised in full) (excluding deferred underwriting commissions of $17,500,000 (or up to $20,125,000 if the underwriters’ over-allotment option is exercised in full)), and (2) the sale of the private placement warrants for a purchase price of $13,500,000 (or $15,000,000 if the underwriters’ over-allotment option is exercised in full), will be $501,750,000 (or $576,750,000 if the underwriters’ over-allotment option is exercised in full). Of this amount, $500,000,000 or $575,000,000 if the underwriters’ over-allotment option is exercised in full, including $17,500,000 (or up to $20,125,000 if the underwriters’ over-allotment option is exercised in full) in deferred underwriting commissions will be deposited into the trust account. The funds in the trust account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries. The remaining $1,750,000 will not be held in the trust account. In the event that our offering expenses exceed our estimate of $1,750,000, we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $1,750,000, 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 and excluding deferred underwriting commissions) and the proceeds from the sale of the forward purchase units to complete our initial business combination. We may withdraw interest to pay taxes. We estimate our annual franchise tax obligations, based on the number of shares of our common stock authorized and outstanding after the completion of this offering, to be $200,000 per year, which is currently the maximum amount of annual franchise taxes payable by us as a Delaware corporation. 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 only taxes payable by us out of the funds in the trust account will be income and franchise taxes. We expect the interest earned on the amount in the trust account will be sufficient to pay our taxes. To the extent that our capital stock 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 $1,750,000 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 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, LMC or its subsidiaries, may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $2,500,000 of such loans made to us may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor, LMC or its subsidiaries, if any, as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
We expect our primary liquidity requirements during that period to include approximately $175,000 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; $225,000 for paying independent directors on our board an annual fee of $75,000 each; $77,000 for Nasdaq continued listing fees; $1,100,000 for office space, administrative and support services; and approximately $23,000 for general working capital that will be used for miscellaneous expenses.
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 reporting requirements of the Sarbanes-Oxley Act for the fiscal year ending December 31, 2022. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer, 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. Further, for as long as we remain an emerging growth company, 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 independent registered accounting firm 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:
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staffing for financial, accounting and external reporting areas, including segregation of duties;
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reconciliation of accounts;
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proper recording of expenses and liabilities in the period to which they relate;
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evidence of internal review and approval of accounting transactions;
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documentation of processes, assumptions and conclusions underlying significant estimates; and
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documentation of accounting policies and procedures.
Because it will take time, management involvement and perhaps outside resources to determine what internal control improvements are necessary for us to meet regulatory requirements and market expectations for our operation of a target business, we may incur significant expenses in meeting our public reporting responsibilities, particularly in the areas of designing, enhancing or remediating internal and disclosure controls. Doing so effectively may also take longer than we expect, thus increasing our exposure to financial fraud or erroneous financing reporting.
Once our management’s report on internal controls is complete, we will retain an independent auditor to audit and render an opinion on such report when required by Section 404 of the Sarbanes-Oxley Act. The independent auditors may identify additional issues concerning a target business’s internal controls while performing their audit of internal control over financial reporting.
Quantitative and Qualitative Disclosures about Market Risk
The net proceeds of this offering and the sale of the private placement warrants held in the trust account will be invested in U.S. government treasury bills with a maturity of 185 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.
Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results
As of December 31, 2020, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations. No unaudited quarterly operating data is included in this prospectus as we have conducted no operations to date.
Related Party Transactions
In November 2020, our sponsor purchased an aggregate of 17,250,000 founder shares for an aggregate purchase price of $25,000. In November 2020, our sponsor contributed an aggregate of 2,875,000 founder shares to our capital for no consideration, resulting in our sponsor holding an aggregate of 14,375,000 founder shares, with an effective purchase price of approximately $0.0017 per share. The number of founder shares issued was determined based on the expectation that the founder shares would represent 20% of the outstanding shares of common stock upon the completion of this offering. If we increase or decrease the size of this offering, we will effect a stock dividend or share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Series F common stock immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of the outstanding shares of our common stock upon the consummation of this offering. As such, our sponsor will collectively beneficially own 20% of our issued and outstanding capital stock immediately after this offering (assuming our sponsor does not purchase units in this offering). Our sponsor does not intend to purchase any units in this offering. Up to 1,875,000 founder shares are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised.
We will enter into a services agreement and facilities sharing agreement pursuant to which we will pay LMC and certain of its subsidiaries a total of $91,666 per month for office space, administrative and support services. Upon completion of our initial business combination or any liquidation, we may cease paying some or all of these monthly fees.
Our sponsor, officers and directors or LMC or its other subsidiaries will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers or directors or
LMC or its other subsidiaries 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 $300,000 under an unsecured promissory note to be used for a portion of the expenses of this offering. As of December 31, 2020, we had borrowed $154,483 under the promissory note with our sponsor. These loans are non-interest bearing, unsecured and are due at the earlier of December 31, 2021 and the closing of this offering. These loans will be repaid upon completion of this offering out of the $1,750,000 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 fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor, LMC or its subsidiaries may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $2,500,000 of such loans made to us may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor, LMC or its subsidiaries, if any, 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 will commit, pursuant to a written agreement, to purchase an aggregate of 9,000,000 private placement warrants (or 10,000,000 if the underwriters’ over-allotment option is exercised in full) at a price of $1.50 per warrant ($13,500,000 in the aggregate or $15,000,000 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. Each private placement warrant entitles the holder thereof to purchase one share of Series A common stock at a price of $11.50 per share, subject to adjustment as provided herein. The private placement warrants are identical to the warrants sold as part of the units in this offering except that, so long as they are held by our sponsor or its permitted transferees: (1) they will not be redeemable by us; (2) they (including the Series A common stock issuable upon exercise of these warrants) may not be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial business combination (except as described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants”); (3) they may be exercised by the holders on a cashless basis; and (4) the holders thereof (including with respect to the shares of common stock issuable upon exercise of these warrants) are entitled to registration rights.
Prior to this offering, we will enter into a forward purchase agreement pursuant to which our sponsor will agree to acquire forward purchase units for $250,000,000, in the aggregate, in connection with our initial business combination. Each forward purchase unit will consist of one share of Series B common stock, or a forward purchase share, and one-fifth of one warrant to purchase one share of Series A common stock, or a forward purchase warrant, at a purchase price of $10.00 per unit, and will be sold in a private placement that will close substantially concurrently with the consummation of our initial business combination. The terms of the forward purchase warrants will generally be identical to the terms of the redeemable warrants included in the units being issued in this offering. In addition, our sponsor will have the right, but is not required, to provide, or cause LMC or any of its wholly owned subsidiaries to provide, incremental funding to us in connection with our initial business combination by purchasing additional shares of Series B common stock at a purchase price of $10.00 per share, which shares would be sold in a private placement substantially concurrently with the consummation of our initial business combination.
Pursuant to an investor rights agreement that we will enter into with our sponsor and LMC and a forward purchase agreement that we will enter into with LMC 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 warrants issued upon conversion of working capital loans, if any, will be entitled under each of the investor rights agreement and the forward purchase agreement to make up to three demands in any 12-month period 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, our sponsor will have the right to include certain of its securities in other registration statements filed by us. However, the investor rights agreement and the forward purchase agreement will provide that we will not be required to effect or permit any registration or cause any registration statement 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.
The investor rights agreement additionally will provide that upon certain issuances of equity securities by us (other than issuances due to the exercise of warrants), our sponsor will have certain contractual preemptive rights which are intended to allow our sponsor and LMC to maintain their percentage ownership of our outstanding common stock and voting stock after giving effect to the issuance. See “Principal Stockholders — Registration and Preemptive Rights.”
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 this offering or until we are no longer an “emerging growth company,” whichever is earlier.
PROPOSED BUSINESS
Introduction
LMAC is a newly formed blank check company incorporated as a Delaware corporation for the purpose of effecting our initial business combination. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us. Although we may pursue an acquisition in any industry or geography, we intend to capitalize on the ability of our management team and our sponsor, to identify, acquire and operate a business that may provide opportunities for attractive risk-adjusted returns in the media, digital media, music, entertainment, communications, telecommunications and technology industries.
We intend to identify and acquire a business that could benefit from a creative, forward-thinking owner with extensive operational expertise and that presents potential for an attractive risk-adjusted return profile under our stewardship. Even companies with solid fundamentals often under-perform their potential due to underinvestment, ineffective business strategies, sub-optimal capital allocation and capital structures, excessive cost structures, or incomplete management teams. Our management team has extensive experience in identifying and executing acquisitions that are ripe for change across industry sectors and business cycles. In addition, our management has hands-on experience working with companies as active owners and directors by working closely with these companies to continue their transformation and help create value.
Rather than offering a one-time service of going public, LMAC aims to act as a long-term partner to its target companies. Our objective is to provide a target company an efficient path to go public with a significant degree of ongoing funding certainty, while creating value for our stockholders by assisting management with strategy, business planning, capital structure optimization, team building, and synergistic opportunities. LMC has successfully applied this approach over the past decades across a wide range of media and entertainment companies such as Formula 1, Sirius XM Holdings, Live Nation and others. We believe through LMAC we can bring LMC’s full range of capabilities including LMC’s business operation track record, investment experience and long-term capital, and fundamentally enhance the value of the target business.
Our Management Team
We believe that the experience of our management team will allow us to source, identify and execute an attractive transaction for our stockholders. Our management team is led by Gregory B. Maffei as President and Chief Executive Officer, Albert E. Rosenthaler as Chief Corporate Development Officer, Brian J. Wendling as Chief Accounting Officer and Principal Financial Officer, and Renee L. Wilm as Chief Legal Officer and Chief Administrative Officer. See “Management — Directors, Director Nominees and Executive Officers.”
Our Committed Capital
We believe our ability to complete our initial business combination will be enhanced by our entry into a forward purchase agreement pursuant to which our sponsor will acquire forward purchase units for $250,000,000, in the aggregate, in connection with our initial business combination. Each forward purchase unit will consist of one share of Series B common stock, or a forward purchase share, and one-fifth of one warrant to purchase one share of Series A common stock, or a forward purchase warrant, at a purchase price of $10.00 per unit. Such forward purchase units will be sold in a private placement that will close substantially concurrently with the consummation of our initial business combination. The terms of the forward purchase warrants will generally be identical to the terms of the redeemable warrants included in the units being issued in this offering. In addition, our sponsor will have the right, but is not required, to provide, or cause LMC or any of its wholly owned subsidiaries to provide, incremental funding to us in connection with our initial business combination by purchasing additional shares of Series B common stock at a purchase price of $10.00 per share, which shares would also be sold in a private placement substantially concurrently with the consummation of our initial business combination.
We believe our committed capital will make us more attractive to a potential business combination target.
In addition, we expect that third-party investors, including certain prior investors in the related companies who have experienced the strong returns provided by an investment in the related companies, may be interested in providing additional, incremental funding to our company in connection with an initial business combination. Any such third-party investors would likely subscribe for shares of Series A common stock at a purchase price of $10.00 per share, which shares would be sold substantially concurrently with the consummation of our initial business combination.
Our Business Strategy
While our efforts to identify a prospective target business will not necessarily be limited to a particular industry, sector or region, we intend to capitalize on our expertise in the media, digital media, music, entertainment, communications, telecommunications and technology industries.
Our acquisition and value creation strategy is to identify, acquire and, after our initial business combination, fundamentally enhance a company in the public markets. We intend to seek a company in an industry that complements the experience and expertise of our management team and is a business to which we believe we can add value.
We are committed to delivering attractive returns to all stakeholders. Our sponsor is foregoing anti-dilution adjustments on the founder shares in connection with an initial business combination thereby effectively reducing the cost of capital for any third-party investors at such time. We believe this, together with our committed capital through the forward purchase agreement, will enhance our access to additional third-party capital in connection with our initial business combination and create a competitive advantage in consummating an initial business combination.
Our management team is deeply familiar with the trends of our target industries and brings an investing approach that offers multiple competitive advantages in sourcing, evaluating and executing on opportunities, including:
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Stockholder Centric: We think like owners and are focused on long-term gains rather than short-term results. At LMC, the compensation structure of the management team is closely tied to the long-term performance of the stock. In fact, the LMC executive leadership team has a significant portion of its respective net worth tied to LMC.
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Forward Looking: We are deeply familiar with the trends of the industries in which we plan to invest and can evaluate the opportunities and risks presented by ongoing secular changes and temporary market disruptions.
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Nimble: Our team is structured to allow it to move quickly when opportunities arise, and we can be creative in our deal structures.
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Financially Sophisticated: Our management team has extensive experience in mergers, capital restructuring, divestitures, investing, capital deployment, credit analysis and setting capital structures.
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Long-Term Focused: We take a long-term, strategic view in our various operating businesses and are less concerned with short-term bouts of volatility.
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Proprietary Sourcing Channels and Leading Industry Relationships: We believe the capabilities and connections associated with our management team, in combination with those of LMC, will provide us with a differentiated pipeline of acquisition opportunities that would be difficult for other participants in the market to replicate. We expect these sourcing capabilities will be further bolstered by our management team and LMC’s reputation and deep industry relationships.
Acquisition Criteria
We have identified the following general criteria and guidelines, which we believe are important in evaluating prospective target businesses:
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Strong Growth Trajectory: We will seek to acquire a business with attractive growth aspects.
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Need for Scale: We will seek to acquire a business where the global network, scale and capabilities of our management and sponsor can be leveraged to improve reach and promote exponential growth of the target.
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Generate Stable Free Cash Flow: We will seek to acquire a business that has historically generated, or has the near-term potential to generate, strong and sustainable free cash flow.
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Potential Industry Consolidator: Industry leader with barriers to entry; well-positioned to participate in sector consolidation or would benefit from a public acquisition currency.
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Drives Stockholder Return: Offer an attractive risk-adjusted return for our stockholders, weighing potential growth opportunities and operational improvements in the target business against any identified downside risks.
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Inefficient Capital Structure: Have inefficient capital structure or offer potential to improve the efficiency of the capital structure.
These criteria and guidelines are not intended to be exhaustive. Further, we intend to use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines. 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 deemed relevant by our management in effecting our initial business combination consistent with our business objectives. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our shareholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of tender offer documents or proxy solicitation materials that we would file with the SEC.
While our Series A, Series B and Series C common stock capital structure with its low vote, high vote and no vote, respectively, features differs from the typical capital structure of many other special purpose acquisition companies we expect to maintain this capital structure following our initial business combination. However, maintenance of this capital structure is not a condition for us to evaluate acquisition opportunities. Although we are not aware of and are unable to determine at this time the criteria on which we would base our decision regarding whether to engage in a business combination that would eliminate our Series B common stock or its high vote feature, we may, in our sole discretion, seek to amend our amended and restated certificate of incorporation to change this feature.
Our Acquisition Process
In evaluating a prospective target business, we expect to conduct a thorough due diligence review which may encompass, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial, operational, legal and other information that will be made available to us.
We are not prohibited from pursuing an initial business combination with a business that is owned by our sponsor or any of the related companies, or making the acquisition through a joint venture or other form of shared ownership with any of them. Members of our management team may directly or indirectly own our securities following this offering, and accordingly, they may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. 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.
Mr. Maffei, other members of our management team and LMC and other entities in which members of our management team are involved are from time to time made aware of potential business opportunities, one or more of which we may desire to pursue, for a business combination, but we have not selected any business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us.
In addition, each of our officers and directors has, and any of them in the future may have, additional fiduciary or contractual obligations to one or more other entities pursuant to which such officer or director
may be required to present a business combination opportunity to such entities before he or she presents such opportunity to us. See “— Conflicts of Interest” and “Management — Conflicts of Interest” for additional information regarding limitations on our access to investment opportunities sourced by members of our management team, LMC and other entities in which members of our management team are involved, including a list of our executive officers and directors and entities for which a conflict of interest may or does exist between such officers and our company.
We do not believe, however, that the limitations on our access to investment opportunities described above will materially affect our ability to complete our initial business combination.
You should not rely on the historical record or performance of LMC, Mr. Maffei or other members of our management team as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. See “Risk Factors — General Risk Factors — Past performance by LMC, Mr. Maffei and other members of our management team may not be indicative of future performance of an investment in us.”
Initial Business Combination
Nasdaq listing rules require that our initial business combination must be with one or more target businesses that have an aggregate fair market value equal to at least 80% of the value of the trust account (excluding any deferred underwriting commissions and taxes payable on interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. We refer to this as the 80% of net assets test. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case.
We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own or acquire shares will own or acquire 100% of the outstanding equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting power of the outstanding capital stock of the target or otherwise acquires an interest in the target business 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 outstanding voting power of the outstanding capital stock of the target, our stockholders prior to our initial business combination may collectively own a minority interest (economic and/or voting) in the post-business combination company, depending on, among other things, 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 shares of common stock in exchange for all of the outstanding capital stock of a target, issue a substantial number of new shares to third-parties in connection with financing our initial business combination or our sponsor could convert some or all of its Series B common stock into Series A common stock. In such cases, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new shares of common stock or other changes to our capital structure, our stockholders immediately prior to such transaction (including our sponsor) could own less than a majority of our outstanding shares of common stock subsequent to such transaction and therefore a minority interest (economic and/or voting) in the post-transaction company. If less than 100% of the outstanding 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 by us is what will be valued for purposes of the 80% of net assets test. If our initial business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses. 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% of net assets 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.
Sourcing of Potential Business Combination Targets
We believe our management team’s significant transaction experience and industry relationships with companies will provide us with a substantial number of potential business combination targets. Over the course of their careers, the members of our management team have developed a broad network of contacts and corporate relationships. This network has grown through the activities of our management team sourcing, acquiring, financing and selling businesses, our management team’s relationships with sellers, financing sources and target management teams and the experience of our management team in executing transactions under varying economic and financial market conditions.
We believe this network provides our management team with a robust and consistent flow of acquisition opportunities which were proprietary or where a limited group of investors were invited to participate in the sale process. We believe that the network of contacts and relationships of our management team will provide us with important sources of acquisition opportunities. In addition, we anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment market participants, private equity funds and large business enterprises seeking to divest non-core assets or divisions.
We are not prohibited from pursuing an initial business combination with a business that is owned by our sponsor or any of the related companies, or making the acquisition through a joint venture or other form of shared ownership with any of them. In the event we seek to complete our initial business combination with a target that is owned by the related companies, our sponsor, officers or directors, we, or a committee of independent and disinterested directors, expect to obtain an opinion from an independent investment banking firm or another accounting, valuation or appraisal that firm such initial business combination is fair to our company from a financial point of view. However, we are not required to obtain such an opinion in any context.
See “— Conflicts of Interest” and “Management — Conflicts of Interest” for information regarding limitations on our access to investment opportunities sourced by members of our management team, LMC and other entities in which members of our management team are involved, including a list of our executive officers and directors and entities for which a conflict of interest may or does exist between such officers and our company.
Status as a Public Company
We believe our structure will make us an attractive business combination partner to target businesses. As an existing public company, we will offer target businesses an alternative to the traditional initial public offering through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination. In this situation, the owners of the target business would exchange their shares of stock in the target business for shares of our stock or for a combination of shares of our stock and cash, allowing us to tailor the consideration to the specific needs of the sellers. Although there are various costs and obligations associated with being a public company, we believe target businesses will find this method a more certain and cost-effective method to becoming a public company than the typical initial public offering. In a typical initial public offering, there are additional expenses incurred in marketing, road show and public reporting efforts that may not be present to the same extent in connection with a business combination with us.
Furthermore, once a proposed business combination is completed, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could delay or prevent the offering from occurring. Once public, we believe the target business would then have greater access to capital and an additional means of providing management incentives consistent with stockholders’ interests. It can offer
further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.
We are an “emerging growth company,” as defined in the JOBS Act. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the end of that 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.
Financial Position
With funds available for a business combination initially in the amount of $734,250,000 (which includes $250,000,000 that may be received pursuant to the forward purchase agreement) assuming no redemptions and after payment of $17,500,000 of deferred underwriting fees (or $806,625,000 (which includes the $250,000,000 that may be received pursuant to the forward purchase agreement) assuming no redemptions and after payment of up to $20,125,000 of deferred underwriting fees if the underwriters’ over-allotment option is exercised in full), after estimated offering expenses of $1,750,000 (and prior to any estimated post-IPO working capital expenses of $1,750,000), we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third-party financing and there can be no assurance it will be available to us.
Effecting our Initial Business Combination
We are not presently engaged in, and we will not engage in, any operations for an indefinite period of time following this offering. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the sale of the private placement warrants and forward purchase units, our capital stock, debt or a combination of these as the consideration to be paid in our initial business combination. We may seek to complete our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If our initial business combination is paid for using equity or debt or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemption of our public shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other businesses or for working capital.
We have not selected any business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target. Mr. Maffei, other members of our management team and LMC and other entities in which members of our management team are involved are from time to time made aware of potential business opportunities, one or more of which we may desire to pursue, for a business combination, but we have not selected any business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us. See “— Sourcing of Potential Business Combination Targets,” “— Conflicts of Interest” and “Management — Conflicts of Interest” for additional information regarding limitations on our access to investment opportunities sourced by members of our management team, LMC and other entities in which members of our management team are involved.
In addition to the forward purchase agreement, we may seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of our initial business combination,
and we may effectuate our initial business combination using the proceeds of such offerings or loans rather than using the amounts held in the trust account. In addition, our sponsor will have the right, but is not required, to provide, or cause LMC or any of its wholly owned subsidiaries to provide, incremental funding to us in connection with our initial business combination by purchasing additional shares of Series B common stock at a purchase price of $10.00 per share, which shares would be sold in a private placement substantially concurrently with the consummation of our initial business combination.
In the case of an initial business combination funded with assets other than the trust account assets, our tender offer documents or proxy materials disclosing the business combination would disclose the terms of the financing and, only if required by applicable law or we decide to do so for business or other reasons, we would seek stockholder approval of such financing. There are no prohibitions on our ability to raise funds privately or through loans in connection with our initial business combination. At this time, we are not a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities or otherwise.
Selection of a Target Business and Structuring of our Initial Business Combination
Nasdaq listing rules require that our initial business combination must be with one or more target businesses that have an aggregate fair market value equal to at least 80% of the value of the trust account (excluding any deferred underwriting commissions and taxes payable on interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. The fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally accepted by the financial community, such as discounted cash flow valuation or value of comparable businesses. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case. Subject to this requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will not be permitted to effectuate our initial business combination solely with another blank check company or a similar company with nominal operations.
In any case, we will only complete an initial business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting power of the outstanding capital stock of the target or otherwise acquires an interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. If less than 100% of the outstanding 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 by us is what will be valued for purposes of the 80% of net assets test. There is no basis for investors in this offering to evaluate the possible merits or risks of any target business with which we may ultimately complete our initial business combination.
To the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors.
In evaluating a prospective target business, we expect to conduct a thorough due diligence review which may encompass, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial, operational, legal and other information that will be made available to us.
The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target
business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.
Lack of Business Diversification
For an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business.
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:
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solely dependent upon the performance of a single business, property or asset; or
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dependent upon the development or market acceptance of a single or limited number of products, processes or services.
This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
Potential Management Concerns Post-Initial Business Combination
Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial business combination with that business, our assessment of the target business’s management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated with any certainty. 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 and it is highly unlikely that any of them will devote their full efforts to our affairs subsequent to our initial business combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations of the particular target business.
We cannot assure you that any of our key personnel will remain in senior management or advisory positions with the post-business combination company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination.
Following our initial business combination, we may seek to recruit additional managers to supplement the incumbent management team of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management team.
Stockholders May Not Have the Ability to Approve our Initial Business Combination
We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder approval if it is required by Delaware law or stock exchange rule, or we may decide to seek stockholder approval for business or other reasons. Presented in the table below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder approval is currently required under Delaware law for each such transaction.
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Type of Transaction
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Whether
Stockholder
Approval is
Required
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Purchase of assets
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No
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Purchase of stock of target not involving a merger with the company
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No
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Type of Transaction
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Whether
Stockholder
Approval is
Required
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Merger of target into a subsidiary of the company
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No
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Merger of the company with a target
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Yes
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Under Nasdaq’s listing rules, stockholder approval would be required for our initial business combination if, for example:
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we issue (other than in a public offering for cash) shares of common stock that will either (a) be equal to or in excess of 20% of the number of shares of common stock then outstanding or (b) have voting power equal to or in excess of 20% of the voting power then outstanding;
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any of our directors, officers or Substantial Shareholders (as defined by the Nasdaq listing rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired and if the number of shares of common stock to be issued, or if the number of shares of common stock into which the securities may be convertible or exercisable, and the present or potential issuance of shares of common stock, or securities convertible into or exercisable for shares of common stock, could result in an increase in outstanding shares of common stock or voting power of 5% or more; or
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the issuance or potential issuance will result in our undergoing a change of control.
The decision as to whether we will seek stockholder approval of a proposed business combination in those instances in which stockholder approval is not required by Delaware law or stock exchange rule will be made by us, solely in our discretion, and will be based on business and other reasons, which include a variety of factors, including, but not limited to:
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the timing of the transaction, including in the event we determine stockholder approval would require additional time and there is either not enough time to seek stockholder approval or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company;
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the expected cost of holding a stockholder vote;
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the risk that the stockholders would fail to approve the proposed business combination;
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other time and budget constraints of the company; and
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additional legal complexities of a proposed business combination that would be time-consuming and burdensome to present to stockholders.
Permitted purchases and other transactions with respect to our securities
In the event we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules our sponsor, directors, officers, or advisors or any of the related companies and their directors, officers or advisors may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. There is no limit on the number of securities such persons may purchase. Additionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), our sponsor, directors, officers, or advisors or any of the related companies and their directors, officers or advisors may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares. However, they have no current commitments, plans or intentions to engage in such purchases or other transactions and have not formulated any terms or conditions for any such purchases or other transactions. None of the funds held in the trust account will be used to purchase public shares or warrants in such transactions. Such persons will be subject to restrictions in making any such purchases when they are in possession of any material non-public information or if such purchases are prohibited by Regulation M under the Exchange Act. Such a purchase may include a contractual acknowledgement that such
stockholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. We will adopt an insider trading policy which will require insiders to refrain from purchasing securities during certain blackout periods and when they are in possession of any material non-public information. We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as it will be dependent upon several factors, including, but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary.
In the event that our sponsor, directors, officers, or advisors or any of the related companies and their directors, officers or advisors purchase public shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights or submitted a proxy to vote against our initial business combination, such selling stockholders would be required to revoke their prior elections to redeem their shares and any proxy to vote against our initial business combination. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will be required to comply with such rules.
The purpose of any such transaction could be to (1) vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder approval of the initial business combination, (2) 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 or (3) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the consummation of our initial business combination, where it appears that such requirement would otherwise not be met. Any such transactions may result in the completion of our initial business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public “float” of our shares of Series A common stock or warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Our sponsor, officers, directors, and advisors anticipate that they may identify the stockholders with whom our sponsor, officers, directors, or advisors or any of the related companies or their officers, directors or advisors may pursue privately negotiated transactions by either the stockholders contacting us directly or by our receipt of redemption requests submitted by stockholders (in the case of public shares) following our mailing of proxy materials in connection with our initial business combination. To the extent that our sponsor, officers, directors, or advisors or any of the related companies or their officers, directors or advisors enter into a private transaction, they would identify and contact only potential selling or redeeming stockholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against our initial business combination. Such persons would select the stockholders from whom to acquire shares based on the number of shares available, the negotiated price per share and such other factors as any such person may deem relevant at the time of purchase. The price per share paid in any such transaction may be different than the amount per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. Our sponsor, officers, directors, or advisors or any of the related companies or their officers, directors or advisors will be restricted from purchasing shares if such purchases do not comply with Regulation M under the Exchange Act and the other federal securities laws.
Any purchases by any person who is an affiliated purchaser under Rule 10b-18 under the Exchange Act will be restricted unless such purchases are made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our sponsor, officers, and directors and any of the related companies and their officers and directors will be restricted from making purchases of common stock if such purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.
Redemption Rights for Public Stockholders upon Completion of our Initial Business Combination
We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of common stock upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, calculated as of two business days prior to the consummation of the initial business combination, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations described herein. At completion of the business combination, we will be required to purchase any public shares properly delivered for redemption and not withdrawn. The amount in the trust account is initially anticipated to be $10.00 per public share. The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. Our sponsor, executive officers and directors will enter into a letter agreement with us, pursuant to which they will agree to waive their redemption rights with respect to our common stock held by them in connection with the completion of our initial business combination.
Manner of Conducting Redemptions
We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Series A common stock upon the completion of our initial business combination either: (1) in connection with a stockholder meeting called to approve the business combination; or (2) by means of a tender offer. Except as required by Delaware law or stock exchange rule, the decision as to whether we will seek stockholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction. Asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation would typically require stockholder approval. If we structure a business combination transaction with a target company in a manner that requires stockholder approval, we will not have discretion as to whether to seek a stockholder vote to approve the proposed business combination. We intend to conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by applicable law or stock exchange rule or we choose to seek stockholder approval for business or other reasons.
If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation:
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conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and
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file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
Upon the public announcement of our initial business combination, we and our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our Series A common stock in the open market if we elect to redeem our public shares through a tender offer, to comply with Rule 14e-5 under the Exchange Act.
In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public shares, which number will be based on the requirement that we may not redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. If public stockholders tender more shares than we have
offered to purchase, we will withdraw the tender offer and not complete such initial business combination, and we instead may search for an alternate business combination (including, potentially, with the same target).
If, however, stockholder approval of the transaction is required by applicable law or stock exchange rule, or we decide to obtain stockholder approval for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation:
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conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and
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file proxy materials with the SEC.
We expect that a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Although we are not required to do so, we currently intend to comply with the substantive and procedural requirements of Regulation 14A in connection with any stockholder vote even if we are not able to maintain our Nasdaq listing or Exchange Act registration.
In the event that we seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public stockholders with the redemption rights described above upon the consummation of the initial business combination.
If we seek stockholder approval of our initial business combination, we will complete our initial business combination only if a majority of the outstanding shares of our common stock voted are voted in favor of the business combination, subject to any other vote required by applicable law. A quorum for such meeting will consist of the holders present in person or by proxy of shares of our outstanding capital stock representing a majority of all outstanding shares of capital stock of the company entitled to vote at such meeting. Our sponsor, executive officers and directors will count towards this quorum and will agree to vote any shares held by them in favor of our initial business combination. We expect that at the time of any stockholder vote relating to our initial business combination, our sponsor and its permitted transferees will own at least 20% of our outstanding shares of common stock entitled to vote thereon. These quorum and voting thresholds and agreements may make it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public shares without voting and, if it does vote, irrespective of whether it votes for or against the proposed transaction. In addition, our sponsor, executive officers and directors will enter into a letter agreement with us, pursuant to which they will agree to waive their redemption rights with respect to our common stock held by them in connection with the completion of a business combination.
Our amended and restated certificate of incorporation will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions. Redemptions of our public shares may also be subject to a higher net tangible asset test or cash requirement pursuant to an agreement relating to our initial business combination. For example, the proposed business combination may require: (1) cash consideration to be paid to the target or its owners; (2) cash to be transferred to the target for working capital or other general corporate purposes; or (3) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all shares of Series A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all shares of Series A common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination (including, potentially, with the same target).
Limitation on Redemption upon Completion of our Initial Business Combination if we Seek Stockholder Approval
Notwithstanding the foregoing redemption rights, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business
combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to Excess Shares, without our prior consent. We believe this restriction will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or our sponsor to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights if such holder’s shares are not purchased by us or our sponsor at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem to no more than 15% of the shares sold in this offering, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
Tendering Stock Certificates in Connection with a Tender Offer or Redemption Rights
We may require our public stockholders 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 the 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, rather than simply voting against the initial business combination at the holder’s option. The tender offer or 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 stockholders to satisfy such delivery requirements, which will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. Accordingly, a public stockholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two business days prior to the scheduled vote on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Pursuant to the tender offer rules, the tender offer period will be not less than 20 business days and, in the case of a stockholder vote, a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Given the relatively short exercise period, it is advisable for stockholders to use electronic delivery of their public shares.
There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System. The transfer agent will typically charge the tendering broker a fee of approximately $80 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.
The foregoing is different from the procedures used by some blank check companies. In order to perfect redemption rights in connection with their business combinations, some blank check companies would distribute proxy materials for the stockholders’ vote on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his or her redemption rights. After the business combination was approved, the company would contact such stockholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the stockholder then had an “option window” after the completion of the business combination during which he or she could monitor the price of the company’s stock in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open market
before actually delivering his or her shares to the company for cancellation. As a result, the redemption rights, to which stockholders were aware they needed to commit before the stockholder meeting, would become “option” rights surviving past the completion of the business combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming holder’s election to redeem is irrevocable once the business combination is approved.
Any request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the tender offer materials or two business days prior to the scheduled date of the stockholder meeting set forth in our proxy materials, as applicable (unless we elect to allow additional withdrawal rights). Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly after the completion of our initial business combination.
If our initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.
If our initial proposed business combination is not completed, we may continue to try to complete a business combination until 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or during any Extension Period.
Redemption of Public Shares and Liquidation if no Initial Business Combination
Our amended and restated certificate of incorporation will provide that we will have only 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) to complete our initial business combination. If we have not completed our initial business combination within such period or during any Extension 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 (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 public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (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 stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the 24-month (or 27-month, as applicable) time period.
Our sponsor, executive officers and directors will enter into a letter agreement with us, pursuant to which they will waive their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or during any Extension Period (although our sponsor, officers and directors will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame).
Our sponsor, executive officers and directors will agree, pursuant to a letter agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Series A common stock upon approval of any such amendment at a per-share price, payable in cash,
equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions.
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 estimated $1,750,000 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 $100,000 of such accrued interest to pay those costs and expenses.
If we were to expend all of the net proceeds of this offering and the sale of the private placement warrants, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account and any tax payments or expenses for the dissolution of the trust, the per-share redemption amount received by stockholders upon our dissolution would be $10.00. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure you that the actual per-share redemption amount received by stockholders will not be substantially less than $10.00. See “Risk Factors — 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 stockholders may be less than $10.00 per share” and other risk factors described above. Under Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made in full, as applicable, if there are sufficient assets. These claims must be paid or provided for before we make any distribution of our remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.
Although we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management team will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.
Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where 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. In order to protect the amounts held in the trust account, our sponsor will agree that it will be liable to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) 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 the lesser of: (1) $10.00 per public share; and (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. 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, which is a newly formed entity, 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. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 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 will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses. We believe the likelihood of our sponsor having to indemnify the trust account is limited because we will endeavor to have all vendors and prospective target businesses as well as other entities execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account.
In the event that the proceeds in the trust account are reduced below the lesser of: (1) $10.00 per public share; and (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 certain instances. For example, the cost of such legal action may be deemed by the independent directors to be too high relative to the amount recoverable or the independent directors may determine that a favorable outcome is not likely. 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 public share. See “Risk Factors — 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 stockholders may be less than $10.00 per share” and other risk factors described above.
We will seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to 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 an estimated $1,750,000 from the proceeds of this offering and the sale of the private placement warrants, with which to pay any such potential claims (including costs and expenses incurred in connection with any liquidation, currently estimated to be no more than approximately $100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, stockholders who received funds from our trust account could be liable for claims made by creditors. In the event that our offering expenses exceed our estimate of $1,750,000, we may fund such excess with funds from the funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $1,750,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.
Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within the required time period may be considered a liquidating distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period
before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.
Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within the required time period is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. If we have not completed our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or during any Extension 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 (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 public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (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 stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following the end of our acquisition period and, therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such date.
Because we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent ten years. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. As described above, pursuant to the obligation contained in our underwriting agreement, we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account.
As a result of this obligation, the claims that could be made against us are significantly limited and the likelihood that any claim that would result in any liability extending to the trust account is remote. Further, our sponsor may be liable only to the extent necessary to ensure that the amounts in the trust account are not reduced below the lesser of: (1) $10.00 per public share; and (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, our sponsor will not be responsible to the extent of any liability for such third-party claims.
If we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return $10.00 per share to our public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as
either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons. See “Risk Factors — If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy 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.”
A public stockholder 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 public shares that such stockholder has properly elected to redeem, subject to the limitations described in this prospectus; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) the redemption of all of our public shares if we have not completed our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred), subject to applicable law. In no other circumstances will a public stockholder have any right or interest of any kind to or in the trust account. In the event we seek stockholder approval in connection with our initial business combination, a stockholder’s voting in connection with our initial business combination alone will not result in a stockholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such stockholder must have also exercised its redemption rights described above. Holders of warrants will not have any rights to proceeds held in the trust account with respect to the warrants.
Amended and Restated Certificate of Incorporation
Our amended and restated certificate of incorporation will contain certain requirements and restrictions relating to this offering that will apply to us until the completion of our initial business combination. If we seek to amend any provisions of our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, we will provide public stockholders with the opportunity to redeem their public shares in connection with any such vote. Our sponsor, executive officers and directors will agree to waive any redemption rights with respect to our common stock held by them in connection with the completion of our initial business combination. Specifically, our amended and restated certificate of incorporation will provide, among other things, that:
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prior to the completion of our initial business combination, we shall either: (1) seek stockholder approval of our initial business combination at a meeting called for such purpose, in connection with which stockholders may seek to redeem their shares, without voting, and if they do vote, irrespective of whether they vote for or against the proposed business combination, into their pro rata share of the aggregate amount then on deposit in the trust account, calculated as of two business days prior to the completion of our initial business combination, including interest (which interest shall be net of taxes payable); or (2) provide our public stockholders with the opportunity to tender their shares to us by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account,calculated as of two business days prior to the completion of our initial business combination, including interest (which interest shall be net of taxes payable), in each case subject to the limitations described herein;
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we will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and, solely if we seek stockholder approval, a majority of the voting power of all outstanding shares of capital stock voted are voted in favor of the business combination at a duly held stockholders meeting, subject to any other vote required by applicable law;
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if we have not completed our initial business combination within 24 months (or 27 months if an agreement in principle event has occurred) from the closing of this offering, 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 (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 public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (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 stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law; and
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prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (1) receive funds from the trust account or (2) vote pursuant to our amended and restated certificate of incorporation on any initial business combination.
These provisions cannot be amended without the approval of holders of 66 2/3% of the total voting power of our outstanding capital stock.
Additionally, our amended and restated certificate of incorporation will provide that, prior to our initial business combination, only holders of our Series F common stock will have the right to vote on the election of directors and that holders of a majority of the outstanding shares of our Series F common stock may remove members of the board of directors for any reason. These provisions of our amended and restated certificate of incorporation may only be amended if approved by holders of more than 50% of the total voting power of the outstanding shares of our common stock entitled to vote thereon as well as more than 50% of the outstanding Series F common stock. In addition, prior to our initial business combination and so long as any shares of Series F common stock remain outstanding, the rights, powers and preferences provided by our amended and restated certificate of incorporation to the Series B common stock may be amended only if approved by the holders of a majority of the outstanding Series F common stock.
See “Description of Securities” for additional information.
Comparison of Redemption or Purchase Prices in Connection with our Initial Business Combination and if we Fail to Complete our Initial Business Combination
The following table compares the redemptions and other permitted purchases of public shares that may take place in connection with the completion of our initial business combination and if we have not completed our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or during any Extension Period.
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Redemptions in Connection
with our Initial Business
Combination
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Other Permitted
Purchases of Public
Shares by our
Sponsor, Insiders
or Related Companies
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Redemptions if we fail
to Complete an Initial
Business Combination
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Calculation of redemption price or other permitted purchases
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Redemptions at the time of our initial business combination may be made pursuant to a tender offer or in connection with a stockholder vote. The
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If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, or advisors or any of the related companies or their
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If we have not completed our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle
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Redemptions in Connection
with our Initial Business
Combination
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Other Permitted
Purchases of Public
Shares by our
Sponsor, Insiders
or Related Companies
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Redemptions if we fail
to Complete an Initial
Business Combination
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redemption price will be the same whether we conduct redemptions pursuant to a tender offer or in connection with a stockholder vote. In either case, our public stockholders may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust account, calculated as of two business days prior to the consummation of the initial business combination (which is initially anticipated to be $10.00 per public share), including interest (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, subject to the limitation that no redemptions will take place if all of the redemptions would cause our net tangible assets to be less than $5,000,001 following such redemptions, and any limitations (including but not limited to cash requirements) agreed to in connection with the negotiation of terms of a proposed business combination.
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directors, officers or advisors may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. Such purchases will be restricted except to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. None of the funds in the trust account will be used to purchase shares in such transactions.
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event has occurred) or during any Extension Period, we will redeem all public shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account (which is initially anticipated to be $10.00 per public share), 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 public shares.
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Impact to remaining stockholders
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The redemptions in connection with our initial business combination will reduce the book value per share for our remaining stockholders, who will bear the burden of the deferred underwriting commissions and interest withdrawn in order to pay taxes (to the extent
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If the permitted purchases described above are made, there will be no impact to our remaining stockholders because the purchase price would not be paid by us.
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The redemption of our public shares if we fail to complete our initial business combination will reduce the book value per share for the shares held by our sponsor, who will be our only remaining stockholder after such redemptions.
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Redemptions in Connection
with our Initial Business
Combination
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Other Permitted
Purchases of Public
Shares by our
Sponsor, Insiders
or Related Companies
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Redemptions if we fail
to Complete an Initial
Business Combination
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not paid from amounts accrued as interest on the funds held in the trust account).
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Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419
The following table compares the terms of this offering to the terms of an offering by a blank check company subject to the provisions of Rule 419. This comparison assumes that the gross proceeds, underwriting commissions and underwriting expenses of our offering would be identical to those of an offering undertaken by a company subject to Rule 419, and that the underwriters will not exercise their over-allotment option. None of the provisions of Rule 419 apply to our offering.
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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Escrow of offering proceeds
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Nasdaq listing rules provide that at least 90% of the gross proceeds from this offering and the sale of the private placement warrants be deposited in a trust account. $500,000,000 of the net proceeds of this offering and the sale of the private placement warrants will be deposited into a U.S.-based trust account at J.P. Morgan Chase with Continental Stock Transfer & Trust Company acting as trustee.
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Approximately $425,250,000 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.
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Investment of net proceeds
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$500,000,000 of the net offering proceeds and the sale of the private placement warrants held in trust will be invested only in U.S. government treasury bills with a maturity of 185 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.
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Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act or in securities that are direct obligations of, or obligations guaranteed as to principal or interest by, the United States.
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Receipt of interest on escrowed funds
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Interest on proceeds from the trust account to be paid to stockholders is reduced by: (1) any taxes paid or payable; and (2) in the event of any liquidation for failure to complete our initial business combination within the allotted time, up to $100,000 of net interest that may be released to us should we have no or insufficient working capital to fund the costs and expenses of our dissolution and liquidation.
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Interest on funds in escrow account would be held for the sole benefit of investors, unless and only after the funds held in escrow were released to us in connection with our completion of a business combination.
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Limitation on fair value or net assets of
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Nasdaq listing rules require that our initial business combination must be
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The fair value or net assets of a target business must represent at least 80% of
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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target business
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with one or more target businesses that have an aggregate fair market value equal to at least 80% of the value of the trust account (excluding any deferred underwriting commissions and taxes payable on interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination.
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the maximum offering proceeds.
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Trading of securities issued
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The units will begin trading on or promptly after the date of this prospectus. The Series A common stock and warrants constituting the units will begin separate trading on the 52nd day following the date of this prospectus (or, if such date is not a business day, the following business day), unless Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC inform us of their decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. 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.
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No trading of the units or the underlying common stock and warrants would be permitted until the completion of a business combination. During this period, the securities would be held in the escrow or trust account.
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Exercise of the warrants
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The warrants cannot be exercised until the later of 30 days after the completion of our initial business combination and 12 months from the closing of this offering.
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The warrants could be exercised prior to the completion of a business combination, but securities received and cash paid in connection with the exercise would be deposited in the escrow or trust account.
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Election to remain an investor
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We will provide our public stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account, calculated 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
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A prospectus containing information pertaining to the business combination required by the SEC would be sent to each investor. Each investor would be given the opportunity to notify the company in writing, within a period of no less than 20 business days and no more than 45 business days from the effective date of a post-effective amendment to the company’s
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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our initial business combination, subject to the limitations described herein. We may not be required by applicable law or stock exchange rule to hold a stockholder vote. If we are not required by applicable law or stock exchange rule and do not otherwise decide to hold a stockholder vote, we will, pursuant to our amended and restated certificate of incorporation, conduct the redemptions pursuant to the tender offer rules of the SEC and file tender offer documents with the SEC which will contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, we hold a stockholder vote, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Pursuant to the tender offer rules, the tender offer period will be not less than 20 business days and, in the case of a stockholder vote, a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. If we seek stockholder approval, we will complete our initial business combination only if the holders of a majority of the outstanding shares of our common stock voted are voted in favor of the business combination, subject to any other vote required by applicable law. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of all outstanding shares of capital stock of the company entitled to vote at such meeting.
Additionally, each public stockholder
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registration statement, to decide if he, she or it elects to remain a stockholder 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 stockholder. Unless a sufficient number of investors elect to remain investors, all funds on deposit in the escrow account must be returned to all of the investors and none of the securities are issued.
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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may elect to redeem its public shares without voting and, if it does vote, irrespective of whether it votes for or against the proposed transaction.
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Business combination deadline
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If we have not completed an initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or during any Extension 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 (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 public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (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 stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
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If an acquisition has not been completed within 18 months after the effective date of the company’s registration statement, funds held in the trust or escrow account are returned to investors.
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Release of funds
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Except 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, the funds held in the trust account will not be released from the trust account until the earliest of: (1) the completion of our initial business combination; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares
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The proceeds held in the escrow account are not released until the earlier of the completion of a business combination and the failure to effect a business combination within the allotted time.
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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if we do not complete our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) the redemption of all of our public shares if we have not completed our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred), subject to applicable law.
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Limitation on redemption rights of stockholders holding more than 15% of the shares sold in this offering if we hold a stockholder vote
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If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to Excess Shares (more than an aggregate of 15% of the shares sold in this offering), without our prior consent. Our public stockholders’ 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.
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Most blank check companies provide no restrictions on the ability of stockholders to redeem shares based on the number of shares held by such stockholders in connection with an initial business combination.
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Tendering stock certificates in connection with a tender offer or redemption rights
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We may require our public stockholders 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 the business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent
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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 stockholders to arrange for them to deliver their certificate to verify ownership.
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option. The tender offer or 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 stockholders to satisfy such delivery requirements. Accordingly, a public stockholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two business days prior to the vote on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights.
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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. Furthermore, our high vote capital structure differs from the typical capital structure of many other special purpose acquisition company competitors and may make us less attractive to an acquisition target or may make an acquisition more costly to complete. While we believe there will be numerous target businesses we could potentially acquire with the net proceeds of this offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, our obligation to pay cash in connection with our public stockholders who properly exercise their redemption rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by target businesses. Any of these factors may place us at a competitive disadvantage in successfully negotiating and completing a business combination.
Conflicts of Interest
The following discussion describes certain potential conflicts of interest that exist or may exist among the related companies and our company. These are considerations of which investors in our company should be aware, and which may cause conflicts that could disadvantage us. They are not, and are not intended to be, a complete enumeration or explanation of all of the potential conflicts of interest that may arise. Present and future activities of any of the related companies in addition to those described in this “— Conflicts of Interest” or in “Management — Conflicts of Interest” may give rise to additional conflicts of interest. Dealing with conflicts of interest is complex and difficult and new and different types of conflicts may subsequently arise. There can be no assurance that any of the related companies will be able to resolve all conflicts in a manner that is favorable to us, and any such conflicts may have a material adverse effect on us, including our ability to consummate an initial business combination.
The related companies have direct and indirect interests in subsidiaries and other companies which are engaged in in a broad array of industries, including media, digital media, music, entertainment, communications, telecommunications and technology. Conflicts may arise from LMC’s affiliation with our company, as well as from actions undertaken by any of the related companies. One or more of the related companies may compete with us for acquisition opportunities. If these entities decide to pursue any such opportunities, we may be precluded from procuring such opportunities and, in the case of LMC, we note that all opportunities presented to us will first be subject to consideration by a standing committee of LMC’s board of directors. In addition, investment ideas generated within LMC may be suitable for both us and for one or more of the related companies and may be directed to such entity rather than to us. Moreover, any of the related companies may take commercial steps which may have an adverse effect on us, including on any target we acquire in the initial business combination.
Any potential conflict that qualifies as a “related party transaction” (as defined in Item 404 of Regulation S-K under the Securities Act) is subject to review by an independent committee of the applicable issuer’s board of directors in accordance with its corporate governance guidelines. We may enter into transactions with one or more of the related companies. There can be no assurance that the terms of any such transactions will be as favorable to us as would be the case where there is no overlapping officer or director. See “Risk Factors — We may engage in a business combination with one or more target businesses that may be owned by our sponsor or one or more of the related companies, or its or their officers or directors, which may raise potential conflicts of interest.”
Fiduciary or other Duties to Other Companies; Competition for Targets
All of our officers also serve as executive officers of one or more of the related companies and certain of our directors serve on the board of directors of one or more of the related companies as well as may serve on the boards of directors of other companies other companies. Our officers and members of our board of directors have fiduciary duties to our stockholders. Likewise, any such persons who serve in similar capacities at any of the related companies have fiduciary duties to that company’s stockholders. Therefore, such persons may have conflicts of interest or the appearance of conflicts of interest with respect to matters involving or affecting us and one or more of the related companies or other companies to which they owe fiduciary duties.
For example, each of our officers and directors has, and any of them in the future may have, additional fiduciary or contractual obligations to one or more other entities (including, without limitation, to one or more of the entities listed in “Management — Conflicts of Interest”) pursuant to which such officer or director may be required to present a business combination opportunity to such entities before he or she presents such opportunity to us. Also, none of LMC, our sponsor or any of our directors and officers is prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity to which he or she has then-current fiduciary or contractual obligations to present such opportunity to any of the related companies or to any other entity, he or she may only present such opportunity to us if such other entity rejects the opportunity. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company; such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue; and such person has no fiduciary or contractual obligation to present the opportunity to any other person or entity.
Each of Liberty Broadband and Liberty TripAdvisor has renounced its rights to certain business opportunities and its respective certificate of incorporation contains provisions deeming directors and officers not in breach of their fiduciary duties in certain cases for directing a corporate opportunity to another person or entity (including any of the related companies) instead of such company. Similarly, as noted above, our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company; such opportunity is one we
are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue; and such person has no fiduciary or contractual obligation to present the opportunity to any other person or entity.
In addition, LMC will adopt a policy pursuant to which any business combination opportunity that is a corporate opportunity of LMC that may also be a business combination opportunity for our company will first be presented to a standing committee of the board of directors of LMC for consideration as to whether LMC desires to pursue such business combination opportunity as a direct investment or to present such opportunity to our company for consideration. John C. Malone, Chairman of the Board of LMC, will be the sole member of that committee and will not serve in any fiduciary capacity at our company.
Ownership by our Directors and Officers in Other Entities
Most of our directors and officers continue to own stock and options to purchase stock in one or more of the related companies. Additionally, our directors or officers may own disproportionate interests (in percentage or value terms) in any of LMC’s tracking stocks. These ownership interests and/or such disparity could create, or appear to create, potential conflicts of interest when the applicable individuals are faced with decisions that could have different implications for our company and any of the related companies.
Selection of Service Providers
In addition to any services provided under the services agreement with LMC, we expect to engage service providers (including attorneys and consultants) that may also provide services to our sponsor and any of the related companies. We intend to select these service providers based on a number of factors, including expertise and experience, knowledge of related or similar products, quality of service, reputation in the marketplace, relationships with one or more of the related companies or others, and price. These service providers may have business, financial, or other relationships with one or more of the related companies. These relationships may or may not influence our selection of these service providers. In such circumstances, there may be a conflict of interest between us, on the one hand, and one or more of the related companies, on the other hand, if we determine not to engage or continue to engage these service providers. The service providers selected by us may charge different rates to different recipients based on the specific services provided, the personnel providing the services, or other factors. As a result, the rates paid with respect to these service providers by us, on the one hand, may be more or less favorable than the rates paid by LMC, on the other hand.
Sponsor Indemnity
Our sponsor will agree that it will be liable to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) 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 the lesser of: (1) $10.00 per public share; and (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. 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. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 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 will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses. We believe the likelihood of our sponsor having to
indemnify the trust account is limited because we will endeavor to have all vendors and prospective target businesses as well as other entities execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account.
Facilities
We currently maintain our executive offices at 12300 Liberty Boulevard, Englewood, CO 80112. The cost for this space is included in the $91,666 per month fee that we will pay LMC and certain of its subsidiaries for office space, administrative and support services. We consider our current office space adequate for our current operations.
Employees
We currently have 22 officers and do not intend to have any full-time employees prior to the completion of our initial business combination. Such officers are all employees of LMC and receive their compensation directly from LMC. 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 to our company will 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, Series A common stock 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 accounting firm.
We will provide stockholders with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to stockholders to assist them in assessing the target business. These financial statements may be required to be prepared in accordance with, or be reconciled to, 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, 2022 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirements on our internal control over financial reporting. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
Prior to the effectiveness of the registration statement of which this prospectus forms a part, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the 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 stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the end of that 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.
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
Our directors, director nominees and executive officers are as follows:
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Name
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Age
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Title
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Gregory B. Maffei
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60
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President, Chief Executive Officer and Director
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Albert E. Rosenthaler
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61
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Chief Corporate Development Officer
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Brian J. Wendling
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48
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Chief Accounting Officer and Principal Financial Officer
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Renee L. Wilm
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46
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Chief Legal Officer, Chief Administrative Officer and Director Nominee
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Ajay Menon
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58
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Director Nominee
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John E. Welsh III
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69
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Director Nominee
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Geoffrey Y. Yang
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61
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Director Nominee
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Gregory B. Maffei
Mr. Maffei has served as the President and Chief Executive Officer and Director of our company since our inception in November 2020. Mr. Maffei has served as a director and the President and Chief Executive Officer of LMC (including its predecessor) since May 2007, Liberty Broadband since June 2014. Mr. Maffei previously served as a director and the President and Chief Executive Officer of GCI Liberty from March 2018 to December 2020. He has served as the President and Chief Executive Officer of Liberty TripAdvisor since July 2013 and as its Chairman of the Board since June 2015. Mr. Maffei also served as the President and Chief Executive Officer of Qurate Retail (including its predecessor) from February 2006 to March 2018, having served as its CEO-Elect from November 2005 through February 2006. Prior thereto, Mr. Maffei served as President and Chief Financial Officer of Oracle Corporation (“Oracle”), Chairman, President and Chief Executive Officer of 360networks Corporation (“360networks”), and Chief Financial Officer of Microsoft Corporation (“Microsoft”).
As a director, Mr. Maffei has served as (i) Chairman of the Board of Qurate Retail since March 2018 and a director of Qurate Retail (including its predecessor) since November 2005, (ii) Chairman of the Board of Liberty TripAdvisor since June 2015 and a director since July 2013, (iii) a director of Liberty Broadband since June 2014, (iv) the Chairman of the Board of Tripadvisor since February 2013, (v) the Chairman of the Board of Live Nation since March 2013 and as a director since February 2011, (vi) the Chairman of the Board of Sirius XM since April 2013 and as a director since March 2009, (vii) a director of Zillow Group, Inc. since February 2015, having previously served as a director of its predecessor, Zillow, Inc., from May 2005 to February 2015, and (viii) a director of Charter since May 2013. Mr. Maffei served as (i) a director of DIRECTV and its predecessors from February 2008 to June 2010, (ii) a director of Electronic Arts, Inc. from June 2003 to July 2013, (iii) a director of Barnes & Noble, Inc. from September 2011 to April 2014, (iv) Chairman of the Board of Starz from January 2013 until its acquisition by Lions Gate Entertainment Corp. in December 2016 and (v) the Chairman of the Board of Pandora Media, Inc. from September 2017 to February 2019.
Mr. Maffei brings significant financial and operational experience based on his senior policy making positions at LMC, Qurate Retail (including its predecessor), Liberty TripAdvisor, Liberty Broadband, Oracle, 360networks and Microsoft and his public company board experience. He provides our board with executive leadership perspective on the operations and management of large public companies and risk management principles.
Albert E. Rosenthaler
Mr. Rosenthaler has served as the Chief Corporate Development Officer of our company since our inception in November 2020. Mr. Rosenthaler has served as Chief Corporate Development Officer of LMC, Qurate Retail, Liberty TripAdvisor and Liberty Broadband since October 2016. He previously served as Chief Corporate Development Officer of GCI Liberty and Liberty Expedia from March 2018 to
December 2020 and October 2016 to July 2019, respectively. Mr. Rosenthaler also previously served as Chief Tax Officer of LMC, Qurate Retail, Liberty TripAdvisor and Liberty Broadband from January 2016 to September 2016 and Liberty Expedia from March 2016 to September 2016. Prior to that, he served as a Senior Vice President of LMC (including its predecessor) from May 2007 to December 2015, Qurate Retail (including its predecessor) from April 2002 to December 2015, Liberty TripAdvisor from July 2013 to December 2015 and Liberty Broadband from June 2014 to December 2015. He holds a Bachelor of Arts degree from Olivet College and a Master of Accounting Science from the University of Illinois.
Brian J. Wendling
Mr. Wendling has served as the Chief Accounting Officer and Principal Financial Officer of our company since our inception in November 2020. Mr. Wendling has served as Chief Accounting Officer and Principal Financial Officer of LMC, Qurate Retail and Liberty Broadband since January 2020 and July 2019, respectively. He previously served as Chief Accounting Officer and Principal Financial Officer of GCI Liberty to December 2020, and as Senior Vice President and Controller of each of LMC, Qurate Retail and Liberty Broadband from January 2016 to December 2019 and GCI Liberty from March 2018 to December 2019. In addition, Mr. Wendling has served as a Senior Vice President and Chief Financial Officer of Liberty TripAdvisor since January 2016, and he previously served as Vice President and Controller of Liberty TripAdvisor from August 2014 to December 2015. He previously served as Senior Vice President of Liberty Expedia Holdings, Inc. (“Liberty Expedia”) from March 2016 to July 2019, and Vice President and Controller of LMC (including its predecessor) from November 2011 to December 2015, Qurate Retail from November 2011 to December 2015 and Liberty Broadband from October 2014 to December 2015. Prior thereto, Mr. Wendling held various positions with LMC and Qurate Retail and their predecessors since 1999.
Renee L. Wilm
Ms. Wilm has served as the Chief Legal Officer of our company since our inception in November 2020, served as Chief Legal Officer of GCI Liberty from September 2019 to December 2020 and has agreed to serve on our Board following completion of this offering. Ms. Wilm has served as Chief Legal Officer of LMC, Qurate Retail, Liberty TripAdvisor and Liberty Broadband since September 2019. Ms. Wilm has also been designated to serve as Chief Administrative Officer of our company, LMC, Qurate Retail, Liberty TripAdvisor and Liberty Broadband. Previously, Ms. Wilm was a Senior Partner with the law firm Baker Botts L.L.P., where she represented LMC, Qurate Retail, Liberty TripAdvisor, Liberty Broadband and GCI Liberty and their predecessors for over twenty years, specializing in mergers and acquisitions, complex capital structures and shareholder arrangements, as well as securities offerings and matters of corporate governance and securities law compliance. At Baker Botts, Ms. Wilm was a member of the Executive Committee, the East Coast Corporate Department Chair and Partner-in-Charge of the New York office. Ms. Wilm holds a Bachelor of Business Administration with High Honors in Finance from Hofstra University and a Juris Doctorate from St. John’s University School of Law.
Ajay Menon
Dr. Menon has served as President and Chief Executive Officer of Colorado State University Research Foundation (“CSURF”) since October 2019, where he is responsible for the protection, management and commercialization of intellectual property resulting from research at Colorado State University (“CSU”) and oversees the services that CSURF provides to both CSU and institutions affiliated with CSU. Dr. Menon served as Dean of CSU’s College of Agricultural Sciences and director of the Colorado Agriculture Experiment Station from July 2015 until August 2019. Dr. Menon served as Dean of CSU’s College of Business from July 2002 until June 2015. Dr. Menon’s teaching and research expertise lie in the areas of international marketing, new product development and management and strategic market planning. From November 2011 to August 2013, as appointed by the Governor of Colorado, Dr. Menon served as the state’s first Chief Innovation Officer. In that role, he helped establish and lead the Colorado Innovation Network to develop an ecosystem in Colorado that cultivates entrepreneurial and innovative activities. Dr. Menon has also served as a director on the boards of directors or advisors to for-profit and nonprofit organizations including the Colorado Innovation Network, Junior Achievement — Rocky Mountain, Inc., Colorado National Bancorp, World’s Fresh Waters, Chile, Convera Corp., Women’s Vision Foundation, Envirofit Corp.
and the Better Business Bureau of Northern Colorado. Dr. Menon holds a Ph.D. in Marketing and joined CSU in 1991 as a member of the Marketing Department faculty.
John E. Welsh III
Mr. Welsh has served as a director of Liberty Broadband since November 2014. Mr. Welsh has served as the President of Avalon Capital Partners LLC, an investment firm, since 2002. He served as a director of CIP Management LLC from October 2000 to December 2002 and as Managing Director and Vice-Chairman of the Board of SkyTel Communications, Inc. from 1992 to 1999. Prior to 1992, Mr. Welsh was Managing Director of Investment Banking of Prudential Securities, Inc. and Co-Head of the Mergers and Acquisitions Department.
Mr. Welsh served as a director of General Cable Corp. from 1997 to June 2018 and Chairman of the Board from August 2001 to June 2018. He also served as a director of Spreckels Industries, Inc. and York International, Inc. from 1996 to 2000, and Integrated Electrical Services Corp. from 2006 to 2013.
Geoffrey Y. Yang
Mr. Yang has served as a founding partner and Managing Director of Redpoint Ventures (a global private equity and venture capital firm based in Menlo Park, California) since 1999. Mr. Yang also serves as CEO and founder of Performance Health Sciences (d/b/a Apeiron Life), located in Menlo Park, California. Prior to founding Redpoint, Mr. Yang previously served as a General Partner with Institutional Venture Partners (a private equity and venture capital firm in Menlo Park, California), which he joined in 1987. Mr. Yang has over 35 years of experience in the venture capital industry and has helped found or served on the boards of a variety of consumer media, internet, and infrastructure companies. Mr. Yang also has served as a director to the boards of directors of AT&T Inc. since June 2016 and Franklin Resources, Inc. since March 2011. Mr. Yang holds a B.S.E. in engineering from Princeton University and an M.B.A. from Stanford University.
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. Following the consummation of our initial business combination, our board of directors will be divided into three classes, with only one class of directors being elected in each year, and with each class (except for those directors appointed prior to our first annual meeting of stockholders) serving a three-year term. The term of office of the first class of directors, consisting of Dr. Menon, will expire at our first annual meeting of stockholders following the consummation of our initial business combination. The term of office of the second class of directors, consisting of Mr. Yang and Mr. Welsh, will expire at our second annual meeting of stockholders following the consummation of our initial business combination. The term of office of the third class of directors, consisting of Mr. Maffei and Ms. Wilm, will expire at our third annual meeting of stockholders following the consummation of our initial business combination.
Prior to consummation of our initial business combination, holders of our Series F common stock will have the right to elect all of our directors and remove members of our board of directors for any reason. Holders of our public shares will not have the right to vote on the election of directors during such time. These provisions of our amended and restated certificate of incorporation may only be amended if approved by holders of more than 50% of the total voting power of the outstanding shares of our common stock entitled to vote thereon as well as more than 50% of the outstanding Series F common stock. Approval of our initial business combination will require the affirmative vote of a majority of our board directors, which must include a majority of our independent directors. Subject to any other special rights applicable to the stockholders, prior to our initial business combination, any vacancies on our board of directors may be filled by holders of a majority of the outstanding shares of our Series F common stock.
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 bylaws as it deems appropriate. Our amended and restated bylaws will provide that our officers may consist of a Chief Executive Officer, a President, a
Principal Financial Officer, Vice Presidents, a Secretary, a Treasurer, and such other offices as may be determined by the board of directors.
Director Independence
Nasdaq listing rules 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 executive officer or employee of the company or any of its parents or 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 intend to add “independent directors” as defined in Nasdaq listing rules and applicable SEC rules prior to completion of this offering. Upon the effectiveness of the registration statement of which this prospectus forms a part, we expect to have three “independent directors” as defined in the Nasdaq listing rules and applicable SEC rules prior to completion of this offering. Our board has determined that each of Dr. Menon, Mr. Yang and Mr. Welsh are independent directors under applicable SEC and Nasdaq listing rules. Our independent directors will have regularly scheduled meetings at which only independent directors are present.
Executive Officer and Director Compensation
Our executive officers are all employees of LMC and receive their compensation directly from LMC. Upon completion of this offering, we will execute a services agreement with LMC pursuant to which LMC will cause our management team and other LMC personnel to provide us with the services we need to conduct our business in exchange for a flat monthly fee of $91,666. We do not intend to provide any cash compensation to our employees prior to our initial business combination.
Upon the closing of this offering, we will begin providing our non-employee directors with annual cash compensation in the amount of $75,000.
In addition, our sponsor, LMC and its subsidiaries, and their officers and directors will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers or directors or LMC or its other subsidiaries.
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 by us to our directors and executive officers will be fully disclosed to stockholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed business combination. It is unlikely the amount of such compensation will be known at the time such materials are distributed, because the directors of the post-combination business will be responsible for determining executive officer and director compensation. Any compensation to be paid to our executive officers 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, although certain of the related companies are. 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
Upon the effective date of the registration statement of which this prospectus forms a part, our board of directors will have four standing committees: an audit committee, a compensation committee, a nominating and corporate governance committee, and an executive committee. Subject to phase-in rules and a limited exception, the rules of Nasdaq and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors. Subject to phase-in rules and a limited exception,
the rules of Nasdaq require that the compensation committee of a listed company be comprised solely of independent directors. Both our audit committee and our compensation committee will be composed 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. The members of our audit committee will be Dr. Menon, Mr. Yang and Mr. Welsh. Mr. Welsh will serve as the chairman of the audit committee.
Each member of the audit committee is financially literate and our board of directors has determined that Mr. Welsh qualifies as an “audit committee financial expert” as defined in applicable SEC rules.
We will adopt an audit committee charter, which will detail the scope 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; 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. The members of our compensation committee will be Dr. Menon, Mr. Yang and Mr. Welsh. Dr. Menon will serve as chairman of the compensation committee. We will adopt a compensation committee charter, which will detail the scope and principal functions of the compensation committee, including:
•
reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;
•
reviewing and approving the compensation of all of our other executive officers;
•
reviewing our executive compensation policies and plans;
•
implementing and administering our incentive compensation equity-based remuneration plans;
•
assisting management in complying with our proxy statement and annual report disclosure requirements;
•
approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees;
•
producing a report on executive compensation to be included in our annual proxy statement; and
•
reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
The charter will also provide that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, 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.
Nominating and Corporate Governance Committee
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish a nominating and corporate governance committee of the board of directors. The members of our nominating and corporate governance committee will be Dr. Menon, Mr. Yang and Mr. Welsh. Mr. Yang will serve as chair of the nominating and corporate governance committee.
We will adopt a nominating and corporate governance committee charter, which will detail the purpose and responsibilities of the nominating and corporate governance committee, including:
•
identifying, screening and reviewing individuals qualified to serve as directors, consistent with criteria approved by the board, and recommending to the board of directors candidates for nomination for election at the annual meeting of stockholders or to fill vacancies on the board of directors;
•
developing and recommending to the board of directors and overseeing implementation of our corporate governance guidelines;
•
coordinating and overseeing the annual self-evaluation of the management in the governance of the company; and
•
reviewing our overall corporate governance from time to time and recommending improvements as and when necessary.
The charter will also provide that the nominating and corporate governance committee may, in its sole discretion, retain or obtain the advice of, and terminate, any search firm to be used to identify director candidates, and will be directly responsible for approving the search firm’s fees and other retention terms.
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 stockholders. Prior to our initial business combination, holders of our public shares will not have the right to recommend director candidates for nomination to our board of directors.
Executive Committee
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish an executive committee of the board of directors, consisting of Mr. Maffei and Ms. Wilm. Mr. Maffei will be the chairman of the executive committee. Except for the approval of our initial business combination, which will require the affirmative vote of a majority of our board of directors, which must include a majority of our independent directors, or as specifically prohibited by the DGCL, the executive committee may exercise all the powers and authority of our board of directors in the management of our business and affairs, including the power and authority to authorize the issuance of shares of our capital stock.
Compensation Committee Interlocks and Insider Participation
None of our executive officers currently serves, and in the past year has not served, (i) as a member of the compensation committee or board of directors of another entity, one of whose executive officers served on our compensation committee, or (ii) as a member of the compensation committee of another entity, one of whose executive officers served on our board of directors.
Code of Ethics
Prior to the closing of this offering, we will have adopted a code of ethics and business conduct (our “Code of Ethics”) applicable to our directors, officers and employees. A copy of our Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K. See “Where You Can Find Additional Information.”
Conflicts of Interest
All of our officers also serve as executive officers of one or more of the related companies, and there are overlapping directors with such entities. Our officers and members of our board of directors have fiduciary duties to our stockholders. Likewise, any such persons who serve in similar capacities at any of the related companies have fiduciary duties to that company’s stockholders. Therefore, such persons may have conflicts of interest or the appearance of conflicts of interest with respect to matters involving or affecting us and one or more of related companies to which they owe fiduciary duties.
Each of our officers and directors has, and any of them in the future may have, additional fiduciary or contractual obligations to one or more other entities (including, without limitation, to one or more of the entities listed in this section) pursuant to which such officer or director may be required to present a business combination opportunity to such entities before he or she presents such opportunity to us. Also, none of LMC, our sponsor or any of our directors and officers is prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity to which he or she has then-current fiduciary or contractual obligations to present such opportunity to any of the related companies or to any other entity, he or she may only present such opportunity to us if such other entity rejects the opportunity. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company; such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue; and such person has no fiduciary or contractual obligation to present the opportunity to any other person or entity.
Moreover, most of our directors and officers continue to own stock and options to purchase stock in one or more of the related companies. Additionally, our directors or officers could own disproportionate interests (in percentage or value terms) in any of LMC’s tracking stocks. These ownership interests and/or such disparity could create, or appear to create, potential conflicts of interest when the applicable individuals are faced with decisions that could have different implications for our company and the related companies.
In addition to the matters discussed in “Proposed Business — Conflicts of Interest,” potential investors should also be aware of the following other potential conflicts of interest:
•
None of our officers or directors is required to, nor will he or she, commit his or her full time to our affairs and, accordingly, each of our officers may have conflicts of interest in allocating his or her time among our operations, including our search for an initial business combination, and these other businesses.
•
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 of which they are also officers or directors. Our management may be required to present such business opportunities to such entities before presenting such opportunity to us.
•
Our sponsor, executive officers and directors will agree to waive their redemption rights with respect to our common stock held by them in connection with the completion of our initial business combination. Additionally, our sponsor, executive officers and directors will agree to waive their redemption rights with respect to our common stock held by them if we fail to consummate our initial business combination within 24 months (or 27 months if an agreement in principle event has occurred) after the closing of this offering or during any Extension Period. However, if our sponsor, officers or directors then hold any 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 time frame to complete our initial business combination. If we do not complete our initial business combination within such applicable time period, the proceeds of the sale of the private placement warrants held in the trust account will be used to fund the redemption of our public shares, and the private placement warrants will expire worthless. With certain exceptions as described under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants,” the founder shares will not be transferable, assignable or salable by our sponsor until the earlier of: (1) one year after the completion of our initial business combination; and (2) subsequent to our initial business combination, (x) the date on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property or (y) if the last reported sale price of our Series A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination. With certain exceptions, the private placement warrants and the shares of our common stock underlying such warrants, will not be transferable, assignable or salable by our sponsor until 30 days after the completion of our initial business combination. Since our sponsor, officers and directors may directly or indirectly own our common stock 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 key personnel may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such key personnel 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.
In general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if:
•
the corporation is financially able to exploit the opportunity;
•
the opportunity is within the corporation’s line of business;
•
the corporation has an interest or expectancy in the opportunity; and
•
by taking the opportunity for his or her own, the corporate fiduciary will thereby be placed in a position inimical to his duties to the corporation.
Accordingly, as a result of multiple business affiliations, our officers and directors have similar legal obligations or duties relating to presenting business opportunities meeting the above-listed criteria to multiple entities. Furthermore, our amended and restated certificate of incorporation will provide that we renounce
our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company; such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue; and such person has no fiduciary or contractual obligation to present the opportunity to any other person or entity. Below is a table summarizing the entities to which our officers, directors and director nominees currently have fiduciary duties or contractual obligations that may present a conflict of interest:
|
Name of Individual
|
|
|
Entity Name
|
|
|
Entity’s Business
|
|
|
Affiliation
|
|
|
Gregory B. Maffei
|
|
|
Liberty Media Corporation
|
|
|
Media/Tech/Telecom
|
|
|
Director/CEO/President
|
|
|
|
|
|
Liberty Broadband Corporation
|
|
|
Telecom
|
|
|
Director/CEO/President
|
|
|
|
|
|
Zillow Group, Inc.
|
|
|
Real Estate/Internet
|
|
|
Director
|
|
|
|
|
|
Charter Communications, Inc.
|
|
|
Telecom
|
|
|
Director
|
|
|
|
|
|
Qurate Retail, Inc.
|
|
|
Shopping/Media/Internet
|
|
|
Chairman/Director
|
|
|
|
|
|
Liberty TripAdvisor Holdings, Inc.
|
|
|
Travel/Internet
|
|
|
Chairman/Director/CEO/President
|
|
|
|
|
|
Tripadvisor, Inc.
|
|
|
Travel/Internet
|
|
|
Chairman/Director
|
|
|
|
|
|
Live Nation Entertainment, Inc.
|
|
|
Entertainment/Media
|
|
|
Chairman/Director
|
|
|
|
|
|
Sirius XM Holdings Inc.
|
|
|
Entertainment/Media
|
|
|
Chairman/Director
|
|
|
Albert E. Rosenthaler
|
|
|
Liberty Media Corporation
|
|
|
Media/Tech/Telecom
|
|
|
Chief Corporate Development Officer
|
|
|
|
|
|
Liberty Broadband Corporation
|
|
|
Telecom
|
|
|
Chief Corporate Development Officer
|
|
|
|
|
|
Qurate Retail, Inc.
|
|
|
Shopping/Media/Internet
|
|
|
Chief Corporate Development Officer
|
|
|
|
|
|
Liberty TripAdvisor Holdings, Inc.
|
|
|
Travel/Internet
|
|
|
Chief Corporate Development Office/Director
|
|
|
|
|
|
Tripadvisor, Inc.
|
|
|
Travel/Internet
|
|
|
Director
|
|
|
Brian J. Wendling
|
|
|
Liberty Media Corporation
|
|
|
Media/Tech/Telecom
|
|
|
Chief Accounting Officer/Principal Financial Officer
|
|
|
|
|
|
Liberty Broadband Corporation
|
|
|
Telecom
|
|
|
Chief Accounting Officer/Principal Financial Officer
|
|
|
|
|
|
Qurate Retail, Inc.
|
|
|
Shopping/Media/Internet
|
|
|
Chief Accounting Officer/Principal Financial Officer
|
|
|
|
|
|
Liberty TripAdvisor Holdings, Inc.
|
|
|
Travel/Internet
|
|
|
Senior Vice President/Chief Financial Officer
|
|
|
Renee L. Wilm
|
|
|
Liberty Media Corporation
|
|
|
Media/Tech/Telecom
|
|
|
Chief Legal Officer/Chief Administrative Officer
|
|
|
|
|
|
Liberty Broadband Corporation
|
|
|
Telecom
|
|
|
Chief Legal Officer/Chief Administrative Officer
|
|
|
|
|
|
Qurate Retail, Inc.
|
|
|
Shopping/Media/Internet
|
|
|
Chief Legal Officer/Chief Administrative Officer
|
|
|
|
|
|
Liberty TripAdvisor Holdings, Inc.
|
|
|
Travel/Internet
|
|
|
Chief Legal Officer/Chief Administrative Officer
|
|
|
Ajay Menon
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
John E. Welsh III
|
|
|
Liberty Broadband Corporation
|
|
|
Telecom
|
|
|
Director
|
|
|
|
|
|
Avalon Capital Partners LLC
|
|
|
Investment Management
|
|
|
President
|
|
|
Name of Individual
|
|
|
Entity Name
|
|
|
Entity’s Business
|
|
|
Affiliation
|
|
|
Geoffrey Y. Yang
|
|
|
Redpoint Ventures
AT&T Inc.
Franklin Resources, Inc.
Scribd, Inc.
TasteMade, Inc.
Rock the Bells
Esquel Holdings, Inc.
Performance Health Sciences, LLC (d/b/a Apeiron Life)
|
|
|
Venture Capital
Telecom
Investment Management
Books
Food/Travel
Music/Media
Clothing
Healthcare/Tech
|
|
|
Founding Partner/Managing Director
Director
Director
Director
Director
Chairman/Director
Director
Director/CEO
|
|
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 will 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 rejects the opportunity and he or she determines to present the opportunity to us.
In addition, LMC will adopt a policy pursuant to which any business combination opportunity that is a corporate opportunity of LMC that may also be a business combination opportunity for our company will first be presented to a standing committee of the board of directors of LMC for consideration as to whether LMC desires to pursue such business combination opportunity as a direct investment or to present such opportunity to our company for consideration. John C. Malone, Chairman of the Board of LMC, will be the sole member of that committee and will not serve in any fiduciary capacity at our company.
We do not believe, however, that any of the foregoing fiduciary duties or contractual obligations or the LMC policy described above will materially affect our ability to complete our initial business combination. As noted above, our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company; such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue; and such person has no fiduciary or contractual obligation to present the opportunity to any other person or entity.
In the event that we submit our initial business combination to our public stockholders for a vote, our sponsor, executive officers and directors will agree, and their permitted transferees will agree, to vote our common stock held by them in favor of our initial business combination.
Limitation on Liability and Indemnification of Officers and Directors
Our amended and restated certificate of incorporation will provide that our officers and directors will be indemnified by us to the fullest extent authorized by Delaware law, as it now exists or may in the future be amended. In addition, our amended and restated certificate of incorporation will provide that our directors will not be personally liable for monetary damages to us or stockholders for breaches of their fiduciary duty as directors, except to the extent such exemption from liability or limitation thereof is not permitted by the DGCL.
We will enter into agreements with our officers and directors to provide contractual indemnification in addition to the indemnification provided for in our amended and restated certificate of incorporation. Our amended and restated bylaws also permit us to maintain insurance on behalf of any officer, director or employee for any liability arising out of his or her actions, regardless of whether Delaware law would permit such indemnification. We will obtain 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.
A stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against officers and directors pursuant to these indemnification provisions.
We believe that these provisions, the 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, 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 STOCKHOLDERS
The following table sets forth information regarding the beneficial ownership of our common stock as of the date of this prospectus, and as adjusted to reflect the sale of our common stock 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 outstanding shares of common stock;
•
each of our executive officers, directors and director nominees; and
•
all our executive 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 shares of common stock beneficially owned by them. The following table does not reflect record or beneficial ownership of the private placement warrants as these warrants are not exercisable within 60 days of the date of this prospectus.
The table below assumes that the underwriters do not exercise their over-allotment option, that our sponsor forfeits an aggregate of 1,875,000 founder shares and that there are 62,500,000 shares of our common stock outstanding after this offering.
The table below does not reflect any units that may be purchased pursuant to our directed unit program described under “Underwriting — Directed Unit Program.”
|
Name and Address of Beneficial Owner(1)
|
|
|
Number of
Shares
Beneficially
Owned
|
|
|
Approximate Percentage of
Outstanding Common Stock
|
|
|
|
Before
Offering
|
|
|
After
Offering(2)
|
|
|
Liberty Media Acquisition Sponsor LLC (our sponsor)(3)
|
|
|
|
|
12,500,000(2)
|
|
|
|
|
|
100%
|
|
|
|
|
|
20%
|
|
|
|
Gregory B. Maffei
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Albert E. Rosenthaler
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Brian J. Wendling
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Renee L. Wilm
|
|
|
|
|
—
|
|
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Ajay Menon
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John E. Welsh III
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Geoffrey Y. Yang
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All directors and executive officers as a group (7 individuals)
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(1)
Unless otherwise noted, the business address of each of the following entities or individuals is 12300 Liberty Boulevard, Englewood, CO 80112.
(2)
Interests shown consist solely of shares of Series F common stock which are referred to herein as founder shares. Such shares will automatically convert into shares of Series B common stock at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis, as described under “Description of Securities.” Prior to and following our initial business combination, each share of Series B common stock is convertible, at the option of the holder, into one share of our Series A common stock. Excludes forward purchase securities that will only be issued, if at all, at the time of our initial business combination.
(3)
LMC is the sole member and manager of our sponsor. LMC may be deemed to beneficially own the shares held by our sponsor by virtue of its direct ownership over our sponsor.
Upon the completion of this offering, our sponsor will beneficially own 20% of the then issued and outstanding shares of our common stock (assuming our sponsor does not purchase any units in this offering). As a result of holding substantially all of the founder shares, our sponsor will have the right, prior to our initial business combination, to elect all of our directors and remove any director for any reason. Holders of our public shares will not have the right to appoint any directors to our board of directors prior to our
initial business combination. In addition, because of this ownership block, our sponsor may be able to effectively influence the outcome of all other matters requiring approval by our stockholders, including amendments to our amended and restated certificate of incorporation and approval of significant corporate transactions. If we increase or decrease the size of this offering, we will effect a stock dividend or share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Series F common stock immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of the outstanding shares of our common stock upon the consummation of this offering.
Our sponsor will commit, pursuant to a written agreement, to purchase an aggregate of 9,000,000 private placement warrants (or 10,000,000 if the underwriters’ over-allotment option is exercised in full) at a price of $1.50 per warrant ($13,500,000 in the aggregate or $15,000,000 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. Each private placement warrant entitles the holder thereof to purchase one share of Series A common stock at a price of $11.50 per share, subject to adjustment as provided herein. A portion of the purchase price of the private placement warrants 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 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or during any Extension Period, the proceeds of the sale of the private placement warrants held in the trust account will be used to fund the redemption of our public shares, and the private placement warrants will expire worthless. The private placement warrants are identical to the warrants sold as part of the units in this offering except that, so long as they are held by our sponsor or its permitted transferees: (1) they will not be redeemable by us; (2) they (including the Series A common stock issuable upon exercise of these warrants) may not be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial business combination (except as described herein under “— Transfers of Founder Shares and Private Placement Warrants”); (3) they may be exercised by the holders on a cashless basis; and (4) the holders thereof (including with respect to the shares of common stock issuable upon exercise of these warrants) are entitled to registration rights.
Prior to this offering, we will enter into a forward purchase agreement pursuant to which our sponsor will agree to acquire forward purchase units for $250,000,000, in the aggregate, in connection with our initial business combination. Each forward purchase unit will consist of one share of Series B common stock, or a forward purchase share, and one-fifth of one warrant to purchase one share of Series A common stock, or a forward purchase warrant, at a purchase price of $10.00 per unit, and will be sold in a private placement that will close substantially concurrently with the consummation of our initial business combination. The terms of the forward purchase warrants will generally be identical to the terms of the redeemable warrants included in the units being issued in this offering. In addition, our sponsor will have the right, but is not required, to provide, or cause LMC or any of its wholly owned subsidiaries to provide, incremental funding to us in connection with our initial business combination by purchasing additional shares of Series B common stock at a purchase price of $10.00 per share, which shares would also be sold in a private placement substantially concurrently with the consummation of our initial business combination.
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 Placement Warrants
The founder shares and private placement warrants (and any shares of Series A common stock issued upon 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 sponsor, executive officers and directors. Those lock-up provisions will provide that such securities are not transferable, assignable 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 and (B) subsequent to our initial business combination, (x) the date on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property or (y) if the last reported sale price of our Series A common stock equals or exceeds $12.00 per share (as adjusted for
stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after completion of our initial business combination, and (2) in the case of the private placement warrants and the shares of Series A common stock issuable upon exercise of such warrants, until 30 days after the completion of our initial business combination. Notwithstanding the above, during the applicable lock-up period our sponsor will be able to transfer founder shares and private placement warrants (or the shares of Series A common stock issuable on the exercise of such warrants) (a) to our directors or officers, LMC’s directors or officers, their respective family members and entities formed by such persons for investment or estate planning purposes which are controlled by such persons or formed for their benefit or for charitable purposes, (b) to LMC or any entity in which LMC or the officers and directors of LMC hold, in the aggregate, securities representing no less than 25% of the outstanding voting power of such entity (so long as no other holder or group holds a higher percentage of the voting power of such entity), and the subsidiaries of each of the foregoing, (c) to any corporation or other entity which, as a result of any spinoff, splitoff or other distribution transaction, becomes the beneficial owner of the founder shares and private placement warrants (and shares issuable upon the exercise of such warrants), or (d) 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; provided, however, that in the case of clauses (a) through (d) such permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions. In addition, our sponsor or its permitted transferees will be permitted to pledge or grant a security interest in such securities to secure bona fide indebtedness or engage in certain hedging transactions; provided, that the holder thereof retains voting control over such securities prior to delivery of shares upon foreclosure or upon satisfaction of the hedge. In the event of any liquidation prior to our completion of our initial business combination or our completion of a liquidation, merger, stock exchange, reorganization or other similar transaction which results in all of our public stockholders having the right to exchange their shares of Series A common stock for cash, securities or other property subsequent to our completion of our initial business combination, the lockup period will be deemed terminated. In no event will any such transfer restrictions prohibit or otherwise restrict LMC’s ability to reattribute its interest in our sponsor or us between or among its tracking stock groups, combine such tracking stock groups or otherwise take actions with respect to its tracking stock groups provided for or permitted by LMC’s organizational documents or its policies.
Registration and Preemptive Rights
The holders of the founder shares, forward purchase shares, forward purchase warrants, private placement warrants and warrants that may be issued upon conversion of working capital loans (and any shares of common stock issuable upon the exercise of the private placement warrants, forward purchase warrants or warrants issued upon conversion of working capital loans and upon conversion of the founder shares) will be entitled to registration rights with respect to private placement warrants, forward purchase warrants, warrants that may be issued upon conversion of working capital loans, warrants purchased by them in the open market and shares of Series A common stock purchased by them in the open market or issuable upon (1) conversion of the founder shares, (2) exercise of the private placement warrants, (3) conversion of the forward purchase shares and shares of Series B common stock purchased in connection with our initial business combination (if any), (4) exercise of the forward purchase warrants pursuant to an investor rights agreement and forward purchase agreement to be signed prior to or on the effective date of this offering requiring us to register such securities for resale, and (5) exercise of warrants issued upon conversion of working capital loans (if any). The holders of these securities can also demand that we register securities we may issue by way of a stock dividend, recapitalization, merger or similar transaction. The holder of these securities will be entitled to make up to three demands in any 12-month period under each agreement, excluding short form registration demands, that we register such securities. In addition, the holders will 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. The holders will also have registration rights in connection with certain hedging and financing transactions that they may enter into with respect to these securities. However, both the investor rights agreement and the forward purchase agreement will provide that we will not be required to effect or permit any registration or cause any registration statement to become effective until the securities covered thereby are released from their lock-up restrictions, as described herein. We will bear the expenses incurred in connection with the filing of any such registration statements.
Following the consummation of our initial business combination, our sponsor will have certain rights (which may be exercised in whole or in part) to maintain its proportionate interest in our then outstanding common stock or voting stock by purchasing additional securities as a result of certain issuances by our company. Our sponsor will have the right to purchase (in whole or in part) its pro rata share of such securities issuable in connection with the Triggering Event or, alternatively, if the issuance is (1) voting common stock, its pro rata share in shares of our Series B common stock, (2) voting preferred stock, its pro rata share in preferred stock with per share voting rights proportionate to a share of Series B common stock in the same proportion as a share of the new voting preferred has to a share of Series A common stock and, if applicable, conversion or exchange rights into shares of Series B common stock instead of Series A common stock or (3) other securities convertible, exercisable or exchangeable for voting stock, its pro rata share in such securities but convertible, exercisable or exchangeable for our Series B common stock as and to the extent of the conversion, exercise or exchange by the third-party holders. Such preemptive rights will not be applicable to the issuance of equity incentive plan awards (rather, our sponsor’s preemptive rights as to such awards are described below) or to shares issued upon the exercise of public warrants, private placement warrants or forward purchase warrants that are outstanding prior to or issued in connection with our initial business combination.
The price per security to be paid by our sponsor pursuant to the exercise of its preemptive rights in connection with a Triggering Event will be (1) the same price per security at which the securities are issued or sold in the relevant Triggering Event (for example, based on the transaction price in connection with an acquisition transaction or the sale price (net of any underwriting discounts, commissions or similar sale expenses) in the case of a financing transaction)), with the fair market value of any non-cash consideration to be determined in good faith by our board of directors (but without giving effect to the taxability of the underlying transaction) or (2) in the event our sponsor elects to receive shares of Series B common stock in lieu of a new series of voting common stock, the volume weighted average price of our Series A common stock during the 10 trading days immediately prior to the issuance of securities in connection with the Triggering Event.
In addition, our sponsor may defer its preemptive rights described above in connection with the issuance of nonstock securities convertible, exercisable or exchangeable for any series of our stock until the third-party holders of such securities have converted, exercised or exchanged for our stock. Furthermore, our sponsor will have preemptive rights following the consummation of our initial business combination to account for the exercise or exchange of employee stock options or other equity incentive awards or the vesting of restricted shares under any of our equity incentive plans (including any assumed by our company in connection with its initial business combination) and for other stock issuances upon the conversion, exercise or exchange of any other securities assumed by our company in connection with its initial business combination. The preemptive rights described in this paragraph provide our sponsor with a quarterly right to purchase (in whole or in part) its pro rata share of the stock issued during such quarter pursuant to the conversion, exercise or exchange of securities described in this paragraph or, if such stock is a new series of voting stock, its pro rata share in shares of our Series B common stock.
The price per share to be paid by our sponsor pursuant to the exercise of its quarterly preemptive rights will be (1) the volume weighted average price during the 10 trading days immediately prior to the end of the applicable quarter for the applicable stock issued (or, if such stock is not then listed or traded on a national securities exchange, the fair market value of such equity security as determined in good faith by our board of directors (but without giving effect to the taxability of the underlying transaction)), or (2) in the event our sponsor elects to receive Series B common stock in lieu of a new series of voting common stock, the volume weighted average price of our Series A common stock during the 10 trading days immediately prior to the end of the applicable quarter.
Our sponsor’s pro rata share in connection with the exercise of its preemptive rights will be an amount sufficient to maintain the percentage ownership of outstanding voting stock by our sponsor and LMC and its permitted transferees in the case of issuances of voting stock and other securities convertible, exercisable or exchangeable for voting stock, and an amount sufficient to maintain the percentage ownership of our outstanding common stock by our sponsor and LMC and its permitted transferees in the case of issuances of nonvoting stock or other securities convertible, exercisable or exchangeable for nonvoting stock.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In November 2020, our sponsor purchased an aggregate of 17,250,000 founder shares for an aggregate purchase price of $25,000. In November 2020, our sponsor contributed an aggregate of 2,875,000 founder shares to our capital for no consideration, resulting in our sponsor holding an aggregate of 14,375,000 founder shares, with an effective purchase price of approximately $0.0017 per share. If we increase or decrease the size of this offering, we will effect a stock dividend or share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Series F common stock immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of the outstanding shares of our common stock upon the consummation of this offering. As such, our sponsor will collectively beneficially own 20% of our issued and outstanding capital stock immediately after this offering (assuming our sponsor does not purchase units in this offering). Our sponsor does not intend to purchase any units in this offering. Up to 1,875,000 founder shares are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised.
Our sponsor will commit, pursuant to a written agreement, to purchase an aggregate of 9,000,000 private placement warrants (or 10,000,000 if the underwriters’ over-allotment option is exercised in full) at a price of $1.50 per warrant ($13,500,000 in the aggregate or $15,000,000 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. Each private placement warrant entitles the holder thereof to purchase one share of Series A common stock at a price of $11.50 per share, subject to adjustment as provided herein. The private placement warrants (including the Series A common stock issuable upon exercise of the private placement 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.
Prior to this offering, we will enter into a forward purchase agreement pursuant to which our sponsor will agree to acquire forward purchase units for $250,000,000, in the aggregate, in connection with our initial business combination. Each forward purchase unit will consist of one share of Series B common stock, or a forward purchase share, and one-fifth of one warrant to purchase one share of Series A common stock, or a forward purchase warrant, at a purchase price of $10.00 per unit, and will be sold in a private placement that will close substantially concurrently with the consummation of our initial business combination. The terms of the forward purchase warrants will generally be identical to the terms of the redeemable warrants included in the units being issued in this offering. In addition, our sponsor will have the right, but is not required, to provide, or cause LMC or any of its wholly owned subsidiaries to provide, incremental funding to us in connection with our initial business combination by purchasing additional shares of Series B common stock at a purchase price of $10.00 per share, which shares would be sold in a private placement substantially concurrently with the consummation of our initial business combination.
