As filed with the U.S. Securities and Exchange Commission on February 18, 2021 under the Securities Act of 1933, as amended.
No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Frontier Acquisition Corp.
(Exact name of registrant as specified in its charter)
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Cayman Islands
(State or other jurisdiction of
incorporation or organization)
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6770
(Primary Standard Industrial
Classification Code Number)
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98-1578395
(I.R.S. Employer
Identification Number)
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660 Madison Avenue, 19th Floor
New York, New York 10065
212-803-9080
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Ryan Khoury
Co-President
660 Madison Avenue, 19th Floor
New York, New York 10065
212-803-9080
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
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Christian O. Nagler
James S. Rowe
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
Tel: (212) 446-4800
Fax: (212) 446-4900
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Derek J. Dostal
Deanna L. Kirkpatrick
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, New York 10013
Tel: (212) 450-4000
Fax: (212) 701-5800
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Approximate date of commencement of proposed sale to the public
As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☒
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Smaller reporting company ☒
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Emerging growth company ☒
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF SECURITIES
TO BE REGISTERED
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AMOUNT TO BE
REGISTERED
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PROPOSED MAXIMUM
OFFERING PRICE PER
SECURITY(1)
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PROPOSED MAXIMUM
AGGREGATE OFFERING
PRICE(1)
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AMOUNT OF
REGISTRATION FEE
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Units, each consisting of one Class A ordinary share, $0.0001 par value, and one-third of one redeemable warrant(2)
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23,000,000 units
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$10.00
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$230,000,000
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$25,093
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Class A ordinary shares included as part of the units(3)
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23,000,000 shares
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—
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—
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—(4)
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Redeemable warrants included as part of the
units(3)
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7,666,667 warrants
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—
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—
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—(4)
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Total
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$230,000,000
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$25,093
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(1)
Estimated solely for the purpose of calculating the registration fee.
(2)
Includes 3,000,000 units, consisting of 3,000,000 Class A ordinary shares and 1,000,000 warrants, which may be issued upon exercise of a 45-day option granted to the underwriter to cover over-allotments, if any.
(3)
Pursuant to Rule 416(a), there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from share splits, share dividends or similar transactions.
(4)
No fee pursuant to Rule 457(g).
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED FEBRUARY 18, 2021
$200,000,000
Frontier Acquisition Corp.
20,000,000 Units
Frontier Acquisition Corp. is a newly organized blank check company incorporated as a Cayman Islands exempted company and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities, which we refer to as our initial business combination. We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. We will not be limited to a particular industry or geographic region in our identification and acquisition of a target company.
This is an initial public offering of our securities. Each unit has an offering price of $10.00 and consists of one Class A ordinary share and one-third of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment, terms and limitations as described herein. The underwriter has a 45-day option from the date of this prospectus to purchase up to 3,000,000 additional units to cover over-allotments, if any.
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination, subject to the limitations as described herein. If we do not consummate an initial business combination within 24 months from the closing of this offering, we will redeem 100% of the public shares for cash, subject to applicable law and certain conditions as described herein.
Our sponsor, Frontier Acquisition Sponsor LLC, has agreed to purchase 600,000 units (or 660,000 units if the underwriter’s over-allotment option is exercised in full), at a price of $10.00 per unit in a private placement to occur concurrently with the closing of this offering for an aggregate purchase price of $6,000,000 (or $6,600,000 if the over-allotment option is exercised in full) that will close simultaneously with the closing of this offering. The private placement units are identical to the units sold in this offering, subject to certain limited exceptions as described in this prospectus.
Our initial shareholders currently own 5,750,000 Class B ordinary shares (up to 750,000 shares of which are subject to forfeiture depending on the extent to which the underwriter’s over-allotment option is exercised), which will automatically convert into shares of Class A ordinary shares at the time of our initial business combination, subject to adjustment pursuant to certain anti-dilution rights, as described herein. Prior to the completion of our initial business combination, only holders of our Class B ordinary shares will be entitled to vote on the appointment of directors.
Currently, there is no public market for our securities. We intend to apply to have our units listed on The Nasdaq Capital Market, or Nasdaq, under the symbol “FRONU” We expect the Class A ordinary shares and warrants comprising the units to begin separate trading on Nasdaq under the symbols “FRON” and “FRONW,” respectively, on the 52nd day following the date of this prospectus unless the underwriter permits earlier separate trading and we have satisfied certain conditions described herein.
We are an “emerging growth company” and “smaller reporting company” under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 34 for a discussion of information that should be considered in connection with an investment in our securities. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings.
Neither the U.S. Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
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PER UNIT
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TOTAL
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Public offering price
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$
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10.00
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$
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200,000,000
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Underwriting discounts and commissions(1)
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$
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0.55
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$
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11,000,000
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Proceeds, before expenses, to us
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$
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9.45
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$
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189,000,000
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(1)
Includes $0.35 per unit, or $7,000,000 in the aggregate (or $8,050,000 in the aggregate if the underwriter’s over-allotment option is exercised in full), payable to the underwriter for deferred underwriting commissions to be placed in a trust account located in the United States as described herein and released to the underwriter only upon the consummation of an initial business combination. See also “Underwriting” beginning on page 161 for a description of compensation and other items of value payable to the underwriter.
Of the proceeds we receive from this offering and the sale of the private placement units described in this prospectus, $200.0 million, or $230.0 million if the underwriter’s over-allotment option is exercised in full ($10.00 per unit in either case), will be deposited into a trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee.
The underwriter is offering the units for sale on a firm commitment basis. The underwriter expects to deliver the units to the purchasers on or about , 2021.
Sole Book-Running Manager
Credit Suisse
, 2021
TABLE OF CONTENTS
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Page
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1
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33
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34
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72
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113
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125
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127
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150
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161
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169
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169
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169
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F-1
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We are responsible for the information contained in this prospectus. We have not authorized anyone to provide you with different information, and neither we nor the underwriter take any responsibility for any other information others may give to you. We are not, and the underwriter is not, making an offer to sell securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.
SUMMARY
This summary only highlights the more detailed information appearing elsewhere in this prospectus. 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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“Companies Act” are to the Companies Act (As Revised) of the Cayman Islands as the same may be amended from time to time;
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“company,” “we,” “us,” “our,” or “our company” are to Frontier Acquisition Corp., a Cayman Islands exempted company;
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“founder shares” are to our Class B ordinary shares initially issued to our sponsor in a private placement prior to this offering and the Class A ordinary shares that will be issued upon the automatic conversion of the Class B ordinary shares at the time of our initial business combination (for the avoidance of doubt, such Class A ordinary shares will not be “public shares”);
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“initial shareholders” are to our sponsor and each other holder of founder shares upon the consummation of this offering;
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“management” or “our management team” are to our executive officers and directors (including our director nominees who will become directors at the consummation of this offering);
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“ordinary shares” are to our Class A ordinary shares and our Class B ordinary shares;
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“private placement shares” are to the Class A ordinary shares sold as part of the private placement units;
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“private placement units” are to the units to be issued to our sponsor in a private placement simultaneously with the closing of this offering, which private placement units are identical to the units sold in this offering, subject to certain limited exceptions as described in this prospectus;
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“private placement warrants” are to the warrants sold as part of the private placement units and upon conversion of working capital loans, if any;
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“public shareholders” are to the holders of our public shares, including our sponsor and management team to the extent our sponsor and/or members of our management team purchase public shares, provided that our sponsor’s and each member of our management team’s status as a “public shareholder” will only exist with respect to such public shares;
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“public shares” are to our Class A ordinary shares to be sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market); and
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“sponsor” are to Frontier Acquisition Sponsor LLC, a Cayman Islands exempted company incorporated with limited liability.
Any forfeiture of shares described in this prospectus will take effect as a surrender of shares for no consideration of such shares as a matter of Cayman Islands law. Any conversion of the Class B ordinary shares described in this prospectus will take effect as a compulsory redemption of Class B ordinary shares and an issuance of Class A ordinary shares as a matter of Cayman Islands law. Any share dividends described in this prospectus will take effect as share capitalizations as a matter of Cayman Islands law.
Unless we tell you otherwise, the information in this prospectus assumes that the underwriter will not exercise its over-allotment option.
General
We are a newly incorporated blank check company incorporated as a Cayman Islands exempted company and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. We have not identified any potential business
combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target.
Our objective is to identify, acquire, and operate a business to generate attractive risk-adjusted returns for our shareholders by effecting a business combination with a target company that is rapidly growing and ready for public market ownership. While we may pursue an initial business combination opportunity in any business, industry, sector or geographic area, we intend to capitalize on the ability of our management team to identify promising opportunities at the intersection of the healthcare and technology industries, specifically within the biotechnology sector.
Apeiron Investment Group and Falcon Edge Capital
Our sponsor is an affiliate of Apeiron Investment Group, a private limited company incorporated in Malta (together with its affiliates, “Apeiron”) and Falcon Edge Capital.
Apeiron is the family office and merchant banking business of Christian Angermayer. Apeiron focuses across a number of industries including life sciences, financial services, deep technology, media and entertainment and real estate. Apeiron invests across all phases and stages of a company’s life cycle, with a particular focus on non-listed seed / start-up investments and larger size restructuring and special situations transactions (frequently involving listed assets) with significant value creation opportunities. Apeiron is a team of more than 20 professionals with extensive experience at top-tier investment banks, private equity and venture capital funds prior to Apeiron, led by Mr. Angermayer.