As described under “Proposed Business — Conflicts of Interest” and “Management — Conflicts of Interest,” each of our officers and directors has, and any of them in the future may have, additional fiduciary or contractual obligations to one or more entities pursuant to which such officer or director may be required to present a business combination opportunity to such entities before he or she presents such opportunity to us. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity to which he or she has then-current fiduciary or contractual obligations to present such opportunity to another entity, he or she may only present such opportunity to us if such other entity rejects the opportunity. For more information, see “Proposed Business — Conflicts of Interest” and “Management — Conflicts of Interest.”
We will enter into a services agreement and facilities sharing agreement pursuant to which we will also pay LMC and certain of its subsidiaries a total of $91,666 per month for office space, administrative and support services. Upon completion of our initial business combination or any liquidation, we may cease paying some or all of these monthly fees. Accordingly, in the event the completion of our initial business combination takes the maximum 27 months, subsidiaries of LMC will be paid a total of $2,474,982 ($91,666 per month) 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 LMC or its other subsidiaries will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers or directors or
LMC or its other subsidiaries 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 $300,000 to be used for a portion of the expenses of this offering. As of December 31, 2020, we had borrowed $154,483 under the promissory note with our sponsor. These loans are non-interest bearing, unsecured and are due at the earlier of December 31, 2021 and the closing of this offering. These loans will be repaid upon completion of this offering out of the $1,750,000 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 fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor, LMC or its subsidiaries may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $2,500,000 of such loans made to us may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor, LMC or its subsidiaries, if any, 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, if any, may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to our stockholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a stockholder meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive officer and director compensation.
Our sponsor, executive officers and directors will enter into a letter agreement with us, pursuant to which they will agree to waive: (a) their redemption rights with respect to our common stock held by them in connection with the completion of our initial business combination; (b) their redemption rights with respect to our common stock held by them in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we have not consummated our initial business combination within 24 months from the closing of this offering (or 27 months following an agreement in principle event) or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (c) 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 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or during any Extension Period (although our sponsor, officers and directors will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame). Additionally, if we seek stockholder approval in connection with our initial business combination, our sponsor, executive officers and directors will agree, pursuant to the terms of the letter agreement, and their permitted transferees will agree, to vote any of our common stock held by them in favor of our initial business combination.
We will enter into an investor rights agreement providing for registration rights with respect to private placement warrants, forward purchase warrants, warrants that may be issued upon conversion of working capital loans and shares of Series A common stock issuable upon (1) conversion of the founder shares, (2) exercise of the private placement warrants, (3) conversion of the forward purchase shares and shares of Series B common stock purchased in connection with our initial business combination (if any), (4) exercise of the forward purchase warrants and (5) exercise of warrants issued upon conversion of working capital loans (if any). The investor rights agreement additionally will provide that upon certain issuances of equity securities by us (other than issuances due to the exercise of warrants), our sponsor will have certain contractual preemptive rights which are intended to allow our sponsor and LMC to maintain their percentage ownership
of our outstanding common stock and voting stock after giving effect to the issuance. See “Principal Stockholders — Registration and Preemptive 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 of directors) 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 by us to our sponsor, officers or directors or LMC or its other subsidiaries.
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 expect not to consummate an initial business combination with a business that is owned by any of the related companies, or our sponsor, or its or their 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 accounting, valuation or appraisal firm that such initial business combination is fair to our company from a financial point of view. There will be no finder’s fees, reimbursements or cash payments made by us to our sponsor, LMC or its other subsidiaries, or their officers or directors, for services rendered to us prior to or in connection with the completion of our initial business combination, other than, the following payments, none of which will be made from the proceeds of this offering and the sale of the private placement warrants held in the trust account prior to the completion of our initial business combination:
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repayment of an aggregate of up to $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses;
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payment to certain subsidiaries of LMC of a total of $91,666 per month for office space, administrative and support services;
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payment of an annual fee of $75,000, payable in cash, to each of our independent directors for service on our board of directors;
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reimbursement for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination; and
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repayment of loans which may be made by our sponsor or LMC or its other subsidiaries to finance transaction costs in connection with an intended initial business combination, the terms of which have not been determined nor have any written agreements been executed with respect thereto. Up to $2,500,000 of such loans made to us may be convertible into warrants at a price of $1.50 per warrant at the option of the lender.
These payments may be funded using the net proceeds of this offering and the sale of the private placement warrants, in each case to the extent not held in the trust account or, upon the consummation 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
Pursuant to our amended and restated certificate of incorporation, our authorized capital stock will consist of 3,000,000,000 shares of Series A common stock, $0.0001 par value, 1,000,000,000 shares of Series B common stock, $0.0001 par value, 5,000,000,000 shares of Series C common stock, $0.0001 par value, 200,000,000 shares of Series F common stock, $0.0001 par value, and 50,000,000 shares of undesignated preferred stock, $0.0001 par value. The following description summarizes the material terms of our capital stock. Because it is only a summary, it may not contain all the information that is important to you.
Units
Each unit has an offering price of $10.00 and consists of one share of Series A common stock and one-fifth of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one share of Series A common stock at a price of $11.50 per share, subject to adjustment as described in this prospectus. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares of the company’s Series A common stock. This means only a whole warrant may be exercised at by a warrant holder following the consummation of our initial business combination as described below.
The common stock and warrants constituting the units will begin separate trading on the 52nd day following the date of this prospectus (or, if such date is not a business day, the following business day), unless Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC inform us of their decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. Once the shares of Series A common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into shares of Series A common stock and warrants. Additionally, the units will automatically separate into their component parts and will not be traded after completion of our initial business combination. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you are separating at least five units, you will not be able to receive or trade a whole warrant.
In no event will the Series A common stock 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 of our company 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 will include this audited balance sheet. 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.
Common Stock
Upon the closing of this offering, 62,500,000 shares of our common stock will be outstanding (assuming no exercise of the underwriters’ over-allotment option and the corresponding forfeiture of an aggregate of 1,875,000 founder shares by our sponsor), including:
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50,000,000 shares of our Series A common stock underlying the units being offered in this offering; and
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12,500,000 shares of Series F common stock held by our sponsor.
If we increase or decrease the size of this offering, we will effect a stock dividend or share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Series F common stock immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of the outstanding shares of our common stock upon the consummation of this offering.
Prior to our initial business combination, holders of the Series A common stock, holders of our Series B common stock, if any, and holders of the Series F common stock are entitled to one vote for each share on all matters to be voted on by stockholders, including any vote in connection with our initial business combination, and vote together as a single class; provided that, prior to our initial business combination, only holders of our Series F common stock will have the right to elect our directors and remove members of
our board of directors for any reason. These provisions of our amended and restated certificate of incorporation may only be amended if approved by holders of more than 50% of the total voting power of the outstanding shares of our common stock entitled to vote thereon as well as more than 50% of the outstanding Series F common stock. In addition, prior to our initial business combination and so long as any shares of Series F common stock remain outstanding, the rights, powers and preferences provided by our amended and restated certificate of incorporation to the Series B common stock may be amended only if approved by the holders of a majority of the outstanding Series F common stock.
Following our initial business combination, holders of our Series A common stock and holders of our Series B common stock will generally vote together as a single class on matters presented for a stockholder vote, except as required by Delaware law or stock exchange rule, with each share of Series A common stock entitling the holder to one vote per share and each share of Series B common stock entitling the holder to ten votes per share.
Holders of the Series C common stock will not be entitled to any voting powers, except as otherwise required by applicable law or stock exchange rule. When so required, holders of Series C common stock will be entitled to 1/100th of a vote for each share of such stock held.
While our Series A, Series B and Series C common stock capital structure with its low vote, high vote and no vote features differs from the typical capital structure of many other special purpose acquisition companies, we expect to maintain this capital structure following our initial business combination. Any change to these voting features would require an amendment to our amended and restated certificate of incorporation.
Prior to our initial business combination, the affirmative vote of holders of a majority of the outstanding shares of our Series F common stock is required to approve the election or removal of directors. Following the consummation of our initial business combination, our board of directors will be divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. There is no cumulative voting with respect to the election of directors, with the result that, prior to our initial business combination, the holders of more than 50% of the Series F common stock voted for the election of directors can elect all of the directors. Our stockholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor.
Because our amended and restated certificate of incorporation will authorize the issuance of up to 3,000,000,000 shares of Series A common stock, if we were to enter into a business combination, we may (depending on the terms of such a business combination) be required to increase the number of shares of common stock which we are authorized to issue at the same time as our stockholders vote on the business combination to the extent we seek stockholder approval in connection with our initial business combination.
In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following our listing on Nasdaq. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with our amended and restated bylaws unless such election is made by written consent in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior to the completion of our initial business combination, and thus we may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the completion of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.
We will provide our public stockholders with the opportunity to redeem all or a portion of their shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, calculated as of two business days prior to the completion of our initial business combination, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption rights will include the
requirement that a beneficial owner must identify itself in order to validly redeem its shares. Our sponsor, executive officers and directors will enter into a letter agreement with us, pursuant to which they will agree to waive their redemption rights with respect to our common stock held by them in connection with the completion of our initial business combination or certain amendments to our amended and restated certificate of incorporation. Permitted transferees of our sponsor, executive officers and directors will be subject to the same obligations.
Unlike some blank check companies that hold stockholder votes and conduct proxy solicitations in conjunction with their initial business combinations and provide for related redemptions of public shares for cash upon completion of such initial business combinations even when a vote is not required by applicable law or stock exchange rule, if a stockholder vote is not required by applicable law or stock exchange rule and we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation, conduct the redemptions pursuant to the tender offer rules of the SEC, and file tender offer documents with the SEC prior to completing our initial business combination. Our amended and restated certificate of incorporation will require these tender offer documents to contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, a stockholder approval of the transaction is required by applicable law or stock exchange rule, or we decide to obtain stockholder approval for business or other reasons, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of our common stock voted are voted in favor of the business combination, subject to any other vote required by applicable law. A quorum for such meeting will consist of the holders present in person or by proxy of shares of our outstanding capital stock representing a majority of all outstanding shares of capital stock of the company entitled to vote at such meeting. However, the participation of our sponsor, officers, directors or advisors in privately-negotiated transactions (as described in this prospectus), if any, could result in the approval of our initial business combination even if a majority of our public stockholders vote, or indicate their intention to vote, against such business combination. For purposes of seeking approval of the majority of our outstanding shares of common stock for the purposes of our initial business combination, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. We intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any such meeting, if required, at which a vote shall be taken to approve our initial business combination. These quorum and voting thresholds, and agreements, may make it more likely that we will consummate our initial business combination.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming Excess Shares, without our prior consent. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Our stockholders’ inability to redeem the Excess Shares will reduce their influence over our ability to complete our initial business combination, and such stockholders could suffer a material loss in their investment if they sell such Excess Shares on the open market. Additionally, such stockholders will not receive redemption distributions with respect to the Excess Shares if we complete the business combination. And, as a result, such stockholders will continue to hold that number of shares exceeding 15% and, in order to dispose such shares would be required to sell their stock in open market transactions, potentially at a loss.
If we seek stockholder approval in connection with our initial business combination, our sponsor, executive officers and directors will agree, pursuant to the terms of a letter agreement entered into with us, and their permitted transferees will agree, to vote our common stock held by them in favor of our initial business combination. As a result, in addition to our sponsor’s founder shares, we would need 18,750,001, or 37.5% (assuming all outstanding shares are voted and the over-allotment option is not exercised), or 3,125,001, or 6.25% (assuming only the minimum number of shares representing a quorum are voted and the over-allotment option is not exercised), of the 50,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have such initial business combination approved.
Additionally, each public stockholder may elect to redeem its public shares without voting and, if it does vote, irrespective of whether it votes for or against the proposed transaction.
Pursuant to our amended and restated certificate of incorporation, if we have not completed our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred), 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 (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 public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (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 stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Our sponsor, executive officers and directors will enter into a letter agreement with us, pursuant to which they will waive their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) (although our sponsor, executive officers and directors will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame).
In the event of a liquidation, dissolution or winding up of the company after a business combination, our stockholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the common stock. Our stockholders have no preemptive or other subscription rights except as described under “Principal Stockholders — Registration and Preemptive Rights.” There are no sinking fund provisions applicable to the common stock, except that we will provide our stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account, 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
The founder shares are identical to the shares of Series A common stock included in the units being sold in this offering, except that: (1) prior to our initial business combination, only holders of the Series F common stock have the right to vote on the election of directors and holders of a majority of the outstanding shares of our Series F common stock may remove members of our board of directors for any reason; (2) following our initial business combination, holders of the Series B common stock and holders of the Series A common stock will vote together as a single class, with each share of Series B common stock having ten votes per share and each share of Series A common stock having one vote per share except as required by Delaware law or stock exchange rule; (3) the founder shares are subject to certain transfer restrictions, as described in more detail above; (4) our sponsor, executive officers and directors will enter into a letter agreement with us, pursuant to which they will agree to waive: (a) their redemption rights with respect to our common stock held by them in connection with the completion of our initial business combination; (b) their redemption rights with respect to our common stock held by them in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we have not consummated our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (c) 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 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or during any Extension Period (although our sponsor, officers and directors will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame); (5) shares of our Series F common stock are automatically
convertible into shares of our Series B common stock at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis, and, prior to and following our initial business combination, each share of Series B common stock is convertible, at the option of the holder, into one share of our Series A common stock; and (6) the holders of founder shares are entitled to registration rights. If we submit our initial business combination to our public stockholders for a vote, our sponsor, executive officers and directors will agree (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, to vote all shares held by them purchased during or after this offering in favor of our initial business combination.
Prior to and following our initial business combination, each share of Series B common stock is convertible, at the option of the holder, into one share of our Series A common stock.
With certain exceptions as described under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants,” the founder shares are not transferable, assignable or salable until the earlier of (A) one year after the completion of our initial business combination; and (B) subsequent to our initial business combination, (x) the date on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property or (y) if the last reported sale price of our Series A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination.
Preferred Stock
Our amended and restated certificate of incorporation will authorize 50,000,000 shares of preferred stock and will provide that shares of preferred stock may be issued from time to time in one or more series by action taken by the affirmative vote of not less than 80% of the members of our board of directors then in office. 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 stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover effects. The ability of our board of directors to issue preferred stock without stockholder 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 preferred stock outstanding at the date hereof. Although we do not currently intend to issue any shares of preferred stock, we cannot assure you that we will not do so in the future. No shares of preferred stock are being issued or registered in this offering.
Warrants
Public Stockholders’ Warrants
Each whole warrant entitles the registered holder to purchase one share of Series A common stock at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing on the later of 12 months from the closing of this offering and 30 days after the completion of our initial business combination, except as described below. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares of Series A common stock. This means only a whole warrant may be exercised at a given time by a warrant holder. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you are separating a multiple of five units, the number of warrants issuable to you upon separation of the units will be rounded down to the nearest whole number of warrants. The warrants will expire five years after the completion of our initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
We will not be obligated to deliver any shares of Series A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares of Series A common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of Series A common stock is available, subject to our satisfying our obligations described below with respect to registration. 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. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the share of Series A common stock underlying such unit.
We have agreed that as soon as practicable, but in no event later than 20 business days after the consummation of our initial business combination, we will use our commercially reasonable efforts to file with the SEC, and within 60 business days following our initial business combination to have declared effective, a registration statement covering the issuance of the shares of Series A common stock issuable upon exercise of the warrants and to maintain a current prospectus relating to those shares of Series A common stock until the warrants expire or are redeemed. Notwithstanding the above, if our Series A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
Redemption of warrants when the price per share of Series A common stock equals or exceeds $18.00. Once the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private placement warrants):
•
in whole and not in part;
•
at a price of $0.01 per warrant;
•
upon a minimum of 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and
•
if, and only if, the last reported sale price of the Series A common stock equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities — Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments”) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders.
We will not redeem the warrants for cash unless a registration statement under the Securities Act covering the issuance of the shares of Series A common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of common stock is available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. As a result, we may redeem warrants even if the holders are otherwise unable to exercise their warrants.
We have established the $18.00 per share (as adjusted) redemption criteria discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and we issue a notice of redemption of the warrants, each warrant holder will be entitled to exercise its warrant prior to the scheduled redemption date. However, the price of the Series A common stock may fall below the $18.00 redemption trigger price (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities — Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments”) as well as the $11.50 warrant exercise price after the redemption notice is issued.
Redemption of warrants when the price per share of Series A common stock equals or exceeds $10.00. Once the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private placement warrants):
•
in whole and not in part;
•
at a price of $0.10 per warrant provided that holders will be able to exercise their warrants prior to redemption and receive that number of shares of Series A common stock to be determined by reference to the table below, based on the redemption date and the “fair market value” of our Series A common stock (as defined below) except as otherwise described below;
•
upon a minimum of 30 days’ prior written notice of redemption;
•
if, and only if, the last reported sale price of our Series A common stock equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities — Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments”) on the trading day prior to the date on which we send the notice of redemption to the warrant holders; and
•
if, and only if, there is an effective registration statement covering the issuance of the shares of Series A common stock issuable upon exercise of the warrants and a current prospectus relating thereto available throughout the 30-day period after written notice of redemption is given.
The numbers in the table below represent the number of shares of Series A common stock that a warrant holder will receive upon such cashless exercise in connection with a redemption by us pursuant to this redemption feature, based on the “fair market value” of our Series A common stock on the corresponding redemption date (assuming holders elect to exercise their warrants and such warrants are not redeemed for $0.10 per warrant), determined for these purposes based on volume weighted average price of our Series A common stock during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants, and the number of months that the corresponding redemption date precedes the expiration date of the warrants, each as set forth in the table below. We will provide our warrant holders with the final fair market value no later than one business day after the 10-trading day period described above ends.
Pursuant to the warrant agreement, references above to Series A common stock shall include a security other than Series A common stock into which the Series A common stock has been converted or exchanged for in the event we are not the surviving company in our initial business combination. The numbers in the tables below will not be adjusted solely as a result of us not being the surviving entity following our initial business combination.
The stock prices set forth in the column headings of the table below will be adjusted as of any date on which the number of shares issuable upon exercise of a warrant is adjusted as set forth in the first three paragraphs under the heading “— Anti-dilution Adjustments” below. The adjusted stock prices in the column headings will equal the stock prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the number of shares deliverable upon exercise of a warrant immediately prior to such adjustment and the denominator of which is the number of shares deliverable upon exercise of a warrant as so adjusted. The number of shares in the table below shall be adjusted in the same manner and at the same time as the number of shares issuable upon exercise of a warrant. If the exercise price of a warrant is adjusted, (a) in the case of an adjustment pursuant to the fifth paragraph under the heading “— Anti-dilution Adjustments” below, the adjusted share prices in the column headings will equal the unadjusted share price multiplied by a fraction, the numerator of which is the higher of the Market Value and the Newly Issued Price as set forth under the heading “— Anti-dilution Adjustments” and the denominator of which is $10.00 and (b) in the case of an adjustment pursuant to the second paragraph under the heading “— Antidilution Adjustments” below, the adjusted share prices in the column headings will equal the unadjusted share price less the decrease in the exercise price of a warrant pursuant to such exercise price adjustment.
|
Redemption Date (period to expiration
of warrants)
|
|
|
Fair Market Value of Series A Common Stock
|
|
|
|
≤$10.00
|
|
|
$11.00
|
|
|
$12.00
|
|
|
$13.00
|
|
|
$14.00
|
|
|
$15.00
|
|
|
$16.00
|
|
|
$17.00
|
|
|
≥$18.00
|
|
|
60 months
|
|
|
|
|
0.261
|
|
|
|
|
|
0.281
|
|
|
|
|
|
0.297
|
|
|
|
|
|
0.311
|
|
|
|
|
|
0.324
|
|
|
|
|
|
0.337
|
|
|
|
|
|
0.348
|
|
|
|
|
|
0.358
|
|
|
|
|
|
0.361
|
|
|
|
57 months
|
|
|
|
|
0.257
|
|
|
|
|
|
0.277
|
|
|
|
|
|
0.294
|
|
|
|
|
|
0.310
|
|
|
|
|
|
0.324
|
|
|
|
|
|
0.337
|
|
|
|
|
|
0.348
|
|
|
|
|
|
0.358
|
|
|
|
|
|
0.361
|
|
|
|
54 months
|
|
|
|
|
0.252
|
|
|
|
|
|
0.272
|
|
|
|
|
|
0.291
|
|
|
|
|
|
0.307
|
|
|
|
|
|
0.322
|
|
|
|
|
|
0.335
|
|
|
|
|
|
0.347
|
|
|
|
|
|
0.357
|
|
|
|
|
|
0.361
|
|
|
|
51 months
|
|
|
|
|
0.246
|
|
|
|
|
|
0.268
|
|
|
|
|
|
0.287
|
|
|
|
|
|
0.304
|
|
|
|
|
|
0.320
|
|
|
|
|
|
0.333
|
|
|
|
|
|
0.346
|
|
|
|
|
|
0.357
|
|
|
|
|
|
0.361
|
|
|
|
48 months
|
|
|
|
|
0.241
|
|
|
|
|
|
0.263
|
|
|
|
|
|
0.283
|
|
|
|
|
|
0.301
|
|
|
|
|
|
0.317
|
|
|
|
|
|
0.332
|
|
|
|
|
|
0.344
|
|
|
|
|
|
0.356
|
|
|
|
|
|
0.361
|
|
|
|
45 months
|
|
|
|
|
0.235
|
|
|
|
|
|
0.258
|
|
|
|
|
|
0.279
|
|
|
|
|
|
0.298
|
|
|
|
|
|
0.315
|
|
|
|
|
|
0.330
|
|
|
|
|
|
0.343
|
|
|
|
|
|
0.356
|
|
|
|
|
|
0.361
|
|
|
|
42 months
|
|
|
|
|
0.228
|
|
|
|
|
|
0.252
|
|
|
|
|
|
0.274
|
|
|
|
|
|
0.294
|
|
|
|
|
|
0.312
|
|
|
|
|
|
0.328
|
|
|
|
|
|
0.342
|
|
|
|
|
|
0.355
|
|
|
|
|
|
0.361
|
|
|
|
39 months
|
|
|
|
|
0.221
|
|
|
|
|
|
0.246
|
|
|
|
|
|
0.269
|
|
|
|
|
|
0.290
|
|
|
|
|
|
0.309
|
|
|
|
|
|
0.325
|
|
|
|
|
|
0.340
|
|
|
|
|
|
0.354
|
|
|
|
|
|
0.361
|
|
|
|
36 months
|
|
|
|
|
0.213
|
|
|
|
|
|
0.239
|
|
|
|
|
|
0.263
|
|
|
|
|
|
0.285
|
|
|
|
|
|
0.305
|
|
|
|
|
|
0.323
|
|
|
|
|
|
0.339
|
|
|
|
|
|
0.353
|
|
|
|
|
|
0.361
|
|
|
|
33 months
|
|
|
|
|
0.205
|
|
|
|
|
|
0.232
|
|
|
|
|
|
0.257
|
|
|
|
|
|
0.280
|
|
|
|
|
|
0.301
|
|
|
|
|
|
0.320
|
|
|
|
|
|
0.337
|
|
|
|
|
|
0.352
|
|
|
|
|
|
0.361
|
|
|
|
30 months
|
|
|
|
|
0.196
|
|
|
|
|
|
0.224
|
|
|
|
|
|
0.250
|
|
|
|
|
|
0.274
|
|
|
|
|
|
0.297
|
|
|
|
|
|
0.316
|
|
|
|
|
|
0.335
|
|
|
|
|
|
0.351
|
|
|
|
|
|
0.361
|
|
|
|
27 months
|
|
|
|
|
0.185
|
|
|
|
|
|
0.214
|
|
|
|
|
|
0.242
|
|
|
|
|
|
0.268
|
|
|
|
|
|
0.291
|
|
|
|
|
|
0.313
|
|
|
|
|
|
0.332
|
|
|
|
|
|
0.350
|
|
|
|
|
|
0.361
|
|
|
|
24 months
|
|
|
|
|
0.173
|
|
|
|
|
|
0.204
|
|
|
|
|
|
0.233
|
|
|
|
|
|
0.260
|
|
|
|
|
|
0.285
|
|
|
|
|
|
0.308
|
|
|
|
|
|
0.329
|
|
|
|
|
|
0.348
|
|
|
|
|
|
0.361
|
|
|
|
21 months
|
|
|
|
|
0.161
|
|
|
|
|
|
0.193
|
|
|
|
|
|
0.223
|
|
|
|
|
|
0.252
|
|
|
|
|
|
0.279
|
|
|
|
|
|
0.304
|
|
|
|
|
|
0.326
|
|
|
|
|
|
0.347
|
|
|
|
|
|
0.361
|
|
|
|
18 months
|
|
|
|
|
0.146
|
|
|
|
|
|
0.179
|
|
|
|
|
|
0.211
|
|
|
|
|
|
0.242
|
|
|
|
|
|
0.271
|
|
|
|
|
|
0.298
|
|
|
|
|
|
0.322
|
|
|
|
|
|
0.345
|
|
|
|
|
|
0.361
|
|
|
|
15 months
|
|
|
|
|
0.130
|
|
|
|
|
|
0.164
|
|
|
|
|
|
0.197
|
|
|
|
|
|
0.230
|
|
|
|
|
|
0.262
|
|
|
|
|
|
0.291
|
|
|
|
|
|
0.317
|
|
|
|
|
|
0.342
|
|
|
|
|
|
0.361
|
|
|
|
12 months
|
|
|
|
|
0.111
|
|
|
|
|
|
0.146
|
|
|
|
|
|
0.181
|
|
|
|
|
|
0.216
|
|
|
|
|
|
0.250
|
|
|
|
|
|
0.282
|
|
|
|
|
|
0.312
|
|
|
|
|
|
0.339
|
|
|
|
|
|
0.361
|
|
|
|
9 months
|
|
|
|
|
0.090
|
|
|
|
|
|
0.125
|
|
|
|
|
|
0.162
|
|
|
|
|
|
0.199
|
|
|
|
|
|
0.237
|
|
|
|
|
|
0.272
|
|
|
|
|
|
0.305
|
|
|
|
|
|
0.336
|
|
|
|
|
|
0.361
|
|
|
|
6 months
|
|
|
|
|
0.065
|
|
|
|
|
|
0.099
|
|
|
|
|
|
0.137
|
|
|
|
|
|
0.178
|
|
|
|
|
|
0.219
|
|
|
|
|
|
0.259
|
|
|
|
|
|
0.296
|
|
|
|
|
|
0.331
|
|
|
|
|
|
0.361
|
|
|
|
3 months
|
|
|
|
|
0.034
|
|
|
|
|
|
0.065
|
|
|
|
|
|
0.104
|
|
|
|
|
|
0.150
|
|
|
|
|
|
0.197
|
|
|
|
|
|
0.243
|
|
|
|
|
|
0.286
|
|
|
|
|
|
0.326
|
|
|
|
|
|
0.361
|
|
|
|
0 months
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
0.042
|
|
|
|
|
|
0.115
|
|
|
|
|
|
0.179
|
|
|
|
|
|
0.233
|
|
|
|
|
|
0.281
|
|
|
|
|
|
0.323
|
|
|
|
|
|
0.361
|
|
|
The exact fair market value and redemption date may not be set forth in the table above, in which case, if the fair market value is between two values in the table or the redemption date is between two redemption dates in the table, the number of shares of Series A common stock to be issued for each warrant exercised will be determined by a straight-line interpolation between the number of shares set forth for the higher and lower fair market values and the earlier and later redemption dates, as applicable, based on a 365 or 366-day year, as applicable. For example, if the volume weighted average price of our Series A common stock during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of the warrants is $11 per share, and at such time there are 57 months until the expiration of the warrants, holders may choose to, in connection with this redemption feature, exercise their warrants for 0.277 shares of Series A common stock for each whole warrant. For an example where the exact fair market value and redemption date are not as set forth in the table above, if the volume weighted average price of our Series A common stock during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of the warrants is $13.50 per share, and at such time there are 38 months until the expiration of the warrants, holders may choose to, in connection with this redemption feature, exercise their warrants for 0.298 shares of Series A common stock for each whole warrant. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361 shares of Series A common stock per warrant (subject to adjustment). Finally, as reflected in the table above, if the warrants are out of the money and about to expire, they cannot be exercised on a cashless basis in connection with a redemption by us pursuant to this redemption feature, since they will not be exercisable for any shares of Series A common stock.
Any public warrants held by our officers or directors will be subject to this redemption feature, except that such officers and directors shall only receive “fair market value” for such public warrants if they exercise their public warrants in connection with such redemption (“fair market value” for such public warrants held by our officers or directors being defined as the last reported sale price of the public warrants on such redemption date).
This redemption feature differs from the typical warrant redemption features used in some other blank check offerings, which typically only provide for a redemption of warrants for cash (other than the private placement warrants) when the trading price for the Series A common stock exceeds $18.00 per share for a specified period of time. This redemption feature is structured to allow for all of the outstanding warrants (other than the private placement warrants) to be redeemed when the Series A common stock is trading at or above $10.00 per share, which may be at a time when the trading price of our Series A common stock is below the exercise price of the warrants. We have established this redemption feature to provide us with the flexibility to redeem the warrants without the warrants having to reach the $18.00 per share threshold set forth above under “— Redemption of warrants when the price per share of Series A common stock equals or exceeds $18.00.” Holders choosing to exercise their warrants in connection with a redemption pursuant to this feature will, in effect, receive a number of shares for their warrants based on an option pricing model with a fixed volatility input as of the date of this prospectus. This redemption right provides us an additional mechanism by which to redeem all of the outstanding warrants, and therefore have certainty as to our capital structure as the warrants would no longer be outstanding and would have been exercised or redeemed, and we will effectively be required to pay the redemption price to warrant holders if we choose to exercise this redemption right and it will allow us to quickly proceed with a redemption of the warrants if we determine it is in our best interest to do so. As such, we would redeem the warrants in this manner when we believe it is in our best interest to update our capital structure to remove the warrants and pay the redemption price to the warrant holders.
As stated above, we can redeem the warrants when the Series A common stock is trading at a price starting at $10.00, which is below the exercise price of $11.50, because it will provide certainty with respect to our capital structure and cash position while providing warrant holders with the opportunity to exercise their warrants on a cashless basis for the applicable number of shares of Series A common stock. If we choose to redeem the warrants when the Series A common stock is trading at a price below the exercise price of the warrants, this could result in the warrant holders receiving fewer shares of Series A common stock than they would have received if they had chosen to exercise their warrants for shares of Series A common stock if and when shares of Series A common stock were trading at a price higher than the exercise price of $11.50 per share.
No fractional shares of Series A common stock will be issued upon exercise. If, upon exercise, a holder would be entitled to receive a fractional interest in a share, we will round down to the nearest whole number of the number of shares of Series A common stock to be issued to the holder. If, at the time of redemption, the warrants are exercisable for a security other than the shares of Series A common stock pursuant to the warrant agreement (for instance, if we are not the surviving company in our initial business combination), the warrants may be exercised for such security.
Redemption procedures and cashless exercise. If we call the warrants for redemption as described above under “— Redemption of warrants when the price per share of Series A common stock equals or exceeds $18.00,” our management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis” (such option, the “Cashless Exercise Option”). In determining whether to require all holders to exercise their warrants on a “cashless basis,” our management will consider, among other factors, our cash position, the number of warrants that are outstanding and the dilutive effect on our stockholders of issuing the maximum number of shares of Series A common stock issuable upon the exercise of our warrants. In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of Series A common stock equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of shares of Series A common stock underlying the warrants, multiplied by the excess of the “fair market value” (defined below) over the exercise price of the warrants by (y) the fair market value and (B) the product of 0.361 and the number of shares of Series A common stock underlying the warrants. The “fair market value” for this purpose shall mean the volume weighted average price of our Series A common stock during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. If our management takes advantage of this Cashless Exercise Option, the notice of redemption will contain the information necessary to calculate the number of shares of Series A common stock to be received upon exercise of the warrants, including the “fair market value” in such case. Requiring a cashless exercise in this manner will reduce the number of shares to be issued and thereby lessen the dilutive effect of a warrant redemption. We believe this Cashless Exercise Option feature is an attractive option to us if we do not need the cash from the exercise of the warrants after our initial
business combination. If we call our warrants for redemption and our management does not take advantage of this Cashless Exercise Option, our sponsor and its permitted transferees would still be entitled to exercise their private placement warrants for cash or on a cashless basis using the same formula described above that other warrant holders would have been required to use had management taken advantage of this Cashless Exercise Option, as described in more detail below.
A holder of a warrant may notify us in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), would beneficially own in excess of 9.8% (or such other amount as a holder may specify) of the shares of Series A common stock outstanding immediately after giving effect to such exercise.
Anti-dilution Adjustments. If the number of outstanding shares of Series A common stock is increased by a stock dividend payable in shares of Series A common stock, or by a stock split of shares of Series A common stock or other similar event, then, on the effective date of such stock dividend, stock split or similar event, the number of shares of Series A common stock issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding shares of Series A common stock. If, at a time that the warrant may be exercised only for Series A common stock, the company effects a rights offering (including, without limitation, by distribution of stock purchase rights, warrants or options) to all holders of shares of Series A common stock entitling those holders to purchase shares of Series A common stock at a price per share less than the then-fair market value of Series A common stock, the number of shares of Series A common stock issuable on exercise of each warrant will be appropriately adjusted to give effect to the per share diminution in value resulting from the completion of the rights offering. If the company effects a rights offering (including, without limitation, by distribution of stock purchase rights, warrants or options) to all holders of shares of Series A common stock (or other series of our common stock which a holder is entitled to receive upon exercise of such warrant) entitling those holders to purchase shares of any series of our common stock at a price per share less than the then-fair market value of such series of our common stock and such rights offering is not described in the preceding sentence, then our company will deliver to each holder of warrants the number and type of stock purchase rights, warrants or options such holder would have been entitled to receive if it had exercised such warrant immediately prior to the record date for such rights offering.
In addition, if we, at any time while the warrants are outstanding and unexpired, pay a dividend or make a distribution in shares of our Series C common stock, each warrant shall become exercisable for a basket of shares consisting of the same number of shares of Series A common stock prior to such dividend or distribution together with the number of whole or fractional shares of Series C common stock such holder would have been entitled to receive if it had exercised such warrant immediately prior to the dividend or distribution. The aggregate exercise price of the warrant will not change as a result of such dividend or distribution; however, we will adjust the other terms of the warrants, as appropriate, including but not limited to those governing exercise (such as cashless exercise), redemption (including the table above) and further antidilution adjustments, to provide for the shares of Series C common stock issuable upon exercise of the warrants. Furthermore, if we at any time while the warrants are outstanding and unexpired pay a dividend or make a distribution in cash, securities or other assets to the holders of Series A common stock on account of such shares of Series A common stock (or other shares of our capital stock into which the warrants are convertible), other than (a) as described in the immediately preceding sentence or the paragraph above, (b) certain ordinary cash dividends, (c) to satisfy the redemption rights of the holders of Series A common stock in connection with a proposed initial business combination, (d) to satisfy the redemption rights of the holders of Series A common stock in connection with a stockholder vote to amend our amended and restated certificate of incorporation (I) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to allow redemptions in connection with our initial business combination or to redeem 100% of our Series A common stock if we do not complete our initial business combination within 24 months from the closing of this offering or (II) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, or (e) in connection with the redemption of our public shares upon our failure to complete our initial business combination, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each share of Series A common stock in respect of such event.
If the number of outstanding shares of our Series A common stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of Series A common stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Series A common stock issuable on exercise of each warrant will be decreased in proportion to such decrease in outstanding shares of Series A common stock.
Whenever the number of shares of Series A common stock purchasable upon the exercise of the warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of shares of Series A common stock purchasable upon the exercise of the warrants immediately prior to such adjustment, and (y) the denominator of which will be the number of shares of Series A common stock so purchasable immediately thereafter.
In addition, if (x) we issue additional shares of common stock or equity-linked securities, excluding forward purchase units, for capital raising purposes in connection with the consummation of our initial business combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our sponsor or LMC or its other subsidiaries, without taking into account any founder shares held by our sponsor or LMC or its other subsidiaries, as applicable) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances, excluding the forward purchase units, 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 (z) the volume weighted average trading price of our Series A common stock during the 20 trading day period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price described below under “Redemption of warrants when the price per share of Series A common stock equals or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described below under “Redemption of warrants when the price per share of Series A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
In case of any reclassification or reorganization of the outstanding shares of Series A common stock (other than those described above or that solely affects the par value of such shares of Series A common stock), or in the case of any merger or consolidation of us with or into another corporation (other than a merger or consolidation in which we are the continuing corporation and that does not result in any reclassification or reorganization of our outstanding shares of Series A common stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially as an entirety in connection with which we are dissolved, the holders of the warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the warrants and in lieu of the shares of our Series A common stock immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of 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 their warrants immediately prior to such event. However, if such holders were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such merger or consolidation, then the kind and amount of securities, cash or other assets for which each warrant will become exercisable will be deemed to be the weighted average of the kind and amount received per share by such holders in such merger or consolidation that affirmatively make such election, and if a tender, exchange or redemption offer has been made to and accepted by such holders (other than a tender, exchange or redemption offer made by the company in connection with redemption rights held by stockholders of the company as provided for in the company’s amended and restated certificate of incorporation or as a result of the redemption of shares of Series A common stock by the company if a proposed initial business combination is presented to the stockholders of the company for approval) under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange
Act) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the outstanding shares of Series A common stock, the holder of a warrant will be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a stockholder 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 Series A common stock 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 the warrant agreement. Additionally, if less than 70% of the consideration receivable by the holders of Series A common stock in such a transaction is payable in the form of Series A common stock in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the warrant properly exercises the warrant within thirty days following public disclosure of such transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the per share consideration minus Black-Scholes Warrant Value (as defined in the warrant agreement) of the warrant.
The warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. You should review a copy of the warrant agreement, which is filed as an exhibit to the registration statement of which this prospectus is a part, for a description of the terms and conditions applicable to the warrants. The warrant agreement provides that (a) the terms of the warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity or correct any mistake, including to conform the provisions of the warrant agreement to the description of the terms of the warrants and the warrant agreement set forth in this prospectus, or defective provision or (ii) adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of the warrants and (b) all other modifications or amendments require the vote or written consent of at least 50% of the then outstanding public warrants; provided that any amendment that solely affects the terms of the private placement warrants or forward purchase warrants or any provision of the warrant agreement solely with respect to the private placement warrants or forward purchase warrants will also require at least 50% of the then outstanding private placement warrants or forward purchase warrants, respectively. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment.
The warrant holders do not have the rights or privileges of holders of Series A common stock and any voting rights until they exercise their warrants and receive shares of Series A common stock. After the issuance of shares of Series A common stock 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 stockholders.
No fractional warrants will be issued upon separation of the units and only whole warrants will trade.
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 Delaware or the United States District Court for the District of Delaware, 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 Delaware or the United States District Court for the District of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.” This provision applies to claims under the Securities Act but does not apply to claims under the Exchange Act or any claim for which the federal district courts of the United States of America are the sole and exclusive forum.
Private Placement Warrants
The private placement warrants are identical to the warrants sold as part of the units in this offering except that, so long as they are held by our sponsor or its permitted transferees: (1) they will not be redeemable
by us; (2) they (including the Series A common stock issuable upon exercise of these warrants) may not be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial business combination (except as described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants”); (3) they may be exercised by the holders on a cashless basis; and (4) the holders thereof (including with respect to the shares of common stock issuable upon exercise of these warrants) are entitled to registration rights. If the private placement warrants are held by holders other than our sponsor or its permitted transferees, the private placement warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering.
If holders of the private placement warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering his, her or its warrants for that number of shares of Series A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Series A common stock underlying the warrants, multiplied by the excess of the “sponsor fair market value” (defined below) over the exercise price of the warrants by (y) the sponsor fair market value. The “sponsor fair market value” shall mean the average last reported sale price of the Series A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is sent to the warrant agent. The reason that we have agreed that these warrants will be exercisable on a cashless basis so long as they are held by our sponsor and its permitted transferees is because it is not known at this time whether our sponsor will cease to be affiliated with us following a business combination. If our sponsor remains affiliated with us its ability to sell our securities in the open market will be significantly limited. We expect to have policies in place that prohibit insiders from selling our securities except during specific periods of time. Even during such periods of time when insiders will be permitted to sell our securities, an insider cannot trade in our securities if he or she is in possession of material non-public information. Accordingly, unlike public stockholders who could exercise their warrants and sell the shares of Series A common stock received upon such exercise freely in the open market in order to recoup the cost of such exercise, the insiders could be significantly restricted from selling such securities. As a result, we believe that allowing the holders to exercise such warrants on a cashless basis is appropriate.
In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or LMC or its subsidiaries may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $2,500,000 of such loans may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or LMC or its subsidiaries 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.
Forward Purchase Units
Prior to this offering, we will enter into a forward purchase agreement pursuant to which our sponsor will agree to acquire forward purchase units for $250,000,000, in the aggregate, in connection with our initial business combination. Each forward purchase unit will consist of one share of Series B common stock, or a forward purchase share, and one-fifth of one warrant to purchase one share of Series A common stock, or a forward purchase warrant, at a purchase price of $10.00 per unit, and would be sold in a private placement that will close substantially concurrently with the consummation of our initial business combination. The terms of the forward purchase warrants will generally be identical to the terms of the redeemable warrants included in the units being issued in this offering.
Dividends
We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of 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 stock dividends in the foreseeable future, except if we increase the size of this offering, in which case we will effect a stock dividend or other appropriate mechanism with respect to our Series F common stock immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of the outstanding shares of our common stock upon the consummation of this offering. 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.
Our Transfer Agent and Warrant Agent
The transfer agent for our common stock and warrant agent for our warrants will be Continental Stock Transfer & Trust Company. We will agree to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent and warrant agent, its agents and each of its stockholders, 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.
Our Amended and Restated Certificate of Incorporation
Our amended and restated certificate of incorporation 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 (other than amendments relating to the appointment or removal of directors prior to our initial business combination, which require the approval of holders of more than 50% of the total voting power of the outstanding shares of our common stock entitled to vote thereon as well as more than 50% of the outstanding Series F common stock or, so long as any shares of Series F common stock remain outstanding, relating to the rights, powers and preferences of the Series B common stock, which require the approval of the holders of a majority of the outstanding Series F common stock) cannot be amended without the approval of the holders of at least 662∕3% of the total voting power of our outstanding capital stock except in limited circumstances described under “— Certain Anti-Takeover Provisions of Delaware Law and our Amended and Restated Certificate of Incorporation and Bylaws — Actions Requiring Supermajority Stockholder Vote.” Our sponsor, who will beneficially own 20% of the shares of our common stock outstanding upon the closing of this offering (assuming our sponsor does not purchase any units in this offering), may participate in any vote to amend our amended and restated certificate of incorporation and will have the discretion to vote in any manner they choose. Prior to our initial business combination, the affirmative vote of holders of a majority of the outstanding shares of our Series F common stock is required to approve the election or removal of directors. Specifically, our amended and restated certificate of incorporation will provide, among other things, that:
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if we have not completed our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred), 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 (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 public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (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 stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law;
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prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to: (1) receive funds from the trust account; or (2) vote pursuant to our amended and restated certificate of incorporation on any initial business combination;
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if a stockholder vote on our initial business combination is not required by applicable law or stock exchange rule and we do not decide to hold a stockholder 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;
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as long as our securities are listed on Nasdaq, our initial business combination must occur with one or more target businesses that have an aggregate fair market value equal to at least 80% of the value of the trust account (excluding any deferred underwriting commissions and taxes payable on the income earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination;
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if our stockholders approve an amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, we will provide our public stockholders with the opportunity to redeem all or a portion of their shares of common stock upon such approval at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding public shares; and
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we will not effectuate our initial business combination solely with another blank check company or a similar company with nominal operations.
In addition, our amended and restated certificate of incorporation will provide that under no circumstances will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions.
Certain Anti-Takeover Provisions of Delaware Law and our Amended and Restated Certificate of Incorporation and Bylaws
DGCL 203 Opt Out
Pursuant to our amended and restated certificate of incorporation, we have opted out of the provisions of Section 203 of the DGCL regulating corporate takeovers. This statute prevents certain Delaware corporations, under certain circumstances, from engaging in a “business combination” with:
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a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”);
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an affiliate of an interested stockholder; or
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an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder.
A “business combination” includes a merger or sale of more than 10% of our assets. However, the above provisions of Section 203 do not apply if:
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our board of directors approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction;
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after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of common stock; or
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on or subsequent to the date of the transaction, the business combination is approved by our board of directors and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder.
We have opted out of the provisions of Section 203 of the DGCL because we believe this statute could prohibit or delay mergers or other change in control attempts, and thus may discourage attempts to acquire us.
Authorized Shares
Our authorized but unissued common stock and preferred stock are available for future issuances without stockholder approval, provided that the issuance of such preferred stock is approved by at least 80% of the members of our board of directors then in office, and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
Special Meeting of Stockholders
Our amended and restated certificate of incorporation will provide that special meetings of our stockholders may be called (i) upon the written request of the holders of not less than 662∕3% of the total voting power of our outstanding capital stock and preferred stock or (ii) by an affirmative vote of not less than 80% the members of the board of directors then in office.
Advance Notice Requirements for Stockholder Proposals and Director Nominations
Our amended and restated bylaws will provide for advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors, other than nominations made by or at the direction of our board of directors or a committee of our board of directors. In order for any matter to be “properly brought” before a meeting, a stockholder will have to comply with advance notice requirements and provide us with certain information. Generally, to be timely, a stockholder’s notice must be received at our principal executive offices not less than 60 days nor more than 90 days prior to the first anniversary date of the immediately preceding annual meeting of stockholders. Pursuant to Rule 14a-8 of the Exchange Act, proposals seeking inclusion in our annual proxy statement must comply with the notice periods contained therein. Our amended and restated bylaws will also specify requirements as to the form and content of a stockholder’s notice. Our amended and restated bylaws will allow the chairman of the meeting at a meeting of the stockholders to adopt rules and regulations for the conduct of meetings which may have the effect of precluding the conduct of certain business at a meeting if the rules and regulations are not followed. These provisions may also defer, delay or discourage a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to influence or obtain control of us.
Action by Written Consent
Following the completion of our initial business combination, after the date on which our sponsor, LMC or its other subsidiaries beneficially own, in the aggregate, less than 50% of the voting power of all outstanding shares of capital stock of the company, any action required or permitted to be taken by the stockholders must be effected at a duly called annual or special meeting of stockholders and may not be effected by any consent in writing in lieu of a meeting of such stockholders, subject to the rights of the holders of our Series B common stock, Series F common stock and any series of preferred stock with respect to such series.
Classified Board of Directors
Our amended and restated certificate of incorporation will provide that prior to our initial business combination, only holders of our Series F common stock will have the right to elect our directors and may remove members of our board of directors for any reason. Upon the consummation of our initial business combination, our board of directors will initially be divided into three classes, Class I, Class II and Class III, with members of each class serving staggered three-year terms. As a result, in most circumstances, a person other than our sponsor can gain control of our board only by successfully engaging in a proxy contest at two or more annual stockholder meetings following our initial business combination.
Our amended and restated certificate of incorporation will also provide that the authorized number of directors may be changed only by resolution of the board of directors. Subject to the terms of any preferred stock, following the consummation of our initial business combination, any or all of the directors may be removed from office at any time, but only for cause and only by the affirmative vote of holders of a majority of the voting power of all then outstanding shares of our capital stock entitled to vote generally in the election of directors, voting together as a single class.
Prior to our initial business combination, any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may be filled only by the affirmative vote or written consent of the holders of a majority of our Series F common stock . Following the consummation of our initial business combination, any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may be filled only by the affirmative vote of a majority of the remaining directors then in office (even though less than a quorum) or by the sole remaining director.
No Cumulative Voting
The DGCL provides that stockholders are not entitled to cumulate votes in the election of directors unless a corporation’s certificate of incorporation provides otherwise. Our amended and restated certificate of incorporation will not provide for cumulative voting.
Actions Requiring Supermajority Stockholder Vote
Subject to certain exceptions set forth in the amended and restated certificate of incorporation and the rights of the holders of our Series B common stock, Series F common stock and any series of our preferred stock, the affirmative vote of the holders of at least 662∕3% of the total voting power of all then outstanding shares of our capital stock entitled to vote thereon, voting together as a single class at a meeting specifically called for such purpose, will be required in order for us to take any action to authorize (i) the amendment, alteration or repeal of any provision of our amended and restated certificate of incorporation or the addition or insertion of other provisions thereto, except (a) for those as to which the laws of the State of Delaware, as then in effect, do not require stockholder consent or (b) where at least 80% the members of the board of directors then in office have approved such change; (ii) the adoption, amendment or repeal of any provision of our amended and restated bylaws, except by the board of directors in accordance with our amended and restated certificate of incorporation; (iii) the merger or consolidation of us with or into any other corporation (including pursuant to Section 251(h) of the DGCL) unless (a) the laws of the State of Delaware, as then in effect, do not require consent by our stockholders (other than Section 251(h) of the DGCL) or (b) at least 80% of the members of the board of directors then in office have approved; (iv) the sale, lease or exchange of all, or substantially all, of our property or assets, unless at least 80% of the members of the board of directors then in office have approved; or (v) our dissolution, unless approved by at least 80% of the members of the board of directors then in office. However, if we seek stockholder approval of our initial business combination such stockholder approval will not be subject to the foregoing.
Supermajority of Board of Directors Permitted to Amend Bylaws
Our amended and restated certificate of incorporation and our amended and restated bylaws authorize our board of directors to adopt, amend or repeal our amended and restated bylaws by the affirmative vote of not less than 80% of the members of the board of directors then in office.
Series B Common Stock and series F Common Stock Consent Right
Prior to the consummation of our initial business combination, for so long as any shares of our Series F common stock remain outstanding, we will not have the power, without the prior affirmative vote or consent of the holders of a majority of the shares of our Series F common stock then outstanding, voting as a separate class, to amend, alter or repeal any provision of our amended and restated certificate of incorporation, whether by merger, consolidation or otherwise, if such amendment, alteration or repeal would alter or change the powers, preferences or relative, participating, optional or other special rights of the Series B common stock.
For so long as any shares of our Series B common Stock or Series F common stock are issued and outstanding, we will not have the power, without the prior affirmative vote or consent of the holders of a
majority of the voting power of our Series B common stock and Series F common stock then outstanding, voting together as a single class, to issue any shares of our Series B common stock or equity securities convertible into shares of our Series B common stock, or our Series F common stock or equity securities convertible into shares of our Series F common stock to any person other than LMC and its wholly owned subsidiaries or an existing beneficial owner of issued and outstanding shares of our Series B common stock.
Any action required or permitted to be taken at any meeting of the holders of our Series B common stock and/or Series F common stock, as applicable, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of the outstanding shares of our Series B common stock and/or Series F common stock, as applicable, having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of our Series B common stock and/or Series F common stock, as applicable, were present and voted.
Exclusive Forum for Certain Lawsuits
Our amended and restated certificate of incorporation will provide that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by applicable law, the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery does not have subject matter jurisdiction, another state court within the State of Delaware or, if no state court in Delaware has subject matter jurisdiction, the federal district courts of the United Stated States of America) shall be the sole and exclusive forum for any stockholder (including a beneficial owner within the meaning of Section 13(d) of the Exchange Act) to bring (1) any derivative action, suit or proceeding brought or purportedly brought on behalf of our company, (2) any action, suit or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former director, stockholder, officer, employee or agent of our company to our company or our stockholders, or any claim of aiding and abetting such breach, (3) any action, suit or proceeding asserting a claim arising pursuant to, or seeking to enforce any right, obligation, or remedy under, any provision of the DGCL or the amended and restated certificate of incorporation or the amended and restated bylaws, (4) any action to interpret, apply, enforce or determine the validity of amended and restated certificate of incorporation or the amended and restated bylaws, (5) any action asserting a claim against our company or any director or officer of our company governed by the internal affairs doctrine, (6) any action, suit, or proceeding as to which the DGCL confers jurisdiction on the Court of Chancery, or (7) any action, suit or proceeding asserting an “internal corporate claim” as defined in Section 115 of the DGCL; in all cases, subject to the court’s having personal jurisdiction over the indispensable parties named as defendants. Notwithstanding the foregoing, the provisions of this paragraph will not apply to any actions arising under the Securities Act or the Exchange Act or otherwise arising under federal securities laws, for which the federal district courts of the United States of America shall be the sole and exclusive forum.
Section 22 of the Securities Act of 1933, as amended (the “Securities Act”), creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated certificate of incorporation also will provide that the federal district courts of the United States of America will, to the fullest extent permitted by law, be the sole and exclusive forum for resolving the resolution of any complaint asserting a cause of action arising under the Securities Act.
Any person or entity purchasing or otherwise acquiring or holding or owning (or continuing to hold or own) any interest in any of our securities shall be deemed to have notice of and consented to the foregoing bylaw provisions. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law and federal securities laws in the types of lawsuits to which it applies, the provision may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or any of our directors, officers, stockholders, or other employees, which may discourage lawsuits with respect to such claims against us and our current and former directors, officers, stockholders, or other employees. Furthermore, the enforceability of choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable. See “Risk Factors — Risks Relating to Our
Securities — Our amended and restated certificate of incorporation will designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, and also provide that the federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, each of which could limit our stockholders’ ability to choose the judicial forum for disputes with our company or our company’s directors, officers or employees.”
Securities Eligible for Future Sale
Immediately after this offering we will have 62,500,000 (or 71,875,000 if the underwriters’ over-allotment option is exercised in full) shares of common stock outstanding. Of these shares, the 50,000,000 shares (or 57,500,000 shares if the underwriters’ over-allotment option is exercised in full) sold in this offering 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 and any units purchased by our directors and executive officers in the directed unit program, which units would be subject to lock-up restrictions, as described under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants.” All of the remaining 12,500,000 (or 14,375,000 if the underwriters’ over-allotment option is exercised in full) founder shares and all 9,000,000 (or 10,000,000 if the underwriters’ over-allotment option is exercised in full) private placement warrants are restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering, and are subject to transfer restrictions as set forth elsewhere in this prospectus.
Upon the closing of the sale of the forward purchase units, all forward purchase shares and forward purchase warrants will be restricted securities under Rule 144. Otherwise, the forward purchase units will not be subject to any transfer restrictions.
Rule 144
Pursuant to Rule 144, a person who has beneficially owned restricted shares of our common stock or warrants for at least six months would be entitled to sell their securities provided that: (1) 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 (2) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as we were required to file reports) preceding the sale.
Persons who have beneficially owned restricted shares of our common stock or warrants for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:
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1% of the total number of shares of common stock then outstanding, which will equal 625,000 shares immediately after this offering (or 718,750 if the underwriters exercise their over-allotment option in full); or
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the average weekly reported trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.
Sales by our affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.
Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies
Rule 144 is not available for the resale of securities initially issued by shell companies (other than a business combination related shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:
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the issuer of the securities that was formerly a shell company has ceased to be a shell company;
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the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
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the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Current Reports on Form 8-K; and
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at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
As a result, our sponsor will be able to sell their founder shares and its private placement warrants, as applicable, pursuant to Rule 144 without registration one year after we have completed our initial business combination.
Registration and Preemptive Rights
The holders of the founder shares, forward purchase shares, forward purchase warrants, private placement warrants and warrants that may be issued upon conversion of working capital loans (and any shares of common stock issuable upon the exercise of the private placement warrants, forward purchase warrants or warrants issued upon conversion of working capital loans and upon conversion of the founder shares) will be entitled to registration rights with respect to private placement warrants, forward purchase warrants, warrants that may be issued upon conversion of working capital loans, warrants purchased by them in the open market and shares of Series A common stock purchased by them in the open market or issuable upon (1) conversion of the founder shares, (2) exercise of the private placement warrants, (3) conversion of the forward purchase shares and shares of Series B common stock purchased in connection with our initial business combination (if any), (4) exercise of the forward purchase warrants pursuant to an investor rights agreement and forward purchase agreement to be signed prior to or on the effective date of this offering requiring us to register such securities for resale, and (5) exercise of warrants issued upon conversion of working capital loans (if any). The holders of these securities can also demand that we register securities we may issue by way of stock, dividend, recapitalization, merger or similar transaction. The holder of these securities will be entitled to make up to three demands in any 12-month period under each agreement, excluding short form registration demands, that we register such securities. In addition, the holders will 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. The holders will also have registration rights in connection with certain hedging and financing transactions that they may enter into with respect to these securities. However, both the investor rights agreement and the forward purchase agreement will provide that we will not be required to effect or permit any registration or cause any registration statement to become effective until the securities covered thereby are released from their lock-up restrictions, as described under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants.” We will bear the expenses incurred in connection with the filing of any such registration statements.
The investor rights agreement additionally will provide that upon certain issuances of equity securities by us (other than issuances due to the exercise of warrants), our sponsor will have certain contractual preemptive rights which are intended to allow our sponsor and LMC to maintain their percentage ownership of our outstanding common stock and voting stock. See “Principal Stockholders — Registration and Preemptive Rights.”
Listing of Securities
We have applied to list our units, Series A common stock and warrants on Nasdaq under the symbols “LMACU,” “LMACA” and “LMACW,” respectively. We expect that our units will be listed on Nasdaq on or promptly after the effective date of the registration statement of which this prospectus forms a part. Following the date the shares of our Series A common stock and warrants are eligible to trade separately, we anticipate that the shares of our common stock 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.
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a summary of the U.S. federal income tax considerations generally applicable to the ownership and disposition of our units, Series A common stock and warrants, which we refer to collectively as our securities. This summary is based upon U.S. federal income tax law as of the date of this prospectus, which is subject to change or differing interpretations, possibly with retroactive effect. This summary does not discuss all aspects of U.S. federal income taxation that may be important to particular investors in light of their individual circumstances, including investors subject to special tax rules (e.g., financial institutions, insurance companies, broker-dealers, tax-exempt organizations (including private foundations), taxpayers that have elected mark-to-market accounting, S corporations, regulated investment companies, real estate investment trusts, investors that will hold Series A common stock or warrants as part of a straddle, hedge, conversion, or other integrated transaction for U.S. federal income tax purposes, or investors that have a functional currency other than the U.S. dollar), all of whom may be subject to tax rules that differ materially from those summarized below. In addition, this summary does not discuss other U.S. federal tax consequences (e.g., estate or gift tax), any state, local, or non-U.S. tax considerations or the Medicare tax or alternative minimum tax. In addition, this summary is limited to investors that will hold our securities as “capital assets” (generally, property held for investment) under the Internal Revenue Code of 1986, as amended, (the “Code”), and that acquired the securities pursuant to this offering (or, in the case of Series A common stock, upon exercise of warrants so acquired). No ruling from the Internal Revenue Service, (the “IRS”) has been or will be sought regarding any matter discussed herein. No assurance can be given that the IRS would not assert, or that a court would not sustain a position contrary to any of the tax aspects set forth below.
For purposes of this summary, a “U.S. Holder” is a beneficial holder of securities who or that, for U.S. federal income tax purposes is:
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an individual who is a United States citizen or resident of the United States;
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a corporation or other entity treated as a corporation for United States federal income tax purposes created in, or organized under the law of, the United States or any state or political subdivision thereof;
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an estate the income of which is includible in gross income for United States federal income tax purposes regardless of its source; or
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a trust (A) the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons (within the meaning of the Code) who have the authority to control all substantial decisions of the trust or (B) that has in effect a valid election under applicable Treasury regulations to be treated as a United States person.
A “non-U.S. Holder” is a beneficial holder of shares who or that is neither a U.S. Holder nor a partnership for U.S. federal income tax purposes.
If a partnership (including an entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds our securities, the tax treatment of a partner, member or other beneficial owner in such partnership will generally depend upon the status of the partner, member or other beneficial owner, the activities of the partnership and certain determinations made at the partner, member or other beneficial owner level. If you are a partner, member or other beneficial owner of a partnership holding our securities, you are urged to consult your tax advisor regarding the tax consequences of the ownership and disposition of our securities.
THIS DISCUSSION OF U.S. FEDERAL INCOME TAX CONSIDERATIONS IS FOR GENERAL INFORMATION PURPOSES ONLY AND IS NOT TAX ADVICE. WE URGE PROSPECTIVE HOLDERS TO CONSULT THEIR TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME TAX CONSEQUENCES TO THEM OF OWNING AND DISPOSING OF OUR SECURITIES, AS WELL AS THE APPLICATION OF ANY, STATE, LOCAL AND NON-U.S. INCOME, ESTATE AND OTHER TAX CONSIDERATIONS.
Personal Holding Company Status
We would be subject to a second level of U.S. federal income tax on a portion of our income if we are determined to be a personal holding company, or PHC, for U.S. federal income tax purposes. A U.S.
corporation will generally be classified as a PHC for U.S. federal income tax purposes in a given taxable year if (1) at any time during the last half of such taxable year, five or fewer individuals (without regard to their citizenship or residency and including as individuals for this purpose certain entities such as certain tax-exempt organizations, pension funds, and charitable trusts) own or are deemed to own (pursuant to certain constructive ownership rules) more than 50% of the stock of the corporation by value and (2) at least 60% of the corporation’s adjusted ordinary gross income, as determined for U.S. federal income tax purposes, for such taxable year consists of PHC income (which includes, among other things, dividends, interest, certain royalties, annuities and, under certain circumstances, rents).
Depending on the date and size of our initial business combination, it is possible that at least 60% of our adjusted ordinary gross income may consist of PHC income as discussed above. In addition, depending on the concentration of our stock in the hands of individuals, including certain tax-exempt organizations, pension funds, and charitable trusts, it is possible that more than 50% of our stock will be owned or deemed owned (pursuant to the constructive ownership rules) by five or fewer such persons during the last half of a taxable year. Thus, no assurance can be given that we will not become a PHC following this offering or in the future. If we are or were to become a PHC in a given taxable year, we would be subject to an additional PHC tax, currently 20%, on our undistributed PHC income, which generally includes our taxable income, subject to certain adjustments.
General Treatment of Units
There is no authority directly addressing the treatment, for U.S. federal income tax purposes, of instruments with terms substantially the same as the units and, therefore, their treatment is not entirely clear. The acquisition of a unit should be treated for U.S. federal income tax purposes as the acquisition of one share of our Series A common stock and one-fifth of one warrant to acquire one share of our Series A common stock. We intend to treat the acquisition of a unit in this manner and, by purchasing a unit, you agree to adopt such treatment for tax purposes. Each holder of a unit must allocate the purchase price paid by such holder for such unit between the one share of Series A common stock and the one-fifth of one warrant based on their respective relative fair market values. Under U.S. federal income tax law, each investor must make his or her own determination of such value based on all the relevant facts and circumstances. Therefore, we strongly urge each investor to consult his or her tax advisor regarding the determination of value for these purposes. A holder’s initial tax basis in the Series A common stock and the warrant included in each unit should equal the portion of the purchase price of the unit allocated thereto. Any disposition of a unit should be treated for U.S. federal income tax purposes as a disposition of the share of Series A common stock and one-fifth of one warrant comprising the unit, and the amount realized on the disposition should be allocated between the Series A common stock and the one-fifth of one warrant based on their respective relative fair market values (as determined by each such unit holder based on all the relevant facts and circumstances) at the time of disposition. The separation of the Series A common stock and warrant constituting a unit should not be a taxable event for U.S. federal income tax purposes.
The foregoing treatment of the units and a holder’s purchase price allocation are not binding on the IRS or the courts. Because there is no authority that directly addresses 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. Each prospective investor is urged to consult its tax advisors regarding the U.S. federal, state, local and any foreign tax consequences of an investment in a unit (including alternative characterizations of a unit and its components). The following discussion is based on the assumption that the characterization of the Series A common stock and warrants and the allocation described above are respected for U.S. federal income tax purposes.
U.S. Holders
Taxation of Distributions
If we pay distributions in cash or other property (other than certain distributions of our stock or rights to acquire our stock) to U.S. Holders of shares of our Series A common stock, such distributions will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of current and accumulated earnings and profits will constitute a return of capital that will be applied against
and reduce (but not below zero) the U.S. Holder’s adjusted tax basis in our Series A common stock. Any remaining excess will be treated as gain realized on the sale or other disposition of the Series A common stock and will be treated as described under “U.S. Holders — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Series A Common Stock” below.
Dividends we pay to a U.S. Holder that is a taxable corporation generally will qualify for the dividends received deduction if the requisite holding period is satisfied. With certain exceptions (including dividends treated as investment income for purposes of investment interest deduction limitations), and provided certain holding period requirements are met, dividends we pay to a non-corporate U.S. Holder will generally constitute “qualified dividends” that will be subject to tax at the preferential tax rate accorded to long-term capital gains. It is unclear whether the redemption rights with respect to the Series A common stock described in this prospectus may prevent a U.S. Holder from satisfying the applicable holding period requirements with respect to the dividends received deduction or the preferential tax rate on qualified dividend income, as the case may be. If the holding period requirements are not satisfied, then a corporation may not be able to qualify for the dividends received deduction and would have taxable income equal to the entire dividend amount, and non-corporate U.S. Holders may be subject to tax on such dividend at regular ordinary income tax rates instead of the preferential rate that applies to qualified dividend income.
Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Series A Common Stock
A U.S. Holder will recognize gain or loss on the sale, taxable exchange or other taxable disposition (which would include a dissolution and liquidation in the event we do not complete an initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or during any Extension Period) of our Series A common stock. Any such gain or loss will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder’s holding period for the Series A common stock so disposed of exceeds one year. It is unclear, however, whether the redemption rights with respect to the Series A common stock described in this prospectus may suspend the running of the applicable holding period for this purpose. If the running of the holding period for the Series A common stock is suspended, then non-corporate U.S. Holders may not be able to satisfy the one-year holding period requirement for long-term capital gain treatment, in which case any gain on a sale or taxable disposition of the shares would be subject to short-term capital gain treatment and would be taxed at regular ordinary income tax rates. Long-term capital gains recognized by non-corporate U.S. Holders are eligible to be taxed at reduced rates.
The amount of gain or loss recognized will generally be equal to the difference between (1) the sum of the amount of cash and the fair market value of any property received in such disposition (or, if the Series A common stock is held as part of a unit at the time of the disposition, the portion of the amount realized on such disposition that is allocated to the Series A common stock based upon the then fair market values of the Series A common stock and the warrant included in the unit) and (2) the U.S. Holder’s adjusted tax basis in its Series A common stock so disposed of. A U.S. Holder’s adjusted tax basis in its Series A common stock will generally equal the U.S. Holder’s acquisition cost (that is, as discussed above, the portion of the purchase price of a unit allocated to a share of Series A common stock or, as discussed below, the U.S. Holder’s initial basis for Series A common stock received upon exercise of a warrant) less any prior distributions treated as a return of capital. The deductibility of capital losses is subject to limitations.
Redemption of Series A Common Stock
In the event that a U.S. Holder’s Series A common stock is redeemed pursuant to the redemption provisions described in this prospectus under “Description of Securities — Common Stock” or if we purchase a U.S. Holder’s Series A common stock in an open market transaction (each of which we refer to as a “redemption”), the treatment of the transaction for U.S. federal income tax purposes will depend on whether the redemption qualifies as a sale of the Series A common stock under Section 302 of the Code. If the redemption qualifies as a sale of Series A common stock under the tests described below, the tax consequences to the U.S. Holder will be the same as described under “U.S. Holders — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Series A Common Stock” above. If the redemption does not qualify as a sale of Series A common stock, the U.S. Holder will be treated as receiving a corporate distribution, the tax consequences of which are described above under “U.S. Holders — Taxation of Distributions.” Whether the redemption qualifies for sale treatment will depend primarily on the total number
of shares of our stock treated as held by the U.S. Holder (including any stock constructively owned by the U.S. Holder as a result of owning warrants) both before and after the redemption. The redemption of Series A common stock will generally be treated as a sale of the Series A common stock (rather than as a corporate distribution) if the redemption (1) is “substantially disproportionate” with respect to the U.S. Holder, (2) results in a “complete termination” of the U.S. Holder’s interest in us or (3) is “not essentially equivalent to a dividend” with respect to the U.S. Holder. These tests are explained more fully below.
In determining whether any of the foregoing tests are satisfied, a U.S. Holder takes into account not only stock actually owned by the U.S. Holder, but also shares of our stock that are constructively owned by it. A U.S. Holder may constructively own, in addition to stock owned directly, stock owned by certain related individuals and entities in which the U.S. Holder has an interest or that have an interest in such U.S. Holder, as well as any stock the U.S. Holder has a right to acquire by exercise of an option, which would generally include common stock which could be acquired pursuant to the exercise of the warrants. A redemption of a U.S. Holder’s stock will be substantially disproportionate with respect to the U.S. Holder if the percentage of our outstanding voting stock actually and constructively owned by the U.S. Holder immediately following the redemption of common stock is, among other requirements, less than 80% of the percentage of our outstanding voting stock actually and constructively owned by the U.S. Holder immediately before the redemption. Prior to our initial business combination, the Series A common stock may not be treated as voting stock 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 (1) all of the shares of our stock actually and constructively owned by the U.S. Holder are redeemed or (2) all of the shares of our stock actually owned by the U.S. Holder are redeemed and the U.S. Holder is eligible to waive, and effectively waives in accordance with specific rules, the attribution of stock owned by certain family members and the U.S. Holder does not constructively own any other stock (including any stock constructively owned by the U.S. Holder as a result of owning warrants). The redemption of the Series A common stock will not be essentially equivalent to a dividend if the 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. The IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority stockholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a “meaningful reduction.” A U.S. Holder is urged to consult its tax advisors as to the tax consequences of a redemption, including the application of the constructive ownership rules described above.
If none of the foregoing tests is satisfied, the redemption will be treated as a corporate distribution, the tax consequences of which are described under “U.S. Holders — Taxation of Distributions,” above. After the application of those rules, any remaining tax basis of the U.S. Holder in the redeemed Series A common stock should be added to the U.S. Holder’s adjusted tax basis in its remaining stock, or, if it has none, to the U.S. Holder’s adjusted tax basis in its warrants or possibly in other stock constructively owned by it.
Exercise of a Warrant
Except as discussed below with respect to the cashless exercise of a warrant, a U.S. Holder will not recognize gain or loss upon the exercise of a warrant. The U.S. Holder’s tax basis in the share of our Series A common stock received upon exercise of the warrant will generally be an amount equal to the sum of the U.S. Holder’s initial investment in the warrant (i.e., the portion of the U.S. Holder’s purchase price for a unit that is allocated to the warrant, as described above under “— General Treatment of Units”) and the exercise price of such warrant. It is unclear whether a U.S. Holder’s holding period for the Series A common stock received upon exercise of the warrant would commence on the date of exercise of the warrant or the day following the date of exercise of the warrant; however, in either case the holding period will not include the period during which the U.S. Holder held the warrants.
The tax consequences of a cashless exercise of a warrant are not clear under current tax law. A cashless exercise may be nontaxable, either because the exercise is not a realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either situation, a U.S. Holder’s tax basis in the Series A common stock received would generally equal the holder’s tax basis in the warrant. If the cashless exercise were treated as not being a realization event, it is unclear whether a U.S. Holder’s holding period for the Series A common stock would commence on the date of exercise of the warrant or the day
following the date of exercise of the warrant. If, however, the cashless exercise were treated as a recapitalization, the holding period of the Series A common stock would include the holding period of the warrant.
It is also possible that a cashless exercise could be treated in part as a taxable exchange in which gain or loss is recognized. In such event, a U.S. Holder would be deemed to have surrendered a number of warrants having an aggregate fair market value equal to the exercise price for the total number of warrants to be exercised. 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 Series A common stock 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 “— General Treatment of Units”) and the exercise price of such warrants. It is unclear whether a U.S. Holder’s holding period for the Series A common stock would 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 would not include the period during which the U.S. Holder held the warrant.
Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise, including when a U.S. Holder’s holding period would commence with respect to the Series A common stock received, 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 are urged to consult their tax advisors regarding the tax consequences of a cashless exercise.
Sale, Taxable Exchange, Redemption or Expiration of a Warrant
Upon a sale, taxable exchange (other than by exercise), redemption (other than a redemption for Series A common stock), or expiration of a warrant, a U.S. Holder will recognize taxable gain or loss in an amount equal to the difference between (1) the amount realized upon such disposition or expiration (or, if the warrant is held as part of a unit at the time of the disposition of the unit, the portion of the amount realized on such disposition that is allocated to the warrant based on the then fair market values of the warrant and the Series A common stock constituting such unit) and (2) the U.S. Holder’s tax basis in the warrant (that is, the portion of the U.S. Holder’s purchase price for a unit that is allocated to the warrant, as described above under “— General Treatment of Units”). Such gain or loss will generally be treated as long-term capital gain or loss if the warrant is held by the U.S. Holder for more than one year at the time of such disposition or expiration. 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 deductibility of capital losses is subject to certain limitations.
If we give notice of an intention to redeem warrants for Series A common stock as described in the section of this prospectus entitled “Description of Securities — Warrants — Public Stockholders’ Warrants,” and a U.S. Holder exercises its warrant on a cashless basis and receives the amount of Series A common stock as determined by reference to the table set forth thereunder, we intend to treat such exercise as a redemption of warrants for Series A common stock for U.S. federal income tax purposes. Such redemption should be treated as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the Code. Accordingly, you should not recognize any gain or loss on the redemption of warrants for shares of our Series A common stock. Your aggregate tax basis in the shares of Series A common stock received in the redemption should equal your aggregate tax basis in your warrants redeemed and your holding period for the shares of Series A common stock received in redemption of your warrants should include your holding period for your surrendered warrants. However, there is some uncertainty regarding this tax treatment and it is possible such a redemption could be treated in part as an exchange in which gain or loss would be recognized in a manner similar to that discussed above for a cashless exercise of warrants or otherwise characterized. Accordingly, a U.S. Holder is urged to consult its tax advisor regarding the tax consequences of a redemption of warrants for shares of Series A common stock.
Possible Constructive Distributions and Distributions of Certain Rights
As discussed in the section of this prospectus captioned “Description of Securities — Warrants — Public Stockholders’ Warrants,” the terms of each warrant provide for in certain events, an adjustment to the number
of shares of Series A common stock for which the warrant may be exercised or to the exercise price of the warrant (and in some transactions, an adjustment to the type and number of securities for which the warrant may be exercised), and in certain rights offerings, an adjustment to provide a warrant holder with the number and type of stock purchase rights, warrants or options such holder would have been entitled to receive if it had exercised such warrant immediately prior to the record date for such rights offering (“Pass-Through Rights”). An adjustment which has the effect of preventing dilution is generally not a taxable event. Nevertheless, a U.S. Holder of warrants would be treated as receiving a constructive distribution (or in the case of the Pass-Through Rights, an actual distribution) from us if, for example, the adjustment increases the holder’s proportionate interest in our assets or earnings and profits (e.g., through an increase in the number of shares of Series A common stock (or other equity securities) that would be obtained upon exercise) as a result of a distribution of cash or other property to the holders of shares of our common stock which is taxable to such holders as a dividend. Any constructive distribution (or distribution of Pass-Through Rights) received by a U.S. Holder would be subject to U.S. federal income tax as described under “— U.S. Holders — Taxation of Distributions” above in the same manner as if such U.S. Holder received a cash distribution from us equal to the fair market value of such increased interest (or distribution). A U.S. Holder is urged to consult its tax advisor regarding the tax consequences of an adjustment to the terms of the warrants or the receipt of Pass-Through Rights as described in “Description of Securities — Warrants — Public Stockholders’ Warrants.”
Non-U.S. Holders
Taxation of Distributions
In general, any distributions (including constructive distributions) we make to a non-U.S. Holder of shares of our Series A common stock, to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles), will constitute dividends for U.S. federal income tax purposes and, provided such dividends are not effectively connected with the non-U.S. Holder’s conduct of a trade or business within the United States, we will be required to withhold tax from the gross amount of the dividend at a rate of 30%, unless such non-U.S. Holder is eligible for a reduced rate of withholding tax under an applicable income tax treaty and provides proper certification of its eligibility for such reduced rate (usually on an IRS Form W-8BEN or W-8BEN-E, as applicable). In the case of any constructive dividend, it is possible that this tax would be withheld from any amount owed to a non-U.S. Holder by the applicable withholding agent, including cash distributions on other property or sale proceeds from warrants or other property subsequently paid or credited to such holder. Any distribution not constituting a dividend will be treated first as reducing (but not below zero) the non-U.S. Holder’s adjusted tax basis in its shares of our Series A common stock and, to the extent such distribution exceeds the non-U.S. Holder’s adjusted tax basis, as gain realized from the sale or other disposition of the Series A common stock, which will be treated as described under “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Series A Common Stock and Warrants” below. In addition, if we determine that we are classified as a “United States real property holding corporation” (see “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Series A Common Stock and Warrants” below), we will withhold 15% of any distribution that exceeds our current and accumulated earnings and profits.
Dividends we pay to a non-U.S. Holder that are effectively connected with such non-U.S. Holder’s conduct of a trade or business within the United States (or if a tax treaty applies are attributable to a U.S. permanent establishment or fixed base maintained by the non-U.S. Holder) will generally not be subject to U.S. withholding tax, provided such non-U.S. Holder complies with certain certification and disclosure requirements (usually by providing an IRS Form W-8ECI or other applicable form). Instead, such dividends will generally be subject to U.S. federal income tax, net of certain deductions, at the same graduated individual or corporate rates applicable to U.S. Holders. If the non-U.S. Holder is a corporation, dividends that are effectively connected income may also be subject to a “branch profits tax” at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty).
Exercise or Lapse of a Warrant
The characterization for U.S. federal income tax purposes of a non-U.S. Holder’s exercise of a warrant or the lapse of a warrant held by a non-U.S. Holder generally will correspond to the characterization described under “U.S. Holders — Exercise of a Warrant” or “U.S. Holders — Sale, Exchange, Redemption
or Expiration of a Warrant” above, although to the extent a cashless exercise results in a taxable exchange, the tax consequences to the non-U.S. Holder would be the same as those described below in “Non-U.S. Holders — Gain on Sale, Exchange or Other Taxable Disposition of Series A Common Stock and Warrants.”
Redemption of Warrants for Series A Common Stock
A redemption of warrants for Series A common stock described in this prospectus under “Description of Securities — Warrants — Public Stockholders’ Warrants” should be treated as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the Code. Accordingly, you should not recognize any gain or loss on the redemption of warrants for shares of our Series A common stock. Your aggregate tax basis in the shares of Series A common stock received in the redemption should equal your aggregate tax basis in your warrants redeemed and your holding period for the shares of Series A common stock received in redemption of your warrants should include your holding period for your surrendered warrants. However, there is some uncertainty regarding this tax treatment and it is possible that such a redemption could be treated in part as an exchange in which gain or loss would be recognized in a manner similar to that discussed above for a cashless exercise of warrants, or otherwise characterized. Accordingly, a non-U.S. Holder is urged to consult its tax advisor regarding the tax consequences of a redemption of warrants for shares of Series A common stock.
Gain on Sale, Taxable Exchange or Other Taxable Disposition of Series A Common Stock and Warrants
A non-U.S. Holder will generally not be subject to U.S. federal income or withholding tax in respect of gain recognized on a sale, taxable exchange or other taxable disposition of our Series A common stock, which would include a dissolution and liquidation in the event we do not complete an initial business combination within 24 months from the closing of this offering (or 27 months if an agreement in principle event has occurred) or during any Extension Period, or warrants (including an expiration or redemption of our warrants), in each case without regard to whether those securities were held as part of a unit, unless:
•
the gain is effectively connected with the conduct of a trade or business by the non-U.S. Holder within the United States (and, if an applicable tax treaty so requires, is attributable to a U.S. permanent establishment or fixed base maintained by the non-U.S. Holder);
•
the non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of disposition and certain other conditions are met; or
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we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the non-U.S. Holder held our Series A common stock, and, in the case where shares of our Series A common stock are regularly traded on an established securities market, the non-U.S. Holder has owned, directly or constructively, more than 5% of our Series A common stock at any time within the shorter of the five-year period preceding the disposition or such non-U.S. Holder’s holding period for the shares of our Series A common stock. There can be no assurance that our Series A common stock will be treated as regularly traded on an established securities market for this purpose.
Gain described in the first bullet point above will be subject to tax at generally applicable U.S. federal income tax rates. Any gains described in the first bullet point above of a non-U.S. Holder that is a foreign corporation may also be subject to an additional “branch profits tax” at a 30% rate (or lower applicable treaty rate). Gain described in the second bullet point above will generally be subject to a flat 30% U.S. federal income tax. Non-U.S. Holders are urged to consult their tax advisors regarding possible eligibility for benefits under income tax treaties.
If the third bullet point above applies to a non-U.S. Holder, gain recognized by such holder on the sale, exchange or other disposition of our Series A common stock or warrants will be subject to tax at generally applicable U.S. federal income tax rates. In addition, a buyer of our Series A common stock or warrants from such holder may be required to withhold U.S. income tax at a rate of 15% of the amount realized upon such disposition. We cannot determine whether we will be a United States real property holding corporation in the future until we complete an initial business combination. We will be classified as a United States real
property holding corporation if the fair market value of our “United States real property interests” equals or exceeds 50% of the sum of the fair market value of our worldwide real property interests plus our other assets used or held for use in a trade or business, as determined for U.S. federal income tax purposes. If we are or have been a “United States real property holding corporation” you are urged to consult your own tax advisors regarding the application of these rules.
Possible Constructive Distributions and Distributions of Certain Rights
As discussed in the section of this prospectus captioned “Description of Securities — Warrants — Public Stockholders’ Warrants,” the terms of each warrant provide for in certain events, an adjustment to the number of shares of Series A common stock for which the warrant may be exercised or to the exercise price of the warrant (and in some transactions, an adjustment to the type and number of securities for which the warrant may be exercised), and in certain rights offerings, an adjustment to provide a warrant holder with Pass-Through Rights. An adjustment which has the effect of preventing dilution is generally not a taxable event. Nevertheless, a non-U.S. Holder of warrants would be treated as receiving a constructive distribution (or in the case of the Pass-Through Rights, an actual distribution) from us if, for example, the adjustment increases the holder’s proportionate interest in our assets or earnings and profits (e.g., through an increase in the number of shares of Series A common stock (or other equity securities) that would be obtained upon exercise) as a result of a distribution of cash or other property to the holders of shares of our common stock which is taxable to such holders as a dividend. Any constructive distribution (or distribution of Pass-Through Rights) received by a non-U.S. Holder would be subject to U.S. federal income tax withholding as described under “Non-U.S. Holders — Taxation of Distributions” above in the same manner as if such non-U.S. Holder received a cash distribution from us equal to the fair market value of such increased interest (or distribution). A non-U.S. Holder is urged to consult its tax advisor regarding the tax consequences of an adjustment to the terms of the warrants or the receipt of Pass-Through Rights as described in “Description of Securities — Warrants — Public Stockholders’ Warrants.”
Redemption of Series A Common Stock
The characterization for U.S. federal income tax purposes of the redemption of a non-U.S. Holder’s Series A common stock pursuant to the redemption provisions described in this prospectus under “Description of Securities — Common Stock” will generally correspond to the U.S. federal income tax characterization of such a redemption of a U.S. Holder’s Series A common stock, as described under “U.S. Holders — Redemption of Series A Common Stock” above, and the consequences of the redemption to the non-U.S. Holder will be as described above under “Non-U.S. Holders — Taxation of Distributions” and “Non-U.S. Holders — Gain on Sale, Exchange or Other Taxable Disposition of Series A Common Stock and Warrants,” as applicable.
Foreign Account Tax Compliance Act
Sections 1471 through 1474 of the Code and the Treasury Regulations and administrative guidance promulgated thereunder (commonly referred as the “Foreign Account Tax Compliance Act” or “FATCA”) generally impose withholding at a rate of 30% in certain circumstances on dividends in respect of our securities which are held by or through certain foreign financial institutions (including investment funds), unless any such institution (1) enters into, and complies with, an agreement with the IRS to report, on an annual basis, information with respect to interests in, and accounts maintained by, the institution that are owned by certain U.S. persons and by certain non-U.S. entities that are wholly or partially owned by U.S. persons and to withhold on certain payments, or (2) if required under an intergovernmental agreement between the United States and an applicable foreign country, reports such information to its local tax authority, which will exchange such information with the U.S. authorities. An intergovernmental agreement between the United States and an applicable foreign country may modify these requirements. Accordingly, the entity through which our securities are held will affect the determination of whether such withholding is required. Similarly, dividends in respect of our securities held by an investor that is a non-financial non-U.S. entity that does not qualify under certain exceptions will generally be subject to withholding at a rate of 30%, unless such entity either (1) certifies to us or the applicable withholding agent that such entity does not have any “substantial United States owners” or (2) provides certain information regarding the entity’s “substantial United States owners,” which will in turn be provided to the U.S. Department of Treasury.
Prior to the issuance of proposed U.S. Treasury regulations, such U.S. federal withholding tax under FATCA also would have applied to gross proceeds from the sale or disposition of our Series A common stock or warrants. However, the proposed U.S. Treasury regulations provide that such gross proceeds will not be subject to U.S. federal withholding taxes under FATCA. Taxpayers may rely on these proposed U.S. Treasury regulations until they are revoked or final U.S. Treasury regulations are issued. Prospective investors should consult their tax advisors regarding the possible implications of FATCA on their investment in our securities.
Information Reporting and Backup Withholding
In general, information reporting requirements will apply to payments of dividends and proceeds from the sale of our securities to non-U.S. Holders that are not exempt recipients. We must report annually to the IRS and to each such holder the amount of dividends or other distributions we pay to such non-U.S. Holder on our shares of Series A common stock and the amount of tax withheld with respect to those distributions, regardless of whether withholding is required. The IRS may make copies of the information returns reporting those dividends and amounts withheld available to the tax authorities in the country in which the non-U.S. Holder resides pursuant to the provisions of an applicable income tax treaty or exchange of information treaty.
The gross amount of dividends and proceeds from the disposition of our Series A common stock or warrants paid to a holder that fails to provide the appropriate certification in accordance with applicable U.S. Treasury regulations generally will be subject to backup withholding at the applicable rate.
Information reporting and backup withholding are generally not required with respect to the amount of any proceeds from the sale by a non-U.S. Holder of Series A common stock or warrants outside the United States through a foreign office of a foreign broker that does not have certain specified connections to the United States. However, if a non-U.S. Holder sells Series A common stock or warrants through a U.S. broker or the U.S. office of a foreign broker, the broker will generally be required to report to the IRS the amount of proceeds paid to such holder, unless the non-U.S. Holder provides appropriate certification (usually on an IRS Form W-8BEN or W-8BEN-E, as applicable) to the broker of its status as a non-U.S. Holder or such non-U.S. Holder is an exempt recipient. In addition, for information reporting purposes, certain non-U.S. brokers with certain relationships with the United States will be treated in a manner similar to U.S. brokers.
Backup withholding is not an additional tax. Any amounts we withhold under the backup withholding rules may be refunded or credited against a holder’s U.S. federal income tax liability, if any, by the IRS if the required information is furnished in a timely manner to the IRS.
All non-U.S. Holders should consult their tax advisors regarding the application of information reporting and backup withholding to them.
UNDERWRITING
Under the terms and subject to the conditions contained in an underwriting agreement dated , 2021 we have agreed to sell to the underwriters named below, for whom Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) LLC and Goldman Sachs & Co. LLC are acting as representatives, the following respective numbers of units:
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Underwriter
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Number
of Units
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Citigroup Global Markets Inc.
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Morgan Stanley & Co. LLC
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Credit Suisse Securities (USA) LLC
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Goldman Sachs & Co. LLC
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Total
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50,000,000
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The underwriting agreement will provide that the underwriters are obligated to purchase all the units in this offering if any are purchased, other than those units covered by the over-allotment option described below.
We have granted to the underwriters a 45-day option from the date of this prospectus to purchase on a pro rata basis up to 7,500,000 additional units at the initial public offering price, less the underwriting discounts and commissions. The option may be exercised only to cover any over-allotments of units.
The underwriters propose to offer the units initially at the public offering price on the cover page of this prospectus and to selling group members at that price less a selling concession of $ per unit.
The following table summarizes the compensation and estimated expenses we will pay:
|
|
|
|
Per Unit(1)
|
|
|
Total(1)
|
|
|
|
|
|
Without
Over-allotment
|
|
|
With
Over-allotment
|
|
|
Without
Over-allotment
|
|
|
With
Over-allotment
|
|
|
Underwriting Discounts and Commissions paid
by us
|
|
|
|
$
|
0.55
|
|
|
|
|
$
|
0.55
|
|
|
|
|
$
|
27,500,000
|
|
|
|
|
$
|
31,625,000
|
|
|
(1)
Includes $0.35 per unit, or $17,500,000 (or $20,125,000 if the over-allotment option is exercised in full) in the aggregate, payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States as described herein. The deferred commissions will be released only on completion of an initial business combination, in an amount equal to $0.35 multiplied by the number of shares of Series A common stock sold as part of the units in this offering, as described in this prospectus.
We estimate that our out-of-pocket expenses for this offering will be approximately $1,750,000. We have agreed to pay for the FINRA-related fees and expenses of the underwriters’ legal counsel, not to exceed $25,000.
The representatives have informed us that the underwriters do not intend to make sales to discretionary accounts.
We, our sponsor and our executive officers and directors have agreed that we will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, without the prior written consent of Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC for a period of 180 days after the date of this prospectus, any units, warrants, common stock or any other securities convertible into, or exercisable, or exchangeable for, shares of common stock; provided, however, that we may (1) issue and sell the private placement warrants; (2) issue and sell the additional units to cover our underwriters’ over-allotment option (if any); (3) register with the SEC pursuant to an agreement to be entered into concurrently with the issuance and sale of the securities in this offering, the resale of the private placement warrants and the shares of Series A common stock issuable upon exercise of the warrants and the founder shares; and (4) issue securities
in connection with our initial business combination, subject to certain exceptions described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants.” Any permitted transferees as described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants” would be subject to the same restrictions and other agreements as our sponsor with respect to any founder shares. However, the foregoing shall not apply to the forfeiture of any founder shares pursuant to their terms or any transfer of founder shares to any current or future independent director of the Company (as long as such current or future independent director is subject to the terms of the letter agreement, filed herewith, at the time of such transfer; and as long as, to the extent any Section 16 reporting obligation is triggered as a result of such transfer, any related Section 16 filing includes a practical explanation as to the nature of the transfer). Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC in their sole discretion may release any of the securities subject to these lock-up agreements at any time without notice.
Our sponsor and our executive officers and directors will agree not to transfer, assign or sell any of their founder shares until the earlier to occur of: (A) one year after the completion of our initial business combination; and (B) subsequent to our initial business combination, (x) the date on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property or (y) if the last reported sale price of our Series A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 trading day period commencing at least 150 days after our initial business combination, subject to certain exceptions described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants.” Any permitted transferees as described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants” would be subject to the same restrictions and other agreements as our sponsor with respect to any founder shares.
The private placement warrants (including the shares of Series A common stock issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business combination (except with respect to permitted transferees as described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants”).
We have agreed to indemnify the underwriters against certain liabilities under the Securities Act, or contribute to payments that the underwriters may be required to make in that respect.
We expect our units to be listed on the Nasdaq, under the symbol “LMACU” and, once the Series A common stock and warrants begin separate trading, to have our Series A common stock and warrants listed on Nasdaq under the symbols “LMACA” and “LMACW,” respectively.
Prior to this offering, there has been no public market for our securities. Consequently, the initial public offering price for the units was determined by negotiations between us and the representatives.
The determination of our per unit offering price was more arbitrary than would typically be the case if we were an operating company. Among the factors considered in determining the initial public offering price were the history and prospects of companies whose principal business is the acquisition of other companies, prior offerings of those companies, our management, our capital structure, and currently prevailing general conditions in equity securities markets, including current market valuations of publicly traded companies considered comparable to our company. We cannot assure you, however, that the price at which the units, Series A common stock or warrants will sell in the public market after this offering will not be lower than the initial public offering price or that an active trading market in our units, Series A common stock or warrants will develop and continue after this offering.
If we do not complete our initial business combination, the underwriters have agreed that: (1) the underwriters will forfeit any rights or claims to their deferred underwriting discounts and commissions, including any accrued interest thereon, then in the trust account; and (2) that the deferred underwriters’ discounts and commissions will be distributed on a pro rata basis, together with any accrued interest thereon (which interest shall be net of taxes payable) to the public stockholders.
In connection with this offering, the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate covering transactions and penalty bids in accordance with Regulation M under the Exchange Act.
•
Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.