Apeiron has a strong track record of success within the healthcare and technology industries. Within the biotechnology sector Apeiron’s investments include COMPASS Pathways, AbCellera, atai Life Sciences, Cambrian Biopharma and Rejuveron Life Sciences. Within the financial technology, cryptocurrency and deep technology sectors Apeiron has invested in Deposit Solutions, Block One, Northern Data, Flatex, Mynaric and ISAR Aerospace amongst others.
Founded in 2012, Falcon Edge Capital is a diversified global alternative asset manager led by Rick Gerson, Ryan Khoury and Navroz Udwadia. Falcon Edge Capital offers a variety of investment products that cover a number of asset classes, themes, and geographies and employs an investment philosophy that emphasizes creative, and fact-based research. The firm has a team of highly experienced investment and operational professionals with diverse and differentiated expertise across sectors, industries, and geographies. The firm has over 40 employees across its offices in New York, London, Bangalore and Abu Dhabi.
Falcon Edge Capital manages approximately $4.3 billion of client assets across a range of private investment funds and separately managed accounts following long/short equity, venture capital and special situations investment mandates. Falcon Edge Capital has been investing in venture capital and private equity since 2014 and has since deployed over $2 billion in total capital. The firm has a track record of successfully identifying category and industry leaders. Some of Falcon Edge Capital’s prior investments in the private markets include: SpaceX, Ant Financial, Ola, Alibaba, Uber, Lyft and AbCellera.
We believe that a partnership between Apeiron and Falcon Edge Capital is well suited for the SPAC structure. The firms have a history of investments within innovative healthcare and technology companies and across the entire life cycle of SPAC investing from sponsorship, IPO, PIPE and secondary market and collectively have a strong track record of identifying, investing and supporting promising business opportunities, with an aggregate of over 20 years of board level experience. We believe that our sector expertise and broad network of relationships will allow us to add significant value in identifying potential business combination targets and supporting their growth post an initial business combination. We expect to collaborate with founders, senior management and key leaders through a long-term partnership to create value for all stakeholders.
Our Founders / Management Team
Our management team is led by Christian Angermayer as Chief Executive Officer, Ryan Khoury and Rick Gerson as Co-Presidents, Scott Carpenter as Chief Operating Officer and Matthew Corey as Chief Financial Officer. Our board of directors will consist of Peter Attia and David A. Sinclair as Co-Chairmen, Jonathan Christodoro, Christian Angermayer and Rick Gerson.
Christian Angermayer is the founder of Apeiron and a serial entrepreneur and investor. In 2000, Mr. Angermayer co-founded Ribopharma which merged with U.S. peer Alnylam in 2003 and subsequently went public and became the first commercial RNAi technology company. Since then, Mr. Angermayer has created, co-founded and invested in numerous successful companies, has raised approximately $2 billion for his portfolio companies and has been involved in more than 40 successful IPO and M&A transactions either as an entrepreneur, investor or advisor. Through his experience as an investor and entrepreneur Mr. Angermayer has also developed a network of deep relationships with leading investors and thought leaders globally. Mr. Angermayer is a Young Global Leader of the World Economic Forum, a partner of the Munich Security Conference, a member of the Milken Institute Young Leaders Circle, a member of The Court of the London School of Hygiene and Tropical Medicine and a member of the Global Advisory Council of the Wilson Center, one of the leading institutions for in-depth research and dialogue to inform actionable ideas on global issues.
Rick Gerson is the Founder, Chairman and Chief Investment Officer of Falcon Edge Capital. Prior to founding Falcon Edge Capital, Mr. Gerson was a Founding Member and Managing Director of Blue Ridge Capital, a New York-based investment firm. Mr. Gerson is a member of the Cleveland Clinic International Leadership Board, a founding member of the Board of Trustees of PAVE (a charter school in Brooklyn), and is a member of the board of 92nd Street Y (a cultural and community center in New York). Mr. Gerson is also a member of the Belfer Center’s International Council at the John F. Kennedy School of Government at Harvard University. Mr. Gerson graduated from the University of Virginia, McIntire School of Commerce with a BS in Commerce with a concentration in Finance.
Ryan Khoury is a co-Founder and Partner of Falcon Edge Capital. Prior to joining Falcon Edge Capital, Mr. Khoury worked at Eton Park in London, where he focused on special situations and distressed credit investments in Europe, Middle East and Africa. Before Eton Park, Mr. Khoury worked with Goldman Sachs’ Financial Institutions Group, where he worked on transactions including: ABN Amro’s sale and breakup to RBS, Santander and Fortis, Allianz offer for AGF and the Bank of Ireland’s sale of Davy. Prior to that he worked at JP Morgan in their Financial Institutions Group. Mr. Khoury graduated from the London School of Economics with First Class Honors in Economics and completed his MSc. in financial mathematics at Stanford University.
Matthew Corey is the Chief Financial Officer of Falcon Edge Capital. Prior to joining Falcon Edge, Matthew worked for Gruss Capital Management for 10 years in a variety of roles including Chief Financial Officer, Controller and Senior Accountant. Matthew worked on all aspects of fund accounting, management accounting, tax, operations, treasury and investor reporting at Gruss Capital Management. Matthew started his career as an auditor with Rothstein Kass from 2006 to 2009, where he conducted a variety of private company audits and prepared private company tax returns. Matthew graduated from Lehigh University with a Bachelor of Science in Accounting and completed a Master of Science in Jurisprudence from the Seton Hall School of Law. Matthew is a Certified Public Accountant licensed in New York.
Scott Carpenter is the Chief Operating Officer of Falcon Edge Capital. He is responsible for the non-investment side of the business. He was a founding member of the firm when he joined at the beginning of 2012. Prior to joining Falcon Edge, Scott was the Global Head of Operations at CQS in London for eight years where he held a variety of responsibilities including Company Secretary for the CQS Management entities. Prior to joining CQS in 2004, Scott worked for Credit Suisse for 10 years in a variety of operational management roles in London, New York, Brisbane, Sydney, Wellington and Singapore.
Our Independent Director Nominees
Our efforts to seek a suitable business combination target will be augmented by the expertise and network of relationships of our directors, each of whom has extensive healthcare, science and/or business experience.
David A. Sinclair, Ph.D, A.O. has agreed to serve on our board of directors and will be our Co-Chairman. Dr. Sinclair is a Professor in the Department of Genetics, co-Director of the Paul F. Glenn Center for Biology of Aging Research at Harvard Medical School, and a NY Times bestselling author. He is renowned for his work on understanding why we age and how to slow and reverse its effects. Dr. Sinclair is co-founder of several biotechnology companies, including Sirtris Pharma (acquired by GSK), Genocea,
Cohbar, Life Biosciences, MetroBiotech, ArcBio, and Liberty Biosecurity, and serves on the boards of several others. He has received over 25 awards and honors including The Merck Prize, The ASBMB Medal, The Genzyme Award, TIME100’s “most influential people in the world”, and TIME’s “Top 50 in healthcare.” He is an inventor on approximately 50 patents and co-author more than 200 scientific papers. Dr. Sinclair obtained his Ph.D. in Molecular Genetics from the University of New South Wales, Sydney and worked as a postdoctoral researcher at the Massachusetts Institute of Technology before being hired as an Assistant Professor at Harvard Medical School. In 2018, he became an Officer of the Order of Australia (AO).
Peter Attia has agreed to serve on our board of directors and will be Co-Chairman. Dr. Attia is a physician focusing on the applied science of longevity. His practice deals extensively with nutritional interventions, exercise physiology, sleep physiology, emotional and mental health, and pharmacology to increase lifespan (how long you live), while simultaneously improving healthspan (the quality of your life). Dr. Attia is the co-founder and Chief Medical Officer of the fasting app Zero. Dr. Attia co-founded and served as the first President of Nutrition Science Initiative in 2012. He is an advisor to, and/or investor in, the companies Virta Health, Hu Kitchen, Oura Health Oy, Magic Spoon Cereal, Inevitable Ventures, Salutoceuticals, Dexcom, Kia Hawaii, and Supercast. Dr. Attia earned his M.D. from Stanford University and holds a B.Sc. in mechanical engineering and applied mathematics. Dr. Attia trained for five years at the Johns Hopkins Hospital in general surgery, where he was the recipient of several awards, including resident of the year. He spent two years at NIH as a surgical oncology fellow at the National Cancer Institute where his research focused on immune-based therapies for melanoma.
Jonathan Christodoro has agreed to serve on our board of directors. Mr. Christodoro has served as the Chief Investment Officer and President at Patriot Global Management, LP since 2018. Prior to that, Mr. Christodoro previously served as a Managing Director of Icahn Capital LP, the entity through which Carl Icahn manages investment funds. Prior to joining Icahn Capital, Mr. Christodoro served in various investment and research roles. Mr. Christodoro began his career as an investment banking analyst at Morgan Stanley, where he focused on merger and acquisition transactions across a variety of industries. Mr. Christodoro currently serves as a director on the board of PayPal, Xerox and SandRidge Energy and Pioneer Merger Corp.. He was previously a board member of eBay, Lyft, Hologic, Herbalife, Talisman Energy, Enzon Pharmaceuticals, American Railcar Industries and Cheniere Energy. Mr. Christodoro received an M.P.H. from the Harvard T.H. Chan School ofPublic Health, an M.B.A. from the University of Pennsylvania's Wharton School of Business with Distinction, and a B.S. in Applied Economicsand Management Magna Cum Laude with Honors Distinction in Research from Cornell University. He also served in the United States Marine Corps.