•
Over-allotment involves sales by the underwriters of units in excess of the number of units the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of units over-allotted by the underwriters is not greater than the number of units that they may purchase in the over-allotment option. In a naked short position, the number of units involved is greater than the number of units in the over-allotment option. The underwriters may close out any covered short position by either exercising their over-allotment option and/or purchasing units in the open market.
•
Syndicate covering transactions involve purchases of the units in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of units to close out the short position, the underwriters will consider, among other things, the price of units available for purchase in the open market as compared to the price at which they may purchase units through the over-allotment option. If the underwriters sell more units than could be covered by the over-allotment option, a naked short position, the position can only be closed out by buying units in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the units in the open market after pricing that could adversely affect investors who purchase in this offering.
•
Penalty bids permit the representatives to reclaim a selling concession from a syndicate member when the units originally sold by the syndicate member are purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.
These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our units or preventing or retarding a decline in the market price of the units. As a result, the price of our units may be higher than the price that might otherwise exist in the open market. These transactions may be effected on the Nasdaq or otherwise and, if commenced, may be discontinued at any time.
We are not under any contractual obligation to engage any of the underwriters to provide any services for us after this offering, and have no present intent to do so. However, any of 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 of the underwriters and no fees for such services will be paid to any of the underwriters prior to the date that is 60 days from the date of this prospectus, unless FINRA determines that such payment would not be deemed underwriters’ compensation in connection with this offering, and we may pay the underwriters of this offering or any entity with which they are affiliated, a finder’s fee or other compensation for services rendered to us in connection with the completion of a business combination.
Some of the underwriters and their respective affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us or our affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions.
In addition, in the ordinary course of their business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The underwriters and their respective affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
A prospectus in electronic format may be made available on the web sites maintained by one or more of the underwriters, or selling group members, if any, participating in this offering and one or more of the underwriters participating in this offering may distribute prospectuses electronically. The representatives may agree to allocate a number of units to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the underwriters and selling group members that will make internet distributions on the same basis as other allocations.
The units are offered for sale in those jurisdictions in the United States, Europe, Asia and elsewhere where it is lawful to make such offers.
Each of the underwriters has represented and agreed that it has not offered, sold or delivered and will not offer, sell or deliver any of the units directly or indirectly, or distribute this prospectus or any other offering material relating to the units, in or from any jurisdiction except under circumstances that will result in compliance with the applicable laws and regulations thereof and that will not impose any obligations on us except as set forth in the underwriting agreement.
Directed Unit Program
At our request, the underwriters have reserved up to 2,500,000, or 5% (or 4.3%, assuming full exercise of the underwriters’ over-allotment option), of the units offered hereby for sale, at the initial public offering price, to directors, officers, business associates and related persons of LMAC. The number of units available for sale to the general public will be reduced to the extent these individuals purchase reserved units. The underwriters will receive the same underwriting discount on any shares purchase pursuant to this program as they will on any other shares sold to the public in this offering. Any reserved units that are not so purchased will be offered by the underwriters to the general public on the same basis as the other units offered by this prospectus. Except for any units acquired by our directors and executive officers, units purchased pursuant to the directed unit program will not be subject to lock-up agreements with the underwriters.
European Economic Area
In relation to each Member State of the European Economic Area (each, a “Relevant Member State”), each underwriter represents and agrees that no units have been offered or will be offered pursuant to this offering to the public in that Relevant Member State prior to the publication of a prospectus in relation to the units which 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 Regulation, except that offers of units may be made to the public in that Relevant Member State at any time in accordance with the following exemptions under the Prospectus Regulation:
(a)
to any legal entity which is a qualified investor as defined under the Prospectus regulation;
(b)
to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Regulation) subject to obtaining the prior consent of the manager for any such offer; or
(c)
in any other circumstances falling within Article 1(4) of the Prospectus Regulation,
provided that no such offer of units shall require the issuer or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.
No units will be made available to retail investors in the EEA within the meaning of the PRIIPs Regulation. The issuer is not a PRIIP manufacturer under the PRIIPs Regulation and no underwriter is, or will hold itself out to be, a “person selling a PRIIP” as such expression is defined in the PRIIPs Regulation. No units have been offered or will be offered in circumstances in which a Key Information Document is required to be published in accordance with the PRIIPs Regulation.
For the purposes of this provision, the expression an “offer of units to the public” in relation to any units 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 any units,the expression “Prospectus Regulation” means Regulation (EU) 2017/1129 and the expression “PRIIPs Regulation” means Regulation (EU) 1286/2014.
Notice to Investors in the United Kingdom
In relation to the United Kingdom, no units have been offered or will be offered pursuant to this offering to the public in the United Kingdom prior to the publication of a prospectus in relation to the units which has been approved by the competent authority in the United Kingdom in accordance with the UK Prospectus Regulation, except that offers of units may be made to the public in the United Kingdom at any time under the following exemptions under the UK Prospectus Regulation:
(a)
to any legal entity which is a qualified investor as defined under the UK Prospectus Regulation;
(b)
to fewer than 150 natural or legal persons (other than qualified investors as defined under the UK Prospectus Regulation), subject to obtaining the prior consent of the Representative for any such offer; or
(c)
in any other circumstances falling within Article 1(4) of the UK Prospectus Regulation,
provided that no such offer of units shall require the issuer or any underwriter to publish a prospectus pursuant to section 85 of the Financial Services and Markets Act 2000 (as amended, the “FSMA”) or supplement a prospectus pursuant to Article 23 of the UK Prospectus Regulation.
No units will be made available to retail investors in the UK within the meaning of the UK PRIIPs Regulation. The issuer is not a PRIIP manufacturer under the UK PRIIPs Regulation and no underwriter is, or will hold itself out to be, a “person selling a PRIIP” as such expression is defined in the UK PRIIPs Regulation. No units have been offered or will be offered in circumstances in which a Key Information Document is required to be published in accordance with the UK PRIIPs Regulation.
For the purposes of this provision, the expression an “offer to the public” in relation to any units in the United Kingdom means the communication in any form and by any means of sufficient information on the terms of the offer and any units to be offered so as to enable an investor to decide to purchase or subscribe for any units, the expression “UK Prospectus Regulation” means Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the Prospectus (Amendment etc.) (EU Exit) Regulations 2019, and the expression “UK PRIIPs Regulation” means Regulation (EU) 1286/2014 as it forms part of domestic law by virtue of the Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019.
Each of the underwriters severally represents, warrants and agrees as follows:
(a)
it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) to persons who have professional experience in matters relating to investments falling with Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or in circumstances in which section 21 of FSMA does not apply to the company; and
(b)
it has complied with, and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the units in, from or otherwise involving the United Kingdom.
Notice to Residents of Japan
The underwriters will not offer or sell any of our units directly or indirectly in Japan or to, or for the benefit of any Japanese person or to others, for re-offering or re-sale directly or indirectly in Japan or to any Japanese person, except in each case pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Securities and Exchange Law of Japan and any other applicable laws and regulations of Japan. For purposes of this paragraph, “Japanese person” means any person resident in Japan, including any corporation or other entity organized under the laws of Japan.
Notice to Residents of Hong Kong
The underwriters and each of their affiliates have not (1) offered or sold, and will not offer or sell, in Hong Kong, by means of any document, our units other than (A) to “professional investors” as defined in the Securities and Futures Ordinance (Cap.571) of Hong Kong and any rules made under that Ordinance or (B) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance (Cap. 32 of Hong Kong) or which do not constitute an offer to the public within the meaning of that Ordinance or (2) issued or had in its possession for the purposes of issue, and will not issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere any advertisement, invitation or document relating to our units which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to our securities which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the Securities and Futures Ordinance and any rules made under that Ordinance. The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice.
Notice to Residents of Singapore
This prospectus or any other offering material relating to our units has not been and will not be registered as a prospectus with the Monetary Authority of Singapore, and the units will be offered in Singapore pursuant to exemptions under Section 274 and Section 275 of the Securities and Futures Act, Chapter 289 of Singapore (the “Securities and Futures Act”). Accordingly our units may not be offered or sold, or be the subject of an invitation for subscription or purchase, nor may this prospectus or any other offering material relating to our units be circulated or distributed, whether directly or indirectly, to the public or any member of the public in Singapore other than (a) to an institutional investor or other person specified in Section 274 of the Securities and Futures Act, (b) to a sophisticated investor, and in accordance with the conditions specified in Section 275 of the Securities and Futures Act or (c) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the Securities and Futures Act.
Notice to Residents of Germany
Each person who is in possession of this prospectus is aware that no German sales prospectus (Verkaufsprospekt) within the meaning of the Securities Sales Prospectus Act (Wertpapier-Verkaufsprospektgesetz, the “Act”) of the Federal Republic of Germany has been or will be published with respect to our units. In particular, each underwriter has represented that it has not engaged and has agreed that it will not engage in a public offering (offentliches Angebot) within the meaning of the Act with respect to any of our units otherwise then in accordance with the Act and all other applicable legal and regulatory requirements.
Notice to Residents of France
The units are being issued and sold outside the Republic of France and that, in connection with their initial distribution, it has not offered or sold and will not offer or sell, directly or indirectly, any units to the public in the Republic of France, and that it has not distributed and will not distribute or cause to be distributed to the public in the Republic of France this prospectus or any other offering material relating to the units, and that such offers, sales and distributions have been and will be made in the Republic of France only to qualified investors (investisseurs qualifiés) in accordance with Article L.411-2 of the Monetary and Financial Code and decrét no. 98-880 dated October 1, 1998.
Notice to Residents of the Netherlands
Our units may not be offered, sold, transferred or delivered in or from the Netherlands as part of their initial distribution or at any time thereafter, directly or indirectly, other than to, individuals or legal entities situated in The Netherlands who or which trade or invest in securities in the conduct of a business or profession (which includes banks, securities intermediaries (including dealers and brokers), insurance companies,
pension funds, collective investment institution, central governments, large international and supranational organizations, other institutional investors and other parties, including treasury departments of commercial enterprises, which as an ancillary activity regularly invest in securities; hereinafter, “Professional Investors”); provided that in the offer, prospectus and in any other documents or advertisements in which a forthcoming offering of our units is publicly announced (whether electronically or otherwise) in The Netherlands it is stated that such offer is and will be exclusively made to such Professional Investors. Individual or legal entities who are not Professional Investors may not participate in the offering of our units, and this prospectus or any other offering material relating to our units may not be considered an offer or the prospect of an offer to sell or exchange our units.
Notice to Canadian Residents
Resale Restrictions
The distribution of units in Canada is being made only in the provinces of Ontario, Quebec, Alberta and British Columbia on a private placement basis exempt from the requirement that we prepare and file a prospectus with the securities regulatory authorities in each province where trades of these securities are made. Any resale of the units in Canada must be made under applicable securities laws which may vary depending on the relevant jurisdiction, and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers are advised to seek legal advice prior to any resale of the securities.
Representations of Canadian Purchasers
By purchasing units in Canada and accepting delivery of a purchase confirmation, a purchaser is representing to us and the dealer from whom the purchase confirmation is received that:
•
the purchaser is entitled under applicable provincial securities laws to purchase the units without the benefit of a prospectus qualified under those securities laws as it is an “accredited investor” as defined under National Instrument 45-106 — Prospectus Exemptions;
•
the purchaser is a “permitted client” as defined in National Instrument 31-103 — Registration Requirements, Exemptions and Ongoing Registrant Obligations;
•
where required by law, the purchaser is purchasing as principal and not as agent; and
•
the purchaser has reviewed the text above under Resale Restrictions.
Conflicts of Interest
Canadian purchasers are hereby notified that Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) LLC and Goldman Sachs & Co. LLC are relying on the exemption set out in section 3A.3 or 3A.4, if applicable, of National Instrument 33-105 — Underwriting Conflicts from having to provide certain conflict of interest disclosure in this document.
Statutory Rights of Action
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if the prospectus (including any amendment thereto) such as this document contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser of these securities in Canada should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.
Enforcement of Legal Rights
All of our directors and officers as well as the experts named herein may be located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All or a substantial portion of our assets and the assets of those persons may be
located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons outside of Canada.
Taxation and Eligibility for Investment
Canadian purchasers of units should consult their own legal and tax advisors with respect to the tax consequences of an investment in the units in their particular circumstances and about the eligibility of the units for investment by the purchaser under relevant Canadian legislation.
LEGAL MATTERS
Skadden, Arps, Slate, Meagher & Flom LLP, Los Angeles, California, will pass upon the validity of the securities offered in this prospectus on behalf of us. Baker Botts L.L.P. advised the company with respect to certain corporate matters. Ropes & Gray LLP advised the underwriters in connection with the offering of the securities.
EXPERTS
The financial statements of Liberty Media Acquisition Corporation as of December 31, 2020 and for the period from November 6, 2020 (inception) through December 31, 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 Liberty Media 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 on such report given on the authority of such firm as experts in auditing and accounting.
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.
LIBERTY MEDIA ACQUISITION CORPORATION
INDEX TO FINANCIAL STATEMENTS
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Page
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F-2
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F-3
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F-4
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F-5
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F-6
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F-7
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholder and Board of Directors of
Liberty Media Acquisition Corporation
Opinion on the Financial Statements
We have audited the accompanying balance sheet of Liberty Media Acquisition Corporation (the “Company”) as of December 31, 2020, the related statements of operations, changes in stockholder’s equity and cash flows for the period from November 6, 2020 (inception) through December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the period from November 6, 2020 (inception) through December 31, 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 deficit as of December 31, 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) (“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.
Melville, NY
January 13, 2021
LIBERTY MEDIA ACQUISITION CORPORATION
BALANCE SHEET
DECEMBER 31, 2020
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Assets:
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Deferred offering costs associated with proposed public offering
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797,479
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Total assets
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$
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797,479
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Liabilities and Stockholder’s Equity:
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Current liabilities:
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Accrued expenses
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619,296
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Promissory Note – Related Party
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154,483
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Total current liabilities
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773,779
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Commitments and Contingencies
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Stockholder’s Equity:
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Preferred stock, $0.0001 par value; 50,000,000 shares authorized; none issued and outstanding
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—
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|
|
Series A common stock, $0.0001 par value; 2,000,000,000 shares authorized; none issued and outstanding
|
|
|
|
|
—
|
|
|
|
|
Series B common stock, $0.0001 par value; 300,000,000 shares authorized; none issued and outstanding
|
|
|
|
|
—
|
|
|
|
|
Series C common stock, $0.0001 par value; 5,000,000,000 shares authorized; none issued and outstanding
|
|
|
|
|
—
|
|
|
|
|
Series F common stock, $0.0001 par value; 200,000,000 shares authorized; 14,375,000 shares issued and outstanding at December 31, 2020(1)
|
|
|
|
|
1,438
|
|
|
|
|
Additional paid-in capital
|
|
|
|
|
23,562
|
|
|
|
|
Accumulated deficit
|
|
|
|
|
(1,300)
|
|
|
|
|
Total stockholder’s equity
|
|
|
|
|
23,700
|
|
|
|
|
Total Liabilities and Stockholder’s Equity
|
|
|
|
$
|
797,479
|
|
|
(1)
This number includes up to 1,875,000 shares of Series F common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (as described in Note 4).
The accompanying notes are an integral part of these financial statements.
LIBERTY MEDIA ACQUISITION CORPORATION
STATEMENT OF OPERATIONS
For the period from November 6, 2020 (inception) through December 31, 2020
|
|
Formation costs
|
|
|
|
$
|
1,300
|
|
|
|
|
Net loss
|
|
|
|
$
|
(1,300)
|
|
|
|
|
Weighted average shares outstanding, basic and diluted(1)
|
|
|
|
|
12,500,000
|
|
|
|
|
Basic and diluted net loss per share
|
|
|
|
$
|
(0.00)
|
|
|
(1)
This number excludes an aggregate of up to 1,875,000 shares of Series F common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (as described in Note 4).
The accompanying notes are an integral part of these financial statements.
LIBERTY MEDIA ACQUISITION CORPORATION
STATEMENT OF CHANGES IN STOCKHOLDER’S EQUITY
For the period from November 6, 2020 (inception) through December 31, 2020
|
|
|
|
Common Stock
|
|
|
Additional
Paid-In
Capital
|
|
|
Accumulated
Deficit
|
|
|
Total
Stockholder’s
Equity
|
|
|
|
|
|
Series F
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Balance – November 6, 2020 (inception)
|
|
|
|
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
Issuance of Series F common stock to Sponsor(1)
|
|
|
|
|
14,375,000
|
|
|
|
|
|
1,438
|
|
|
|
|
|
23,562
|
|
|
|
|
|
—
|
|
|
|
|
|
25,000
|
|
|
|
Net loss
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
(1,300)
|
|
|
|
|
|
(1,300)
|
|
|
|
Balance – December 31, 2020
|
|
|
|
|
14,375,000
|
|
|
|
|
$
|
1,438
|
|
|
|
|
$
|
23,562
|
|
|
|
|
$
|
(1,300)
|
|
|
|
|
$
|
23,700
|
|
|
(1)
This number includes up to 1,875,000 shares of Series F common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (as described in Note 4).
The accompanying notes are an integral part of these financial statements.
LIBERTY MEDIA ACQUISITION CORPORATION
STATEMENT OF CASH FLOWS
For the period from November 6, 2020 (inception) through December 31, 2020
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
$
|
(1,300)
|
|
|
|
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
Accrued expenses
|
|
|
|
|
1,300
|
|
|
|
|
Net cash used in operating activities
|
|
|
|
|
—
|
|
|
|
|
Net increase in cash
|
|
|
|
|
—
|
|
|
|
|
Cash – beginning of the period
|
|
|
|
|
—
|
|
|
|
|
Cash – end of the period
|
|
|
|
$
|
—
|
|
|
|
|
Supplemental disclosure of noncash activities:
|
|
|
|
|
|
|
|
|
|
Deferred offering costs paid by Sponsor for issuance of Series F common stock
|
|
|
|
$
|
25,000
|
|
|
|
|
Deferred offering costs included in accrued offering costs
|
|
|
|
$
|
617,996
|
|
|
|
|
Deferred offering costs paid by Sponsor
|
|
|
|
$
|
154,483
|
|
|
The accompanying notes are an integral part of these financial statements.
LIBERTY MEDIA ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
Note 1 — Description of Organization, Business Operations, Going Concern and Basis of Presentation
Liberty Media Acquisition Corporation (the “Company”) is a blank check company incorporated in Delaware on November 6, 2020. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with emerging growth companies.
On November 18, 2020, the Company filed a restated certificate of incorporation to change its name from LMAC, Inc. to Liberty Media Acquisition Corporation and increased its authorized shares for Series A Common Stock from 1 billion shares to 2 billion shares; Series B Common Stock from 200 million shares to 300 million shares and Series C Common Stock from 2.4 billion shares to 5 billion shares.
As of December 31, 2020, the Company had not commenced any operations. All activity for the period from November 6, 2020 (inception) through December 31, 2020 relates to the Company’s formation and the proposed initial public offering described below. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Proposed Public Offering (as defined below). The Company has selected December 31 as its fiscal year end.
The Company’s sponsor, Liberty Media Acquisition Sponsor LLC is a Delaware limited liability company (the “Sponsor”). The Company’s ability to commence operations is contingent upon obtaining adequate financial resources through a proposed public offering (the “Proposed Public Offering”) of 50,000,000 units of the Company (each, a “Unit” and collectively, the “Units” and, with respect to the shares of Series A common stock included in the Units, the “Public Shares”) at $10.00 per Unit (or 57,500,000 Units if the underwriters’ over-allotment option is exercised in full), which is discussed in Note 3, and the sale of 9,000,000 warrants of the Company (or 10,000,000 warrants if the underwriters’ over-allotment option is exercised in full) (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”), at a price of $1.50 per Private Placement Warrant in a private placement to the Sponsor that will close simultaneously with the Proposed Public Offering.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Proposed Public Offering and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (as defined below) (excluding the amount of any deferred underwriting discount held in the Trust Account) at the time of the agreement to enter into the initial Business Combination. However, the Company only intends to complete a Business Combination if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires an interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act 1940, as amended (the “Investment Company Act”). Upon the consummation of the Proposed Public Offering, management has agreed that an amount equal to at least $10.00 per Unit sold in the Proposed Public Offering, including proceeds from the sale of the Private Placement Warrants, will be held in a trust account (“Trust Account”) located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and invested only in U.S. “government securities,” within the meaning of Section 2(a)(16) of the Investment Company Act, having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act, which invest only in direct U.S. government treasury obligations, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.
The Company will provide the holders of the Company’s issued and outstanding shares of Series A common stock (the “Public Stockholders”), with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting
LIBERTY MEDIA ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS (continued)
Note 1 — Description of Organization, Business Operations, Going Concern and Basis of Presentation (continued)
called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then held in the Trust Account (initially anticipated to be $10.00 per Public Share).
The per-share amount to be distributed to Public Stockholders who redeem their Public Shares will not be reduced by the deferred underwriting commission the Company will pay upon the Business Combination (as discussed in Note 5). These Public Shares will be recorded at a redemption value and classified as temporary equity upon the completion of the Proposed Public Offering in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” If the Company seeks stockholder approval, the Company will proceed with a Business Combination if a majority of the shares voted are voted in favor of the Business Combination, subject to any other vote required by applicable law. The Company will not redeem the Public Shares in connection with a Business Combination in an amount that would cause its net tangible assets to be less than $5,000,001. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or other reasons, the Company will offer to redeem the Public Shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each Public Stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks stockholder approval in connection with a Business Combination, the initial stockholders (as defined below) have agreed to vote their Founder Shares (as defined below in Note 4) and any Public Shares purchased during or after the Proposed Public Offering in favor of a Business Combination. In addition, the initial stockholders have agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of a Business Combination.
The Certificate of Incorporation provides that a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the Public Shares, without the prior consent of the Company.
The Sponsor, executive officers and directors will agree, pursuant to a letter agreement with the Company, not to propose an amendment to the Certificate of Incorporation (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with a Business Combination or to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or (B) with respect to any other provision relating to stockholders’ rights or pre-initial Business Combination activity, unless the Company provides the Public Stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
If the Company is unable to complete a Business Combination within 24 months from the consummation of the Proposed Public Offering (or 27 months if an agreement in principle event has occurred), and the Company’s stockholders have not amended the Certificate of Incorporation to extend such period (as it may be extended, the “Combination Period”), the Company 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 $100,000 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 Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (3) as promptly
LIBERTY MEDIA ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS (continued)
Note 1 — Description of Organization, Business Operations, Going Concern and Basis of Presentation (continued)
as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Company’s board of directors, liquidate and dissolve, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
The Sponsor, executive officers and directors will agree to waive their rights to liquidating distributions from the Trust Account with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the initial stockholders acquire Public Shares in or after the Proposed Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to the deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not complete a Business Combination within in the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than $10.00. In order to protect the amounts held in the Trust Account, the Sponsor, executive officers and directors will agree to be liable to the Company if and to the extent any claims by a third party (except for the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement (a “Target”), reduce the amount of funds in the Trust Account to below (i) $10.00 per Public Share or (ii) the 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 interest which may be withdrawn to pay taxes, provided that such liability will not apply to any claims by a third party or Target that executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the Proposed Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). 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 registered public accounting firm), prospective target businesses and 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
As of December 31, 2020, the Company had no cash and a working capital deficit of approximately $773,779. Further, the Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. The Company 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. Management plans to address this need for capital through the Proposed Public Offering. The Company cannot assure that its plans to raise capital or to consummate an initial Business Combination will be successful. In addition, management is currently evaluating the impact of the COVID-19 pandemic and its effect on the Company's financial position, results of its operations and/or closing the initial public offering or search for a target company.
These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern one year from the date these financial statements are issued. The financial statements do not include any adjustments that might result from its inability to consummate the Proposed Public Offering or its inability to continue as a going concern.
LIBERTY MEDIA ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS (continued)
Note 1 — Description of Organization, Business Operations, Going Concern and Basis of Presentation (continued)
Basis of Presentation
The accompanying financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Note 2 — Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities during the reporting period. Actual results could differ from those estimates.
Deferred Offering Costs
Deferred offering costs consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Proposed Public Offering and that will be charged to stockholders’ equity upon the completion of the Proposed Public Offering. Should the Proposed Public Offering prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations.
Net Loss Per Share of Common Stock
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period excluding shares of common stock subject to
LIBERTY MEDIA ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS (continued)
Note 2 — Summary of Significant Accounting Policies (continued)
forfeiture. Weighted average shares were reduced for the effect of an aggregate of 1,875,000 shares of Series F common stock that are subject to forfeiture if the over-allotment option is not exercised by the underwriters (as further described in Note 4). At December 31, 2020, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into shares of common stock and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the period presented.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Deferred tax assets were deemed immaterial as of December 31, 2020.
FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of December 31, 2020. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties as of December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
The provision for income taxes was deemed to be de minimis for the period from November 6, 2020 (inception) through December 31, 2020.
Recent Accounting Standards
The Company’s management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying financial statements.
Note 3 — Proposed Public Offering
Pursuant to the Proposed Public Offering, the Company intends to offer for sale 50,000,000 Units at a price of $10.00 per Unit. Each Unit consists of one share of Series A common stock, and one-fifth of one redeemable warrant (each, a “Public Warrant”). Each Public Warrant entitles the holder to purchase one share of Series A common stock at a price of $11.50 per share, subject to adjustment (see Note 6).
The Company will grant the underwriters a 45-day option from the date of the final prospectus relating to the Proposed Public Offering to purchase up to 7,500,000 additional Units to cover over-allotments, if any, at the Proposed Public Offering price, less underwriting discounts and commissions.
Note 4 — Related Party Transactions
Founder Shares
On November 6, 2020, the Sponsor purchased 17,250,000 shares of the Company’s Series F common stock, par value $0.0001 per share, (the “Founder Shares”) for an aggregate price of $25,000. On November 18, 2020, the Sponsor contributed an aggregate of 2,875,000 Founder Shares to the Company’s capital for no
LIBERTY MEDIA ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS (continued)
Note 4 — Related Party Transactions (continued)
consideration resulting in the Sponsor holding an aggregate of 14,375,000 Founder Shares, including an aggregate of up to 1,875,000 Founder Shares that are subject to forfeiture for no consideration to the extent that the underwriter’s over-allotment option is not exercised in full or in part, so that the number of Founder Shares will equal 20% of the Company’s issued and outstanding common stock after the Proposed Public Offering. The forfeiture will be adjusted to the extent that the over-allotment option is not exercised in full by the underwriters so that the Founder Shares will represent 20.0% of the Company’s issued and outstanding shares after the Proposed Public Offering. If the Company increases or decreases the size of the offering, the Company will effect a stock dividend or share contribution back to capital, as applicable, immediately prior to the consummation of the Proposed Public Offering so as to maintain the ownership of the initial stockholders at 20.0% of the Company’s issued and outstanding common stock upon the consummation of the Proposed Public Offering.
The initial stockholders will agree, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (A) one year after the consummation of the initial Business Combination; and (B) subsequent to the initial Business Combination (x) if the last reported sale price of Series A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination or (y) the date on which the Company completes a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of the Public Stockholders having the right to exchange their shares of Series A common stock for cash, securities or other property. Any permitted transferees will be subject to the same restrictions and other agreements of the initial stockholders with respect to any Founder Shares.
Private Placement Warrants
The Sponsor will agree to purchase an aggregate of 9,000,000 Private Placement Warrants (or 10,000,000 Private Placement Warrants if the underwriters’ over-allotment option is exercised in full), at a price of $1.50 per Private Placement Warrant, or $13.5 million in the aggregate (or $15.0 million if the underwriters’ over-allotment option is exercised in full) in a private placement that will occur simultaneously with the consummation of the Proposed Public Offering. Each Private Placement Warrant is exercisable for one whole share of Series A common stock at a price of $11.50 per share, subject to adjustment. A portion of the proceeds from the sale of the Private Placement Warrants to the Sponsor will be added to the proceeds from the Proposed Public Offering to be held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. The Private Placement Warrants will be non-redeemable so long as they are held by the initial purchasers or their permitted transferees.
The purchasers of the Private Placement Warrants will agree, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants (except to permitted transferees) until 30 days after the consummation of the initial Business Combination.
Related Party Loans
On November 6, 2020, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Proposed Public Offering pursuant to a promissory note (the “Note”). This loan is non-interest bearing and payable on the earlier of December 31, 2021 and the completion of the Proposed Public Offering. As of December 31 , 2020, the Company had borrowed $154,483 under the Note.
In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor, Liberty Media Corporation (“LMC”) and its subsidiaries, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. In the event that a Business
LIBERTY MEDIA ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS (continued)
Note 4 — Related Party Transactions (continued)
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. The Working Capital Loans would either be repaid upon consummation of a Business Combination or, at the lender’s discretion, up to $2.5 million of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.50 per warrant. The warrants would be identical to the Private Placement Warrants. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. To date, the Company had no borrowings under the Working Capital Loans.
Services Agreement and Facilities Sharing Agreement
The Company will enter into agreements that will provide that, commencing on the date that the Company’s securities are first listed on The Nasdaq Stock Market (the “Nasdaq’’) through the earlier of consummation of the initial Business Combination and the Company’s liquidation, the Company will pay Liberty Media Corporation and its subsidiary a total of $91,666 per month for office space, administrative and support services. In addition, each independent director will receive annual cash compensation of $75,000.
The Sponsor, officers and directors of the Company, or LMC and its subsidiaries will be reimbursed for any out-of-pocket expenses incurred in connection with activities on the Company’s behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. The Company’s audit committee will review on a quarterly basis all payments that were made by the Company to the Sponsor, directors, officers of the Company or LMC and its subsidiaries.
Forward Purchase Agreement
Prior to the Public Proposed Offering, the Company will enter into a forward purchase agreement (the “Forward Purchase Agreement”) under which the Sponsor (the “Forward Purchaser’’) will acquire forward purchase units (each, a “Forward Purchase Unit’’) for $250,000,000, in the aggregate, in connection with the Company's initial Business Combination. Each Forward Purchase Unit will consist of one share of Series B common stock (the “Forward Purchase Shares”), and one-fifth of one warrant to purchase one share of Series A common stock (the “Forward Purchase Warrants”), at a purchase price of $10.00 per unit, and will be sold in a private placement that will close substantially concurrently with the closing of the Company’s initial Business Combination. The terms of the Forward Purchase Warrants will generally be identical to the terms of the redeemable warrants included in the units being issued in the Proposed Public Offering.
In addition, the Forward Purchaser will reserve the right to provide incremental funding to the Company in connection with the Company’s initial Business Combination by purchasing additional shares of Series B common stock at a purchase price of $10.00 per share, which shares would be sold in a private placement substantially concurrently with the closing of the initial Business Combination.
The investor rights agreement whose terms are incorporated in the Forward Purchase Agreement also will provide that the Sponsor be entitled to registration rights with respect to the Forward Purchase Warrants and the shares of common stock issuable upon exercise of the Forward Purchase Warrants or upon conversion of the Series B common stock.
In addition, the investor rights agreement will provide that upon certain issuances of equity securities by the Company (other than issuances due to the exercise of warrants) (each such issuance, a “Triggering Event”), the Sponsor will have certain contractual preemptive rights which are intended to allow the Sponsor to maintain its percentage ownership interest the Company’s common stock and voting stock (See Note 5).
Note 5 — Commitments & Contingencies
Registration Rights and Preemptive Rights
The holders of the Founder Shares, Forward Purchase Shares, Series B common stock, Forward Purchase Warrants, Private Placement Warrants and warrants that may be issued upon conversion of
LIBERTY MEDIA ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS (continued)
Note 5 — Commitments & Contingencies (continued)
Working Capital Loans, if any (and any shares of Series A common stock issuable upon the exercise of the Forward Purchase Warrants, Private Placement Warrants or warrants issued upon the conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights with respect to the Private Placement Warrants, Forward Purchase Warrants, warrants issued upon conversion of Working Capital Loans, if any, warrants purchased by them in the open market, and shares of Series A common stock purchased by them in the open market or issuable upon (1) conversion of the Founder Shares, (2) exercise of the Private Placement Warrants, (3) conversion of the Forward Purchase Shares and shares of Series B common stock purchased in connection with our initial business combination (if any), (4) exercise of the Forward Purchase Warrants, and (5) exercise of warrants issued upon conversion of Working Capital Loans, if any, pursuant to an investor rights agreement to be signed prior to or on the effective date of this offering requiring the Company to register such securities for resale. The holders of these securities will be entitled to make up to three demands in any 12-month period, 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 consummation of our initial business combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. The holders will also have registration rights in connection with certain hedging and financing transactions that they may enter into with respect to these securities. However, the investor rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until the securities covered thereby are released from their lock-up restrictions. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Following the consummation of the initial Business Combination, the Sponsor will have certain rights to maintain its proportionate interest in the Company’s common stock and voting stock by purchasing additional shares as a result of certain issuances by the Company. Upon certain events, our Sponsor will have the right to purchase such equity securities issuable in connection with the events (or if the issuance is shares of the Company’s Series A common stock or equity securities convertible into shares of the Company’s Series A common stock, a number of shares of our Series B common stock or equity securities convertible into shares of the Company’s Series B common stock) which will, when added to the issued and outstanding common shares beneficially owned by LMC and its wholly owned subsidiaries immediately prior to the events, result in LMC and its wholly owned subsidiaries beneficially owning the same percentage of the Company's outstanding common shares that LMC and its wholly owned subsidiaries owned immediately prior to the Triggering Event. Such right will not be applicable to the issuance of shares upon the exercise of Public Warrants or Private Placement Warrants which are outstanding prior to or issued in connection with the Company’s initial Business Combination.
Underwriting Agreement
The underwriters will be entitled to an underwriting discount of $0.20 per Unit, or $10.0 million in the aggregate (or $11.5 million in the aggregate if the underwriters’ over-allotment option is exercised in full), payable upon the consummation of the Proposed Public Offering. An additional fee of $0.35 per Unit, or $17.5 million in the aggregate (or approximately $20.1 million in the aggregate if the underwriters’ over-allotment option is exercised in full) will be payable to the underwriters for deferred underwriting commissions. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
Risks and Uncertainties
Management is currently evaluating the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or consummation the initial public offering or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial
LIBERTY MEDIA ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS (continued)
Note 5 — Commitments & Contingencies (continued)
statements do not include any adjustments that might result from the outcome of this uncertainty.
Note 6 — Stockholder’s Equity
Series A Common Stock — The Company is authorized to issue 2,000,000,000 shares of Series A common stock with a par value of $0.0001 per share. As of December 31, 2020, there were no shares of Series A common stock issued or outstanding.
Series B Common Stock — The Company is authorized to issue 300,000,000 shares of Series B common stock with a par value of $0.0001 per share. As of December 31, 2020, there were no shares of Series B common stock issued or outstanding.
Series C Common Stock — The Company is authorized to issue 5,000,000,000 shares of Series C common stock with a par value of $0.0001 per share. As of December 31, 2020, there were no shares of Series C common stock issued or outstanding.
Series F Common Stock — The Company is authorized to issue 200,000,000 shares of Series F common stock with a par value of $0.0001 per share. On November 6, 2020, the Company issued 17,250,000 shares of Series F common stock. On November 18, 2020, the Sponsor contributed an aggregate of 2,875,000 shares of Series F common stock to the Company’s capital for no consideration resulting in the Sponsor holding an aggregate of 14,375,000 shares of Series F common stock, including an aggregate of up to 1,875,000 shares of Series F common stock that are subject to forfeiture to the Company by the Sponsor for no consideration to the extent that the underwriter’s over-allotment option is not exercised in full or in part, so that the number of shares of Series F common stock will equal 20% of the Company’s issued and outstanding common stock after the Proposed Public Offering.
Prior to the Company’s initial business combination, holders of the Series A common stock, Series B common stock, if any, and holders of the Series F common stock and holders of the are entitled to one vote for each share on all matters to be voted on by stockholders, including any vote in connection with the Company’s initial business combination, and vote together as a single class; provided that, prior to the Company’s initial business combination, only holders of the Series F common stock will have the right to elect the Company’s directors and remove members of the Company’s board of directors for any reason. These provisions of the Company’s amended and restated certificate of incorporation may only be amended if approved by holders of more than 50% of the total voting power of the outstanding shares of the Company’s common stock entitled to vote thereon as well as more than 50% of the outstanding Series F common stock, voting as a separate class.
Following the Company’s initial business combination, holders of the Series A common stock and holders of the Series B common stock will generally vote together as a single class on matters presented for a stockholder vote, except as required by Delaware law or stock exchange rule, with each share of Series A common stock entitling the holder to one vote per share and each share of Series B common stock entitling the holder to ten votes per share.
Holders of the Series C common stock will not be entitled to any voting powers, except as otherwise required by applicable law or stock exchange rule. When so required, holders of Series C common stock will be entitled to 1/100th of a vote for each share of such stock held.
Series F common stock are automatically convertible into shares of the Series B common stock at the time of the Company’s initial business combination, or earlier at the option of the holder, on a one-for-one basis and, prior to and following the Company’s initial business combination, each share of Series B common stock is convertible, at the option of the holder, into one share of the Series A common stock.
Preferred Stock — The Company is authorized to issue 50,000,000 shares of preferred stock, par value $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of December 31, 2020, there were no shares of preferred stock issued or outstanding.
LIBERTY MEDIA ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS (continued)
Note 6 — Stockholder’s Equity (continued)
Warrants — Public Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the Units and only whole Public Warrants will trade. 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 consummation of the Proposed Public Offering; provided in each case that the Company has an effective registration statement under the Securities Act covering the shares of Series A common stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or the Company permits holders to exercise their Public Warrants on a cashless basis and such cashless exercise is exempt from registration under the Securities Act). The Company has agreed that as soon as practicable, but in no event later than 20 business days after the consummation of its initial Business Combination, the Company will use its commercially reasonable efforts to file with the SEC and have an effective registration statement covering the shares of Series A common stock issuable upon exercise of the warrants and will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the consummation of the Company’s initial Business Combination and to maintain a current prospectus relating to those shares of Series A common stock until the warrants expire or are redeemed. If the shares issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the above requirements, the Company 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 the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. Notwithstanding the above, if the Company’s shares of Series A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, it will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
The warrants have an exercise price of $11.50 per share, subject to adjustments, and will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation. In addition, if (x) the Company issues additional shares of Series A common stock or equity-linked securities, excluding Forward Purchase Units, for capital raising purposes in connection with the consummation of the initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Series A common stock (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 LMC and its subsidiaries, without taking into account any Founder Shares held by the Sponsor or LMC and its subsidiaries, as applicable) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances, excluding the Forward Purchase Units, represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Series A common stock 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, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger prices described below under “Redemption of warrants when the price per share of Series A common stock equals or exceeds $18.00” and “Redemption of warrants when the price per share of Series A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price
LIBERTY MEDIA ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS (continued)
Note 6 — Stockholder’s Equity (continued)
described below under “Redemption of warrants when the price per share of Series A common stock equals or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants and the shares of Series A common stock issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be non-redeemable so long as they are held by the Sponsor or its permitted transferees. If the Private Placement Warrants are held by someone other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
Redemption of warrants when the price per share of Series A common stock equals or exceeds $18.00:
Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described herein with respect to the Private Placement Warrants):
•
in whole and not in part;
•
at a price of $0.01 per warrant;
•
upon a minimum of 30 days' prior written notice of redemption to each warrant holder; and
•
if, and only if, the last reported sale price of the Series A common stock equals or exceeds $18.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
The Company will not redeem the warrants for cash unless a registration statement under the Securities Act covering the issuance of the shares of Series A common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of common stock is available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
If the Company calls the warrants for redemption as described above, the management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In determining whether to require all holders to exercise their warrants on a “cashless basis,” the management will consider, among other factors, the cash position, the number of warrants that are outstanding and the dilutive effect on our stockholders of issuing the maximum number of shares of Series A common stock issuable upon the exercise of our warrants. In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of Series A common stock equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of shares of Series A common stock underlying the warrants, multiplied by the excess of the “fair market value” of the Series A common stock (defined below) over the exercise price of the warrants by (y) the fair market value and (B) the product of 0.361 and the number of shares of Series A common stock underlying the warrants.
Redemption of warrants when the price per share of Series A common stock equals or exceeds $10.00:
Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described herein with respect to the Private Placement Warrants):
•
in whole and not in part;
•
at a price of $0.10 per warrant provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares of Series A common stock to
LIBERTY MEDIA ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS (continued)
Note 6 — Stockholder’s Equity (continued)
be determined by reference to an agreed table based on the redemption date and the “fair market value” (as defined below) of Series A common stock;
•
upon a minimum of 30 days’ prior written notice of redemption;
•
if, and only if, the last reported sale price of our Series A common stock equals or exceeds $10.00 per share (as adjusted) on the trading day prior to the date on which the Company sends the notice of redemption to the warrant holders; and
•
if, and only if, there is an effective registration statement covering the issuance of the shares of Series A common stock issuable upon exercise of the warrants and a current prospectus relating thereto available throughout the 30-day period after written notice of redemption is given.
The “fair market value” of our Series A common stock for the above purpose shall mean the volume weighted average price of our Series A common stock during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. This redemption feature differs from the typical warrant redemption features used in other blank check offerings. The Company will provide its warrant holders with the final fair market value no later than one business day after the 10-trading day period described above ends. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361 shares of Series A common stock per warrant (subject to adjustment).
In no event will the Company be required to net cash settle any warrant. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
Note 7 — Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based on this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
Liberty Media Acquisition Corporation
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Citigroup
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Morgan Stanley
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Credit Suisse
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Goldman Sachs & Co. LLC
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|
Until , 2021, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to unsold allotments or subscriptions.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13.
Other Expenses of Issuance and Distribution.
The estimated expenses payable by us in connection with the offering described in this registration statement (other than the underwriting discount and commissions) will be as follows:
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SEC expenses
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$
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62,733
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|
|
|
|
FINRA expenses
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|
|
|
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86,750
|
|
|
|
|
Accounting fees and expenses
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|
|
|
|
60,000
|
|
|
|
|
Printing and engraving expenses
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|
|
|
|
35,000
|
|
|
|
|
Directors and officers liability insurance premiums(1)
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|
|
|
|
700,000
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|
|
|
|
Legal fees and expenses
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700,000
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|
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Nasdaq listing and filing fees
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|
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75,000
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|
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Miscellaneous
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30,517
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|
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Total
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$
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1,750,000
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(1)
This amount represents the approximate amount of annual director and officer liability insurance premiums the registrant anticipates paying following the completion of its initial public offering and until it completes a business combination.
Item 14.
Indemnification of Directors and Officers.
Our amended and restated certificate of incorporation will provide that all of our directors, officers, employees and agents shall be entitled to be indemnified by us to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware (“DGCL”). Section 145 of the DGCL concerning indemnification of officers, directors, employees and agents is set forth below.
Section 145. Indemnification of officers, directors, employees and agents; insurance.
(a) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful.
(b) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
(c) To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders.
(e) Expenses (including attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys’ fees) incurred by former officers and directors or other employees and agents may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.
(f) The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office. A right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw shall not be eliminated or impaired by an amendment to such provision after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred.
(g) A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under this section.
(h) For purposes of this section, references to “the corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued.
(i) For purposes of this section, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit
plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this section.
(j) The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any by law, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation’s obligation to advance expenses (including attorneys’ fees).
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to the court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
In accordance with Section 102(b)(7) of the DGCL, our amended and restated certificate of incorporation, will provide that no director shall be personally liable to us or any of our stockholders for monetary damages resulting from breaches of their fiduciary duty as directors, except to the extent such limitation on or exemption from liability is not permitted under the DGCL. The effect of this provision of our amended and restated certificate of incorporation is to eliminate our rights and those of our stockholders (through stockholders’ derivative suits on our behalf) to recover monetary damages against a director for breach of the fiduciary duty of care as a director, including breaches resulting from negligent or grossly negligent behavior, except, as restricted by Section 102(b)(7) of the DGCL. However, this provision does not limit or eliminate our rights or the rights of any stockholder to seek non-monetary relief, such as an injunction or rescission, in the event of a breach of a director’s duty of care.
If the DGCL is amended to authorize corporate action further eliminating or limiting the liability of directors, then, in accordance with our amended and restated certificate of incorporation, the liability of our directors to us or our stockholders will be eliminated or limited to the fullest extent authorized by the DGCL, as so amended. Any repeal or amendment of provisions of our amended and restated certificate of incorporation limiting or eliminating the liability of directors, whether by our stockholders or by changes in law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by applicable law) be prospective only, except to the extent such amendment or change in law permits us to further limit or eliminate the liability of directors on a retroactive basis.
Our amended and restated certificate of incorporation will also provide that we will, to the fullest extent authorized or permitted by applicable law, indemnify our current and former officers and directors, as well as those persons who, while directors or officers of our corporation, are or were serving as directors, officers, employees or agents of another entity, trust or other enterprise, including service with respect to an employee benefit plan, in connection with any threatened, pending or completed proceeding, whether civil, criminal, administrative or investigative, against all expense, liability and loss (including, without limitation, attorney’s fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred or suffered by any such person in connection with any such proceeding. Notwithstanding the foregoing, a person eligible for indemnification pursuant to our amended and restated certificate of
incorporation will be indemnified by us in connection with a proceeding initiated by such person only if such proceeding was authorized by our board of directors, except for proceedings to enforce rights to indemnification.
The right to indemnification which will be conferred by our amended and restated certificate of incorporation is a contract right that includes the right to be paid by us the expenses incurred in defending or otherwise participating in any proceeding referenced above in advance of its final disposition, provided, however, that if the DGCL requires, an advancement of expenses incurred by our officer or director (solely in the capacity as an officer or director of our corporation) will be made only upon delivery to us of an undertaking, by or on behalf of such officer or director, to repay all amounts so advanced if it is ultimately determined that such person is not entitled to be indemnified for such expenses under our amended and restated certificate of incorporation or otherwise.
The rights to indemnification and advancement of expenses will not be deemed exclusive of any other rights which any person covered by our amended and restated certificate of incorporation may have or hereafter acquire under law, our amended and restated certificate of incorporation, our amended and restated bylaws, an agreement, vote of stockholders or disinterested directors, or otherwise.
Any repeal or amendment of provisions of our amended and restated certificate of incorporation affecting indemnification rights, whether by our stockholders or by changes in law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by applicable law) be prospective only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not in any way diminish or adversely affect any right or protection existing at the time of such repeal or amendment or adoption of such inconsistent provision with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision. Our amended and restated certificate of incorporation will also permit us, to the extent and in the manner authorized or permitted by law, to indemnify and to advance expenses to persons other that those specifically covered by our amended and restated certificate of incorporation.
Our bylaws, which we intend to adopt immediately prior to the closing of this offering, include the provisions relating to advancement of expenses and indemnification rights consistent with those which will be set forth in our amended and restated certificate of incorporation. In addition, our amended and restated bylaws provide for a right of indemnity to bring a suit in the event a claim for indemnification or advancement of expenses is not paid in full by us within a specified period of time. Our bylaws also permit us to purchase and maintain insurance, at our expense, to protect us and/or any director, officer, employee or agent of our corporation or another entity, trust or other enterprise against any expense, liability or loss, whether or not we would have the power to indemnify such person against such expense, liability or loss under the DGCL.
Any repeal or amendment of provisions of our amended and restated bylaws affecting indemnification rights, whether by our board of directors, stockholders or by changes in applicable law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by applicable law) be prospective only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not in any way diminish or adversely affect any right or protection existing thereunder with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision.
We will enter into indemnification agreements with each of our officers and directors a form of which is to be filed as Exhibit 10.7 to this Registration Statement. These agreements will require us to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.
Pursuant to the Underwriting Agreement to be filed as Exhibit 1.1 to this Registration Statement, we have agreed to indemnify the underwriters and the underwriters have agreed to indemnify us against certain civil liabilities that may be incurred in connection with this offering, including certain liabilities under the Securities Act.
Item 15.
Recent Sales of Unregistered Securities.
In November 2020, Liberty Media Acquisition Sponsor LLC (our “sponsor”) purchased an aggregate of 17,250,000 founder shares, for an aggregate offering price of $25,000. In November 2020, our sponsor contributed an aggregate of 2,875,000 founder shares to our capital for no consideration, resulting in our sponsor holding an aggregate of 14,375,000 founder shares, with an effective purchase price of approximately $0.0017 per share. The number of founder shares issued was determined based on the expectation that the founder shares would represent 20% of the outstanding shares of common stock upon completion of this offering. Such securities were issued in connection with our organization pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. Each of our sponsor is an accredited investor for purposes of Rule 501 of Regulation D.
In addition, our sponsor will commit, pursuant to a written agreement, to purchase from us an aggregate of 9,000,000 (or 10,000,000 if the underwriters’ over-allotment option is exercised in full) private placement warrants at $1.50 per warrant (for an aggregate purchase price of $13,500,000 or $15,000,000 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.
Prior to this offering, we will enter into a forward purchase agreement pursuant to which our sponsor will agree to acquire forward purchase units for $250,000,000, in the aggregate, in connection with our initial business combination. Each forward purchase unit will consist of one share of Series B common stock, or a forward purchase share, and one-fifth of one warrant to purchase one share of Series A common stock, or a forward purchase warrant, at a purchase price of $10.00 per unit, and will be sold in a private placement that will close substantially concurrently with the consummation of our initial business combination. The terms of the forward purchase warrants will generally be identical to the terms of the redeemable warrants included in the units being issued in this offering.
No underwriting discounts or commissions were paid with respect to such sales.
Item 16.
Exhibits and Financial Statement Schedules.
(a) Exhibits. The following exhibits are being filed herewith:
*
Previously filed
**
To be filed by amendment
(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 the registrant has duly caused this Amendment No. 2 to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Englewood, State of Colorado on January 13, 2021.
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LIBERTY MEDIA ACQUISITION
CORPORATION
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By:
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/s/ Renee L. Wilm
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Name:
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Renee L. Wilm
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Title:
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Chief Legal Officer
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Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 2 to the registration statement has been signed by the following persons in the capacities and on the dates indicated.
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Signature
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Title
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Date
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Gregory B. Maffei
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President and Chief Executive Officer and Director
(Principal Executive Officer)
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January 13, 2021
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Brian J. Wendling
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Chief Accounting Officer and Principal Financial Officer
(Principal Financial and Accounting Officer)
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January 13, 2021
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*By:
/s/ Renee L. Wilm
Renee L. Wilm
Attorney-in-fact
Exhibit 1.1
50,000,000 Units
Liberty Media Acquisition Corporation
UNDERWRITING
AGREEMENT
[•], 2021
Citigroup Global Markets
Inc.
388 Greenwich Street
New York, New York 10013
Morgan Stanley &
Co. LLC
1585 Broadway
New York, New York 10036
As the Representatives of the several Underwriters
listed in Schedule I to the Agreement
Dear Ladies and Gentlemen:
1. Introductory.
Liberty Media Acquisition Corporation, a Delaware corporation (the “Company”), agrees with the several underwriters
named in Schedule I hereto (collectively, the “Underwriters”), for whom you (together, the “Representatives”)
are acting as representative, to issue and sell to the several Underwriters 50,000,000 units of the Company (said units to be issued
and sold by the Company being hereinafter called the “Firm Securities”) and also proposes to issue and sell
to the Underwriters, at the option of the Underwriters, an aggregate of not more than 7,500,000 additional units of the Company
to cover over-allotments (the “Optional Securities”) as set forth below. The Firm Securities and the Optional
Securities are herein collectively called the “Offered Securities.” To the extent that there are no additional
Underwriters listed on Schedule I other than you, the term Representatives as used herein shall mean you, as Underwriters, and
the term Underwriter shall mean either the singular or plural as the context requires. Certain capitalized terms used herein and
not otherwise defined are defined in Section 23 to this agreement (this “Agreement”).
Each unit (the “Unit(s)”)
consists of one share of the Company’s Series A common stock, par value $0.0001 per share (the “Series A
Common Stock”), and one-fifth of one redeemable warrant, where each whole warrant entitles the holder to purchase one
share of Series A Common Stock (the “Warrant(s)”). The Series A Common Stock and Warrants included
in the Units will not trade separately until the 52nd day following the date of the Prospectus (or, if such date is not a business
day, the following business day) (the “Detachment Date”) (unless the Representatives inform the Company of their
decision to allow earlier separate trading), subject to (a) the Company’s preparation of an audited balance sheet reflecting
the receipt by the Company of the proceeds of the Offering (as defined below), (b) the filing of such audited balance sheet
with the Commission on a Current Report on Form 8-K or similar form by the Company that includes such audited balance sheet,
and (c) if the Detachment Date is earlier than the 52nd day following the date of the Prospectus, the Company having issued
a press release announcing when such separate trading will begin. No fractional Warrants will be issued upon separation of the
Units, and only whole Warrants will trade. Each whole Warrant entitles its holder, upon exercise, to purchase one share of Series A
Common Stock at a price of $11.50 per share, subject to adjustment, during the period commencing on the later of thirty (30) days
after the completion of the Company’s Business Combination (as defined below) and twelve (12) months from the date of the
consummation of the Offering and terminating on the five-year anniversary of the date of the completion of such Business Combination
or earlier upon redemption or Liquidation; provided, however, that pursuant to the Warrant Agreement (as defined
below), only a whole Warrant may be exercised. As used herein, the term “Business Combination” (as described
more fully in the Registration Statement) shall mean the Company’s initial merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination with one or more businesses.
The Company has entered into an Investment
Management Trust Agreement, dated the date hereof (the “Trust Agreement”), with Continental Stock Transfer &
Trust Company (“CST”), as trustee (the “Trustee”), in substantially the form filed as Exhibit 10.3
to the Registration Statement, pursuant to which proceeds from the sale of the Private Placement Warrants (as defined below) and
proceeds of the Offering will be deposited and held in a U.S.-based trust account (the “Trust Account”) for
the benefit of the Company, the Underwriters and the holders of the Firm Securities and the Optional Securities, if and when issued.
The Company has entered into a Warrant Agreement,
dated the date hereof (the “Warrant Agreement”) with CST, as warrant agent, with respect to the Warrants, the
Private Placement Warrants, the Forward Purchase Warrants (as defined below) and certain warrants of the Company that the Company
may issue to Liberty Media Acquisition Sponsor LLC, a Delaware limited liability company (the “Sponsor”), Liberty
Media Corporation or its other subsidiaries or the Company’s officers and directors upon conversion of working capital loans
made by such parties to the Company (the “Working Capital Warrants”), in substantially the form filed as Exhibit 4.4
to the Registration Statement, pursuant to which CST will act as warrant agent in connection with the issuance, registration, transfer,
exchange, redemption, and exercise of the Warrants, the Private Placement Warrants, the Forward Purchase Warrants and the Working
Capital Warrants.
The Company has entered into a Securities
Subscription Agreement, dated November 6, 2020 (the “Founder Shares Subscription Agreement”), with the
Sponsor, filed as Exhibit 10.5 to the Registration Statement, pursuant to which the Sponsor purchased an aggregate of 17,250,000
shares of Series F common stock, par value $0.0001 per share (the “Series F Common Stock”), of the
Company, for an aggregate purchase price of $25,000 (including (a) the shares of the Company’s Series B common
stock, par value $0.0001 per share (the “Series B Common Stock” and, together with the Series A Common
Stock, the Series F Common Stock and the Company’s Series C common stock, par value $0.0001 per share, the “Common
Stock”), issuable upon conversion of such Series F Common Stock and (b) the Series A Common Stock issuable
upon conversion of such Series B Common Stock, the “Founder Share(s)”). In November 2020, the Sponsor
contributed an aggregate of 2,875,000 Founder Shares to the Company for no consideration, which resulted in the Sponsor holding
an aggregate of 14,375,000 Founder Shares, with an effective purchase price of approximately $0.0017 per share. Up to 1,875,000
Founder Shares are subject to forfeiture depending on the extent to which the Underwriters’ over-allotment option is exercised.
The Series F Common Stock is substantially similar to the Series A Common Stock included in the Units, except as described
in the Registration Statement, the Statutory Prospectus and the Prospectus.
The Company has entered into a Sponsor Warrants
Purchase Agreement, dated the date hereof (the “Warrant Subscription Agreement”), with the Sponsor, in substantially
the form filed as Exhibit 10.6 to the Registration Statement, pursuant to which the Sponsor agreed to purchase an aggregate
of 9,000,000 warrants (or up to 10,000,000 warrants depending on the extent to which the Underwriters’ over-allotment option
is exercised) at a price of $1.50 per warrant (the “Private Placement Warrant(s)”), each entitling the holder
to purchase one share of Series A Common Stock for $11.50 per share. The Private Placement Warrants are substantially similar
to the Warrants included in the Units, except as described in the Registration Statement, the Statutory Prospectus and the Prospectus.
The Company has entered into a Forward Purchase
Agreement, dated the date hereof (the “Forward Purchase Agreement”), with the Sponsor, in substantially the
form filed as Exhibit 10.10 to the Registration Statement, pursuant to which the Sponsor agreed to purchase an aggregate of
$250,000,000 of units (the “Forward Purchase Unit(s)”) at a purchase price of $10.00 per unit in a private placement
that will close substantially concurrently with the closing of the Business Combination, each Forward Purchase Unit consisting
of one share of Series B Common Stock (the “Forward Purchase Share(s)”) and one-fifth of one redeemable
warrant to purchase one share of Series A Common Stock (the “Forward Purchase Warrant(s)”). The Forward
Purchase Warrants are substantially similar to the Warrants included in the Units, except as described in the Registration Statement,
the Statutory Prospectus and the Prospectus.
The Company has entered into an Investor
Rights Agreement, dated the date hereof (the “Investor Rights Agreement”), with the Sponsor and the other parties
thereto, in substantially the form filed as Exhibit 10.4 to the Registration Statement, pursuant to which the Company has
granted (a) certain registration rights with respect to the shares of Series A Common Stock underlying the Founder Shares,
the Private Placement Warrants, the Forward Purchase Warrants, any Working Capital Warrants and any shares of Series A Common
Stock issuable upon (i) exercise of the Private Placement Warrants, (ii) conversion of the Forward Purchase Shares, (iii) exercise
of the Forward Purchase Warrants, and (iv) exercise of any Working Capital Warrants, and (b) certain preemptive rights
to the Sponsor to maintain its proportionate equity interest in the Company by purchasing additional equity securities as a result
of certain issuances by the Company.
The Company has caused to be duly executed
and delivered a letter agreement, dated the date hereof (the “Insider Letter”), by and among the Sponsor and
each of the Company’s executive officers, directors and director nominees, in substantially the form filed as Exhibit 10.2
to the Registration Statement.
The Company issued a non-interest bearing,
unsecured promissory note for an aggregate amount of $300,000 to the Sponsor in substantially the form filed as Exhibit 10.1
to the Registration Statement (the “Promissory Note”). The Promissory Note will be payable on the earlier to
occur of December 31, 2021 and the Closing Date (as defined herein).
The Company has entered into a Services
Agreement, dated the date hereof (the “Support Services Agreement”), with Liberty Media Corporation, in substantially
the form filed as Exhibit 10.8 to the Registration Statement, and a Facilities Sharing Agreement, dated the date hereof (the
“Facilities Sharing Agreement”), with Liberty Property Holdings, Inc. and Liberty Media Corporation, in
substantially the form filed as Exhibit 10.9 to the Registration Statement, pursuant to which the Company will pay to Liberty
Media Corporation and Liberty Property Holdings, Inc. an aggregate monthly fee of $91,666 for office space and certain administrative
and support services.
The Underwriters have agreed to reserve
a portion of the Units to be purchased by it under this Agreement for sale to the Company’s directors, officers, employees
and business associates and other parties related to the Company (collectively, “Participants”), as set forth
in each of the Statutory Prospectus and the Prospectus under the heading “Underwriters” (the “Directed Units
Program”). The Units to be sold by the Underwriters pursuant to the Directed Units Program, at the direction of the Company,
are referred to hereinafter as the “Directed Units.” Any Directed Units not orally confirmed for purchase by
any Participant by the end of the business day on which this Agreement is executed will be offered to the public by the Underwriters
as set forth in the Prospectus.
2. Representations
and Warranties of the Company. The Company represents and warrants to, and agrees with, the several Underwriters that:
(a) Filing
and Effectiveness of Registration Statement. The Company has prepared and filed with the Commission the Registration Statement
(file number 333-250188) on Form S-1, including the related Preliminary Prospectus, for registration under the Act of the
offering and sale of the Offered Securities. Such Registration Statement, including any amendments thereto filed prior to the Execution
Time, has become effective. The Company has filed one or more amendments thereto, including the related Preliminary Prospectus,
each of which has previously been furnished to the Representatives. The Company will file with the Commission the Prospectus in
accordance with Rule 424(b). As filed, such Prospectus shall contain all information required by the Act and, except to the
extent the Representatives shall agree in writing to a modification, shall be in all substantive respects in the form furnished
to the Representatives prior to the Execution Time or, to the extent not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that contained in the latest Preliminary Prospectus) as the Company has
advised the Representatives, prior to the Execution Time, will be included or made therein. The Company has complied, to the Commission’s
satisfaction, with all requests of the Commission for additional or supplemental information.
(b) Compliance
with Securities Act Requirements. On the Effective Date, the Registration Statement did, and when the Prospectus is first filed
in accordance with Rule 424(b) and on the Closing Date and on any date on which Optional Securities are purchased, if
such date is not the Closing Date (a “settlement date”), the Prospectus (and any supplement thereto) will, comply
in all material respects with the applicable requirements of the Act; on the Effective Date and at the Execution Time, the Registration
Statement did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not misleading; as of the Applicable Time and on the Closing
Date and any settlement date, any individual Written Testing-the-Waters Communication (as defined herein) did not conflict with
the information contained in the Registration Statement or the Statutory Prospectus, and complied in all material respects with
the Act; as of the Applicable Time and on the Closing Date and any settlement date, each “road show” as defined in
Rule 433(h) of the Act (a “road show”) and any individual Written Testing-the-Waters Communication,
in each case, when considered together with the Statutory Prospectus, did not and will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading; and on the date of any filing pursuant to Rule 424(b) and
on the Closing Date and each settlement 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; provided, however, that the Company makes no representations
or warranties as to the information contained in or omitted from the Registration Statement or the Prospectus (or any supplement
thereto) in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Underwriter
through the Representatives specifically for inclusion in the Registration Statement or the Prospectus (or any supplement thereto),
it being understood and agreed that the only such information furnished by or on behalf of any Underwriter consists of the information
described as such in Section 8 hereof.
(c) Statutory
Prospectus. The Statutory Prospectus, as of the Applicable Time and on the Closing Date and any settlement date, did not and will
not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to the information contained in or omitted from the Statutory Prospectus in reliance
upon and in conformity with written information furnished to the Company by or on behalf of any Underwriter through the Representatives
specifically for use therein, it being understood and agreed that the only such information furnished by or on behalf of any Underwriter
consists of the information described as such in Section 8 hereof.
(d) Listing.
The Company has filed with the Commission a registration statement on Form 8-A (file number 001-[•]) providing for the
registration under the Exchange Act of the Units and the Series A Common Stock and Warrants included as part of the Units,
which registration is currently effective on the date hereof. The Offered Securities and the Series A Common Stock and Warrants
included as part of the Offered Securities have been authorized for listing, subject to official notice of issuance and evidence
of satisfactory distribution, on The Nasdaq Stock Market, and the Company knows of no reason or set of facts that is likely to
adversely affect such authorization.
(e) No
Stop Order. The Commission has not issued any order or, to the Company’s knowledge, threatened to issue any order preventing
or suspending the effectiveness of the Registration Statement or 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.
(f) Ineligible
Issuer Status. (i) At the time of filing the Registration Statement and (ii) as of the Execution Time (with such date
being used as the determination date for purposes of this clause (ii)), the Company was and is an Ineligible Issuer (as defined
in Rule 405).
(g) Free
Writing Prospectuses. The Company has not prepared or used a Free Writing Prospectus.
(h) Good
Standing of the Company. The Company has been duly incorporated and is validly existing as a corporation in good standing under
the laws of the State of Delaware with full corporate power and authority to own or lease, as the case may be, and to operate its
properties and conduct its business in all material respects as described in the Registration Statement, the Statutory Prospectus
and the Prospectus and to enter into this Agreement, the Trust Agreement, the Warrant Agreement, the Founder Shares Subscription
Agreement, the Warrant Subscription Agreement, the Forward Purchase Agreement, the Investor Rights Agreement, the Insider Letter,
the Support Services Agreement and the Facilities Sharing Agreement and to carry out the transactions contemplated hereby and thereby,
and, except where failure to be so qualified or be in good standing would not reasonably be expected to result in a Material Adverse
Effect (as defined below), other than changes relating to the economy in general or the media, digital media, music, entertainment,
communications, telecommunications and technology industries and not specifically relating to the Company, is duly qualified to
do business as a foreign corporation and is in good standing under the laws of each jurisdiction that requires such qualification.
(i) Disclosure.
There is no franchise, contract or other document required to be described in the Registration Statement or Prospectus, or to be
filed as an exhibit thereto, which is not described or filed as required (and the Statutory Prospectus contains in all material
respects the same description of the foregoing matters contained in the Prospectus); and the statements in the Statutory Prospectus
and the Prospectus under the headings “Principal Stockholders,” “Certain Relationships and Related Party Transactions,”
and “Description of Securities” insofar as such statements summarize legal matters, agreements or documents discussed
therein, are accurate and fair summaries of such legal matters, agreements or documents.
(j) Capitalization.
The Company’s authorized equity capitalization is as set forth in the Registration Statement, the Statutory Prospectus and
the Prospectus.
(k) Outstanding
Securities. All issued and outstanding securities of the Company have been duly authorized and validly issued and are fully paid
and nonassessable; 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 offers and sales of the issued and outstanding securities
of the Company were at all relevant times either registered under the Act, the applicable state securities and blue sky laws or,
based in part on the representations and warranties of the purchasers of such Common Stock and Warrants, exempt from such registration
requirements. The holder of issued and outstanding Common Stock of the Company is not entitled to preemptive or other rights to
subscribe for the Offered Securities; and, except as set forth in the Registration Statement, the Statutory Prospectus and the
Prospectus, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, Common Stock or other ownership interests in the Company are outstanding.
(l) Offered
Securities. The Offered Securities have been duly authorized and when issued and delivered against payment by the Underwriters
pursuant to this Agreement, will be validly issued.
(m) Series A
Common Stock. The Series A Common Stock included in the Units has been duly authorized and, when issued and delivered against
payment for the Offered Securities by the Underwriters pursuant to this Agreement, will be validly issued, fully paid and non-assessable.
The holders of such Series A Common Stock are not and will not be subject to personal liability by reason of being such holders;
except as set forth in the Investor Rights Agreement, such Series A Common Stock is not and will not be subject to any preemptive
or other similar contractual rights granted by the Company.
(n) Warrants.
The Warrants included in the Units, when issued and delivered in the manner set forth in the Warrant Agreement against payment
for the Offered Securities by the Underwriters pursuant to this Agreement, will be duly issued and delivered, and will constitute
valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting creditors’ rights generally from time to time in effect and by equitable principles
of general applicability (regardless of whether enforcement is considered in a proceeding in equity or at law).
(o) Series A
Common Stock Issuable Upon Exercise of Warrants. The Series A Common Stock issuable upon exercise of the Warrants included
in the Units and the Private Placement Warrants has been duly authorized and reserved for issuance upon exercise thereof and, when
issued and delivered against payment therefor pursuant to the Warrants and the Private Placement Warrants, as applicable, and the
Warrant Agreement, will be validly issued, fully paid and non-assessable. The holders of such Series A Common Stock are not
and will not be subject to personal liability by reason of being such holders; except as set forth in the Investor Rights Agreement,
such Series A Common Stock is not and will not be subject to any preemptive or other similar contractual rights granted by
the Company; and all corporate action required to be taken for the authorization, issuance and sale of such Series A Common
Stock (other than such execution (if applicable), countersignature (if applicable) and delivery at the time of issuance) has been
duly and validly taken.
(p) Registration
Rights. 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.
(q) Sales
to Affiliates. No securities of the Company have been sold by the Company or by or on behalf of, or for the benefit of, any person
or persons controlling, controlled by, or under common control with the Company from its inception through and including the date
hereof, except as disclosed in the Registration Statement, the Statutory Prospectus and the Prospectus.
(r) Integration.
Neither the Company nor any of its affiliates has, prior to the date hereof, made any offer or sale of any securities that are
required to be “integrated” pursuant to the Act with the offer and sale of the Offered Securities pursuant to the Registration
Statement.
(s) [Reserved].
(t) Private
Placement Warrants. The Private Placement Warrants, when delivered upon the consummation of the Offering, will be duly issued and
delivered, and will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with
their terms, except as the enforceability thereof may be limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting creditors’ rights generally
from time to time in effect and by equitable principles of general applicability (regardless of whether enforcement is considered
in a proceeding in equity or at law).
(u) Forward
Purchase Units. The Forward Purchase Units have been duly authorized and, when issued and delivered against payment for the Forward
Purchase Units pursuant to the Forward Purchase Agreement, will be validly issued, fully paid and non-assessable.
(v) Authorization
of this Agreement. This Agreement has been duly authorized, executed and delivered by the Company.
(w) Trust
Agreement. The Trust Agreement has been duly authorized, executed and delivered by the Company, and is a valid and binding agreement
of the Company, enforceable against the Company in accordance with its terms except as the enforceability thereof may be limited
by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium
or similar laws affecting creditors’ rights generally from time to time in effect and by equitable principles of general
applicability (regardless of whether enforcement is considered in a proceeding in equity or at law).
(x) Warrant
Agreement. The Warrant Agreement has been duly authorized, executed and delivered by the Company, and is a valid and binding agreement
of the Company, enforceable against the Company in accordance with its terms except as the enforceability thereof may be limited
by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium
or similar laws affecting creditors’ rights generally from time to time in effect and by equitable principles of general
applicability (regardless of whether enforcement is considered in a proceeding in equity or at law).
(y) Founder
Shares Subscription Agreement. The Founder Shares Subscription Agreement has been duly authorized, executed and delivered by the
Company and the Sponsor, and is a valid and binding agreement of the Company and the Sponsor, enforceable against the Company and
the Sponsor in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting creditors’
rights generally from time to time in effect and by equitable principles of general applicability (regardless of whether enforcement
is considered in a proceeding in equity or at law).
(z) Warrant
Subscription Agreement. The Warrant Subscription Agreement has been duly authorized, executed and delivered by the Company and
the Sponsor, and is a valid and binding agreement of the Company and the Sponsor, enforceable against the Company and the Sponsor
in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting creditors’ rights
generally from time to time in effect and by equitable principles of general applicability (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(aa) Forward
Purchase Agreement. The Forward Purchase Agreement has been duly authorized, executed and delivered by the Company and is a valid
and binding agreement of the Company, enforceable against the Company in accordance with its terms except as the enforceability
thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting creditors’ rights generally from time to time in effect and by equitable principles
of general applicability (regardless of whether enforcement is considered in a proceeding in equity or at law).
(bb) Investor
Rights Agreement. The Investor Rights Agreement has been duly authorized, executed and delivered by the Company and is a valid
and binding agreement of the Company, enforceable against the Company in accordance with its terms except as the enforceability
thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting creditors’ rights generally from time to time in effect and by equitable principles
of general applicability (regardless of whether enforcement is considered in a proceeding in equity or at law).
(cc) Insider
Letter. The Insider Letter executed by the Company, the Sponsor and each executive officer, director and director nominee of the
Company, has been duly authorized, executed and delivered by the Company, the Sponsor and, to the Company’s knowledge, each
such executive officer, director and director nominee, respectively, and is a valid and binding agreement of the Company, the Sponsor
and, to the Company’s knowledge, each such executive officer, director and director nominee, respectively, enforceable against
the Company, the Sponsor and, to the Company’s knowledge, each such executive officer, director and director nominee, respectively,
in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting creditors’ rights
generally from time to time in effect and by equitable principles of general applicability (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(dd) Support
Services Agreement and the Facilities Sharing Agreement. Each of the Support Services Agreement and the Facilities Sharing Agreement
has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting
creditors’ rights generally from time to time in effect and by equitable principles of general applicability (regardless
of whether enforcement is considered in a proceeding in equity or at law).
(ee) Investment
Company Act. The Company is not and, after giving effect to the offering and sale of the Offered Securities and the Private Placement
Warrants and the application of the proceeds thereof as described in the Registration Statement, the Statutory Prospectus and
the Prospectus, will not be required to register as an “investment company” as defined in the Investment Company Act
of 1940, as amended (the “Investment Company Act”).
(ff) Absence
of Further Requirements. No consent, approval, authorization, filing with or order of any court or governmental agency or body
is required in connection with the transactions contemplated herein or in the Trust Agreement, the Warrant Agreement, the Founder
Shares Subscription Agreement, the Warrant Subscription Agreement, the Forward Purchase Agreement, the Investor Rights Agreement,
the Insider Letter, the Support Services Agreement or the Facilities Sharing Agreement, except for the registration under the Act
and the Exchange Act of the Offered Securities and the Series A Common Stock and Warrants included as part of the Offered
Securities and such as may be required under state securities or blue sky laws of any jurisdiction, in connection with the purchase
and distribution of the Offered Securities by the Underwriters in the manner contemplated herein and in the Registration Statement,
the Statutory Prospectus and the Prospectus.
(gg) Absence
of Existing Defaults. The Company is not in violation or default of (i) any provision of the Company’s Amended and Restated
Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its property is subject, or (iii) any statute, law, rule or
regulation, judgment, order or decree applicable to the Company of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the Company or any of its properties; except in the case of clauses
(ii) and (iii) above for any such violation or default that would not, individually or in the aggregate, be reasonably
expected to result in a material adverse change in the condition, financial or otherwise, or in the results of operations or business
affairs of the Company, taken as a whole, whether or not arising in the ordinary course of business (a “Material Adverse
Effect”).
(hh) Absence
of Defaults and Conflicts Resulting From Transaction. Neither the issue and sale of the Offered Securities nor the consummation
of any other of the transactions herein contemplated nor the fulfillment of the terms hereof or of the Trust Agreement, the Warrant
Agreement, the Founder Shares Subscription Agreement, the Warrant Subscription Agreement, the Forward Purchase Agreement, the Investor
Rights Agreement, the Insider Letter, the Support Services Agreement or the Facilities Sharing Agreement will conflict with, result
in a breach or violation of, or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant
to, (i) the Amended and Restated Certificate of Incorporation, (ii) the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which the Company
is a party or bound or to which the Company’s property is subject, or (iii) any statute, law, rule, or regulation, judgment,
order or decree applicable to the Company of any court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or any of its properties, except in the case of clauses (ii) and (iii) above
for any such conflict, breach, violation, lien, charge or encumbrance that would not, individually or in the aggregate, be reasonably
expected to result in a Material Adverse Effect and except as would not materially adversely affect the ability of the Underwriters
to consummate the transactions contemplated by this Agreement.
(ii) Registration
Rights under the Registration Statement. No holders of securities of the Company have rights to the registration of such securities
under the Registration Statement.
(jj) Financial
Statements. The historical financial statements, including the notes thereto and the supporting schedules, if any, of the Company
included in the Statutory Prospectus, the Prospectus and the Registration Statement present fairly in all material respects the
financial condition, results of operations and cash flows of the Company as of the dates and for the periods indicated and have
been prepared in all material respects in compliance with the applicable accounting requirements of the Act and in conformity with
generally accepted accounting principles applied on a consistent basis throughout the periods involved (except as otherwise noted
therein). The statistical, industry-related and market-related data included in the Registration Statement, the Statutory Prospectus
and the Prospectus are based on or derived from sources that the Company reasonably and in good faith believes are reliable and
accurate, and such data in all material respects agree with the sources from which they are derived.
(kk) Litigation.
No action, suit or proceeding by or before any court or governmental agency, authority or body involving the Company, or, to the
Company’s knowledge, the Sponsor, any officer or director of the Company, or the property of the Company or the Sponsor is
pending or, to the knowledge of the Company, threatened that (i) would reasonably be expected to result in a Material Adverse
Effect on the performance of this Agreement or the consummation of any of the transactions contemplated hereby by the Company or
(ii) would reasonably be expected to result in a Material Adverse Effect, except as set forth in or contemplated in the Registration
Statement, the Statutory Prospectus and the Prospectus (exclusive of any supplement thereto).
(ll) Properties.
The Company owns, leases or otherwise has access to, all such properties as are necessary to the conduct of its operations as presently
conducted.
(mm) Independent
Auditors. Marcum, LLP (“Marcum”), who have certified certain financial statements of the Company and delivered
their report with respect to the audited financial statements and schedules included in the Registration Statement, Statutory
Prospectus and the Prospectus, is a registered public accounting firm that is independent with respect to the Company within the
meaning of the Act and the Exchange Act and the applicable published rules and regulations thereunder.
(nn) 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.
(oo) [Reserved].
(pp) Compliance
with Exchange Rules. There is and has been no failure on the part of the Company or, to the knowledge of the Company, any of the
Company’s officers or directors, in their capacities as such, to comply with (as and when applicable), and immediately following
the Effective Date the Company will be in compliance with, the Nasdaq Listing Rules. Further, there is and has been no failure
on the part of the Company or, to the knowledge of the Company, any of the Company’s officers or directors, in their capacities
as such, to comply with (as and when applicable), and immediately following the Effective Date the Company will be in compliance
with, the phase-in requirements and all other applicable provisions of The Nasdaq Stock Market corporate governance requirements
set forth in the Nasdaq Stock Listing Rules.
(qq) Taxes.
There are no transfer, stamp, issue, registration, documentary or other similar taxes, duties, fees or charges under U.S. federal
law or the laws of any state, or any political subdivision thereof, required to be paid in connection with the execution and delivery
of this Agreement or the issuance or sale by the Company of the Offered Securities.
(rr) Filing
of Tax Returns. The Company has filed all necessary federal, state, local and foreign tax returns, and has paid all taxes shown
as due thereon (other than those being contested in good faith and by appropriate proceedings and with respect to which adequate
reserves are being maintained in accordance with GAAP), except where failure to so file or pay would not reasonably be expected
to result in a Material Adverse Effect and except as otherwise set forth in or contemplated in the Registration Statement, Statutory
Prospectus and the Prospectus (exclusive of any supplement thereto).
(ss) Possession
of Licenses and Permits. The Company possesses all licenses, certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct its business, and the Company has not received any notice
of proceedings relating to the revocation or modification of any such license, certificate, authorization or permit that, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably be expected to result in a
Material Adverse Effect, except as set forth in or contemplated in the Registration Statement, the Statutory Prospectus and the
Prospectus (exclusive of any supplement thereto).
(tt) Anti-Corruption
Laws. (i) None of the Company, the Sponsor, any director, director nominee, officer or, to the Company Knowledge, any agent,
employee, affiliate or other person associated with or acting on behalf of the Company has taken or will take any action in furtherance
of an offer, payment, promise to pay, or authorization or approval of the payment, giving or receipt of money, property, gifts
or anything else of value, directly or indirectly, to any government official (including any officer or employee of a government
or government-owned or controlled entity or of a public international organization, or any person acting in an official capacity
for or on behalf of any of the foregoing, or any political party or party official or candidate for political office) in order
to influence official action, or to any person in violation of any applicable anti-corruption laws; (ii) the Company and the
Sponsor have conducted their businesses in compliance with applicable anti-corruption laws and have instituted and maintained policies
and procedures designed to promote and achieve compliance with such laws and with the representations and warranties contained
herein; and (iii) the Company will not use, directly or indirectly, the proceeds of the Offering in furtherance of an offer,
payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any person in violation
of any applicable anti-corruption laws.
(uu) Anti-Money
Laundering Laws. The operations of the Company are and have been conducted at all times in compliance with all applicable financial
record-keeping and reporting requirements, including those of the Bank Secrecy Act, as amended by Title III of the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act),
the Currency and Foreign Transactions Reporting Act of 1970, as amended, and the applicable anti-money laundering statutes of
jurisdictions where the Company conducts business, the rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any governmental agency having jurisdiction over the Company (collectively,
the “Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company with respect to the Anti-Money Laundering Laws is pending or,
to the best knowledge of the Company, threatened.
(vv) Economic
Sanctions. (i) None of the Company, the Sponsor, any independent director, director nominee, officer or, to the Company’s
knowledge, any agent or affiliate or representative of the Company is an individual or entity (“Person”) that
is, or is majority-owned or controlled by one or more Persons that are (A) the subject of any Sanctions (as defined below)),
or (B) located, organized or resident in a country or territory that is the subject of Sanctions (at the time of this agreement,
Crimea, Cuba, Iran, North Korea and Syria). (ii) The Company will not, directly or indirectly, use the proceeds of the
Offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person:
(A) to fund or facilitate any activities or business of or with any Person or in any country or territory that, at the time
of such funding or facilitation, is the subject of Sanctions; or (B) in any other manner that will result in a violation of
Sanctions by any Person (including any Person participating in the Offering, whether as underwriter, advisor, investor or otherwise).
(iii) The Company has not knowingly engaged in, is not now knowingly engaged in any dealings or transactions with any Person,
or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions, each of the
foregoing to the extent such dealing or transaction would be in violation of applicable Sanctions. “Sanctions”
means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by the U.S. Department
of the Treasury's Office of Foreign Assets Control, the United Nations Security Council, the European Union, Her Majesty’s
Treasury of the United Kingdom or other relevant sanctioning authority.
(ww) Lending
Relationships; Use of Proceeds. Except as disclosed in the Registration Statement, the Statutory Prospectus and the Prospectus,
the Company (i) does not have any material lending or other relationship with any bank or lending affiliate of any of the
Underwriters and (ii) does not intend to use any of the proceeds from the sale of the Offered Securities hereunder to repay
any outstanding debt owed to any affiliate of any of the Underwriters.
(xx) Questionnaires.
All information contained in the questionnaires (the “Questionnaires”) completed by the Company and the Sponsor
and, to the knowledge of the Company, the Company’s officers, directors and director nominees and provided to the Underwriters
is true and correct in all material respects and the Company has not become aware of any information that would cause the information
disclosed in the Questionnaires completed by the Sponsor or the Company’s officers, directors and director nominees to become
inaccurate or incorrect in any material respect.
(yy) Acquisition
Target Not Selected. Prior to the date hereof, the Company has not selected any business combination target and has not, nor has
anyone on its behalf, initiated any substantive discussions, directly or indirectly, with any business combination target.
(zz) No
Finder’s or Similar Fees. Except as described in the Registration Statement, the Statutory Prospectus and the Prospectus,
there are no claims, payments, arrangements, contracts, agreements or understandings relating to the payment of a brokerage commission
or finder’s, consulting, origination or similar fee by the Company, the Sponsor or any officer, director or director nominee
of the Company with respect to the sale of the Offered Securities hereunder or any other arrangements, agreements or understandings
of the Company, the Sponsor or, to the Company’s knowledge, any such officer, director or director nominee of the Company,
or their respective affiliates, that may affect the Underwriters’ compensation, as determined by the Financial Industry Regulatory
Authority, Inc. (“FINRA”).
(aaa) Absence
of Certain Fees. Except as described in the Registration Statement, the Statutory Prospectus and the Prospectus, the Company has
not made any direct or indirect payments (in cash, securities or by any other method that would be deemed to be "underwriting
compensation" as defined in Rule 5110(j)(22) of FINRA’s Conduct Rules and Supplemental Material .01 thereunder):
(i) to any person, as a finder’s fee, consulting fee or otherwise, in consideration of such person raising capital for
the Company or introducing to the Company persons who raised or provided capital to the Company; (ii) to any person that,
to the Company’s knowledge, has been accepted by FINRA as a member of FINRA (a “Member”); or (iii) to
any person or entity that, to the Company’s knowledge, has any direct or indirect affiliation or association with any Member,
within the 180-day period prior to the initial filing date of the Registration Statement, other than payments to the Underwriters
pursuant to this Agreement.
(bbb) Investment
Banking Services. Except as disclosed in the Registration Statement, the Statutory Prospectus and the Prospectus, during the period
beginning 180 days prior to the initial filing of the Registration Statement and ending on the Effective Date, no Member and/or
any person associated or affiliated with a Member has provided any investment banking, financial advisory and/or consulting services
to the Company. No Participating Member (as defined in FINRA Rule 5110(j)(15)) in the Offering has received any underwriting
compensation in connection with a public offering that has not been completed according to the terms of an agreement entered into
by the Company and a Participating Member in the Offering.
(ccc) FINRA
Membership of Affiliates. No officer, director, director nominee or beneficial owner of any class of the Company’s securities
(whether debt or equity, registered or unregistered, regardless of the time acquired or the source from which derived) is a Member
or a person associated or affiliated with a Member.
(ddd) Ownership
of FINRA Member Securities. Except as disclosed in the Registration Statement, the Statutory Prospectus and the Prospectus, no
Company Affiliate is an owner of stock or other securities of any Member (other than securities purchased on the open market).
(eee) [Reserved].
(fff) Proceeds;
Payment to FINRA Members. No proceeds from the sale of the Offered Securities (excluding underwriting compensation as disclosed
in the Registration Statement, Statutory Prospectus and the Prospectus) will be paid by the Company to any Member, or any persons
associated or affiliated with a Member.
(ggg) Issuance
of Securities to Underwriters. 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 an affiliated or associated 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.
(hhh) FINRA
Association of Company Equityholders. Except for the issuance of securities to the Sponsor, no person to whom securities of the
Company have been privately issued within the 180-day period prior to the initial filing date of the Registration Statement has
any affiliation or association with any Member.
(iii) Conflicts
of Interest. Except as disclosed in the Registration Statement, the Statutory Prospectus and the Prospectus, to the Company’s
knowledge, no Member intending to participate in the Offering has a conflict of interest with the Company. For this purpose, a
“conflict of interest” means, if at the time of the Member’s participation in the Offering, any of the following
applies: (A) the securities are to be issued by the Member; (B) the Company controls, is controlled by or is under common
control with the Member or the Member’s associated persons; (C) at least 5% of the net offering proceeds, not including
underwriting compensation, are intended to be: (i) used to reduce or retire the balance of a loan or credit facility extended
by the Member, its affiliates and its associated persons, in the aggregate; or (ii) otherwise directed to the Member, its
affiliates and associated persons, in the aggregate; or (D) as a result of the Offering and any transactions contemplated
at the time of the Offering: (i) the Member will be an affiliate of the Company; (ii) the Member will become publicly
owned; or (iii) the Company will become a Member or form a broker-dealer subsidiary. As used herein, the term “Member
intending to participate in the Offering” includes any associated person of a Member that is participating in the Offering,
any members of such associated person’s immediate family, and any affiliate of a Member that is participating in the Offering.
(jjj) Non-Compete/Non-Solicitation.
Except as described in the Statutory Prospectus and the Prospectus, to the Company’s knowledge, none of the Sponsor, directors
or officers of the Company is subject to a noncompetition agreement or non-solicitation agreement with any employer or prior employer
that could materially affect its, his or her ability to be and act in the capacity of stockholder, officer or director of the Company,
as applicable.
(kkk) Absence
of Manipulation. The Company has not taken, directly or indirectly, any action designed to or that would constitute or that might
reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Offered Securities.
(lll) Company
Ownership of Other Entities. The Company does not own an interest in any corporation, partnership, limited liability company, joint
venture, trust or other entity.
(mmm) Related
Party Transactions. No relationship, direct or indirect, exists between or among any of the Company or any affiliate of the Company,
on the one hand, and any director, director nominee, officer, stockholder, special advisor, customer or supplier of the Company
or any affiliate of the Company, on the other hand, which is required by the Act or the Exchange Act to be described in the Registration
Statement, Statutory Prospectus or the Prospectus that is not described as required. There are no outstanding loans, advances
(except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company
to or for the benefit of any of the officers, directors or director nominees of the Company or any of their respective family
members, except as disclosed in the Registration Statement, 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 officer, director or director nominee of the Company.
(nnn) Directed
Unit Program. (i) The Registration Statement, the Statutory Prospectus, the Prospectus and any preliminary prospectus comply,
and any amendments or supplements thereto will comply, with any applicable laws or regulations of foreign jurisdictions in which
the Statutory Prospectus, the Prospectus or any preliminary prospectus, as amended or supplemented, if applicable, are distributed
in connection with the Directed Unit Program; (ii) No consent, approval, authorization or order of, or qualification with,
any governmental body or agency, other than those obtained, is required in connection with the offering of the Directed Units in
any jurisdiction where the Directed Units are being offered; and (iii) The Company has not offered, or caused the Underwriters
to offer, Series A Common Stock to any person pursuant to the Directed Unit Program with the specific intent to unlawfully
influence (i) a customer or supplier of the Company to alter the customer’s or supplier’s level or type of business
with the Company or (ii) a trade journalist or publication to write or publish favorable information about the Company or
its products.
(ooo) Applicability
of Rule 419. Upon delivery and payment for the Offered Securities on the Closing Date, the Company will not be subject to
Rule 419 under the Act and none of the Company’s outstanding securities will be deemed to be a “penny stock”
as defined in Rule 3a51-1 under the Exchange Act.
(ppp) Emerging
Growth Company Status. From the time of the initial filing of the Registration Statement to the Commission (or, if earlier, the
first date on which the Company engaged, directly or through any person authorized to act on its behalf, in any Testing-the-Waters
Communication) through the Execution Time, the Company has been and is an “emerging growth company,” as defined in
Section 2(a) of the Act (an “Emerging Growth Company”). “Testing-the-Waters Communication”
means any oral or written communication with potential investors undertaken in reliance on Section 5(d) or Rule 163B
of the Act.
(qqq) Testing-the-Waters
Communications. The Company (i) has not alone engaged in any Testing-the-Waters Communication other than Testing-the-Waters
Communications with the consent of the Representatives with entities that are qualified institutional buyers within the meaning
of Rule 144A under the Act or institutions that are accredited investors within the meaning of Rule 501 under the Act
and (ii) has not authorized anyone other than the Representatives to engage in Testing-the-Waters Communications. The Company
reconfirms that the Representatives have been authorized to act on its behalf in undertaking Testing-the-Waters Communications.
The Company has not distributed any Written Testing-the-Waters Communications other than those listed on Schedule III hereto. “Written
Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a written communication within the
meaning of Rule 405 under the Act.
Any certificate signed by any officer or
director of the Company and delivered to the Representatives or counsel for the Underwriters in connection with the Offering shall
be deemed a representation and warranty by the Company, as to matters covered thereby, to each Underwriter.
3. Purchase
and Sale. (a) Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth,
the Company agrees to sell to each Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Company,
at a purchase price of $9.80 per Unit, the amount of the Firm Securities set forth opposite such Underwriter’s name in Schedule
I hereto.
(b) Subject
to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company hereby grants
an option to the several Underwriters to purchase, severally and not jointly, up to 7,500,000 Optional Securities at $9.80 per
Unit. Said option may be exercised only to cover over-allotments in the sale of the Firm Securities by the Underwriters. Said option
may be exercised in whole or in part at any time on or before the 45th day after the date of the Prospectus upon written notice
by the Representatives to the Company setting forth the number of Optional Securities as to which the several Underwriters are
exercising the option and the settlement date. The number of Optional Securities to be purchased by each Underwriter shall be based
upon the same percentage of the total number of the Optional Securities to be purchased by the several Underwriters as such Underwriter
is purchasing of the Firm Securities, subject to such adjustments as the Representatives in their absolute discretion shall make
to eliminate any fractional shares.
(c) In
addition to the discount from the public offering price represented by the purchase price set forth in the first sentence of Section 3(a) of
this Agreement, the Company hereby agrees to pay to the Underwriters a deferred discount of $0.35 per Unit (including both Firm
Securities and Optional Securities) purchased hereunder (the “Deferred Discount”). The Deferred Discount will be paid
directly to the Representatives, on behalf of the Underwriters, by the Trustee from amounts on deposit in the Trust Account by
wire transfer payable in same-day funds if and when the Company consummates its Business Combination. The Underwriters hereby agree
that if no Business Combination is consummated within the time period provided in the Amended and Restated Certificate of Incorporation,
as amended, and the funds held under the Trust Agreement are distributed to the holders of the Series A Common Stock included
in the Offered Securities sold pursuant to this Agreement (the “Public Stockholders”), (i) the Underwriters
will forfeit any rights or claims to the Deferred Discount and (ii) the Trustee under the Trust Agreement is authorized to
distribute the Deferred Discount to the Public Stockholders on a pro rata basis.
4. Delivery
and Payment. Delivery of and payment for the Firm Securities and the Optional Securities (if the option provided for in Section 3
hereof shall have been exercised on or before the second (2nd) Business Day prior to the Closing Date) shall be made
at 10:00 a.m., New York City time, on [•], 2021, or at such time on such later date not more than three (3) Business
Days after the foregoing date as the Representatives shall designate, which date and time may be postponed by agreement between
the Representatives and the Company or as provided in Section 9 hereof (such date and time of delivery and payment for the
Offered Securities being herein called the “Closing Date”). Delivery of the Offered Securities shall be made
to the Representatives for the respective accounts of the several Underwriters against payment by the several Underwriters through
the Representatives of the purchase price thereof by wire transfer payable in same-day funds to an account specified by the Company
and to the Trust Account as described below in this Section 4. Delivery of the Firm Securities and the Optional Securities
shall be made through the facilities of The Depository Trust Company (“DTC”) unless the Representatives shall
otherwise instruct.