Business Strategy
Our business strategy is to identify and complete our initial business combination with a leading or emerging private company that is a potential industry disruptor or innovator. We believe that our management team’s extensive experience of founding and investing in companies, established network across business leaders, and proven deal-sourcing capabilities presents an opportunity to create significant long-term value for our shareholders. Although we may pursue an opportunity in any business, industry, sector or geographic area, our management team believes that opportunities at the intersection of the healthcare and technology industries represent among the most attractive opportunities for growth and innovation. We are particularly focused on biotechnology opportunities that may be enhanced through the application of technology solutions, for example, but not limited to, artificial intelligence, machine learning, microfluidics or single cell sequencing. We also believe in our ability to support founders and management teams as they take their business to the next level, a public listing.
Our investment highlights and value proposition include:
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Track record of early identification of disruptive companies and themes across sectors: Our management team has significant experience founding, investing in and supporting innovative companies across multiple sectors with a particular focus on the biotechnology, financial technology, cryptocurrency, and deep technology industries. Within biotechnology, specifically, our management team has invested in COMPASS Pathways and AbCellera both of which completed successful initial public offerings in the second half of 2020 and co-founded and invested in atai Life Sciences which is aiming to pioneer mental health innovation as well as Rejuveron Life Sciences, a fully integrated
biotechnology platform company with the aim to improve healthy aging and prolong lifespan. Within the financial technology, cryptocurrency and deep technology sectors our management team has invested in Deposit Solutions, Block One, Northern Data, Flatex, Mynaric and ISAR Aerospace amongst others.
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Broad and diversified set of investor relationships: We are committed to developing and leveraging our relationships with leading public and private market investors in the US, Europe, Middle East and Asia. The management team’s deep network of investor contacts provides access to potential target opportunities as well as resources and expertise and potentially further sources of capital.
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Deep industry and geopolitical connections: We believe our management team’s extensive network across industries within key global markets will be a key source of opportunities for potential business combination targets. As well as operational, investment and board level experience within a corporate setting, our management team has a strong ecosystem of contacts within the geopolitical domain. In particular Mr. Angermayer has an active political network, including heads of state, particularly in Western Europe, and leads a ‘think tank’ and event series “Angermayer Policy and Innovation Forum” which regularly features leading global politicians.
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Capital markets focus and creativity: Collectively our management team has invested over $2 billion of capital in venture capital and private equity, raised approximately $2 billion for portfolio companies and been involved in more than 24 successful IPOs either as an entrepreneur, investor or advisor. We have extensive experience across the capital markets, including various deal structures such as traditional venture and IPO financings, pre-IPO convertible structures, EU to U.S. cross-listings, take-privates and re-listings.
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Synergistic collaboration between Apeiron and Falcon Edge: We believe that a partnership between Apeiron and Falcon Edge Capital is well suited for the SPAC structure. The firms have a history of investments within innovative healthcare and technology companies and across the entire life cycle of SPAC investing from sponsorship, IPO, PIPE and secondary market and collectively have a strong track record of identifying, investing and supporting promising business opportunities, with an aggregate of over 20 years of board level experience. We believe that our sector expertise and broad network of relationships will allow us to add significant value in identifying potential business combination targets and supporting the growth post an initial business combination. We expect to collaborate with founders, senior management and key leaders through a long-term partnership to create value for all stakeholders.
Acquisition Strategy / Criteria and Target Identification
Our acquisition strategy is to complete a business combination that will create value for our shareholders over time. We will seek to capitalize on Apeiron and Falcon Edge Capital’s experience and capabilities through the leadership of Christian Angermayer, Ryan Khoury and Rick Gerson, combined with the expertise of the other members of our management team and board of directors, in consummating our initial business combination. We plan to identify a high-quality private company at the intersection of data science and life sciences which has many of the following key characteristics:
•
Significant advancements in data science have game changing implications for life sciences;
•
Focus on extending healthy lifespans through the convergence of life sciences and data science;
•
Identify visionary life sciences founders;
•
Reasonable entry valuation with significant asymmetric risk-reward potential for all stakeholders.
These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management team may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our 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.