(a) Payment
for the Firm Securities shall be made as follows: $490,000,000 of the net proceeds for the Firm Securities (including $17,500,000
of Deferred Discount) shall be deposited in the Trust Account pursuant to the terms of the Trust Agreement along with such portion
of the net proceeds from the sale of the Private Placement Warrants in order for the Trust Account to equal the product of the
number of Units sold and the public offering price per Unit as set forth on the cover of the Prospectus upon delivery to the Representatives
of the Firm Securities through the facilities of DTC or, if the Representatives have otherwise instructed, upon delivery to the
Representatives of certificates (in form and substance satisfactory to the Representatives) representing the Firm Securities, in
each case for the account of the Underwriters. The Firm Securities shall be registered in such name or names and in such authorized
denominations as the Representatives may request in writing at least two (2) Business Days prior to the Closing Date. If delivery
is not made through the facilities of DTC, the Company will permit the Representatives to examine and package the Firm Securities
for delivery, at least one (1) Business Day prior to the Closing Date. The Company shall not be obligated to sell or deliver
the Firm Securities except upon tender of payment by the Representatives for all the Firm Securities.
(b) Payment
for the Optional Securities shall be made as follows: $9.80 per Optional Security (including $0.35 per Optional Security of Deferred
Discount) shall be deposited in the Trust Account pursuant to the terms of the Trust Agreement upon delivery to the Representatives
of the Optional Securities through the facilities of DTC or, if the Representatives has otherwise instructed, upon delivery to
the Representatives of certificates (in form and substance satisfactory to the Representatives) representing the Optional Securities
(or through the facilities of DTC) for the account of the Underwriters. The Optional Securities shall be registered in such name
or names and in such authorized denominations as the Representatives may request in writing at least two (2) Business Days
prior to the settlement date of such Optional Securities. If delivery is not made through the facilities of DTC, the Company will
permit the Representatives to examine and package the Optional Securities for delivery, at least one (1) Business Day prior
to the settlement date of such Optional Securities. The Company shall not be obligated to sell or deliver the Optional Securities
except upon tender of payment by the Representatives for all the Optional Securities.
If the option provided for in Section 3
hereof is not exercised on or before the second (2nd) Business Day prior to the Closing Date, the Company will deliver
the Optional Securities (at the expense of the Company) to the Representatives, at Citigroup Global Markets Inc., 388 Greenwich
Street, New York, New York 10013, Attention: General Counsel and Morgan Stanley & Co. LLC, 1585 Broadway, New York, New
York 10036, Attention: Equity Syndicate Desk, with a copy to the Legal Department, on the date specified by the Representatives
(which shall be at least two (2) Business Days after exercise of said option, unless otherwise agreed to by the Representatives
and the Company) for the respective accounts of the several Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price thereof to the Trust Account as described above in Section 4(b). If settlement for the
Optional Securities occurs after the Closing Date, the Company will deliver to the Representatives on the settlement date for such
Optional Securities, and the obligation of the Underwriters to purchase such Optional Securities shall be conditioned upon receipt
of, supplemental opinions, certificates and letters confirming as of such date the opinions, certificates and letters delivered
on the Closing Date pursuant to Section 7 hereof.
5. Offering
by Underwriters. It is understood that the several Underwriters propose to offer the Offered Securities for sale to the public
as set forth in the Prospectus (the “Offering”).
6. Certain
Agreements of the Company. The Company agrees with the several Underwriters that:
(a) Prior
to the termination of the Offering, the Company will not file any amendment of the Registration Statement or supplement to the
Prospectus or any Rule 462(b) Registration Statement unless the Company has furnished the Representatives with a copy
for their review prior to filing and will not file any such proposed amendment, supplement or Rule 462(b) Registration
Statement to which the Representatives reasonably object. The Company will cause the Prospectus, properly completed, and any supplement
thereto to be filed in a form approved by the Representatives with the Commission pursuant to the applicable paragraph of Rule 424(b) within
the time period prescribed and will provide evidence satisfactory to the Representatives of such timely filing. The Company will
promptly advise the Representatives (i) when the Prospectus, and any supplement thereto, shall have been filed (if required)
with the Commission pursuant to Rule 424(b) or when any Rule 462(b) Registration Statement or any Written Testing-the-Waters
Communication shall have been filed with the Commission, (ii) when, prior to termination of the Offering, any amendment to
the Registration Statement shall have been filed or become effective, (iii) of any request by the Commission or its staff
for any amendment of the Registration Statement, any Rule 462(b) Registration Statement or any Written Testing-the-Waters
Communication or for any supplement to the Prospectus or for any additional information, (iv) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or any order preventing or suspending the use of the
Preliminary Prospectus, the Prospectus or any Written Testing-the-Waters Communication, or of the institution of any proceedings
for that purpose or pursuant to Section 8A of the Act and (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Offered Securities for sale in any jurisdiction or the institution or threatening
of any proceeding for such purpose. The Company will use commercially reasonable efforts to prevent the issuance of any such stop
order or the occurrence of any such suspension or objection to the use of the Registration Statement and, upon such issuance, occurrence
or notice of objection, to obtain as soon as possible the withdrawal of such stop order or relief from such occurrence or objection,
including, if necessary, by filing an amendment to the Registration Statement or a new registration statement and using commercially
reasonable efforts to have such amendment or new registration statement declared or become effective as soon as practicable.
(b) If,
at any time prior to the filing of the Prospectus pursuant to Rule 424(b), any event or development occurs as a result of
which the Statutory Prospectus would include any untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under which they were made at such time not misleading, the Company
will (i) notify promptly the Representatives so that any use of the Statutory Prospectus may cease until it is amended or
supplemented; (ii) amend or supplement the Statutory Prospectus to correct such statement or omission; and (iii) supply
any amendment or supplement to the Representatives in such quantities as the Representatives may reasonably request.
(c) If,
at any time when a prospectus relating to the Offered Securities is required to be delivered under the Act (including in circumstances
where such requirement may be satisfied pursuant to Rule 172), any event or development occurs as a result of which the Prospectus
as then supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make
the statements therein in the light of the circumstances under which they were made at such time not misleading, or if it shall
be necessary to amend the Registration Statement or supplement the Prospectus to comply with the Act or the rules thereunder,
the Company promptly will (i) notify the Representatives of any such event; (ii) prepare and file with the Commission,
subject to the second sentence of paragraph (a) of this Section 6, an amendment or supplement that will correct such
statement or omission or effect such compliance; and (iii) supply any supplemented Prospectus to the Representatives in such
quantities as the Representatives may reasonably request.
(d) As
soon as practicable, the Company will make generally available to its security holders and to the Representatives an earnings statement
or statements of the Company and its subsidiaries that will satisfy the provisions of Section 11(a) of the Act and Rule 158.
(e) The
Company will not make any offer relating to the Units or the securities contained therein that constitutes or would constitute
a Free Writing Prospectus or a portion thereof required to be filed by the Company with the Commission or retained by the Company
under Rule 433 of the Act.
(f) The
Company will furnish to the Representatives and counsel for the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a copy of the Registration Statement (without exhibits thereto)
and, so long as delivery of a prospectus by an Underwriter or dealer may be required by the Act (including in circumstances where
such requirement may be satisfied pursuant to Rule 172), as many copies of each Preliminary Prospectus, the Prospectus and
any supplement thereto as the Representatives may reasonably request. The Company will pay the expenses of printing or other production
of all documents relating to the Offering.
(g) The
Company will indemnify and hold harmless the Underwriters against any documentary, stamp or similar issue tax, including any interest
and penalties, on the creation, issue and sale of the Offered Securities and on the initial resale thereof by the Underwriters
and on the execution and delivery of this Agreement. All payments to be made by the Company hereunder shall be made without withholding
or deduction for or on account of any present or future taxes, duties or governmental charges whatsoever unless the Company is
compelled by law to deduct or withhold such taxes, duties or charges. In that event, the Company shall pay such additional amounts
as may be necessary in order that the net amounts received after such withholding or deduction shall equal the amounts that would
have been received if no withholding or deduction had been made.
(h) The
Company will not, without the prior written consent of the Representatives, (x) offer, sell, contract to sell, pledge or otherwise
dispose of (or enter into any transaction that is designed to, or might reasonably be expected to, result in the disposition (whether
by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Company or any affiliate of
the Company or any person in privity with the Company or any affiliate of the Company), directly or indirectly, including the filing
(or participation in the filing) of a registration statement with the Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act
with respect to, any other Units, Series A Common Stock, Warrants or any securities convertible into, or exercisable, or exchangeable
for, Series A Common Stock or publicly announce an intention to effect any such transaction during the period commencing on
the date hereof and ending 180 days after the date of this Agreement; provided, however, that the foregoing shall not apply to
the forfeiture of a portion of the Founder Shares pursuant to their terms or any transfer of Founder Shares to any current or future
independent director of the Company (provided that such current or future independent director transferee is subject to the Insider
Letter or executes an agreement substantially identical to the Insider Letter, as applicable to directors and officers, at the
time of such transfer, and provided further that to the extent any Section 16 reporting obligation is triggered as a result
of such transfer, any related Section 16 filing includes a practical explanation as to the nature of the transfer) and the
Company may (1) issue and sell the Private Placement Warrants, (2) issue and sell the Optional Securities on exercise
of the option provided for in Section 3 hereof, (3) register with the Commission pursuant to the Investor Rights Agreement,
in accordance with the terms of the Investor Rights Agreement, the resale of the securities covered thereby, (4) register
with the Commission pursuant to the Warrant Agreement, in accordance with the terms of the Warrant Agreement, the issuance of the
shares of Series A Common Stock to be issued upon exercise of the Warrants, the Private Placement Warrants, the Forward Purchase
Warrants and the Working Capital Warrants, and (5) issue securities in connection with a Business Combination, or (y) release
the Sponsor or any officer or director from the 180-day lock-up contained in the Insider Letter.
(i) The
Company will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected
to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Offered Securities.
(j) The
Company agrees to pay the costs and expenses relating to the following matters: (i) the preparation, printing or reproduction
and filing with the Commission of the Registration Statement (including financial statements and exhibits thereto), each Preliminary
Prospectus, the Prospectus and each amendment or supplement to any of them; (ii) the printing (or reproduction) and delivery
(including postage, air freight charges and charges for counting and packaging) of such copies of the Registration Statement, each
Preliminary Prospectus, the Prospectus and all amendments or supplements to any of them, as may, in each case, be reasonably requested
for use in connection with the offering and sale of the Offered Securities; (iii) the preparation, printing, authentication,
issuance and delivery of certificates for the Offered Securities, including any stamp or transfer taxes in connection with the
original issuance and sale of the Offered Securities; (iv) the printing (or reproduction) and delivery of this Agreement and
all other agreements or documents printed (or reproduced) and delivered in connection with the Offering; (v) the registration
of the Offered Securities under the Exchange Act and the listing of the Offered Securities and the Series A Common Stock and
Warrants included in the Offered Securities on The Nasdaq Stock Market; (vi) the printing and delivery of a preliminary blue
sky memorandum, any registration or qualification of the Offered Securities for offer and sale under the securities or blue sky
laws of the several states and any filings required to be made with FINRA (including filing fees and the reasonably incurred and
documented fees and expenses of counsel for the Underwriters relating to such filings, memorandum, registration and qualification
in an aggregate amount up to $25,000); (vii) the transportation and other expenses incurred by or on behalf of the Company
(and not the Underwriters) in connection with presentations to prospective purchasers of the Offered Securities; (viii) the
fees and expenses of the Company’s accountants and the fees and expenses of counsel for the Company; (ix) all fees and
disbursements of counsel incurred by the Underwriters in connection with the Directed Unit Program, all documented costs and expenses
incurred by the Underwriters in connection with the printing (or reproduction) and delivery (including postage, air freight charges
and charges for counting and packaging) of copies of the Directed Unit Program material and all stamp duties, similar taxes or
duties or other taxes, if any, incurred by the Underwriters in connection with the Directed Unit Program; and (x) all other
costs and expenses incident to the performance by the Company of its obligations hereunder.
(k) For
a period commencing on the Effective Date and ending five (5) years from the date of the consummation of the Business Combination
or until such earlier time at which the Liquidation occurs, the Company will use commercially reasonable efforts to maintain the
registration of the Series A Common Stock and Warrants (or such other securities into which the Series A Common Stock
or Warrants, as the case may be, may be exchanged in connection with the Business Combination) under the provisions of the Exchange
Act, except after giving effect to a going private transaction after the completion of a Business Combination. For a period commencing
on the Effective Date and ending upon the consummation of the Business Combination or until such earlier time at which the Liquidation
occurs, the Company will use commercially reasonable efforts to maintain the registration of the Units under the provisions of
the Exchange Act. During such applicable period, the Company will not deregister the Units, Series A Common Stock or Warrants
under the Exchange Act (except in connection with an exchange pursuant to a Business Combination or a going private transaction
after the completion of a Business Combination) without the prior written consent of the Representatives.
(l) The
Company shall, on the date hereof, retain its independent registered public accounting firm to audit the balance sheet of the Company
as of the Closing Date (the “Audited Balance Sheet”) reflecting the receipt by the Company of the proceeds of
the Offering on the Closing Date. As soon as the Audited Balance Sheet becomes available, the Company shall promptly, but not later
than four (4) Business Days after the Closing Date, file a Current Report on Form 8-K with the Commission, which Current
Report shall contain the Company’s Audited Balance Sheet. Additionally, upon the Company’s receipt of the proceeds
from the exercise of all or any portion of the option provided for in Section 3 hereof, the Company shall promptly, but not
later than four (4) Business Days after the receipt of such proceeds, file a Current Report on Form 8-K with the Commission,
which report shall disclose the Company’s sale of the Optional Securities and its receipt of the proceeds therefrom, unless
the receipt of such proceeds are reflected in the Current Report on Form 8-K referenced in the immediately prior sentence.
(m) For
a period commencing on the Effective Date and ending five (5) years from the date of the consummation of the Business Combination
or until such earlier time at which the Liquidation occurs or the Series A Common Stock and Warrants cease to be publicly
traded, the Company, at its expense, shall cause its regularly engaged independent registered public accounting firm to review
(but not audit) the Company’s financial statements for each of the first three (3) fiscal quarters prior to the announcement
of quarterly financial information, the filing of the Company’s Quarterly Reports on Form 10-Q.
(n) For
a period commencing on the Effective Date and ending five (5) years from the date of the consummation of the Business Combination
or until such earlier time at which the Liquidation occurs, the Company shall, to the extent such information or documents are
not otherwise publicly available, upon written request from the Representatives, furnish to the Representatives copies of such
financial statements and other periodic and special reports as the Company from time to time furnishes generally to holders of
any class of securities, and promptly furnish to the Representatives: (i) a copy of such registration statements, financial
statements and periodic and special reports as the Company shall be required to file with the Commission and from time to time
furnishes generally to holders of any such class of its securities in their capacities as such; and (ii) such additional documents
and information with respect to the Company and the affairs of any future subsidiaries of the Company as the Representatives may
from time to time reasonably request, all subject to the execution of a satisfactory confidentiality agreement. Any registration
statements, financial statements, periodic and special reports or other additional documents referred to in the preceding sentence
filed or furnished on the Commission’s EDGAR website will be considered furnished for the purposes of this section.
(o) For
a period commencing on the Effective Date and ending five (5) years from the date of the consummation of the Business Combination
or until such earlier time at which the Liquidation occurs or the Series A Common Stock and Warrants cease to be publicly
traded, the Company shall retain a transfer and warrant agent.
(p) In
no event will the amounts payable by the Company to Liberty Media Corporation and Liberty Property Holdings, Inc. for office
space and certain administrative and support services provided to the Company under the Support Services Agreement and Facilities
Sharing Agreement exceed $1,099,992 in the aggregate per calendar year period from the date hereof until the earlier of the date
of the consummation of the Business Combination and the Liquidation.
(q) [Reserved].
(r) Other
than as disclosed in the Registration Statement, the Statutory Prospectus and the Prospectus, or as otherwise contemplated in the
proxy statement related to its Business Combination, the Company shall not pay the Sponsor or its affiliates or any of the Company’s
executive officers, directors, director nominees or any of their respective affiliates any fees or compensation of any kind for
services rendered to the Company prior to, or in connection with, the completion of a Business Combination.
(s) The
Company will apply the net proceeds from the Offering and the sale of the Private Placement Warrants received by it in a manner
consistent in all material respects with the applications described under the caption “Use of Proceeds” in the Statutory
Prospectus and the Prospectus.
(t) For
a period of 60 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 merger candidate or to provide any other merger and acquisition services,
or has provided or will provide any investment banking, financial, advisory and/or consulting services to the Company, the Company
agrees that it shall promptly provide to FINRA (via a FINRA submission), the Representatives and their counsel a notification prior
to entering into the agreement or transaction relating to a potential Business Combination: (i) the identity of the person
or entity providing any such services; (ii) complete details of all such services and copies of all agreements governing such
services prior to entering into the agreement or transaction; and (iii) justification as to why the value received by any
person or entity for such services is not underwriting compensation for the Offering. The Company also agrees that proper disclosure
of such arrangement or potential arrangement will be made in the tender offer materials or proxy statement, as applicable, which
the Company may file in connection with the Business Combination for purposes of offering redemption of shares held by its stockholders
or for soliciting stockholder approval, as applicable.
(u) The
Company shall advise FINRA, the Representatives and their counsel if it is aware that any 5% or greater stockholder of the Company
becomes an affiliate or associated person of a Member participating in the distribution of the Offered Securities.
(v) The
Company shall cause the proceeds of the Offering and the sale of the Private Placement Warrants to be held in the Trust Account
to be invested only in United States government treasury bills with a maturity of 185 days or less or in money market funds investing
solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act as set forth in
the Trust Agreement and disclosed in the Statutory Prospectus and the Prospectus. The Company will otherwise conduct its business
in a manner so that it will not become subject to the Investment Company Act. Furthermore, once the Company consummates a Business
Combination, it will not be required to register as an investment company under the Investment Company Act.
(w) Prior
to the earlier of the consummation of the Company’s Business Combination and the Liquidation, the Company may instruct the
Trustee under the Trust Agreement to release from the Trust Account, (i) solely from interest income earned on the funds held
in the Trust Account, the amounts necessary to pay taxes, and (ii) to pay Public Stockholders who properly redeem their Series A
Common Stock in connection with a vote to approve an amendment to the Amended and Restated Certificate of Incorporation (A) to
modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s Business
Combination or to redeem 100% of the Series A Common Stock sold in the Offering if the Company does not complete its Business
Combination within the time period required by the Amended and Restated Certificate of Incorporation or (B) with respect to
any other provision relating to stockholders’ rights or pre-Business Combination activity. Otherwise, all funds held in the
Trust Account (including any interest income earned on the amounts held in the Trust Account (which interest shall be net of taxes
payable)) will remain in the Trust Account until the earlier of the consummation of the Company’s Business Combination and
the Liquidation; provided, however, that in the event of the Liquidation, up to $100,000 of interest income may be released to
the Company if the proceeds of the Offering held by the Company outside of the Trust Account are not sufficient to cover the costs
and expenses associated with implementing the Company’s plan of dissolution.
(x) The
Company will reserve and keep available that maximum number of its authorized but unissued securities that are issuable upon exercise
of the Warrants and Private Placement Warrants, and upon conversion of the Founder Shares, outstanding from time to time.
(y) Subsequent
to the issuance and sale of the Offered Securities and prior to the earlier of the consummation of a Business Combination and the
Liquidation, the Company shall not issue (other than in replacement for lost, stolen or mutilated certificates) any Series A
Common Stock, Warrants or any options or other securities convertible into or exercisable for Series A Common Stock, or any
preferred shares, in each case, that participate in any manner in the Trust Account or that vote as a class with the Series A
Common Stock on a Business Combination.
(z) Prior
to the earlier of the consummation of a Business Combination and the Liquidation, the Company’s audit committee will review
on a quarterly basis all payments made to the Sponsor, to the Company’s officers or directors, or to the Company’s
or any of such other persons’ respective affiliates.
(aa) The
Company agrees that it will use commercially reasonable efforts to prevent the Company from becoming subject to Rule 419
under the Act prior to the consummation of any Business Combination, including, but not limited to, using commercially reasonable
efforts to prevent any of the Company’s outstanding securities from being deemed to be a “penny stock” as defined
in Rule 3a51-1 under the Exchange Act during such period.
(bb) To
the extent required by Rule 13a-15(e) under the Exchange Act, the Company will maintain “disclosure controls and
procedures” (as defined under Rule 13a-15(e) under the Exchange Act) and a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general
or specific authorization, (ii) transactions are recorded as necessary in order to permit preparation of financial statements
in accordance with GAAP and to maintain accountability for assets, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(cc) For
a period commencing on the Effective Date and ending on the date of the consummation of the Business Combination or until such
earlier time at which the Liquidation occurs, the Company will use commercially reasonable efforts to effect and maintain the
listing of the Common Stock on the Nasdaq Stock Market (or another national securities exchange).
(dd) For
a period commencing as soon as legally required to do so and ending on the date of the consummation of the Business Combination
or at such earlier time at which the Liquidation occurs, the Company and its directors and officers, in their capacities as such,
have taken or shall take all actions necessary to comply with any applicable provisions of the Sarbanes-Oxley Act, including Section 402
related to loans and Sections 302 and 906 related to certifications, and to comply with the Nasdaq Stock Market Listed Company
Manual (or such other national securities exchange on which the Series A Common Stock is listed).
(ee) For
a period commencing on the Effective Date and ending on the date of the consummation of the Business Combination or at such earlier
time at which the Liquidation occurs, the Company shall not take any action or omit to take any action that would cause the Company
to be in breach or violation of the Amended and Restated Certificate of Incorporation.
(ff) The
Company will seek to have all vendors, service providers (other than independent accountants), prospective target businesses, lenders
or other entities with which it does business enter into agreements waiving any right, title, interest or claim of any kind in
or to any monies held in the Trust Account for the benefit of the Public Stockholders. The Company may forego obtaining such waivers
only if the Company’s management shall have determined that such third party’s engagement would be significantly more
beneficial to the Company than any alternative.
(gg) The
Company, subject to any applicable provision of the Amended and Restated Certificate of Incorporation, may consummate the Business
Combination and conduct redemptions of Series A Common Stock for cash upon consummation of such Business Combination without
a stockholder vote pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, including the filing of tender offer documents
with the Commission. Such tender offer documents will contain substantially the same financial and other information about the
Business Combination and the redemption rights as is required under the Commission’s proxy rules and will provide each
stockholder of the Company with the opportunity prior to the consummation of the Business Combination to redeem the Series A
Common Stock held by such stockholder for an amount of cash equal to (A) the aggregate amount then on deposit in the Trust
Account, calculated as of two (2) Business Days prior to the consummation of the Business Combination, representing (x) the
proceeds held in the Trust Account from the Offering and the sale of the Private Placement Warrants and (y) any interest
income earned on the funds held in the Trust Account then on deposit in Trust Account (which interest shall be net of taxes payable),
divided by (B) the total number of Series A Common Stock sold as part of the Units in the Offering (the “Public
Shares”) then outstanding. If, however, the Company elects not to file such tender offer documents, a stockholder vote
is required by applicable law or stock exchange listing requirement in connection with the Business Combination, or the Company
decides to hold a stockholder vote for business or other reasons, the Company will submit such Business Combination to the Company’s
stockholders for their approval (“Business Combination Vote”). With respect to the Business Combination Vote,
if any, the Sponsor and the directors and executive officers of the Company have agreed to vote all of their Founder Shares and
any other Series A Common Stock they may acquire during or after the Offering in favor of the Company’s Business Combination.
If the Company seeks stockholder approval of the Business Combination, the Company will offer to each Public Stockholder holding
Series A Common Stock the right to have its shares redeemed in conjunction with a proxy solicitation pursuant to the proxy
rules of the Commission at a per share redemption price (the “Redemption Price”) equal to (I) the
aggregate amount then on deposit in the Trust Account as of two (2) Business Days prior to the consummation of the Business
Combination, representing (1) the proceeds held in the Trust Account from the Offering and the sale of the Private Placement
Warrants and (2) any interest income earned on the funds held in the Trust Account then on deposit in the Trust Account (which
interest shall be net of any taxes payable), divided by (II) the total number of Public Shares then outstanding. If the Company
seeks stockholder approval of the Business Combination, the Company may proceed with such Business Combination only if a majority
of the outstanding shares of the Company’s common stock voted are voted in favor of the Business Combination, subject to
any other vote required by applicable law. If, after seeking and receiving such stockholder approval, the Company elects to so
proceed, it will redeem shares, at the Redemption Price, from those Public Stockholders who validly and affirmatively requested
(and did not validly withdraw) such redemption. Only Public Stockholders holding Series A Common Stock who properly exercise
their redemption rights, in accordance with the applicable tender offer or proxy materials related to such Business Combination
and the Amended and Restated Certificate of Incorporation, shall be entitled to receive distributions from the Trust Account in
connection with a Business Combination, and the Company shall pay no distributions with respect to any other holders of Series A
Common Stock of the Company in connection therewith. In the event that the Company does not effect a Business Combination by the
time period required by the Amended and Restated Certificate of Incorporation, the Company will (i) cease all operations
except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten (10) Business Days
thereafter subject to lawfully available funds therefor, 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 (net of taxes payable, less up to $100,000 of such net interest
to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish
Public Stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any),
and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining
stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations
under the laws of the State of Delaware to provide for claims of creditors and the requirements of other applicable law. Only
Public Stockholders holding Series A Common Stock included in the Offered Securities shall be entitled to receive such redemption
amounts and the Company shall pay no such redemption amounts or any distributions in liquidation with respect to any other Series A
Common Stock of the Company. In the event that the Company proposes any amendment to the Amended and Restated Certificate of Incorporation
to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s
Business Combination or to redeem 100% of the outstanding Public Shares if the Company has not consummated a Business Combination
within the time period required by the Amended and Restated Certificate of Incorporation; and with respect to any other provision
relating to stockholders’ rights or pre-Business Combination activity, as described in the Amended and Restated Certificate
of Incorporation, the Company shall provide to the Public Stockholders the opportunity to redeem their Public Shares upon the
approval of any such amendment.
(hh) In
the event that the Company desires or is required by an applicable law or regulation to cause an announcement (“Business
Combination Announcement”) to be placed in The Wall Street Journal, The New York Times or any other news or media publication
or outlet or to be made via a public filing or submission with the Commission announcing the consummation of the Business Combination
that indicates that the Underwriters were the underwriters in the Offering, the Company shall supply the Representatives with a
draft of the Business Combination Announcement and provide the Representatives with a reasonable advance opportunity to comment
thereon, subject to the agreement of the Underwriters to keep confidential such draft announcement in accordance with the Representatives’
standard policies regarding confidential information.
(ii) Upon
the consummation of the Business Combination, the Company and the Representatives will jointly direct the Trustee to pay the Representatives,
on behalf of the Underwriters, the Deferred Discount out of the proceeds of the Offering held in the Trust Account. The Underwriters
shall have no claim to payment of any interest earned on the portion of the proceeds held in the Trust Account representing the
Deferred Discount. If the Company fails to consummate its Business Combination within the time period required by the Amended and
Restated Certificate of Incorporation, the Deferred Discount will not be paid to the Representatives and will, instead, be included
in the Liquidation distribution of the proceeds held in the Trust Account made to the Public Stockholders. In connection with any
such Liquidation, the Underwriters forfeit any rights or claims to the Deferred Discount.
(jj) The
Company will endeavor in good faith to arrange, in cooperation with the Representatives, to qualify the Offered Securities for
offering and sale under the securities laws of such jurisdictions as the Representatives may reasonably designate and will maintain
such qualifications in effect so long as required for the distribution of the Offered Securities; 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, or would be required to qualify to do business in any
jurisdiction where it is not now so qualified. Until the earliest of (i) the date on which all Underwriters shall have ceased
to engage in market-making activities in respect of the Offered Securities, (ii) the date on which the Offered Securities
are listed on The Nasdaq Stock Market (or any successor thereto), (iii) a going private transaction after the completion of
a Business Combination, and (iv) the date of the Liquidation, in each jurisdiction where such qualification shall be effected,
the Company will, unless the Representatives agree that such action is not at the time necessary or advisable, use commercially
reasonable efforts to file and make such statements or reports at such times as are or may be required to qualify the Offered Securities
for offering and sale under the securities laws of such jurisdiction.
(kk) If
at any time following the distribution of any Written Testing-the-Waters Communication and prior to the Closing Date or any settlement
date, there occurred or occurs an event or development as a result of which such Written Testing-the-Waters Communication included
or would include any untrue statement of a material fact or omitted or would omit to state any material fact necessary to make
the statements therein in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly
(i) notify the Representatives so that use of the Written Testing-the-Waters Communication may cease until it is amended or
supplemented; (ii) amend or supplement, at its own expense, such Written Testing-the-Waters Communication to eliminate or
correct such untrue statement or omission; and (iii) supply any amendment or supplement to the Representatives in such quantities
as may be reasonably requested.
(ll) The
Company will promptly notify the Representatives if the Company ceases to be an Emerging Growth Company at any time prior to the
later of (i) completion of the distribution of the Offered Securities within the meaning of the Act and (ii) completion
of the 180-day restricted period referred to in Section 6(h) hereof.
(mm) Upon
the earlier to occur of the expiration and termination of the Underwriters’ over-allotment option, the Company shall cancel
or otherwise effect the forfeiture of Founder Shares from the Sponsor, in an aggregate amount equal to the number of Founder Shares
determined by multiplying (a) 1,875,000 by (b) a fraction, (i) the numerator of which is 7,500,000 minus the number
of Series A Common Stock purchased by the Underwriters upon the exercise of their over-allotment option, and (ii) the
denominator of which is 7,500,000. For the avoidance of doubt, if the Underwriters exercise their over-allotment option in full,
the Company shall not cancel or otherwise effect the forfeiture of the Founder Shares pursuant to this subsection.
(nn) The
Company will comply with all applicable securities and other laws, rules and regulations in each jurisdiction in which the
Directed Units are offered in connection with the Directed Unit Program.
7. Conditions
of the Obligations of the Underwriters. The obligations of the Underwriters to purchase the Firm Securities and the Optional
Securities, as the case may be, shall be subject to the accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time, the Closing Date and any settlement date pursuant to Section 4 hereof, to the accuracy
of the statements of the Company made in any certificates pursuant to the provisions hereof, to the performance by the Company
of its obligations hereunder and to the following additional conditions:
(a) The
Prospectus, and any supplement thereto, have been filed in the manner and within the time period required by Rule 424(b);
and no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use shall have been
issued and no proceedings for that purpose or under Section 8A of the Securities Act shall have been instituted or threatened.
(b) The
Company shall have requested and caused Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Company, to have furnished
to the Representatives its opinions dated the Closing Date and any settlement date, as applicable, and addressed to the Representatives,
in a form reasonably acceptable to the Representatives.
(c) [Reserved].
(d) The
Representatives shall have received from Ropes & Gray LLP, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date and any settlement date, as applicable, and addressed to the Representatives, with respect to the issuance and
sale of the Offered Securities, the Registration Statement, the Statutory Prospectus, the Prospectus (together with any supplement
thereto) and other related matters as the Representatives may reasonably require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to pass upon such matters.
(e) The
Company shall have furnished to the Representatives a certificate of the Company, signed by its Chief Executive Officer and the
principal financial or accounting officer of the Company, dated the Closing Date, and any settlement date, as applicable, to the
effect that the signers of such certificate have carefully examined the Registration Statement and each Preliminary Prospectus,
the Prospectus and any amendment or supplement thereto, and each road show used in connection with the Offering, and this Agreement
and that:
(i) the
representations and warranties of the Company in this Agreement are true and correct on and as of such date with the same effect
as if made on such date and the Company has complied with all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such date;
(ii) no
stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use has been issued and no
proceedings for that purpose or under Section 8A of the Securities Act have been instituted or, to the Company’s knowledge,
threatened; and
(iii) since
the date of the most recent financial statements included in the Statutory Prospectus and the Prospectus (exclusive of any supplement
thereto), there has been no Material Adverse Effect, other than changes relating to the economy in general or the media, digital
media, music, entertainment, communications, telecommunications and technology industries and not specifically relating to the
Company, except as set forth in or contemplated in the Statutory Prospectus and the Prospectus (exclusive of any supplement thereto).
(f) [Reserved].
(g) The
Company shall have requested and caused Marcum to have furnished to the Representatives, at the Execution Time and at the Closing
Date and any settlement date, as applicable, letters, dated respectively as of the Execution Time and as of the Closing Date and
any settlement date, as applicable, in form and substance reasonably satisfactory to the Representatives.
(h) Subsequent
to the Execution Time or, if earlier, the dates as of which information is given in the Registration Statement (exclusive of any
amendment thereof), the Statutory Prospectus and the Prospectus (exclusive of any supplement thereto), there shall not have been
(i) any change or decrease specified in the letter or letters referred to in paragraph (g) of this Section 7 or
(ii) any Material Adverse Effect, other than changes relating to the economy in general or the media, digital media, music,
entertainment, communications, telecommunications and technology industries and not specifically relating to the Company, except
as set forth in or contemplated in the Statutory Prospectus and the Prospectus (exclusive of any supplement thereto) the effect
of which, in any case referred to in clause (i) or (ii) above, is, in the sole judgment of the Representatives, so material
and adverse as to make it impractical or inadvisable to proceed with the offering or delivery of the Offered Securities as contemplated
by the Registration Statement (exclusive of any amendment thereof), the Statutory Prospectus and the Prospectus (exclusive of any
supplement thereto).
(i) Prior
to the Closing Date, and any settlement date, as applicable, the Company shall have furnished to the Representatives such further
information, certificates and documents as the Representatives may reasonably request.
(j) FINRA
shall not have raised any objection with respect to the fairness or reasonableness of the underwriting or other arrangements of
the transactions contemplated hereby.
(k) The
Offered Securities shall be duly listed subject to notice of issuance on The Nasdaq Stock Market, satisfactory evidence of which
shall have been provided to the Representatives.
(l) On
the Effective Date, the Company shall have delivered to the Representatives executed copies of the Trust Agreement, the Warrant
Agreement, the Founder Shares Subscription Agreement, the Warrant Subscription Agreement, the Forward Purchase Agreement, the Insider
Letter, the Investor Rights Agreement, the Support Services Agreement and the Facilities Sharing Agreement.
(m) At
least one Business Day prior to the Closing Date or a settlement date, as applicable, the Company shall have caused proceeds from
the sale of the Private Placement Warrants to be deposited into the Trust Account such that the cumulative amount deposited into
the Trust Account as of such Closing Date or such settlement date, as applicable, shall equal the product of the number of Units
issued in the Offering as of such Closing Date or such settlement date, as applicable, and the public offering price per Unit as
set forth on the cover of the Prospectus.
(n) No
order preventing or suspending the sale of the Units in any jurisdiction designated by the Representatives pursuant to Section 6(jj)
hereof shall have been issued as of the Closing Date, and no proceedings for that purpose shall have been instituted or shall have
been threatened.
If any of the conditions specified in this
Section 7 shall not have been fulfilled when and as provided in this Agreement, or if any of the opinions and certificates
mentioned above or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the Representatives
and counsel for the Underwriters, this Agreement and all obligations of the Underwriters hereunder may be canceled at, or at any
time prior to, the Closing Date by the Representatives. Notice of such cancellation shall be given to the Company in writing or
by telephone or facsimile confirmed in writing.
The documents required to be delivered by
this Section 7 shall be delivered electronically, or if by mail, at the office of Ropes & Gray LLP, counsel for the
Underwriters, at Ropes & Gray LLP, 1211 Avenue of the Americas, New York, New York, 10036, Attention: Paul Tropp, unless
otherwise indicated herein, on the Closing Date and any settlement date, as applicable.
8. Indemnification
and Contribution.
(a) Indemnification
of Underwriters. The Company agrees to indemnify and hold harmless each Underwriter, each person, if any, who controls such Underwriter
within the meaning of either Section 15 of the Act or Section 20 of the Exchange Act (the “Underwriter Entities”)
and each affiliate of any Underwriter within the meaning of Rule 405 under the Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending
or investigating any such action or claim) that (i) arise out of, or are based upon, any untrue statement or alleged untrue
statement of a material fact contained in any part of the Registration Statement or amendment thereof, or any Preliminary Prospectus,
any Statutory Prospectus or any amendment or supplement thereto, the Prospectus, any road show, the Prospectus or any amendment
or supplement thereto, or any Testing-the-Waters Communication; (ii) arise out of, or are based upon, any omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any such untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein, it being understood
and agreed that the only such information furnished by the Underwriters through the Representatives consists of the information
described as such in paragraph (b) below; or (iii) related to, arising out of, or in connection with the Directed Unit
Program, except that this clause (iii) shall not apply to the extent that such loss, claim, damage or liability is finally
judicially determined to have resulted primarily from the fraud, gross negligence or willful misconduct of the Underwriter Entities.
(b) Indemnification
of Company. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, each of its directors
and each of its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning
of either Section 15 of the Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from
the Company to such Underwriter, but only with reference to information relating to such Underwriter furnished to the Company in
writing by such Underwriter through the Representatives expressly for use in the Registration Statement, the Statutory Prospectus
and the Prospectus or any amendment or supplement thereto. The Company acknowledges that the following statements set forth under
the heading “Underwriting” in the Registration Statement, the Statutory Prospectus and the Prospectus constitute the
only information furnished in writing by or on behalf of the Underwriters for inclusion in the documents referred to in the foregoing
indemnity: (v) the list of Underwriters and their respective roles and participation in the sale of the Offered Securities;
(w) the sentence related to the Underwriters’ proposed public offering price less a selling concession per unit; (x) the
sentence related to the Underwriters’ intention not to make sales to discretionary accounts; (y) the paragraphs related
to stabilizing transactions, over-allotment transactions, syndicate covering transactions and penalty bids; and (z) the paragraph
related to making a prospectus in electronic format available on the web sites maintained by one or more Underwriters, allocating
units to online brokerage account holders, and internet distributions.
(c) Actions
against Parties; Notification. In case any proceeding (including any governmental investigation) shall be instituted involving
any person in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b), such person (the “indemnified
party”) shall promptly notify the person against whom such indemnity may be sought (the “indemnifying party”)
in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party
shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified
party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel
or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and
the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by the Representatives, in the
case of parties indemnified pursuant to Section 8(a), and by the Company, in the case of parties indemnified pursuant to Section 8(b).
The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled
with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered
into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying
party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) Contribution.
To the extent the indemnification provided for in Section 8(a) or 8(b) is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such
paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the other hand from the offering and sale of the Offered
Securities or (ii) if the allocation provided by clause 8(d)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause 8(d)(i) above but also the relative
fault of the Company on the one hand and of the Underwriters on the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other hand in connection with the offering and sale of the
Offered Securities shall be deemed to be in the same respective proportions as the net proceeds from the offering and sale of the
Offered Securities (before deducting expenses) received by the Company and the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate public offering
price of the Units. The relative fault of the Company on the one hand and the Underwriters on the other hand shall be determined
by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Underwriters’
respective obligations to contribute pursuant to this Section 8 are several in proportion to the respective number of Units
they have purchased hereunder, and not joint.
(e) The
Company and the Underwriters agree that it would not be just or equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations referred to in Section 8(d). The amount paid
or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in Section 8(d) shall
be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8,
no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Units 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 by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 8 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.
9. Default
of Underwriters. If any Underwriter or Underwriters default in their obligations to purchase Offered Securities agreed to be
purchased by such Underwriter or Underwriters hereunder and the aggregate number of Offered Securities that such defaulting Underwriter
or Underwriters agreed but failed to purchase does not exceed 10% of the total number of Offered Securities that the Underwriters
are obligated to purchase on the Closing Date, the Representatives may make arrangements satisfactory to the Company for the purchase
of such Offered Securities by other persons, including any of the Underwriters, but if no such arrangements are made by the Closing
Date, the non-defaulting Underwriters shall be obligated severally, in proportion to their respective commitments hereunder, to
purchase the Offered Securities that such defaulting Underwriters agreed but failed to purchase on the Closing Date. If any Underwriter
or Underwriters so default and the aggregate number of Offered Securities with respect to which such default or defaults occur
exceeds 10% of the total number of Offered Securities that the Underwriters are obligated to purchase on the Closing Date and arrangements
satisfactory to the Representatives and the Company for the purchase of such Offered Securities by other persons are not made within
36 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Underwriter or the
Company, except as provided in Section 11 hereof (provided that if such default occurs with respect to Optional Securities
after the Closing Date, this Agreement will not terminate as to the Firm Securities or any Optional Securities purchased prior
to such termination). As used in this Agreement, the term “Underwriter” includes any person substituted for
an Underwriter under this Section. Nothing herein will relieve a defaulting Underwriter from liability for its default.
10. Termination.
This Agreement shall be subject to termination, by notice given to the Company prior to delivery of and payment for the Offered
Securities, if at any time prior to such delivery and payment (i) trading in the Company’s Units, Series A Common
Stock or Warrants shall have been suspended by the Commission, or trading in securities generally on the New York Stock Exchange
or the Nasdaq Capital Market (or successor trading market) shall have been suspended or limited or minimum prices shall have been
established on such exchange or trading market, (ii) a banking moratorium shall have been declared either by Federal or New
York State authorities, (iii) there shall have occurred a material disruption in commercial banking or securities settlement
or clearance services, (iv) there shall have occurred any outbreak or escalation of hostilities, declaration by the United
States of a national emergency or war, or other national or international calamity or crisis (including, without limitation, an
act of terrorism) or change in economic or political conditions the effect of which on financial markets is such as to make it,
in the sole judgment of the Representatives, impractical or inadvisable to proceed with the offering or delivery of the Offered
Securities as contemplated by the Statutory Prospectus or the Prospectus (exclusive of any supplement thereto), (v) since
the respective dates as of which information is given in the Registration Statement, the Statutory Prospectus and the Prospectus,
any material adverse change in the condition, financial or otherwise, or in the results of operations, business affairs or business
prospects of the Company, taken as a whole, whether or not arising in the ordinary course of business, (vi) the enactment,
publication, decree or other promulgation of any statute, regulation, rule or order of any court or other governmental authority
which in the opinion of the Representatives materially and adversely affects or may materially and adversely affect the business
or operations of the Company, or (vii) the taking of any action by any governmental body or agency in respect of its monetary
or fiscal affairs which in the opinion of the Representatives has a material adverse effect on the securities markets in the United
States.
11. Survival
of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements
of the Company or its officers, directors and of the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives, officers, directors or any controlling person, and
will survive delivery of and payment for the Offered Securities. If the purchase of the Offered Securities by the Underwriters
is not consummated for any reason other than solely because of the termination of this Agreement pursuant to Section 9 hereof,
the Company will reimburse the Underwriters for all out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering and sale of the Offered Securities. The respective obligations of the Company
and the Underwriters pursuant to Section 8 hereof shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of any Underwriter, any person controlling any
Underwriter or any affiliate of any Underwriter or by or on behalf of the Company, its officers or directors or any person controlling
the Company and (iii) acceptance of and payment for any of the Offered Securities.
12. Notices.
All communications hereunder will be in writing and, if sent to the Underwriters, will be mailed or delivered and confirmed to
the Representatives at: Citigroup Global Markets Inc., 388 Greenwich Street, New York, New York 10013 Attention: General Counsel,
facsimile number 1-646-291-1469 and Morgan Stanley & Co. LLC, 1585 Broadway, New York, New York 10036, Attention: Equity
Syndicate Desk, with a copy to the Legal Department, or, if sent to the Company, will be mailed or delivered and confirmed to it
at 12300 Liberty Boulevard, Englewood, CO 80112, Attention: Chief Legal Officer with copies to Skadden, Arps, Slate, Meagher &
Flom LLP, 525 University Avenue, Suite 1400, Palo Alto, CA 94301, Attention: Gregg A. Noel, Esq. and Baker Botts L.L.P.,
2001 Ross Avenue, Suite 900, Dallas, Texas 75201, Attention: Samantha H. Crispin, Esq.; provided, however, that any notice
to an Underwriter pursuant to Section 8 will be mailed or delivered and confirmed to such Underwriter.
13. Successors.
This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers,
directors and director nominees and controlling persons referred to in Section 8 hereof, and no other person will have any
right or obligation hereunder.
14. Representation
of Underwriters. The Representatives will act for the several Underwriters in connection with this financing, and any action
under this Agreement taken by the Representatives will be binding upon all the Underwriters.
15. Counterparts.
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 Agreement. The words “execution,” “signed,” “signature,”
“delivery,” and words of like import in or relating to this Agreement or any document to be signed in connection with
this Agreement shall be deemed to include electronic signatures, deliveries or the keeping of records in electronic form, each
of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof
or the use of a paper-based recordkeeping system, as the case may be, and the parties hereto consent to conduct the transactions
contemplated hereunder by electronic means.
16. Absence
of Fiduciary Relationship. The Company acknowledges and agrees that:
(a) No
Other Relationship. The Underwriters have been retained solely to act as an underwriter in connection with the sale of Offered
Securities and that no fiduciary, advisory or agency relationship between the Company and the Underwriters has been created in
respect of any of the transactions contemplated by this Agreement or the Prospectus, irrespective of whether any Underwriter has
advised or is advising the Company on other matters;
(b) Arms’
Length Negotiations. The price of the Offered Securities set forth in this Agreement was established by the Company following discussions
and arms-length negotiations with the Representatives and the Company is capable of evaluating and understanding and understands
and accepts the terms, risks and conditions of the transactions contemplated by this Agreement;
(c) Absence
of Obligation to Disclose. The Company has been advised that the Underwriters and their affiliates are engaged in a broad range
of transactions which may involve interests that differ from those of the Company and that the Underwriters have no obligation
to disclose such interests and transactions to the Company by virtue of any fiduciary, advisory or agency relationship; and
(d) Waiver.
The Company waives, to the fullest extent permitted by law, any claims it may have against the Underwriters for breach of fiduciary
duty or alleged breach of fiduciary duty and agrees that the Underwriters shall have no liability (whether direct or indirect)
to the Company in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right
of the Company, including stockholders, employees or creditors of the Company.
17. Activities
of the Underwriters. Other than pursuant to the Directed Units Program, the Underwriters advise the Company that none of the
activities of the Underwriters in connection with the transactions contemplated herein constitutes a recommendation or investment
advice with respect to any entity or natural person who would be considered a “retail customer” under Regulation Best
Interest.
18. Integration.
This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Underwriters,
or any of them, with respect to the subject matter hereof.
19. Headings.
The section headings used herein are for convenience only and shall not affect the construction hereof.
20. Applicable
Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.
The Company and each Underwriter hereby
submits to the non-exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. The Company and each
Underwriter irrevocably and unconditionally waives any objection to the laying of venue of any suit or proceeding arising out of
or relating to this Agreement or the transactions contemplated hereby in Federal and state courts in the Borough of Manhattan in
The City of New York and irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such
suit or proceeding in any such court has been brought in an inconvenient forum.
21. Entire
Agreement.
(a) This
Agreement, together with any contemporaneous written agreements and any prior written agreements (to the extent not superseded
by this Agreement) that relate to the Offering, represents the entire agreement between the Company and the Underwriters with respect
to the preparation of the Preliminary Prospectus, the Prospectus, the conduct of the Offering, and the purchase and sale of the
Offered Securities.
(b) The
Company acknowledges that in connection with the offering and sale of the Offered Securities: (i) the Underwriters have acted
at arm’s length, are not agents of, and owe no fiduciary duties to, the Company or any other person, (ii) the Underwriters
owe the Company only those duties and obligations set forth in this Agreement, any contemporaneous written agreements and prior
written agreements (to the extent not superseded by this Agreement), if any, and (iii) the Underwriters may have interests
that differ from those of the Company. The Company waives to the full extent permitted by applicable law any claims it may have
against the Underwriters arising from an alleged breach of fiduciary duty in connection with the Offering.
22. Recognition
of the U.S. Special Resolution Regimes.
In the event that any Underwriter that is
a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of
this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer
would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed
by the laws of the United States or a state of the United States.
In the event that any Underwriter that is
a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime,
Default Rights under this Agreement that may be exercised against such Underwriters are permitted to be exercised to no greater
extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by
the laws of the United States or a state of the United States.
23. Definitions.
The terms that follow, when used in this Agreement, shall have the meanings indicated.
“Act” shall mean the
Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.
“Applicable Time” shall
mean [•] a.m./p.m. (New York time) on the date of this Agreement.
“BHC Act Affiliate” has
the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Business Day” shall
mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized
or obligated by law to close in New York City.
“Commission” shall mean
the U.S. Securities and Exchange Commission.
“Covered Entity” means
any of the following:
(i) a
“covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(ii) a
“covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(iii) “covered
FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the
meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as
applicable.
“Effective Date” shall
mean each date and time that the Registration Statement, any post-effective amendment or amendments thereto and any Rule 462(b) Registration
Statement became or becomes effective.
“Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.
“Execution Time” shall
mean the date and time that this Agreement is executed and delivered by the parties hereto.
“Free Writing Prospectus”
shall mean a free writing prospectus, as defined in Rule 405.
“Liquidation” shall mean
the distributions of the Trust Account to the Public Stockholders in connection with the redemption of Series A Common Stock
held by the Public Stockholders pursuant to the terms of the Amended and Restated Certificate of Incorporation, as amended, if
the Company fails to consummate a Business Combination.
“Preliminary Prospectus”
shall mean any preliminary prospectus referred to in paragraph 2(a) above and any preliminary prospectus included in the Registration
Statement at the Effective Date that omits Rule 430A Information.
“Prospectus” shall mean
the prospectus relating to the Offered Securities that is first filed pursuant to Rule 424(b) after the Execution Time.
“Registration Statement”
shall mean the registration statements referred to in paragraph 2(a) above, including exhibits and financial statements and
any prospectus and prospectus supplement relating to the Offered Securities that is filed with the Commission pursuant to Rule 424(b) and
deemed part of such registration statement pursuant to Rule 430A, as amended at the Execution Time and, in the event any post-effective
amendment thereto or any Rule 462(b) Registration Statement becomes effective prior to the Closing Date, shall also mean
such registration statement as so amended or such Rule 462(b) Registration Statement, as the case may be.
“Rule 158,” “Rule 172,”
“Rule 405,” “Rule 419,” “Rule 424,” “Rule 430A,”
“Rule 433,” and “Rule 462” refer to such rules under the Act.
“Rule 430A Information”
shall mean information with respect to the Offered Securities and the offering thereof permitted to be omitted from the Registration
Statement when it becomes effective pursuant to Rule 430A.
“Rule 462(b) Registration
Statement” shall mean a registration statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the registration statement referred to in Section 2(a) hereof.
“Statutory Prospectus”
shall mean (i) the Preliminary Prospectus dated [•], 2021, relating to the Offered Securities and (ii) the Time
of Delivery Information, if any, set forth on Schedule II hereto.
“U.S. Special Resolution Regime”
means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the
Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
If the foregoing is in accordance with the
Representatives’ understanding of our agreement, kindly sign and return to the Company one of the counterparts hereof, whereupon
it will become a binding agreement between the Company and the several Underwriters in accordance with its terms.
Very truly yours,
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LIBERTY MEDIA ACQUISITION CORPORATION
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By:
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Name:
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Title:
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The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date first above written.
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Citigroup Global Markets Inc.
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By:
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Name:
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Title:
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MORGAN STANLEY & CO. LLC
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By:
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Name:
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Title:
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Acting on behalf of itself and
as the
Representatives of the several Underwriters.
[Signature
Page to Underwriting Agreement]
SCHEDULE
I
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Underwriter
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Number of
Firm
Securities
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Citigroup Global Markets Inc.
Morgan Stanley & Co. LLC
Credit Suisse Securities (USA) LLC
Goldman Sachs & Co. LLC
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Total
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50,000,000
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SCHEDULE
II
TIME
OF DELIVERY INFORMATION
Liberty Media Acquisition Corporation priced
50,000,000 Units at $10.00 per Unit, plus an additional 7,500,000 Units if the underwriters exercise their over-allotment option
in full.
SCHEDULE
III
SCHEDULE
OF WRITTEN TESTING-THE-WATERS COMMUNICATIONS
Reference is made to the materials used
in the testing-the-waters presentation made to potential investors by the Company, if any, to the extent such materials are deemed
to be a “written communication” within the meaning of Rule 405 under the Securities Act of 1933, as amended.
Exhibit 3.2
AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION
OF
LIBERTY MEDIA ACQUISITION CORPORATION
LIBERTY MEDIA ACQUISITION
CORPORATION, a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:
(1)
The name of the Corporation is Liberty Media Acquisition Corporation. The original Certificate of Incorporation of the Corporation
was filed with the Secretary of State of the State of Delaware on November 6, 2020, and the name under which the Corporation was
originally incorporated was LMAC, Inc.
(2)
This Amended and Restated Certificate of Incorporation has been duly adopted by the Board of Directors of the Corporation
in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware, and stockholder
approval of the adoption of this Restated Certificate of Incorporation was effected by consent in accordance with Section 228 of
the General Corporation Law of the State of Delaware.
(3)
This Amended and Restated Certificate of Incorporation restates, integrates and further amends the provisions of the Certificate
of Incorporation of the Corporation.
(4)
Pursuant to Sections 242 and 245 of the General Corporation Law of the State of Delaware, the text of the Certificate of
Incorporation of the Corporation is hereby restated and amended in its entirety to read as follows:
Article
I
NAME
The name of the corporation
is Liberty Media Acquisition Corporation (the “Corporation”).
Article
II
REGISTERED OFFICE
The address of the
registered office of the Corporation in the State of Delaware is 251 Little Falls Drive, in the City of Wilmington, County of New
Castle, 19808. The name of its registered agent at such address is the Corporation Service Company.
Article
III
PURPOSE
The purpose of the
Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law
of the State of Delaware (as the same may be amended from time to time, the “DGCL”). In furtherance and not
in limitation of the powers and privileges conferred upon the Corporation by law and those incidental thereto, the Corporation
shall possess and may exercise all the powers and privileges that are necessary or convenient to the conduct, promotion or attainment
of the business or purposes of the Corporation, including, but not limited to, effecting the Corporation’s initial merger,
capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses
(a “Business Combination”).
Article
IV
AUTHORIZED STOCK
The total number of
shares of all classes of capital stock, each with a par value of $0.0001 per share, which the Corporation shall have authority
to issue is 9,250,000,000, of which (a) 9,200,000,000 shares shall be common stock, including (i) 3,000,000,000 shares
of Series A common stock (the “Series A Common Stock”), (ii) 1,000,000,000 shares of Series B common
stock (the “Series B Common Stock”), (iii) 5,000,000,000 shares of Series C common stock (the “Series
C Common Stock”), and (iv) 200,000,000 shares of Series F common stock (the “Series F Common Stock”
together with the Series A Common Stock, the Series B Common Stock and the Series C Common Stock, the “Common Stock”)
and (b) 50,000,000 shares shall be preferred stock (the “Preferred Stock”).
The description of
the Common Stock and the Preferred Stock, and the powers, designations, preferences, and relative, participating, optional or other
rights, and the qualifications, limitations or restrictions thereof, or the method of fixing and establishing the same, are as
hereinafter set forth in this Article IV.
Section A
CERTAIN DEFINITIONS AND INTERPRETATIONS
Unless the context
otherwise requires, the terms defined below will have, for all purposes of this Amended and Restated Certificate of Incorporation
of the Corporation (the “Restated Certificate”), the meanings herein specified:
“Agreement
in Principle Event” means the Corporation having executed a letter of intent, agreement in principle or definitive agreement
for the initial Business Combination within 24 months from the closing of the Offering but having not consummated the initial Business
Combination within such 24-month period.
“Amendment
Time” shall have the meaning set forth in Article XI, Section 3(a).
“Board of
Directors” or “Board” means the Board of Directors of the Corporation and, unless the context indicates
otherwise, also means, to the extent permitted by law, any committee thereof authorized, with respect to any particular matter,
to exercise the power of the Board of Directors of the Corporation with respect to such matter.
“Business
Combination” shall have the meaning set forth in Article III.
“Capital Stock”
means any and all shares of capital stock of the Corporation.
“Common Stock”
shall have the meaning set forth in Article IV.
“Control”
means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by agreement, or otherwise. The terms “Controls”, “Controlled”
and “Controlling” will have corresponding meanings.
“Convertible
Securities” means (x) any securities of the Corporation (other than any series of Common Stock) that are directly or
indirectly convertible into or exchangeable for, or that evidence the right to purchase, directly or indirectly, securities of
the Corporation or any other Person, whether upon conversion, exercise, exchange, pursuant to anti-dilution provisions of such
securities or otherwise, and (y) any securities of any other Person that are directly or indirectly convertible into or exchangeable
for, or that evidence the right to purchase, directly or indirectly, securities of such Person or any other Person (including the
Corporation), whether upon conversion, exercise, exchange, pursuant to anti-dilution provisions of such securities or otherwise.
“Corporation”
shall have the meaning set forth in Article I.
“Court of
Chancery” shall have the meaning set forth in Article XII, Section A.1.
“DGCL”
shall have the meaning set forth in Article III.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“Foreign Action”
shall have the meaning set forth in Article XII, Section A.4.
“FSC Enforcement
Action” shall have the meaning set forth in Article XII, Section A.4.
“indemnitee”
shall have the meaning set forth in Article V, Section E.2.
“Liberty Media”
means Liberty Media Corporation, including any successor thereto by operation of law or otherwise.
“LMC Stockholders”
means Liberty Media and its Wholly Owned Subsidiaries (other than the Corporation and its Subsidiaries); provided, that
following a Qualified Transfer, the term “LMC Stockholders” will be deemed to refer to the Qualified Transferee and
its Wholly Owned Subsidiaries.
“Offering”
shall have the meaning set forth in Article X, Section 1(b).
“Offering
Shares” shall have the meaning set forth in Article X, Section 1(b).
“Other Entity”
shall have the meaning set forth in Article XI, Section 1(a).
“Person”
means any natural person, corporation, limited liability company, general or limited partnership, joint venture, trust, estate,
proprietorship, unincorporated association, organization or other entity.
“Potential
Business Opportunity” shall have the meaning set forth in Article XI, Section 2.
“Preferred
Stock” shall have the meaning set forth in Article IV.
“Preferred
Stock Designation” shall have the meaning set forth in Article IV, Section C.
“Preferred
Stock Directors” shall have the meaning set forth in Article V, Section B.
“proceeding”
shall have the meaning set forth in Article V, Section E.2.
“Proxy Solicitation
Rules” shall have the meaning set forth in Article X, Section 2(b).
“Public Stockholders”
shall have the meaning set forth in Article X, Section 1(b).
“Qualified
Transfer” means, following the initial Business Combination, the transfer, sale, assignment or other disposition by the
LMC Stockholders of all or substantially all of the shares of Series B Common Stock beneficially owned by them in any spinoff,
splitoff or other transaction in which the equity interests of an LMC Stockholder holding, directly or indirectly, all or substantially
all of the shares of Series B Common Stock beneficially owned by the LMC Stockholders are distributed to or acquired by (whether
by redemption, dividend, share distribution, merger or otherwise) holders of one or more classes or series of common stock of Liberty
Media on a pro rata basis with respect to each such class or series, or such equity interests are available to be acquired by the
holders of one or more classes or series of Liberty Media’s common stock (including through any rights offering, exchange
offer, exercise of subscription rights or other offer made available to such holders) on a pro rata basis with respect to each
such class or series, whether voluntary or involuntary.
“Qualified Transferee”
means the LMC Stockholder whose equity interests are distributed or acquired in a Qualified Transfer.
“Redemption Limitation”
shall have the meaning set forth in Article X, Section 2(a).
“Redemption Price” shall
have the meaning set forth in Article X, Section 2(a).
“Redemption
Rights” shall have the meaning set forth in Article X, Section 2(a).
“Registration
Statement” shall have the meaning set forth in Article X, Section 1(b).
“Related Companies”
means Liberty Media, Qurate Retail, Inc., Liberty Broadband Corporation, and Liberty TripAdvisor Holdings, Inc., and each of their
respective Subsidiaries and any other entity with an executive management team that may from time to time include one or more members
of the Corporation’s management team (other than the Corporation and its Subsidiaries).
“SEC”
means the U.S. Securities and Exchange Commission.
“Securities
Act” means the Securities Act of 1933, as amended.
“Series A
Common Stock” shall have the meaning set forth in Article IV.
“Series A
Convertible Securities” means Convertible Securities convertible into or exercisable or exchangeable for Series A Common
Stock.
“Series B
Common Stock” shall have the meaning set forth in Article IV.
“Series B
Convertible Securities” means Convertible Securities convertible into or exercisable or exchangeable for Series B Common
Stock.
“Series C
Common Stock” shall have the meaning set forth in Article IV.
“Series C
Convertible Securities” means Convertible Securities convertible into or exercisable or exchangeable for Series C Common
Stock.
“Series F
Common Stock” shall have the meaning set forth in Article IV.
“Series F
Convertible Securities” means Convertible Securities convertible into or exercisable or exchangeable for Series F Common
Stock.
“Share Distribution”
shall have the meaning set forth in Article IV, Section B.3.
“Subsidiary”
when used with respect to any Person, means any other Person of which (x) in the case of a corporation, (A) at least 50% of the
equity or (B) securities representing at least 50% of the outstanding voting power of such other Person are owned or Controlled,
directly or indirectly, by such first Person, by any one or more of its Subsidiaries, or by such first Person and one or more of
its Subsidiaries or (y) in the case of any Person other than a corporation, such first Person, one or more of its Subsidiaries,
or such first Person and one or more of its Subsidiaries (A) owns at least 50% of the equity interests thereof or (B) has the power
to elect or direct the election of at least 50% of the members of the governing body thereof or otherwise has Control over such
organization or entity.
“Tender Offer
Rules” shall have the meaning set forth in Article X, Section 2(b).
“Trigger
Event” means the date following the consummation of the initial Business Combination on which the LMC Stockholders
cease to beneficially own in the aggregate at least 50% of the voting power of all shares of Voting Securities issued and
outstanding. For the purposes of this Restated Certificate, beneficial ownership of shares shall be determined in accordance
with Rule 13d-3 promulgated under the Exchange Act.
“Trust Account”
shall have the meaning set forth in Article X, Section 1(b).
“Underlying
Securities” means, with respect to any class or series of Convertible Securities, the class or series of securities into
which such class or series of Convertible Securities are directly or indirectly convertible, or for which such Convertible Securities
are directly or indirectly exchangeable, or that such Convertible Securities evidence the right to purchase or otherwise receive,
directly or indirectly.
“Voting Securities”
means the Series A Common Stock, the Series B Common Stock, the Series F Common Stock and any series of Preferred Stock which by
the terms of this Restated Certificate or its Preferred Stock Designation is designated as a Voting Security; provided
that, except as otherwise required by the laws of the State of Delaware, each such series of Preferred Stock will be entitled
to vote together with the other Voting Securities only as and to the extent expressly provided for in this Restated Certificate
or the applicable Preferred Stock Designation.
“Wholly Owned
Subsidiary” means, as to any Person, a Subsidiary of such Person, 100% of the equity and voting interest in which is
beneficially owned or owned of record, directly and/or indirectly, by such Person.
Section B
SERIES A COMMON STOCK, SERIES B COMMON STOCK,
SERIES C COMMON STOCK, AND SERIES F COMMON STOCK
Each share of Common
Stock will, except as otherwise provided in this Restated Certificate or as required by applicable law, be identical in all respects
and will have equal rights, powers and privileges.
1.
Voting Rights.
(a)
Prior to the consummation of the initial Business Combination, except as otherwise provided for by this Restated Certificate
(including as set forth in Article X, Section 8 hereof) or as required by applicable law:
(i)
Holders of Series A Common Stock will be entitled to one vote for each share of such stock held of record.
(ii)
Holders of Series B Common Stock will be entitled to one vote for each share of such stock held of record.
(iii)
Holders of Series F Common Stock will be entitled to one vote for each share of such stock held of record.
(iv)
Holders of Series C Common Stock will not be entitled to any voting powers, except as (and then only to the extent) otherwise
required by the laws of the State of Delaware. If a vote or consent of the holders of Series C Common Stock should at any time
be required by the laws of the State of Delaware on any matter, the holders of Series C Common Stock will be entitled to one-hundredth
(1/100) of a vote on such matter for each share of Series C Common Stock held of record.
(b)
Following the consummation of the initial Business Combination, except as otherwise provided for by this Restated Certificate
or as required by applicable law:
(i)
Holders of Series A Common Stock will be entitled to one vote for each share of such stock held of record.
(ii)
Holders of Series B Common Stock will be entitled to ten votes for each share of such stock held of record.
(iii)
Holders of Series C Common Stock will not be entitled to any voting powers, except as (and then only to the extent) otherwise
required by the laws of the State of Delaware. If a vote or consent of the holders of Series C Common Stock should at any time
be required by the laws of the State of Delaware on any matter, the holders of Series C Common Stock will be entitled to one-hundredth
(1/100) of a vote on such matter for each share of Series C Common Stock held of record.
(c)
Except (i) as may otherwise be required by the laws of the State of Delaware, (ii) as may otherwise be provided in this
Restated Certificate (including, without limitation, Article X, Section 8 hereof), or (iii) as may otherwise be provided in any
Preferred Stock Designation, the holders of outstanding shares of Series A Common Stock, the holders of outstanding shares of Series
B Common Stock, the holders of outstanding shares of Series F Common Stock and the holders of outstanding shares of each series
of Preferred Stock that is designated as a Voting Security and is entitled to vote thereon in accordance with the terms of the
applicable Preferred Stock Designation, will vote as one class with respect to the election of directors and with respect to all
other matters to be voted on by stockholders of the Corporation (including, without limitation, and irrespective of the provisions
of Section 242(b)(2) of the DGCL, any proposed amendment to this Restated Certificate (including any amendment to any Preferred
Stock Designation) required to be voted on by the stockholders of the Corporation that would (x) increase (i) the number of authorized
shares of Common Stock or any series thereof, (ii) the number of authorized shares of Preferred Stock or any series thereof or
(iii) the number of authorized shares of any other class or series of Capital Stock hereafter established or (y) decrease (i) the
number of authorized shares of Common Stock or any series thereof, (ii) the number of authorized shares of Preferred Stock or any
series thereof or (iii) the number of authorized shares of any other class or series of Capital Stock hereafter established (but,
in each case, not below the number of shares of such class or series of Capital Stock, as the case may be, then outstanding)),
and, except as otherwise provided in a Preferred Stock Designation with respect to any series of Preferred Stock, no separate class
or series vote or consent of the holders of shares of any class or series of Capital Stock will be required for the approval of
any such matter, and such stockholders will not be allowed to cumulate their votes.
2.
Conversion Rights.
(a)
Series B Common Stock Conversion Rights. Each share of Series B Common Stock will be convertible, at the option of
the holder thereof, into one fully paid and non-assessable share of Series A Common Stock.
(b)
Series F Common Stock Conversion Rights. Each share of Series F Common Stock will be convertible, (i) at the option
of the holder thereof and (ii) automatically at the time of the consummation of the initial Business Combination, into one fully
paid and non-assessable share of Series B Common Stock.
(c)
General.
(i) Any
voluntary conversion of (A) Series B Common Stock into Series A Common Stock pursuant to Article IV, Section B.2(a) or (B)
Series F Common Stock into Series B Common Stock pursuant to Article IV, Section B.2(b)(i) may be effected by any holder of
Series B Common Stock or Series F Common Stock, as applicable, by surrendering such holder’s certificate or
certificates (if any) for the Common Stock to be converted, duly endorsed, at the office of the Corporation or any transfer
agent for such Common Stock, or by delivering to the Corporation or its transfer agent an appropriate instrument or
instruction if the shares of Common Stock to be converted are uncertificated, in either case, together with a written notice
to the Corporation at such office that such holder elects to convert all or a specified number of shares of such Common Stock
and stating the name or names in which such holder desires the shares of Series A Common Stock or Series B Common Stock, as
applicable, to be issued and, if the shares of Common Stock to be converted are certificated and less than all of the shares
of Common Stock represented by one certificate and convertible pursuant to this Article IV, Section B.2(c)(i) are to be
converted, the name or names in which such holder desires the certificate representing such remaining unconverted shares of
Common Stock to be issued. If so required by the Corporation or its transfer agent, any certificate representing shares
surrendered for conversion, or any appropriate instrument or instruction delivered in the case of uncertificated shares, in
accordance with this Article IV, Section B.2(c)(i) will be accompanied by instruments of transfer, in form satisfactory to
the Corporation or its transfer agent, duly executed by the holder of such shares or the duly authorized representative of
such holder, and will, if required by the last sentence of Article IV, Section B.2(c)(ii) of this Restated Certificate, be
accompanied by payment, or evidence of payment, of applicable issue or transfer taxes. Promptly thereafter, the Corporation
will, (A) if the applicable shares of Common Stock are certificated, issue and deliver to such holder or such holder’s
nominee or nominees, a certificate or certificates representing the number of shares of applicable Common Stock to which such
holder will be entitled as herein provided, and if less than all of the shares of Common Stock represented by any one
certificate and convertible pursuant to this Article IV, Section B.2(c)(i) are to be converted, the Corporation will issue
and deliver to such holder or such holder’s nominee or nominees a new certificate representing such remaining
unconverted shares of Common Stock, or (B) if the applicable shares of Common Stock are uncertificated, issue and deliver to
such holder or such holder’s nominee or nominees, a notice of issuance of uncertificated shares or other evidence of
shares held in book-entry form. Such conversion will be deemed to have been made at the close of business on the date of
receipt by the Corporation or any such transfer agent of the certificate or certificates (if any), an appropriate instrument
or instruction (if applicable), notice and, if required, instruments of transfer and payment or evidence of payment of taxes
referred to above, and the person or persons entitled to receive the Common Stock issuable on such conversion will be treated
for all purposes as the record holder or holders of such Common Stock on that date. A number of shares of issuable Common
Stock equal to the number of outstanding shares of Common Stock convertible pursuant to this Article IV, Section B.2(c)(i)
from time to time will be set aside and reserved for issuance upon conversion of such shares of Common Stock. Shares of
Series A Common Stock and shares of Series C Common Stock are not voluntarily convertible into shares of any other series of
Common Stock.
(ii)
The Corporation will pay any and all documentary, stamp or similar issue or transfer taxes that may be payable in respect
of the issue or delivery of certificates representing shares of issuable Common Stock on conversion of shares of convertible Common
Stock pursuant to Article IV, Sections B.2(a) or B.2(b)(i), as applicable. The Corporation will not, however, be required to pay
any tax that may be payable in respect of any issue or delivery of certificates representing any shares of issuable Common Stock
in a name other than that in which the shares of Common Stock so converted were registered and no such issue or delivery will be
made unless and until the Person requesting the same has paid to the Corporation the amount of any such tax or has established
to the satisfaction of the Corporation that such tax has been paid.
3.
Dividends.
Whenever a dividend,
other than a dividend that constitutes a Share Distribution, is paid to the holders of any series of Common Stock then outstanding,
the Corporation will also pay to the holders of each other series of Common Stock then outstanding an equal dividend per share.
Dividends will be payable only as and when declared by the Board of Directors out of assets of the Corporation legally available
therefor. Whenever a Share Distribution is paid to the holders of any series of Common Stock then outstanding, the Corporation
will also pay a Share Distribution to the holders of each other series of Common Stock then outstanding, as provided in Article
IV, Section B.4 below. For purposes of this Article IV, Section B.3 and Article IV, Section B.4 below, a “Share Distribution”
means a dividend or distribution (including a distribution made in connection with any stock-split, reclassification, recapitalization,
dissolution, winding up or full or partial liquidation of the Corporation) payable in shares of any class or series of Capital
Stock, Convertible Securities or other securities of the Corporation or any other Person.
4.
Share Distributions.
If at any time a Share
Distribution is to be made with respect to any series of Common Stock, such Share Distribution may be declared and paid only as
follows:
(a)
a Share Distribution (i) consisting of shares of Series C Common Stock or Series C Convertible Securities may be declared
and paid to holders of Series A Common Stock, Series B Common Stock, Series C Common Stock and Series F Common Stock, on an equal
per share basis, or (ii) consisting of (w) shares of Series A Common Stock or Series A Convertible Securities may be declared and
paid to holders of Series A Common Stock, on an equal per share basis, (x) shares of Series B Common Stock or Series B Convertible
Securities may be declared and paid to holders of Series B Common Stock, on an equal per share basis, (y) shares of Series C Common
Stock or Series C Convertible Securities may be declared and paid to holders of Series C Common Stock, on an equal per share basis,
and (z) shares of Series F Common Stock or Series F Convertible Securities may be declared and paid to holders of Series F Common
Stock, on an equal per share basis; or
(b) a
Share Distribution consisting of any class or series of securities of the Corporation or any other Person, other than Series
A Common Stock, Series B Common Stock, Series C Common Stock or Series F Common Stock (or Series A Convertible Securities,
Series B Convertible Securities, Series C Convertible Securities or Series F Convertible Securities), may be declared and
paid on the basis of a distribution of (i) identical securities, on an equal per share basis, to holders of Series A Common
Stock, Series B Common Stock, Series C Common Stock and Series F Common Stock, (ii) separate classes or series of securities,
on an equal per share basis, to the holders of each such series of Common Stock or (iii) a separate class or series of
securities to the holders of one or more series of Common Stock and, on an equal per share basis, a different class or series
of securities to the holders of all other series of Common Stock; provided, that, in connection with a
Share Distribution pursuant to clause (ii) or clause (iii), (1) such separate classes or series of securities (and, if the
distribution consists of Convertible Securities, the Underlying Securities) do not differ in any respect other than their
relative voting rights (and any related differences in designation, conversion and share distribution provisions, as
applicable), with holders of shares of Series B Common Stock and Series F Common Stock receiving the class or series of
securities having (or convertible into or exercisable or exchangeable for securities having) the highest relative voting
rights and the holders of shares of each other series of Common Stock receiving securities of a class or series having (or
convertible into or exercisable or exchangeable for securities having) lesser relative voting rights, in each case, without
regard to whether such rights differ to a greater or lesser extent than the corresponding differences in voting rights (and
any related differences in designation, conversion and share distribution, as applicable) among the Series A Common Stock,
the Series B Common Stock, the Series C Common Stock and the Series F Common Stock, and (2) in the event the securities to be
received by the holders of shares of Common Stock other than the Series B Common Stock and Series F Common Stock consist of
different classes or series of securities, with each such class or series of securities (or the Underlying Securities into
which such class or series is convertible or for which such class or series is exercisable or exchangeable) differing only
with respect to the relative voting rights of such class or series (and any related differences in designation, conversion
and share distribution provisions, as applicable), then such classes or series of securities will be distributed to the
holders of each series of Common Stock (other than the Series B Common Stock and Series F Common Stock) (A) as the Board of
Directors determines or (B) such that the relative voting rights (and any related differences in designation, conversion and
share distribution provisions, as applicable) of the class or series of securities (or the Underlying Securities) to be
received by the holders of each series of Common Stock (other than the Series B Common Stock and Series F Common Stock)
corresponds to the extent practicable to the relative voting rights (and any related differences in designation, conversion
and share distribution provisions, as applicable) of such series of Common Stock, as compared to the other series of Common
Stock (other than the Series B Common Stock and Series F Common Stock).
5.
Reclassification.
The Corporation will
not reclassify, subdivide or combine any series of Common Stock then outstanding without reclassifying, subdividing or combining
each other series of Common Stock then outstanding, on an equal per share basis. Any such reclassification, subdivision or combination
is subject to Article IX of this Restated Certificate.
6.
Liquidation and Dissolution.
In the event of a liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary, after payment or provision for payment of the debts
and liabilities of the Corporation and the distribution of the Trust Account as provided for under Article X, Section 2(d), and
subject to the prior payment in full of the preferential or other amounts to which any series of Preferred Stock are entitled,
the holders of shares of Common Stock will share equally, on a share for share basis, in the assets of the Corporation remaining
for distribution to the holders of Common Stock. Neither the consolidation or merger of the Corporation with or into any other
Person or Persons nor the sale, transfer or lease of all or substantially all of the assets of the Corporation will itself be deemed
to be a liquidation, dissolution or winding up of the Corporation within the meaning of this Article IV, Section B.6.
7.
Protective Provisions.
(a) Prior
to the consummation of the initial Business Combination, for so long as any shares of Series F Common Stock shall remain
outstanding and in addition to any requirements for approval under the laws of the state of Delaware, the Corporation shall
not, without the prior affirmative vote or consent of the holders of a majority of the shares of Series F Common Stock then
outstanding, voting or consenting as a separate class, amend, alter or repeal any provision of this Restated Certificate,
whether by merger, consolidation or otherwise, if such amendment, alteration or repeal would alter or change the powers,
preferences or relative, participating, optional or other special rights of the Series B Common Stock, including, without
limitation, those provided in Article IV, Section B.7(b) hereof.
(b) Except
with respect to the conversion of shares of Series F Common Stock into Series B Common Stock pursuant to Article IV, Section
B.2(b) hereof, so long as any shares of Series B Common Stock or Series F Common Stock are issued and outstanding, the
Corporation shall not, without the prior affirmative vote or consent of the holders of a majority of the voting power of
shares of Series B Common Stock and Series F Common Stock then outstanding, voting or consenting together as a single class,
issue any shares of Series B Common Stock, Series B Convertible Securities, shares of Series F Common Stock or Series F
Convertible Securities to any Person who is not either (x) a LMC Stockholder or (y) prior to the issuance in question to such
Person, a beneficial owner (as determined pursuant to Rule 13d-3 under the
Exchange Act) of issued and outstanding shares of Series B Common Stock.
(c)
Any action required or permitted to be taken at any meeting of the holders of Series B Common Stock and/or Series F Common
Stock, as applicable, may be taken without a meeting, without prior notice and without a vote, if a consent or consents, setting
forth the action to be so taken, shall be signed by the holders of the outstanding shares of Series B Common Stock and/or Series
F Common Stock, as applicable, having not less than the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares of Series B Common Stock and/or Series F Common Stock, as applicable, then outstanding
were present and voted and shall be delivered to the Corporation in accordance with Section 228 of the DGCL.
Section C
PREFERRED STOCK
The Preferred Stock
may be divided and issued in one or more series from time to time, with such powers, designations, preferences and relative, participating,
optional or other rights and qualifications, limitations or restrictions thereof, as will be stated and expressed in a resolution
or resolutions providing for the issue of each such series adopted by the Board of Directors (a “Preferred Stock Designation”)
by action taken by the affirmative vote of not less than 80% of the members of the Board of Directors then in office. The Board
of Directors, in the Preferred Stock Designation with respect to a series of Preferred Stock (a copy of which will be filed as
required by law), will, without limitation of the foregoing, fix the following with respect to such series of Preferred Stock:
(a) the
distinctive serial designations and the number of authorized shares of such series, which may be increased or decreased, but not
below the number of shares thereof then outstanding, by a certificate made, signed and filed as required by law (except where
otherwise provided in a Preferred Stock Designation);
(b) the
dividend rate or amounts, if any, for such series, the date or dates from which dividends on all shares of such series will be
cumulative, if dividends on stock of such series will be cumulative, and the relative preferences or rights of priority, if any,
or participation, if any, with respect to payment of dividends on shares of such series;
(c) the
rights of the shares of such series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, if any, and the relative preferences or rights of priority, if any, of payment of shares of such series;
(d) the
right, if any, of the holders of such series to convert or exchange such stock into or for other classes or series of a class
of stock or indebtedness of the Corporation or of another Person, and the terms and conditions of such conversion or exchange,
including provision for the adjustment of the conversion or exchange rate in such events as the Board of Directors may determine;
(e)
the voting powers, if any, of the holders of such series, including whether such series will be a Voting Security and,
if so designated, the terms and conditions on which the holders of such series may vote together with the holders of any other
class or series of Capital Stock;
(f)
the terms and conditions, if any, for the Corporation to purchase or redeem shares of such series; and
(g)
any other relative rights, powers, preferences and limitations, if any, of such series.
The Board of Directors
is hereby expressly authorized to exercise its authority with respect to fixing, designating and issuing various series of the
Preferred Stock and determining the powers, designations, preferences and relative, participating, optional or other rights of
such series of Preferred Stock, if any, and the qualifications, restrictions or limitations thereof, if any, to the full extent
permitted by applicable law, subject to any stockholder vote that may be required by this Restated Certificate or any Preferred
Stock Designation. All shares of any one series of the Preferred Stock will be alike in every particular. Except to the extent
otherwise expressly provided in the Preferred Stock Designation for a series of Preferred Stock, the holders of shares of such
series will have no voting rights except as may be required by the laws of the State of Delaware. Further, unless otherwise expressly
provided in the Preferred Stock Designation for a series of Preferred Stock, no consent or vote of the holders of shares of Preferred
Stock or any series thereof, consenting or voting as a separate class or series, will be required for any amendment to this Restated
Certificate that would increase the number of authorized shares of Preferred Stock or the number of authorized shares of any series
thereof or decrease the number of authorized shares of Preferred Stock or the number of authorized shares of any series thereof
(but not below the number of authorized shares of Preferred Stock or such series, as the case may be, then outstanding).
Except as may be provided
by the Board of Directors in a Preferred Stock Designation or by law, shares of any series of Preferred Stock that have been redeemed
(whether through the operation of a sinking fund or otherwise) or purchased by the Corporation, or which, if convertible or exchangeable,
have been converted into or exchanged for shares of stock of any other class or classes will have the status of authorized and
unissued shares of Preferred Stock and may be reissued as a part of the series of which they were originally a part or may be reissued
as part of a new series of Preferred Stock to be created by a Preferred Stock Designation or as part of any other series of Preferred
Stock.
Article
V
DIRECTORS
Section A
NUMBER OF DIRECTORS
The governing
body of the Corporation will be a Board of Directors. Subject to any rights of the holders of any series of Preferred Stock
to elect additional directors, the total number of directors will not be less than three (3) and the exact number of
directors will be fixed exclusively by the Board of Directors by resolution from time to time. Election of directors need not
be by written ballot.
Section B
CLASSIFICATION OF THE BOARD
Upon the consummation
of the initial Business Combination, except as otherwise fixed by or pursuant to the provisions of any Preferred Stock Designation
relating to the rights of the holders of any series of Preferred Stock to separately elect any additional directors (the “Preferred
Stock Directors”), which Preferred Stock Directors are not required to be classified pursuant to the terms of such series
of Preferred Stock, the Board of Directors will be divided into three classes: Class I, Class II and Class III. Each class will
consist, as nearly as possible, of a number of directors equal to one-third (1/3) of the total number of
members of the Board of Directors (other than any Preferred Stock Directors) authorized as provided in Article V, Section A. The
Board of Directors is authorized to assign members of the Board of Directors already in office to such classes at the time the
classification of the Board of Directors becomes effective pursuant to this Article V, Section B. The term of office of the initial
Class I directors will expire at the first annual meeting of stockholders following the initial Business Combination; the term
of office of the initial Class II directors will expire at the second annual meeting of stockholders following the initial Business
Combination; and the term of office of the initial Class III directors will expire at the third annual meeting of stockholders
following the initial Business Combination. At each annual meeting of stockholders of the Corporation the successors of that class
of directors whose term expires at that meeting will be elected to hold office in accordance with this Article V, Section B for
a term expiring at the annual meeting of stockholders held in the third year following the year of their election. The directors
of each class will hold office until the expiration of the term of such class and until their respective successors are elected
and qualified or until such director’s earlier death, resignation or removal.
Section C
REMOVAL OF DIRECTORS
Subject to the rights
of the holders of any series of Preferred Stock and except as otherwise provided for by this Restated Certificate (including as
set forth in Article X, Section 8 hereof), (i) prior to the consummation of the initial Business Combination, any or all of the
directors may be removed from office with or without cause, and (ii) following the consummation of the initial Business Combination,
any or all of the directors may be removed from office at any time, but only for cause, and, in each case, only upon the affirmative
vote of the holders of at least a majority of the total voting power of the then outstanding Voting Securities entitled to vote
thereon, voting together as a single class.
Section D
NEWLY CREATED DIRECTORSHIPS AND VACANCIES
Subject to the rights
of holders of any series of Preferred Stock, (i) prior to the consummation of the initial Business Combination, vacancies on the
Board of Directors resulting from death, resignation or removal or other cause, and newly created directorships resulting from
any increase in the number of directors on the Board of Directors, will be filled only by the holders of a majority of the then
outstanding shares of Series F Common Stock, voting or consenting as a separate class, and (ii) following the consummation of the initial
Business Combination, vacancies on the Board of Directors resulting from death, resignation or removal or other cause, and newly
created directorships resulting from any increase in the number of directors on the Board of Directors, will be filled only by
the affirmative vote of a majority of the remaining directors then in office (even though less than a quorum) or by the sole remaining
director (and not by stockholders) and, in all cases, any director so appointed will hold office for the remainder of the full
term of the class of directors in which the vacancy occurred or to which the new directorship is apportioned, and until such director’s
successor will have been elected and qualified or until such director’s earlier death, resignation or removal. No decrease
in the number of directors constituting the Board of Directors will shorten the term of any incumbent director, except as may be
provided with respect to any additional director elected by the holders of the applicable series of Preferred Stock.
Section E
LIMITATION ON LIABILITY AND INDEMNIFICATION
1.
Limitation On Liability.
To the fullest extent
permitted by the DGCL as the same exists or may hereafter be amended, a director of the Corporation shall not be liable to the
Corporation or any of its stockholders for monetary damages for any breach of fiduciary duty as a director. Any amendment, alteration
or repeal of, or adoption of any provision inconsistent with, this Article V, Section E.1 will be prospective only and will not
adversely affect any limitation, right or protection of a director of the Corporation existing at the time of such amendment, alteration
or repeal or adoption.
2.
Indemnification.
(a) Right
to Indemnification. The Corporation will indemnify, to the fullest extent permitted by applicable law as it presently
exists or may hereafter be amended, any person who was or is made or is threatened to be made a party or is otherwise
involved in any action, suit or proceeding, whether civil, criminal, administrative, or investigative (a
“proceeding”) by reason of the fact that such person, or, to the fullest extent permitted by law, a person
for whom such person is the legal representative, is or was a director or officer of the Corporation or, while a director or
officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of
another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect
to employee benefit plans (an “indemnitee”), against all liability and loss suffered and expenses
(including attorneys’ fees) incurred by such person. Such right of indemnification will inure whether or not the claim
asserted is based on matters which antedate the adoption of this Article V, Section E. Notwithstanding this Article V,
Section E, the Corporation will be required to indemnify or make advances to an indemnitee in connection with a proceeding
(or part thereof) initiated by such indemnitee only if the proceeding (or part thereof) was authorized by the Board of
Directors.
(b)
Prepayment of Expenses. The Corporation will pay the expenses (including attorneys’ fees) incurred by a director
or officer in defending any proceeding in advance of its final disposition; provided, however, that the payment
of expenses incurred by a director or officer in advance of the final disposition of the proceeding will be made only upon receipt
of an undertaking by the director or officer to repay all amounts advanced if it should ultimately be determined that the director
or officer is not entitled to be indemnified under this Article V, Section E or otherwise.
(c)
Claims. To the fullest extent permitted by law, if a claim for indemnification or payment of expenses under this
Article V, Section E is not paid in full (following the final disposition of the proceeding) within 60 days after a written claim
therefor has been received by the Corporation, the claimant may file suit to recover the unpaid amount of such claim and, if successful,
will be entitled to be paid the expense (including attorney’s fees) of prosecuting such claim to the fullest extent permitted
by the laws of the State of Delaware. In any such action, to the fullest extent permitted by law, the Corporation will have the
burden of proving that the claimant was not entitled to the requested indemnification or payment of expenses under applicable law.
(d)
Non-Exclusivity of Rights. The rights conferred on any indemnitee by this Article V, Section E will not be exclusive
of any other rights which such person may have or hereafter acquire under any statute, provision of this Restated Certificate,
the Bylaws of the Corporation, agreement, vote of stockholders or resolution of disinterested directors or otherwise.
(e)
Other Indemnification. To the fullest extent permitted by law, the Corporation’s obligation, if any, to indemnify
any indemnitee who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, enterprise or nonprofit entity will be reduced by any amount such indemnitee may collect as indemnification
from such other corporation, partnership, joint venture, trust, enterprise or nonprofit entity. This Article V, Section E shall
not limit the right of the Corporation, to the extent and in the manner authorized or permitted by law, to indemnify and to advance
expenses to persons other than indemnitees.
3.
Amendment or Repeal.
Any amendment, alteration
or repeal of, or adoption of any provision inconsistent with the foregoing provisions of this Article V, Section E will be prospective
only (except to the extent such amendment, alteration or repeal or adoption or change in law permits the Corporation to provide
broader indemnification rights on a retroactive basis than permitted prior thereto) and will not adversely affect any right or
protection hereunder of any person in respect of any act or omission occurring prior to the time of such amendment, alteration
or repeal or adoption.
Section F
AMENDMENT OF BYLAWS
In furtherance and
not in limitation of the powers conferred by the DGCL, the Board of Directors, by action taken by the affirmative vote of not less
than 80% of the members of the Board of Directors then in office, is hereby expressly authorized and empowered to adopt, alter,
amend or repeal any provision or all of the Bylaws of the Corporation.
Article
VI
TERM
The term of existence
of the Corporation shall be perpetual.
Article
VII
STOCK NOT ASSESSABLE
The Capital Stock shall
not be assessable. It shall be issued as fully paid, and the private property of the stockholders shall not be liable for the debts,
obligations or liabilities of the Corporation. This Restated Certificate shall not be subject to amendment in this respect.
Article
VIII
MEETINGS OF STOCKHOLDERS
Section A
ANNUAL AND SPECIAL MEETINGS
Except as otherwise
provided in a Preferred Stock Designation with respect to any series of Preferred Stock or unless otherwise prescribed by law or
by another provision of this Restated Certificate, special meetings of the stockholders of the Corporation, for any purpose or
purposes, will be called only by the Secretary of the Corporation (i) upon the written request of the holders of not less than
662/3% of the total voting power of the then outstanding Voting Securities entitled to vote thereon or (ii)
at the request of at least 80% of the members of the Board of Directors then in office.
Section B
ACTION WITHOUT A MEETING
Prior to the
Trigger Event, any action required or permitted to be taken by the stockholders of the Corporation at an annual or special
meeting of the stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents
setting forth the action taken are signed by the holders of outstanding shares of the relevant series or class(es) of stock
of the Corporation representing not less than the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares of stock of the Corporation then issued and outstanding entitled to vote thereon were
present and voted and delivered to the Corporation in accordance with Section 228 of the DGCL. Subject to the terms of any
series of Preferred Stock permitting the holders of such series of Preferred Stock to act by consent, and except as provided
in Article IV, Section B.7, from and after the Trigger Event, no action required or permitted to be taken by the stockholders
of the Corporation at any annual meeting or special meeting of stockholders may be taken without a meeting, and the power of
stockholders to consent, without a meeting, to the taking of any action is specifically denied.
Article
IX
ACTIONS REQUIRING SUPERMAJORITY STOCKHOLDER VOTE
Subject to the rights
of the holders of Series B Common Stock, Series F Common Stock and any series of Preferred Stock, and except as expressly provided
in Article X, the affirmative vote of the holders of at least 662/3% of the total voting power of the then
outstanding Voting Securities entitled to vote thereon, voting together as a single class at a meeting specifically called for
such purpose, will be required in order for the Corporation to take any action to authorize:
(i) the
amendment, alteration or repeal of any provision of this Restated Certificate or the addition or insertion of other provisions
herein; provided, however, that this clause (i) will not apply to any such amendment, alteration, repeal, addition
or insertion (A) as to which the laws of the State of Delaware, as then in effect, do not require the vote or consent of the Corporation’s
stockholders, or (B) that at least 80% of the members of the Board of Directors then in office have approved;
(ii) the
adoption, amendment or repeal of any provision of the Bylaws of the Corporation; provided, however, that this clause
(ii) will not apply to, and no vote of the stockholders of the Corporation will be required to authorize, the adoption, amendment
or repeal of any provision of the Bylaws of the Corporation by the Board of Directors in accordance with the power conferred upon
it pursuant to Article V, Section F;
(iii) the
merger or consolidation of the Corporation with or into any other corporation (including a merger consummated pursuant to Section
251(h) of the DGCL and notwithstanding the exception to a vote of the stockholders for such a merger set forth therein); provided,
however, that this clause (iii) will not apply to any such merger or consolidation (A) which constitutes the Corporation’s
initial Business Combination, (B) as to which the laws of the State of Delaware, as then in effect, do not require the vote or
consent of the Corporation’s stockholders (other than Section 251(h) of the DGCL), or (C) that at least 80% of the members
of the Board of Directors then in office have approved;
(iv) the
sale, lease or exchange of all, or substantially all, of the property or assets of the Corporation; provided, however,
that this clause (iv) will not apply to any such sale, lease or exchange that at least 80% of the members of the Board of Directors
then in office have approved; or
(v) the dissolution of the Corporation; provided, however, that this clause (v) will not apply to such dissolution
if at least 80%of the members of the Board of Directors then in office have approved such dissolution.