Industry Opportunity
While we may acquire a business in any sector, our focus will be on innovative companies at the intersection of healthcare and technology, particularly within the biotechnology industry. With a broadening set of applications for biotechnology that includes therapeutics, diagnostics, research and development tools and technologies and data applications, the sector offers compelling opportunities for growth and innovation. We believe these industries are attractive for a number of key reasons:
•
Large addressable market with strong growth: Total U.S. national health expenditure was $3.8 trillion in 2019 and, according to the Centers for Medicare & Medicaid Services, is projected to grow at an average annual rate of 5.4 percent between 2019 and 2028 reaching $6.2 trillion. This growth is expected to be 1.1 percentage points faster than Gross Domestic Product per year over the 2019-28 period. Furthermore prescription drug expenditure in the U.S. is expected to grow more than 5 percent per year on average over the 2019-28 period driven in part by projected new drug approvals. New drug approvals by the U.S. FDA has accelerated in recent years, with the number of novel drug approvals increasing approximately 48 percent for the 2015-2020 period compared to the 2009-2014 period. We believe the momentum of innovation across science and technology offers compelling opportunities.
•
Transformational opportunities. Technology can be used as a disruptor within the healthcare sector to improve the quality of care provided to patients or the accessibility of care. Furthermore there is significant scope for transformational innovation within the healthcare and technology industries separately. Our management team has experience founding, operating and investing across multiple disrupters within biotechnology, financial technology, cryptocurrency and deep technology.
•
Strong macroeconomic trends. The global population is aging and according to the United Nations the population aged 60 years or over is expected to more than double between 2017 and 2050. This represents a significant global healthcare challenge but also an opportunity for innovative companies focused on extending healthy lifespans.
Our Acquisition Process
In evaluating a prospective target business, we expect to conduct a thorough due diligence review which will encompass, among other things, meetings with incumbent management and employees, document reviews and inspection of facilities, as well as a review of financial, operational, legal and other information that will be made available to us. Our comprehensive due diligence review will help us to determine the quality and intrinsic value of the company.
We are not prohibited from pursuing an initial business combination with a company in which our sponsor, officers or directors are invested or affiliated. In the event we seek to complete our initial business combination with a company in which our sponsor, officers or directors are invested or affiliated, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm that is a member of the Financial Industry Regulatory Authority, or FINRA, or from an independent valuation or appraisal firm, that our initial business combination is fair to our company from a financial point of view.
Members of our management team may directly or indirectly own our ordinary shares and/or private placement warrants following this offering, and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, 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.
We currently do not have any specific business combination under consideration. Our officers and directors have neither individually identified nor considered a target business for our initial business combination. Apeiron and Falcon Edge Capital 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 (nor has anyone on our behalf) contacted any prospective target business or had any discussions, formal or otherwise, with any business combination target. Additionally, we have not, nor has anyone on our behalf,
taken any measure, directly or indirectly, to identify or locate any suitable acquisition candidate for us, nor have we engaged or retained any agent or other representative to identify or locate any such acquisition candidate.
Each of our officers and directors presently has, and any of them in the future may have, additional fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, subject to his or her fiduciary duties under Cayman Islands law. We expect that if an opportunity is presented to one of our officers or directors in his or her capacity as an officer or director of one of those other entities, such opportunity would be presented to such other entity and not to us. For more information on the entities to which our officers and directors currently have fiduciary or contractual obligations, please refer to “Management — Conflicts of Interest.” We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination. We believe this conflict of interest will be naturally mitigated by the differing nature of the investments that Apeiron and/or Falcon Edge Capital typically considers most attractive for its funds or investment vehicles and the types of acquisitions we expect to find most attractive for our company. Although Apeiron’s and Falcon Edge Capital’s activities may involve investing in private companies, such investments are typically not a controlling stake in the private company and/or the investments are not of a similar size as the target companies expected to be most attractive for our company. As a result, we may become aware of a potential transaction that is not a fit for the traditional private investment activities of Apeiron and/or Falcon Edge Capital but that is an attractive opportunity for us.
In addition, Apeiron, Falcon Edge Capital and our officers and directors may sponsor, form or participate in other blank check companies similar to ours, beginning after we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination. Any such companies may present additional conflicts of interest in pursuing an acquisition target. However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.
Initial Business Combination
So long as our securities are then listed on Nasdaq, our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the net assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of signing a definitive agreement in connection with our initial business combination. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm or an independent valuation or appraisal firm with respect to the satisfaction of such criteria. While we consider it unlikely that our board will not be able to make an independent determination of the fair market value of a target business or businesses, it may be unable to do so if the board is less familiar or experienced with the target company’s business, there is a significant amount of uncertainty as to the value of the company’s assets or prospects, including if such company is at an early stage of development, operations or growth, or if the anticipated transaction involves a complex financial analysis or other specialized skills and the board determines that outside expertise would be helpful or necessary in conducting such analysis. Since any opinion, if obtained, would merely state that the fair market value of the target business meets the 80% of net assets threshold, unless such opinion includes material information regarding the valuation of a target business or the consideration to be provided, it is not anticipated that copies of such opinion would be distributed to our shareholders. However, if required under applicable law, any proxy statement that we deliver to shareholders and file with the SEC in connection with a proposed transaction will include such opinion.