Subject to the foregoing
provisions of this Article IX and except as otherwise provided in Article X, the Corporation reserves the right at any time, and
from time to time, to amend, alter, change or repeal any provision contained in this Restated Certificate, and other provisions
authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed
by law; and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other Persons
whomsoever by and pursuant to this Restated Certificate in its present form or as hereafter amended are granted subject to the
rights reserved in this Article IX.
Article
X
BUSINESS COMBINATION REQUIREMENTS; EXISTENCE
1.
General.
(a)
The provisions of this Article X shall apply during the period commencing upon the effectiveness of this Restated Certificate
and shall terminate upon the consummation of the Corporation’s initial Business Combination, and no amendment to this Article
X shall be effective prior to the consummation of the initial Business Combination unless approved by the affirmative vote of the
holders of at least 662/3% of the total voting power of the then outstanding Voting Securities entitled to
vote thereon, voting together as a single class (except as otherwise set forth in Article X, Section 8 hereof).
(b) In
connection with the Corporation’s initial public offering of securities (the “Offering”), an amount
equal to the gross offering proceeds received by the Corporation in the Offering (including the proceeds of any exercise of
the underwriters’ over-allotment option) as described in the Corporation’s registration statement on Form S-1, as
initially filed with the SEC on November 19, 2020, as amended (the “Registration Statement”), shall be
deposited in a trust account (the “Trust Account”), established for the benefit of the Public Stockholders
pursuant to a trust agreement described in the Registration Statement. Except for the withdrawal of interest to pay taxes,
none of the funds held in the Trust Account (including the interest earned on the funds held in the Trust Account) will be
released from the Trust Account until the earliest of (i) the consummation of the initial Business Combination, (ii) the
redemption of 100% of the Offering Shares if the Corporation is unable to complete its initial Business Combination within 24
months from the closing of the Offering (or 27 months if an Agreement in Principle Event has occurred) and (iii) the
redemption of Offering Shares in connection with a vote seeking to amend any provisions of this Restated Certificate (A) to
modify the substance or timing of the Corporation’s obligation to allow redemptions in connection with the
Corporation’s initial Business Combination or to redeem 100% of the Offering Shares if the Corporation has not
consummated an initial Business Combination within 24 months from the date of the closing of the Offering (or 27 months if an
Agreement in Principle Event has occurred) or (B) relating to stockholders’ rights or pre-initial Business Combination
activity (as described in Article X, Section 6). Holders of shares of Series A Common Stock included as part of the units
sold in the Offering (including as part of an underwriters’ overallotment option) (the “Offering
Shares”) (whether such Offering Shares were purchased in the Offering or in the secondary market following the
Offering and whether or not such holders are Liberty Media Acquisition Sponsor LLC or officers or directors of the
Corporation, or affiliates of any of the foregoing) are referred to herein as “Public Stockholders.”
2.
Redemption Rights.
(a)
Prior to the consummation of the initial Business Combination, the Corporation shall provide all Public Stockholders with
the opportunity to have their Offering Shares redeemed (which redemption may be in the form of a repurchase by the Corporation),
subject to lawfully available funds, upon the consummation of the initial Business Combination pursuant to, and subject to the
limitations of, Article X, Sections 2(b), 2(c) and 6 (such rights of such holders to have their Offering Shares redeemed pursuant
to such sections, the “Redemption Rights”) hereof for cash equal to the applicable redemption price per share
determined in accordance with Article X, Section 2(b) hereof (the “Redemption Price”); provided, however, that
the Corporation shall not have the power to redeem Offering Shares to the extent that such redemption would result in the Corporation
having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act (or any successor rule)) of
less than $5,000,001 (such limitation hereinafter called the “Redemption Limitation”). Notwithstanding anything
to the contrary contained in this Restated Certificate, there shall be no Redemption Rights or liquidating distributions with respect
to any warrant issued pursuant to the Offering.
(b) If
the Corporation offers to redeem the Offering Shares other than in conjunction with a stockholder vote on an initial Business
Combination with a proxy solicitation pursuant to Regulation 14A of the Exchange Act (or any successor rules or regulations)
(such rules and regulations hereinafter called the “Proxy Solicitation Rules”) and filing proxy materials
with the SEC, the Corporation shall offer to redeem the Offering Shares upon the consummation of the initial Business
Combination, subject to lawfully available funds therefor, in accordance with the provisions of Article X, Section 2(a)
hereof pursuant to a tender offer in accordance with Rule 13e-4 and Regulation 14E of the Exchange Act (or any successor rule
or regulation) (such rules and regulations hereinafter called the “Tender Offer Rules”) which it shall
commence prior to the consummation of the initial Business Combination and shall file tender offer documents with the SEC
prior to the consummation of the initial Business Combination that contain substantially the same financial and other
information about the initial Business Combination and the Redemption Rights as is required under the Proxy Solicitation
Rules, even if such information is not required under the Tender Offer Rules; provided, however, that if a stockholder vote
is required by law to approve the proposed initial Business Combination, or the Corporation decides to submit the proposed
initial Business Combination to the stockholders for their approval for business or other reasons, the Corporation shall
offer to redeem the Offering Shares, subject to lawfully available funds therefor, in accordance with the provisions of
Article X, Section 2(a) hereof in conjunction with a proxy solicitation pursuant to the Proxy Solicitation Rules (and not the
Tender Offer Rules) at a price per share equal to the Redemption Price calculated in accordance with the following provisions
of this Article X, Section 2(b). In the event that the Corporation offers to redeem the Offering Shares pursuant to a tender
offer in accordance with the Tender Offer Rules, the Redemption Price per share of the Common Stock payable to holders of the
Offering Shares tendering their Offering Shares pursuant to such tender offer shall be equal to the quotient obtained by
dividing: (i) the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the
initial Business Combination, including interest (net of taxes payable), by (ii) the total number of then outstanding
Offering Shares. If the Corporation offers to redeem the Offering Shares in conjunction with a stockholder vote on the
proposed initial Business Combination pursuant to a proxy solicitation, the Redemption Price per share of the Common Stock
payable to holders of the Offering Shares exercising their Redemption Rights shall be equal to the quotient obtained by
dividing (a) the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the
initial Business Combination, including interest (net of taxes payable), by (b) the total number of then outstanding Offering
Shares.
(c)
If the Corporation offers to redeem the Offering Shares in conjunction with a stockholder vote on an initial Business Combination
pursuant to a proxy solicitation, a Public Stockholder, together with any affiliate of such stockholder or any other person with
whom such stockholder is acting in concert or as a “group” (as defined under Section 13(d)(3) of the Exchange Act),
shall be restricted from seeking to exercise its Redemption Rights with respect to Offering Shares in excess of an aggregate of
15% of the Offering Shares without the consent of the Corporation, unless the Corporation waives such restriction with respect
to a particular stockholder or “group.”
(d)
In the event that the Corporation has not consummated an initial Business Combination within 24 months from the closing
of the Offering (or 27 months if an Agreement in Principle Event has occurred), the Corporation shall (i) cease all operations
except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter subject
to lawfully available funds therefor, redeem 100% of the Offering Shares in consideration of a per-share price, payable in cash,
equal to the quotient obtained by dividing (A) the aggregate amount then on deposit in the Trust Account, including interest (net
of taxes payable, and less up to $100,000 of such net interest to pay dissolution expenses), by (B) the total number of then outstanding
Offering Shares, which redemption will completely extinguish rights of the Public Stockholders (including the right to receive
further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to
the approval of the remaining stockholder(s) and the Board in accordance with applicable law, dissolve and liquidate, subject in
each case to the Corporation’s obligations under the DGCL to provide for claims of creditors and other requirements of applicable
law.
(e)
If the Corporation offers to redeem the Offering Shares in conjunction with a stockholder vote on an initial Business Combination,
the Corporation shall have the power to consummate the proposed initial Business Combination only if (i) such initial Business
Combination is approved by the affirmative vote of the holders of a majority of the shares of the Common Stock that are voted at
a stockholder meeting held to consider such initial Business Combination (in addition to any other vote required by applicable
law) and (ii) the Redemption Limitation is not exceeded.
(f)
If the Corporation conducts a tender offer pursuant to Article X, Section 2(b), the Corporation shall have the power to
consummate the proposed initial Business Combination only if the Redemption Limitation is not exceeded.
3.
Distributions from the Trust Account.
(a)
A Public Stockholder shall be entitled to receive funds from the Trust Account only as provided in Article X, Sections
2(a), 2(b), 2(d) or 6 hereof. In no other circumstances shall a Public Stockholder have any right or interest of any kind in or
to distributions from the Trust Account, and no stockholder other than a Public Stockholder shall have any interest in or to the
Trust Account.
(b)
Each Public Stockholder that does not exercise its Redemption Rights shall retain its interest in the Corporation and shall
be deemed to have given its consent to the release of the remaining funds in the Trust Account to the Corporation, and following
payment to any Public Stockholders exercising their Redemption Rights, the remaining funds in the Trust Account shall be released
to the Corporation.
(c)
The exercise by a Public Stockholder of the Redemption Rights (and any withdrawal of any exercise of such rights) shall
be conditioned on such Public Stockholder following the specific procedures for redemptions (or withdrawals, as applicable) set
forth by the Corporation in any applicable tender offer or proxy materials sent to the Corporation’s Public Stockholders
relating to the proposed initial Business Combination. Payment of the amounts necessary to satisfy the Redemption Rights properly
exercised shall be made as promptly as practical after the consummation of the initial Business Combination.
4.
Share Issuances. Subsequent to the issuance and sale of the Offering Shares and prior to the consummation of the
Corporation’s initial Business Combination, the Corporation shall not have the power to issue any additional shares of Capital
Stock that would entitle the holders thereof to receive funds from the Trust Account or vote pursuant to the Restated Certificate
on any initial Business Combination or on any amendment to this Article X.
5.
No Transactions with Other Blank Check Companies. The Corporation shall not have the power to enter into an initial
Business Combination solely with another blank check company or a similar company with nominal operations.
6.
Additional Redemption Rights. If, in accordance with Article X, Section 1(a), any amendment is made to this Restated
Certificate that would modify the substance or timing of the Corporation’s obligation to allow redemptions in connection
with the Corporation’s initial Business Combination or to redeem 100% of the Offering Shares if the Corporation has not
consummated an initial Business Combination within 24 months from the date of the closing of the Offering (or 27 months if an
Agreement in Principle Event has occurred), or with respect to any other provision herein relating to stockholder’s rights
or pre-initial Business Combination activity, the Public Stockholders shall be provided with the opportunity to redeem their Offering
Shares upon the approval of any such amendment, at a per-share price, payable in cash, equal to the aggregate amount then on deposit
in the Trust Account, including interest (net of taxes payable), divided by the number of then outstanding Offering Shares. The
Corporation’s ability to provide such opportunity and implement such an amendment is subject to the Redemption Limitation.
Each Public Stockholder that does not exercise its Redemption Rights under this Section 6 shall retain its interest in the Corporation
and shall be deemed to have given its consent to the release of the applicable funds in the Trust Account pursuant to this Section
6. The exercise by a Public Stockholder of the Redemption Rights under this Section 6 (and any withdrawal of any exercise of such
rights) shall be conditioned on such Public Stockholder following the specific procedures for redemptions (or withdrawals, as
applicable) set forth by the Corporation in any applicable tender offer or proxy materials sent to the Corporation’s Public
Stockholders relating to the proposed initial Business Combination.
7.
Minimum Value of Target. As long as the Corporation’s securities are listed on The Nasdaq Stock Market, the
Corporation shall have the power to consummate an initial Business Combination only if such initial Business Combination is consummated
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 the amount of any deferred underwriting discount and taxes payable on interest earned on the trust account)
at the time of signing a definitive agreement in connection with the initial Business Combination.
8. Appointment
and Removal of Directors. Notwithstanding any other provision in this Restated Certificate, prior to the consummation of
the initial Business Combination, the holders of Series F Common Stock shall have the exclusive right to elect, remove and
replace any director, and the holders of Series A Common Stock, Series B Common Stock, Series C Common Stock or Preferred
Stock shall have no right to vote on the election, removal or replacement of any director (including, without limitation, by
filling any vacancies on the Board of Directors resulting from death, resignation, removal or other cause and newly created
directorships resulting from any increase in the number of directors on the Board of Directors). Notwithstanding any other
provision in this Restated Certificate, any amendment to this Article X, Section 8 shall be effective solely upon approval by
the affirmative vote of the holders of at least (i) a majority of the voting power of the then outstanding Voting Securities
entitled to vote thereon, voting together as a single class, and (ii) a majority of the then outstanding shares of Series F
Common Stock, voting or consenting as a separate class.
9.
Approval of Business Combination. Notwithstanding any other provision in this Restated Certificate, approval of the
initial Business Combination shall require the affirmative vote of a majority of the Board, which must include a majority of the
Corporation’s independent directors.
Article
XI
CERTAIN BUSINESS OPPORTUNITIES
1.
Certain Acknowledgements; Definitions.
In recognition and
anticipation that:
(a)
directors and officers of the Corporation may serve as directors, officers, employees and agents of any other corporation,
company, partnership, association, firm or other entity, including, without limitation, current and former Subsidiaries and Affiliates
of the Corporation and the Related Companies (“Other Entity”),
(b)
the Corporation, directly or indirectly, may engage in the same, similar or related lines of business as those engaged in
by any Other Entity and other business activities that overlap with or compete with those in which such Other Entity may engage,
(c)
the Corporation may have an interest in the same areas of business opportunity as any Other Entity, and
(d)
the Corporation may engage in material business transactions with any Other Entity and its Affiliates, including, without
limitation, receiving services from, providing services to or being a significant customer or supplier to such Other Entity and
its Affiliates, and that the Corporation and such Other Entity or one or more of their respective Subsidiaries or Affiliates may
benefit from such transactions, and as a consequence of the foregoing, it is in the best interests of the Corporation that the
rights of the Corporation, and the duties of any directors or officers of the Corporation (including any such persons who are also
directors, officers or employees of any Other Entity), be determined and delineated, as set forth herein, in respect of (x) any
transactions between the Corporation and its Subsidiaries or Affiliates, on the one hand, and such Other Entity and its Subsidiaries
or Affiliates, on the other hand, and (y) any potential transactions or matters that may be presented to officers or directors
of the Corporation, or of which such officers or directors may otherwise become aware, which potential transactions or matters
may constitute business opportunities of the Corporation or any of its Subsidiaries or Affiliates.
In recognition of the
benefits to be derived by the Corporation through its continued contractual, corporate and business relations with any Other Entity
and of the benefits to be derived by the Corporation by the possible service as directors or officers of the Corporation and its
Subsidiaries of persons who may also serve from time to time as directors, officers or employees of any Other Entity, the provisions
of this Article XI will, to the fullest extent permitted by law, regulate and define the conduct of the business and affairs of
the Corporation in relation to such Other Entity and its Affiliates, and as such conduct and affairs may involve such Other Entity’s
respective directors, officers or employees, and the powers, rights, duties and liabilities of the Corporation and its officers
and directors in connection therewith and in connection with any potential business opportunities of the Corporation.
To the fullest extent
permitted by law, any Person purchasing, receiving or otherwise becoming the owner of any shares of Capital Stock, or any interest
therein, will be deemed to have notice of and to have consented to the provisions of this Article XI. References in this Article
XI to “directors,” “officers” or “employees” of any Person will be deemed to include those
Persons who hold similar positions or exercise similar powers and authority with respect to any Other Entity that is a limited
liability company, partnership, joint venture or other non-corporate entity.
2.
Duties of Directors and Officers Regarding Potential Business Opportunities; No Liability for Certain Acts or Omissions.
The doctrine of
corporate opportunity, or any other analogous doctrine, shall not apply with respect to the Corporation or any of its
officers or directors in circumstances where the application of any such doctrine to a corporate opportunity would conflict
with any fiduciary duties or contractual obligations they may have as of the date of this Restated Certificate or in the
future, and the Corporation renounces any expectancy that any of the directors or officers of the Corporation will offer any
such corporate opportunity of which he or she may become aware to the Corporation. If a director or officer of the
Corporation is offered, or otherwise acquires knowledge of, a potential transaction or matter that may constitute or present
a business opportunity for the Corporation or any of its Subsidiaries or Affiliates, in which the Corporation could, but for
the provisions of this Article XI, have an interest or expectancy (any such transaction or matter, and any such actual or
potential business opportunity, a “Potential Business Opportunity”):
(a) such
director or officer will, to the fullest extent permitted by law, have no duty or obligation to refer such Potential Business
Opportunity to the Corporation, or to refrain from referring such Potential Business Opportunity to any Other Entity, or to give
any notice to the Corporation regarding such Potential Business Opportunity (or any matter related thereto),
(b) such
director or officer will not be liable to the Corporation or any of its Subsidiaries or any of its stockholders, as a director,
officer, stockholder or otherwise, for any failure to refer such Potential Business Opportunity to the Corporation or any of its
Subsidiaries, or for referring such Potential Business Opportunity to any Other Entity, or for any failure to give any notice
to or otherwise inform the Corporation or any of its Subsidiaries regarding such Potential Business Opportunity or any matter
relating thereto,
(c) any
Other Entity may engage or invest in, independently or with others, any such Potential Business Opportunity,
(d)
the Corporation shall not have any right in or to such Potential Business Opportunity or to receive any income or proceeds
derived therefrom, and
(e) the
Corporation shall have no interest or expectancy, and hereby specifically renounces any interest or expectancy, in any such Potential
Business Opportunity, unless (for any of (a) through (d) above and this (e)) all of the following conditions are satisfied: (A)
such Potential Business Opportunity was expressly offered to a director or officer of the Corporation solely in his or her capacity
as a director or officer of the Corporation or as a director or officer of any Subsidiary of the Corporation, (B) such opportunity
is one the Corporation is legally and contractually permitted to undertake and would otherwise be reasonable for the Corporation
to pursue and (C) the director or officer has no fiduciary or contractual obligation to present the opportunity to any other Person.
3.
Amendment of Article XI.
No alteration, amendment
or repeal of, or adoption of any provision inconsistent with, any provision of this Article XI will have any effect upon:
(a) any
agreement between the Corporation or an Affiliate thereof and any Other Entity or an Affiliate thereof, that was entered into
before the time of such alteration, amendment or repeal or adoption of any such inconsistent provision (the “Amendment
Time”), or any transaction entered into in connection with the performance of any such agreement, whether such transaction
is entered into before or after the Amendment Time,
(b) any
transaction entered into between the Corporation or an Affiliate thereof and any Other Entity or an Affiliate thereof, before
the Amendment Time,
(c)
the allocation of any business opportunity between the Corporation or any Subsidiary or Affiliate thereof and any Other
Entity before the Amendment Time, or
(d) any
duty or obligation owed by any director or officer of the Corporation or any Subsidiary of the Corporation (or the absence of
any such duty or obligation) with respect to any Potential Business Opportunity which such director or officer was offered, or
of which such director or officer otherwise became aware, before the Amendment Time (regardless of whether any proceeding relating
to any of the above is commenced before or after the Amendment Time).
4.
Definitions for Article XI
For purposes of this
Article XI, the following terms have the meanings set forth below:
“Affiliate”
means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries Controls, is
Controlled by, or is under common Control with such Person.
Article
XII
MISCELLANEOUS
Section A
EXCLUSIVE FORUM
1. Unless
the Corporation consents in writing to the selection of an alternative forum, to the fullest extent permitted by applicable law,
the Court of Chancery of the State of Delaware (the “Court of Chancery”) (or, if and only if the Court of Chancery
does not have subject matter jurisdiction, another state court within the State of Delaware or, if no state court within the State
of Delaware has subject matter jurisdiction, the federal district court for the District of Delaware) shall be the sole and exclusive
forum for any stockholder (including a beneficial owner within the meaning of Section 13(d) of the Exchange Act) to bring (i) any
derivative action, suit or proceeding brought or purportedly brought on behalf of the Corporation, (ii) any action, suit or proceeding
asserting a claim of breach of a fiduciary duty owed by any current or former director, stockholder, officer, employee or agent
of the Corporation to the Corporation or the Corporation’s stockholders, or any claim of aiding and abetting such breach,
(iii) any action, suit or proceeding asserting a claim arising pursuant to, or seeking to enforce any right, obligation, or remedy
under, any provision of the DGCL or this Restated Certificate or the Bylaws of the Corporation, (iv) any action to interpret,
apply, enforce or determine the validity of this Restated Certificate or the Bylaws of the Corporation, (v) any action asserting
a claim against the Corporation or any director or officer of the Corporation governed by the internal affairs doctrine, (vi) any
action, suit, or proceeding as to which the DGCL confers jurisdiction on the Court of Chancery, or (vii) any action, suit or proceeding
asserting an “internal corporate claim” as defined in Section 115 of the DGCL; in all cases, subject to the court’s
having personal jurisdiction over the indispensable parties named as defendants. The choice of forum provision set forth in this
Article XII, Section A.1 does not apply to any actions arising under the Securities Act or the Exchange Act.
2. Unless
the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States
of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting
a cause of action arising under the Securities Act.
3. To the
fullest extent permitted by law, any person or entity purchasing or otherwise acquiring or holding any interest in shares of Capital
Stock shall be deemed to have notice of and consented to the provisions of this Article XII, Section A and personal jurisdiction
and venue (x) in any state or federal court located within the State of Delaware for any action or proceeding set forth above in
clauses (i) to (vii) of Article XII, Section A.1 and (y) in any federal court of the United States of America for any complaint
set forth in Article XII, Section A.2.
4. If any
action the subject matter of which is within the scope of this Article XII, Section A is filed in a court other than the courts
set forth in Article XII, Section A.1 or Section A.2, as applicable (a “Foreign Action”), in the name of any
stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state courts located within
the State of Delaware and the federal courts of the United States of America, as applicable, in connection with any action brought
in any such court to enforce this Article XII, Section A (an “FSC Enforcement Action”) and (ii) having service
of process made upon such stockholder in any such FSC Enforcement Action by service upon such stockholder’s counsel in the
Foreign Action as agent for such stockholder.
Section B
SEVERABILITY
If any
provision or provisions of this Restated Certificate shall be held to be invalid, illegal or unenforceable as applied to any person
or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law (1) the validity, legality and
enforceability of such provisions in any other circumstance and of the remaining provisions of this Restated Certificate (including,
without limitation, each portion of any sentence of this Restated Certificate containing any such provision held to be invalid,
illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision
to other persons or entities and circumstances shall not in any way be affected or impaired thereby and (2) the provisions of this
Restated Certificate (including, without limitation, each portion of any sentence of this Restated Certificate containing any such
provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors,
officers, employees and agents from personal liability in respect of their good faith service or for the benefit of the Company
to the fullest extent permitted by law.
Section C
APPLICATION
OF DGCL SECTION 203
The Corporation
hereby expressly elects not to be governed by Section 203 of the DGCL, and the restrictions contained in Section 203 of the DGCL
shall not apply to the Corporation.
IN WITNESS WHEREOF,
the undersigned has executed this Amended and Restated Certificate of Incorporation on this [●] day of [●], 2021.
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LIBERTY MEDIA ACQUISITION CORPORATION
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By:
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Name:
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Title:
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Exhibit 3.4
LIBERTY MEDIA ACQUISITION
CORPORATION
A Delaware Corporation
AMENDED AND RESTATED BYLAWS
Article
I
STOCKHOLDERS
Section
1.1
Annual Meeting.
An annual meeting of
stockholders for the purpose of electing directors and of transacting any other business properly brought before the meeting pursuant
to these Bylaws shall be held each year at such date, time and place, either within or without the State of Delaware or, if so
determined by the Board of Directors in its sole discretion, at no place (but rather by means of remote communication), as may
be specified by the Board of Directors in the notice of meeting.
Section
1.2
Special Meetings.
Except as otherwise provided
in the terms of any series of preferred stock or unless otherwise provided by law or by the Certificate of Incorporation, special
meetings of stockholders of the Corporation, for the transaction of such business as may properly come before the meeting, may
be called by the Secretary of the Corporation (the “Secretary”) only (i) upon written request received by the
Secretary at the principal executive offices of the Corporation by or on behalf of the holder or holders of record of outstanding
shares of capital stock of the Corporation, representing collectively not less than 66 2/3% of the total
voting power of the outstanding capital stock of the Corporation entitled to vote at such meeting or (ii) at the request of not
less than 80% of the members of the Board of Directors then in office. Only such business may be transacted as is specified in
the notice of the special meeting. The Board of Directors shall have the sole power to determine the time, date and place, either
within or without the State of Delaware, or, if so determined by the Board of Directors in its sole discretion, at no place (but
rather by means of remote communication), for any special meeting of stockholders (including those properly called by the Secretary
in accordance with Section 1.2(i) hereof). Following such determination, it shall be the duty of the Secretary to cause notice
to be given to the stockholders entitled to vote at such meeting that a meeting will be held at the time, date and place, if any,
and in accordance with the record date determined by the Board of Directors.
Section
1.3
Record Date.
In order that the
Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the
Board of Directors may fix, in advance, a record date, which shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors, and which record date shall not be more than sixty (60) calendar days nor
less than ten (10) calendar days before the date of such meeting. If the Board of Directors so fixes a record date for
determining the stockholders entitled to notice of any meeting of stockholders, such date shall be the record date for
determining the stockholders entitled to vote at such meeting, unless the Board of Directors determines, at the time it fixes
the record date for determining the stockholders entitled to notice of such meeting, that a later date on or before the date
of the meeting shall be the record date for determining stockholders entitled to vote at such meeting. In order that the
Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of
any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose
of any other lawful action, the Board of Directors may fix, in advance, a record date, which record date shall not precede
the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall
not be more than sixty (60) calendar days prior to such action. If no record date is fixed by the Board of Directors: (i) the
record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close
of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held, and (ii) the record date for determining stockholders for any
other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating
thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply
to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned
meeting in accordance with this Section 1.3.
Section
1.4
Notice of Meetings.
Notice of all stockholders
meetings, stating the place, if any, date and hour thereof, as well as the record date for determining stockholders entitled to
vote at such meeting (if such record date is different from the record date for determining stockholders entitled to notice of
the meeting); the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in
person and vote at such meeting; and, in the case of a special meeting, the purpose or purposes for which the meeting is called,
shall be delivered by the Corporation in accordance with Section 5.4 of these Bylaws, applicable law and applicable stock exchange
rules and regulations by the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Secretary
or an Assistant Secretary, to each stockholder entitled to notice of such meeting, unless otherwise provided by applicable law
or the Certificate of Incorporation, at least ten (10) calendar days but not more than sixty (60) calendar days before the date
of the meeting.
Section
1.5
Notice of Stockholder Business.
(a)
Annual Meetings of Stockholders.
(1) At
an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the
meeting. To be properly brought before an annual meeting, nominations for persons for election to the Board of Directors and
the proposal of business to be considered by the stockholders must be (i) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (ii)
otherwise properly brought before the meeting by or at the direction of the Board of Directors (or any duly authorized
committee thereof), or (iii) otherwise properly be requested to be brought before the meeting by a stockholder (x) who
complies with the procedures set forth in this Section 1.5 and (y) who was a stockholder of record of the Corporation (and,
with respect to any beneficial owner, if different, on whose behalf such business is proposed or such nomination or
nominations made, only if such beneficial owner was the beneficial owner of shares of the Corporation) both at the time the
notice provided for in Section 1.5(a)(2) is delivered to the Secretary and on the record date for the determination of
stockholders entitled to vote at the meeting, and (z) who is entitled to vote at the meeting upon such election of directors
or upon such business, as the case may be.
(2)
In addition to any other requirements under applicable law and the Certificate of Incorporation, for a nomination
for election to the Board of Directors or the proposal of business to be properly requested to be brought before an annual meeting
by a stockholder, the stockholder must have given timely notice thereof in proper written form to the Secretary and any such proposed
business, other than the nominations of persons for election to the Board of Directors, must constitute a proper matter for stockholder
action pursuant to the Certificate of Incorporation, these Bylaws, and applicable law. To be timely, a stockholder’s notice
must be received at the principal executive offices of the Corporation (x) in the case of an annual meeting that is called for
a date that is within thirty (30) calendar days before or after the anniversary date of the immediately preceding annual meeting
of stockholders, not less than sixty (60) calendar days nor more than ninety (90) calendar days prior to the meeting and (y) in
the case of an annual meeting that is called for a date that is not within thirty (30) calendar days before or after the anniversary
date of the immediately preceding annual meeting, not later than the close of business on the tenth (10th) day following
the day on which notice of the date of the meeting was communicated to stockholders or public announcement (as defined below) of
the date of the meeting was made, whichever occurs first. In no event shall the public announcement of an adjournment or postponement
of a meeting of stockholders commence a new time period (or extend any time period) for the giving of a stockholder notice as described
herein.
To be in proper
written form, such stockholder’s notice to the Secretary must be submitted by a holder of record of stock entitled to
vote on the nomination of directors of the Corporation and shall set forth in writing and describe in fair, accurate, and
material detail (A) as to each person whom the stockholder proposes to nominate for election as a director (a
“nominee”) (i) all information relating to such nominee that is required to be disclosed in solicitations
of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to and in
accordance with Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
and (ii) such nominee’s written consent to being named in the proxy statement as a nominee and to serving as a director
if elected; (B) as to any other business that the stockholder proposes to bring before the annual meeting, (i) a brief
description of the business desired to be brought before the annual meeting and the reasons for conducting such business at
the annual meeting, (ii) the text of the proposal or business (including the text of any resolutions proposed for
consideration and, in the event that such business includes a proposal to amend the Bylaws of the Corporation, the language
of the proposed amendment), and (iii) any material interest of the stockholder and beneficial owner, if any, on whose behalf
the proposal is made, in such business; and (C) as to such stockholder giving notice and the beneficial owner or owners,
if different, on whose behalf the nomination or proposal is made, and any affiliates or associates (each within the meaning
of Rule 12b-2 under the Exchange Act) of such stockholder or beneficial owner (each a “Proposing Person”)
(i) the name and address, as they appear on the Corporation’s books, of such Proposing Person, (ii) the class or series
and number of shares of the capital stock of the Corporation that are owned beneficially and of record by such Proposing
Person, (iii) a description of all arrangements or understandings between such Proposing Person and any other person or
persons (including their names) pursuant to which the proposals are to be made by such stockholder, (iv) a representation by
each Proposing Person who is a holder of record of stock of the Corporation (A) that the notice the Proposing Person is
giving to the Secretary is being given on behalf of (x) such holder of record and/or (y) if different than such holder of
record, one or more beneficial owners of stock of the Corporation held of record by such holder of record, (B) as to each
such beneficial owner, the number of shares held of record by such holder of record that are beneficially owned by such
beneficial owner, with documentary evidence of such beneficial ownership, and (C) that such holder of record is entitled to
vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business or nomination set
forth in its notice, (v) a representation (I) whether any such Proposing Person or nominee has received any financial
assistance, funding or other consideration from any other person in respect of the nomination (and the details thereof) (a
“Stockholder Associated Person”) and (II) whether and the extent to which any hedging, derivative or other
transaction has been entered into with respect to the Corporation within the past six (6) months by, or is in effect with
respect to, such stockholder, any person to be nominated by such stockholder or any Stockholder Associated Person, the effect
or intent of which transaction is to mitigate loss to or manage risk or benefit of share price changes for, or to increase or
decrease the voting power of, such stockholder, nominee or any such Stockholder Associated Person, and (vi) a representation
whether any Proposing Person intends or is part of a group that intends to (I) deliver a proxy statement and/or form of proxy
to holders of at least the percentage of the Corporation’s outstanding voting power required to approve or adopt the
proposal or elect the nominee and/or (II) otherwise solicit proxies from stockholders in support of such proposal, and (vii)
any other information relating to such Proposing Person that would be required to be disclosed in a proxy statement or other
filings required to be made in connection with solicitations of proxies in support of such proposal pursuant to Section 14 of
the Exchange Act, and any rules and regulations promulgated thereunder. The foregoing notice requirements of this Section 1.5
shall not apply to any proposal made pursuant to Rule 14a-8 (or any successor thereof) promulgated under the Exchange Act. A
proposal to be made pursuant to Rule 14a-8 (or any successor thereof) promulgated under the Exchange Act shall be deemed
satisfied if the stockholder making such proposal complies with the provisions of Rule 14a-8 and has notified the Corporation
of his or her intention to present a proposal at an annual meeting in compliance with Rule 14a-8 and such stockholder’s
proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual
meeting. The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to
determine (x) the eligibility of such proposed nominee to serve as a director of the Corporation and (y) whether the nominee
would qualify as an “independent director” or “audit committee financial expert” under applicable
law, securities exchange rule or regulation, or any publicly disclosed corporate governance guideline or committee charter of
the Corporation.
(3) Notwithstanding
anything in paragraph (a)(2) of this Section 1.5 to the contrary, in the event that the number of directors to be elected to
the Board of Directors at an annual meeting is increased and there is no public announcement by the Corporation naming all of
the nominees for director or specifying the size of the increased Board of Directors at least one hundred (100) calendar days
prior to the first anniversary date of the immediately preceding annual meeting, a stockholder’s notice required by
this Section 1.5 shall also be considered timely, but only with respect to nominees for any new positions created by such
increase, if it shall be received by the Secretary at the principal executive offices of the Corporation not later than the
close of business on the tenth (10th) day following the day on which such public announcement is first made by the
Corporation. For purposes of the first annual meeting of stockholders of the Corporation, the first anniversary date shall be
[●], 2022.
(b)
Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall
have been brought before the meeting pursuant to the Corporation’s notice of meeting. In the event the Corporation calls
a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder
entitled to vote at such meeting who was a stockholder of record of the Corporation (and, with respect to any beneficial owner,
if different, on whose behalf such nomination or nominations are made, only if such beneficial owner was the beneficial owner of
shares of the Corporation) both at the time the notice provided for in paragraph (a)(2) of this Section 1.5 is delivered to the
Secretary and on the record date for the determination of stockholders entitled to vote at the special meeting may nominate a person
or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, if
the stockholder’s notice meeting the requirements of paragraph (a)(2) of this Section 1.5 (substituting special meeting for
annual meeting as applicable) shall be received by the Secretary at the principal executive offices of the Corporation not earlier
than the close of business on the ninetieth (90th) day prior to such special meeting and not later than the close of
business on the later of the sixtieth (60th) day prior to such special meeting or the tenth (10th) day following
the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board
of Directors to be elected at such meeting; provided, however, that a stockholder may nominate persons for election at a special
meeting only to such directorship(s) as specified in the Corporation’s notice of the meeting. In no event shall the public
announcement of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for
the giving of a stockholder’s notice as described above.
(c)
Updating and Supplementing of Stockholder Information. A stockholder providing notice of nominations of persons for
election to the Board of Directors at an annual or special meeting of stockholders or notice of business proposed to be brought
before an annual meeting of stockholders shall further update and supplement such notice so that the information provided or required
to be provided in such notice pursuant to paragraph (a)(2) of this Section 1.5 shall be true and correct both as of the record
date for the determination of stockholders entitled to notice of the meeting and as of the date that is ten (10) business days
before the meeting or any adjournment or postponement thereof, and such updated and supplemental information shall be delivered
to, or mailed and received by, the Secretary at the principal executive offices of the Corporation (a) in the case of information
that is required to be updated and supplemented to be true and correct as of the record date for the determination of stockholders
entitled to notice of the meeting, not later than the later of five (5) business days after such record date or five (5) business
days after the public announcement of such record date, and (b) in the case of information that is required to be updated and supplemented
to be true and correct as of ten (10) business days before the meeting or any adjournment or postponement thereof, not later than
eight (8) business days before the meeting or any adjournment or postponement thereof (or if not practicable to provide such updated
and supplemental information not later than eight (8) business days before any adjournment or postponement, on the first practicable
date before any such adjournment or postponement).
(d)
General.
(1)
Only such persons who are nominated in accordance with the procedures set forth in this Section 1.5 shall be eligible
to be elected at an annual or special meeting of stockholders of the Corporation to serve as directors and only such business shall
be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth
in this Section 1.5. Except as otherwise provided by law, the chairman of the meeting shall have the power and duty (i) to determine
whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance
with the procedures set forth in this Section 1.5 (including whether the stockholder or beneficial owner, if any, on whose behalf
the nomination or proposal is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be,
proxies in support of such stockholder’s nominee or proposal in compliance with such stockholder’s representation as
required by clause (a)(2)(C)(vi) of this Section 1.5) and (ii) if any proposed nomination or proposed business was not made or
proposed in compliance with this Section 1.5, to declare that such nomination shall be disregarded or that such proposed business
shall not be transacted. Notwithstanding the foregoing provisions of this Section 1.5, if the stockholder (or a qualified representative
of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present the nomination
to the Board of Directors or to present the proposed business, such nomination shall be disregarded and such proposed business
shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes
of this Section 1.5, to be considered a qualified representative of the stockholder, a person must be authorized by a writing executed
by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting
of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing
or electronic transmission, at the meeting of stockholders.
(2)
For purposes of this Section 1.5, (i) “public announcement” shall mean disclosure in a press release
reported by a national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission
pursuant to the Exchange Act, and (ii) “business day” shall mean any day, other than Saturday, Sunday and any
day on which banks located in the State of New York are authorized or obligated by applicable law to close.
(3)
Notwithstanding the foregoing provisions of this Section 1.5, a stockholder shall also comply with all applicable
requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section
1.5. Nothing in this Section 1.5 shall be deemed to affect any rights (i) of stockholders to request inclusion of proposals in
the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (ii) of the holders of any series of preferred
stock to elect directors pursuant to any applicable provisions of the Certificate of Incorporation.
Section
1.6
Quorum.
Subject to the
rights of the holders of any series of preferred stock and except as otherwise provided by law or in the Certificate of
Incorporation or these Bylaws, at any meeting of stockholders, the holders of a majority in total voting power of the
outstanding shares of stock entitled to vote at the meeting shall be present or represented by proxy in order to constitute a
quorum for the transaction of any business. The chairman of the meeting shall have the power and duty to determine whether a
quorum is present at any meeting of the stockholders. Shares of its own stock belonging to the Corporation or to another
corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held,
directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes;
provided, however, that the foregoing shall not limit the right of the Corporation or any subsidiary of the Corporation to
vote stock, including, but not limited to, its own stock, held by it in a fiduciary capacity. In the absence of a quorum, the
chairman of the meeting may adjourn the meeting from time to time in the manner provided in Section 1.7 hereof until a quorum
shall be present.
Section
1.7
Adjournment.
Any meeting of stockholders,
annual or special, may be adjourned from time to time solely by the chairman of the meeting because of the absence of a quorum
or for any other reason and to reconvene at the same or some other time, date and place, if any, or by means of remote communication.
Notice need not be given of any such adjourned meeting if the time, date and place, if any, and the means of remote communications,
if any, thereof are announced at the meeting at which the adjournment is taken. The chairman of the meeting shall have full power
and authority to adjourn a stockholder meeting in his or her sole discretion even over stockholder opposition to such adjournment.
The stockholders present at a meeting shall not have the authority to adjourn the meeting. If the time, date and place, if any,
thereof, and the means of remote communication, if any, by which the stockholders and the proxy holders may be deemed to be present
in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken and the adjournment
is for less than thirty (30) calendar days, no notice need be given of any such adjourned meeting. If the adjournment is for more
than thirty (30) calendar days or if after the adjournment a new record date for determining stockholders entitled to vote at the
adjourned meeting is fixed for the adjourned meeting, then notice shall be given to each stockholder entitled to vote at the meeting.
At the adjourned meeting, the stockholders may transact any business that might have been transacted at the original meeting.
Section
1.8
Organization.
The Chairman of the
Board, or in his or her absence the Chief Executive Officer, or in their absence the President, or in their absence any Vice
President, shall call to order meetings of stockholders and preside over and act as chairman of such meetings. The Board of
Directors or, if the Board fails to act, the stockholders, may appoint any stockholder, director or officer of the
Corporation to act as chairman of any meeting in the absence of the Chairman of the Board, the Chief Executive Officer, the
President and all Vice Presidents. The date and time of the opening and closing of the polls for each matter upon which the
stockholders will vote at a meeting shall be determined by the chairman of the meeting and announced at the meeting. The
Board of Directors may adopt by resolution such rules and regulations for the conduct of the meeting of stockholders as it
shall deem appropriate. Unless otherwise determined by the Board of Directors, the chairman of the meeting shall have the
exclusive right to determine the order of business and to prescribe other such rules, regulations and procedures and shall
have the authority in his or her discretion to regulate the conduct of any such meeting. Such rules, regulations or
procedures, whether adopted by the Board of Directors or prescribed by the chairman of the meeting, may include, without
limitation, the following: (i) rules and procedures for maintaining order at the meeting and the safety of those present;
(ii) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly
authorized and constituted proxies or such other persons as the chairman of the meeting shall determine; (iii) restrictions
on entry to the meeting after the time fixed for the commencement thereof; and (iv) limitations on the time allotted to
questions or comments by participants. Unless and to the extent determined by the Board of Directors or the chairman of the
meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary
procedure.
The Secretary shall act
as secretary of all meetings of stockholders, but, in the absence of the Secretary, the chairman of the meeting may appoint any
other person to act as secretary of the meeting.
Section
1.9
Postponement or Cancellation of Meeting.
Any previously scheduled
annual or special meeting of the stockholders may be postponed or canceled by resolution of the Board of Directors upon public
notice given prior to the time previously scheduled for such meeting of stockholders.
Section
1.10 Voting.
Subject to the rights
of the holders of any series of preferred stock and except as otherwise provided by law, the Certificate of Incorporation or these
Bylaws and except for the election of directors, at any meeting duly called and held at which a quorum is present, the affirmative
vote of a majority of the combined voting power of the outstanding shares present in person or represented by proxy at the meeting
and entitled to vote on the subject matter shall be the act of the stockholders. Subject to the rights of the holders of any series
of preferred stock, at any meeting duly called and held for the election of directors at which a quorum is present, directors shall
be elected by a plurality of the combined voting power of the outstanding shares present in person or represented by proxy at the
meeting and entitled to vote on the election of directors.
Section
1.11 List
of Stockholders.
The Corporation
shall prepare, at least ten (10) calendar days before every meeting of the stockholders, a complete list of the stockholders
entitled to vote thereat, arranged in alphabetical order, and showing the address of each stockholder and the number of
shares registered in the stockholder’s name; provided, however, if the record date for determining the stockholders
entitled to vote at the meeting is fewer than ten (10) calendar days before the meeting date, the list shall reflect the
stockholders entitled to vote as of the tenth (10th) calendar day before the meeting date. Nothing contained in
this Section 1.11 shall require the Corporation to include electronic mail addresses or other electronic contact information
on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a
period of at least ten (10) calendar days prior to the meeting: (i) on a reasonably accessible electronic network, provided
that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary
business hours, at the principal place of business of the Corporation. If the Corporation determines to make the list
available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available
only to stockholders of the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at
the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If
the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any
stockholder during the whole time of the meeting on a reasonably accessible network, and the information required to access
such list shall be provided with the notice of the meeting. The stock ledger shall be the only evidence of the identity of
the stockholders entitled to examine such list.
Section
1.12 Remote
Communications.
For purposes of these
Bylaws, if authorized by the Board of Directors in its sole discretion, and subject to such guidelines and procedures as the Board
of Directors may adopt, stockholders and proxyholders may, by means of remote communication:
(a)
participate in a meeting of stockholders; and
(b)
be deemed present in person and vote at a meeting of stockholders whether such meeting is to be held at a designated place
or solely by means of remote communication, provided that (i) the Corporation shall implement reasonable measures to verify that
each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder,
(ii) the Corporation shall implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity
to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the
proceedings of the meeting substantially concurrent with such proceedings, and (iii) if any stockholder or proxyholder votes or
takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by
the Corporation.
Article
II
BOARD OF DIRECTORS
Section
2.1
Number and Term of Office.
Subject to any limitations
set forth in the Certificate of Incorporation and to any provision of the General Corporation Law of the State of Delaware relating
to the powers or rights conferred upon or reserved to the stockholders or the holders of any class or series of the issued and
outstanding stock of the Corporation, the business and affairs of the Corporation shall be managed, and all corporate powers shall
be exercised, by or under the direction of the Board of Directors. Subject to any rights of the holders of any series of preferred
stock to elect additional directors, the Board of Directors shall be comprised of not less than three (3) members and the exact
number will be fixed from time to time by the Board of Directors by resolution adopted by the affirmative vote of not less than
80% of the members of the Board of Directors then in office. Directors need not be stockholders of the Corporation. The Corporation
shall nominate the persons serving as Chairman of the Board and Chief Executive Officer for election as directors at any meeting
at which such persons are subject to election as directors.
Section
2.2
Resignations.
Any director of the Corporation,
or any member of any committee, may resign at any time by giving notice in writing or by electronic transmission to the Board of
Directors, the Chairman of the Board, the Chief Executive Officer, or the President or Secretary. Any such resignation shall take
effect at the time specified therein or, if the time be not specified therein, then upon receipt thereof. The acceptance of such
resignation shall not be necessary to make it effective unless otherwise stated therein.
Section
2.3
Removal of Directors.
Directors may be removed
from office as provided in the Certificate of Incorporation.
Section
2.4
Newly Created Directorships and Vacancies.
Newly created directorships
and vacancies on the Board of Directors shall be filled as provided in the Certificate of Incorporation.
Section
2.5
Meetings.
Regular meetings of the
Board of Directors shall be held on such dates and at such times and places, within or without the State of Delaware, as shall
from time to time be determined by the Board of Directors, such determination to constitute the only notice of such regular meetings
to which any director shall be entitled. In the absence of any such determination, such meeting shall be held, upon notice to each
director in accordance with Section 2.6 of this Article II, at such times and places, within or without the State of Delaware,
as shall be designated in the notice of meeting.
Special meetings of the
Board of Directors shall be held at such times and places, if any, within or without the State of Delaware, as shall be designated
in the notice of the meeting in accordance with Section 2.6 hereof. Special meetings of the Board of Directors may be called by
the Chairman of the Board, and shall be called by the Chief Executive Officer, President or Secretary upon the written request
of not less than 80% of the members of the Board of Directors then in office.
Section
2.6
Notice of Meetings.
The Secretary, or in
his or her absence any other officer of the Corporation, shall give each director notice of the time and place of holding of any
regular meetings (if required) or special meetings of the Board of Directors, in accordance with Section 5.4 of these Bylaws, by
mail at least ten (10) calendar days before the meeting, or by courier service at least three (3) calendar days before the meeting,
or by facsimile transmission, electronic mail or other electronic transmission, or personal service, in each case, at least twenty-four
(24) hours before the meeting, unless notice is waived in accordance with Section 5.4 of these Bylaws. Unless otherwise stated
in the notice thereof, any and all business may be transacted at any meeting without specification of such business in the notice.
Section
2.7
Meetings by Conference Telephone or Other
Communications.
Members of the Board
of Directors, or any committee thereof, may participate in a meeting of the Board of Directors or such committee by means of telephone
conference or other communications equipment by means of which all persons participating in the meeting can hear each other and
communicate with each other, and such participation in a meeting by such means shall constitute presence in person at such meeting.
Section
2.8
Quorum and Organization of Meetings.
A majority of the total
number of members of the Board of Directors as constituted from time to time shall constitute a quorum for the transaction of business,
but, if at any meeting of the Board of Directors (whether or not adjourned from a previous meeting) there shall be less than a
quorum present, a majority of those present may adjourn the meeting to another time, date and place, and the meeting may be held
as adjourned without further notice or waiver. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws,
a majority of the directors present at any meeting at which a quorum is present may decide any question brought before such meeting.
Meetings shall be presided over by the Chairman of the Board or in his or her absence by such other person as the directors may
select. The Board of Directors shall keep written minutes of its meetings. The Secretary shall act as secretary of the meeting,
but in his or her absence the chairman of the meeting may appoint any person to act as secretary of the meeting.
The Board may designate
one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board may designate one
or more directors as alternate members of any committee to replace absent or disqualified members at any meeting of such committee.
If a member of a committee shall be absent from any meeting, or disqualified from voting thereat, the remaining member or members
present and not disqualified from voting, whether or not such member or members constitute a quorum, may, by a unanimous vote,
appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member. Any
such committee, to the extent provided in a resolution of the Board of Directors passed as aforesaid, shall have and may exercise
all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may
authorize the seal of the Corporation to be impressed on all papers that may require it, but no such committee shall have the power
or authority of the Board of Directors in reference to (i) approving or adopting, or recommending to the stockholders, any action
or matter expressly required by the laws of the State of Delaware to be submitted to the stockholders for approval or (ii) adopting,
amending or repealing any Bylaw of the Corporation. Such committee or committees shall have such name or names as may be determined
from time to time by resolution adopted by the Board of Directors. Unless otherwise specified in the resolution of the Board of
Directors designating a committee, at all meetings of such committee a majority of the total number of members of the committee
shall constitute a quorum for the transaction of business, and the vote of a majority of the members of the committee present at
any meeting at which there is a quorum shall be the act of the committee. Each committee shall keep regular minutes of its meetings.
Unless the Board of Directors otherwise provides, each committee designated by the Board of Directors may make, alter and repeal
rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner
as the Board of Directors conducts its business pursuant to Article II of these Bylaws.
Section
2.9
Indemnification.
The Corporation shall
indemnify members of the Board of Directors and officers of the Corporation and their respective heirs, personal representatives
and successors in interest for or on account of any action performed on behalf of the Corporation, to the fullest extent permitted
by the laws of the State of Delaware and the Certificate of Incorporation, as now or hereafter in effect.
Section
2.10 Indemnity
Undertaking.
To the extent not prohibited
by law, the Corporation shall indemnify any person who is or was made, or threatened to be made, a party to any threatened, pending
or completed action, suit or proceeding (a “Proceeding”), whether civil, criminal, administrative or investigative,
including, without limitation, an action by or in the right of the Corporation to procure a judgment in its favor, by reason of
the fact that such person, or a person of whom such person is the legal representative, is or was a director or officer of the
Corporation, or is or was serving in any capacity at the request of the Corporation for any other corporation, partnership, limited
liability company, joint venture, trust, employee benefit plan or other enterprises (an “Other Entity”), against
judgments, fines, penalties, excise taxes, amounts paid in settlement and costs, charges and expenses (including attorneys’
fees). Persons who are not directors or officers of the Corporation may be similarly indemnified in respect of service to the Corporation
or to an Other Entity at the request of the Corporation to the extent the Board of Directors at any time specifies that such persons
are entitled to the benefits of this Section 2.10. Except as otherwise provided in Section 2.12 hereof, the Corporation shall be
required to indemnify a person in connection with a proceeding (or part thereof) commenced by such person only if the commencement
of such proceeding (or part thereof) by the person was authorized by the Board of Directors.
Section
2.11 Advancement
of Expenses.
The Corporation shall,
from time to time, reimburse or advance to any director or officer or other person entitled to indemnification hereunder the funds
necessary for payment of expenses, including attorneys’ fees, incurred in connection with any Proceeding in advance of the
final disposition of such Proceeding; provided, however, that, such expenses incurred by or on behalf of any director or officer
or other person may be paid in advance of the final disposition of a Proceeding only upon receipt by the Corporation of an undertaking,
by or on behalf of such director or officer or such person, to repay all amounts advanced if it shall ultimately be determined
by final judicial decision from which there is no further right of appeal that such director, officer or other person is not entitled
to be indemnified for such expenses. Except as otherwise provided in Section 2.12 hereof, the Corporation shall be required to
reimburse or advance expenses incurred by a person in connection with a proceeding (or part thereof) commenced by such person only
if the commencement of such proceeding (or part thereof) by the person was authorized by the Board of Directors.
Section 2.12
Claims.
If a claim for indemnification
or advancement of expenses under this Article II is not paid in full within sixty (60) calendar days after a written claim therefor
by the person seeking indemnification or reimbursement or advancement of expenses has been received by the Corporation, the person
may file suit to recover the unpaid amount of such claim and, if successful, in whole or in part, shall be entitled to be paid
the expense (including attorneys’ fees) of prosecuting such claim to the fullest extent permitted by Delaware law. In any
such action the Corporation shall have the burden of proving that the person seeking indemnification or reimbursement or advancement
of expenses is not entitled to the requested indemnification, reimbursement or advancement of expenses under applicable law.
Section
2.13 Amendment,
Modification or Repeal.
Any amendment, modification
or repeal of the foregoing provisions of this Article II shall not adversely affect any right or protection hereunder of any person
entitled to indemnification under Section 2.9 hereof in respect of any act or omission occurring prior to the time of such repeal
or modification.
Section
2.14 Executive
Committee of the Board of Directors.
The Board of Directors,
by the affirmative vote of not less than 80% of the members of the Board of Directors then in office, may designate an executive
committee, all of whose members shall be directors, to manage and operate the affairs of the Corporation or particular properties
or enterprises of the Corporation. Subject to the limitations of the law of the State of Delaware and the Certificate of Incorporation,
such executive committee shall exercise all powers and authority of the Board of Directors in the management of the business and
affairs of the Corporation including, but not limited to, the power and authority to authorize the issuance of shares of common
or preferred stock; provided, however, that such executive committee shall not have the power to approve the Corporation’s
initial merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with
one or more businesses. The executive committee shall keep minutes of its meetings and report to the Board of Directors not less
often than quarterly on its activities and shall be responsible to the Board of Directors for the conduct of the enterprises and
affairs entrusted to it. Regular meetings of the executive committee, of which no notice shall be necessary, shall be held at such
time, dates and places, if any, as shall be fixed by resolution adopted by the executive committee. Special meetings of the executive
committee shall be called at the request of the Chief Executive Officer or of any member of the executive committee, and shall
be held upon such notice as is required by these Bylaws for special meetings of the Board of Directors, provided that oral notice
by telephone or otherwise, or notice by electronic transmission shall be sufficient if received not later than the day immediately
preceding the day of the meeting.
Section
2.15 Other
Committees of the Board of Directors.
The Board of
Directors may by resolution establish committees other than an executive committee and shall specify with particularity the
powers and duties of any such committee. Subject to the limitations of the laws of the State of Delaware and the Certificate
of Incorporation, any such committee shall exercise all powers and authority specifically granted to it by the Board of
Directors, which powers may include the authority to authorize the issuance of shares of common or preferred stock. Such
committees shall serve at the pleasure of the Board of Directors, keep minutes of their meetings and have such names as the
Board of Directors by resolution may determine and shall be responsible to the Board of Directors for the conduct of the
enterprises and affairs entrusted to them.
Section
2.16 Directors’
Compensation.
Directors shall receive
such compensation for attendance at any meetings of the Board and any expenses incidental to the performance of their duties as
the Board of Directors shall determine by resolution. Such compensation may be in addition to any compensation received by the
members of the Board of Directors in any other capacity.
Section
2.17 Action
Without Meeting.
Nothing contained in
these Bylaws shall be deemed to restrict the power of members of the Board of Directors or any committee designated by the Board
of Directors to take any action required or permitted to be taken by them without a meeting and may be documented, signed and delivered
in any manner permitted by Section 116 of the General Corporation Law of the State of Delaware; provided, however, that if
such action is taken without a meeting by consent by electronic transmission or transmissions, such electronic transmission or
transmissions must either set forth or be submitted with information from which it can be determined that the electronic transmission
or transmissions were authorized by the director.
Section
2.18 Chairman
of the Board of Directors.
The Board of Directors
shall elect a Chairman of the Board from among the members of the Board of Directors. The Chairman of the Board shall preside at
all meetings of the stockholders and of the Board of Directors, at which he or she is present, and perform such other duties and
exercise such other powers as from time to time may be assigned to him or her by these Bylaws or by the Board of Directors.
Article
III
OFFICERS
Section
3.1
Executive Officers.
The Board of Directors
shall elect from its own number, a Chief Executive Officer and a President (which may be the same or separate persons). The Board
of Directors may also elect such Vice Presidents as in the opinion of the Board of Directors the business of the Corporation requires,
a Treasurer and a Secretary, any of whom may or may not be directors. The Board of Directors may also elect, from time to time,
such other or additional officers as in its opinion are desirable for the conduct of business of the Corporation and such officers
shall hold office at the pleasure of the Board of Directors; provided, however, that the Chief Executive Officer shall not
hold any other office except that the Chief Executive Officer may serve as President.
Section
3.2
Powers and Duties of Officers.
The Chief Executive Officer
shall have overall responsibility for the management and direction of the business and affairs of the Corporation and shall exercise
such duties as customarily pertain to the office of chief executive officer and such other duties as may be prescribed from time
to time by the Board of Directors. The Chief Executive Officer shall be the senior officer of the Corporation and in case of the
inability or failure of the President to perform his or her duties, he or she shall perform the duties of the President. In the
absence or disability of the Chairman of the Board, the Chief Executive Officer shall perform the duties and exercise the powers
of the Chairman of the Board. The Chief Executive Officer may appoint and terminate the appointment or election of officers, agents
or employees other than those appointed or elected by the Board of Directors. The Chief Executive Officer may sign, execute and
deliver, in the name of the Corporation, powers of attorney, contracts, bonds and other obligations. The Chief Executive Officer
shall perform such other duties as may be prescribed from time to time by the Board of Directors or these Bylaws.
The offices of President
and Chief Executive Officer may be held by the same or separate persons, each having the powers and duties hereunder as determined
by the Board of Directors. The President of the Corporation shall be under the direction of the Chief Executive Officer and shall
exercise such powers and duties as may be delegated by the Chief Executive Officer and such other duties as may be prescribed from
time to time by the Board of Directors or assigned to him or her by these Bylaws. The President may sign, execute and deliver,
in the name of the Corporation, powers of attorney, contracts, bonds and other obligations.
Vice Presidents shall
have such powers and perform such duties as may be assigned to them by the Chairman of the Board, the Chief Executive Officer,
the President, the executive committee, if any, or the Board of Directors. A Vice President may sign and execute contracts and
other obligations pertaining to the regular course of his or her duties which implement policies established by the Board of Directors.
Unless the Board of
Directors otherwise declares by resolution, the Treasurer shall have general custody of all the funds and securities of the
Corporation and general supervision of the collection and disbursement of funds of the Corporation. He or she shall endorse
for collection on behalf of the Corporation checks, notes and other obligations, and shall deposit the same to the credit of
the Corporation in such bank or banks or depository as the Board of Directors may designate. He or she may sign, with the
Chairman of the Board, the Chief Executive Officer, the President or such other person or persons as may be designated for
the purpose by the Board of Directors, all bills of exchange or promissory notes of the Corporation. He or she shall enter or
cause to be entered regularly in the books of the Corporation a full and accurate account of all moneys received and paid by
him or her on account of the Corporation, shall at all reasonable times exhibit his or her books and accounts to any director
of the Corporation upon application at the office of the Corporation during business hours and, whenever required by the
Board of Directors, the Chairman of the Board, the Chief Executive Officer, or the President, shall render a statement of his
or her accounts. He or she shall perform such other duties as may be prescribed from time to time by the Board of Directors
or by these Bylaws. He or she may be required to give bond for the faithful performance of his or her duties in such sum and
with such surety as shall be approved by the Board of Directors. Any Assistant Treasurer shall, in the absence or disability
of the Treasurer, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have
such other powers as the Board of Directors may from time to time prescribe.
The Secretary shall keep
the minutes of all meetings of the stockholders and of the Board of Directors. The Secretary shall cause notice to be given of
meetings of stockholders, of the Board of Directors, and of any committee appointed by the Board of Directors. He or she shall
have custody of the corporate seal, minutes and records relating to the conduct and acts of the stockholders and Board of Directors,
which shall, at all reasonable times, be open to the examination of any director. The Secretary or any Assistant Secretary may
certify the record of proceedings of the meetings of the stockholders or of the Board of Directors or resolutions adopted at such
meetings, may sign or attest certificates, statements or reports required to be filed with governmental bodies or officials, may
sign acknowledgments of instruments, may give notices of meetings and shall perform such other duties and have such other powers
as the Board of Directors may from time to time prescribe.
Section
3.3
Bank Accounts.
In addition to such bank
accounts as may be authorized in the usual manner by resolution of the Board of Directors, the Treasurer, with approval of the
Chairman of the Board, the Chief Executive Officer or the President, may authorize such bank accounts to be opened or maintained
in the name and on behalf of the Corporation as he may deem necessary or appropriate, provided payments from such bank accounts
are to be made upon and according to the check of the Corporation, which may be signed jointly or singularly by either the manual
or facsimile signature or signatures of such officers or bonded employees of the Corporation as shall be specified in the written
instructions of the Treasurer or Assistant Treasurer of the Corporation with the approval of the Chairman of the Board, the Chief
Executive Officer or the President of the Corporation.
Section
3.4
Proxies; Stock Transfers.
Unless otherwise provided
in the Certificate of Incorporation or directed by the Board of Directors, the Chairman of the Board, the Chief Executive Officer
or the President or any Vice President or their designees shall have full power and authority on behalf of the Corporation to attend
and to vote upon all matters and resolutions at any meeting of stockholders of any corporation in which this Corporation may hold
stock, and may exercise on behalf of this Corporation any and all of the rights and powers incident to the ownership of such stock
at any such meeting, whether regular or special, and at all adjournments thereof, and shall have power and authority to execute
and deliver proxies and consents on behalf of this Corporation in connection with the exercise by this Corporation of the rights
and powers incident to the ownership of such stock, with full power of substitution or revocation. Unless otherwise provided in
the Certificate of Incorporation or directed by the Board of Directors, the Chairman of the Board, the Chief Executive Officer
or the President or any Vice President or their designees shall have full power and authority on behalf of the Corporation to transfer,
sell or dispose of stock of any corporation in which this Corporation may hold stock.
Article
IV
CAPITAL STOCK
Section
4.1
Shares.
The shares of the Corporation
shall be represented by a certificate or shall be uncertificated. Every holder of shares of capital stock of the Corporation represented
by a certificate shall be entitled to have a certificate signed by, or in the name of, the Corporation by any two (2) authorized
officers of the Corporation representing the number of shares registered in certificate form, and sealed with the seal of the Corporation.
Such seal may be a facsimile, engraved or printed. Within a reasonable time after the issuance or transfer of uncertificated shares,
the Corporation shall send to the registered owner thereof a written notice containing the information required to be set forth
or stated on certificates pursuant to Sections 151, 156, 202(a) or 218(a) of the General Corporation Law of the State of Delaware
or a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences
and relative participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations
or restrictions of such preferences and/or rights.
Any of or all the signatures
on a certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such an officer, transfer agent or registrar before such certificate
is issued, it may be issued by the Corporation with the same effect as if such officer, transfer agent or registrar had not ceased
to hold such position at the time of its issuance.
Except as otherwise expressly
provided by law, the rights and obligations of the holders of uncertificated shares and the rights and obligations of the holders
of certificates representing stock of the same class and series shall be identical.
Section
4.2
Transfer of Shares.
(a)
Upon surrender to the Corporation or the transfer agent of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignation or authority to transfer, it shall be the duty of the Corporation to issue a new certificate
to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Upon receipt of proper transfer
instructions from the registered owner of uncertificated shares such uncertificated shares shall be cancelled, and the issuance
of new equivalent uncertificated shares or certificated shares shall be made to the person entitled thereto and the transaction
shall be recorded upon the books of the Corporation.
(b)
The person in whose name shares of stock stand on the books of the Corporation shall be deemed by the Corporation to be
the owner thereof for all purposes, and the Corporation shall not be bound to recognize any equitable or other claim to or interest
in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as
otherwise provided by the laws of the State of Delaware.
Section
4.3
Lost Certificates.
The Board of Directors
or any transfer agent of the Corporation may direct a new certificate or certificates or uncertificated shares representing stock
of the Corporation to be issued in place of any certificate or certificates theretofore issued by the Corporation, alleged to have
been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate to be lost,
stolen or destroyed. When authorizing such issue of a new certificate or certificates or uncertificated shares, the Board of Directors
(or any transfer agent of the Corporation authorized to do so by a resolution of the Board of Directors) may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates,
or his or her legal representative, to give the Corporation a bond in such sum as the Board of Directors (or any transfer agent
so authorized) shall direct to indemnify the Corporation and the transfer agent against any claim that may be made against the
Corporation with respect to the certificate alleged to have been lost, stolen or destroyed or the issuance of such new certificates
or uncertificated shares, and such requirement may be general or confined to specific instances.
Section
4.4
Transfer Agent and Registrar.
The Board of Directors
may appoint one or more transfer agents and one or more registrars, and may require all certificates for shares to bear the manual
or facsimile signature or signatures of any of them.
Section
4.5
Regulations.
The Board of Directors
shall have power and authority to make all such rules and regulations as it may deem expedient concerning the issue, transfer,
registration, cancellation and replacement of certificates representing stock of the Corporation or uncertificated shares, which
rules and regulations shall comply in all respects with the rules and regulations of the transfer agent.
Article
V
GENERAL PROVISIONS
Section
5.1
Offices.
The Corporation shall
maintain a registered office in the State of Delaware as required by the laws of the State of Delaware. The Corporation may also
have offices in such other places, either within or without the State of Delaware, as the Board of Directors may from time to time
designate or as the business of the Corporation may require.
Section
5.2
Corporate Seal.
The corporate seal shall
have inscribed thereon the name of the Corporation, the year of its organization, and the words “Corporate Seal” and
“Delaware.”
Section
5.3
Fiscal Year.
Unless otherwise determined
by the Board of Directors, the fiscal year begins on January first each year.
Section
5.4
Notices and Waivers Thereof.
Whenever any notice is
required by the laws of the State of Delaware, the Certificate of Incorporation or these Bylaws to be given by the Corporation
to any stockholder, such notice may be given in any manner permitted by applicable law. An affidavit of the Secretary or Assistant
Secretary or of the transfer agent or other agent of the Corporation that the notice has been given shall, in the absence of fraud,
be prima facie evidence of the facts stated therein. Whenever any notice is required by the laws of the State of Delaware, the
Certificate of Incorporation or these Bylaws to be given to any director or officer of the Corporation, such notice may be given
to such director or officer in the same manner as notice may be given effectively to stockholders in accordance with applicable
law.
Whenever any notice is
required to be given by law, the Certificate of Incorporation, or these Bylaws to the person entitled to such notice, a waiver
thereof, in writing signed by the person, or by electronic transmission, whether before or after the meeting or the time stated
therein, shall be deemed equivalent in all respects to such notice to the full extent permitted by law. If such waiver is given
by electronic transmission, the electronic transmission must either set forth or be submitted with information from which it can
be determined that the electronic transmission was authorized by the person waiving notice. In addition, notice of any meeting
of the Board of Directors, or any committee thereof, need not be given to any director if such director shall sign the minutes
of such meeting or attend the meeting, except that if such director attends a meeting for the express purpose of objecting at the
beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened, then such director
shall not be deemed to have waived notice of such meeting.
Section
5.5
Saving Clause.
These Bylaws are subject
to the provisions of the Certificate of Incorporation and applicable law. In the event any provision of these Bylaws is inconsistent
with the Certificate of Incorporation or the corporate laws of the State of Delaware, such provision shall be invalid to the extent
only of such conflict, and such conflict shall not affect the validity of any other provision of these Bylaws.
Section
5.6
Amendments.
In furtherance and not
in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors, by action taken by the affirmative
vote of not less than 80% of the members of the Board of Directors then in office, is hereby expressly authorized and empowered
to adopt, amend or repeal any provision of the Bylaws of this Corporation.
Subject to the
rights of the holders of any series of preferred stock, these Bylaws may be adopted, amended or repealed by the affirmative
vote of the holders of not less than 66 2/3% of the total voting power of the then outstanding capital
stock of the Corporation entitled to vote thereon; provided, however, that this paragraph shall not apply to, and no
vote of the stockholders of the Corporation shall be required to authorize, the adoption, amendment or repeal of any
provision of the Bylaws by the Board of Directors in accordance with the preceding paragraph.
Section
5.7
Gender/Number.
As used in these Bylaws,
the masculine, feminine, or neuter gender, and the singular and plural number, shall include the other whenever the context so
indicates.
Section
5.8
Electronic Transmission.
For purposes of these
Bylaws, “electronic transmission” means any form of communication, not directly involving the physical transmission
of paper, including the use of, or participation in, one or more electronic networks or databases (including one or more distributed
electronic networks or databases), that creates a record that may be retained, retrieved, and reviewed by a recipient thereof,
and that may be directly reproduced in paper form by such recipient through an automated process.
Exhibit 4.1
NUMBER UNITS
U-
SEE REVERSE FOR CERTAIN
DEFINITIONS
CUSIP
LIBERTY MEDIA ACQUISITION CORPORATION
UNITS CONSISTING OF ONE SHARE OF SERIES
A COMMON STOCK AND
ONE-FIFTH OF ONE REDEEMABLE WARRANT, EACH WHOLE WARRANT ENTITLING THE HOLDER TO
PURCHASE ONE SHARE OF SERIES A COMMON STOCK
|
THIS CERTIFIES THAT
|
is the owner of
|
Units.
|
Each Unit (“Unit”) consists of one
(1) share of Series A common stock, par value $0.0001 per share (“Series A Common Stock”), of Liberty
Media Acquisition Corporation, a Delaware corporation (the “Company”), and one-fifth (1/5) of one redeemable
warrant (each whole warrant exercisable for one share of Series A Common Stock) (the “Warrant”). Each
whole Warrant entitles the holder to purchase one (1) share of Series A Common Stock (subject to adjustment) for $11.50 per share
(subject to adjustment). Only whole Warrants are exercisable. Each Warrant will become exercisable on the later of (i) thirty (30)
days after the Company’s completion of an initial merger, capital stock exchange, asset acquisition, stock purchase, reorganization
or other similar business combination with one or more businesses (each 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 shares of Series A Common Stock and Warrants comprising the Units represented
by this certificate are not transferable separately prior to , 2021, unless Citigroup Global Markets, Inc. and Morgan Stanley &
Co. LLC elect to allow separate trading earlier, 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 (the “Form 8-K”) and issuing a press release announcing when such earlier separate trading
will begin. The Company shall file the Form 8-K with the Securities and Exchange Commission no later than , 2021. No fractional
Warrants will be issued upon separation of the Units and only whole Warrants will trade. The terms of the Warrants are governed
by a Warrant Agreement, dated as of , 2021, between the Company and Continental Stock Transfer & Trust Company, as Warrant
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 are on file at the office of the Warrant Agent at One State Street,
30th Floor, New York, New York 10004, and are available to any Warrant holder on written request and without cost.
Upon the consummation of the Business Combination,
the Units represented by this certificate will automatically separate into the Series A Common Stock and Warrants comprising such
Units.
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 Delaware.
Witness the facsimile signature of its duly
authorized officers.
|
|
|
|
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Secretary
|
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Principal Executive Officer
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LIBERTY MEDIA 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 stock 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:
|
TEN COM
|
—
|
as tenants in common
|
|
UNIF GIFT MIN ACT
|
—
|
|
Custodian
|
|
|
|
|
|
|
|
|
(Cust)
|
|
(Minor)
|
|
TEN ENT
|
—
|
as tenants by the entireties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under Uniform Gifts to
|
|
JT TEN
|
—
|
as joint tenants with right of survivorship
and not as tenants in common
|
|
|
|
Minors
Act
(State)
|
Additional abbreviations may also be used
though not in the above list.
For value received, ______________ hereby
sell(s), assign(s) and transfer(s) unto ________________
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING
ZIP CODE, OF ASSIGNEE)
_______________Units represented by the within Certificate,
and do(es) hereby irrevocably constitute and appoint
________________________Attorney to transfer the said Units
on the books of the within named Company with full power of substitution in the premises.
Dated _______________
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 whatsoever.
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 , 2021, the holder(s) of this certificate shall be entitled to receive a pro-rata portion of certain funds
held in the trust account established in connection with the Company’s initial public offering only in the event that (i)
the Company redeems the shares of Series A Common Stock sold in its initial public offering and liquidates because it does not
consummate an initial business combination within the period of time set forth in the Company’s amended and restated certificate
of incorporation, (ii) the Company redeems the shares of Series A Common Stock sold in its initial public offering in connection
with a stockholder vote to amend the Company’s amended and restated certificate of incorporation (A) to modify the substance
or timing of the Company’s obligation to allow redemptions in connection with the Company’s initial business combination
or to redeem 100% of the Series A Common Stock if it does not complete its initial business combination within the period of time
set forth in the Company’s amended and restated certificate of incorporation, or (B) with respect to any other provision
relating to the holder(s) rights or pre-initial business combination activity, or (iii) if the holder(s) seek(s) to redeem for
cash his, her, its or their respective shares of Series A Common Stock in connection with a tender offer (or proxy solicitation,
solely in the event the Company seeks stockholder approval of the proposed initial business combination) setting forth the details
of a proposed initial business combination. In no other circumstances shall the holder(s) have any right or interest of any kind
in or to the trust account.
Exhibit 4.2
NUMBER
NUMBER
C
SHARES
SEE REVERSE FOR
CERTAIN
DEFINITIONS
CUSIP
LIBERTY MEDIA ACQUISITION CORPORATION
INCORPORATED UNDER THE LAWS OF THE
STATE OF DELAWARE
SERIES A COMMON STOCK
FULLY PAID AND NON-ASSESSABLE SHARES OF SERIES A COMMON STOCK
OF THE PAR VALUE OF $0.0001 EACH OF
LIBERTY MEDIA ACQUISITION CORPORATION
(THE “COMPANY”)
transferable on the books of the Company in person or by duly
authorized attorney upon surrender of this certificate properly endorsed.
Subject to the Company’s amended and restated certificate
of incorporation (as may be amended from time to time, the “restated certificate”), the shares of Series A common stock
will be redeemed by the Company if it is unable to complete a business combination within the period of time set forth in the restated
certificate, or by such later date approved by the Company’s stockholders in accordance with the restated certificate, all
as more fully described in the Company’s final prospectus dated , 2021.
This certificate is not valid unless countersigned by the Transfer
Agent and registered by the Registrar.
Witness the facsimile signatures of its
duly authorized officers.
|
Secretary
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[Corporate Seal]
Delaware
|
Principal Executive Officer
|
LIBERTY MEDIA ACQUISITION CORPORATION
The Company will furnish without charge to each stockholder
who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class
of stock or series thereof of the Company and the qualifications, limitations, or restrictions of such preferences and/or rights.
This certificate and the shares represented thereby are issued and shall be held subject to all the provisions of the restated
certificate and all amendments thereto and resolutions of the Board of Directors providing for the issue of securities (copies
of which may be obtained from the secretary of the Company), to all of which the holder of this certificate by acceptance hereof
assents. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though
they were written out in full according to applicable laws or regulations:
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TEN COM
|
—
|
as tenants in common
|
|
UNIF GIFT MIN ACT
|
—
|
|
Custodian
|
|
|
|
|
|
|
|
|
(Cust)
|
|
(Minor)
|
|
TEN ENT
|
—
|
as tenants by the entireties
|
|
|
|
|
|
|
|
|
|
|
|
|
Under Uniform Gifts to
|
|
JT TEN
|
—
|
as joint tenants with right of survivorship
and not as tenants in common
|
|
|
Minors
Act
(State)
|
Additional abbreviations may also be used though not in the
above list.
For value received, _______________hereby sell(s), assign(s)
and transfer(s) unto
(PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING NUMBER(S) OF ASSIGNEE(S))
(PLEASE PRINT
OR TYPEWRITE NAME(S) AND ADDRESS(ES), INCLUDING ZIP CODE, OF ASSIGNEE(S))
Shares of the capital stock represented
by the within Certificate, and do(es) hereby irrevocably constitutes and appoints
Attorney to transfer the said stock on the books of the within
named Company with full power of substitution in the premises.
Dated:
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND
WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE
WHATEVER.
Signature(s) Guaranteed:
By
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 , 2021, the holder(s) of this certificate shall be entitled to receive a pro-rata portion of certain funds
held in the trust account established in connection with the Company’s initial public offering only in the event that, subject
to the restated certificate, (i) the Company redeems the shares of Series A common stock sold in its initial public offering and
liquidates because it does not consummate an initial business combination within the period of time set forth in the restated certificate,
(ii) the Company redeems the shares of Series A common stock sold in its initial public offering in connection with a stockholder
vote to amend the restated certificate (A) to modify the substance or timing of the Company’s obligation to allow redemptions
in connection with the Company’s initial business combination or to redeem 100% of the Series A common stock if it does not
complete its initial business combination within the period of time set forth in the restated certificate , or (B) with respect
to any other provision relating to the holder(s) rights or pre-initial business combination activity, or (iii) if the holder(s)
seek(s) to redeem for cash his, her, its or their respective shares of Series A common stock in connection with a tender offer
(or proxy solicitation, solely in the event the Company seeks stockholder approval of the proposed initial business combination)
setting forth the details of a proposed initial business combination. In no other circumstances shall the holder(s) have any right
or interest of any kind in or to the trust account.
Exhibit 4.4
LIBERTY MEDIA ACQUISITION CORPORATION
and
CONTINENTAL STOCK TRANSFER & TRUST
COMPANY
WARRANT AGREEMENT
Dated as
of [•], 2021
THIS
WARRANT AGREEMENT (this “Agreement”), dated as of [•], 2021, is
by and between Liberty Media Acquisition Corporation, a Delaware corporation (the “Company”), Continental Stock
Transfer & Trust Company, a New York corporation, as warrant agent (in such capacity, the “Warrant Agent”).
WHEREAS, the Company
has entered into that certain Warrant Purchase Agreement with Liberty Media Acquisition Sponsor LLC, a Delaware limited liability
company (the “Sponsor”), pursuant to which the Sponsor agreed to purchase an aggregate of 9,000,000 warrants
(or 10,000,000 warrants in the aggregate 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 the closing of the Over-allotment
Option, if applicable) bearing the legend set forth in Exhibit B hereto (the “Sponsor Warrants”) at a
purchase price of $1.50 per Sponsor Warrant;
WHEREAS, the Company
has entered into that certain Forward Purchase Agreement with the Sponsor, pursuant to which the Sponsor has agreed to purchase
an aggregate of 25,000,000 forward purchase units, which consist in the aggregate of 25,000,000 shares of the Company’s
Series B common stock, par value $0.0001 per share (the “Series B Common Stock”), and 5,000,000 redeemable
warrants (the “Forward Purchase Warrants”) in a private placement transaction to occur substantially concurrently
with the closing of the Company’s initial Business Combination (as defined below). Each Forward Purchase Warrant will entitle
the holder thereof to purchase one share of the Company’s Series A common stock, par value $0.0001 per share (the “Series A
Common Stock”), for $11.50 per share, subject to adjustment, terms and limitations as described herein;
WHEREAS, as used in
this Agreement, the term “Common Stock” means the Series A Common Stock; provided, however,
that following any event described in Section 4.1.1(b) pursuant to which the Warrants become exercisable for
shares of the Company’s Series C common stock, par value $0.0001 per share (the “Series C Common Stock”),
in addition to Series A Common Stock, the term “Common Stock” shall be read to include the Series A Common
Stock and Series C Common Stock, where applicable, and any corresponding changes to the related provisions shall be made
consistent with the recommendations described in Section 4.9;
WHEREAS, in order
to finance the Company’s transaction costs in connection with an intended initial merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or similar business combination, involving the Company and one or more businesses
(a “Business Combination”), the Sponsor, Liberty Media Corporation, a Delaware corporation and the parent of
the Sponsor and any successor thereto (“LMC”), and its subsidiaries may, but are not obligated to, loan the
Company funds as the Company may require, of which up to $2,500,000 of such loans made to the Company may be convertible into
up to an additional 1,666,666 Sponsor Warrants at a price of $1.50 per Sponsor Warrant, and such Sponsor Warrants issued in this
way shall have the same terms and be in the same form as the other Sponsor Warrants described under this Agreement;
WHEREAS, the Company
is engaged in an initial public offering (the “Offering”) of units of the Company’s equity securities,
each such unit comprised of one share of Series A Common Stock and one-fifth of one Public Warrant (as defined below) (the
“Units”) and, in connection therewith, has determined to issue and deliver up to 11,500,000 redeemable warrants
(including up to 1,500,000 redeemable warrants subject to the Over-allotment Option) to public investors in the Offering (the
“Public Warrants” and, together with the Sponsor Warrants and the Forward Purchase Warrants, the “Warrants”).
Each whole Warrant entitles the holder thereof to purchase one share of Series A Common Stock, for $11.50 per whole share,
subject to adjustments, terms and limitations as described herein. Only whole warrants are exercisable. A holder of the Public
Warrants will not be able to exercise any fraction of a Warrant;
WHEREAS, the Company
has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-1,
File No. 333-250188 (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 and the shares of Series A Common Stock included in the Units;
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;
WHEREAS, the Company
desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the
respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and
WHEREAS, all acts
and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned
by or on behalf of the Warrant Agent (if a physical certificate is issued), as provided herein, the valid, binding and legal obligations
of the Company, and to authorize the execution and delivery of this Agreement.
NOW, THEREFORE, in
consideration of the mutual agreements herein contained, the parties hereto agree as follows:
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1.
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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.
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2.1
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Form of Warrant. Each Warrant
shall initially be issued in registered form only.
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2.2
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Effect of Countersignature.
If a physical certificate is issued, unless and until countersigned by the Warrant Agent,
either by manual or facsimile signature, pursuant to this Agreement, a certificated Warrant
shall be invalid and of no effect and may not be exercised by the holder thereof.
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2.3.1
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Warrant Register. The
Warrant Agent shall maintain books (the “Warrant Register”), for the
registration of original issuance and the registration of transfer of the Warrants. Upon
the initial issuance of the Warrants in book-entry form, the Warrant Agent shall issue
and register the Warrants in the names of the respective holders thereof in such denominations
and otherwise in accordance with instructions delivered to the Warrant Agent by the Company.
Ownership of beneficial interests in the Public Warrants shall be shown on, and the transfer
of such ownership shall be effected through, records maintained by institutions that
have accounts with The Depository Trust Company (the “Depositary”)
(such institution, with respect to a Warrant in its account, a “Participant”).
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If the Depositary subsequently
ceases to make its book-entry settlement system available for the Public Warrants, the Company may instruct the Warrant Agent
regarding making other arrangements for book-entry settlement. In the event that the Public Warrants are not eligible for, or
it is no longer necessary to have the Public Warrants available in, book-entry form, the Warrant Agent shall provide written instructions
to the Depositary to deliver to the Warrant Agent for cancellation each book-entry Public Warrant, and the Company shall instruct
the Warrant Agent to deliver to the Depositary definitive certificates in physical form evidencing such Warrants (“Definitive
Warrant Certificates”) which shall be in the form annexed hereto as Exhibit A.
Physical certificates, if issued,
shall be signed by, or bear the facsimile signature of, the Chief Executive Officer, Principal Financial Officer, Principal Accounting
Officer, Chief Corporate Development Officer, Chief Legal Officer or Secretary of the Company or other authorized 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.
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2.3.2
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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.
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2.4
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Detachability of Warrants. The
shares of Common Stock and Public Warrants comprising the Units shall begin separate
trading on the 52nd day following the date of the Prospectus or, if such 52nd day is
not on a day, other than a Saturday, Sunday or federal holiday, on which banks in New
York City are generally open for normal business (a “Business Day”),
then on the immediately succeeding Business Day following such date, or earlier (the
“Detachment Date”) with the consent of Citigroup Global Markets Inc.
and Morgan Stanley & Co. LLC, but in no event shall the shares of Common Stock
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) if the Detachment Date is earlier than the 52nd day
following the date of the Prospectus, the Company issues a press release announcing when
such earlier separate trading shall begin.
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2.5
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Fractional Warrants. The Company
shall not issue fractional Warrants other than as part of the Units, each of which is
comprised initially of one share of Series A Common Stock and one-fifth of one Public
Warrant. If, upon the detachment of Public Warrants from the Units or otherwise, a holder
of Warrants would be entitled to receive a fractional Warrant, the Company shall round
down to the nearest whole number the number of Warrants to be issued to such holder.
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2.6
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Sponsor Warrants. The Sponsor
Warrants shall be identical to the Public Warrants, except that so long as they are held
by the Sponsor or any of its Permitted Transferees (as defined below): (i) the Sponsor
Warrants may be exercised for cash or on a cashless basis, pursuant to Section 3.3.1(c) hereof
and (ii) the Sponsor Warrants shall not be redeemable by the Company. Unless
waived by the Company, the Sponsor Warrants and any shares of Common Stock issuable upon
exercise of the Sponsor Warrants may not be transferred, assigned or sold until thirty
(30) days after the completion by the Company of an initial Business Combination;
provided, however, that the Sponsor Warrants and any shares of Common Stock
issued upon exercise of the Sponsor Warrants may be transferred by the holders thereof:
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(a)
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to the Company’s officers
or directors, LMC’s officers or directors, their respective family members and
entities formed by such persons for investment or estate planning purposes which are
controlled by such persons or formed for their benefit or for charitable purposes;
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(b)
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to LMC or any entity in which LMC
or the officers and directors of LMC hold, in the aggregate, securities representing
no less than 25% of the outstanding voting power of such entity (so long as no other
holder or group holds a higher percentage of the voting power of such entity), and the
subsidiaries of LMC or such entities;
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(c)
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to any corporation or other entity
which, as a result of any spinoff, splitoff or other distribution transaction, becomes
the beneficial owner of the Sponsor Warrants (and shares issuable upon the exercise of
the Sponsor Warrants); or
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(d)
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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;
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provided, however,
that in the case of clauses (a) through (d) these permitted transferees (the “Permitted Transferees”)
must enter into a written agreement agreeing to be bound by these transfer restrictions and the other restrictions contained in
a certain letter agreement, by and among the Company, the Sponsor and the Company’s executive officers and directors, dated
as of the date of this Agreement, as it may be amended from time to time (the “Letter Agreement”).
In addition, the Sponsor or
its Permitted Transferees will be permitted to pledge or grant a security interest in such securities to secure bona fide indebtedness
or engage in hedging transactions; provided, that the holder thereof retains voting control over such securities prior to delivery
of shares upon foreclosure or upon satisfaction of the hedge. In the event of any liquidation prior to the completion of the Company’s
initial Business Combination or the Company’s completion of a liquidation, merger, stock exchange, reorganization or other
similar transaction which results in all of the Company’s public stockholders having the right to exchange their shares
of Common Stock for cash, securities or other property subsequent to the Company’s completion of its initial Business Combination,
the lockup period will be deemed terminated. In no event will any such transfer restrictions prohibit or otherwise restrict LMC’s
ability to reattribute its interest in the Sponsor or the Company between or among its tracking stock groups, combine such tracking
stock groups or otherwise take actions with respect to its tracking stock groups provided for or permitted by LMC’s organizational
documents or its policies.
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2.7
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Forward Purchase Warrants. The
Forward Purchase Warrants shall have the same terms and be in the same form as the Public
Warrants. Except as expressly noted herein, Forward Purchase Warrants shall be treated
as Public Warrants under this Agreement.
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3.
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Terms and Exercise of Warrants.
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3.1
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Warrant Price. Upon issuance,
each Warrant shall entitle the Registered Holder thereof, subject to the provisions of
such Warrant and of this Agreement, to purchase from the Company the number of shares
of Series A Common Stock stated therein, at the price of $11.50 per share of Series A
Common Stock, and shall be 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 initially mean the price per share of
Series A Common Stock (including in cash or by payment of Warrants pursuant to a
“cashless exercise,” to the extent permitted hereunder) described in the
prior sentence and such term shall be subject to adjustment as provided in Section 4.
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 three (3) Business 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.
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3.2
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Duration of Warrants. A Warrant
may be exercised only during the period (the “Exercise Period”) (A) commencing
on the later of: (i) the date that is thirty (30) days after the first date
on which the Company completes a Business Combination, and (ii) the date that is
twelve (12) months from the date of the closing of the Offering, and (B) terminating
at the earliest to occur of: (w) 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, (x) the liquidation of the Company in accordance with the Company’s
certificate of incorporation, as amended, restated or amended and restated from time
to time, if the Company fails to consummate a Business Combination, and (y) other
than with respect to the Sponsor Warrants then held by the Sponsor or its Permitted Transferees,
the Redemption Date (as defined below) as provided in Section 6.4 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 Section 3.3.2 below, with respect to an effective registration
statement or a valid exemption therefrom being available. Except with respect to the
right to receive the Redemption Price (as defined below) (other than with respect to
a Sponsor Warrant then held by the Sponsor or its Permitted Transferees) in the event
of a redemption (as set forth in Section 6 hereof), each Warrant (other than
a Sponsor Warrant then held by the Sponsor or its Permitted Transferees in the event
of a redemption) not exercised on or before the Expiration Date shall become null and
void, and all rights thereunder and all rights in respect thereof under this Agreement
shall cease at 5:00 p.m. New York City time on the Expiration Date. The Company
in its sole discretion may extend the duration of the Warrants by delaying the Expiration
Date; provided that the Company shall provide at least twenty (20) days prior
written notice of any such extension to Registered Holders of the Warrants and, provided
further that any such extension shall be identical in duration among all the Warrants.
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3.3
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Exercise of Warrants.
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3.3.1
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Payment. Subject to the
provisions of the Warrant and this Agreement, a Warrant may be exercised by the Registered
Holder thereof by delivering to the Warrant Agent at its corporate trust department (i) the
Definitive Warrant Certificate evidencing the Warrants to be exercised, or, in the case
of a Warrant represented by a book-entry, the Warrants to be exercised (the “Book-Entry
Warrants”) on the records of the Depositary to an account of the Warrant Agent
at the Depositary designated for such purposes in writing by the Warrant Agent to the
Depositary from time to time, (ii) an election to purchase (“Election
to Purchase”) any shares of Common Stock pursuant to the exercise of a Warrant,
properly completed and executed by the Registered Holder on the reverse of the Definitive
Warrant Certificate or, in the case of a Book-Entry Warrant, properly delivered by the
Participant in accordance with the Depositary’s procedures, and (iii) the
payment in full of the aggregate Warrant Price for all shares of Common Stock 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 shares of Common Stock and
the issuance of such shares of Common Stock, as follows:
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(a)
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in lawful money of the United States,
in good certified check or good bank draft payable to the order of the Warrant Agent;
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(b)
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in the event of a redemption pursuant
to Section 6.1 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 shares of Series A Common Stock equal to the lesser of (A) the quotient
obtained by dividing (x) the product of the number of shares of Series A Common
Stock underlying the Warrants, multiplied by the excess of the “Fair Market Value”
(as defined in this Section 3.3.1(b)) over the Warrant Price by (y) the
Fair Market Value and (B) the product of 0.361 and the number of shares of Series A
Common Stock underlying the Warrants. Solely for purposes of this Section 3.3.1(b),
Section 6.2 and Section 6.5, the “Fair Market Value”
shall mean the volume weighted average price of the applicable series of Common Stock
for the ten (10) trading days immediately following the date on which the notice
of redemption is sent to the holders of the Warrants, pursuant to Section 6
hereof;
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(c)
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with respect to any Sponsor Warrant,
so long as such Sponsor Warrant is held by the Sponsor or a Permitted Transferee, by
surrendering the Warrants for that number of shares of Series A Common Stock equal
to the quotient obtained by dividing (x) the product of the number of shares of
Series A Common Stock underlying the Warrants, multiplied by the excess of the “Sponsor
Fair Market Value” (as defined in this Section 3.3.1(c)) over the Warrant
Price, by (y) the Sponsor Fair Market Value. Solely for purposes of this Section 3.3.1(c),
the “Sponsor Fair Market Value” shall mean the average last reported
sale price of the applicable series of Common Stock for the ten (10) trading days
ending on the third trading day prior to the date on which notice of exercise of the
Warrant is sent to the Warrant Agent;
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(d)
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as provided in Section 6.2
with respect to a Make-Whole Exercise; or
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(e)
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as provided in Section 7.4
hereof;
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provided, however,
that this Section 3 shall be adjusted pursuant to Section 4.1.1(b) following any event described
in Section 4.1.1(b) pursuant to which the Warrants become exercisable for shares of Series C Common Stock
in addition to shares of Series A Common Stock, including to provide that exercise of the Warrants on a “cashless basis”
would be net of the proportionate number of shares of both Series A Common Stock and Series C Common Stock issuable
upon exercise of the Warrants. The Warrant Agent shall forward funds received for warrant exercises as promptly as practicable
after receipt thereof and in any event not later than by the 5th business day of the following month by wire transfer to an account
designated by the Company.