We anticipate structuring our initial business combination so that the post-business combination company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such
that the post-business combination company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-business combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act. Even if the post-business combination company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding shares, capital stock or other equity interests of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-business combination company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses. If our securities are not then listed on Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% of net asset test. However, we intend to satisfy the 80% requirement even if our securities are not listed on Nasdaq at the time of our initial business combination. In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor.
If we target businesses with enterprise values that are greater than we could acquire with the net proceeds of this offering and the sale of the private placement units, and, as a result, if the cash portion of the purchase price exceeds the amount available from the trust account, net of amounts needed to satisfy any redemptions by public shareholders, we may be required to seek additional financing to complete such proposed initial business combination. We may also obtain financing prior to the closing of our initial business combination to fund our working capital needs and transaction costs in connection with our search for and completion of our initial business combination. There is no limitation on our ability to raise funds through the issuance of equity or equity-linked securities or through loans, advances or other indebtedness in connection with our initial business combination, including pursuant to forward purchase agreements or backstop agreements we may enter into following consummation of this offering. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the 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 addition, following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
To the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.
Other Considerations
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor or any of our officers or directors, we, or a committee of
independent directors, will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that such initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
We currently do not have any specific business combination under consideration. Our officers and directors have neither individually selected nor considered a target business nor have they had any substantive discussions regarding possible target businesses among themselves or with our underwriter or other advisors. Our management team is regularly made aware of potential business opportunities, one or more of which we may desire to pursue for a business combination, but we have not (nor has anyone on our behalf) contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to a business combination transaction with our company. Additionally, we have not, nor has anyone on our behalf, taken any substantive measure, directly or indirectly, to identify or locate any suitable acquisition candidate for us, nor have we engaged or retained any agent or other representative to identify or locate any such acquisition candidate.
In addition, certain of our officers and directors presently have, and any of them in the future are expected to have, additional, fiduciary and contractual duties to other entities. As a result, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he, she or it has then-current fiduciary or contractual obligations, then, subject to their fiduciary duties under Cayman Islands law, he, she or it will need to honor such fiduciary or contractual obligations to present such business combination opportunity to such entity, before we can pursue such opportunity. If these other entities decide to pursue any such opportunity, we may be precluded from pursuing the same. However, we do not expect these duties to materially affect our ability to complete our initial business combination because we do not currently anticipate any meaningful overlap of investment objectives. Our amended and restated memorandum and articles of association provide that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other.
Our sponsor, officers and directors may sponsor, form or participate in other blank check companies similar to ours during the period in which we are seeking an initial business combination. Any such companies may present additional conflicts of interest in pursuing an acquisition target, particularly in the event there is overlap among investment mandates. In particular, affiliates of our sponsor currently sponsor a blank check company, Pioneer Merger Corp., of which Mr. Gerson is the Co-President, Mr. Khoury is the Chief Executive Officer, Mr. Carpenter is the Chief Operating Officer, and Mr. Corey is the Chief Financial Officer. Pioneer Merger Corp. may seek to complete a business combination in any industry or location. In addition, our sponsor, officers and directors, are not required to commit any specified amount of time to our affairs, and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. Moreover, certain of our officers and directors have time and attention requirements for private investment funds of which Apeiron and/or Falcon Edge Capital are the investment managers.
Corporate Information
Our executive offices are located at 660 Madison Avenue, 19th Floor, New York, NY 10065, and our telephone number is 212-803-9080. We maintain a corporate website at . The information contained on or accessible through our corporate website or any other website that we may maintain is not part of this prospectus or the registration statement of which this prospectus is a part.
We are a Cayman Islands exempted company. Exempted companies are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Act. As an exempted company, we applied for and received a tax exemption undertaking from the Cayman Islands government that, in accordance with Section 6 of the Tax Concessions Act (As Revised) of the Cayman Islands, for a period of 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits,
income, gains or appreciations will apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i) on or in respect of our shares, debentures or other obligations or (ii) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us.
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved, If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that are held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of any fiscal year for so long as either (1) the market value of our Class A ordinary shares held by non-affiliates did not exceed $250 million as of the prior June 30, or (2) our annual revenues did not exceed $100 million during such completed fiscal year and the market value of our Class A ordinary shares held by non-affiliates did not exceed $700 million as of the prior June 30.