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3.3.2
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Issuance of Shares of Common
Stock 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 Section 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 shares of Common Stock to which
he, she or it is entitled, registered in such name or names as may be directed by him,
her or it, 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 of Common
Stock as to which such Warrant shall not have been exercised. Notwithstanding the foregoing,
the Company shall not be obligated to deliver any shares of Common Stock pursuant to
the exercise of a Warrant and shall have no obligation to settle such Warrant exercise
unless a (a) registration statement under the Securities Act with respect to the
shares of Common Stock underlying the Public Warrants is then effective and (b)
prospectus relating thereto is current, subject to the Company satisfying its obligations
under Section 7.4. No Warrant shall be exercisable for cash or on a cashless
basis and the Company shall not be obligated to issue shares of Common Stock to holders
seeking to exercise Warrants unless the shares of Common Stock issuable upon such Warrant
exercise have been registered, qualified or deemed to be exempt from registration or
qualification under the securities laws of the state of residence of the Registered Holder
of the Warrants. Subject to Section 4.7 of this Agreement, a Registered Holder
of Public Warrants may exercise its Public Warrants only for a whole number of shares
of Common Stock. In no event will the Company be required to net cash settle the Warrant
exercise. 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 Warrants
would be entitled, upon the exercise of such Warrants, to receive a fractional interest
in a share of Common Stock, the Company shall round down to the nearest whole number,
the number of shares of Common Stock to be issued to such holder.
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3.3.3
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Valid Issuance. All shares
of Common Stock issued upon the proper exercise of a Warrant in conformity with this
Agreement shall be validly issued, fully paid and non-assessable.
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3.3.4
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Date of Issuance. Each
person in whose name any book-entry position or certificate, as applicable, for shares
of Common Stock is issued shall for all purposes be deemed to have become the holder
of record of such shares of Common Stock 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 share
transfer books of the Company or book-entry system of the Warrant Agent are closed, such
person shall be deemed to have become the holder of such shares of Common Stock at the
close of business on the next succeeding date on which the share transfer books or book-entry
system are open.
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3.3.5
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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 Section 3.3.5; however, no holder
of a Warrant shall be subject to this Section 3.3.5 unless he, she or it
makes such election. If the election is made by a holder, 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 the
holder may specify (the “Maximum Percentage”) of the shares of any
series of Common Stock outstanding immediately after giving effect to such exercise.
For purposes of the foregoing sentence, the aggregate number of shares of any series
of Common Stock beneficially owned by such person and its affiliates shall include the
number of shares of such series of Common Stock issuable upon exercise of the Warrant
with respect to which the determination of such sentence is being made, but shall exclude
shares of such series of Common Stock 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
stock or warrants) subject to a limitation on conversion or exercise analogous to the
limitation contained herein. Except as set forth in the preceding sentence, for purposes
of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
For purposes of the Warrant, in determining the number of outstanding shares of any series
of Common Stock, the holder may rely on the number of outstanding shares of such series
of Common Stock 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 the
Company’s transfer agent setting forth the number of shares of such series of Common
Stock outstanding. For any reason at any time, upon the written request of the holder
of a Warrant who has made an election under this Section 3.3.5, the Company
shall, within two (2) Business Days confirm orally and in writing to such holder
the number of shares of any series of Common Stock then outstanding. In any case, the
number of outstanding shares of any series of Common Stock 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 outstanding shares
of such series of Common Stock 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.
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4.1.1
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Stock Splits and Distributions.
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(a)
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If after the date hereof, the number
of outstanding shares of Series A Common Stock is increased by a stock dividend
or share distribution to holders of Series A Common Stock payable in shares of Series A
Common Stock, or by a stock split of shares of Series A Common Stock or other similar
event, then, on the effective date of such stock dividend, stock split or similar event,
the number of shares of Series A Common Stock issuable on exercise of each Warrant
will be increased in proportion to such increase in the outstanding shares of Series A
Common Stock.
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(b)
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If after the date hereof, a stock
dividend or other share distribution is made to the holders of Series A Common Stock
consisting of shares of Series C Common Stock, then the terms of the Warrant will
be adjusted so that, upon exercise thereof the holder will be entitled to receive, in
addition to the shares of Series A Common Stock such holder is otherwise entitled,
such number of shares of Series C Common Stock which such holder would have received
had such holder exercised the Warrant in full immediately prior to the record date for
such stock dividend or share distribution and held the applicable number of shares of
Series A Common Stock at the time of record date for such stock dividend or share
distribution. For the avoidance of doubt, in such event, each Warrant shall become exercisable
for a basket of shares consisting of the same number of shares of Series A Common
Stock prior to such dividend or distribution together with the number of whole or fractional
shares of Series C Common Stock such holder would have been entitled to receive
if it had exercised such warrant immediately prior to the record date for such dividend
or distribution and the Warrant Price will not be adjusted as a result of such dividend
or distribution. Immediately following any event described in this Section 4.1.1(b) pursuant
to which the Warrants become exercisable for shares of Series C Common Stock in
addition to Series A Common Stock, the terms and provisions of this Agreement, including,
without limitation, Sections 3.1, 3.3, 4.1, 4.2, 4.3,
4.4, 4.5, 6 and 7.4, and the Definitive Warrant Certificates
and the form of Election to Purchase contained therein shall be adjusted by the Company
to provide for the shares of Series C Common Stock issuable upon exercise of the
Warrants and to effectuate the intent and purpose of this Section 4.1.1(b) based
on the recommendation (in the exercise of the reasonable judgement) of a firm of independent
registered public accountants, investment banking or other appraisal firm of recognized
national standing appointed by the Company in accordance with Section 4.9.
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4.1.2
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Series A Rights Offering.
If after the date hereof, the Company effects a rights offering (including, without limitation,
by distribution of stock purchase rights, warrants or options (collectively, “Rights”))
to all holders of shares of Series A Common Stock entitling holders to purchase
shares of Series A Common Stock at a price per share less than the “Rights
Offering Fair Market Value” (as defined below), and at the time of such Rights
offering (or distribution of Rights) each Warrant is exercisable only for Series A
Common Stock, then the number of shares of Series A Common Stock issuable on exercise
of each Warrant (the “Warrant Share Number”) shall be increased as
of immediately after the open of business on the “Ex-Dividend Date” (as defined
below) based on the following formula:
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where,
WS0 = the
Warrant Share Number in effect immediately prior to the open of business on the Ex-Dividend Date for such Rights offering;
WS' = the
Warrant Share Number in effect immediately after the open of business on such Ex-Dividend Date;
OS0 = the
number of shares of Series A Common Stock outstanding immediately prior to the open of business on such Ex-Dividend Date;
X = the
total number of shares of Series A Common Stock issuable pursuant to such Rights that are distributed to holders of Series A
Common Stock; and
Y = the
number equal to the aggregate price payable to exercise in full such Rights that are distributed to holders of shares of Series A
Common Stock divided by the Rights Offering Fair Market Value.
Such adjustment to Warrant Share
Number shall be made immediately after the opening of business on the Ex-Dividend Date for such distribution. To the extent that
shares of Series A Common Stock are not delivered after the expiration of such Rights, the Warrant Share Number may be readjusted
(in the sole discretion of the Board) to the Warrant Share Number that would then be in effect had the adjustment made upon the
distribution of such Rights been made on the basis of delivery of only the number of shares of Series A Common Stock actually
delivered pursuant to the Rights.
For purposes of this Section 4.1.2,
(i) if the Rights offering is for securities convertible into or exercisable for shares of Series A Common Stock, in
determining the price payable for shares of Series A Common Stock, there shall be taken into account any consideration received
for such Rights, as well as any additional amount payable upon exercise or conversion, (ii) “Rights Offering Fair
Market Value” means the volume weighted average price per share of the Series A Common Stock as reported during
the ten (10) trading day period ending on, and including, the last trading day prior to the Ex-Dividend Date, and (iii) “Ex-Dividend
Date” means the first date on which the shares of Series A Common Stock trade on the applicable exchange or in
the applicable market, regular way, without the right to receive such Rights.
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|
4.1.3
|
Other Rights Offering.
If after the date hereof, the Company effects a Rights offering (including, without limitation,
by distribution of Rights) (other than a Rights offering described in Section 4.1.2)
to all holders of shares of Common Stock entitling holders to purchase shares of the
Company’s common stock at a price per share less than the “Other Rights Offering
Fair Market Value” (as defined below) applicable thereto, then the Company will
cause to be delivered (immediately following the date such Rights are distributed to
the holders of Common Stock) to each holder of Warrants the number and type of Rights
such holder would have been entitled to receive had it exercised such Warrant immediately
prior to the record date for such Rights distribution and been the holder of the number
of shares and series of Common Stock deliverable upon exercise of a Warrant on such record
date. The Rights so delivered to such holder are referred to as the “Pass-Through
Securities.” The delivery of Pass-Through Securities to the holders of Warrants
as provided herein will be the sole adjustment required in connection with any such Rights
offering.
|
For purposes of this Section 4.1.3,
(i) if the Rights offering is for securities convertible into or exercisable for shares of Common Stock, in determining the
price payable for shares of Common Stock, there shall be taken into account any consideration received by the Company for such
Rights, as well as any additional amount payable upon exercise or conversion, (ii) “Other Rights Offering Fair Market
Value” means the volume weighted average price of the applicable series of the Company’s common stock as reported
on a national securities exchange during the ten (10) trading day period ending on the last trading day prior to the Ex-Dividend
Date, and (iii) “Ex-Dividend Date” means the first date on which the shares of the applicable series of
Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such Rights.
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|
4.1.4
|
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 the shares of Common Stock on account of such shares of Common Stock, other than (a) as
described in Sections 4.1.1, 4.1.2 or 4.1.3 above, (b) Ordinary Cash Dividends
(as defined below), (c) to satisfy the redemption rights of the holders of the shares
of Common Stock in connection with a proposed initial Business Combination, (d) to
satisfy the redemption rights of the holders of the shares of Common Stock in connection
with a stockholder vote to amend the Company’s amended and restated certificate
of incorporation (i) to modify the substance or timing of the Company’s obligation
to allow redemptions in connection with its initial Business Combination or to redeem
100% of the Company’s public shares of Series A Common Stock if the Company
does not complete its initial Business Combination within the time period set forth therein
or (ii) with respect to any other provision relating to the Company’s stockholders’
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 share of Common Stock in respect of such Extraordinary Dividend. For purposes of
this Section 4.1.4, “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 shares
of Common Stock during the 365-day period ending on the date of declaration of such dividend
or distribution, does not exceed $0.50 (as adjusted to appropriately reflect any of the
events referred to in this Section 4 and excluding cash dividends or cash
distributions that resulted in an adjustment to the Warrant Price or to the number of
shares of Common Stock issuable on exercise of each Warrant).
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|
4.2
|
Aggregation of Shares. If after
the date hereof, the number of outstanding shares of a series of Common Stock is decreased
by a consolidation, combination, reverse stock split or reclassification of shares of
such series of Common Stock or other similar event, then, on the effective date of such
consolidation, combination, reverse stock split, reclassification or similar event, the
number of shares of such series of Common Stock issuable on exercise of each Warrant
shall be decreased in proportion to such decrease in outstanding shares of such series
of Common Stock.
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|
4.3
|
Adjustments in Exercise Price.
Except as described in Section 4.1.1(b), whenever the number of shares of Common
Stock purchasable upon the exercise of the Warrants is adjusted, 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 shares of Common Stock purchasable upon the exercise of the Warrants immediately prior
to such adjustment, and (y) the denominator of which shall be the number of shares
of Common Stock so purchasable immediately thereafter.
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|
4.4
|
Raising of Capital in Connection
with the Initial Business Combination. If (x) the Company issues additional
shares of Series A Common Stock or equity-linked securities convertible, exercisable
or exchangeable for Series A Common Stock, excluding forward purchase units, for
capital raising purposes in connection with the closing of its initial Business Combination
at an issue price or effective issue price of less than $9.20 per share of Series A
Common Stock (with such issue price or effective issue price to be determined in good
faith by the Board and, in the case of any such issuance to the Sponsor or its affiliates,
without taking into account any shares of Series F common stock, par value $0.0001
per share, of the Company, or Series B Common Stock held by the Sponsor or such
affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”),
(y) the aggregate gross proceeds from such issuances represent more than 60% of
the total equity proceeds, and interest thereon, available for the funding of the Company’s
initial Business Combination on the date of the completion of the Company’s initial
Business Combination (net of redemptions), and (z) the volume-weighted average trading
price of shares of Series A Common Stock during the twenty (20) trading day period
starting on the trading day prior to the day on which the Company consummates its initial
Business Combination (such price, the “Market Value”) is below $9.20
per share, the Warrant Price shall be adjusted (to the nearest cent) to be equal to 115%
of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption
trigger price described in Section 6.1 shall be adjusted (to the nearest
cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price,
and the $10.00 per share redemption trigger price described in Section 6.2
shall be adjusted (to the nearest cent) to be equal to the higher of the Market Value
and the Newly Issued Price.
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|
|
4.5
|
Replacement of Securities upon Reorganization, etc.
In case of any reclassification or reorganization of the outstanding shares of Common
Stock (other than a change under Section 4.1 or Section 4.2 hereof
or that solely affects the par value of such shares of Common Stock), or in the case
of any merger or consolidation of the Company with or into another corporation (other
than a merger or consolidation in which the Company is the continuing corporation and
that does not result in any reclassification or reorganization of the outstanding shares
of Common Stock), 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 shares of
Common Stock of the Company immediately theretofore purchasable and receivable upon the
exercise of the rights represented thereby, the kind and amount of shares of stock or
other securities or property (including cash without interest) 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 shares of Common Stock were entitled to exercise a right of election as to the kind
or amount of securities, cash or other assets receivable upon such merger or consolidation,
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 shares of Common
Stock in such merger or consolidation 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 shares of Common Stock (other than a tender, exchange or redemption offer made
by the Company in connection with redemption rights held by stockholders of the Company
as provided for in the Company’s amended and restated certificate of incorporation
or as a result of the repurchase of shares of Common Stock by the Company if a proposed
initial Business Combination is presented to the stockholders 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
outstanding shares of Common Stock, 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 stockholder 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 shares of Common Stock held by such holder had been
purchased pursuant to such tender or exchange offer, subject to adjustments (from and
after the consummation of such tender or exchange offer) as nearly equivalent as possible
to the adjustments provided for in this Section 4; provided, further,
that if less than 70% of the consideration receivable by the holders of the shares of
Common Stock in the applicable event is payable in the form of common stock in the successor
entity that is listed for trading on a national securities exchange or is quoted in an
established over-the-counter market, or is to be so listed for trading or quoted immediately
following such event, and if the Registered Holder properly exercises the Warrant within
thirty (30) days following the public disclosure of the consummation of such applicable
event by the Company pursuant to a Current Report on Form 8-K filed with the Commission,
the Warrant Price shall be reduced by an amount (in dollars) equal to the difference
of (i) the Warrant Price in effect prior to such reduction minus (ii) (A) the
Per Share Consideration (as defined below) (but in no event less than zero) minus (B) the
Black-Scholes Warrant Value (as defined below). The “Black-Scholes Warrant Value”
means the value of a Warrant immediately prior to the consummation of the applicable
event based on the Black-Scholes Warrant Model for a Capped American Call on Bloomberg
Financial Markets (“Bloomberg”). For purposes of calculating such
amount, (1) Section 6 of this Agreement shall be taken into account,
(2) the price of each series of Common Stock shall be the volume weighted average
price of such series of Common Stock as reported during the ten (10) trading day
period ending on the trading day prior to the effective date of the applicable event,
(3) the assumed volatility shall be the 90 day volatility obtained from the HVT
function on Bloomberg determined as of the trading day immediately prior to the day of
the announcement of the applicable event, and (4) the assumed risk-free interest
rate shall correspond to the U.S. Treasury rate for a period equal to the remaining term
of the Warrant. “Per Share Consideration” means initially (subject
to adjustment pursuant to Section 4) (i) if the consideration paid to holders
of the shares of Series A Common Stock consists exclusively of cash, the amount
of such cash per share of Series A Common Stock, and (ii) in all other cases,
the volume weighted average price of the Series A Common Stock as reported during
the ten (10) trading day period ending on the trading day prior to the effective
date of the applicable event. If any reclassification or reorganization also results
in a change in shares of Series A Common Stock covered by Section 4.1.1
(including, if applicable, to provide for any Series C Common Stock issuable
upon exercise of this Warrant), then such adjustment shall be made pursuant to Section 4.1.1
or Sections 4.2, 4.3, 4.4 and this Section 4.5.
The provisions of this Section 4.5 shall similarly apply to successive reclassifications,
reorganizations, mergers or consolidations, sales or other transfers. In no event shall
the Warrant Price be reduced to less than the par value per share issuable upon exercise
of such Warrant.
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|
|
4.6
|
Notices of Changes in Warrant.
Upon every adjustment of the Warrant Price or the number of shares or series of Common
Stock 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 adjustment, if any, in the number of shares or series of Common Stock
purchasable at such price upon the exercise of a Warrant, setting forth in reasonable
detail the method of calculation and the facts upon which such calculation is based.
Upon the occurrence of any event specified in Sections 4.1, 4.2, 4.3,
4.4 or 4.5, the Company shall give written notice of the occurrence of
such event to each holder of a Warrant, at the last address set forth for such holder
in the Warrant Register, of the record date or the effective date of the event. Failure
to give such notice, or any defect therein, shall not affect the legality or validity
of such event.
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|
|
4.7
|
No Fractional Shares. Notwithstanding
any provision contained in this Agreement to the contrary, the Company shall not issue
fractional shares of Common Stock upon the exercise of Warrants. If, by reason of any
adjustment made pursuant to this Section 4, the holder of any Warrants would
be entitled, upon the exercise of such Warrants, to receive a fractional interest in
a share, the Company shall, upon such exercise, round down to the nearest whole number
the number of shares of Common Stock to be issued to such holder.
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|
|
4.8
|
Form of Warrant. The form
of Warrant need not be changed because of any adjustment pursuant to this Section 4,
and Warrants issued after such adjustment may state the same Warrant Price and the same
number of shares of Common Stock as is stated in the Warrants initially issued pursuant
to this Agreement; provided, however, that the Company may at any time
in its sole discretion make any change in the form of Warrant that the Company may deem
appropriate and that does not affect the substance thereof, and any Warrant thereafter
issued or countersigned, whether in exchange or substitution for an outstanding Warrant
or otherwise, may be in the form as so changed.
|
|
|
4.9
|
Other Events. In the case of
(a) any event occurring that affects 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, or (b) any event described
in Section 4.1.1(b) pursuant to which the Warrants become exercisable
for shares of Series C Common Stock in addition to Series A Common Stock, the
Company shall appoint a firm of independent registered public accountants, investment
banking or other appraisal firm of recognized national standing, which shall give its
recommendation 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 in their
reasonable judgment; provided, however, that under no circumstances shall
the Warrants be adjusted pursuant to Section 4.9(a) 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
by such firm in its reasonable judgment.
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|
|
5.
|
Transfer and Exchange of Warrants.
|
|
|
5.1
|
Registration of Transfer. The
Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant
upon the Warrant Register, upon surrender of such Warrant for transfer, properly endorsed
with signatures properly guaranteed and accompanied by appropriate instructions for transfer.
Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants
shall be issued and the old Warrant shall be cancelled by the Warrant Agent. In the case
of certificated Warrants, the Warrants so cancelled shall be delivered by the Warrant
Agent to the Company from time to time upon request.
|
|
|
5.2
|
Procedure for Surrender of Warrants.
Warrants may be surrendered to the Warrant Agent, together with a written request for
exchange or transfer reasonably acceptable to the Warrant Agent, duly executed by the
registered holder thereof, or by a duly authorized attorney, and thereupon the Warrant
Agent shall issue in exchange therefor one or more new Warrants as requested by the Registered
Holder of the Warrants so surrendered, representing an equal aggregate number of Warrants;
provided, however, that except as otherwise provided herein or with respect
to any Book-Entry Warrant, each Book-Entry Warrant may be transferred only in whole and
only to the Depositary, to another nominee of the Depositary, to a successor depository,
or to a nominee of a successor depository; provided further, however, that
in the event that a Warrant surrendered for transfer bears a restrictive legend (as in
the case of the Sponsor 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.
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|
|
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 except
for any tax or other third-party charges imposed in connection therewith.
|
|
|
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.
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|
|
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.
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|
|
6.1
|
Redemption of Warrants when the
price per share of Series A Common Stock equals or exceeds $18.00. Subject to
Sections 6.6 and 6.7 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(s) of the Warrant Agent, upon notice
to the Registered Holders of the Warrants, as described in Section 6.4 below,
at the price (the “Redemption Price”) of $0.01 per Warrant, provided
that (i) the last sales price of the Series A Common Stock reported has been
at least $18.00 per share (such Common Stock and its price subject to adjustment in compliance
with Section 4 hereof) on each of twenty (20) trading days, within the
thirty (30) trading-day period ending on the third trading day prior to the date
on which notice of the redemption is given and (ii) there is an effective registration
statement covering the shares of Common Stock issuable upon exercise of the Warrants,
and a current prospectus relating thereto, available throughout the 30-day Redemption
Period (as defined in Section 6.4 below) or the Company has elected to require
the exercise of the Warrants on a “cashless basis” pursuant to Section 3.3.1.
In connection with any redemption pursuant to this Section 6.1, the Company
shall provide notice to the Registered Holders of the Fair Market Value no later than
one (1) Business Day after the end of the ten (10) trading day period described
in the definition of Fair Market Value in Section 3.3.1(b).
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|
|
6.2
|
Redemption of Warrants when the price per share of Series A
Common Stock equals or exceeds $10.00. Subject to Sections 6.6 and 6.7
hereof, not less than all of the outstanding Warrants may be redeemed, at the option
of the Company, commencing once they are first 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 6.4 below, at a Redemption Price of $0.10 per Warrant,
provided that (i) the last reported sales price of the Series A Common Stock
reported has been at least $10.00 per share (such Common Stock and its price subject
to adjustment in compliance with Section 4 hereof) on the trading day prior
to the date on which notice of the redemption is given and (ii) there is an effective
registration statement covering the shares of Common Stock issuable upon exercise of
the Warrants, and a current prospectus relating thereto, available throughout the 30-day
Redemption Period (as defined in Section 6.4 below). During the Redemption
Period in connection with a redemption pursuant to this Section 6.2, Registered
Holders of the Warrants may elect to exercise their Warrants on a “cashless basis”
pursuant to Section 3.3.1 and (subject to Section 6.3) receive a number
of shares of Common Stock determined by reference to the table below, based on the Redemption
Date (calculated for purposes of the table as the period to expiration of the Warrants)
and the “Fair Market Value” (as such term is defined in Section 3.3.1(b))
(a “Make-Whole Exercise”). In connection with any redemption pursuant
to this Section 6.2, the Company shall provide notice to the Registered Holders
of the Fair Market Value no later than one (1) Business Day after the end of the
ten (10) trading day period described in the definition of Fair Market Value in
Section 3.3.1(b).
|
|
Redemption Date (period to expiration of the
|
|
Fair
Market Value of shares of Series A Common Stock ($)
|
|
|
Warrants)
|
|
≤10
|
|
|
11
|
|
|
12
|
|
|
13
|
|
|
14
|
|
|
15
|
|
|
16
|
|
|
17
|
|
|
≥18
|
|
|
60 months
|
|
|
0.261
|
|
|
|
0.281
|
|
|
|
0.297
|
|
|
|
0.311
|
|
|
|
0.324
|
|
|
|
0.337
|
|
|
|
0.348
|
|
|
|
0.358
|
|
|
|
0.361
|
|
|
57 months
|
|
|
0.257
|
|
|
|
0.277
|
|
|
|
0.294
|
|
|
|
0.310
|
|
|
|
0.324
|
|
|
|
0.337
|
|
|
|
0.348
|
|
|
|
0.358
|
|
|
|
0.361
|
|
|
54 months
|
|
|
0.252
|
|
|
|
0.272
|
|
|
|
0.291
|
|
|
|
0.307
|
|
|
|
0.322
|
|
|
|
0.335
|
|
|
|
0.347
|
|
|
|
0.357
|
|
|
|
0.361
|
|
|
51 months
|
|
|
0.246
|
|
|
|
0.268
|
|
|
|
0.287
|
|
|
|
0.304
|
|
|
|
0.320
|
|
|
|
0.333
|
|
|
|
0.346
|
|
|
|
0.357
|
|
|
|
0.361
|
|
|
48 months
|
|
|
0.241
|
|
|
|
0.263
|
|
|
|
0.283
|
|
|
|
0.301
|
|
|
|
0.317
|
|
|
|
0.332
|
|
|
|
0.344
|
|
|
|
0.356
|
|
|
|
0.361
|
|
|
45 months
|
|
|
0.235
|
|
|
|
0.258
|
|
|
|
0.279
|
|
|
|
0.298
|
|
|
|
0.315
|
|
|
|
0.330
|
|
|
|
0.343
|
|
|
|
0.356
|
|
|
|
0.361
|
|
|
42 months
|
|
|
0.228
|
|
|
|
0.252
|
|
|
|
0.274
|
|
|
|
0.294
|
|
|
|
0.312
|
|
|
|
0.328
|
|
|
|
0.342
|
|
|
|
0.355
|
|
|
|
0.361
|
|
|
39 months
|
|
|
0.221
|
|
|
|
0.246
|
|
|
|
0.269
|
|
|
|
0.290
|
|
|
|
0.309
|
|
|
|
0.325
|
|
|
|
0.340
|
|
|
|
0.354
|
|
|
|
0.361
|
|
|
36 months
|
|
|
0.213
|
|
|
|
0.239
|
|
|
|
0.263
|
|
|
|
0.285
|
|
|
|
0.305
|
|
|
|
0.323
|
|
|
|
0.339
|
|
|
|
0.353
|
|
|
|
0.361
|
|
|
33 months
|
|
|
0.205
|
|
|
|
0.232
|
|
|
|
0.257
|
|
|
|
0.280
|
|
|
|
0.301
|
|
|
|
0.320
|
|
|
|
0.337
|
|
|
|
0.352
|
|
|
|
0.361
|
|
|
30 months
|
|
|
0.196
|
|
|
|
0.224
|
|
|
|
0.250
|
|
|
|
0.274
|
|
|
|
0.297
|
|
|
|
0.316
|
|
|
|
0.335
|
|
|
|
0.351
|
|
|
|
0.361
|
|
|
27 months
|
|
|
0.185
|
|
|
|
0.214
|
|
|
|
0.242
|
|
|
|
0.268
|
|
|
|
0.291
|
|
|
|
0.313
|
|
|
|
0.332
|
|
|
|
0.350
|
|
|
|
0.361
|
|
|
24 months
|
|
|
0.173
|
|
|
|
0.204
|
|
|
|
0.233
|
|
|
|
0.260
|
|
|
|
0.285
|
|
|
|
0.308
|
|
|
|
0.329
|
|
|
|
0.348
|
|
|
|
0.361
|
|
|
21 months
|
|
|
0.161
|
|
|
|
0.193
|
|
|
|
0.223
|
|
|
|
0.252
|
|
|
|
0.279
|
|
|
|
0.304
|
|
|
|
0.326
|
|
|
|
0.347
|
|
|
|
0.361
|
|
|
18 months
|
|
|
0.146
|
|
|
|
0.179
|
|
|
|
0.211
|
|
|
|
0.242
|
|
|
|
0.271
|
|
|
|
0.298
|
|
|
|
0.322
|
|
|
|
0.345
|
|
|
|
0.361
|
|
|
15 months
|
|
|
0.130
|
|
|
|
0.164
|
|
|
|
0.197
|
|
|
|
0.230
|
|
|
|
0.262
|
|
|
|
0.291
|
|
|
|
0.317
|
|
|
|
0.342
|
|
|
|
0.361
|
|
|
12 months
|
|
|
0.111
|
|
|
|
0.146
|
|
|
|
0.181
|
|
|
|
0.216
|
|
|
|
0.250
|
|
|
|
0.282
|
|
|
|
0.312
|
|
|
|
0.339
|
|
|
|
0.361
|
|
|
9 months
|
|
|
0.090
|
|
|
|
0.125
|
|
|
|
0.162
|
|
|
|
0.199
|
|
|
|
0.237
|
|
|
|
0.272
|
|
|
|
0.305
|
|
|
|
0.336
|
|
|
|
0.361
|
|
|
6 months
|
|
|
0.065
|
|
|
|
0.099
|
|
|
|
0.137
|
|
|
|
0.178
|
|
|
|
0.219
|
|
|
|
0.259
|
|
|
|
0.296
|
|
|
|
0.331
|
|
|
|
0.361
|
|
|
3 months
|
|
|
0.034
|
|
|
|
0.065
|
|
|
|
0.104
|
|
|
|
0.150
|
|
|
|
0.197
|
|
|
|
0.243
|
|
|
|
0.286
|
|
|
|
0.326
|
|
|
|
0.361
|
|
|
0 months
|
|
|
—
|
|
|
|
—
|
|
|
|
0.042
|
|
|
|
0.115
|
|
|
|
0.179
|
|
|
|
0.233
|
|
|
|
0.281
|
|
|
|
0.323
|
|
|
|
0.361
|
|
The exact Fair Market Value and Redemption Date (as
defined below) may not be set forth in the table above, in which case, if the Fair Market Value is between two values in the table
or the Redemption Date is between two redemption dates in the table, the number of shares of Series A Common Stock to be
issued for each Warrant exercised in a Make-Whole Exercise shall be determined by a straight-line interpolation between the number
of shares set forth for the higher and lower Fair Market Values and the earlier and later redemption dates, as applicable, based
on a 365- or 366-day year, as applicable.
|
|
6.3
|
The stock prices set forth in the column
headings of the table above shall be adjusted as of any date on which the number of shares
of Series A Common Stock issuable upon exercise of a Warrant is adjusted pursuant
to Section 4. In the case of an adjustment to the number of shares of Series A
Common Stock, the adjusted stock prices in the column headings shall equal the stock
prices immediately prior to such adjustment, multiplied by a fraction, the numerator
of which is the number of shares of Series A Common Stock deliverable upon exercise
of a Warrant immediately prior to such adjustment and the denominator of which is the
number of shares of Series A Common Stock deliverable upon exercise of a Warrant
as so adjusted. In the case of an adjustment pursuant to Section 4.1.1(b) whereby
the Warrants become exercisable for shares of Series C Common Stock in addition
to Series A Common Stock, then adjustments shall be made to the table above and
to this Section 6 pursuant to Section 4.1.1(b), including to
provide for the shares of Series C Common Stock issuable upon exercise of the Warrants.
The number of shares, and the series of Common Stock, in the table above shall be adjusted
in the same manner and at the same time as the number and series of shares of Common
Stock issuable upon exercise of a Warrant. If the Exercise Price is adjusted, (a) in
the case of an adjustment pursuant to Section 4.4 hereof, the adjusted stock
prices in the column headings shall equal the stock prices immediately prior to such
adjustment multiplied by a fraction, the numerator of which is the higher of the Market
Value and the Newly Issued Price and the denominator of which is $10.00 and (b) in
the case of an adjustment pursuant to Section 4.1.4 hereof, the adjusted
stock prices in the column headings shall equal the stock prices immediately prior to
such adjustment less the decrease in the Exercise Price pursuant to such Exercise Price
adjustment. In no event shall the Warrants be exercisable in connection with a Make-Whole
Exercise for more than 0.361 shares of Series A Common Stock per Warrant (subject
to adjustment pursuant to Section 4).
|
|
|
6.4
|
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
or 6.2, the Company shall fix a date for the redemption (the “Redemption
Date”). Notice of redemption shall be mailed by first class mail, postage
prepaid, by the Company not less than thirty (30) days prior to the Redemption Date
(such 30-day period, the “Redemption Period”) to the Registered Holders
of the Warrants to be redeemed at their last addresses as they shall appear on the registration
books. Any notice mailed in the manner herein provided shall be conclusively presumed
to have been duly given whether or not the Registered Holder received such notice.
|
|
|
6.5
|
Exercise After Notice of Redemption.
The Warrants may be exercised, for cash (or on a “cashless basis” in accordance
with Section 3.3.1(b) or 6.2 of this Agreement) at any time after
notice of redemption shall have been given by the Company pursuant to Section 6.4
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 Section 3.3.1, the notice of redemption shall contain the information
necessary to calculate the number of shares of Common Stock to be received upon exercise
of the Warrants, and the Company shall provide the Registered Holders with the Fair Market
Value no later than one (1) Business Day after the end of the ten (10) trading
day period described in the definition of Fair Market Value in Section 3.3.1(b).
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.
|
|
|
6.6
|
Exclusion of Sponsor Warrants.
The Company agrees that the redemption rights provided in Section 6.1 and
Section 6.2 shall not apply to the Sponsor Warrants if at the time of the
redemption such Sponsor Warrants continue to be held by the initial holder thereof or
its Permitted Transferees. Sponsor Warrants that are transferred to persons other than
Permitted Transferees shall upon such transfer cease to be Sponsor Warrants and shall
become Public Warrants under this Agreement and shall be subject to redemption on the
same basis and subject to the same terms and conditions as Public Warrants.
|
|
|
6.7
|
Public Warrants Held By the Company’s
Officers or Directors. The Company agrees that if Public Warrants or Forward Purchase
Warrants are held by any of the Company’s officers or directors, the Public Warrants
and Forward Purchase Warrants held by such officers and directors will be subject to
the redemption rights provided in Section 6.2, except that such officers
and directors shall only receive “Fair Market Value” (“Fair Market
Value” in this Section 6.7 shall mean the last reported sale price
of the Public Warrants on the applicable Redemption Date) for such Public Warrants and
Forward Purchase Warrants so redeemed.
|
|
|
7.
|
Other Provisions Relating to Rights
of Holders of Warrants.
|
|
|
7.1
|
No Rights as Stockholder. Except
as set forth in Section 4.1.3, a Warrant does not entitle the Registered
Holder thereof to any of the rights of a stockholder 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 stockholders in respect of the meetings
of stockholders or the election of directors of the Company or any other matter.
|
|
|
7.2
|
Lost, Stolen, Mutilated, or Destroyed
Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company and
the Warrant Agent may on such terms as to indemnity or otherwise as they may in their
discretion impose (which shall, in the case of a mutilated Warrant, include the surrender
thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant so
lost, stolen, mutilated, or destroyed. Any such new Warrant shall constitute a substitute
contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated,
or destroyed Warrant shall be at any time enforceable by anyone.
|
|
|
7.3
|
Reservation of Shares of Common
Stock. The Company shall at all times reserve and keep available a number of its
authorized but unissued shares of Common Stock that shall be sufficient to permit the
exercise in full of all outstanding Warrants issued pursuant to this Agreement.
|
|
|
7.4
|
Registration of Shares of Common
Stock; Cashless Exercise at Company’s Option.
|
|
|
7.4.1
|
Registration of Shares of
Common Stock. The Company agrees that as soon as practicable, but in no event later
than twenty (20) Business Days after the closing of its initial Business Combination,
it shall use its commercially reasonable efforts to file with the Commission a registration
statement for the registration, under the Securities Act of the shares of Common Stock
issuable upon exercise of the Warrants. The Company shall use its commercially reasonable
efforts to cause the same to become effective within sixty (60) Business Days after the
closing of its initial Business Combination and to maintain the effectiveness of such
registration statement, and a current prospectus relating thereto, until the expiration
or redemption of the Warrants in accordance with the provisions of this Agreement. If
any such registration statement has not been declared effective by the sixtieth (60th)
Business Day following the closing of the Business Combination, holders of the Warrants
shall have the right, during the period beginning on the sixty-first (61st)
Business Day after the closing of the Business Combination and ending upon such registration
statement being declared effective by the Commission, and during any other period when
the Company shall fail to have maintained an effective registration statement covering
the issuance of the shares of Common Stock issuable upon exercise of the Warrants, to
exercise such Warrants on a “cashless basis,” by exchanging the Warrants
(in accordance with Section 3(a)(9) of the Securities Act (or any successor
statute) or another exemption) initially (subject to adjustment pursuant to Section 4)
for that number of shares of Series A Common Stock equal to the lesser of (A) the
quotient obtained by dividing (x) the product of the number of shares of Series A
Common Stock underlying the Warrants, multiplied by the excess of the “Fair Market
Value” (as defined below) over the Warrant Price by (y) the Fair Market Value
and (B) the product of 0.361 and the number of shares of Series A Common Stock
underlying the Warrants. Solely for purposes of this Section 7.4.1, “Fair
Market Value” shall mean the volume weighted average price of the applicable
series of Common Stock as reported during the ten (10) trading day period ending
on the trading day prior to the date that notice of exercise is received by the Warrant
Agent from the holder of such Warrants or its securities broker or intermediary. The
date that notice of “cashless exercise” is received by the Warrant Agent
shall be conclusively determined by the Warrant Agent. In connection with the “cashless
exercise” of a Public Warrant, the Company shall, upon request, provide the Warrant
Agent with an opinion of counsel for the Company (which shall be an outside law firm
with securities law experience) stating that (i) the exercise of the Warrants on
a “cashless basis” in accordance with this Section 7.4.1 is not
required to be registered under the Securities Act and (ii) the shares of Common
Stock 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. Except as provided in Section 7.4.2,
for the avoidance of doubt, unless and until all of the Warrants have been exercised
or have expired, the Company shall continue to be obligated to comply with its registration
obligations under the first three sentences of this Section 7.4.1.
|
|
|
7.4.2
|
Cashless Exercise at Company’s
Option. If Common Stock is at the time of any exercise of a Warrant not listed on
a national securities exchange such that it satisfies the definition of a “covered
security” under Section 18(b)(1) of the Securities Act (or any successor
statute), the Company may, at its option, (i) require holders of Public Warrants
who exercise Public Warrants to exercise such Public Warrants on a “cashless basis”
in accordance with Section 3(a)(9) of the Securities Act (or any successor
statute) as described in Section 7.4.1 and (ii) in the event the Company
so elects, the Company shall (x) not be required to file or maintain in effect a
registration statement for the registration, under the Securities Act, of the shares
of Common Stock issuable upon exercise of the Warrants, notwithstanding anything in this
Agreement to the contrary, and (y) use its commercially reasonable efforts to register
or qualify for sale the shares of Common Stock issuable upon exercise of the Public Warrant
under applicable blue sky laws to the extent an exemption is not available.
|
|
|
8.
|
Concerning the Warrant Agent and
Other Matters.
|
|
|
8.1
|
Payment of Taxes. The Company
shall from time to time promptly pay all taxes and charges that may be imposed upon the
Company or the Warrant Agent in respect of the issuance or delivery of shares of Common
Stock upon the exercise of the Warrants, but the Company and the Warrant Agent shall
not be obligated to pay any transfer taxes in respect of the Warrants or such shares
of Common Stock.
|
|
|
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 Company’s transfer
agent for the shares of Common Stock not later than the effective date of any such appointment.
|
|
|
8.2.3
|
Merger or Consolidation of
Warrant Agent. Any entity into which the Warrant Agent may be merged or with which
it may be consolidated or any entity resulting from any merger or consolidation to which
the Warrant Agent shall be a party shall be the successor Warrant Agent under this Agreement
without any further act.
|
|
|
8.3
|
Fees and Expenses of Warrant Agent.
|
|
|
8.3.1
|
Remuneration. The Company
agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant
Agent hereunder and shall, pursuant to its obligations under this Agreement, reimburse
the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably
incur in the execution of its duties hereunder.
|
|
|
8.3.2
|
Further Assurances. The
Company agrees to perform, execute, acknowledge, and deliver or cause to be performed,
executed, acknowledged, and delivered all such further and other acts, instruments, and
assurances as may reasonably be required by the Warrant Agent for the carrying out or
performing of the provisions of this Agreement.
|
|
|
8.4
|
Liability of Warrant Agent.
|
|
|
8.4.1
|
Reliance on Company Statement.
Whenever in the performance of its duties under this Agreement, the Warrant Agent shall
deem it necessary or desirable that any fact or matter be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a statement signed by the Chief Executive Officer,
Principal Financial Officer, Principal Accounting Officer, Chief Corporate Development
Officer, Chief Legal Officer or Secretary of the Company or other authorized officer
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, 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 shares of Common Stock to be
issued pursuant to this Agreement or any Warrant or as to whether any shares of Common
Stock 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
shares of Common Stock 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 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, addressed (until another address
is filed in writing by the Warrant Agent with the Company), as follows:
|
Liberty Media Acquisition Corporation
12300 Liberty Boulevard
Englewood, CO 80112
Attention: Chief Legal 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 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, addressed (until another address is filed in writing by the Warrant Agent
with the Company), as follows:
Continental Stock Transfer &
Trust Company
One State Street, 30th Floor
New York, NY 10004
Attention: Compliance Department
|
|
9.3
|
Applicable
Law and Exclusive Forum. The validity, interpretation, and performance of this Agreement
and of the Warrants shall be governed by and construed in accordance with the laws of
the State of Delaware. The Company hereby agrees that any action, proceeding or claim
against it arising out of or relating in any way to this Agreement or the Warrants will
be brought and enforced in the courts of the State of Delaware or the United States District
Court for the District of Delaware, and irrevocably submits to such jurisdiction, which
jurisdictions will be the exclusive forums for any such action, proceeding or claim.
The Company hereby waives any objection to such exclusive jurisdictions and that such
courts represent an inconvenient forum. Notwithstanding the foregoing, the provisions
of this paragraph will not apply to suits brought to enforce any liability or duty created
by the Exchange Act or any other claim for which the federal district courts of the United
States of America are the sole and exclusive forum, and the federal district courts of
the United States of America shall, to the fullest extent permitted by law, be the sole
and exclusive forum for the resolution of any complaint asserting such causes of action.
|
Any person or entity purchasing
or otherwise acquiring any interest in the Warrants shall be deemed to have notice of and to have consented to the forum provisions
in this Section 9.3. If any action, the subject matter of which is within the scope of the forum provisions above,
is filed in a court other than the state and federal courts located within the State of Delaware or the federal district courts
of the United States of America, as applicable (a “foreign action”), in the name of any warrant holder, such
warrant holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located
within the State of Delaware or the federal courts of the United States of America, as applicable, in connection with any action
brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service
of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in
the foreign action as agent for such warrant holder.
|
|
9.4
|
Persons Having Rights under this
Agreement. Nothing in this Agreement shall be construed to confer upon, or give to,
any person 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 his Warrant for inspection by it.
|
|
|
9.6
|
Counterparts; Electronic Signatures.
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. A signature
to this Agreement transmitted electronically shall have the same authority, effect, and
enforceability as an original signature.
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9.7
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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.
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9.8
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Amendments. This Agreement may
be amended by the parties hereto without the consent of any Registered Holder for the
purpose of (i) curing any ambiguity or to correct any mistake, including to conform
the provisions hereof to the description of the terms of the Warrants and this Agreement
set forth in the Prospectus, or defective provision contained herein, (ii) modifying
the terms of this Agreement and the Warrants pursuant to Section 4.1.1(b) or
Section 4.9 or (iii) adding or changing any provisions with respect to matters
or questions arising under this Agreement as the parties may deem necessary or desirable
and that the parties deem shall not adversely affect the rights of the Registered Holders
under this Agreement. All other modifications or amendments, including any modification
or amendment to increase the Warrant Price or shorten the Exercise Period and any amendment
to the terms of only the Sponsor Warrants or Forward Purchase Warrants, shall require
the vote or written consent of the Registered Holders of 50% of the then-outstanding
Public Warrants and, solely with respect to any amendment to the terms of the Sponsor
Warrants or Forward Purchase Warrants or any provision of this Agreement with respect
to the Sponsor Warrants and Forward Purchase Warrants, 50% of the then-outstanding Sponsor
Warrants or Forward Purchase Warrants, respectively. 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.
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9.9
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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.
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9.10
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Confidentiality. The Warrant
Agent and the Company agree that all books, records, information and data pertaining
to the business of the other party, including inter alia, personal, non-public
warrant holder information, which are exchanged or received pursuant to the negotiation
or the carrying out of this Agreement, including the fees for services, shall remain
confidential, and shall not be voluntarily disclosed to any other person, except as may
be required by law or regulation, including, without limitation, pursuant to requests
from the Securities and Exchange Commission and subpoenas from state or federal government
authorities (e.g., in divorce and criminal actions).
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Exhibit A Form of
Warrant Certificate
Exhibit B Legend
— Sponsor’s Warrants
IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be duly executed as of the date first above written.
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LIBERTY MEDIA ACQUISITION CORPORATION
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By:
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Name:
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Title:
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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 to Warrant Agreement]
EXHIBIT A
Form of Warrant Certificate
[FACE]
Number
Warrants
THIS WARRANT SHALL BE NULL AND VOID
IF NOT EXERCISED PRIOR TO
THE EXPIRATION OF THE EXERCISE PERIOD PROVIDED FOR
IN THE WARRANT AGREEMENT DESCRIBED BELOW
Liberty Media Acquisition Corporation
Incorporated Under the Laws of the State of Delaware
CUSIP [·]
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 shares
of Series A common stock, $0.0001 par value per share (“Series A Common Stock”), of Liberty Media
Acquisition Corporation, a Delaware corporation (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 shares of Series A Common Stock as set forth below, at the exercise price (the “Exercise Price”)
as determined pursuant to the Warrant Agreement, payable in lawful money (or through “cashless exercise” as provided
for in the Warrant Agreement) of the United States of America upon surrender of this Warrant Certificate and payment of the Exercise
Price at the office or agency of the Warrant Agent referred to below, subject to the conditions set forth herein and in the Warrant
Agreement. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the
Warrant Agreement.
Each whole Warrant
is initially exercisable for one fully paid and non-assessable share of Series A Common Stock. No fractional shares will
be issued upon exercise of any Warrant. If, upon the exercise of Warrant, a holder would be entitled to receive a fractional interest
in a share, the Company will, upon exercise, round down to the nearest whole number of the number of shares of Series A Common
Stock to be issued to the holder. The number of shares of Series A Common Stock 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 share of Series A Common Stock for any Warrant is equal to $11.50 per whole 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 null and 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 Delaware.
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LIBERTY MEDIA ACQUISITION CORPORATION
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By:
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Name:
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Title:
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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
shares of Series A Common Stock and are issued or to be issued pursuant to a Warrant Agreement dated as of [•], 2021
(the “Warrant Agreement”), duly executed and delivered by the Company to Continental Stock Transfer &
Trust Company, a New York corporation, as warrant agent (or successor warrant agent) (collectively, 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 designated office(s) 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 shares of Series A Common Stock to be issued upon exercise is effective under the Securities
Act and (ii) a prospectus thereunder relating to the shares of Series A Common Stock 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 shares of Series A Common Stock 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 share of Series A Common Stock, the Company shall,
upon exercise, round down to the nearest whole number of shares of Series A Common Stock to be issued to the holder of the
Warrant.
Warrant Certificates,
when surrendered at the designated office(s) 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(s) 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 third-party charges 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 stockholder 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
shares of Series A Common Stock and herewith tenders payment for such shares of Series A Common Stock to the order of
Liberty Media Acquisition Corporation (the “Company”) in the amount of $
in accordance with the terms hereof. The undersigned requests that a certificate for such shares of Series A Common Stock
be registered in the name of ,
whose address is
and that such shares of Series A Common Stock be delivered to whose address is .
If said number of shares of Series A Common Stock is less than all of the shares of Series A Common Stock purchasable
hereunder, the undersigned requests that a new Warrant Certificate representing the remaining balance of such shares of Series A
Common Stock 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 6.1 or Section 6.2 of the
Warrant Agreement and the Company has required cashless exercise pursuant to Section 6.5 of the Warrant Agreement,
the number of shares of Series A Common Stock that this Warrant is exercisable for shall be determined in accordance with
Section 3.3.1(b) and Section 6.5 of the Warrant Agreement.
In the event that
the Warrant is a Sponsor Warrant that is to be exercised on a “cashless” basis pursuant to Section 3.3.1(c) of
the Warrant Agreement, the number of shares of Series A Common Stock that this Warrant is exercisable for shall be determined
in accordance with Section 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 shares of Series A Common Stock 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
shares of Series A Common Stock 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 shares of Series A Common Stock. If said number of shares of Series A
Common Stock is less than all of the shares of Series A Common Stock purchasable hereunder (after giving effect to the cashless
exercise), the undersigned requests that a new Warrant Certificate representing the remaining balance of such shares of Series A
Common Stock be registered in the name of ,
whose address is ,
and that such Warrant Certificate be delivered to ,
whose address is .
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Date: ,
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(Signature)
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(Address)
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(Tax Identification Number)
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Signature Guaranteed:
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 SEC 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 LIBERTY MEDIA ACQUISITION CORPORATION (THE
“COMPANY”), Liberty Media Acquisition Sponsor LLC AND THE OTHER PARTIES
THERETO, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED PRIOR TO THE DATE THAT IS THIRTY (30) DAYS
AFTER THE DATE UPON WHICH THE COMPANY COMPLETES ITS INITIAL BUSINESS COMBINATION (AS DEFINED IN 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 SHARES
OF COMMON STOCK 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 5.1
Skadden,
Arps, Slate, Meagher & Flom llp
One
Rodney Square
P.O. Box
636
Wilmington,
Delaware 19899-0636
TEL: (302) 651-3000
FAX: (302) 651-3001
www.skadden.com
, 2021
Liberty Media Acquisition Corporation
12300 Liberty Boulevard
Englewood, Colorado 80112
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RE:
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Liberty Media Acquisition
Corporation
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Registration Statement on Form S-1
Ladies and Gentlemen:
We have acted as special counsel to Liberty
Media Corporation, in connection with the initial public offering by Liberty Media Acquisition Corporation, a Delaware corporation
(the “Company”), of up to 57,500,000 units of the Company (the “Units”) (including up to
7,500,000 Units subject to an over-allotment option), each Unit consisting of one share of Series A common stock of the Company,
par value $0.0001 per share (“Series A Common Stock”), and one-fifth of one redeemable warrant of the
Company (each whole warrant, a “Warrant”), each Warrant exercisable for the purchase of one share of Series A
Common Stock. The Units, the Series A Common Stock and Warrants, in each case, included as part of the Units, are collectively
referred to herein as the “Securities.”
This opinion is being furnished in accordance
with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended (the “Securities
Act”).
In rendering the opinions stated herein,
we have examined and relied upon the following:
(a) the
registration statement on Form S-1 (File No. 333-250188) of the Company relating to the Securities filed on November 19,
2020 with the Securities and Exchange Commission (the “Commission”) under the Securities Act, and Pre-Effective
Amendment No. 1 thereto (such registration statement, as so amended, being hereinafter referred to as the “Registration
Statement”);
Liberty Media Acquisition Corporation
, 2021
Page 2
(b) an
executed copy of a certificate of Michael E. Hurelbrink, Assistant Vice President and Secretary of the Company, dated the date
hereof (the “Secretary’s Certificate”);
(c) a
copy of the Company’s Restated Certificate of Incorporation, certified by the Secretary of State of the State of Delaware
as of January 5, 2021, certified pursuant to the Secretary’s Certificate;
(d) a
copy of the Company’s Bylaws, as amended and in effect as of the date hereof, certified pursuant to the Secretary’s
Certificate and filed as Exhibit 3.3 to the Registration Statement;
(e) a
copy of certain resolutions of the board of directors of the Company, adopted on , 2021, certified pursuant to the Secretary’s
Certificate;
(f) the
form of Underwriting Agreement (the “Underwriting Agreement”) proposed to be entered into by and between the
Company and Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC, as representatives of the several underwriters
named therein (the “Underwriters”), relating to the sale by the Company to the Underwriters of the Units, filed
as Exhibit 1.1 to the Registration Statement;
(g) the
form of Unit certificate to be used to evidence the Units, filed as Exhibit 4.1 to the Registration Statement (the “Unit
Certificate”);
(h) the
form of Warrant certificate, filed as Exhibit 4.3 to the Registration Statement (the “Warrant Certificate”);
(i) the
form of Warrant Agreement (the “Warrant Agreement”) proposed to be entered into by and between the Company and
Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (the “Warrant Agent”),
filed as Exhibit 4.4 to the Registration Statement; and
(j) a
copy of a certificate, dated January 5, 2021, and a bringdown verification thereof, dated the date hereof, from the Secretary
of State of the State of Delaware with respect to the Company’s existence and good standing in the State of Delaware.
Liberty Media Acquisition Corporation
, 2021
Page 3
We have also examined originals or copies,
certified or otherwise identified to our satisfaction, of such records of the Company and such agreements, certificates and receipts
of public officials, certificates of officers or other representatives of the Company and others, and such other documents as we
have deemed necessary or appropriate as a basis for the opinions stated below.
In our examination, we have assumed the
genuineness of all signatures, including electronic signatures, the legal capacity and competency of all natural persons, the authenticity
of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as facsimile,
electronic, certified or photocopied copies, and the authenticity of the originals of such copies. As to any facts relevant to
the opinions stated herein that we did not independently establish or verify, we have relied upon statements and representations
of officers and other representatives of the Company and others and of public officials, including the facts and conclusions set
forth in the Secretary’s Certificate.
We do not express any opinion with respect
to the laws of any jurisdiction other than the laws of the State of Delaware, including the General Corporation Law of the State
of Delaware (all of the foregoing being referred to as “Opined-on Law”).
As used herein, “Transaction Documents”
means the Underwriting Agreement, the Unit Certificate, the Warrant Certificate and the Warrant Agreement.
Based upon the foregoing and subject to
the qualifications and assumptions stated herein, we are of the opinion that when (i) the Registration Statement, as finally
amended (including all necessary post-effective amendments), has become effective under the Securities Act, (ii) the Underwriting
Agreement and the Warrant Agreement have been duly executed and delivered, and (iii) the Unit Certificate and the Warrant
Certificate are duly executed and delivered by the Company in accordance with the Underwriting Agreement and the Warrant Agreement,
as applicable, upon payment of the agreed upon consideration therefor, that:
1. The
Unit Certificate will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with
their terms under the laws of the State of Delaware.
2. The
shares of Series A Common Stock included in the Units will be validly issued, fully paid and nonassessable, provided that
the consideration therefor is not less than $0.0001 per share.
Liberty Media Acquisition Corporation
, 2021
Page 4
3. The
Warrants included in such Units will constitute valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms under the laws of the State of Delaware.
The opinions stated herein are subject to
the following qualifications:
(a) we
do not express any opinion with respect to the effect on the opinions stated herein of any bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer, preference and other similar laws or governmental orders affecting creditors’ rights generally,
and the opinions stated herein are limited by such laws and by general principles of equity (regardless of whether enforcement
is sought in equity or at law);
(b) we
do not express any opinion with respect to any law, rule or regulation that is applicable to any party to the Warrant Agreement
or the transactions contemplated thereby solely because such law, rule or regulation is part of a regulatory regime applicable
to any such party or any of its affiliates as a result of the specific assets or business operations of such party or such affiliates;
(c) we
do not express any opinion with respect to the enforceability of any provision contained in any Transaction Document relating to
any indemnification, contribution, non-reliance, exculpation, release, limitation or exclusion of remedies, waiver or other provisions
having similar effect that may be contrary to public policy or violative of federal or state securities laws, rules or regulations,
or to the extent any such provision purports to, or has the effect of, waiving or altering any statute of limitations;
(d) we
have assumed that the Warrant Agreement, when executed and delivered, will constitute the valid and binding obligation of the Warrant
Agent, enforceable against the Warrant Agent in accordance with its terms;
(e) to
the extent that any opinion relates to the enforceability of the choice of Delaware law and choice of Delaware forum provisions
contained in the any Transaction Document, the opinions stated herein are rendered solely in reliance upon Delaware Code title
6, section 2708 and are subject to the qualification that such enforceability may be subject to (i) the exceptions and limitations
in Delaware Code title 6, Section 2708 and (ii) principles of public policy, comity and constitutionality;
(f) we
do not express any opinion with respect to the enforceability of any provision of any Transaction Document to the extent that such
section purports to bind any Opinion Party to the exclusive jurisdiction of any particular federal court or courts; and
Liberty Media Acquisition Corporation
, 2021
Page 5
(g) we
call to your attention that irrespective of the agreement of the parties to any Transaction Document, a court may decline to hear
a case on grounds of forum non conveniens or other doctrine limiting the availability of such court as a forum for resolution of
disputes; in addition, we call to your attention that we do not express any opinion with respect to the subject matter jurisdiction
of the federal courts of the United States of America in any action arising out of or relating to any Transaction Document.
In addition, in rendering the foregoing
opinions we have assumed that:
(a) neither
the execution and delivery by the Company of the Transaction Documents nor the performance by the Company of its obligations thereunder,
including the issuance and sale of the Securities, (i) constitutes or will constitute a violation of, or a default under,
any lease, indenture, instrument or other agreement to which the Company or its property is subject, (ii) contravenes or will
contravene any order or decree of any governmental authority to which the Company or its property is subject, or (iii) violates
or will violate any law, rule or regulation to which the Company or its property is subject (except that we do not make the
assumption set forth in this clause (iii) with respect to the Opined-on Law); and
(b) neither
the execution and delivery by the Company of the Transaction Documents nor the performance by the Company of its obligations thereunder,
including the issuance and sale of the Securities, requires or will require the consent, approval, licensing or authorization of,
or any filing, recording or registration with, any governmental authority under any law, rule or regulation of any jurisdiction
(except that we do not make the assumption set forth in this clause (b) with respect to the Opined-on Law).
We hereby consent to the reference to our
firm under the heading “Legal Matters” in the prospectus forming part of the Registration Statement. We also hereby
consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement. In giving this consent,
we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities
Act or the General Rules and Regulations under the Securities Act.
Exhibit 10.2
[•], 2021
Liberty Media Acquisition Corporation
12300 Liberty Boulevard
Englewood, Colorado 80112
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Re:
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Initial Public Offering
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Ladies and Gentlemen:
This letter (this “Letter Agreement”)
is being delivered to you in accordance with the Underwriting Agreement (the “Underwriting Agreement”)
entered into or proposed to be entered into by and between Liberty Media Acquisition Corporation, a Delaware corporation (the “Company”),
and Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC, as the representatives of the several underwriters named therein
(each an “Underwriter” and collectively, the “Underwriters”), relating to an
underwritten initial public offering (the “Public Offering”), of up to 57,500,000 of the Company’s
units (including up to 7,500,000 units that may be purchased to cover the Underwriters’ option to purchase additional units,
if any) (the “Units”), each comprised of one share of Series A common stock of the Company, par value
$0.0001 per share (“Series A Common Stock”), and one-fifth of one redeemable warrant (each whole
warrant, a “Warrant”). Each Warrant entitles the holder thereof to purchase one share of Series A Common
Stock at a price of $11.50 per share, 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”). Certain capitalized terms used herein are defined in paragraph 11
hereof.
In order to induce the Company and the Underwriters
to enter into the Underwriting Agreement and to proceed with the Public Offering and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Liberty Media Acquisition Sponsor LLC, a Delaware limited liability
company (the “Sponsor”), and the other undersigned persons (each such other undersigned person, an “Insider”
and collectively, the “Insiders”), each hereby agrees, severally but not jointly, with the Company as
follows:
1.
The Sponsor and each Insider agrees with the Company that if the Company seeks stockholder approval of a proposed Business
Combination, then in connection with such proposed Business Combination, it, he or she shall (i) vote any Shares owned by
it, him or her in favor of any proposed Business Combination (including any proposals recommended by the Company’s Board
of Directors in connection with such Business Combination) and (ii) not redeem any Shares owned by it, him or her in connection
with such stockholder approval.
2. The
Sponsor and each Insider hereby agrees with the Company that in the event that the Company fails to consummate a Business
Combination within 24 months from the closing of the Public Offering (or 27 months from the closing of the Public Offering if
the Company has executed a letter of intent, agreement in principle or definitive agreement for a Business Combination within
24 months from the closing of the Public Offering (an “Agreement in Principle Event”)), or such
later period approved by the Company’s stockholders in accordance with the Company’s amended and restated
certificate of incorporation, 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 Series A Common 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 Stockholders’ rights as stockholders (including
the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following such
redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors,
dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of
creditors and the other requirements of applicable law. The Sponsor and each Insider agrees to not propose any amendment to
the Company’s amended and restated certificate of incorporation (A) to modify the substance or timing of the
Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to
redeem 100% of the Offering Shares if the Company does not complete its initial Business Combination within 24 months from
the closing of the Public Offering (or 27 months if an Agreement in Principle Event has occurred) or (B) with respect to any
other provision relating to stockholders’ rights or pre-initial Business Combination activity, unless the Company
provides its Public Stockholders with the opportunity to redeem their Offering Shares upon approval of any such amendment at
a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest
(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 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 (x) the consummation of a Business Combination, including, without limitation, any such rights
available in the context of a stockholder vote to approve such Business Combination or in the context of a tender offer made by
the Company to purchase Series A Common Shares and (y) a stockholder vote to approve an amendment to the Company’s amended
and restated certificate of incorporation (A) to modify the substance or timing of the Company’s obligation to allow redemptions
in connection with the Company’s initial Business Combination or to redeem 100% of the Offering Shares if the Company has
not consummated its initial Business Combination within 24 months from the closing of the Public Offering (or 27 months if an Agreement
in Principle Event has occurred) or (B) with respect to any other provision relating to stockholders’ rights or pre-initial
Business Combination activity (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 24 months from
the date of the closing of the Public Offering (or 27 months if an Agreement in Principle Event has occurred)).
3.
During the period commencing on the effective date of the Underwriting Agreement and ending 180 days after such date, the
Sponsor and each Insider shall not, without the prior written consent of Citigroup Global Markets Inc. and Morgan Stanley &
Co. LLC, offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the Commission promulgated
thereunder, with respect to, any Units, Series A Common Shares, Warrants or any securities convertible into, or exercisable, or
exchangeable for, Series A Common Shares or publicly announce an intention to effect any such transaction; provided, however,
that the foregoing does not apply to the forfeiture of any Founder Shares pursuant to their terms or any transfer of Founder Shares
to any current or future independent director of the Company (as long as such current or future independent director transferee
is subject to this Letter Agreement or executes an agreement substantially identical to the terms of this Letter Agreement, as
applicable to directors and officers at the time of such transfer; and as long as, to the extent any Section 16 reporting obligation
is triggered as a result of such transfer, any related Section 16 filing includes a practical explanation as to the nature of the
transfer). The provisions of this paragraph will not apply if (i) the transfer of securities is not for consideration and (ii)
the transferee has agreed in writing to be bound by the same terms described in this Letter Agreement to the extent and for the
duration that such terms remain in effect at the time of the transfer.
4. In
the event of the liquidation of the Trust Account, the Sponsor (which for purposes of clarification shall not extend to any
other stockholders, 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 registered public accounting firm) 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 (I) apply only to the extent necessary to ensure that such claims by a third party for services rendered (other than
the Company’s independent registered public accounting firm) 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 Offering Share or (ii) such lesser amount per Offering
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 as of the date of the liquidation of the Trust Account, in each case, net of the amount of interest which may be
withdrawn to pay taxes and (II) not apply with respect to any claims by any third party which has executed a waiver of any
and all of such third party’s rights to proceed against, or seek satisfaction from the Trust Account or with respect to
any claims under the Company’s indemnity of the Underwriters against certain liabilities, including liabilities under
the Securities Act of 1933, as amended (the “Securities Act”). 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.
5.
To the extent that the Underwriters do not exercise in full their option to purchase up to an additional 7,500,000 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 1,875,000 multiplied by a fraction, (i) the numerator of which
is 7,500,000 minus the number of Units purchased by the Underwriters upon the exercise of their option to purchase additional Units,
and (ii) the denominator of which is 7,500,000. All references in this Letter Agreement to Founder Shares of the Company being
forfeited shall take effect as a contribution of such Founder Shares to the Company’s capital as a matter of Delaware law.
The Sponsor and each Insider further acknowledge and agree that to the extent that the size of the Public Offering is increased
or decreased, the Company will effect a recapitalization or stock repurchase or redemption, as applicable, immediately prior to
the consummation of the Public Offering in such amount as to maintain the number of Founder Shares at 20.0% of the Company’s
issued and outstanding Shares upon the consummation of the Public Offering. In connection with such increase or decrease in the
size of the Public Offering, then (A) the references to 7,500,000 in the numerator and denominator of the formula in the first
sentence of this paragraph shall be changed to a number equal to 15.0% of the number of Series A Common Shares included in the
Units issued in the Public Offering and (B) the reference to 1,875,000 in the formula set forth in the immediately preceding sentence
shall be adjusted to such number of Founder Shares that the Sponsor would have to return to the Company in order for the number
of Founder Shares to equal an aggregate of 20.0% of the Company’s issued and outstanding Shares after the Public Offering.
6.
The Sponsor and each Insider hereby agrees and acknowledges that: (i) the Underwriters and the Company would be irreparably
injured in the event of a breach by such Sponsor or Insider of its, his or her obligations under paragraphs 1, 2, 3, 4, 5, 7(a),
7(b), and 9 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.
7.
(a) In addition to the provisions set forth in paragraph 3, the Sponsor and each Insider agrees that it, he or she shall
not Transfer (as defined below) any Founder Shares until the earlier of (A) one year after the completion of the Company’s
initial Business Combination and (B) subsequent to the Company’s initial Business Combination, (x) the date on which the
Company completes a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of the
Public Stockholders having the right to exchange their Series A Common Shares for cash, securities or other property or (y) if
the last reported sale price of the Series A Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock
dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing
at least 150 days after the Company’s initial Business Combination (the “Founder Shares Lock-up Period”).
(b) In
addition to the provisions set forth in paragraph 3, the Sponsor and each Insider agrees that it, he or she shall not
Transfer any Private Placement Warrants (or Series A Common Shares issued or issuable upon the exercise of the Private
Placement Warrants), until 30 days after the completion of the Company’s initial Business Combination (the
“Private Placement Warrants Lock-up Period”, together with the Founder Shares Lock-up Period, the
“Lock-up Periods”).
(c)
Notwithstanding the provisions set forth in paragraphs 3, 7(a) and (b), Transfers of the Founder Shares, Private Placement
Warrants and Series A Common Shares issued or issuable upon the exercise of the Private Placement Warrants and that are held by
the Sponsor or any Insider or any of their permitted transferees (that have complied with this paragraph 7(c) or Section 3, if
applicable), are permitted (i) to the Company’s directors or officers, to the directors or officers of Liberty Media Corporation,
a Delaware corporation (or any successor thereto) (“LMC”), and to their respective family members and entities
formed by such persons for investment or estate planning purposes which are controlled by such persons or formed for their benefit
or for charitable purposes, (ii) to LMC or any entity in which LMC or the officers and directors of LMC hold, in the aggregate,
securities representing no less than 25% of the outstanding voting power of such entity (so long as no other holder or group holds
a higher percentage of the voting power of such entity), and the subsidiaries of LMC or such entities, (iii) to any corporation
or other entity which, as a result of any spinoff, splitoff or other distribution transaction, becomes the beneficial owner of
the Founder Shares and Private Placement Warrants (and shares issuable upon the exercise of such warrants), or (iv) 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; provided, however, that in the case of clauses (i) through (iv), these
permitted transferees must enter into a written agreement with the Company, agreeing to be bound by the transfer restrictions
and other applicable restrictions in this Letter Agreement; provided, further, that, the Company shall enter into
such written agreement with the permitted transferee upon request of the Sponsor or the applicable Insider in form and substance
reasonably acceptable to the Company (such determination not to be unreasonably withheld, conditioned or delayed). Such written
agreement will not be deemed an assignment of this Letter Agreement. In addition, the Sponsor or its permitted transferees will
be permitted to pledge or grant a security interest in such securities to secure bona fide indebtedness or engage in hedging transactions;
provided, that the holder thereof retains voting control over such securities prior to delivery of shares upon foreclosure or
upon satisfaction of the hedge. In the event of any liquidation prior to the completion of the Company’s initial Business
Combination or the Company’s completion of a liquidation, merger, stock exchange, reorganization or other similar transaction
which results in all of the Company’s Public Stockholders having the right to exchange their shares of Series A Common Stock
for cash, securities or other property subsequent to the Company's completion of our initial Business Combination, the Lock-Up
Periods will be deemed terminated. In no event will paragraph 3 or this paragraph 7 prohibit or otherwise restrict LMC’s
ability to reattribute its interest in the Sponsor or the Company between or among its tracking stock groups, combine such tracking
stock groups or otherwise take actions with respect to its tracking stock groups provided for or permitted by LMC’s organizational
documents or its policies.
8. The
Sponsor and each Insider represents and warrants that, as of the date hereof, 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 material respects as of the date
when such information was furnished 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
material respects as of the date when such questionnaire was furnished. Except as otherwise disclosed in any publicly
available filings with the Commission, the Sponsor and each Insider represents and warrants, each as to itself and not
jointly with any other person, that: as of the date hereof, 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 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 is not currently a defendant in any such criminal proceeding.
9.
Except as disclosed in, or as expressly contemplated by, the Prospectus, or as otherwise contemplated in the proxy statement
related to the Company’s initial Business Combination 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).
10.
The Sponsor and each Insider has full right and power, without violating any agreement to which it is bound (including,
without limitation, any non-competition or non-solicitation agreement with any employer or former employer), to enter into this
Letter Agreement and, as applicable, to serve as an officer and/or a director on the board of directors of the Company and hereby
consents to being named in the Prospectus as an officer and/or a director of the Company.
11. As
used herein, (i) “Business Combination” shall mean a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or similar business combination, involving the Company and one or more
businesses; (ii) “Shares” shall mean, collectively, the Series A Common Shares and the Founder
Shares; (iii) “Series A Common Shares” shall mean shares of Series A Common Stock; (iv)
“Founder Shares” shall mean (a) the 14,375,000 shares of the Company’s Series F common stock,
par value $0.0001 per share, initially purchased by the Sponsor in a private placement prior to the Public Offering, (b)
shares of the Company’s Series B common stock, par value $0.0001 per share, issued upon the conversion of such shares
of Series F common stock, and (c) Series A Common Shares issued upon the conversion of such shares of Series B common
stock; (v) “Private Placement Warrants” shall mean the Warrants to purchase up to 9,000,000
Series A Common Shares of the Company (or 10,000,000 Series A Common Shares if the over-allotment option is exercised in
full) that the Sponsor has agreed to purchase for an aggregate purchase price of $13,500,000 in the aggregate (or $15,000,000
if the over-allotment option is exercised in full), or $1.50 per Warrant, in a private placement that shall occur
simultaneously with the consummation of the Public Offering; (vi) “Public Stockholders” shall
mean the holders of securities issued in the Public Offering; (vii) “Trust Account” shall mean
the trust fund into which a portion of the net proceeds of the Public Offering shall be deposited; and
(viii) “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 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) herein.
12.
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 (1) each Insider that is the subject of any such change, amendment modification or waiver,
(2) the Sponsor, and (3) the Company.
13.
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 Company and the Sponsor. 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.
14.
Nothing in this Letter Agreement shall be construed to confer upon, or give to, any person or entity other than the parties
hereto any right, remedy or claim under or by reason of this Letter Agreement or of any covenant, condition, stipulation, promise
or agreement hereof. All covenants, conditions, stipulations, promises and agreements contained in this Letter Agreement shall
be for the sole and exclusive benefit of the parties hereto and their successors, heirs, personal representatives and assigns and
permitted transferees.
15.
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.
16.
This Letter Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof
shall not affect the validity or enforceability of this Letter Agreement or of any other term or provision hereof. Furthermore,
in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of
this Letter Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid
and enforceable.
17.
This Letter Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware.
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 the State of Delaware or the United States District Court for the
District of Delaware, and irrevocably submit to such jurisdiction and venue, which jurisdiction and venue shall be exclusive and
(ii) waive any objection to such exclusive jurisdiction and venue or that such courts represent an inconvenient forum.
18.
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 deemed given (a) on the date of delivery if delivered personally or sent via e-mail (providing proof
of delivery) or (b) on the first (1st) business day following the date of dispatch if sent by a nationally recognized overnight
courier (providing proof of delivery).
19.
No party hereto shall 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.
20.
This Letter Agreement shall terminate on the earlier of (i) the expiration of the Lock-up Periods and (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 March 31, 2021; provided further that paragraph 4 of this Letter Agreement shall
survive such liquidation.
[Signature page follows]
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Sincerely,
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LIBERTY
MEDIA ACQUISITION SPONSOR LLC
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By:
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Name:
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Title:
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Name: Gregory B. Maffei
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Name: Albert E. Rosenthaler
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Name: Brian J. Wendling
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Name: Renee L. Wilm
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Name: Ajay Menon
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Name: John E. Welsh III
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Name: Geoffrey Y. Yang
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[Signature Page to Letter Agreement]
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Acknowledged and Agreed:
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Liberty
Media Acquisition Corporation
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By:
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Name:
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Title:
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[Signature Page to Letter Agreement]
Exhibit 10.3
INVESTMENT MANAGEMENT TRUST AGREEMENT
This Investment Management Trust Agreement
(this “Agreement”) is made effective as of [∙], 2021, by and between Liberty Media Acquisition
Corporation, a Delaware Corporation (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. 333-250188 (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 Series A common stock, par value $0.0001 per share (the “Common Stock”), and
one-fifth of one redeemable warrant, each whole warrant entitling the holder thereof to purchase one share of Common Stock (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 Citigroup Global Markets, Inc. and
Morgan Stanley & Co. LLC, as representatives (the “Representatives”) of the several underwriters
(the “Underwriters”) named therein; and
WHEREAS, as described in the Prospectus,
$500,000,000 of the gross proceeds of the Offering and sale of the Private Placement Warrants (as defined in the Underwriting Agreement)
(or $575,000,000 if the Underwriters’ over-allotment option is exercised in full) will be delivered to the Trustee to be
deposited and held in a segregated trust account located at all times in the United States (the “Trust Account”)
for the benefit of the Company and the holders of shares of Common Stock 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 stockholders for whose benefit the Trustee shall hold the Property will be referred
to as the “Public Stockholders,” and the Public Stockholders and the Company will be referred
to together as the “Beneficiaries”); and
WHEREAS, pursuant to the Underwriting
Agreement, a portion of the Property equal to $17,500,000, or $20,125,000 if the Underwriters’ over-allotment option is exercised
in full, is attributable to deferred underwriting discounts and commissions that may be payable by the Company to the Underwriters
upon the consummation of the Business Combination (as defined below) (the “Deferred Discount”); and
WHEREAS, the Company and the Trustee
desire to enter into this Agreement to set forth the terms and conditions pursuant to which the Trustee shall hold the Property.
NOW THEREFORE, IT IS AGREED:
1.
Agreements and Covenants of Trustee. The Trustee hereby agrees and covenants to:
(a) Hold
the Property in trust for the Beneficiaries in accordance with the terms of this Agreement in the Trust Account established
by the Trustee located in the United States at J.P. Morgan Chase Bank, N.A. (or at another U.S. chartered commercial bank
with consolidated assets of $100 billion or more) and at a brokerage institution selected by the Trustee that is reasonably
satisfactory to the Company;
(b)
Manage, supervise and administer the Trust Account subject to the terms and conditions set forth herein;
(c)
In a timely manner, upon the written instruction of the Company, invest and reinvest the Property in United States government
securities within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, having a maturity of 185 days
or less, or in money market funds meeting the conditions of paragraphs (d)(1), (d)(2), (d)(3) and (d)(4) of Rule 2a-7 promulgated
under the Investment Company Act of 1940, as amended, which invest only in direct U.S. government treasury obligations, as determined
by the Company; it being understood that the Trust Account will earn no interest while account funds are uninvested awaiting the
Company’s instructions hereunder; 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 Representatives of all communications received by the Trustee with respect to any Property
requiring action by the Company;
(f)
Supply any necessary information or documents as may be requested by the Company (or its authorized agents) in connection
with the Company’s preparation of tax returns relating to assets held in the Trust Account or in connection with the preparation
or completion 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 signed on behalf of the Company by its Chief Executive Officer, Principal Financial
Officer, Principal Accounting Officer, Chief Corporate Development Officer, Chief Legal Officer or Secretary of the Company
or other authorized officer of the Company, and complete the liquidation of the Trust Account and distribute the Property in
the Trust Account, including interest (which interest shall be net of taxes payable, and less up to $100,000 of interest may
be released to the Company to pay dissolution expenses, it being understood that the Trustee has no obligation to monitor or
question the Company’s position that an allocation has been made for taxes payable), only as directed in the
Termination Letter and the other documents referred to therein; provided, that, in the case a Termination Letter in
the form of Exhibit A is received, or (y) upon the date which is twenty-four (24) months after the closing of the Offering
(or twenty- seven (27) months from the closing of the Offering if the Company has executed a letter of intent, agreement in
principle or definitive agreement for a Business Combination within twenty-four (24) months from the closing of the Offering
but has not completed a Business Combination within such twenty-four (24) month period), or such later date as may be
approved by the Company’s stockholders in accordance with the Company’s amended and restated certificate of
incorporation, as it may be amended from time to time, 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 taxes
payable, and less up to $100,000 of interest may be released to the Company to pay dissolution expenses), shall be
distributed to the Public Stockholders of record as of such date;
(j)
Upon written request from the Company, which may be given from time to time in a form substantially similar to that attached
hereto as Exhibit C (a “Tax Payment Withdrawal Instruction”), withdraw from the Trust Account and distribute
to the Company the amount of interest earned on the Property requested by the Company to cover any tax obligation owed by the Company
as a result of assets of the Company or interest or other income earned on the Property, which amount shall be delivered directly
to the Company by electronic funds transfer or other method of prompt payment, and the Company shall forward such payment to the
relevant taxing authority; 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 per share initially deposited in
the Trust Account; provided, further, however, that if the tax to be paid is a franchise tax, the written
request by the Company to make such distribution shall be accompanied by a copy of the franchise tax bill for the Company (it being
acknowledged and agreed that any such amount in excess of interest income earned on the Property shall not be payable from the
Trust Account). The written request of the Company referenced above shall constitute presumptive evidence that the Company is entitled
to said funds, and the Trustee shall have no responsibility to look beyond said request;
(k) Upon
written request from the Company, which may be given from time to time in a form substantially similar to that attached
hereto as Exhibit D (a “Stockholder Redemption Withdrawal Instruction”), the Trustee shall
distribute on behalf of the Company the amount requested by the Company to be used to redeem shares of Common Stock from
Public Stockholders properly submitted in connection with a stockholder vote to approve an amendment to the Company’s
amended and restated certificate of incorporation (A) to modify the substance or timing of the Company’s
obligation to allow redemption in connection with the Company’s initial merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or similar business combination involving the Company and one or more businesses
(a “Business Combination”) or to redeem 100% of the Company’s public shares if it does not
complete its initial Business Combination within twenty-four (24) months from the closing of the Offering (or twenty-seven
(27) months from the closing of the Offering if the Company has executed a letter of intent, agreement in principle or
definitive agreement for a Business Combination within twenty-four (24) months from the closing of the Offering but has not
completed a Business Combination within such twenty-four (24) month period) or (B) with respect to any other provision
relating to stockholders’ rights or pre-initial Business Combination activity. The written request of the Company
referenced above shall constitute presumptive evidence that the Company is entitled to distribute said funds, and the Trustee
shall have no responsibility to look beyond said request; and
(l)
Not make any withdrawals or distributions from the Trust Account other than pursuant to Section 1(i), (j) or (k) above.
2.
Agreements and Covenants of the Company. The Company hereby agrees and covenants to:
(a)
Give all instructions to the Trustee hereunder in writing, signed by the Company’s Chief Executive Officer, Principal
Financial Officer, Principal Accounting Officer, Chief Corporate Development Officer, Chief Legal Officer, Secretary or other authorized
officer of the Company. 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 reasonable
and documented expenses, including reasonable outside counsel fees and disbursements, or losses suffered by the Trustee in connection
with any action taken by it hereunder and in connection with any action, suit or other proceeding brought against the Trustee involving
any claim, or in connection with any claim or demand, which in any way arises out of or relates to this Agreement, the services
of the Trustee hereunder, or the Property or any interest earned on the Property, except for expenses and losses resulting from
the Trustee’s gross negligence, fraud or willful misconduct. Promptly after the receipt by the Trustee of notice of demand
or claim or the commencement of any action, suit or proceeding, pursuant to which the Trustee intends to seek indemnification under
this Section 2(b), it shall notify the Company in writing of such claim (hereinafter referred to as the “Indemnified
Claim”). The Trustee shall have the right to conduct and manage the defense against such Indemnified Claim; provided
that the Trustee shall obtain the consent of the Company with respect to the selection of counsel, which consent shall not be unreasonably
withheld. The Trustee may not agree to settle any Indemnified Claim without the prior written consent of the Company, which such
consent shall not be unreasonably withheld. The Company may participate in such action with its own counsel;
(c)
Pay the Trustee the fees set forth on Schedule A hereto, including an initial acceptance fee, annual administration fee,
and transaction processing fee which fees shall be subject to modification by the parties from time to time. It is expressly understood
that the Property shall not be used to pay such fees unless and until it is distributed to the Company pursuant to Sections
1(i) through 1(j) hereof. The Company shall pay the Trustee the initial acceptance fee and the first annual administration
fee at the consummation of the Offering. The Company shall not be responsible for any other fees or charges of the Trustee except
as set forth in this Section 2(c) and as may be provided in Section 2(b) hereof;
(d)
In connection with any vote of the Company’s stockholders regarding a Business Combination, provide to the Trustee
an affidavit or certificate of the inspector of elections for the stockholder meeting verifying the vote of such stockholders regarding
such Business Combination;
(e)
Provide the Representatives with a copy of any Termination Letter(s) and/or any other correspondence that is sent to the
Trustee with respect to any proposed withdrawal from the Trust Account promptly after it issues the same;
(f)
Expressly provide in any Instruction Letter (as defined in Exhibit A) delivered in connection with a Termination Letter
in the Form of Exhibit A that the Deferred Discount be paid directly to the account or accounts directed by the Representatives;
and
(g)
Instruct the Trustee to make only those distributions that are permitted under this Agreement, and refrain from instructing
the Trustee to make any distributions that are not permitted under this Agreement.
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 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 with written notification to the Company,
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, franchise and 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) or 1(k) hereof.
4.
Trust Account Waiver. The Trustee has no right of set-off or any right, title, interest or claim of any kind (“Claim”)
to, or to any monies in, the Trust Account, and hereby irrevocably waives any Claim to, or to any monies in, the Trust Account
that it may have now or in the future. In the event the Trustee has any Claim against the Company under this Agreement, including,
without limitation, under Section 2(b) or Section 2(c) hereof, the Trustee shall pursue such Claim solely against
the Company and its assets outside the Trust Account and not against the Property or any monies in the Trust Account.
5.
Termination. This Agreement shall terminate as follows:
(a) If
the Trustee gives written notice to the Company that it desires to resign under this Agreement, the Company shall use its
reasonable efforts to locate a successor trustee, pending which the Trustee shall continue to act in accordance with this
Agreement. At such time that the Company notifies the Trustee that a successor trustee has been appointed and has agreed to
become subject to the terms of this Agreement (whether following the Trustee giving notice that it desires to resign under
this Agreement or the Company otherwise electing to replace the Trustee under 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;
(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 Liberty Media Acquisition Sponsor LLC for purposes of funding the Trust Account shall
be promptly returned to the Company or Liberty Media Acquisition 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 out-of-pocket 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.
(c)
This Agreement contains the entire agreement and understanding of the parties hereto with respect to the subject matter
hereof. Except for Section 1(i), 1(j) and 1(k) hereof (which sections may not be modified, amended or deleted without
the affirmative vote of sixty-six and 2/3rds percent (66⅔%) of the then outstanding shares of Common Stock, Series B shares
of common stock of the Company, par value $0.0001 per share, and Series F shares of common stock of the Company, par value $0.0001
per share, voting together as a single class; provided that no such amendment will affect any Public Stockholder who has otherwise
indicated his, her or its election to redeem his, her or its shares of Common Stock in connection with a stockholder 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:
if to the Trustee, to:
Continental Stock Transfer & Trust Company
One State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf & Celeste Gonzalez
Email: fwolf@continentalstock.com
Email: cgonzalez@continentalstock.com
if to the Company, to:
Liberty Media Acquisition Corporation
12300 Liberty Boulevard
Englewood, CO 80012
Attn: Renee L. Wilm, Esq., Chief Legal Officer
Email: [Separately provided]
in each case, with copies to:
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, CA 90071
Attn: Gregg A. Noel, Esq.
Email: gregg.noel@skadden.com
and
Citigroup Global Markets, Inc.
399 Greenwich Street
New York, NY 10013
Attn: General Counsel
and
Morgan Stanley & Co. LLC
1585 Broadway Avenue
New York, NY 10036
Attn: Kyle McDonnell
Email: kyle.mcdonnell@morganstanley.com
and
Ropes & Gray LLP
1211 Avenue of the Americas
New York, NY 10036
Attn: Paul D. Tropp, Esq.
Email: Paul.tropp@ropesgray.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 Representatives on behalf of the Underwriters
are third party beneficiaries 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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Francis Wolf
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Title:
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Vice President
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Liberty Media Acquisition Corporation
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By:
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/s/
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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 the Offering by wire transfer.
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$3,500.00
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Annual fee
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First year fee payable at initial closing of the Offering by wire transfer, thereafter on the anniversary of the effective date of the Offering by wire transfer or check.
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$10,000.00
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Transaction processing fee for disbursements to Company under Sections 1(i) and 1(j)
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Billed to Company following disbursement made to Company under Sections 1(i) and 1(j)
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$250.00
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Paying Agent services as required pursuant to Section 1(i) and 1(k)
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Billed to Company upon delivery of service pursuant to Section 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 & Celeste Gonzalez
Re: Trust Account - Termination Letter
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section 1(i) of the Investment Management
Trust Agreement between Liberty Media Acquisition Corporation (the “Company”) and Continental Stock Transfer
& Trust Company (the “Trustee”), dated as of [∙], 2021 (the “Trust Agreement”),
this is to advise you that the Company has entered into an agreement with (the
“Target Business”) to consummate a merger, capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination with the Target Business (the “Business Combination”)
on or about [insert date]. The Company shall notify you at least seventy-two (72) hours in advance of the actual date (or
such shorter time period as you may agree) of the consummation of the Business Combination (“Consummation Date”).
Capitalized terms used but not defined herein shall have the meanings set forth in the Trust Agreement.
In accordance with the terms of the Trust
Agreement, we hereby authorize you to commence to liquidate all of the assets of the Trust Account and to transfer the proceeds
into the above-referenced trust operating account at J.P. Morgan Chase Bank, N.A. 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 Citigroup
Global Markets, Inc. and Morgan Stanley & Co. LLC (the “Representatives”) (with respect to the Deferred
Discount) and the Company shall direct on the Consummation Date. It is acknowledged and agreed that while the funds are on deposit
in the trust operating account at J.P. Morgan Chase Bank, N.A. awaiting distribution, neither the Company nor the Representatives
will earn any interest.
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, which verifies that the Business Combination has been approved by a vote of the Company’s stockholders, if a
vote is held and (b) joint written instruction signed by the Company and the Representatives with respect to the transfer of
the funds held in the Trust Account, including payment of the Deferred Discount from the Trust Account (the
“Instruction Letter”). You are hereby directed and authorized to transfer the funds held in the
Trust Account immediately upon your receipt of the Notification and the Instruction Letter, in accordance with the terms of
the Instruction Letter. In the event that certain deposits held in the Trust Account may not be liquidated by the
Consummation Date without penalty, you will notify the Company in writing of the same and the Company shall direct you as to
whether such funds should remain in the Trust Account and be distributed after the Consummation Date to the Company. Upon the
distribution of all the funds, net of any payments necessary for reasonable unreimbursed expenses related to liquidating the
Trust Account, your obligations under the Trust Agreement shall be terminated.
In the event that the Business Combination
is not consummated on the Consummation Date described in the notice thereof and we have not notified you on or before the original
Consummation Date of a new Consummation Date, then upon receipt by the Trustee of written instructions from the Company, the funds
held in the Trust Account shall be reinvested as provided in Section 1(c) of the Trust Agreement on the business day immediately
following the Consummation Date as set forth in the notice as soon thereafter as possible.
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Very truly yours,
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Liberty Media Acquisition Corporation
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By:
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Name:
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Title:
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cc:
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Citigroup Global Markets, Inc.
Morgan Stanley & Co. LLC
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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 & Celeste Gonzalez
Re: Trust Account - Termination Letter
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section 1(i) of the Investment
Management Trust Agreement between Liberty Media Acquisition Corporation (the “Company”) and Continental
Stock Transfer & Trust Company (the “Trustee”), dated as of [∙], 2021 (the “Trust
Agreement”), this is to advise you that the Company has been unable to effect a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or similar business combination with a Target Business (the “Business Combination”)
within the time frame specified in the Company’s amended and restated certificate of incorporation, as described in the Company’s
Prospectus relating to the Offering. Capitalized terms used but not defined herein shall have the meanings set forth in the Trust
Agreement.
In accordance with the terms of the Trust
Agreement, we hereby authorize you to liquidate all of the assets in the Trust Operating Account and to transfer the total proceeds
into the trust operating account at J.P. Morgan Chase Bank, N.A. to await distribution to the Public Stockholders. The Company
has selected [●] as the effective date for the purpose of determining when the Public Stockholders will be entitled to receive
their share of the liquidation proceeds. You agree to be the Paying Agent of record and, in your separate capacity as Paying Agent,
agree to distribute said funds directly to the Company’s Public Stockholders in accordance with the terms of the Trust Agreement
and the amended and restated certificate of incorporation of the Company. Upon the distribution of all the funds, your obligations
under the Trust Agreement shall be terminated, except to the extent otherwise provided in Section 1(j) of the Trust Agreement.
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Very truly yours,
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Liberty Media Acquisition Corporation
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By:
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Name:
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Title:
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cc:
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Citigroup Global Markets, Inc.
Morgan Stanley & Co. LLC
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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 & Celeste Gonzalez
Re: Trust Account - Tax Payment Withdrawal Instruction
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section 1(j) of the Investment
Management Trust Agreement between Liberty Media Acquisition Corporation (the “Company”) and Continental
Stock Transfer & Trust Company (the “Trustee”), dated as of [∙], 2021 (the “Trust
Agreement”), the Company hereby requests that you deliver to the Company $
of the interest income earned on the Property as of the date hereof. Capitalized terms used but not defined herein shall have the
meanings set forth in the Trust Agreement.
The Company needs such funds to pay for
the tax obligations as set forth on the attached tax return or tax statement. In accordance with the terms of the Trust Agreement,
you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to
the Company’s operating account at:
[WIRE INSTRUCTION INFORMATION]
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Very truly yours,
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Liberty Media Acquisition Corporation
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By:
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Name:
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Title:
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cc:
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Citigroup Global Markets, Inc.
Morgan Stanley & Co. LLC
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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 & Celeste Gonzalez
Dear Mr. Wolf and Ms. Gonzalez:
Re: Trust Account - Stockholder Redemption Withdrawal
Instruction
Pursuant to Section 1(k) of the Investment
Management Trust Agreement between Liberty Media Acquisition Corporation (the “Company”) and Continental
Stock Transfer & Trust Company (the “Trustee”), dated as of [∙], 2021 (the “Trust
Agreement”), the Company hereby requests that you deliver to the redeeming Public Stockholders on behalf of the Company
$ of the principal and
interest income earned on the Property as of the date hereof. Capitalized terms used but not defined herein shall have the meanings
set forth in the Trust Agreement.
The Company needs such funds to pay its
Public Stockholders who have properly elected to have their shares of Common Stock redeemed by the Company in connection with a
stockholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation (A) to modify
the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business
Combination or to redeem 100% of the Company’s public shares if it does not complete its initial Business Combination within
such time as is described in the Company’s amended and restated certificate of incorporation or (B) with respect to any other
provision relating to stockholders’ rights or pre-initial Business Combination activity. As such, you are hereby directed
and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to the redeeming Public Stockholders
in accordance with your customary procedures.
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Very truly yours,
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Liberty Media Acquisition Corporation
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By:
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Name:
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Title:
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cc:
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Citigroup Global Markets, Inc.
Morgan Stanley & Co. LLC
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Exhibit 10.4
Investor
Rights Agreement
Dated
as of [●], 2021
by
and among
Liberty
Media Acquisition Corporation,
Liberty
Media Acquisition Sponsor LLC
and
Liberty
Media Corporation
TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS
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2
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Section 1.1
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Definitions
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2
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Section 1.2
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General Interpretive Principles
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15
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ARTICLE II. PREEMPTIVE RIGHTS
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15
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Section 2.1
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Triggering Event Preemptive Rights
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15
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Section 2.2
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Other Preemptive Rights
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17
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Section 2.3
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Section 16b-3
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18
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Section 2.4
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Matters as to Preemptive Rights
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18
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ARTICLE III. REGISTRATION RIGHTS
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21
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Section 3.1
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Demand Registration
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21
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Section 3.2
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Shelf Registration on Form S-3
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23
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Section 3.3
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Piggyback Registration
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25
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Section 3.4
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Restrictions on Registration Rights
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27
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Section 3.5
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Lock-Up Periods
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27
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Section 3.6
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Registration in Connection with Hedging Transactions
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28
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Section 3.7
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Registration in Connection with Exchangeable Private Placements
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29
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ARTICLE IV. COMPANY PROCEDURES
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30
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Section 4.1
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General Procedures
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30
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Section 4.2
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Registration Expenses
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33
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Section 4.3
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Requirements for Participation in Underwritten Offerings
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33
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Section 4.4
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Suspension of Sales; Adverse Disclosure
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33
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Section 4.5
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Reporting Obligations
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34
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ARTICLE V. INDEMNIFICATION AND CONTRIBUTION
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34
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Section 5.1
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Indemnification
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34
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ARTICLE VI. TERMINATION
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36
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Section 6.1
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Termination
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36
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Section 6.2
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Effect of Termination; Survival
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36
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ARTICLE VII. MISCELLANEOUS
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36
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Section 7.1
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Amendment and Modification
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36
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Section 7.2
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Assignment; No Third-Party Beneficiaries
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37
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Section 7.3
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Binding Effect; Entire Agreement
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37
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Section 7.4
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Severability
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37
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Section 7.5
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Notices and Addresses
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38
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Section 7.6
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Governing Law
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38
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Section 7.7
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Headings
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38
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Section 7.8
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Counterparts
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39
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Section 7.9
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Further Assurances
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39
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Section 7.10
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Remedies
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39
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Section 7.11
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Jurisdiction and Venue
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39
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Section 7.12
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Adjustments
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40
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INVESTOR RIGHTS AGREEMENT
THIS INVESTOR RIGHTS AGREEMENT (this “Agreement”),
dated as of [●], 2021, by and among Liberty Media Acquisition Corporation, a Delaware corporation (the “Company,”
which term will include any successor company resulting from or in connection with the initial Business Combination), Liberty Media
Acquisition Sponsor LLC, a Delaware limited liability company (the “Sponsor”), and Liberty Media Corporation,
a Delaware corporation (“Liberty Media”).
RECITALS:
A. The Company was formed for the purpose of effecting a Business Combination;
B. The Sponsor owns an aggregate of 14,375,000 shares of the Company Series F Common Stock, up to 1,875,000 of which are subject to
forfeiture depending on the extent to which the underwriters’ option to purchase additional units in connection with the
Company’s initial public offering (“IPO”) is exercised in full (the “Founder Shares”).
C. The Founder Shares are convertible into shares of the Company Series B Common Stock, which are convertible into shares of
the Company Series A Common Stock, in each case on the terms and conditions provided in the Certificate of Incorporation.
D. [On [●], 2021], the Company and the Sponsor entered into that certain Sponsor Warrants Purchase Agreement, pursuant to which
the Sponsor agreed to purchase 9,000,000 warrants (or up to 10,000,000 warrants if the underwriters’ option to purchase additional
units in connection with the Company’s IPO is exercised in full) (the “Sponsor Warrants”), in a private
placement transaction occurring simultaneously with the closing of the Company’s IPO.
E. [On [●], 2021], the Company entered into that certain Forward Purchase Agreement (the “Forward Purchase Agreement”)
with the Sponsor pursuant to which, (i) substantially concurrently with the closing of the
Company’s initial Business Combination, the Company shall issue and sell to the Sponsor, and the Sponsor shall purchase in
the aggregate from the Company, on a private placement basis, 25,000,000 units (each, a “Forward Purchase Unit”),
each Forward Purchase Unit consisting of one share of Company Series B Common Stock and one-fifth of one warrant (the “Forward
Purchase Warrants”), where each whole warrant is exercisable to purchase one share of Company Series A Common Stock at
an exercise price of $11.50 per share, at a purchase price of $10.00 per Forward Purchase Unit and (ii) the Sponsor may, at its
election, purchase additional shares of Company Series B Common Stock at a purchase price of $10.00 per share, and the Company
shall issue and sell to the Sponsor, on a private placement basis, such shares of Company Series B Common Stock, in each case in
accordance with the terms and conditions of the Forward Purchase Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the
foregoing premises and the mutual covenants and agreements contained herein and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, intending to be legally bound, the parties hereto agree as follows:
ARTICLE
I.
DEFINITIONS
Section
1.1 Definitions. The following terms shall have the meanings set forth below:
“Adverse Disclosure” means any public disclosure
of material non-public information, which disclosure, in the good faith judgment of the Chief Executive Officer or Principal Financial
Officer of the Company, after consultation with counsel to the Company, (a) 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, (b) would not be required
to be made at such time if the Registration Statement were not being filed, and (c) the Company has a bona fide business purpose
for not making such information public.
“Affiliate” of a Person has the meaning set
forth in Rule 12b-2 under the Exchange Act, and “Affiliated” has a correlative meaning. For purposes of
this definition, the term “control” (including the correlative meanings of the terms “controlled by” and
“under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of
the power to direct or cause the direction of the management policies of such Person, whether through the ownership of voting securities
or by contract or otherwise.
“Assumed Equity-Linked Security” means any
security convertible into, or exercisable or exchangeable for, Capital Stock of the Company assumed by the Company in connection
with the initial Business Combination.
“Beginning Measurement Date” means, for purposes
of determining the Pro Rata Portion in respect of Quarterly Triggering Issuances during a quarterly period, the last Business Day
of the calendar quarter immediately preceding the calendar quarter in which the Ending Measurement Date occurs, provided,
however, that the first Beginning Measurement Date shall be the first Business Day after the consummation of the initial
Business Combination.
“beneficial owner”, “beneficial
ownership”, “beneficially owns” and “owns beneficially” have the meaning given
such terms in Rule 13d-3 under the Exchange Act and a Person’s beneficial ownership of Capital Stock shall be calculated
in accordance with the provisions of such Rule; provided, however, that, for purposes of determining beneficial ownership,
(a) a Person shall be deemed to be the beneficial owner of any Capital Stock which may be acquired by such Person (disregarding
any legal impediments to such beneficial ownership), whether within sixty (60) days or thereafter, upon the conversion, exchange
or exercise of any warrants, options, rights or other Equity-Linked Securities issued by a Person and (b) no Person shall be deemed
to beneficially own any Capital Stock or Equity-Linked Securities (i) which such Person may be entitled to acquire (but has not
yet acquired) pursuant to the preemptive rights provided herein or (ii) solely as a result of such Person’s execution of
this Agreement or such Person’s filing of any reports, forms or schedules with the Commission in connection with any of the
matters contemplated hereby.
“Board” means the Board of Directors of the
Company and, unless the context indicates otherwise, also means, to the extent permitted by law, any committee thereof authorized,
with respect to any particular matter, to exercise the power of the Board of Directors of the Company with respect to such matter.
“Business Combination” has the meaning assigned
to such term in the Certificate of Incorporation.
“Business Day” means any day that is not
a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed in the City of New York.
“Bylaws” means the Amended and Restated Bylaws
of the Company, dated [●], 2021 (including as they may subsequently be amended, modified, supplemented and/or restated in
accordance with its terms).
“Capital Raising Transactions” means any
issuance by the Company of shares of Capital Stock or Equity-Linked Securities for cash (or cash equivalents) (other than upon
conversion, exercise or exchange of Assumed Equity-Linked Securities or Equity-Linked Securities issued pursuant to a Company Incentive
Plan), whether registered under the Securities Act or otherwise (other than pursuant to any shareholder rights plan (as such term
is commonly understood in connection with corporate transactions)) following the consummation of the Company’s initial Business
Combination.
“Capital Stock” means, with respect to any
Person at any time, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting)
of capital stock, partnership interests (whether general or limited) or equivalent ownership interests in or issued by such Person.
“Certificate of Incorporation” means the
Amended and Restated Certificate of Incorporation of the Company, dated [●], 2021 (including as it may subsequently be amended,
modified, supplemented and/or restated in accordance with its terms).
“Code” means the Internal Revenue Code of
1986, as amended.
“Commission” means the U.S. Securities and
Exchange Commission.
“Company” has the meaning set forth in the
Preamble.
“Company Common Stock” means the Company
Series A Common Stock, the Company Series B Common Stock, the Company Series C Common Stock, the Company Series F Common Stock,
and all shares of any other series or class of common stock of the Company hereafter authorized.
“Company Incentive Plan” means any equity
or omnibus incentive plan adopted by the Company or assumed by the Company in connection with the initial Business Combination
or any other acquisition or business combination involving the Company, or any other compensatory equity-based award or inducement
award.
“Company Preferred Stock” means any series
or class of Capital Stock of the Company designated as preferred stock.
“Company Series A Common Stock” means the
Company’s Series A Common Stock, par value $0.0001 per share.
“Company Series B Common Stock” means the
Company’s Series B Common Stock, par value $0.0001 per share.
“Company Series C Common Stock” means the
Company’s Series C Common Stock, par value $0.0001 per share.
“Company Series F Common Stock” means the
Company’s Series F Common Stock, par value $0.0001 per share.
“Deferred Exercise” has the meaning given
in Section 2.1(b).
“Demand Registration” has the meaning given
in Section 3.1(a).
“Demanding Holder” has the meaning given
in Section 3.1(a).
“Director” means a director of the Company.
“Ending Measurement Date” means, for purposes
of determining the Pro Rata Portion in respect of Quarterly Triggering Issuances during a quarterly period, the last Business Day
of the calendar quarter in which such Quarterly Triggering Issuances are made.
“Equity-Linked Securities” means any securities
(other than Capital Stock) convertible into, or exercisable or exchangeable for, Capital Stock (whether directly or indirectly).
“Exchange Act” means the Securities Exchange
Act of 1934, as amended, including the rules and regulations promulgated thereunder.
“Exchangeable
Holder” means a holder of record or beneficial owner of Exchangeable Securities.
“Exchangeable Private Placement” means any
sale of exchangeable notes or debentures made pursuant to Rule 144A under the Securities Act, which notes or debentures are exchangeable
for consideration that includes Registrable Securities.
“Exchangeable Private Placement Request”
has the meaning set forth in Section 3.7.
“Exchangeable Registrable Securities” means
any shares of Company Common Stock delivered or deliverable to an Exchangeable Holder upon the exchange of Exchangeable Securities,
which shares are Registrable Securities immediately prior to such delivery.
“Exchangeable Securities” means exchangeable
notes or debentures issued by a Holder in an Exchangeable Private Placement.
“Exchangeable Security Shelf Period” has
the meaning set forth in Section 3.7.
“Exchangeable Security Shelf Registration”
has the meaning set forth in Section 3.7(a).
“Exchangeable Security Shelf Registration Request”
has the meaning set forth in Section 3.7(a).
“Exchangeable Shelf Registration Statement”
means a registration statement pursuant to Rule 415 under the Securities Act (or any successor rule promulgated thereafter by the
Commission) on Form S-3 or any similar short-form registration statement that may be available at such time providing for an offering
of Exchangeable Registrable Securities to be made on a delayed or continuous basis.
“Exchangeable Shelf Registration Trigger Event”
means the thirty (30) days prior to the first date on which any Exchangeable Securities become eligible to be exchanged
for Registrable Securities.
“Exercise Price” means, with respect to:
(a) Issuances
of New Securities or Modified New Securities pursuant to Section 2.1(a) : (i) for M&A Transactions and Other Issuances:
the effective price per security (as determined in good faith by the Company, but without giving effect to the taxability of the
underlying transaction) at which shares of the New Securities are being issued in such M&A Transaction or Other Issuance and
(ii) for Capital Raising Transactions: the price per security at which such New Securities are offered and sold (net of any underwriting
discounts, commissions or similar sale expenses) in such Capital Raising Transaction; provided, that in respect of the issuance
of New Securities described in clauses (i) or (ii) above for consideration other than cash consideration, the Exercise Price will
be the fair value of such non-cash consideration, as determined in good faith by the Board (but without giving effect to the taxability
of the underlying transaction);
(b) Issuances of Company Series B Common Stock pursuant to Section 2.1(a): the volume weighted average price per share
of the Company Series A Common Stock over the ten trading days prior to the closing of the applicable Triggering Event (or, if
different, the issuance date for the New Securities to be issued in connection therewith); provided, however, that
if Company Series B Common Stock is issued pursuant to Section 2.1(a)(i) and the New Securities are Company Series A Common
Stock or Company Series B Common Stock, then the Exercise Price shall be as described above in clauses (a)(i) or (a)(ii) of this
definition;
(c) Issuances of Capital Stock (other than Company Series B Common Stock) pursuant to Section 2.2(a) or 2.2(b): the volume
weighted average price per share of the applicable Capital Stock over the ten trading days prior to the applicable Ending Measurement
Date; provided, that if such Capital Stock is not listed on a national securities exchange and actively traded, then the
Exercise Price shall be the fair market value per share of such Capital Stock, as determined in good faith by the Board (but without
giving effect to the taxability of the original transaction) as of the time of issuance to the LMC Stockholder;
(d) Issuances
of Company Series B Common Stock pursuant to Section 2.2(a) or 2.2(b): the volume weighted average price per share of the Company
Series A Common Stock over the ten trading days prior to the Ending Measurement Date.
“Form S-1” has the meaning given in Section
3.1(a).
“Form S-3” has the meaning given in Section
3.2(a).
“Forward Purchase Agreement” has the meaning
set forth in the Recitals.
“Forward Purchase Unit” has the meaning set
forth in the Recitals.
“Forward Purchase Warrants” has the meaning
set forth in the Recitals.
“Founder Shares” has the meaning set forth
in the Recitals.
“GAAP” means United States generally accepted
accounting principles, consistently applied.
“Governmental Entity” means any United States
or foreign (a) federal, state, local, municipal or other government, (b) governmental or quasi-governmental entity of
any nature (including any governmental agency, branch, department, official or entity and any court or other tribunal) or (c) body
exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority
or power of any nature, including any arbitral tribunal.
“Hedging Counterparty” means a broker-dealer
registered under Section 15(b) of the Exchange Act or an Affiliate thereof or any other financial institution that routinely engages
in Hedging Transactions in the ordinary course of its business.
“Hedging Transaction” means any transaction
involving a security linked to the Registrable Securities or any security that would be deemed to be a “derivative security”
(as defined in Rule 16a-1(c) under the Exchange Act) with respect to the Registrable Securities or any transaction (even if not
a security) which would (were it a security) be considered such a derivative security, or which transfers some or all of the economic
risk of ownership of the Registrable Securities, including any forward contract, equity swap, put or call, put or call equivalent
position, collar, non-recourse loan, sale of exchangeable security or similar transaction. For the avoidance of doubt, the following
transactions shall be deemed to be Hedging Transactions:
(a) transactions by a Holder in which a Hedging Counterparty engages in short sales of Company Common Stock pursuant to a Prospectus
and may use Registrable Securities to close out its short position;
(b) transactions pursuant to which a Holder sells short Company Common Stock pursuant to a Prospectus and delivers Registrable
Securities to close out its short position;
(c) transactions by a Holder in which the Holder delivers, in a transaction exempt from registration under the Securities Act,
Registrable Securities to a Hedging Counterparty who may then publicly resell or otherwise transfer such Registrable Shares pursuant
to a Prospectus or an exemption from registration under the Securities Act; and
(d) a loan or pledge of Registrable Securities to a Hedging Counterparty who may then become a Permitted Transferee and sell
the loaned shares or, in an event of default in the case of a pledge, then sell the pledged shares, in each case, in a public transaction
pursuant to a Prospectus.
“Holder” means any LMC Stockholder who holds
Registrable Securities and any Person who hereafter becomes entitled to the rights and subject to the obligations contained in
Article III hereof pursuant to Section 7.2 of this Agreement.
“HSR Act” means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
“IPO” has the meaning set forth in the Recitals.
“Law” means any applicable federal, state,
local or foreign law, stock exchange rules and regulations, statute, ordinance, rule, guideline, regulation, order, writ, decree, agency requirement, license or permit
of any Governmental Entity.
“Letter Agreement” means the Letter Agreement,
dated the date hereof, among the Company, the Sponsor and the Company’s executive officers and directors.
“Liberty Media” has the meaning set forth
in the Preamble and which term will include any successor thereto by operation of law or otherwise.
“LMC Common Stock Amount” means, at any designated
time, the aggregate number of issued and outstanding shares of Company Common Stock owned by the LMC Stockholders and any Permitted
Transferees.
“LMC Common Stock Percentage” means, at the
time of any determination thereof, the percentage obtained by dividing (x) the LMC Common Stock Amount by (y) the total number
of issued and outstanding shares of Company Common Stock.
“LMC Stockholders” means (a) Liberty
Media and its Wholly-Owned Subsidiaries (other than the Company and its Subsidiaries) and (b) any Qualified Distribution Transferee
and its Wholly-Owned Subsidiaries.
“LMC Voting Stock Amount” means, at any designated
time, the aggregate number of issued and outstanding shares of Voting Stock owned by the LMC Stockholders and any Permitted Transferees.
“LMC Voting Stock Percentage” means, at the
time of any determination thereof, the percentage obtained by dividing (x) the LMC Voting Stock Amount by (y) the total number
of issued and outstanding shares of Voting Stock.
“Lock-up Period” means, with respect to any
Registrable Security, any period during which a Holder has agreed not to transfer such Registrable Security (subject to certain
exceptions specified in the Letter Agreement) pursuant to the Letter Agreement entered into by such Holder in connection with the
IPO.
“M&A Transaction” means, following the
consummation of the Company’s initial Business Combination, any merger, consolidation, share exchange or other business combination
transaction pursuant to which Capital Stock or Equity-Linked Securities are issued.
“Maximum Number of Securities” has the meaning
set forth in Section 3.1(c).
“Misstatement” means 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.
“Modified New Securities” has the meaning
set forth in Section 2.1(a)(v).
“New Securities” has the meaning set forth
in Section 2.1(a).
“Other Issuance” means any issuance following
the consummation of the Company’s initial Business Combination of Capital Stock or Equity Linked Securities by the Company
(including in connection with the exercise, conversion or exchange of Equity-Linked Securities) other than issuances (a) in connection
with a Capital Raising Transaction or an M&A Transaction, (b) of Voting Stock upon exercise or redemption of Warrants
that are outstanding prior to or issued in connection with the Company’s initial Business Combination, (c) of Capital Stock
pursuant to a Company Incentive Plan or an Assumed Equity-Linked Security as described in Section 2.2 and (d) upon conversion,
exercise or exchange of any Equity-Linked Securities that were issued in connection with any Triggering Event unless a Deferred
Exercise is elected.
“Parent Company” means the publicly traded
Person that beneficially owns, through an unbroken chain of majority-owned subsidiaries, the Person having record ownership of
any voting securities of the Company. For purposes of this definition, the term “publicly traded” means that the Person
in question (a) has a class or series of equity securities registered under Section 12(b) or 12(g) of the Exchange Act
or (b) is required to file reports pursuant to Section 15(d) of the Exchange Act.
“Permitted Transferee” means (i) for the
purposes of Article II, any Person described in clauses (i)-(iv) of paragraph 7(c) of the Letter Agreement and (ii) for
all other purposes of this Agreement, any Person to whom a Holder of Registrable Securities is permitted to transfer such Registrable
Securities.
“Person” means any natural person, corporation,
limited liability company, general or limited partnership, joint venture, trust, estate, proprietorship, unincorporated association,
organization or other entity.
“Piggyback Registration” has the meaning
set forth in Section 3.3(a).
“Preemptive Rights Purchaser” has the meaning
set forth in Section 2.1(d).
“Pro Rata Portion” means:
(a) with respect to any issuance to an LMC
Stockholder pursuant to Section 2.1(a) of any Voting Stock in respect of a Triggering Event, the number of such securities
which will, when added to the LMC Voting Stock Amount immediately prior to the Triggering Event, result in the LMC Stockholders
(together with any Permitted Transferees) owning a number of issued and outstanding shares of Voting Stock immediately following
the Triggering Event that in the aggregate represent a percentage of the total number of issued and outstanding shares of Voting
Stock equal to the LMC Voting Stock Percentage immediately prior to the Triggering Event;
(b) with respect to any issuance to any LMC
Stockholder pursuant to Section 2.1(a) of any New Securities or Modified New Securities, in each case, of the type described
in Sections 2.1(a)(iv) or (v) in respect of a Triggering Event, the number of such securities which will, assuming
such securities are fully converted, exchanged or exercised for Voting Stock in accordance with their terms, when added to the
LMC Voting Stock Amount immediately prior to the applicable Triggering Event, result in the LMC Stockholders (together with any
Permitted Transferees) owning a number of issued and outstanding shares of Voting Stock immediately following the Triggering Event
that, when added together with the shares of Voting Stock issuable upon full conversion, exercise or exchange of such New Securities
or Modified New Securities, in each case, to be issued to the LMC Stockholders pursuant to Sections 2.1(a)(iv) or (v),
in the aggregate represent a percentage of the sum of (i) the total number of issued and outstanding shares of Voting Stock plus
(ii) the total number of shares of Voting Stock issuable upon full conversion, exercise or exchange of such New Securities or Modified
New Securities, in each case, of the type described in Sections 2.1(a)(iv) or (v) issued in respect of such Triggering
Event that is equal to the LMC Voting Stock Percentage immediately prior to the Triggering Event;
(c) with respect to any issuance to an LMC
Stockholder pursuant to Section 2.1(a) of any Company Common Stock that is not Voting Common Stock in respect of a Triggering
Event, the number of such securities which will, when added to the LMC Common Stock Amount immediately prior to the Triggering
Event, result in the LMC Stockholders (together with any Permitted Transferees) owning a number of issued and outstanding shares
of Company Common Stock immediately following the Triggering Event that in the aggregate represent a percentage of the total number
of issued and outstanding shares of Company Common Stock equal to the LMC Common Stock Percentage immediately prior to the Triggering
Event;
(d) with respect to any issuance to an LMC
Stockholder pursuant to Section 2.1(a) of any (i) Preferred Stock that is not Voting Preferred Stock and is not convertible
or exchangeable (directly or indirectly) into Company Common Stock or (ii) Equity-Linked Securities that are not convertible into,
or exercisable or exchangeable for, Company Common Stock, in each case, in respect of a Triggering Event, a percentage of the total
number of such securities issued in respect of such Triggering Event that is equal to the LMC Common Stock Percentage immediately
prior to the Triggering Event;
(e) with respect to any issuance to an LMC
Stockholder pursuant to Section 2.1(a) of any Equity-Linked Securities that are convertible into, or exercisable or exchangeable
for, (directly or indirectly) Company Common Stock that is not Voting Common Stock in respect of a Triggering Event, the number
of such securities which would, assuming such securities are fully converted, exchanged or exercised for such Company Common Stock
in accordance with their terms, when added to the LMC Common Stock Amount immediately prior to the applicable Triggering Event,
result in the LMC Stockholders (together with any Permitted Transferees) owning a number of issued and outstanding shares of Company
Common Stock immediately following the Triggering Event that, when added together with the shares of Company Common Stock issuable
upon full conversion, exercise or exchange of such Equity-Linked Securities to be issued to the LMC Stockholders pursuant to Section
2.1(a) in respect of such Triggering Event, in the aggregate represent a percentage of the sum of (i) the total number of issued
and outstanding shares of Company Common Stock plus (ii) the total number of shares of Company Common Stock issuable upon full
conversion, exercise or exchange of such Equity-Linked Securities issued in respect of such Triggering Event that is equal to the
LMC Common Stock Percentage immediately prior to the Triggering Event; provided, however, in the event both
clause (b) and this clause (e) of this definition of Pro Rata Portion would be applicable to any issuance of Equity-Linked Securities
pursuant to Section 2.1(a) (e.g., exchangeable into convertible Capital Stock), then clause (b) of this definition shall
control;
(f) with respect to all issuances to be made
to an LMC Stockholder pursuant to Sections 2.2(a) or (b) of any shares of Voting Stock in respect of all Quarterly
Triggering Issuances, the number of such shares which will, when added to the LMC Voting Stock Amount as of the Beginning Measurement
Date result in the LMC Stockholders (together with any Permitted Transferees) owning a number of issued and outstanding shares
of Voting Stock as of the Ending Measurement Date that in the aggregate represent a percentage of the total number of issued and
outstanding shares of Voting Stock (excluding any outstanding shares of Voting Stock issued during such quarterly time frame in
respect of a Triggering Event if and to the extent the Sponsor did not either exercise its preemptive rights in Section 2.1(a)
in full or elect a Deferred Exercise) equal to the LMC Voting Stock Percentage as of the Beginning Measurement Date;
(g) with
respect to all issuances to an LMC Stockholder pursuant to Sections 2.2(a) or (b) of any shares of Company Common
Stock (that is not Voting Common Stock) in respect of all Quarterly Triggering Issuances, the number of such shares which will,
when added to the LMC Common Stock Amount as of the Beginning Measurement Date result in the LMC Stockholders (together with any
Permitted Transferees) owning a number of issued and outstanding shares of Company Common Stock as of the Ending Measurement Date
that in the aggregate represent a percentage of the total number of issued and outstanding shares of Company Common Stock (excluding
any outstanding shares of Company Common Stock issued during such quarterly time frame in respect of a Triggering Event if and
to the extent the Sponsor did not either exercise its preemptive rights in Section 2.1(a) in full or elect a Deferred Exercise)
equal to the LMC Common Stock Percentage as of the Beginning Measurement Date; and
(h) with respect to any issuance to an LMC
Stockholder pursuant to Sections 2.2(a) or (b) of any Capital Stock that is not Voting Preferred Stock and is not
convertible or exchangeable (directly or indirectly) into Company Common Stock in respect of any Quarterly Triggering Issuance,
a percentage of the total number of such securities issued in such Quarterly Triggering Issuance that is equal to the LMC Common
Stock Percentage as of as of the Beginning Measurement Date.
“Prospectus” means 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.
“Public Warrants” means the Company’s
warrants sold as part of the units in the IPO (whether such warrants are purchased in the IPO or thereafter in the open market)
and any Sponsor Warrants that are subsequently resold to third parties following the consummation of the Company’s initial
Business Combination.
“Qualified Distribution Transaction”
means, following the initial Business Combination, the transfer, sale, assignment or other disposition by the LMC Stockholders
of all or substantially all of the Voting Stock held by them in any spinoff, splitoff or other distribution transaction in which
the equity interests of an LMC Stockholder holding, directly or indirectly, all or substantially all of the shares of Voting Stock
held by the LMC Stockholders are distributed to or acquired by (whether by redemption, dividend, share distribution, merger or
otherwise) holders of one or more classes or series of common stock of Liberty Media on a pro rata basis with respect to each such
class or series, or such equity interests are available to be acquired by the holders of one or more classes or series of Liberty
Media’s common stock (including through any rights offering, exchange offer, exercise of subscription rights or other offer
made available to such holders) on a pro rata basis with respect to each such class or series, whether voluntary or involuntary.
“Quarterly Preemptive Rights Notice” has
the meaning set forth in Section 2.2(c).
“Quarterly Preemptive Rights Purchaser” has
the meaning set forth in Section 2.2(c).
“Quarterly Triggering Issuance” has the meaning
set forth in Section 2.2(b).
“Registrable Security” means (a) the Sponsor
Warrants, (b) the Forward Purchase Warrants, (c) Working Capital Warrants, (d) the shares of Company Series A Common Stock issued
upon exercise of the securities referenced in clauses (a), (b) or (c) or upon conversion of any share of Company Series B Common
Stock, (e) any other Warrants or Company Common Stock (other than Company Series B Common Stock) that the Holders may have purchased
in the open market and (f) any other equity security of the Company issued with respect to any of the securities referred to in
clauses (a) through (e) or with respect to shares of Company Series B Common Stock by way of a stock dividend or stock split or
by way of a conversion from or exercise of a warrant, or in connection with a combination of shares, recapitalization, merger,
consolidation or reorganization; provided, however, that, as to any particular Registrable Securities, 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 or book-entry shares
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 have been sold without registration pursuant to Rule 144 promulgated under the Securities
Act (or any successor rule promulgated by the SEC); 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” means 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” means the out-of-pocket
expenses of a Registration, including the following:
(a)
all registration, qualification, listing and filing fees (including fees with respect to filings required to be made with
the Commission and Financial Industry Regulatory Authority, Inc.) and any securities exchange on which the Company Series A Common
Stock is then listed;
(b)
fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel
for the Underwriters in connection with blue sky qualifications of Registrable Securities or Exchangeable 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;
(f)
any reasonable fees and disbursements of underwriters customarily paid by issuers or sellers of securities (other than underwriting
discounts and selling commissions) and for any underwritten offering all expenses related to the “road show”, including
applicable travel, meals and lodging; and
(g)
reasonable fees and expenses of one (1) legal counsel selected by the Holder initiating an Underwritten Shelf Offering or
a majority-in-interest of the Demanding Holders initiating a Demand Registration to be registered for offer and sale in the applicable
Registration.
“Registration Statement” means any registration
statement that permits the offer and resale of the Registrable Securities or the Exchangeable 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 or deemed
to be incorporated by reference in such registration statement.
“Requesting Holder” has the meaning set forth
in Section 3.1(a).
“Rule 16b-3” means Rule 16b-3 promulgated
under the Exchange Act or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect
as such rule.
“Section 16(b)” has the meaning set forth
in Section 2.3.
“Section 16 Exemption” has the meaning set
forth in Section 2.3.
“Securities Act” means the Securities Act
of 1933, as amended, and the rules and regulations promulgated thereunder.
“Selling Holders” means the Exchangeable
Holders of the Exchangeable Securities sold in such Exchangeable Private Placement.
“Selling Holder Questionnaire” means a selling
stockholder questionnaire, in form and content reasonably acceptable to the Company, completed and signed by a Selling Holder.
“Shelf Registration Statement” has the meaning
set forth in Section 3.2(a).
“Sponsor” has the meaning set forth in the
Preamble.
“Sponsor Warrants” has the meaning set forth
in the Recitals.
“Subsequent Shelf Registration” has the meaning
set forth in Section 3.2(b).
“Subsidiary” when used with respect to any
Person, means any other Person of which (x) in the case of a corporation, at least (A) 50% of the equity or (B) securities representing
at least 50% of the outstanding voting power of such other Person are owned or Controlled, directly or indirectly, by such first
Person, by any one or more of its Subsidiaries, or by such first Person and one or more of its Subsidiaries or (y) in the case
of any Person other than a corporation, such first Person, one or more of its Subsidiaries, or such first Person and one or more
of its Subsidiaries (A) owns at least 50% of the equity interests thereof or (B) has the power to elect or direct the election
of at least 50% of the members of the governing body thereof or otherwise has Control over such organization or entity.
“Takedown Requesting Holder” has the meaning
set forth in Section 3.2(c).
“Tax” or “Taxes” means
all federal, state, local or non-U.S. taxes, charges, fees, duties, levies or other assessments, including income, gross receipts,
stamp, occupation, premium, environmental, windfall profits, value added, severance, property, production, sales, use, transfer,
registration, duty, license, excise, franchise, payroll, employment, social security (or similar), unemployment, disability, withholding,
alternative or add-on minimum, estimated, or other taxes, whether disputed or not, imposed by any Government Entity, together with
any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties.
“Trading Day” means any day on which The
Nasdaq Stock Market or any national securities exchange on which the Series A Common Stock is listed is open for regular trading
of the Company Series A Common Stock.
“Transfer” means, when used as a noun, any
direct or indirect, voluntary or involuntary, sale, disposition, hypothecation, mortgage, gift, pledge, assignment, attachment
or other transfer (including the creation of any derivative or synthetic interest, including a participation or other similar interest)
and, when used as a verb, voluntarily to directly or indirectly sell, dispose, hypothecate, mortgage, gift, pledge, assign, attach
or otherwise transfer, in any case, whether by operation of law or otherwise.
“Triggering Event” has the meaning set forth
in Section 2.1(a).
“Triggering Event Preemptive Rights Notice”
has the meaning set forth in Section 2.1(d).
“Underwriter” means 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” means a Registration in which securities of the Company are sold to an Underwriter in a firm-commitment basis
for reoffering to the public.
“Underwritten Shelf Takedown” has the meaning
set forth in Section 3.2(c).
“Voting Common Stock” means Common Stock
that entitles the holders thereof to vote on matters submitted generally to the Company’s stockholders for approval, including
the election of directors, but excluding any class or series of Common Stock whose voting rights are limited exclusively to approval
of modifications or amendments to the rights, powers, preferences or privileges of such class or series.
“Voting Preferred Stock” means any Preferred
Stock that entitles the holders thereof to vote on matters submitted generally to the Company’s stockholders for approval,
including the election of directors, but excluding any class or series of Capital Stock whose voting rights are limited exclusively
to approval of modifications or amendments to the rights, powers, preferences or privileges of such class or series.
“Voting Stock” means any Voting Common Stock
and/or Voting Preferred Stock.
“Warrants” means the Public Warrants, the
Forward Purchase Warrants, the Sponsor Warrants and the Working Capital Warrants.
“Wholly-Owned Subsidiary” means, as to any
Person, a Subsidiary of such Person, 100% of the equity and voting interest in which is beneficially owned or owned of record,
directly and/or indirectly, by such Person.
“Working Capital Warrants” means the warrants
that may be issued upon conversion of up to $2,500,000 of working capital loans extended to the Company by the Sponsor or LMC or
its Subsidiaries, at the option of such lender, at a price of $1.50 per Working Capital Warrant.
Section
1.2
General Interpretive Principles. Whenever used in this Agreement, except as otherwise expressly provided or
unless the context otherwise requires, any noun or pronoun shall be deemed to include the plural as well as the singular and to
cover all genders. The name assigned this Agreement and the Section captions used herein are for convenience of reference
only and shall not be construed to affect the meaning, construction or effect hereof. Unless otherwise specified, the terms “hereof,”
“herein” and similar terms refer to this Agreement as a whole (including the exhibits hereto), and references herein
to Sections refer to Sections of this Agreement. The words “include,” “includes” and “including”
shall be deemed to be followed by the phrase “without limitation.” For the avoidance of doubt, references to the ownership
or beneficial ownership by LMC Stockholders of any securities will be deemed to refer to the ownership (whether of record or book-entry
through a brokerage account held in the name of Liberty Media) or beneficial ownership of such securities.
ARTICLE
II.
PREEMPTIVE RIGHTS
Section
2.1
Triggering Event Preemptive Rights.
(a)
If the Company at any time or from time to time, in each case, after the date of the initial Business Combination issues
any Capital Stock or Equity-Linked Securities (the “New Securities”) in any Capital Raising Transaction, M&A
Transaction or Other Issuance (a “Triggering Event”), the Sponsor shall have the right to purchase (or designate
another LMC Stockholder to purchase), up to its Pro Rata Portion of such New Securities or (as applicable) up to its Pro Rata Portion
of the following securities:
(i) if such New Securities are
Voting Common Stock, Company Series B Common Stock,
(ii) if such New Securities are
Voting Preferred Stock that is not convertible or exchangeable into Voting Common Stock, Voting Preferred Stock having the same
terms as such New Securities except with voting rights in the same proportion to the votes per share of Company Series B Common
Stock as such New Securities have to the votes per share of Company Series A Common Stock,
(iii) if such New Securities are
Voting Preferred Stock that is convertible into or exchangeable for Voting Common Stock, Voting Preferred Stock having the same
terms as such New Securities except that the conversion or exchange feature of such Voting Preferred Stock shall instead be the
conversion or exchange into shares of Company Series B Common Stock,
(iv) if such New Securities are
Preferred Stock that is not Voting Preferred Stock and is convertible into or exchangeable for Voting Common Stock, Preferred Stock
having the same terms as such New Securities except that the conversion or exchange feature of such Preferred Stock shall instead
be the conversion or exchange into shares of Company Series B Common Stock and ability by any LMC Stockholder to convert or exchange
into Voting Stock shall arise at the time and to the extent of the conversion or exchange, as applicable, of the New Securities
into Voting Common Stock by the third-party holders thereof,
(v) if such New Securities are
Equity-Linked Securities that are convertible into or exercisable or exchangeable for Voting Stock, Equity-Linked Securities having
the same terms as such New Securities except that the conversion, exercise or exchange, as applicable, feature of such Equity-Linked
Securities (directly or indirectly) into Voting Stock shall instead be the conversion, exercise or exchange, as applicable, into
shares of Company Series B Common Stock and the ability by any LMC Stockholder to convert, exercise or exchange such Equity-Linked
Securities into Voting Stock shall arise at the time and to the extent of the conversion, exercise or exchange, as applicable,
of the New Securities into Voting Common Stock by the third-party holders thereof (such modified Preferred Stock or Equity-Linked
Securities described in clauses (ii), (iii), (iv) and (v), the “Modified New Securities”).
The purchase price per New Security, Company
Series B Common Stock, or Modified New Security to be acquired pursuant to this Section 2.1(a) shall be equal to the applicable
Exercise Price.
(b)
Notwithstanding Section 2.1(a), if the New Securities issued in connection with a Triggering Event are Equity Linked
Securities, in lieu of purchasing its Pro Rata Portion of such New Securities or the applicable Modified New Securities, the Sponsor
may instead elect (pursuant to Section 2.1(d)) to purchase up to its Pro Rata Portion of the shares of Capital Stock issued
on conversion, exercise or exchange of such Equity-Linked Securities (a “Deferred Exercise”) as described in
and pursuant to Section 2.2.
(c)
The Company shall give written notice to the Sponsor of any proposed Triggering Event as promptly as practicable, but in
no event later than ten (10) Business Days prior to the consummation of such Triggering Event, which notice shall set forth all
material terms and conditions of the Triggering Event, including (i) the number of (or formula for determining such number)
and a description of the New Securities proposed to be issued at the closing of the Triggering Event, (ii) the Pro Rata Portion
of New Securities and, if applicable Company Series B Common Stock or Modified New Securities, which may be purchased by the LMC
Stockholders pursuant to Section 2.1(a), together with reasonable supporting detail for the determination thereof; (iii)
the closing date of the Triggering Event and, if different, the issuance date for the New Securities to be issued in connection
therewith; (iv) the proposed offerees or purchasers of the New Securities; (v) the aggregate proposed proceeds or fair market value
to be obtained by the Company from the issuance of New Securities in connection with such Triggering Event; and (vi) the anticipated
Exercise Price per New Security or, if applicable, Company Series B Common Stock or Modified New Securities, together with reasonable
supporting detail for the determination thereof. The Company shall update the information in such notice promptly following any
changes to the material terms and conditions of the Triggering Event.
(d)
The Sponsor’s rights pursuant to Section 2.1(a) shall be exercisable with respect to any Triggering Event by
delivery of written notice (the “Triggering Event Preemptive Rights Notice”) to the Company no later than the
later of (x) ten (10) Business Days after receipt of the Company’s notice in respect of such Triggering Event pursuant to
Section 2.1(b) above and (y) five (5) Business Days prior to the consummation of such Triggering Event. The Triggering Event
Preemptive Rights Notice shall specify the following, each as determined in the Sponsor’s sole discretion: (i) which LMC
Stockholder(s) will purchase securities pursuant to Section 2.1(a) (each, a “Preemptive Rights Purchaser”),
(ii) whether the Preemptive Rights Purchaser will purchase New Securities, Company Series B Common Stock or Modified New Securities
and (iii) the number of such securities (up to its Pro Rata Portion) to be purchased; provided, that Sponsor may update
the information in the Preemptive Rights Notice following any changes to the material terms and conditions of the Triggering Event.
Alternatively, the Sponsor may elect a Deferred Exercise by specifying such election in the Triggering Event Preemptive Notice.
(e) If
the Sponsor exercises its preemptive right pursuant to Section 2.1(a) with respect to any Triggering Event, the Preemptive
Rights Purchaser shall purchase and the Company shall issue to the Preemptive Rights Purchaser the securities specified in the
Triggering Event Preemptive Rights Notice (i) at or approximately the same date and time as the closing of the Triggering Event
or, if different, the issuance date for the New Securities to be issued in connection therewith or (ii) at such date and time
as mutually agreed among the Company and the Preemptive Rights Purchaser, in each case, subject only to the consummation of the
Triggering Event and the satisfaction or waiver of the conditions set forth in Section 2.4 and to any stock exchange
requirements as may then be applicable to the issuance of Capital Stock to the Preemptive Rights Purchaser.
Section
2.2
Other Preemptive Rights.
(a)
If at any time or from time to time after the date of the initial Business Combination (i) the Company issues any Capital
Stock (other than issuances of restricted Capital Stock subject to forfeiture) upon conversion, exercise or exchange of any Equity-Linked
Securities that were issued pursuant to a Company Incentive Plan or an Assumed Equity-Linked Security or (ii) the forfeiture restrictions
on restricted Capital Stock issued by the Company pursuant to a Company Incentive Plan or an Assumed Equity Linked Security vest
or lapse and such shares of Capital Stock are no longer subject to forfeiture (which shall be deemed an issuance of Capital Stock
at such time), the Sponsor shall have the right to purchase (or designate another LMC Stockholder to purchase), up to its Pro Rata
Portion of such Capital Stock or, if such Capital Stock is Voting Stock, up to its Pro Rata Portion of Company Series B Common
Stock.
(b)
If the Sponsor elects a Deferred Exercise in connection with any Equity-Linked Securities issued in connection with a Triggering
Event, then the Sponsor shall have the right to purchase up to its Pro Rata Portion of the shares of Capital Stock issued on conversion,
exercise or exchange of such Equity-Linked Securities or, if such Capital Stock is Voting Stock, up to its Pro Rata Portion of
Company Series B Common Stock. The issuances or deemed issuances of Capital Stock by the Company as described in Sections 2.2(a)
and (b) are referred to as the “Quarterly Triggering Issuances.”
(c)
The purchase price per share of Capital Stock or Company Series B Common Stock to be acquired pursuant to this Section
2.2 shall be equal to the applicable Exercise Price.
(d)
Within five (5) Business Days after the end of each calendar quarter commencing with the first calendar quarter ending after
the initial Business Combination, the Company shall send a written notice to the Sponsor setting forth (i) the number, description
and terms of all Equity-Linked Securities issued from the Beginning Measurement Date to the Ending Measurement Date for such quarter
(identifying separately any issued in connection with a Triggering Event), (ii) the number and type of shares of Capital Stock
issued or deemed issued as described in Sections 2.2(a) and 2.2(b) from the Beginning Measurement Date to the Ending
Measurement Date for such quarter; (iii) the Pro Rata Portion of securities which may be issued to the LMC Stockholders pursuant
to Sections 2.2(a) or 2.2(b), together with reasonable supporting detail for the determination thereof; and (iv)
the Exercise Price per share of Capital Stock, together with reasonable supporting detail for the determination thereof.
(e) The
Sponsor’s rights pursuant to Sections 2.2(a) and 2.2(b) shall be exercisable with respect to applicable Quarterly
Triggering Issuances made from the Beginning Measurement Date to the Ending Measurement Date for any calendar quarter by delivery
of written notice (the “Quarterly Preemptive Rights Notice”) to the Company no later than fifteen (15) Business
Days after receipt of the Company’s notice in respect of such calendar quarter pursuant to Section 2.2(d) above.
The Quarterly Preemptive Rights Notice shall specify the following, each as determined in the Sponsor’s sole discretion:
(i) which LMC Stockholder(s) will purchase securities pursuant to Sections 2.2(a) or 2.2(b) (the “Quarterly
Preemptive Rights Purchaser”), (ii) whether the Quarterly Preemptive Rights Purchaser will purchase the Capital Stock
issued in any Quarterly Triggering Issuances during such quarter or, if appliable, Company Series B Common Stock and (iii) the
number of such securities (up to its Pro Rata Portion) to be purchased. If the Sponsor exercises its preemptive right pursuant
to Sections 2.2(a) or 2.2(b) with respect to any Quarterly Triggering Issuance, the Quarterly Preemptive Rights
Purchaser shall purchase and the Company shall issue to the Quarterly Preemptive Rights Purchaser the number of securities specified
in the Quarterly Preemptive Rights Notice on the fifth (5th) Business Day following the delivery of the Quarterly Preemptive
Rights Notice or at such other date and time as mutually agreed among the Company and the Quarterly Preemptive Rights Purchaser,
in each case, subject only to the satisfaction or waiver of the conditions set forth in Section 2.4 and to any stock
exchange requirements as may then be applicable to the issuance of Capital Stock to the Quarterly Preemptive Rights Purchaser.
Section
2.3 Section 16b-3. The Board shall take
such action as is necessary to cause the exemption (as and to the extent available) of each purchase pursuant to Sections 2.1
or 2.2 from the liability provisions of Section 16(b) of the Exchange Act (“Section 16(b)”)
pursuant to Rule 16b-3 (each, a “Section 16 Exemption”) and the Company shall provide Sponsor with reasonably
satisfactory evidence that such action has been taken prior to the closing of any such purchase.
Section
2.4 Matters
as to Preemptive Rights.
(a) Upon
the date of the applicable purchase pursuant to Sections 2.1 or 2.2, the Company shall (and shall be deemed to)
represent and warrant to each Preemptive Rights Purchaser and Quarterly Preemptive Rights Purchaser, as of such date, that (i) the
Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation
and has the corporate power and authority to consummate the issuance and delivery of the applicable securities; (ii) the securities
to be issued to any Preemptive Rights Purchaser or Quarterly Preemptive Rights Purchaser pursuant to Sections 2.1 or 2.2
have been duly authorized and, when issued and delivered in accordance with the terms of this Agreement, will have been validly
issued and will be fully paid and nonassessable; and (iii) all representations (subject to any qualifications or exceptions thereto
included therein, including any disclosures schedules related thereto), if any, made by the Company to the third party (or underwriter,
if applicable) in the transaction giving rise to the applicable Triggering Event or Quarterly Triggering Issuance giving rise
to the purchase are true and correct in all material respects.
(b) Subject
to the provisions of Sections 2.4(g) and (h), the obligations of the Company to consummate the purchase of securities
specified in the applicable Preemptive Rights Notice or Quarterly Preemptive Rights Notice, as applicable, pursuant to Sections
2.1 or 2.2, as applicable, shall be subject to the satisfaction of, prior to or simultaneously with the consummation of the purchase,
the following conditions:
(i) To the extent that the purchase of securities pursuant to Section 2.1 or 2.2 requires the filing of notification
pursuant to the HSR Act, any applicable waiting period (or extensions thereof) under the HSR Act applicable to the purchase shall
have expired or been terminated; provided, that the Company shall have made any and all requisite filings to be made by it under
the HSR Act and used commercially reasonable efforts to cause such waiting periods to expire or terminate;
(ii)
No Law, order, judgment or injunction (whether preliminary or permanent) issued, enacted, promulgated, entered or enforced by a
court of competent jurisdiction or other Governmental Authority restraining, prohibiting or rendering illegal the consummation
of the purchase by this Agreement is in effect; and
(iii)
The Company shall have received payment in an aggregate amount equal to the Exercise Price per security being purchased.
(c)
Subject to the provisions of Sections 2.4(g) and (h), the obligations of each Preemptive Rights Purchaser and Quarterly
Preemptive Rights Purchaser to consummate the purchase of securities specified in the applicable Preemptive Rights Notice or Quarterly
Preemptive Rights Notice, as applicable, pursuant to Sections 2.1 or 2.2, as applicable, shall be subject to the
satisfaction of, prior to or simultaneously with the consummation of the purchase, the following conditions:
(i) To the extent that the purchase of securities pursuant to Sections 2.1 or 2.2 requires the filing of notification
pursuant to the HSR Act, any applicable waiting period (or extensions thereof) under the HSR Act applicable to the purchase shall
have expired or been terminated; provided, that the applicable LMC Stockholder shall have made or caused to be made any and all
requisite filings to be made by it under the HSR Act and used commercially reasonable efforts to cause such waiting periods to
expire or terminate;
(ii)
No Law, order, judgment or injunction (whether preliminary or permanent) issued, enacted, promulgated, entered or enforced by a
court of competent jurisdiction or other Governmental Authority restraining, prohibiting or rendering illegal the consummation
of the purchase by this Agreement is in effect; and
(iii) Each applicable Preemptive Rights Purchaser and Quarterly Preemptive Rights Purchaser shall have received an officer’s certificate
signed by a duly authorized officer of the Company certifying that (A) the representations deemed made by the Company at such closing
pursuant to Section 2.4(a) are true and correct in all respects and (B) the Company shall have performed in all respects
its obligations required to be performed pursuant to Section 2.3; and
(d) Each applicable Preemptive Rights Purchaser and Quarterly Preemptive Rights Purchaser shall have received reasonably satisfactory
evidence of the issuance by the Company of the securities specified in the applicable Preemptive Rights Notice or Quarterly Preemptive
Rights Notice in the name of the applicable purchaser. The Company and each Preemptive Rights Purchaser or Quarterly Preemptive
Rights Purchaser, as applicable, shall use its reasonable best efforts to cause the conditions to closing set forth in this Section
2.4 to be satisfied. In the event the closing of any purchase pursuant to Sections 2.1 or 2.2 does not occur
as a result of the failure of the conditions specified in Section 2.4(c), then the Preemptive Rights Purchaser or Quarterly
Preemptive Rights Purchaser, as applicable, may elect to defer the closing of such purchase one or more times up to ninety (90)
days after the specified date of closing herein.
(e) No Preemptive Rights Purchaser or any Quarterly Preemptive Rights Purchaser shall be required to comply with any non-compete,
standstill, lock-up, transfer restriction or similar limitations which may be applicable to any other party to the Triggering Event
or Quarterly Triggering Issuance. The election by the Sponsor not to exercise its preemptive rights hereunder in any one instance
shall not affect its right as to any future Triggering Event or Quarterly Triggering Issuance.
(f)
Except as otherwise provided in this Agreement, the rights of the Sponsor pursuant to this Article II shall not be
assignable either directly or indirectly other than to another LMC Stockholder.
(g) In the event that any stockholder approval is required in order for any Preemptive Rights Purchaser or Quarterly Preemptive
Rights Purchaser, as applicable, to purchase securities under Sections 2.1 or 2.2, the Company shall, if permitted,
obtain a written consent evidencing the required approval as soon as reasonably practicable, or if not permitted or if requested
by the Sponsor, call and hold a meeting of its stockholders to consider (and the Company shall recommend that stockholders vote
in favor of) such issuance to the applicable Preemptive Rights Purchaser or Quarterly Preemptive Rights Purchaser, as soon as reasonably
practicable and in any event such meeting shall be held within 65 days after the date that the Company is advised that it will
require stockholder approval. The Company shall solicit proxies from stockholders for use at such meeting to obtain such approval;
provided, however, that the Company shall not be required to engage a proxy solicitation agent or otherwise spend
out-of-pocket amounts in respect of approval for any Quarterly Preemptive Rights Purchaser unless the Quarterly Preemptive Rights
Purchaser, the Sponsor or Liberty Media agrees to reimburse such expenses. With respect to any purchase pursuant to Section
2.1, the record date for voting at such stockholder meeting shall be a date that is prior to the closing of the Triggering
Event or, if different, the issuance date for any New Securities to be issued in connection therewith, unless the Company receives
a voting agreement in form and substance acceptable to the Sponsor from each Person that acquires securities pursuant to the Triggering
Event prior to obtaining stockholder approval pursuant to which voting agreement such Person agrees to vote in favor of the resolution
approving the issuance of securities to each Preemptive Rights Purchaser pursuant to Section 2.1. Subject to compliance
with the above, the Company may close the Triggering Event or, if different, the issuance date for any New Securities to be issued
in connection therewith, prior to obtaining stockholder approval for the issuance of securities to each Preemptive Rights Purchaser
pursuant to Section 2.1 and any timeline to consummate the purchase of securities pursuant to Section 2.1 shall be
tolled for so long as such approval has not been obtained.
(h) In the event that any stock exchange approval is required in order for any Preemptive Rights Purchaser or Quarterly Preemptive
Rights Purchaser, as applicable, to purchase securities under Sections 2.1 or 2.2, the Company shall use its commercially
reasonable efforts to obtain such approval and any timeline for the consummation of the purchase of securities pursuant to Sections
2.1 or 2.2 shall be tolled for so long as such approval has not been obtained.
ARTICLE
III.
REGISTRATION RIGHTS
Section
3.1
Demand Registration.
(a)
Request for Registration. Subject to the provisions of Sections 3.1(c) and 3.4 hereof, at any
time and from time to time on or after the date the Company consummates the initial Business Combination, the Holders of at least
15% in interest of the then-outstanding number of Registrable Securities (the “Demanding Holders”) may make
a written demand for Registration of all or part of their Registrable Securities, which written demand shall describe the amount
and type of securities to be included in such Registration and the intended method(s) of distribution thereof (such written demand
a “Demand Registration”). The Company shall, within three (3) Business 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) Business
Days after the receipt by the Holder of the notice from the Company. Upon receipt by the Company of any such written notification
from a Requesting Holder(s) to the Company, such Requesting Holder(s) shall be entitled to have their Registrable Securities included
in a Registration pursuant to a Demand Registration and the Company shall effect, as soon thereafter as practicable, but not more
than forty five (45) days immediately after the Company’s receipt of the Demand Registration, the Registration of all
Registrable Securities requested by the Demanding Holders and Requesting Holders pursuant to such Demand Registration. Under no
circumstances shall the Company be obligated to effect more than an aggregate of three (3) Registrations pursuant to a Demand
Registration under this Section 3.2(a) in any 12-month period 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 4.1 of this Agreement.
(b) Underwritten Offering. Subject to the provisions of Sections 3.1(c) and 3.4 hereof, if a majority-in-interest
of the Demanding Holders so advise the Company as part of their Demand Registration that the offering of the Registrable Securities
pursuant to such Demand Registration shall be in the form of an Underwritten Offering, then the right of such Demanding Holder
or Requesting Holder (if any) to include its Registrable Securities in such Registration shall be conditioned upon such Holder’s
participation in such Underwritten Offering and the inclusion of such Holder’s Registrable Securities in such Underwritten
Offering to the extent provided herein. All such Holders proposing to distribute their Registrable Securities through an Underwritten
Offering under this Section 3.1(b) and the Company shall enter into an underwriting agreement in customary form with the
Underwriter(s) selected for such Underwritten Offering by the majority-in-interest of the Demanding Holders initiating the Demand
Registration (provided that such investment banker or bankers and managers shall be reasonably satisfactory to the Company). The
majority-in-interest of the Demanding Holders initiating the Demand Registration shall have the right, after consultation with
the Company, to determine the plan of distribution, including the price at which the Registrable Securities are to be sold and
the underwriting commissions, discounts and fees.
(c)
Reduction of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Registration pursuant
to a Demand Registration, in good faith, advises the Company, the Demanding Holders and the Requesting Holders (if any) in writing
that the dollar amount or number of Registrable Securities that the Demanding Holders and the Requesting Holders (if any) desire
to sell, taken together with all other Company Common Stock or other equity securities that the Company desires to sell and the
Company Common Stock, if any, as to which a Registration has been requested pursuant to separate written contractual piggy-back
registration rights held by any other stockholders who desire to sell, exceeds the maximum dollar amount or maximum number of equity
securities that can be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the
distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of such securities,
as applicable, the “Maximum Number of Securities”), then the Company shall include in such Underwritten Offering,
as follows: (i) first, the Registrable Securities of the Demanding Holders and the Requesting Holders (if any) (pro rata based
on the respective number of Registrable Securities that each Demanding Holder and Requesting Holder (if any) holds prior to 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), Company Common Stock or other equity securities
for the account of other Persons that the Company is obligated to register pursuant to separate written contractual arrangements
with such Persons and that 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), Company Common Stock or other equity
securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities.
(d) Demand
Registration Withdrawal. A majority-in-interest of the Demanding Holders initiating a Demand Registration or a majority-in-interest
of the Requesting Holders (if any), pursuant to a Registration under Section 3.1(a) 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 Section 3.1(d).
Section
3.2 Shelf
Registration on Form S-3.
(a)
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”); a registration statement filed pursuant to this Section 3.1(a) (a “Shelf
Registration Statement”) shall provide for the resale of the Registrable Securities included therein pursuant to any
method or combination of methods legally available to, and requested by, any Holder. Within three (3) days of the Company’s
receipt of a written request from a Holder or Holders of Registrable Securities for a Registration on a Shelf Registration Statement,
the Company shall promptly give written notice of the proposed Registration to all other Holders of Registrable Securities, and
each Holder of Registrable Securities who thereafter wishes to include all or a portion of such Holder’s Registrable Securities
in such Registration shall so notify the Company, in writing, within three (3) days after the receipt by the Holder of the notice
from the Company. As soon as practicable thereafter, but not more than ten (10) days after the Company’s initial receipt
of such written request for a Registration on a Shelf Registration Statement, the Company shall file a Shelf Registration Statement
relating to all or such portion of such Holder’s Registrable Securities as are specified in such written request, together
with all or such portion of Registrable Securities of any other Holder or Holders joining in such request as are specified in the
written notification given by such Holder or Holders; provided, however, that the Company shall not be obligated
to effect any such Registration pursuant to this Section 3.1(a) 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 $5,000,000. The Company shall maintain each Shelf Registration Statement in accordance with the
terms hereof, and shall prepare and file with the Commission such amendments, including post-effective amendments, and supplements
as may be necessary to keep such Shelf Registration Statement continuously effective, available for use and in compliance with
the provisions of the Securities Act until such time as there are no longer any Registrable Securities included on such Shelf Registration
Statement.
(b)
If any Shelf Registration Statement ceases to
be effective under the Securities Act for any reason at any time while Registrable Securities included thereon are still outstanding,
the Company shall use its commercially reasonable efforts to as promptly as is reasonably practicable cause such Shelf Registration
Statement to again become effective under the Securities Act (including obtaining the prompt withdrawal of any order suspending
the effectiveness of such Shelf Registration Statement), and shall use its commercially reasonable efforts to as promptly as is
reasonably practicable amend such Shelf Registration Statement in a manner reasonably expected to result in the withdrawal of any
order suspending the effectiveness of such Shelf Registration Statement or file an additional registration statement (a “Subsequent
Shelf Registration”) registering the resale of all Registrable Securities included on such Shelf Registration Statement,
and pursuant to any method or combination of methods legally available to, and requested by, any Holder. If a Subsequent Shelf
Registration is filed, the Company shall use its commercially reasonable efforts to (i) cause such Subsequent Shelf Registration
to become effective under the Securities Act as promptly as is reasonably practicable after the filing thereof and (ii) keep such
Subsequent Shelf Registration continuously effective, available for use and in compliance with the provisions of the Securities
Act until such time as there are no longer any Registrable Securities included thereon. Any such Subsequent Shelf Registration
shall be on Form S-3 to the extent that the Company is eligible to use such form. Otherwise, such Subsequent Shelf Registration
shall be on another appropriate form. In the event that any Holder holds Registrable Securities that are not registered for resale
on a delayed or continuous basis, the Company, upon request of a Holder shall promptly use its commercially reasonable efforts
to cause the resale of such Registrable Securities to be covered by either, at the Company’s option, a Shelf Registration
Statement (including by means of a post-effective amendment) a Subsequent Shelf Registration, or prospectus supplements,
if available, and cause the same to become effective
as soon as practicable after such filing and such Shelf Registration Statement or Subsequent Shelf Registration shall be subject
to the terms hereof; provided, however, the Company shall only be required to cause such Registrable Securities to
be so covered once annually after inquiry of the Holders.
(c)
At any time and from time to time after a Shelf Registration Statement has been declared effective by the Commission, the
Sponsor and the Takedown Requesting Holders (if any) may request to sell all or any portion of its Registrable Securities in an
underwritten offering that is registered pursuant to the Shelf Registration Statement (each, an “Underwritten Shelf Takedown”);
provided that the Company shall be obligated to effect an Underwritten Shelf Takedown only if such offering shall include
securities with a total offering price (including piggyback securities and before deduction of underwriting discounts) reasonably
expected to exceed, in the aggregate, $5,000,000. All requests for Underwritten Shelf Takedowns shall be made by giving written
notice to the Company at least 48 hours prior to the public announcement of such Underwritten Shelf Takedown, which shall specify
the approximate number of Registrable Securities proposed to be sold in the Underwritten Shelf Takedown and the expected price
range (net of underwriting discounts and commissions) of such Underwritten Shelf Takedown. The Company shall include in any Underwritten
Shelf Takedown the securities requested to be included by any Holder (each, a “Takedown Requesting Holder”)
at least 24 hours prior to the public announcement of such Underwritten Shelf Takedown pursuant to written contractual piggyback
registration rights of such Holder (including to those set forth herein). The Sponsor and the Takedown Requesting Holders (if any)
shall have the right to select the underwriter(s) for such offering (which shall consist of one or more reputable nationally recognized
investment banks), subject to the Company’s prior approval which shall not be unreasonably withheld, conditioned or delayed.
(d) If the managing Underwriter or Underwriters in an Underwritten Shelf Takedown, in good faith, advises the Company, the Sponsor
and the Takedown Requesting Holders (if any) in writing that the dollar amount or number of Registrable Securities that the Sponsor
and the Takedown Requesting Holders (if any) desire to sell, taken together with all other Company Common Stock or other equity
securities that the Company desires to sell, exceeds the Maximum Number of Securities, then the Company shall include in such Underwritten
Shelf Takedown, as follows: (i) first, the Registrable Securities of the Sponsor that can be sold without exceeding the Maximum
Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing
clause (i), the Company Common Stock 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 Company Common Stock or other equity securities of the Takedown Requesting Holders, if
any, that can be sold without exceeding the Maximum Number of Securities, determined pro rata, based on the respective number of
Registrable Securities that each Takedown Requesting Holder has so requested to be included in such Underwritten Shelf Takedown.
(e) The Sponsor and the Takedown Requesting Holders (if any) shall have the right to withdraw from an Underwritten Shelf Takedown
for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of its intention
to withdraw from such Underwritten Shelf Takedown prior to the public announcement of such Underwritten Shelf Takedown. Notwithstanding
anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection
with an Underwritten Shelf Takedown prior to a withdrawal under this Section 3.2(e).
Section
3.3 Piggyback
Registration.
(a)
Piggyback Rights. If, at any time on or after the date of the consummation of the initial Business Combination, the
Company proposes to file a Registration Statement under the Securities Act with respect to an offering of equity securities, or
securities or other obligations exercisable or exchangeable for, or convertible into equity securities, for its own account or
for the account of stockholders of the Company (or by the Company and by the stockholders of the Company including pursuant to
Section 3.1 hereof), other than a Registration Statement (i) filed in connection with any Company Incentive Plan or other
benefit plan, (ii) for an exchange offer or offering of securities solely to the Company’s existing stockholders, (iii) for
an offering of debt that is convertible into equity securities of the Company or (iv) for a dividend reinvestment plan, then the
Company shall give written notice of such proposed filing to all of the Holders of Registrable Securities as soon as practicable
but not less than seven (7) Business 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) Business Days after receipt of such written notice (such Registration a “Piggyback Registration”).
The Company shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and shall use
its best efforts to cause the managing Underwriter or Underwriters of a proposed Underwritten Offering to permit the Registrable
Securities requested by the Holders pursuant to this Section 3.3(a) 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 Section 3.3(a) shall enter into an underwriting
agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the Company.
(b) 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 shares of Company Common Stock that the Company desires to sell, taken together
with (i) the shares of Company Common Stock, if any, as to which Registration has been demanded pursuant to separate written contractual
arrangements with Persons other than the Holders of Registrable Securities hereunder, (ii) the Registrable Securities as to which
registration has been requested pursuant to Section 3.3 hereof, and (iii) the shares of Company Common Stock, if any, as
to which Registration has been requested pursuant to separate written contractual piggy-back registration rights of other stockholders
of the Company, exceeds the Maximum Number of Securities, then:
(i) If the Registration is undertaken for the Company’s account, the Company shall include in any such Registration (A) first,
Company Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum
Number of Securities; and (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing
clause (A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to
Section 3.3(a) hereof and Company Common Stock, if any, as to which Registration has been requested pursuant to written
contractual piggy-back registration rights of other stockholders of the Company (pro rata based on the respective number of Registrable
Securities that each stockholder holds prior to such Underwritten Registration), which can be sold without exceeding the Maximum
Number of Securities; and
(ii)
If the Registration is pursuant to a request by Persons other than the Holders of Registrable Securities, then the Company shall
include in any such Registration (A) first, Company Common Stock or other equity securities, if any, of such requesting Persons,
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 Section 3.3(a) and Company Common
Stock or other equity securities for the account of other Persons that the Company is obligated to register pursuant to separate
written contractual arrangements with such Persons (pro rata based on the respective number of Registrable Securities that each
stockholder holds prior to such Underwritten Registration), which can be sold without exceeding the Maximum Number of Securities;
and (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B),
Company Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum
Number of Securities.
(c) 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 Section 3.3(c).
(d) Unlimited Piggyback Registration Rights. For purposes of clarity, any Registration effected pursuant to Section
3.3 hereof shall not be counted as a Registration pursuant to a Demand Registration effected under Section 3.1 hereof.
Section
3.4 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 Section 3.1(a) 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, the Chief Executive Officer or other executive officer
of the Company 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.
Section
3.5 Lock-Up Periods. Notwithstanding anything to the contrary contained in this Agreement, no Holder shall be
permitted to sell Registrable Securities pursuant to a Registration during any Lock-Up Period with respect to such Registrable
Securities; provided that the existence of a Lock-Up Period with respect to any Registrable Securities shall not alter the
Company’s obligation to Register any such Registrable Securities pursuant to this Agreement pursuant to Section 3.1(a).
Section
3.6 Registration
in Connection with Hedging Transactions.
(a) The Company acknowledges that from time to time a Holder may seek to enter into one or more Hedging Transactions with a
Hedging Counterparty. The Company agrees that, in connection with any proposed Hedging Transaction (if during any Lock-Up Period,
to the extent then permitted by the Letter Agreement), if, in the reasonable judgment of counsel to such Holder (after good faith
consultation with counsel to the Company), it is necessary or desirable to register under the Securities Act sales or transfers
(whether short or long and whether by the Holder or by the Hedging Counterparty) of Registrable Securities or (by the Hedging Counterparty)
other shares of Common Stock in connection therewith, then a Registration Statement covering Registrable Securities in a manner
otherwise in accordance with the terms and conditions of this Agreement to register such sales or transfers under the Securities
Act. Notwithstanding anything in this Agreement to the contrary, the Company shall not be required to register, and shall not be
required to pay Registration Expenses in connection with the registration of, an aggregate number of sales or transfers of Registrable
Securities in excess of the total number of Registrable Securities, it being understood that a sale or transfer of any Registrable
Securities shall be considered to have been registered for purposes of this Section 3.6 and Section 6.2 when (1)
a Registration Statement covering such Registrable Securities shall have been declared effective or, following a request pursuant
to Section 3.6(b), an effective shelf Registration Statement is available to cover the sale or transfer of the Registrable
Securities requested to be covered and (2) in the case of a Demand Registration, such Registration Statement shall have remained
effective until such sale or transfer of such Registrable Securities shall have occurred.
(b) If, in the circumstances contemplated by Section 3.6(a), a Holder seeks to register sales or transfers of Registrable
Securities (or the sale or transfer by a Hedging Counterparty of other shares of Company Common Stock) in connection with a Hedging
Transaction at a time when a shelf Registration Statement covering Registrable Securities is effective, upon receipt of written
notice thereof from the Sponsor, the Company shall use commercially reasonable efforts to take such actions as may reasonably be
required to permit such sales or transfers in connection with such Hedging Transaction to be covered by such effective Registration
Statement in a manner otherwise in accordance with the terms and conditions of this Agreement, which may include, among other things,
the filing of a prospectus supplement or post-effective amendment including a description of such Hedging Transaction, the name
of the Hedging Counterparty, identification of the Hedging Counterparty or its Affiliates as underwriters or potential underwriters,
if applicable, and any change to the plan of distribution contained in the Prospectus.
(c) Any information regarding a Hedging Transaction included in a Registration Statement pursuant to this Section 3.6
shall be deemed to be information provided by the Holder selling or transferring Registrable Securities pursuant to such Registration
Statement for purposes of Article V of this Agreement.
(d) If, with respect to a Hedging Transaction in connection with which a registration is contemplated by Section 3.6(a),
a Hedging Counterparty or any Affiliate thereof is (or may be considered) an underwriter or selling securityholder, then, as a
condition to including in any Registration Statement any sales or transfers of Registrable Securities by such Hedging Counterparty
in connection with such Hedging Transaction, it and the Company shall be required to enter into an agreement with the other providing
for indemnification rights substantially similar to those provided under Article V.
Section
3.7 Registration
in Connection with Exchangeable Private Placements.
(a) At any time following the occurrence of an Exchangeable Shelf Registration Trigger Event, the Holder that effected the
Exchangeable Private Placement may, by providing written notice to the Company, request that the corresponding Selling Holders
be able to sell all or part of their Exchangeable Registrable Securities delivered or deliverable under the terms of such Exchangeable
Private Placement pursuant to an Exchangeable Shelf Registration Statement (an “Exchangeable Security Shelf Registration
Request”) for a secondary offering to be made on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act or any successor rule thereto (a “Exchangeable Security Shelf Registration”). Each Exchangeable Security
Shelf Registration Request shall specify the number of Exchangeable Registrable Securities to be registered on the Exchangeable
Shelf Registration Statement. A Selling Holder shall not be named in such Exchangeable Shelf Registration Statement unless and
until the Company has received a fully completed and executed Selling Holder Questionnaire for such Selling Holder. Subject to
the provisions of this Agreement, after receipt of an Exchangeable Security Shelf Registration Request, if the Company is then
eligible to file an Exchangeable Shelf Registration Statement, the Company shall, to the extent permitted by applicable law, as
promptly as practicable and no later than twenty (20) business days after receipt of such Exchangeable Security Shelf Registration
Request file with the Commission a new Exchangeable Shelf Registration Statement or amend or renew an existing or expiring Exchangeable
Shelf Registration Statement, at the Company’s option, to effectuate such Exchangeable Shelf Registration Statement. If
permitted under the Securities Act, such Exchangeable Shelf Registration Statement shall be an “automatic shelf registration
statement” as defined in Rule 405 under the Securities Act. The Company shall use its commercially reasonable efforts to
cause such Exchangeable Shelf Registration Statement to be declared effective by the Commission or otherwise become effective
under the Securities Act as promptly as practicable after the filing thereof. The Company shall use its commercially reasonable
efforts to keep such Exchangeable Shelf Registration Statement continuously effective under the Securities Act in order to permit
the Prospectus forming a part thereof to be usable by such Selling Holders until the earlier of (i) one (1) year after the Exchangeable
Shelf Registration Statement is first declared effective, (ii) the date as of which all of the Exchangeable Registrable Securities
covered by such Shelf Registration Statement shall have been sold pursuant to such Exchangeable Shelf Registration Statement and
(iii) the date as of which each of the Selling Holders is permitted to sell its Exchangeable Registrable Securities without registration
pursuant to Rule 144 under the Securities Act without volume limitations or other restrictions on transfer thereunder (such period
of effectiveness, an “Exchangeable Security Shelf Period”). An Exchangeable Security Shelf Period shall be
extended by the number of days of any suspension of the Exchangeable Shelf Registration Statement that occurs during such Exchangeable
Security Shelf Period. An Exchangeable Shelf Registration pursuant to this Section 5.7(a) shall not be an underwritten
offering. As a condition to being named as a selling stockholder in the Prospectus included in an Exchangeable Shelf Registration
Statement, each Selling Holder will be required to agree to be bound by the obligations applicable to a Holder set forth in Sections
5(b) through (e). All actions on behalf of the Selling Holders shall be coordinated and communicated to the Company
by, and proceed through, the applicable Holder.
(b) In connection with an Exchangeable Private Placement in which the aggregate gross proceeds from such private placement to
the Holder are at least $250,000,000, the Company shall make the Company’s executive officers available, to the extent requested
by such Holder and the initial purchasers (an “Exchangeable Private Placement Request”), to reasonably assist
in the marketing of the Exchangeable Securities to be sold in such Exchangeable Private Placement, to the same extent as would
be required under Section 4.1(j) in connection with a Demand Registration; provided that the Holder may request that
the Company make the Company’s executive officers available for participation in “road show” presentations pursuant
to Section 4.1(o).
(c) A Holder may, by written notice to the Company, withdraw Shelf Registrable Securities from an Exchangeable Security Shelf
Registration at any time prior to the effectiveness of the applicable Registration Statement. Upon receipt of notice from the applicable
Holders to such effect, the Company shall cease all efforts to seek effectiveness of the applicable Registration Statement.
ARTICLE
IV.
COMPANY PROCEDURES
Section
4.1 General Procedures. If at any time on or after the date the Company consummates the initial Business Combination
the Company is required to effect the Registration of Registrable Securities or of Exchangeable Registrable Securities, the Company
shall use its best efforts to effect such Registration or Exchangeable Security Shelf Registration to permit the sale of such Registrable
Securities or such Exchangeable Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant
thereto the Company shall, as expeditiously as possible:
(a)
prepare and file with the Commission as soon as practicable a Registration Statement with respect to such Registrable Securities
or such Exchangeable Registrable Securities and use its reasonable best efforts to cause such Registration Statement to become
effective and remain effective until all Registrable Securities and Exchangeable Registrable Securities covered by such Registration
Statement have been sold;
(b)
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 Holders of at least a majority in interest of the Registrable
Securities 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 and Exchangeable 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;
(c)
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 or of Exchangeable Registrable Securities;
(d)
prior to any public offering of Registrable Securities or Exchangeable Registrable Securities, use its best efforts to (i)
register or qualify the Registrable Securities or Exchangeable Registrable Securities covered by the Registration Statement under
such securities or “blue sky” laws of such jurisdictions in the United States as the Holders (in light of the intended
plan of distribution) may request and (ii) take such action necessary to cause such Registrable Securities or Exchangeable 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 or Selling Holders of Exchangeable Registrable Securities included
in such Registration Statement to consummate the disposition of such Registrable Securities or Exchangeable 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;
(e)
cause all such Registrable Securities or Exchangeable Registrable Securities to be listed on each securities exchange or
automated quotation system on which similar securities issued by the Company are then listed;
(f)
provide a transfer agent or warrant agent, as applicable, and registrar for all such Registrable Securities or Exchangeable
Registrable Securities no later than the effective date of such Registration Statement;
(g) advise each Holder, 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;
(h)
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 Holder or its counsel;
(i)
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 4.4 hereof;
(j)
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;
(k) 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;
(l) 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;
(m) 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;
(n) 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);
(o) in
the case of an Underwritten Offering of Registrable Securities or an Exchangeable Private Placement, in each case, involving gross
proceeds in excess of $25,000,000, use its reasonable efforts to make available senior executives of the Company to participate
in customary “road show” presentations that may be reasonably requested by the Underwriter or applicable Holder, respectively,
in any Underwritten Offering;
(p) 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, including making available senior executives of the Company to participate in any due diligence sessions
that may be reasonably requested by the Underwriter in any Underwritten Offering; and
(q) in the case of an offering of Exchangeable Registrable Securities in connection with an Exchangeable Security Private Placement,
promptly incorporate in a supplement to the Prospectus, a filing incorporated by reference into the Prospectus or a post-effective
amendment to the Exchangeable Shelf Registration Statement the information for each Selling Holder set forth in its fully completed
and executed Selling Holder Questionnaire delivered to the Company, and promptly make all required filings of such supplement,
filing or post-effective amendment after receipt of such Selling Holder Questionnaire.
Section
4.2 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 Underwriters’ commissions and discounts relating to the sale of Registrable
Securities, and, other than as set forth in the definition of “Registration Expenses,” all reasonable fees and expenses
of any legal counsel representing the Holders or the Selling Holders.
Section
4.3 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.
Section
4.4 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 4.4.
Section
4.5 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. The Company further covenants that it shall take such further action as any Holder may reasonably request, all to
the extent required from time to time to enable such Holder to sell shares of Company Common Stock held by such Holder without
registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities
Act (or any successor rule promulgated thereafter by the Commission), including providing any legal opinions. Upon the request
of any Holder, the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it
has complied with such requirements.
ARTICLE
V.
INDEMNIFICATION AND CONTRIBUTION
Section
5.1 Indemnification.
(a) The Company agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities or Selling Holder
of Exchangeable Registrable Securities, their respective officers and directors and each Person who controls such Holder or Selling
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 (including with respect to information about any Selling
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 or Selling Holders.
(b) In
connection with any Registration Statement in which a Holder of Registrable Securities or any Selling Holders of Exchangeable
Registrable Securities is participating, such Holder or Selling 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
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 or such Selling 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 among such Selling Holders of Exchangeable Registrable Securities, and the liability
of each such Holder of Registrable Securities and each such Selling Holder of Exchangeable Registrable Securities shall be in
proportion to and limited to the net proceeds received by such Holder from the sale of Registrable Securities or by each such
Selling Holder from the sale of Exchangeable 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.
(c) 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.
(d) 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 any Exchangeable Registrable Securities by any Holder. The Company and each Holder of Registrable Securities participating
in an offering and each of the Selling Holders of Exchangeable Registrable Securities 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 or such
Selling Holders’ indemnification is unavailable for any reason.
(e) If the indemnification provided under Article V 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 or of any Selling Holders under this
Section 5.1(e) shall be limited to the amount of the net proceeds received by such Holder or such Selling 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 Sections 5.1(a), 5.1(b) and 5.1(c)
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 Section 5.1(e) 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 Section 5.1(e). 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 Section 5.1(e) from any Person who was not guilty of
such fraudulent misrepresentation.
ARTICLE
VI.
TERMINATION
Section
6.1 Termination.
Except as provided in Section 6.2, this Agreement shall terminate (a) with the mutual written agreement of the
Company and the Sponsor or (b) immediately following the first date on which the LMC Voting Stock Percentage is less than two
percent (2%).
Section
6.2 Effect
of Termination; Survival. In the event of any termination of this Agreement pursuant to Section 6.1, there shall be
no further liability or obligation hereunder on the part of any party hereto and this Agreement (other than Sections 7.5,
7.6, 7.10 and 7.11) shall thereafter be null and void; provided, that Articles III, IV
and V of this Agreement shall survive any termination until the earlier of (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 under Rule 144 (or any similar provision)
under the Securities Act without limitation on the amount of securities sold or the manner of sale; and provided, further,
that nothing contained in this Agreement (including this Section 6.2) shall relieve any party from liability for any breach
of any of its representations, warranties, covenants or agreements set forth in this Agreement occurring prior to such termination.
ARTICLE
VII.
MISCELLANEOUS
Section
7.1 Amendment
and Modification. Compliance with the provisions, covenants or conditions set forth in Article II (and any provisions
of this Article VII that affect Article II) may be waived, or any of such provisions, covenants or conditions may
be amended or modified, only with the written consent of the Company, the Sponsor and Liberty Media. Compliance with any of the
provisions, covenants and conditions set forth in this Agreement (other than in Article II or the provisions of this Article
VII that affect Article II) may be waived, or any of such provisions, covenants or conditions may be amended or modified,
only with the written consent of the Company, the Sponsor, Liberty Media and the Holders of at least a majority in interest of
the Registrable Securities at the time in question; provided, however, that notwithstanding the foregoing, any such
amendment hereto or waiver hereof that adversely affects one Holder, solely in his, her or its capacity as a holder of the shares
of capital stock of the Company, in a manner that is materially different from the other Holders (in such capacity) shall require
the consent of the Holder so affected. No course of dealing between or among any Persons having any interest in this Agreement
shall be deemed effective to modify, amend or discharge any part of this Agreement or any rights or obligations of any Person
under or by reason of this Agreement. 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.
Section
7.2 Assignment;
No Third-Party Beneficiaries. Neither this Agreement nor any of the rights, interests or obligations under this Agreement
shall be assigned or delegated, in whole or in part, by any party hereto without the prior written consent of each other party
hereto, except that (i) Sponsor may assign or delegate its rights under Article II to a Qualified Distribution Transferee
in connection with a Qualified Distribution Transaction, and (ii) any Holder may assign or delegate its rights under Article
III to a Permitted Transferee in connection with the transfer of Registrable Securities by such Holder to the Permitted Transferee.
Subject to the preceding sentences, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the
parties and their respective successors (including, in the case of the Company, any successor publicly traded Person resulting
from a reorganization of the Company, and in the case of the Holders, Permitted Transferees) and assigns and executors, administrators
and heirs. This Agreement shall not confer any rights or remedies upon any Person other than the parties to this Agreement and
their respective successors and permitted assigns, and as expressly set forth in this Agreement and this Section 7.2 hereof.
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 7.5
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 7.2 shall be null and void.
Section
7.3 Binding
Effect; Entire Agreement. This Agreement sets forth the entire agreement and understanding between the parties as to the subject
matter hereof and merges and supersedes all prior representations, agreements and understandings, written or oral, of any and
every nature among them.
Section
7.4 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable Law,
(a) a suitable and equitable provision to be negotiated by the Parties, each acting reasonably and in good faith shall be substituted
therefor in order to carry out, so far as may be enforceable, the intent and purpose of such unenforceable provision, and (b) the
balance of this Agreement shall be interpreted as if such unenforceable provisions were excluded and shall be enforceable in accordance
with its terms so long as the economic or legal substance of the transactions contemplated by this Agreement are not affected in
any manner materially adverse to any party.
Section
7.5
Notices and Addresses. All notices, requests, claims, demands, waiver and other communications under this
Agreement shall be in writing and shall be deemed given (a) on the date of delivery if delivered personally or sent via e-mail
(with delivery confirmation); (b) on the first Business Day following the date of dispatch if sent by a nationally recognized overnight
courier (providing proof of delivery); or (c) and on the third Business Day after mailing, if mailed to the party to whom notice
is to be given, by first class mail, registered, return receipt requested, postage prepaid and addressed as follows:
If to the Company:
Liberty Media Acquisition Corporation
12300 Liberty Boulevard
Englewood, CO 80112
Attention: Chief Legal Officer
Telephone: (720) 875-5800
Facsimile: [Separately provided]
Email: [Separately provided]
If to the Sponsor or Liberty Media:
Liberty Media Corporation
12300 Liberty Boulevard
Englewood, CO 80112
Telephone: (720) 875-5400
Facsimile: [Separately provided]
Attention: Chief Legal Officer
E-Mail: [Separately provided]
with a copy (which shall not constitute notice) to:
Baker Botts L.L.P.
2001 Ross Avenue
Suite 900
Dallas, TX 75201
Attention: Samantha Hale Crispin
Telephone: (214) 953-6497
Facsimile: (214) 661-4497
Email: samantha.crispin@bakerbotts.com
Section
7.6 Governing
Law. This Agreement and all claims or disputes arising out of this Agreement shall be governed by and construed in accordance
with the Laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether
of the State of Delaware or any other jurisdiction) that would cause the application of the Law of any jurisdiction other than
the State of Delaware.
Section
7.7 Headings. The headings in this Agreement are for convenience of reference only and shall not constitute a
part of this Agreement, nor shall they affect its meaning, construction or effect.
Section
7.8
Counterparts. This Agreement may be executed via facsimile or pdf and in any number of counterparts, each
of which shall be deemed to be an original instrument and all of which together shall constitute one and the same instrument.
Section
7.9
Further Assurances. Each party shall cooperate and take such action as may be reasonably requested by the
other party in order to carry out the provisions and purposes of this Agreement and the transactions contemplated hereby; provided,
however, that no party shall be obligated to take any actions or omit to take any actions that would be inconsistent with
applicable Law. At such times as the Sponsor or Liberty Media may reasonably request, the Company will provide such requesting
party with information regarding the number of shares of Company Common Stock outstanding.
Section
7.10
Remedies. In the event of a breach or a threatened breach by any party to this Agreement of its obligations
under this Agreement, any party injured or to be injured by such breach shall be entitled to specific performance of its rights
under this Agreement or to injunctive relief, in addition to being entitled to exercise all rights provided in this Agreement and
granted by Law, it being agreed by the parties that the remedy at Law, including monetary damages, for breach of any such provision
will be inadequate compensation for any loss and that any defense or objection in any action for specific performance or injunctive
relief for which a remedy at Law would be adequate is waived.
Section
7.11
Jurisdiction and Venue. The parties hereto hereby irrevocably submit to the exclusive jurisdiction of the
Court of Chancery of the State of Delaware or, in the event (but only in the event) that such court does not have subject matter
jurisdiction over such action or proceeding, another state court within the State of Delaware or, in the event (but only in the
event) that no state court within the State of Delaware has subject matter jurisdiction over such action or proceeding, the United
States District Court for the District of Delaware (and in each case, any appellate courts thereof), in respect of the interpretation
and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and in respect of the transactions
contemplated hereby, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation
or enforcement hereof or of any such document, that it is not subject thereto or that such action, suit or proceeding may not be
brought or is not maintainable in the Court of Chancery of the State of Delaware or, in the event (but only in the event) that
such court does not have subject matter jurisdiction over such action or proceeding, another state court within the State of Delaware
or, in the event (but only in the event) that no state court within the State of Delaware has subject matter jurisdiction over
such action or proceeding, the United States District Court for the District of Delaware (and in each case, any appellate courts
thereof), or that this Agreement or any such document may not be enforced in or by such courts, and the parties hereto irrevocably
agree that all claims with respect to such action or proceeding shall be heard and determined in the Court of Chancery of the State
of Delaware or, in the event (but only in the event) that such court does not have subject matter jurisdiction over such action
or proceeding, another state court within the State of Delaware or, in the event (but only in the event) that no state court within
the State of Delaware has subject matter jurisdiction over such action or proceeding, the United States District Court for the
District of Delaware (and in each case, any appellate courts thereof). The parties hereto hereby consent to and grant the Court
of Chancery of the State of Delaware or, in the event (but only in the event) that such court does not have subject matter jurisdiction
over such action or proceeding, another state court within the State of Delaware or, in the event (but only in the event) that
no state court within the State of Delaware has subject matter jurisdiction over such action or proceeding, the United States District
Court for the District of Delaware (and in each case, any appellate courts thereof), jurisdiction over the Person of such parties
and, to the extent permitted by Law, over the subject matter of such dispute and agree that mailing of process or other papers
in connection with any such action or proceeding in the manner provided in Section 7.5 or in such other manner as may
be permitted by Law shall be valid and sufficient service thereof. EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY IN CONNECTION WITH ANY PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section
7.12
Adjustments. References herein to numbers of shares, the series thereof, and to per share prices, shall be
appropriately adjusted to account for any reclassification, exchange, substitution, combination, stock split, reverse stock split, or stock dividend or other share distribution made on or with respect to the applicable series of shares, occurring or effective
following the date of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date and year first above written.
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LIBERTY MEDIA ACQUISITION CORPORATION
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LIBERTY MEDIA ACQUISITION SPONSOR LLC
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LIBERTY Media CORPORATION
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[Signature
Page to Investor Rights Agreement]
Exhibit 10.6
SPONSOR WARRANTS PURCHASE AGREEMENT
THIS SPONSOR WARRANTS
PURCHASE AGREEMENT, dated as of [∙], 2021 (as it may from time to time be amended, this “Agreement”),
is entered into by and between Liberty Media Acquisition Company, a Delaware corporation (the “Company”), and
Liberty Media Acquisition Sponsor LLC, a Delaware limited liability company (the “Purchaser”).
WHEREAS:
The Company intends to
consummate an initial public offering of the Company’s units (the “Public Offering”), each unit consisting
of one share of Series A common stock of the Company, par value $0.0001 per share (“Common Stock”), and one-fifth
of one redeemable warrant;
Each whole warrant entitles
the holder to purchase one share of Common Stock at an exercise price of $11.50 per share; and
The Purchaser has agreed
to purchase an aggregate of 9,000,000 warrants (or up to 10,000,000 warrants depending on the extent to which the underwriters
in the Public Offering exercise their over-allotment option) (the “Sponsor Warrants”), each Sponsor Warrant
entitling the holder to purchase one share of Common Stock at an exercise price of $11.50 per share.
NOW THEREFORE, in consideration
of the mutual promises contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties to this Agreement hereby, intending legally to be bound, agree as follows:
AGREEMENT
Section 1. Authorization,
Purchase and Sale; Terms of the Sponsor Warrants.
A. Authorization
of the Sponsor Warrants. The Company has duly authorized the issuance and sale of the Sponsor Warrants to the Purchaser.
B. Purchase
and Sale of the Sponsor Warrants.
(i) On the date of
the consummation of the Public Offering or on such earlier time and date as may be mutually agreed by the Purchaser and the Company
(the “Initial Closing Date”), the Company shall issue and sell to the Purchaser, and the Purchaser shall purchase
from the Company, 9,000,000 Sponsor Warrants at a price of $1.50 per warrant for an aggregate purchase price of $13,500,000 (the
“Purchase Price”), which shall be paid by wire transfer of immediately available funds to the Company at least
one day prior to the Initial Closing Date in accordance with the Company’s wiring instructions. On the Initial Closing Date,
following the payment by the Purchaser of the Purchase Price by wire transfer of immediately available funds to the Company, the
Company, at its option, shall deliver a certificate evidencing the Sponsor Warrants purchased by the Purchaser on such date duly
registered in the Purchaser’s name to the Purchaser or effect such delivery in book-entry form.
(ii) On the date of
any closing of the over-allotment option in connection with the Public Offering or on such earlier time and date as may be mutually
agreed by the Purchaser and the Company (each such date, an “Over-allotment Closing Date,” and each Over-allotment
Closing Date (if any) and the Initial Closing Date being sometimes referred to herein as a “Closing Date”),
the Company shall issue and sell to the Purchaser, and the Purchaser shall purchase from the Company, up to an aggregate of 1,000,000
Sponsor Warrants, in the same proportion as the amount of the option that is then so exercised, at a price of $1.50 per warrant
for an aggregate purchase price of up to $1,500,000 (if the over-allotment option in connection with the Public Offering is exercised
in full) (the “Over-allotment Purchase Price”), which shall be paid by wire transfer of immediately available
funds to the Company at least one day prior to such Over-allotment Closing Date in accordance with the Company’s wiring instructions.
On the Over-allotment Closing Date, following the payment by the Purchaser of the Over-allotment Purchase Price by wire transfer
of immediately available funds to the Company, the Company, at its option, shall deliver a certificate evidencing the Sponsor Warrants
purchased by the Purchaser on such date duly registered in the Purchaser’s name to the Purchaser, or effect such delivery
in book-entry form.
C. Terms
of the Sponsor Warrants.
(i) Each Sponsor Warrant
shall have the terms set forth in a Warrant Agreement to be entered into by the Company and a warrant agent, in connection with
the Public Offering (a “Warrant Agreement”).
(ii) At the time of,
or prior to, the closing of the Public Offering, the Company, the Purchaser and Liberty Media Corporation, a Delaware corporation
(“LMC”), shall enter into an investor rights agreement (the “Investor Rights Agreement”)
pursuant to which the Company will grant certain registration rights to the Purchaser and LMC relating to the Sponsor Warrants
and the shares of Common Stock underlying the Sponsor Warrants.
Section 2. Representations
and Warranties of the Company. As a material inducement to the Purchaser to enter into this Agreement and purchase the Sponsor
Warrants, the Company hereby represents and warrants to the Purchaser (which representations and warranties shall survive the Closing
Date) that:
A. Incorporation
and Corporate Power. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of
the State of Delaware and is qualified to do business in every jurisdiction in which the failure to so qualify would reasonably
be expected to have a material adverse effect on the financial condition, operating results or assets of the Company. The Company
possesses all requisite corporate power and authority necessary to carry out the transactions contemplated by this Agreement and
the Warrant Agreement.
B. Authorization;
No Breach.
(i) The
execution, delivery and performance of this Agreement and the Sponsor Warrants have been duly authorized by the Company as of
each Closing Date. This Agreement constitutes the valid and binding obligation of the Company, enforceable in accordance with
its terms. Upon issuance in accordance with, and payment pursuant to, the terms of the Warrant Agreement and this Agreement,
the Sponsor Warrants will constitute valid and binding obligations of the Company, enforceable in accordance with their terms
as of each Closing Date.
(ii) The execution
and delivery by the Company of this Agreement and the Sponsor Warrants, the issuance and sale of the Sponsor Warrants, the issuance
of the shares of Common Stock upon exercise of the Sponsor Warrants and the fulfillment, of and compliance with, the respective
terms hereof and thereof by the Company, do not and will not as of each Closing Date (a) conflict with or result in a breach of
the terms, conditions or provisions of, (b) constitute a default under, (c) result in the creation of any lien, security interest,
charge or encumbrance upon the Company’s share capital or assets under, (d) result in a violation of, or (e) require any
authorization, consent, approval, exemption or other action by or notice or declaration to, or filing with, any court or administrative
or governmental body or agency pursuant to, the amended and restated certificate of incorporation and bylaws of the Company (in
effect on the date hereof or as may be amended prior to completion of the contemplated Public Offering), or any material law, statute,
rule or regulation to which the Company is subject, or any agreement, order, judgment or decree to which the Company is subject,
except for any filings required after the date hereof under federal or state securities laws.
C. Title
to Securities. Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, the shares
of Common Stock issuable upon exercise of the Sponsor Warrants will be duly and validly issued, fully paid and nonassessable. Upon
issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, the Purchaser will have good
title to the Sponsor Warrants and the shares of Common Stock issuable upon exercise of such Sponsor Warrants, free and clear of
all liens, claims and encumbrances of any kind, other than (i) transfer restrictions hereunder and under the other agreements
contemplated hereby, (ii) transfer restrictions under federal and state securities laws, and (iii) liens, claims or encumbrances
imposed due to the actions of the Purchaser.
D. Governmental
Consents. No permit, consent, approval or authorization of, or declaration to or filing with, any governmental authority is
required in connection with the execution, delivery and performance by the Company of this Agreement or the consummation by the
Company of any other transactions contemplated hereby.
Section 3. Representations
and Warranties of the Purchaser. As a material inducement to the Company to enter into this Agreement and issue and sell the
Sponsor Warrants to the Purchaser, the Purchaser hereby represents and warrants to the Company (which representations and warranties
shall survive each Closing Date) that:
A. Organization
and Requisite Authority. The Purchaser possesses all requisite power and authority necessary to carry out the transactions
contemplated by this Agreement.
B. Authorization;
No Breach.
(i) This
Agreement constitutes a valid and binding obligation of the Purchaser, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other laws of general applicability relating to
or affecting creditors’ rights and to general equitable principles (whether considered in a proceeding in equity or
law).
(ii) The execution
and delivery by the Purchaser of this Agreement and the fulfillment of and compliance with the terms hereof by the Purchaser does
not and shall not as of each Closing Date conflict with or result in a breach by the Purchaser of the terms, conditions or provisions
of any agreement, instrument, order, judgment or decree to which the Purchaser is subject.
C. Investment
Representations.
(i) The Purchaser is
acquiring the Sponsor Warrants and, upon exercise of the Sponsor Warrants, the shares of Common Stock issuable upon such exercise
(collectively, the “Securities”), for the Purchaser’s own account, for investment purposes only and not
with a view towards the distribution or dissemination thereof that would result in a violation of the Securities Act.
(ii) The Purchaser
is an “accredited investor” as such term is defined in Rule 501(a)(3) of Regulation D under the Securities Act
of 1933, as amended (the “Securities Act”), and the Purchaser has not experienced a disqualifying event as enumerated
pursuant to Rule 506(d) of Regulation D under the Securities Act.
(iii) The Purchaser
understands that the Securities are being offered and will be sold to it in reliance on specific exemptions from the registration
requirements of the United States federal and state securities laws and that the Company is relying upon the truth and accuracy
of, and the Purchaser’s compliance with, the representations and warranties of the Purchaser set forth herein in order to
determine the availability of such exemptions and the eligibility of the Purchaser to acquire such Securities.
(iv) The Purchaser
decided to enter into this Agreement not as a result of any general solicitation or general advertising within the meaning of Rule
502(c) of Regulation D under the Securities Act.
(v) The Purchaser has
been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the
offer and sale of the Securities which have been requested by the Purchaser. The Purchaser has been afforded the opportunity to
ask questions of the executive officers and directors of the Company. The Purchaser understands that its investment in the Securities
involves a high degree of risk and it has sought such accounting, legal and tax advice as it has considered necessary to make an
informed investment decision with respect to the acquisition of the Securities.
(vi) The Purchaser
understands that no United States federal or state agency or any other government or governmental agency has passed on or made
any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities by the Purchaser
nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
(vii) The
Purchaser understands that: (a) the Securities have not been and are not being registered under the Securities Act or any
state securities laws, and may not be offered for sale, sold, assigned or transferred unless (1) in a registered transaction
or (2) sold in reliance on an exemption therefrom; (b) except as specifically set forth in the Investor Rights Agreement,
neither the Company nor any other person is under any obligation to register the Securities under the Securities Act or any
state securities laws or to comply with the terms and conditions of any exemption thereunder; and (c) Rule 144 adopted
pursuant to the Securities Act will not be available for resale transactions of Securities prior to a Business Combination
and may not be available for resale transactions of Securities after a Business Combination.
(viii) The Purchaser
has such knowledge and experience in financial and business matters, knows of the high degree of risk associated with investments
in the securities of companies in the development stage such as the Company, is capable of evaluating the merits and risks of an
investment in the Securities and is able to bear the economic risk of an investment in the Securities in the amount contemplated
hereunder for an indefinite period of time. The Purchaser has adequate means of providing for its current financial needs and contingencies
and will have no current or anticipated future needs for liquidity which would be jeopardized by the investment in the Securities.
The Purchaser can afford a complete loss of its investments in the Securities.
(ix) The Purchaser
understands that the Sponsor Warrants shall bear the legend substantially in the form set forth in the Warrant Agreement.
Section 4. Conditions
of the Purchaser’s Obligations. The obligations of the Purchaser to purchase and pay for the Sponsor Warrants are subject
to the fulfillment, on or before each Closing Date, of each of the following conditions:
A. Representations
and Warranties. The representations and warranties of the Company contained in Section 2 shall be true and correct at and as
of such Closing Date as though then made.
B. Performance.
The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before such Closing Date.
C. No
Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions
contemplated by this Agreement or the Warrant Agreement.
D. Warrant
Agreement. The Company shall have entered into a Warrant Agreement with a warrant agent on terms satisfactory to the Purchaser
E. Investor
Rights Agreement. The Company shall have entered into an Investor Rights Agreement with the Purchaser and LMC and such Investor
Rights Agreement shall still be in effect as of each Closing Date.
Section 5. Conditions
of the Company’s Obligations. The obligations of the Company to the Purchaser under this Agreement are subject to the
fulfillment, on or before each Closing Date, of each of the following conditions:
A. Representations
and Warranties. The representations and warranties of the Purchaser contained in Section 3 shall be true and correct at and
as of such Closing Date as though then made.
B. Performance.
The Purchaser shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by the Purchaser on or before such Closing Date.
C. Corporate
Consents. The Company shall have obtained the consent of its board of directors authorizing the execution, delivery and performance
of this Agreement and the Warrant Agreement and the issuance and sale of the Sponsor Warrants hereunder.
D. No
Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions
contemplated by this Agreement or the Warrant Agreement.
E. Warrant
Agreement. The Company shall have entered into a Warrant Agreement with a warrant agent on terms satisfactory to the Company.
Section 6. Termination.
This Agreement may be terminated at any time after December 31, 2021 upon the election by either the Company or the Purchaser upon
written notice to the other party if the closing of the Public Offering does not occur prior to such date.
Section 7. Survival
of Representations and Warranties. All of the representations and warranties contained herein shall survive each Closing Date.
Section 8. Definitions.
Terms used but not otherwise defined in this Agreement shall have the meaning assigned to such terms in the registration statement
on Form S-1 the Company has filed with the Securities and Exchange Commission, under the Securities Act.
Section 9. Miscellaneous.
A. Successors
and Assigns. Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors of the parties hereto whether
so expressed or not. Notwithstanding the foregoing or anything to the contrary herein, the parties may not assign this Agreement,
other than assignments by the Purchaser to affiliates thereof.
B. Severability.
Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.
C. Counterparts.
This Agreement may be executed simultaneously in two or more counterparts, none of which need contain the signatures of more than
one party, but all such counterparts taken together shall constitute one and the same agreement.
D. Descriptive
Headings; Interpretation. The descriptive headings of this Agreement are inserted for convenience only and do not constitute
a substantive part of this Agreement. The use of the word “including” in this Agreement shall be by way of example
rather than by limitation.
E. Governing
Law. This Agreement shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall
be construed in accordance with the internal laws of the State of New York.
F. Amendments.
This Agreement may not be amended, modified or waived as to any particular provision, except by a written instrument executed by
all parties hereto.
[Signature page follows]
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement to be effective as of the date first set forth above.
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COMPANY:
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LIBERTY MEDIA ACQUISITION
COMPANY
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By:
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Name:
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Title:
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PURCHASER:
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LIBERTY
MEDIA ACQUISITION Sponsor LLC
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By:
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Name:
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Title:
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[Signature page to Sponsor Warrants Purchase
Agreement]
Exhibit 10.7
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT
(this “Agreement”), dated ___________, ____,
is effective as of the Effective Date (as defined below), by and between Liberty Media Acquisition Corporation, a Delaware corporation
(the “Company”), and ____________ (“Indemnitee”).
WHEREAS, it
is essential to the Company and its mission to retain and attract as officers and directors the most capable persons available;
WHEREAS, both
the Company and Indemnitee recognize the omnipresent risk of litigation and other claims that are routinely asserted against officers
and directors of companies operating in the public arena in the current environment, and the attendant costs of defending even
wholly frivolous claims;
WHEREAS, the
Amended and Restated Certificate of Incorporation (as may be amended, restated or amended and restated from time to time, the
“Charter”) and the Amended and Restated Bylaws (as may be amended, restated or amended and restated from time
to time, the “Bylaws”) of the Company provide certain indemnification rights to the officers and directors
of the Company, as provided by Delaware law; and
WHEREAS, to
induce Indemnitee to continue to serve as [a director/an officer] of the Company
[or as a director/officer of another entity at the Company’s request], and
in recognition of Indemnitee’s need for substantial protection against personal liability in order to enhance Indemnitee’s
continued service to the Company in an effective manner, the Company wishes to provide in this Agreement for the indemnification
of and the advancing of expenses to Indemnitee to the fullest extent permitted by law (whether partial or complete) and as set
forth in this Agreement, and, to the extent insurance is maintained, for the continued coverage of Indemnitee under the Company’s
directors’ and officers’ liability insurance policies.
NOW, THEREFORE,
in consideration of the premises, the mutual covenants and agreements contained herein and Indemnitee’s continuing to serve
as [a director/an officer] of the Company, the parties hereto agree as follows:
1. Certain
Definitions.
(a) Change
in Control: shall be deemed to have occurred if (i) any “person” (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended) becomes the “beneficial owner” (as defined in Rule 13d-3 under
such Act), directly or indirectly, of securities of the Company representing 20% or more of the total voting power represented
by the Company’s then outstanding Voting Securities (a “Significant Stockholder”), other than (x) a trustee
or other fiduciary holding securities under an employee benefit plan of the Company, (y) a corporation owned directly or indirectly
by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, or (z) any
Significant Stockholder as of the date hereof, or (ii) during any period of two consecutive years, individuals who at the beginning
of such period constituted the Board of Directors
of the Company (the “Board of Directors”) and any new director whose election by the Board of Directors or
nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (66-2/3%) of the directors
then still in office who either were directors at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof, or (iii) the stockholders of the Company approve
a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the
Voting Securities of the Company held by the stockholders of the Company and outstanding immediately prior thereto continuing
to represent or being converted into or exchanged for Voting Securities that represent, immediately following such merger or consolidation,
at least 80% of the total voting power of the Voting Securities of (1) the surviving or resulting entity; or (2) if the surviving
or resulting entity is a wholly owned subsidiary of another entity immediately following such merger or consolidation, the parent
entity of such surviving or resulting entity, or the stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company (in one transaction or a series of transactions) of all or
substantially all the Company’s assets.
(b) Claim:
any threatened, pending or completed action, suit, arbitration, alternative dispute
resolution mechanism, inquiry or investigation (including any internal investigation, and whether instituted by the Company or
any other party or otherwise), administrative hearing, or any other threatened, pending or completed proceeding, whether
brought by or in the right of the
Company or any other party or otherwise, whether civil (including intentional
and unintentional tort claims), criminal, administrative, investigative or other.
(c) Corporate
Status: describes the status of a person who is or was a director, officer, employee, agent or fiduciary of the Company,
or is or was serving at the request of the Company as a director, officer, employee, trustee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise.
(d) Expenses:
include attorneys’ fees and all other costs, expenses and obligations paid or incurred in connection with investigating,
defending, being a witness in, subject or target of, or participating in (including on appeal), or preparing to defend, be a witness
in, subject or target of, or participate in, any Claim.
(e) Independent
Legal Counsel: an attorney or firm of attorneys, selected in accordance with the provisions of Section 3, who shall not
have otherwise performed services for the Company, the Company’s parent entity (if any), or Indemnitee within the last five
years and who are not currently performing services for the Company, the Company’s parent entity (if any), or Indemnitee,
in each case, other than with respect to matters concerning the rights of Indemnitee under this Agreement, or of other indemnitees
under similar indemnification agreements.
(f) Reviewing
Party: any appropriate person or body consisting of a member or members of the Board of Directors or any other person or body
appointed by the Board of Directors who is not a party to, or witness
or other participant in, nor threatened to be made a party to, or witness or participant in, the particular Claim for which Indemnitee
is seeking indemnification, or Independent Legal Counsel.
(g) Voting
Securities: shares of any series or class of common stock or preferred stock of the Company, in each case, entitled to vote generally
upon all matters that may be submitted to a vote of stockholders of the Company at any annual or special meeting thereof.
2. Basic
Indemnification and Advancement Arrangement.
(a) In
the event Indemnitee was, is or becomes a party to, subject or target of, or witness or other participant in, or is threatened
to be made a party to, subject or target of, or witness or other participant in, a Claim by reason of (or arising in part out
of) Indemnitee’s Corporate Status, the Company shall indemnify Indemnitee
to the fullest extent permitted by law as soon as practicable but in any event no later than thirty days after written demand
is presented to the Company (which demand may only be presented to the Company following
the final judicial disposition of the Claim, as to which all rights of appeal therefrom have been exhausted or lapsed (a “Final
Disposition”)), against any and all Expenses, judgments, fines, penalties and amounts paid or
payable in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect
of such Expenses, judgments, fines, penalties or amounts paid or payable in
settlement) of such Claim. If so requested by Indemnitee, prior to the Final Disposition of a Claim, the Company shall advance
(within two business days of such request) any and all Expenses actually and reasonably incurred by or on behalf of Indemnitee
(including, without limitation, Expenses actually and reasonably billed to or on behalf of Indemnitee) in connection with any
such Claim (an “Expense Advance”).
(b) Notwithstanding
the foregoing, (i) the obligations of the Company to indemnify Indemnitee under Section 2(a) shall be subject to the condition
that the Reviewing Party shall not have determined (in a written determination, or, in any case in which the Independent Legal
Counsel referred to in Section 3 hereof is involved, in a written opinion) that Indemnitee would not be permitted to be
indemnified under applicable law, and (ii) the obligation of the Company to make an Expense Advance pursuant to Section 2(a)
shall be subject to the condition that, if the Reviewing Party determines in good faith that Indemnitee would not be permitted
to be indemnified under applicable law, the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse
the Company) for all such amounts theretofore paid; provided, however, that if Indemnitee has commenced or thereafter commences
legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee should be indemnified under applicable
law, any determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the Company for any Expense Advance until a Final Disposition
is made with respect thereto. If there has not been a Change in Control, the Reviewing Party shall be selected by the Board of
Directors, and if there has been such a Change in Control, the Reviewing Party shall be the Independent Legal Counsel referred
to in Section 3 hereof. If there has been no determination by the Reviewing
Party as contemplated by Section 2(b)
or if the Reviewing Party determines that Indemnitee substantively would not be permitted to be indemnified in whole
or in part under applicable law, Indemnitee shall have the right to commence litigation in the Court of Chancery of the State
of Delaware seeking to enforce Indemnitee’s rights to indemnification and advancement hereunder or challenging any such
determination by the Reviewing Party or any aspect thereof, including the legal or factual bases therefor, and,
in all events, the Company hereby consents to service of process and agrees to appear in any such proceeding. Any determination
by the Reviewing Party that Indemnitee is entitled to indemnification shall
be conclusive and binding on the Company and Indemnitee. Any determination by the Reviewing Party that Indemnitee is not permitted
to be indemnified (in whole or in part) under applicable law shall be in writing (or, in any case in which the Independent Legal
Counsel referred to in Section 3 hereof is involved, set forth in a written opinion).
3. Change
in Control. The Company agrees that if there is a Change in Control of the Company then with respect to all matters thereafter
arising concerning the rights of Indemnitee to indemnity payments and Expense Advances under this Agreement or any other agreement
or the Bylaws or Charter provision now or hereafter in effect, the Company shall seek legal advice only from Independent Legal
Counsel selected by Indemnitee and approved by the Company (which approval shall not be unreasonably withheld). Such counsel,
among other things, shall render its written opinion to the Company and Indemnitee as to whether and to what extent Indemnitee
would be permitted to be indemnified under applicable law. The Company agrees to pay the reasonable fees of the Independent Legal
Counsel referred to above and to fully indemnify such counsel against any and all expenses (including attorneys’ fees),
claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
4. Indemnification
for Additional Expenses. The Company shall (i) indemnify Indemnitee (to
the extent Indemnitee is successful on the merits or otherwise in the action provided for in this Section 4) against
any and all Expenses (including attorneys’ fees) and, (ii) if requested
by Indemnitee, advance (within two business days of such request) such Expenses to Indemnitee (and
Indemnitee hereby agrees to reimburse the Company for any amounts so advanced if, when, and to the extent Indemnitee is not successful
on the merits or otherwise in the action provided for in this Section 4), which are incurred by Indemnitee in connection
with any action brought by Indemnitee (whether pursuant to Section 19
of this Agreement or otherwise), in each case, for (a) indemnification or advance
payment of Expenses by the Company under this Agreement or any other agreement or the Bylaws or Charter provision now or hereafter
in effect or (b) recovery under any directors’ and officers’ liability insurance policies maintained by the Company,
in all cases, to the fullest extent permitted by law.
5. Proceedings
Against the Company; Certain Securities Laws Claims.
(a) Anything
in this Agreement to the contrary notwithstanding, except as provided in Section 4 hereof, with respect to a Claim initiated against
the Company by Indemnitee (whether initiated by Indemnitee in or by reason of such person’s capacity as an officer or director
of the Company or in or by reason of any other capacity), the Company shall not be required to indemnify or
to advance Expenses to Indemnitee in connection with prosecuting such Claim (or any part thereof) or in defending any counterclaim,
cross-claim, affirmative defense, or like claim of the Company in connection with such Claim (or part thereof) unless, subject
to Section 15 of this Agreement, such Claim was authorized by the Company’s Board of Directors. For purposes of this Section
5, a compulsory counterclaim by Indemnitee against the Company in connection with a Claim initiated against Indemnitee by the
Company shall not be considered a Claim (or part thereof) initiated against the Company by Indemnitee, and Indemnitee shall have
all rights of indemnification and advancement with respect to any such compulsory counterclaim in accordance with and subject
to the terms of this Agreement.
(b) Anything
in this Agreement to the contrary notwithstanding, except as provided in Section 6 hereof with respect to indemnification of Expenses
in connection with whole or partial success on the merits or otherwise in defending any Claim, the Company shall not be required
to indemnify Indemnitee in connection with any Claim made against Indemnitee for (i) an accounting of profits made from the purchase
and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Securities
Exchange Act of 1934 or similar provisions of state statutory law or common law, or (ii) any reimbursement of the Company by Indemnitee
of any bonus or other incentive-based or equity-based compensation or of any profits realized by Indemnitee from the sale of securities
of the Company, as required in each case under the Securities Exchange Act of 1934 (including any such reimbursements that arise
from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley
Act”), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation
of Section 306 of the Sarbanes-Oxley Act).
6. Partial
Indemnity and Success on the Merits. If Indemnitee is entitled under any provision of this Agreement to indemnification by
the Company for some or a portion of the Expenses, judgments, fines, penalties and amounts paid or
payable in settlement of a Claim but not, however, for all of the total amount thereof, the Company shall nevertheless
indemnify Indemnitee for the portion thereof to which Indemnitee is entitled. Moreover, notwithstanding any other provision of
this Agreement, subject to Section 15 of this Agreement, to the extent that Indemnitee is
successful, on the merits or otherwise,
in whole or in part, in defending a Claim (including dismissal without
prejudice), or in defense of any claim, issue or matter therein, Indemnitee
shall be indemnified to the fullest extent permitted by law against all Expenses
actually and reasonably incurred by
Indemnitee or on Indemnitee’s behalf in connection therewith.
7. Burden
of Proof. In connection with any determination by the Reviewing Party or otherwise as to whether Indemnitee is entitled to
be indemnified hereunder or otherwise, the burden shall be on the Company to
prove by clear and convincing evidence that Indemnitee is not so entitled.
8. No
Presumptions. For purposes of this Agreement, the termination of any Claim,
by judgment, order, settlement (whether with or without court approval) conviction,
or otherwise, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet
any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted
by applicable law. In addition, neither the failure of the Reviewing Party to have made a determination as to whether Indemnitee
has met any particular standard of conduct or had any particular belief, nor an actual determination by the Reviewing Party that
Indemnitee has not met such standard of conduct or did not have such belief, prior to the commencement of legal proceedings by
Indemnitee to secure a judicial determination that Indemnitee should be indemnified under applicable law shall be a defense to
Indemnitee’s claim or create a presumption that Indemnitee has not met any particular standard of conduct or did not have
any particular belief.
9. Settlement.
Indemnitee shall be entitled to settle any Claim, in whole or in part, in
such Indemnitee’s sole discretion. To the fullest extent permitted by law, any settlement of a Claim by Indemnitee shall
be deemed the Final Disposition of such Claim for all purposes of this Agreement. The Company acknowledges that a settlement or
other disposition short of final judgment on the merits may be successful if it permits a party to avoid expense, delay, distraction,
disruption, and uncertainty. In the event that any Claim is resolved other than by adverse judgment against Indemnitee (including,
without limitation, settlement of such Claim with or without payment or other consideration) it shall be presumed that Indemnitee
has been successful on the merits or otherwise in such Claim. Any individual or entity seeking to overcome this presumption shall
have the burden to prove by clear and convincing evidence that Indemnitee has not been successful on the merits or otherwise in
such Claim.
10. Nonexclusivity;
Subsequent Change in Law. The rights of Indemnitee hereunder shall be in addition to any other rights Indemnitee may have
under the Bylaws or Charter, under Delaware law or otherwise. To the extent that a change in Delaware law (whether by statute
or judicial decision) permits greater indemnification by agreement than would be afforded currently under the Bylaws and Charter
and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits
so afforded by such change.
11. Liability
Insurance. To the extent the Company maintains an insurance policy or policies providing directors’ and officers’
liability insurance, 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 Company director or officer.
12. Amendments;
Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of
the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
13. Subrogation.
In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including
the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.
14. No
Duplication of Payments. The Company shall not be liable under this Agreement to make any payment in connection with any Claim
made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, the Bylaws
or otherwise) of the amounts otherwise indemnifiable hereunder.
15. Waiver
of Claims to Trust Account. Notwithstanding anything contained herein to the contrary, Indemnitee hereby agrees that it 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 against such trust account 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 such trust account for any reason
whatsoever.
16. Binding
Effect. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their
respective successors, assigns, administrators, heirs, executors and personal and legal representatives. The Company agrees that
in the event the Company or any of its successors (including any successor resulting from the merger or consolidation of the Company
with another corporation or entity where the company is the surviving corporation or entity) or assigns (i) consolidates with
or merges into any other corporation or entity and shall not be the continuing or surviving corporation or entity of such consolidation
or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any corporation or entity, then,
and in each such case, to the extent necessary, proper provision shall be made so that the successors and assigns of the Company
as a result of such transaction assume the obligations of the Company set forth in this Agreement. This Agreement shall continue
in effect regardless of whether Indemnitee continues to serve as a director, officer, employee, agent or fiduciary of the Company
or of any other enterprise at the Company’s request.
17. Severability.
The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision
within a single section, paragraph or sentence) is held by a court of competent jurisdiction to be invalid, void or otherwise
unenforceable in any respect, and the validity and enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired and shall remain enforceable to the fullest extent permitted by law.
18. Effective
Date. To the fullest extent permitted by law, this Agreement shall (i) be effective as of the date that Indemnitee commenced
serving as [a director/an officer] of the Company (the “Effective Date”),
and (ii) apply to any claim for indemnification by Indemnitee with respect to any matters arising from such time and thereafter
through and after the date hereof in accordance with this Agreement.
19. Governing
Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable
to contracts made and to be performed in such state without giving effect to the principles of conflicts of laws.
20. Injunctive
Relief. The parties hereto agree that Indemnitee may enforce this Agreement by seeking specific performance hereof, without
any necessity of showing irreparable harm or posting a bond, which requirements are hereby waived, and that by seeking specific
performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which he or she may be entitled.
[Signature Page Follows]
IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the date first set forth above.
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LIBERTY MEDIA 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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[Signature Page to Indemnity
Agreement]
Exhibit 10.8
SERVICES AGREEMENT
SERVICES AGREEMENT
(this “Agreement”), dated as of [●], 2021, by and between Liberty Media Corporation, a Delaware corporation
(the “Provider”), and Liberty Media Acquisition Corporation, a Delaware corporation (“LMAC”).
RECITALS
WHEREAS, LMAC and the
Provider desire that, following the Effective Date (as defined below), LMAC obtain from the Provider the services described herein,
and that LMAC compensate the Provider for the performance of such services on the basis set forth in this Agreement; and
WHEREAS, on the date
hereof a subsidiary of the Provider is also entering into a facilities sharing agreement with LMAC with respect to 12300 Liberty
Boulevard, Englewood, Colorado 80112.
AGREEMENT
NOW THEREFORE, in consideration
of the foregoing recitals, the mutual agreements contained herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be bound legally, agree as follows:
ARTICLE
I
ENGAGEMENT AND SERVICES
Section
1.1 Engagement.
LMAC engages the Provider to provide to LMAC, commencing on the date the securities of LMAC are first listed on the Nasdaq Capital
Market (the “Effective Date”), the Services (as defined below), and the Provider accepts such engagement, in
each case subject to and upon the terms and conditions of this Agreement. The parties acknowledge that certain of the Services
will be performed by officers, employees or consultants of the Provider, who may also serve, from time to time, as officers, employees
or consultants of other companies, including, without limitation, LMAC, Qurate Retail, Inc. (“Qurate”), Liberty
Broadband Corporation (“LBC”) and Liberty TripAdvisor Holdings, Inc. (“LTAH”).
Section
1.2 Services.
The Provider shall render to LMAC, by and through such of the Provider’s officers, employees, agents, representatives and
affiliates as the Provider, in its sole discretion, may designate from time to time, support and administrative services, including
research, due diligence, transaction process management and execution, information technology, public and investor relations, legal,
facilities management, back office, vendor management, accounting, book and record keeping, cash management and secretarial services
(collectively, the “Services”); provided, however, that the Services shall not include any investment
advice to LMAC.
Section
1.3 Services Not to Interfere with the Provider’s
Business. LMAC acknowledges and agrees that in providing
Services hereunder the Provider will not be required to take any action that would disrupt, in any material respect, the orderly
operation of the Provider’s business activities.
Section
1.4 Services Fee.
(a) For
the period from the Effective Date to the expiration of the Term, LMAC agrees to pay, and the Provider agrees to accept, a monthly
fee equal to $83,333, payable in arrears (the “Services Fee”); provided, that the first payment following
the Effective Date shall be prorated based on the number of days after (but excluding) the Effective Date until (and including)
the last day of the calendar month in an amount equal to one-thirtieth of the Services Fee per day; provided, further,
that upon the consummation by LMAC of the Initial Business Combination (as defined below), the Provider and LMAC will review and
evaluate (and thereafter will review and evaluate semiannually) the Services Fee for reasonableness during the Term and will negotiate
in good faith to reach agreement on any appropriate adjustments to the Services Fee, and based on such review and evaluation, Provider
and LMAC will agree on the appropriate effective date (which may be retroactive, but in no event earlier than the date of the consummation
by LMAC of the Initial Business Combination) of any such adjustment to the Services Fee.
(b) LMAC
will pay the Provider the Services Fee by wire or intrabank transfer of funds or in such other reasonable manner specified by the
Provider to LMAC, in arrears on or before the last day of each calendar month following the Effective Date.
Section
1.5 Survival. LMAC’s obligation to pay the
Services Fee shall survive the expiration or earlier termination of this Agreement with respect to such amounts as are payable
in respect of the period of time prior to the effective date of such expiration or termination.
Section
1.6 LMAC Trust Account. Notwithstanding Article
IV, Article V or anything contained herein to the contrary, the Provider hereby irrevocably waives any and all right,
title, interest, causes of action and claims of any kind or nature whatsoever (each, a “Claim”) in or to, and
any and all right to seek payment of any amounts due to it out of, the trust account established for the benefit of the public
stockholders of LMAC and into which substantially all of the proceeds of LMAC’s initial public offering will be deposited
(the “Trust Account”), and hereby irrevocably waives any Claim it presently has or may have in the future as
a result of, or arising out of, this Agreement, which Claim would reduce, encumber or otherwise adversely affect the Trust Account
or any monies or other assets in the Trust Account, and further agrees not to seek recourse, reimbursement, payment or satisfaction
of any Claim against the Trust Account or any monies or other assets in the Trust Account for any reason whatsoever.
ARTICLE
II
TERM
Section
2.1 Term.
The term of this Agreement (the “Term”) will commence on the Effective Date and will continue until terminated
in accordance with Section 2.2.
Section
2.2 Termination.
This Agreement will be terminated prior to the expiration of the Term in the following events:
(a)
upon mutual written agreement of the parties hereto;
(b) immediately
upon written notice (or at any later time specified in such notice) by the Provider to LMAC if a Change in Control occurs
with respect to LMAC following the consummation by LMAC of an initial business combination (as described in the Registration
Statement on Form S-1 (File No. 333-250188) filed with the Securities and Exchange Commission) (the “Initial
Business Combination”); or
(c)
immediately upon written notice (or at any later
time specified in such notice) by LMAC to the Provider if a Change in Control occurs with respect to the Provider following the consummation by LMAC of the Initial Business Combination.
For purposes of this
Section 2.2, a “Change in Control” will be deemed to have occurred with respect to a party if a merger, consolidation,
binding share exchange, acquisition, or similar transaction (each, a “Transaction”), or series of related Transactions,
involving such party occurs as a result of which the voting power of all voting securities of such party outstanding immediately
prior thereto represent (either by remaining outstanding or being converted into voting securities of the surviving entity) less
than 75% of the voting power of such party or the surviving entity of the Transaction outstanding immediately after such Transaction
(or if such party or the surviving entity after giving effect to such Transaction is a subsidiary of the issuer of securities in
such Transaction, then the voting power of all voting securities of such party outstanding immediately prior to such Transaction
represent (by being converted into voting securities of such issuer) less than 75% of the voting power of the issuer outstanding
immediately after such Transaction). For the avoidance of doubt, the consummation of the Initial Business Combination shall not be deemed to constitute a Change in Control
with respect to LMAC.
Each party will remain
liable to the other for any required payment accrued prior to the termination of this Agreement.
ARTICLE
III
PERSONNEL AND EMPLOYEES
Section
3.1 Personnel to Provide Services.
(a)
The Provider will make available to LMAC, on a non-exclusive basis, certain employees, independent contractors or other
personnel engaged by Provider (the “Personnel”) to perform the Services.
(b)
LMAC acknowledges that certain of the Personnel also will be performing services for the Provider, Qurate, LBC, LTAH and/or
other companies, from time to time, including certain Subsidiaries and Affiliates of each of the foregoing, in each case, while
also potentially performing services directly for LMAC irrespective of this Agreement.
Section
3.2 Provider as Payor.
The parties acknowledge and agree that the Provider, and not LMAC, will be solely responsible for the payment of salaries, wages,
benefits (including health insurance, retirement, and other similar benefits, if any) and other compensation applicable to all
Personnel. All Personnel will be subject to the personnel policies of the Provider. The Provider will be responsible for the payment
of all federal, state, and local withholding taxes on the compensation of all Personnel and other such employment related taxes
as are required by law. LMAC will cooperate with the Provider to facilitate the Provider’s compliance with applicable federal,
state, and local laws, rules, regulations, and ordinances applicable to the employment or engagement of all Personnel.
Section
3.3 Additional Employee Provisions.
The Provider will have the right to terminate its employment or engagement of any Personnel at any time.
ARTICLE
IV
INDEMNIFICATION
Section
4.1 Indemnification by the Provider.
Following the consummation by LMAC of the Initial Business Combination, the Provider will indemnify, defend, and hold harmless
LMAC and each of its Subsidiaries, officers, directors, employees and agents, successors and assigns (collectively, the “LMAC
Indemnitees”), from and against any and all judgments, Liabilities, losses, costs, damages, or expenses, including reasonable
attorney’s fees, disbursements, and costs (collectively, “Losses”), incurred in connection with any Action
brought by a third party (a “Third-Party Claim”) (including but not limited to defending or avoiding any such
Action) arising from or out of, or relating to the gross negligence, willful misconduct, fraud, or bad faith of the Provider in
connection with the performance of any provision of this Agreement (the “Provider Indemnification Matter”);
provided, that notwithstanding the foregoing or any other provisions of this Agreement, at any time during the Term, the
Provider shall not be liable, responsible or accountable to the LMAC Indemnitees for any Losses incurred by the LMAC Indemnitees
for any act or omission by the Provider unless such conduct constitutes gross negligence, willful misconduct, fraud, or bad faith
of the Provider.
Section
4.2 Indemnification by LMAC.
Following the consummation by LMAC of the Initial Business Combination, LMAC will indemnify, defend, and hold harmless the Provider
and its Subsidiaries, Affiliates, officers, directors, employees and agents, successors and assigns (collectively, the “Provider
Indemnitees”), from and against any and all Losses incurred in connection with any Action brought by a third party (including
but not limited to defending or avoiding any Action) arising from or out of, or relating to (a) any material breach by LMAC of
its obligations under this Agreement, or (b) any acts or omissions of the Provider in providing the Services pursuant to this Agreement
(including for its own negligence, but except to the extent such Losses arise from the Provider Indemnification Matter); provided,
that LMAC and its Subsidiaries shall be excluded from the definition of “Provider Indemnitees.”
Section
4.3 Indemnification Procedures.
(a)
(i) In connection with any indemnification provided for in Section 4.1 or 4.2, the party seeking indemnification
(the “Indemnitee”) will give the party from which indemnification is sought (the “Indemnitor”)
prompt notice whenever it comes to the attention of the Indemnitee that the Indemnitee has suffered or incurred, or may suffer
or incur, any Losses for which it is entitled to indemnification under Section 4.1 or 4.2, and, if and when known,
the facts constituting the basis for such claim and the projected amount of such Losses (which shall not be conclusive as to the
amount of such Losses), in each case in reasonable detail, provided that such notice will be given no later than ten business days
following receipt by the Indemnitee of written notice of any Third-Party Claim as to which indemnification is available hereunder.
Failure by any Indemnitee to so notify the Indemnitor will not affect the rights of such Indemnitee hereunder except to the extent
that such failure has a material prejudicial effect on the defenses or other rights available to the Indemnitor with respect to
such Third-Party Claim. The Indemnitee will deliver to the Indemnitor as promptly as practicable, and in any event within five
business days after Indemnitee’s receipt, copies of all notices, court papers and other documents received by the Indemnitee
relating to any Third-Party Claim.
(ii)
The Indemnitor will be entitled, if it so elects, to take control of the defense and investigation with respect to such
Third-Party Claim and to employ and engage attorneys reasonably satisfactory to the Indemnitee to handle and defend such claim,
at the Indemnitor’s cost, risk and expense, upon written notice to the Indemnitee of such election, which notice acknowledges
the Indemnitor’s obligation to provide indemnification under this Agreement with respect to any Losses arising out of or
relating to such Third-Party Claim. The Indemnitor will not settle any Third-Party Claim that is the subject of indemnification
without the written consent of the Indemnitee, which consent will not be unreasonably withheld, conditioned or delayed; provided,
however, that, after reasonable notice, the Indemnitor may settle a claim without the Indemnitee’s consent if such settlement
(A) makes no admission or acknowledgment of Liability or culpability with respect to the Indemnitee, (B) includes a complete release
of the Indemnitee and (C) does not seek any relief against the Indemnitee other than the payment of money damages to be borne by
the Indemnitor. The Indemnitee will cooperate in all reasonable respects with the Indemnitor and its attorneys in the investigation,
trial and defense of any lawsuit or action with respect to such claim and any appeal arising therefrom (including the filing in
the Indemnitee’s name of appropriate cross-claims and counterclaims). The Indemnitee may, at its own cost, participate in
any investigation, trial and defense of any Third-Party Claim controlled by the Indemnitor and any appeal arising therefrom, including
participating in the process with respect to the potential settlement or compromise thereof. If the Indemnitee has been advised
by its counsel that there may be one or more legal defenses available to the Indemnitee that conflict with those available to,
or that are not available to, the Indemnitor (“Separate Legal Defenses”), or that there may be actual or potential
differing or conflicting interests between the Indemnitor and the Indemnitee in the conduct of the defense of such Third-Party
Claim, the Indemnitee will have the right, at the expense of the Indemnitor, to engage separate counsel reasonably acceptable to
the Indemnitor to handle and defend such Third-Party Claim, provided, that, if such Third-Party Claim can be reasonably
separated between those portion(s) for which Separate Legal Defenses are available (“Separable Claims”) and
those for which no Separate Legal Defenses are available, the Indemnitee will instead have the right, at the expense of the Indemnitor,
to engage separate counsel reasonably acceptable to the Indemnitor to handle and defend the Separable Claims, and the Indemnitor
will not have the right to control the defense or investigation of such Third-Party Claim or such Separable Claims, as the case
may be (and, in which latter case, the Indemnitor will have the right to control the defense or investigation of the remaining
portion(s) of such Third-Party Claim).
(iii)
With respect to any Third-Party Claim as to which indemnification is available hereunder, the Indemnitor does not undertake
to defend the Indemnitee against such Third-Party Claim, whether by not giving the Indemnitee timely notice of its election to
so defend or otherwise, the Indemnitee may, but will have no obligation to, assume its own defense, at the expense of the Indemnitor
(including attorney’s fees and costs), it being understood that the Indemnitee’s right to indemnification for such
Third-Party Claim shall not be adversely affected by its assuming the defense of such Third-Party Claim. The Indemnitor will be
bound by the result obtained with respect thereto by the Indemnitee; provided, that the Indemnitee may not settle any lawsuit
or action with respect to which the Indemnitee is entitled to indemnification hereunder without the consent of the Indemnitor,
which consent will not be unreasonably withheld, conditioned or delayed; provided further, that such consent shall not be
required if (i) the Indemnitor had the right under this Section 4.3 to undertake control of the defense of such Third-Party
Claim and, after notice, failed to do so within thirty days of receipt of such notice (or such lesser period as may be required
by court proceedings in the event of a litigated matter), or (ii) (x) the Indemnitor does not have the right to control the defense
of the entirety of such Third-Party Claim pursuant to Section 4.3(a)(ii) or (y) the Indemnitor does not have the right to
control the defense of any Separable Claim pursuant to Section 4.3(a)(ii) (in which case such settlement may only apply
to such Separable Claims), the Indemnitee provides reasonable notice to Indemnitor of the settlement, and such settlement (A) makes
no admission or acknowledgment of Liability or culpability with respect to the Indemnitor, (B) does not seek any relief against
the Indemnitor and (C) does not seek any relief against the Indemnitee for which the Indemnitor is responsible other than the payment
of money damages.
(b)
In no event will the Indemnitor be liable to any Indemnitee for any special, consequential, indirect, collateral, incidental
or punitive damages, however caused and on any theory of liability arising in any way out of this Agreement, whether or not such
Indemnitor was advised of the possibility of any such damages; provided, that the foregoing limitations shall not limit
a party’s indemnification obligations for any Losses incurred by an Indemnitee as a result of the assertion of a Third-Party
Claim.
(c)
The Indemnitor and the Indemnitee shall use commercially reasonable efforts to avoid production of confidential information,
and to cause all communications among employees, counsel and others representing any party with respect to a Third-Party Claim
to be made so as to preserve any applicable attorney-client or work-product privilege.
(d)
The Indemnitor shall pay all amounts payable pursuant to this Section 4.3 by wire transfer of immediately available
funds, promptly following receipt from an Indemnitee of a bill, together with all accompanying reasonably detailed backup documentation,
for any Losses that are the subject of indemnification hereunder, unless the Indemnitor in good faith disputes the amount of such
Losses or whether such Losses are covered by the Indemnitor’s indemnification obligation in which event the Indemnitor shall
promptly so notify the Indemnitee. In any event, the Indemnitor shall pay to the Indemnitee, by wire transfer of immediately available
funds, the amount of any Losses for which it is liable hereunder no later than three (3) days following any final determination
of the amount of such Losses and the Indemnitor’s liability therefor. A “final determination” shall exist when
(a) the parties to the dispute have reached an agreement in writing or (b) a court of competent jurisdiction shall have entered
a final and non-appealable order or judgment.
(e)
The remedies provided in this Section 4.3 shall be cumulative and shall not preclude assertion by any Indemnitee
of any other rights or the seeking of any and all other remedies against an Indemnitor, subject to Section 4.3(b).
(f)
To the fullest extent permitted by applicable law, the Indemnitor will indemnify the Indemnitee against any and all reasonable
fees, costs and expenses (including attorneys’ fees), incurred in connection with the enforcement of his, her or its rights
under this Article IV.
Section
4.4 Survival.
The terms and conditions of this Article IV will survive the expiration or termination of this Agreement.
ARTICLE
V
MISCELLANEOUS
Section
5.1 Defined Terms.
(a)
The following terms will have the following meanings for all purposes of this Agreement:
“Action”
means any demand, action, claim, suit, countersuit, litigation, arbitration, prosecution, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit, examination or investigation commenced, brought,
conducted or heard by or before, or otherwise involving, any court, grand jury or other governmental authority or any arbitrator
or arbitration panel.
“Affiliate”
means, with respect to any Person, any other Person controlled by such first Person, with “control” for such purpose
meaning the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities or voting interests, by contract, or otherwise. Notwithstanding the
foregoing, for purposes of this Agreement, none of the Persons listed in clause (i), (ii), (iii) or (iv)
shall be deemed to be Affiliates of any Person listed in any other such clause: (i) Provider taken together with its Subsidiaries,
(ii) LMAC taken together with its Subsidiaries (iii) LBC taken together with its Subsidiaries, (iv) Qurate taken together with
its Subsidiaries, (v) LTAH taken together with its Subsidiaries, or (vi) any other entities with an executive management team that
may from time to time include certain of the Personnel taken together with the Subsidiaries of such entities.
“Confidential
Information” means any information marked, noticed, or treated as confidential by a party which such party holds in confidence,
including all trade secrets, technical, business, or other information, including customer or client information, however communicated
or disclosed, relating to past, present and future research, development and business activities.
“Liabilities”
means any and all debts, liabilities, commitments and obligations, whether or not fixed, contingent or absolute, matured or unmatured,
direct or indirect, liquidated or unliquidated, accrued or unaccrued, known or unknown, and whether or not required by GAAP to
be reflected in financial statements or disclosed in the notes thereto (other than taxes).
“Person”
means any natural person, corporation, limited liability company, partnership, trust, unincorporated organization, association,
governmental authority, or other entity.
“Subsidiary”
when used with respect to any Person, means (i)(A) a corporation a majority in voting power of whose share capital or capital stock
with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by such Person,
by one or more Subsidiaries of such Person, or by such Person and one or more Subsidiaries of such Person, whether or not such
power is subject to a voting agreement or similar encumbrance, (B) a partnership or limited liability company in which such Person
or a Subsidiary of such Person is, at the date of determination, (1) in the case of a partnership, a general partner of such partnership
with the power affirmatively to direct the policies and management of such partnership or (2) in the case of a limited liability
company, the managing member or, in the absence of a managing member, a member with the power affirmatively to direct the policies
and management of such limited liability company, or (C) any other Person (other than a corporation) in which such Person, one
or more Subsidiaries of such Person or such Person and one or more Subsidiaries of such Person, directly or indirectly, at the
date of determination thereof, has or have (1) the power to elect or direct the election of a majority of the members of the governing
body of such Person, whether or not such power is subject to a voting agreement or similar encumbrance, or (2) in the absence of
such a governing body, at least a majority ownership interest or (ii) any other Person of which an aggregate of 50% or more of
the equity interests are, at the time, directly or indirectly, owned by such Person and/or one or more Subsidiaries of such Person.
Notwithstanding the foregoing, for purposes of this Agreement, none of the Subsidiaries of the Provider will be deemed to be Subsidiaries
of LMAC or any of its Subsidiaries, nor will any of LMAC’s Subsidiaries be deemed to be Subsidiaries of the Provider or any
of its Subsidiaries.
(b)
The following terms will have the meanings for all purposes of this Agreement set forth in the Section reference provided
next to such term:
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Definition
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Section Reference
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Agreement
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Preamble
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Claim
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Section 1.6
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Change in Control
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Section 2.2
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Effective Date
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Section 1.1
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Indemnitee
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Section 4.3(a)(i)
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Indemnitor
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Section 4.3(a)(i)
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Initial Business Combination
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Section 2.2
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LBC
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Section 1.1
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LMAC
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Preamble
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Definition
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Section Reference
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LMAC Indemnitees
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Section 4.1
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Losses
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Section 4.1
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LTAH
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Section 1.1
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Personnel
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Section 3.1
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Provider
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Preamble
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Provider Indemnification Matter
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Section 4.1
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Provider Indemnitees
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Section 4.2
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Qurate
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Section 1.1
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Separate Claims
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Section 4.3(a)(ii)
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Separate Legal Defense
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Section 4.3(a)(ii)
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Services
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Section 1.1
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Services Fee
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Section 1.4
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Term
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Section 2.1
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Third-Party Claim
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Section 4.1
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Transaction
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Section 2.2
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Trust Account
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Section 1.6
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Section
5.2 Entire Agreement; Severability.
This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof, and supersedes
all prior agreements and understandings, oral and written, among the parties hereto with respect to such subject matter. It is
the intention of the parties hereto that the provisions of this Agreement will be enforced to the fullest extent permissible under
all applicable laws and public policies, but that the unenforceability of any provision hereof (or the modification of any provision
hereof to conform with such laws or public policies, as provided in the next sentence) will not render unenforceable or impair
the remainder of this Agreement. Accordingly, if any provision is determined to be invalid or unenforceable either in whole or
in part, this Agreement will be deemed amended to delete or modify, as necessary, the invalid or unenforceable provisions and to
alter the balance of this Agreement in order to render the same valid and enforceable, consistent (to the fullest extent possible)
with the intent and purposes hereof.
Section
5.3 Notices.
All notices and communications hereunder will be in writing and will be deemed to have been duly given if delivered personally
or mailed, certified or registered mail with postage prepaid, or sent by confirmed facsimile, addressed as follows:
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If to the Provider:
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Liberty Media Corporation
12300 Liberty Boulevard
Englewood, Colorado 80112
Attention: Chief Legal Officer
Facsimile: [Separately provided]
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If to LMAC:
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Liberty Media Acquisition Corporation
12300 Liberty Boulevard
Englewood, Colorado 80112
Attention: Chief Legal Officer
Facsimile: [Separately provided]
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or to such other address (or to the attention
of such other person) as the parties may hereafter designate in writing. All such notices and communications will be deemed to
have been given on the date of delivery if sent by facsimile or personal delivery, or the third day after the mailing thereof,
except that any notice of a change of address will be deemed to have been given only when actually received.
Section
5.4 Governing Law.
This Agreement and the legal relations among the parties hereto will be governed in all respects, including validity, interpretation
and effect, by the laws of the State of Colorado applicable to contracts made and performed wholly therein, without giving effect
to any choice or conflict of laws provisions or rules that would cause the application of the laws of any other jurisdiction.
Section 5.5 Submission
to Jurisdiction; Waiver of Jury Trial. Each of the parties hereto irrevocably and unconditionally agrees that it will not commence
any action, litigation or proceeding of any kind whatsoever, whether in law or equity, or whether in contract or tort or otherwise,
in any way relating to this Agreement and the legal relations among the parties hereto, in any forum other than the courts of the
State of Colorado sitting in Denver County, and of the United States District Court of Colorado, and any appellate court from any
thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that
any such action, litigation or proceeding may be brought in any such Colorado State court or, to the fullest extent permitted by
applicable law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action, litigation or
proceeding will be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided
by law. The parties waive the right to a trial by jury in any dispute or other claim in connection with this Agreement.
Section 5.6 Rules
of Construction. The descriptive headings in this
Agreement are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation
of this Agreement. Words used in this Agreement, regardless of the gender and number specifically used, will be deemed and construed
to include any other gender, masculine, feminine, or neuter, and any other number, singular or plural, as the context requires.
As used in this Agreement, the word “including” or any variation thereof is not limiting, and the word “or”
is not exclusive. The word day means a calendar day. If the last day for giving any notice or taking any other action is a Saturday,
Sunday, or a day on which banks in New York, New York or Denver, Colorado are authorized or required to be closed, the time for
giving such notice or taking such action will be extended to the next day that is not such a day.
Section 5.7 No
Third-Party Rights. Nothing expressed or referred
to in this Agreement is intended or will be construed to give any Person other than the parties hereto and their respective successors
and permitted assigns any legal or equitable right, remedy or claim under or with respect to this Agreement, or any provision hereof,
it being the intention of the parties hereto that this Agreement and all of its provisions and conditions are for the sole and
exclusive benefit of the parties to this Agreement and their respective successors and assigns.
Section 5.8 Counterparts.
This Agreement may be executed in one or more counterparts, each of which will be an original and all of which together will constitute
one and the same instrument.
Section 5.9 Payment
of Expenses. From and after the Effective Date, and
except as otherwise expressly provided in this Agreement, each of the parties to this Agreement will bear its own expenses, including
the fees of any attorneys and accountants engaged by such party, in connection with this Agreement.
Section 5.10 Binding
Effect; Assignment.
(a)
This Agreement will inure to the benefit of and be binding on the parties to this Agreement and their respective legal representatives,
successors and permitted assigns.
(b)
Except as expressly contemplated hereby, this Agreement, and the obligations arising hereunder, may not be assigned by either
party to this Agreement; provided, however, that Provider may assign its rights, interests, duties, liabilities and
obligations under this Agreement to any of its wholly-owned Subsidiaries, but such assignment shall not relieve the Provider, as
the assignor, of its obligations hereunder.
Section 5.11 Amendment,
Modification, Extension or Waiver. Any amendment,
modification or supplement of or to any term or condition of this Agreement will be effective only if in writing and signed by
both parties hereto. Either party to this Agreement may (a) extend the time for the performance of any of the obligations or other
acts of the other party to this Agreement, or (b) waive compliance by the other party with any of the agreements or conditions
contained herein or any breach thereof. Any agreement on the part of either party to any such extension or waiver will be valid
only if set forth in an instrument in writing signed on behalf of such party. No waiver of any term, provision or condition of
this Agreement, whether by conduct or otherwise, in any one or more instance, will be deemed or construed as a further or continuing
waiver of any such term, provision or condition or of any other term, provision or condition, but any party hereto may waive its
rights in any particular instance by written instrument of waiver.
Section 5.12 Force
Majeure. Neither party will be liable to the other
party with respect to any nonperformance or delay in performance of its obligations under this Agreement, other than for payment
of the Services Fee, to the extent such failure or delay is due to any action or claims by any third party, labor dispute, labor
strike, weather conditions or any cause beyond a party’s reasonable control. Each party agrees that it will use all commercially
reasonable efforts to continue to perform its obligations under this Agreement, to resume performance of its obligations under
this Agreement, and to minimize any delay in performance of its obligations under this Agreement notwithstanding the occurrence
of any such event beyond such party’s reasonable control.
Section
5.13 Specific Performance. Each
party agrees that irreparable damage would occur and that the parties would not have any adequate remedy at law in the event that
any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that each of the parties shall be entitled to seek an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy
to which they are entitled at law or in equity.
Section 5.14 Confidentiality.
(a)
Except with the prior consent of Provider, LMAC will:
(i)
limit access to the Confidential Information of Provider disclosed to LMAC hereunder to its agents, representatives, and
consultants on a need-to-know basis;
(ii)
advise its agents, representatives, and consultants having access to such Confidential Information of the proprietary nature
thereof and of the obligations set forth in this Agreement; and
(iii)
safeguard such Confidential Information by using a reasonable degree of care to prevent disclosure of the Confidential Information
to third parties, but not less than that degree of care used by LMAC in safeguarding its own similar information or material.
(b)
LMAC’s obligations respecting confidentiality under Section 5.14(a) will not apply to any of the Confidential
Information of LMC that LMAC can demonstrate: (i) was, at the time of disclosure to LMAC, in the public domain or (ii) after disclosure
to LMAC, is published or otherwise becomes part of the public domain other than by acts of LMAC in violation of this Section
5.14.
(c)
The provisions of this Section 5.14 will survive the expiration or termination of this Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF,
each of the parties has signed this Agreement, or has caused this Agreement to be signed by its duly authorized officer, as of
the date first above written.
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PROVIDER:
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LIBERTY MEDIA CORPORATION
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By:
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Name:
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Title:
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LMAC:
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Liberty
Media Acquisition Corporation
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By:
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Name:
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Title:
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[Signature Page
to LMAC Services Agreement]
Exhibit
10.9
LIBERTY PROPERTY HOLDINGS, INC.
12300 LIBERTY BOULEVARD
ENGLEWOOD, CO 80112
[●], 2021
Liberty Media Acquisition Corporation
12300 Liberty Boulevard
Englewood, CO 80112
Attention: Legal Department
Re: Facilities
Sharing Agreement.
Ladies and Gentlemen:
Liberty Media Acquisition
Corporation, a Delaware corporation (“LMAC”), will shortly consummate its initial public offering (the “IPO”).
As you are aware, Liberty
Property Holdings, Inc., a Delaware corporation (“LPH”), is the owner of 12300 Liberty Boulevard, Englewood,
Colorado (the “Premises”) and a wholly-owned subsidiary of Liberty Media Corporation (“Liberty Media”
or “Provider”). In connection with the IPO, LMAC desires to occupy and use a portion of such office and parking
facilities within the Premises following the IPO. Liberty Media and LPH are amenable to such a sharing arrangement, on the terms
and subject to the conditions set forth in this facilities sharing agreement (this “Agreement”).
As you are also aware,
in connection with the IPO, Liberty Media and LMAC have entered into a services agreement (the “Services Agreement”),
dated the date hereof, pursuant to which Liberty Media will provide to LMAC the services described therein on the terms set forth
therein commencing on the date the securities of LMAC are first listed on the Nasdaq Capital Market (the “Effective Date”).
Based on the premises
and the mutual agreements of the parties, and for other good and valuable consideration the receipt of which is hereby acknowledged,
LMAC, LPH and Liberty Media hereby agree as follows:
Section 1. Use of
Facilities. The shared facilities will consist of certain executive offices, working stations for secretarial and other support
staff and common areas designated from time to time by LPH or Provider, including the main reception area, conference facilities,
hallways, stairways, restrooms, kitchenettes, the employee cafeteria, the fitness area and parking facilities, located within the
Premises. The use of the shared facilities will be subject to the applicable policies of the Provider, if any.
Section 2. Sharing
Fee. For the period from the Effective Date until the expiration of the Term, LMAC agrees to pay, and LPH agrees to accept,
a monthly fee equal to $8,333, payable in arrears (the “Sharing Fee”); provided, further, that
upon the consummation by LMAC of the Initial Business Combination (as defined below), LPH and LMAC will review and evaluate (and
thereafter will review and evaluate semiannually) the Sharing Fee for reasonableness during the Term and will negotiate in good
faith to reach agreement on any appropriate adjustments to the Sharing Fee, and based on such review and evaluation, LPH and LMAC
will agree on the appropriate effective date (which may be retroactive, but in no event earlier than the date of the consummation
by LMAC of the Initial Business Combination) of any such adjustment to the Services Fee. LMAC will pay LPH the Sharing Fee by wire
or intrabank transfer of funds or in such other reasonable manner specified by LPH to LMAC, in arrears on or before the last day
of each calendar month following the Effective Date.
Notwithstanding anything
contained herein to the contrary, LPH and Liberty Media hereby irrevocably waive any and all right, title, interest, causes of
action and claims of any kind or nature whatsoever (each, a “Claim”) in or to, and any and all right to seek
payment of any amounts due to it out of, the trust account established for the benefit of the public stockholders of LMAC and into
which substantially all of the proceeds of the IPO will be deposited (the “Trust Account”), and hereby irrevocably
waive any Claim it presently has or may have in the future as a result of, or arising out of, this Agreement, which Claim would
reduce, encumber or otherwise adversely affect the Trust Account or any monies or other assets in the Trust Account, and further
agree not to seek recourse, reimbursement, payment or satisfaction of any Claim against the Trust Account or any monies or other
assets in the Trust Account for any reason whatsoever.
Section 3. Term.
(a) The term of this
Agreement (the “Term”) will commence on the Effective Date and will continue until terminated in accordance
with Section 3(b).
(b) This Agreement will
be terminated prior to the expiration of the Term in the following events:
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(i)
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concurrently with the termination of the Services Agreement;
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(ii)
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upon mutual written agreement of the parties hereto;
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(iii)
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immediately upon written notice (or at any later time specified in such notice) by LPH to LMAC if a Change in Control occurs with respect
to LMAC following the consummation by LMAC of an initial business combination (as described in the Registration
Statement on Form S-1 (File No. 333-250188) filed with the Securities and Exchange Commission) (the “Initial Business
Combination”), immediately upon written notice (or at any time specified in such notice) by LPH to LMAC if a Change in
Control occurs with respect to LMAC; or
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(iv)
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immediately upon written notice (or at any time specified in such notice) by LMAC to LPH if a
Change in Control occurs with respect to Liberty Media following consummation by LMAC of the Initial Business Combination.
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For purposes of this
Section 3(b), a “Change in Control” will have the meaning ascribed thereto in the Services Agreement.
Each party will remain
liable to the other for any required payment accrued prior to the termination of this Agreement.
Section 4. Miscellaneous.
(a) Entire Agreement;
Severability. This Agreement constitutes the entire agreement among the parties hereto, as applicable with respect to the subject
matter hereof, and supersedes all prior agreements and understandings, oral and written, among the parties hereto with respect
to such subject matter. It is the intention of the parties hereto that the provisions of this Agreement will be enforced to the
fullest extent permissible under all applicable laws and public policies, but that the unenforceability of any provision hereof
(or the modification of any provision hereof to conform with such laws or public policies, as provided in the next sentence) will
not render unenforceable or impair the remainder of this Agreement. Accordingly, if any provision is determined to be invalid or
unenforceable either in whole or in part, this Agreement will be deemed amended to delete or modify, as necessary, the invalid
or unenforceable provisions and to alter the balance of this Agreement in order to render the same valid and enforceable, consistent
(to the fullest extent possible) with the intent and purposes hereof.
(b) Notices. All notices and communications
hereunder will be in writing and will be deemed to have been duly given if delivered personally or mailed, certified or registered
mail with postage prepaid, or sent by confirmed facsimile, addressed as follows:
If to LPH:
Liberty Property Holdings, Inc.
c/o Liberty Media Corporation
12300 Liberty Boulevard
Englewood, Colorado 80112
Attention: Chief Legal Officer
Facsimile: [Separately provided]
If to LMAC:
Liberty Media Acquisition Corporation
12300 Liberty Boulevard
Englewood, Colorado 80112
Attention: Chief Legal Officer
Facsimile: [Separately provided]
or to such other address (or to the attention
of such other person) as the parties may hereafter designate in writing. All such notices and communications will be deemed to
have been given on the date of delivery if sent by facsimile or personal delivery, or the third day after the mailing thereof,
except that any notice of a change of address will be deemed to have been given only when actually received.
(c) Governing Law.
This Agreement and the legal relations among the parties hereto will be governed in all respects, including validity, interpretation
and effect, by the laws of the State of Colorado applicable to contracts made and performed wholly therein, without giving effect
to any choice or conflict of laws provisions or rules that would cause the application of the laws of any other jurisdiction.
(d) Submission to
Jurisdiction; Waiver of Jury Trial. Each of the parties hereto irrevocably and unconditionally agrees that it will not commence
any action, litigation or proceeding of any kind whatsoever, whether in law or equity, or whether in contract or tort or otherwise,
in any way relating to this Agreement and the legal relations among the parties hereto, in any forum other than the courts of the
State of Colorado sitting in Denver County, and of the United States District Court of Colorado, and any appellate court from any
thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that
any such action, litigation or proceeding may be brought in any such Colorado State court or, to the fullest extent permitted by
applicable law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action, litigation or
proceeding will be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided
by law. The parties waive the right to a trial by jury in any dispute or other claim in connection with this Agreement.
(e) No Third-Party
Rights. Nothing expressed or referred to in this Agreement is intended or will be construed to give any person other than the
parties hereto and their respective successors and permitted assigns any legal or equitable right, remedy or claim under or with
respect to this Agreement, or any provision hereof, it being the intention of the parties hereto that this Agreement and all of
its provisions and conditions are for the sole and exclusive benefit of the parties to this Agreement and their respective successors
and assigns.
(f) Assignment.
This Agreement will inure to the benefit of and be binding on the parties to this Agreement and their respective legal representatives,
successors and permitted assigns. Except as expressly contemplated hereby, this Agreement, and the obligations arising hereunder,
may not be assigned by either party to this Agreement, provided, however, that LPH may assign its respective rights, interests,
duties, liabilities and obligations under this Agreement to any of its respective wholly-owned subsidiaries, but such assignment
shall not relieve the assignor of its obligations hereunder.
(g) Amendment.
Any amendment, modification or supplement of or to any term or condition of this Agreement will be effective only if in writing
and signed by both parties hereto.
(h) Further Actions.
The parties will execute and deliver all documents, provide all information, and take or forbear from all actions that may be necessary
or appropriate to achieve the purposes of this Agreement.
(i) Force Majeure.
Neither party will be liable to the other party with respect to any nonperformance or delay in performance of its obligations under
this Agreement, other than for payment of the Sharing Fee, to the extent such failure or delay is due to any action or claims by
any third party, labor dispute, labor strike, weather conditions or any cause beyond a party’s reasonable control. Each party
agrees that it will use all commercially reasonable efforts to continue to perform its obligations under this Agreement, to resume
performance of its obligations under this Agreement, and to minimize any delay in performance of its obligations under this Agreement
notwithstanding the occurrence of any such event beyond such party’s reasonable control.
[Signature page follows]
If the foregoing meets
with your approval, kindly execute below and return a copy to the undersigned.
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Very truly yours,
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LIBERTY PROPERTY HOLDINGS, INC.
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By:
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Name:
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Title:
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Accepted and agreed this [●] day of [●], 2021:
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LIBERTY MEDIA ACQUISITION CORPORATION
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By:
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Title:
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LIBERTY MEDIA CORPORATION
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By:
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Name:
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[Signature Page to Facilities Sharing Agreement]
Exhibit 10.10
FORWARD
PURCHASE AGREEMENT
This Forward
Purchase Agreement (this “Agreement”) is entered into as of [Ÿ],
2021, between Liberty Media Acquisition Corporation, a Delaware corporation (the “Company”), and Liberty
Media Acquisition Sponsor LLC, a Delaware limited liability company (the “Sponsor”).
Recitals
WHEREAS, the Company
was incorporated for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization
or similar business combination with one or more businesses (a “Business Combination”);
WHEREAS, the Company
has filed with the U.S. Securities and Exchange Commission (the “SEC”) a registration statement on Form S-1
(such registration statement, as may be amended from time to time, including to reflect changes in terms, the “Registration
Statement”) for its initial public offering (“IPO”) of 50,000,000 units (or 57,500,000 units in the
aggregate if the underwriters exercise their over-allotment in full) (the “Public Units”) at a price of $10.00
per Public Unit, each comprised of one share of Series A common stock of the Company, par value $0.0001 per share (the “Series A
Share(s)”), and one-fifth of one redeemable warrant, where each whole redeemable warrant is exercisable to purchase one
Series A Share at an exercise price of $11.50 per share, subject to adjustment (the “Warrant(s)”);
WHEREAS, following
the closing of the IPO (the “IPO Closing”), the Company will seek to identify and consummate a Business Combination;
WHEREAS, the parties
hereto wish to enter into this Agreement, pursuant to which substantially concurrently with the closing of the Company’s
initial Business Combination (the “Business Combination Closing”), the Company shall issue and sell, and the
Sponsor shall purchase, on a private placement basis, an aggregate of 25,000,000 shares (the “Forward Purchase Shares”)
of Series B common stock of the Company, par value $0.0001 per share (the “Series B Share(s)”), and
5,000,000 redeemable warrants, where each whole redeemable warrant is exercisable to purchase one Series A Share at an exercise
price of $11.50 per share, subject to adjustment (the “Forward Purchase Warrants” and, collectively with the
Forward Purchase Shares and the Series A Shares underlying the Forward Purchase Warrants, the “Forward Purchase Securities”);
and
WHEREAS, at the time
of, or prior to, the closing of the IPO, the Company, the Sponsor and Liberty Media Corporation, a Delaware corporation (“LMC”),
shall enter into an investor rights agreement (the “Investor Rights Agreement”) pursuant to which the Company
will grant certain registration rights to the Sponsor and LMC relating to the Forward Purchase Securities.
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:
Agreement
1. Sale
and Purchase.
(a) Forward
Purchase Units.
(i) The
Company shall issue and sell to the Sponsor and the Sponsor shall purchase from the Company, at a price of $10.00 per one Forward
Purchase Share and one- fifth of one Forward Purchase Warrant (one Forward Purchase Share and one-fifth of one Forward Purchase
Warrant, a “Forward Purchase Unit”), an aggregate of 25,000,000 Forward Purchase Units for an aggregate purchase
price of $250,000,000 (the “FPU Purchase Price”). Each Forward Purchase Warrant and its underlying Series A
Share will have the same terms as the Warrants and their underlying Series A Shares to be issued in the IPO. Each Forward
Purchase Warrant will be subject to the terms and conditions of the Warrant Agreement to be entered into between the Company and
Continental Stock Transfer & Trust Company, as Warrant Agent, in connection with the IPO.
(ii) The
Company shall require the Sponsor to purchase the Forward Purchase Units pursuant to Section 1(a)(i) hereof by delivering
notice (the “Company Notice”) to the Sponsor, at least five (5) Business Days before the funding of the
FPU Purchase Price, specifying the anticipated date of the Business Combination Closing and instructions for wiring the FPU Purchase
Price to an account designated by the Company, which may be but need not be an interest-bearing account. At least two (2) Business
Days before the anticipated date of the Business Combination Closing specified in such Company Notice (or such later date as the
Company and the Sponsor may agree), the Sponsor shall deliver the FPU Purchase Price in cash via wire transfer to the account specified
in such Company Notice, to be held in escrow pending the FPU Closing (as defined below). If the FPU Closing does not occur within
five (5) Business Days after the Sponsor delivers the FPU Purchase Price to such account, the Company shall, upon request
of the Sponsor, return to the Sponsor the FPU Purchase Price (and to the extent that there is any interest on the account holding
the FPU Purchase Price, such interest shall go the Sponsor), provided that the return of the FPU Purchase Price placed in escrow
shall not terminate this Agreement or otherwise relieve either party of any of its obligations hereunder and the Company may provide
a subsequent Company Notice pursuant to this Section 1(a)(ii). For the purposes of this Agreement, “Business Day”
means any day, other than a Saturday or a Sunday, that is neither a legal holiday nor a day on which banking institutions are generally
authorized or required by law or regulation to close in the City of New York, New York.
(iii) The
closing of the sale of the Forward Purchase Units (the “FPU Closing”) shall be held on the same date and substantially
concurrently with the Business Combination Closing (such date being referred to as the “FPU Closing Date”).
At the FPU Closing, the Company will issue to the Sponsor the Forward Purchase Shares and Forward Purchase Warrants.
(b) Delivery
of Forward Purchase Units.
(i) The
Company shall register the Sponsor as the owner of the Forward Purchase Shares and Forward Purchase Warrants included in the Forward
Purchase Units with the Company’s transfer agent by book entry on or promptly after (but in no event more than two (2) Business
Days after) the FPU Closing Date.
(ii) Each
book entry for the Forward Purchase Securities shall contain a notation, and each certificate (if any) evidencing the Forward Purchase
Securities shall be stamped or otherwise imprinted with a legend, in substantially the following form:
“THE SECURITIES REPRESENTED
HEREBY 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.”
(c) Registration
Rights. The Sponsor shall have registration rights as set forth in the Investor Rights Agreement substantially in the form
attached as Exhibit 10.4 of the Registration Statement (the “Investor Rights Agreement”).
2. Representations
and Warranties of the Sponsor. The Sponsor represents and warrants to the Company as follows,
as of the date hereof:
(a) Organization
and Power. The Sponsor is duly formed and validly existing and in good standing in its jurisdiction of incorporation or organization
and has all requisite power and authority to carry on its business as presently conducted and as proposed to be conducted.
(b) Authorization.
The Sponsor has full power and authority to enter into this Agreement. This Agreement, when executed and delivered by the Sponsor,
will constitute the valid and legally binding obligation of the Sponsor, enforceable against the Sponsor in accordance with its
terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and any
other laws of general application affecting enforcement of creditors’ rights generally, (b) as limited by laws relating
to the availability of specific performance, injunctive relief or other equitable remedies, or (c) to the extent the indemnification
provisions contained in the Investor Rights Agreement may be limited by applicable federal or state securities laws.
(c) Governmental
Consents and Filings. No consent, approval, order or authorization of, or registration, qualification, designation, declaration
or filing with, any federal, state or local governmental authority is required on the part of the Sponsor in connection with the
execution of this Agreement.
(d) Compliance
with Other Instruments. The execution, delivery and performance by the Sponsor of this Agreement and the consummation by the
Sponsor of the transactions contemplated by this Agreement will not result in any violation or default (i) of any provisions
of its organizational documents, (ii) of any instrument, judgment, order, writ or decree to which it is a party or by which
it is bound, (iii) under any note, indenture or mortgage to which it is a party or by which it is bound, (iv) under any
lease, agreement, contract or purchase order to which it is a party or by which it is bound or (v) of any provision of federal
or state statute, rule or regulation applicable to the Sponsor, in each case (other than clause (i)), which would have a material
adverse effect on the Sponsor or its ability to consummate the transactions contemplated by this Agreement.
(e) Purchase
Entirely for Own Account. This Agreement is made with the Sponsor in reliance upon the Sponsor’s representation to the
Company, which by the Sponsor’s execution of this Agreement, the Sponsor hereby confirms, that the Forward Purchase Securities
to be acquired by the Sponsor will be acquired for investment for the Sponsor’s own account, not as a nominee or agent, and
not with a view to the resale or distribution of any part thereof, and that the Sponsor has no present intention of selling, granting
any participation in, or otherwise distributing the same in violation of law. By executing this Agreement, the Sponsor further
represents that the Sponsor does not presently have any contract, undertaking, agreement or arrangement with any Person to sell,
transfer or grant participations to such Person or to any third Person, with respect to any of the Forward Purchase Securities.
For purposes of this Agreement, “Person” means an individual, a limited liability company, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization, any other entity or any government or any department or agency thereof.
(f) Disclosure
of Information. The Sponsor has had an opportunity to discuss the Company’s business, management, financial affairs and
the terms and conditions of the offering of the Forward Purchase Units, as well as the terms of the Company’s proposed IPO,
with the Company’s management.
(g) Restricted
Securities. The Sponsor understands that the offer and sale of the Forward Purchase Units have not been registered under the
Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder (the “Securities
Act”), by reason of a specific exemption from the registration provisions of the Securities Act that depends upon, among
other things, the bona fide nature of the investment intent and the accuracy of the Sponsor’s representations as expressed
herein. The Sponsor understands that the Forward Purchase Securities are “restricted securities” under applicable U.S.
federal and state securities laws and that, pursuant to these laws, the Sponsor must hold the Forward Purchase Securities indefinitely
unless they are registered with the SEC and qualified by state authorities, or an exemption from such registration and qualification
requirements is available. The Sponsor acknowledges that the Company has no obligation to register or qualify the Forward Purchase
Securities for resale, except pursuant to the Investor Rights Agreement. The Sponsor further acknowledges that if an exemption
from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the
time and manner of sale, the holding period for the Forward Purchase Securities, and on requirements relating to the Company that
are outside of the Sponsor’s control, and which the Company is under no obligation and may not be able to satisfy. The Sponsor
understands that the offering to the Sponsor of the Forward Purchase Securities is not, and is not intended to be, part of the
IPO, and that the Sponsor will not be able to rely on the protection of Section 11 or Section 12 of the Securities Act
with respect to the Forward Purchase Securities.
(h) No
Public Market. The Sponsor understands that no public market now exists for the Forward Purchase Securities, and that the Company
has made no assurances that a public market will ever exist for the Forward Purchase Securities.
(i) High
Degree of Risk. The Sponsor understands that its agreement to purchase the Forward Purchase Units involves a high degree of
risk, which could cause the Sponsor to lose all or part of its investment.
(j) No
General Solicitation. Neither the Sponsor, nor any of its officers, directors, employees, agents, stockholders or partners,
has either directly or indirectly, including, through a broker or finder (i) to its knowledge, engaged in any general solicitation,
or (ii) published any advertisement in connection with the offer and sale of the Forward Purchase Securities.
(k) Non-Public
Information. The Sponsor acknowledges its obligations under applicable securities laws with respect to the treatment of material
non-public information relating to the Company.
(l) Affiliation
of Certain FINRA Members. The Sponsor is neither a person associated nor affiliated with Citigroup Global Markets, Inc.,
Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) LLC or Goldman Sachs & Co. LLC or, to its actual knowledge,
any other member of the Financial Industry Regulatory Authority (“FINRA”) that is participating in the IPO.
(m) No
Other Representations and Warranties; Non-Reliance. Except for the specific representations and warranties contained in this
Section 2 and in any certificate or agreement delivered pursuant hereto, none of the Sponsor nor any person acting on behalf
of the Sponsor nor any of the Sponsor’s affiliates (other than the Company) (the “Sponsor Parties”) has
made, makes or shall be deemed to make any other express or implied representation or warranty with respect to the Sponsor and
this offering, and the Sponsor Parties disclaim any such representation or warranty. Except for the specific representations and
warranties expressly made by the Company in Section 3 of this Agreement and in any certificate or agreement delivered pursuant
hereto, the Sponsor Parties specifically disclaim that they are relying upon any other representations or warranties that may have
been made by the Company.
(n) Sufficiency
of Funds. On the FPU Closing Date, the Sponsor will have sufficient funds to pay the FPU Purchase Price pursuant to Section 1(a)(ii) of
this Agreement.
3. Representations
and Warranties of the Company. The Company represents and warrants to the Sponsor as follows:
(a) Incorporation
and Corporate Power. The Company is duly incorporated and validly existing and in good standing as a corporation under the
laws of the State of Delaware and has all requisite corporate power and authority to carry on its business as presently conducted
and as proposed to be conducted. The Company has no subsidiaries.
(b) Capitalization.
As of the date of this Agreement, the authorized share capital of the Company consists of:
(i) 3,000,000,000
Series A Shares, none of which are issued and outstanding.
(ii) 1,000,000,000
Series B Shares, none of which are issued and outstanding.
(iii) 5,000,000,000
shares of Series C common stock of the Company, par value $0.0001 per share, none of which are issued and outstanding.
(iv) 200,000,000
shares of Series F common stock of the Company, par value $0.0001 per share (“Series F Share(s)”),
14,375,000 of which are issued and outstanding (1,875,000 of which are subject to forfeiture to the extent that the underwriters’
over-allotment option in connection with the IPO is not exercised in full). All of the issued and outstanding Series F Shares
have been duly authorized, are fully paid and nonassessable and were issued in compliance with all applicable federal and state
securities laws.
(v) 50,000,000
shares of undesignated preferred stock, none of which are issued and outstanding.
(c) Authorization;
No Breach. (i) The execution, delivery and performance of this Agreement and the issuance and sale of the Forward Purchase
Units, including the Forward Purchase Shares and the Forward Purchase Warrants included in the Forward Purchase Units, have been
duly authorized by the Company as of the FPU Closing Date. This Agreement constitutes the valid and binding obligation of the
Company, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other laws of general applicability relating to or affecting creditors’ rights and to general equitable principles (whether
considered in a proceeding in equity or law). Upon issuance in accordance with, and payment pursuant to, the terms of the Warrant
Agreement and this Agreement, the Forward Purchase Warrants will constitute valid and binding obligations of the Company, enforceable
in accordance with their terms.
(ii) The
execution and delivery by the Company of this Agreement and the issuance and sale of the Forward Purchase Units, including the
Forward Purchase Warrants and the Forward Purchase Shares included in the Forward Purchase Units, and the fulfillment of and compliance
with the respective terms hereof and thereof by the Company, do not and will not as of the FPU Closing Date (a) conflict
with or result in a breach of the terms, conditions or provisions of, (b) constitute a default under, (c) result in
the creation of any lien, security interest, charge or encumbrance upon the Company’s share capital or assets under, (d) result
in a violation of, or (e) require any authorization, consent, approval, exemption or other action by or notice or declaration
to, or filing with, any court or administrative or governmental body or agency pursuant to the Company’s certificate of
incorporation (the “Charter”) and bylaws (the “Bylaws”) or any material law, statute, rule or
regulation to which the Company is subject, or any agreement, order, judgment or decree to which the Company is subject, except
for (x) any filings required after the date hereof under federal or state securities laws, or (y) any required approval
of the stockholders of the Company, as applicable.
(d) Valid
Issuance of Forward Purchase Units. Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant
Agreement, the Forward Purchase Shares and the shares issuable upon exercise of the Forward Purchase Warrants will be duly and
validly issued, fully paid and nonassessable. Assuming the accuracy of the representations of the Sponsor in this Agreement and
subject to the filings described in Section 3(e) below, the Forward Purchase Units will be issued in compliance with
all applicable federal and state securities laws. Upon issuance in accordance with, and payment pursuant to, the terms hereof
and the Warrant Agreement, the Sponsor will have good title to the Forward Purchase Warrants and the Forward Purchase Shares purchased
by it and the shares issuable upon exercise of the Forward Purchase Warrants, free and clear of all preemptive or similar rights,
taxes, liens, claims and encumbrances of any kind, other than (i) transfer restrictions hereunder and under the other agreements
contemplated hereby, (ii) transfer restrictions under federal and state securities laws, and (iii) liens, claims or
encumbrances imposed due to the actions of the Sponsor.
(e) Governmental
Consents and Filings. Assuming the accuracy of the representations and warranties made by the Sponsor in this Agreement, no
consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal,
state or local governmental authority is required on the part of the Company in connection with the consummation of the transactions
contemplated by this Agreement, except for applicable requirements of the Securities Act, the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated thereunder (the “Exchange Act”),
and such as may be required under state securities or blue sky laws of any jurisdiction.
(f) Compliance
with Other Instruments. The execution, delivery and performance of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in any violation or default (i) of any provisions of its Charter, Bylaws or
other governing documents, (ii) of any instrument, judgment, order, writ or decree to which it is a party or by which it is
bound, (iii) under any note, indenture or mortgage to which it is a party or by which it is bound, (iv) under any lease,
agreement, contract or purchase order to which it is a party or by which it is bound or (v) of any provision of federal or
state statute, rule or regulation applicable to the Company, in each case (other than clause (i)) which would have a material
adverse effect on the Company or its ability to consummate the transactions contemplated by this Agreement.
(g) No
General Solicitation. Neither the Company, nor any of its officers, directors, employees, agents or shareholders has either
directly or indirectly, including, through a broker or finder (i) engaged in any general solicitation, or (ii) published
any advertisement in connection with the offer and sale of the Forward Purchase Securities.
(h) No
Other Representations and Warranties; Non-Reliance. Except for the specific representations and warranties contained in this
Section 3 and in any certificate or agreement delivered pursuant hereto, the Company has not made and does not make nor shall
be deemed to make any other express or implied representation or warranty with respect to the Company, this offering, the proposed
IPO or a potential Business Combination, and the Company disclaims any such representation or warranty. Except for the specific
representations and warranties expressly made by the Sponsor in Section 2 of this Agreement and in any certificate or agreement
delivered pursuant hereto, the Company specifically disclaims that it is relying upon any other representations or warranties that
may have been made by the Sponsor Parties.
4. Additional
Agreements and Acknowledgements and Waivers of the Sponsor.
(a) Trust
Account.
(i) The
Sponsor hereby acknowledges that it is aware that the Company will establish a trust account (the “Trust Account”)
for the benefit of its public stockholders upon the closing of the IPO.
(ii) The
Sponsor hereby agrees that it shall have 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, except for redemption and liquidation rights, if any, the Sponsor may have in respect of
any Series A Shares purchased in the IPO or thereafter. In the event the Sponsor has any Claim against the Company under this
Agreement, the Sponsor 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, except for redemption and liquidation rights, if any, the Sponsor may have in
respect of any Series A Shares held by it.
(b) No
Short Sales. The Sponsor hereby agrees that neither it, nor any person or entity acting on its behalf or pursuant to any understanding
with it, will engage in any Short Sales with respect to securities of the Company prior to the Business Combination Closing. For
purposes of this Section, “Short Sales” shall include, without limitation, all “short sales” as defined
in Rule 200 promulgated under Regulation SHO under the Exchange Act and all types of direct and indirect stock pledges (other
than pledges in the ordinary course of business as part of prime brokerage arrangements), forward sale contracts, options, puts,
calls, swaps and similar arrangements (including on a total return basis), and sales and other transactions through non-U.S. broker
dealers or foreign regulated brokers.
5. Additional
Agreements of the Company and Reservation of Shares.
(a) Nasdaq
Listing. The Company will use commercially reasonable best efforts to effect and maintain the listing of the Series A
Shares and the Warrants on The Nasdaq Capital Market (or another national securities exchange).
(b) Reservation
of Shares. The Company has reserved and shall keep available that maximum number of (i) its authorized but unissued Series B
Shares and Forward Purchase Warrants that may be sold to the Sponsor pursuant to Section 1(a) of this Agreement, and
(ii) the Series A Shares issuable upon (x) exercise of the Forward Purchase Warrants that may be sold pursuant to
Section 1(a) of this Agreement and (y) conversion of Series B Shares that may be sold to the Sponsor pursuant
to Section 1(a) of this Agreement.
(c) Reserved
Purchase Right for Additional Series B Shares.
(i) If
(A) the Company at any time or from time to time proposes to issue any equity or debt securities or incur any indebtedness
in connection with a Business Combination (a “Capital Raise”), the Sponsor shall have the right to purchase
(or designate another LMC Stockholder (as such term is defined in the Amended and Restated Certificate of Incorporation of the
Company, dated [●], 2021 (including as it may subsequently be amended, modified, supplemented and/or restated in accordance
with its terms)) to purchase (such designated LMC Stockholder, the “Sponsor Designee”)), in whole or in part,
from the Company, and the Company shall sell to the Sponsor or the Sponsor Designee, as applicable, at a price of $10.00 per share
a number of Series B Shares equal to the total net proceeds to be raised in such Capital Raise divided by $10.00 or (B) the
Sponsor desires to purchase Series B Shares of the Company prior to a Business Combination, the Sponsor shall have the right
to purchase (or designate a Sponsor Designee to purchase), in whole or in part, from the Company, and the Company shall sell to
the Sponsor or the Sponsor Designee, as applicable, at a price of $10.00 per share, a number of Series B Shares specified
by the Sponsor or the Sponsor Designee, if applicable, by written notice to the Company (clauses (A) and (B), collectively,
the “Purchase Right”).
(ii) The
Company shall give written notice to the Sponsor of any proposed Capital Raise or Business Combination as promptly as practicable,
but in no event later than ten (10) Business Days prior to such Capital Raise or Business Combination, which notice shall
set forth all terms and conditions of the Capital Raise or Business Combination, as applicable, including (A) the number of
(or formula for determining such number) and a description of the securities to be issued (including whether such number of securities
includes the amount of securities to be purchased by the Purchase Right); (B) the issuance date; (C) the offerees or
transferees; and (D) the purchase price per security. Such notice shall be deemed updated by delivery of the final documentation
for such issuance to the Sponsor.
(iii) The
Purchase Right shall be exercisable with respect to a Capital Raise or Business Combination by delivery of written notice to the
Company (the “Purchase Right Notice”) no later than five (5) Business Days after receipt of the Company’s
notice of such Capital Raise or Business Combination, respectively, specifying the number of Series B Shares to be purchased
(which number may be updated from time to time by the Sponsor or the Sponsor Designee, if applicable, in response to changes to
the terms and conditions of the Capital Raise or Business Combination). If the Sponsor or the Sponsor Designee, as applicable,
exercises the Purchase Right, the Company shall issue to the Sponsor or the Sponsor Designee, as applicable, and the Sponsor (or
Sponsor Designee, as applicable) shall purchase the number of Series B Shares specified in the Purchase Right Notice (A) on
the same date as, and immediately prior to, the Capital Raise or Business Combination, as applicable or (B) at such date and
time as mutually agreed among the Company and the Sponsor or the Sponsor Designee, as applicable, in each case, subject only to
the consummation of the Business Combination.
(iv) The
Purchase Right shall terminate automatically after consummation of the Business Combination.
6. FPU
Closing Conditions.
(a) The
obligation of the Sponsor to purchase the Forward Purchase Units at the FPU Closing under this Agreement shall be subject to the
fulfillment, at or prior to the FPU Closing of each of the following conditions, any of which, to the extent permitted by applicable
laws, may be waived by the Sponsor:
(i) the
Business Combination shall be consummated substantially concurrently with the purchase of Forward Purchase Units;
(ii) the
representations and warranties of the Company set forth in Section 3 of this Agreement shall have been true and correct as
of the date hereof and shall be true and correct, in the case of the Company, as of the FPU Closing, as applicable, with the same
effect as though such representations and warranties had been made on and as of such date (other than any such representation or
warranty that is made by its terms as of a specified date, which shall be true and correct as of such specified date), except,
in the case of the Company, where the failure to be so true and correct would not have a material adverse effect on the Company
or its ability to consummate the transactions contemplated by this Agreement;
(iii) the
Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required
by this Agreement to be performed, satisfied or complied with by the Company at or prior to the FPU Closing;
(iv) no
order, writ, judgment, injunction, decree, determination, or award shall have been entered by or with any governmental, regulatory,
or administrative authority or any court, tribunal, or judicial, or arbitral body, and no other legal restraint or prohibition
shall be in effect, preventing the purchase by the Sponsor of the Forward Purchase Units; and
(v) The
Company shall have entered into an Investor Rights Agreement with the Sponsor and LMC, and such Investor Rights Agreement shall
still be in effect as of the FPU Closing.
(b) The
obligation of the Company to sell the Forward Purchase Units at the FPU Closing under this Agreement shall be subject to the fulfillment,
at or prior to the FPU Closing of each of the following conditions, any of which, to the extent permitted by applicable laws, may
be waived by the Company:
(i) the
Business Combination shall be consummated substantially concurrently with the purchase of Forward Purchase Units;
(ii) the
representations and warranties of the Sponsor set forth in Section 2 of this Agreement shall have been true and correct as
of the date hereof and shall be true and correct as of the FPU Closing, as applicable, with the same effect as though such representations
and warranties had been made on and as of such date (other than any such representation or warranty that is made by its terms as
of a specified date, which shall be true and correct as of such specified date), except where the failure to be so true and correct
would not have a material adverse effect on the Sponsor or its ability to consummate the transactions contemplated by this Agreement;
(iii) the
Sponsor shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required
by this Agreement to be performed, satisfied or complied with by the Sponsor at or prior to the FPU Closing; and
(iv) no
order, writ, judgment, injunction, decree, determination, or award shall have been entered by or with any governmental, regulatory,
or administrative authority or any court, tribunal, or judicial, or arbitral body, and no other legal restraint or prohibition
shall be in effect, preventing the purchase by the Sponsor of the Forward Purchase Units.
7. Termination.
This Agreement may be terminated at any time prior to the FPU Closing:
(a) by
mutual written consent of the Company and the Sponsor;
(b) automatically
(i) if
the IPO is not consummated on or prior to December 31, 2021;
(ii) if
the Business Combination is not consummated within twenty-four (24) months from the closing of the IPO (or 27 months from the closing
of the IPO if the Company has executed a letter of intent, agreement in principle or definitive agreement for the Business Combination
within 24 months from the closing of the IPO), unless extended upon approval of the Company’s stockholders in accordance
with the Charter; or
(iii) if
the Company becomes subject to any voluntary or involuntary petition under the United States federal bankruptcy laws or any state
insolvency law, in each case which is not withdrawn within sixty (60) days after being filed, or a receiver, fiscal agent or similar
officer is appointed by a court for business or property of the Company, in each case which is not removed, withdrawn or terminated
within sixty (60) days after such appointment.
In the event of any
termination of this Agreement pursuant to this Section 7, the FPU Purchase Price (and interest thereon, if any), if previously
paid, and the Sponsor’s funds paid in connection herewith shall be promptly returned to the Sponsor, and thereafter this
Agreement shall forthwith become null and void and have no effect, without any liability on the part of the Sponsor or the Company
and their respective directors, officers, employees, partners, managers, members, or stockholders and all rights and obligations
of each party shall cease; provided, however, that nothing contained in this Section 7 shall relieve any party
from liabilities or damages arising out of any fraud or willful breach by such party of any of its representations, warranties,
covenants or agreements contained in this Agreement.
8. General
Provisions.
(a) Notices.
All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively
given upon the earlier of actual receipt, and (a) personal delivery to the party to be notified, (b) when sent, if sent
by electronic mail or facsimile (if any) during normal business hours of the recipient, and if not sent during normal business
hours, then on the recipient’s next Business Day, (c) three (3) Business Days after having been sent by registered
or certified mail, return receipt requested, postage prepaid, or (d) one (1) Business Day after deposit with a nationally
recognized overnight courier, freight prepaid, specifying next Business Day delivery, with written verification of receipt. All
communications sent to the Company shall be sent to: Liberty Media Acquisition Corporation, 12300 Liberty Boulevard, Englewood,
Colorado 80112, Attn: Chief Legal Officer, email: [separately provided], with a copy to the Company’s counsel at:
Skadden, Arps, Slate, Meagher & Flom LLP, 525 University Ave., Palo Alto, CA 94301, Attn: Gregg Noel, Esq., email:
Gregg.Noel@skadden.com, respectively.
All communications
to the Sponsor shall be sent to the Sponsor’s address at Liberty Media Acquisition Sponsor LLC, 12300 Liberty Boulevard,
Englewood, Colorado 80112, Attn: Chief Legal Officer, email: [separately provided].
(b) Survival
of Representations and Warranties. All of the representations and warranties contained herein shall survive the FPU Closing.
(c) Entire
Agreement. This Agreement, together with any documents, instruments and writings that are delivered pursuant hereto or referenced
herein, 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.
(d) 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. Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
(e) Assignments.
Except as otherwise specifically 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.
(f) 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.
(g) Headings.
The 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.
(h) Governing
Law. This Agreement, the entire relationship of the parties hereto, and any dispute 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 Delaware.
(i) Jurisdiction.
The parties hereto (i) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of Delaware and
to the jurisdiction of the United States District Court for the District of Delaware for the purpose of any suit, action or other
proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising
out of or based upon this Agreement except in state courts of Delaware or the United States District Court for the District of
Delaware, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action
or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is
exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the
venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in
or by such court.
(j) Waiver
of Jury Trial. 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.
(k) Amendments
and Waiver. This Agreement may not be amended, modified or waived as to any particular provision, except with the written consent
of the Company and the Sponsor. 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.
(l) 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 authority, arbitrator, or mediator not to be enforceable
in accordance with its terms, the parties hereto agree that the governmental authority, 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.
(m) Expenses.
Each of the Company and the Sponsor 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.
(n) 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. The word “Business Day” means
any calendar day other than Saturday, Sunday, or a day on which banks in New York, New York or Denver, Colorado are authorized
or required to be closed.
(o) Confidentiality.
Except as may be required by law, regulation or applicable stock exchange listing requirements, unless and until the transactions
contemplated hereby and the terms hereof are publicly announced or otherwise publicly disclosed by the Company, the parties hereto
shall keep confidential and shall not publicly disclose the existence or terms of this Agreement.
(p) Adjustments.
References herein to numbers of shares, the series thereof, and to per share prices, shall be appropriately adjusted to account
for any reclassification, exchange, substitution, combination, stock split, reverse stock split, or stock dividend or other share
distribution made on or with respect to the applicable series of shares, occurring or effective following the date of this Agreement.
[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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SPONSOR:
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LIBERTY MEDIA ACQUISITION SPONSOR LLC
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COMPANY:
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LIBERTY MEDIA ACQUISITION CORPORATION
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Exhibit 23.1
Independent
Registered Public Accounting Firm’s Consent
We consent to the inclusion in this Registration
Statement of Liberty Media Acquisition Corporation (the “Company”) on Amendment No. 2 to Form S-1, File No. 333-250188,
of our report dated January 13, 2021, 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 Liberty Media Acquisition Corporation as of December 31, 2020
and for the period from November 6, 2020 (inception) through December 31, 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
Melville, NY
January 13, 2021
Exhibit 99.4
CONSENT OF DIRECTOR NOMINEE
Pursuant to Rule
438 promulgated by the Securities and Exchange Commission (“SEC”) under the Securities Act of 1933, as
amended, I hereby consent to be named in the Registration Statement on Form S-1 (the “Registration Statement”)
of Liberty Media Acquisition Corporation (the “Company”), and any amendments or supplements thereto,
as a person about to become a director of the Company and agree that following the effectiveness of the Registration Statement
and commencing at the time the SEC declares the registration statement of the Company on Form 8-A under Section 12(b) of the Securities
Exchange Act of 1934, as amended, effective, I will serve as a member of the board of directors of the Company.
Dated:
January 13, 2021
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/s/ John E. Welsh III
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Name: John E. Welsh III
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