THE OFFERING
In deciding whether to invest in our securities, you should take into account not only the backgrounds of the members of our management team, but also the special risks we face as a blank check company and the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. You will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. You should carefully consider these and the other risks set forth in the section below entitled “Risk Factors” of this prospectus.
20,000,000 units (or 23,000,000 units if the underwriter’s over-allotment option is exercised in full), at $10.00 per unit, each unit consisting of:
•
one Class A ordinary share; and
•
one-third of one redeemable warrant.
Units: “FRONU”
Class A ordinary shares: “FRON”
Warrants: “FRONW”
Trading commencement and separation of Class A ordinary shares and warrants
The units are expected to begin trading on or promptly after the date of this prospectus. The Class A ordinary shares and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus unless Credit Suisse informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. Once the Class A ordinary shares and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities.
Holders will need to have their brokers contact our transfer agent in order to separate the units into Class A ordinary shares and warrants. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least three units, you will not be able to receive or trade a whole warrant.
Additionally, the units will automatically separate into their component parts and will not be traded after completion of our initial business combination.
Separate trading of the Class A ordinary shares and warrants is prohibited until we have filed a Current Report on Form 8-K
In no event will the Class A ordinary shares and warrants be traded separately until we have filed with the SEC a Current Report on Form 8-K which includes an audited balance sheet reflecting our receipt of the gross proceeds at the closing of this offering. We will file the Current Report on Form 8-K promptly after the closing of this offering. If the underwriter’s 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 underwriter’s over-allotment option.
Units:
Number outstanding before this offering
0
Number outstanding after this offering
20,600,000(1)(2)
Ordinary shares:
Number outstanding before this offering
5,750,000(3)(4)
Number outstanding after this offering
25,600,000(1)(3)(5)
Warrants:
Number of private placement warrants to be sold in a private placement simultaneously with this offering
200,000(1)
Number of warrants to be outstanding after this offering and the private placement
6,866,667(1)(6)
Each whole warrant sold in this offering is exercisable to purchase one Class A ordinary share, subject to adjustment as described herein. Only whole warrants are exercisable.
We structured each unit to contain one-third of one redeemable warrant, with each whole warrant exercisable for one Class A ordinary share, as compared to units issued by some other similar blank check companies which contain whole warrants exercisable for one whole share, in order to reduce the dilutive effect of the warrants upon completion of a business combination as compared to units that each contain a whole warrant to purchase one whole share, thus making us, we believe, a more attractive business combination partner for target businesses.
(1)
Assumes no exercise of the underwriter’s over-allotment option.
(2)
Comprised of 20,000,000 units sold in this offering and 600,000 private placement units to be sold in the private placement.
(3)
Founder shares are currently classified as Class B ordinary shares, which shares will automatically convert into Class A ordinary shares following the consummation of our initial business combination as described below adjacent to the caption “Founder shares conversion and anti-dilution rights” and in our amended and restated memorandum and articles of association. Such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions from the trust account if we do not consummate an initial business combination.
(4)
Includes up to 750,000 founder shares that are subject to forfeiture.
(5)
Includes 20,000,000 public shares, 600,000 Class A ordinary shares underlying the private placement units to be sold in the private placement and 5,000,000 founder shares, assuming 750,000 founder shares have been forfeited.
(6)
Includes 6,666,667 public warrants included in the units sold in this offering and 200,000 private placement warrants underlying the private placement units to be sold in the private placement.
$11.50 per whole share, subject to adjustments as described herein.
In addition, if (x) we issue additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our sponsor or its affiliates, without taking into account any founder shares held by our sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (z) the volume weighted average trading price of our Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price described adjacent to “Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described adjacent to the caption “Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
The warrants will become exercisable on the later of:
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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 Class A ordinary shares issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement). If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
We are not registering the Class A ordinary shares issuable upon exercise of the warrants at this time. However, we have agreed that as soon as practicable, but in no event later than 20 business days after the closing of our initial business combination, we will use our commercially reasonable efforts to file with the SEC a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants, and we will use our commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of our initial business combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement; provided that if our Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th business day after the closing of the initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when we will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption, but we will use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
The warrants will expire at 5:00 p.m., New York City time, five years after the completion of our initial business combination or earlier upon redemption or liquidation. On the exercise of any warrant, the warrant exercise price will be paid directly to us and not placed in the trust account.
Redemption of warrants for cash when the price per Class A ordinary share equals or exceeds $18.00
Once the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private placement warrants):
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in whole and not in part;
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at a price of $0.01 per warrant;
•
upon a minimum of 30 days’ prior written notice of redemption, which we refer to as the “30-day redemption period”; and
•
if, and only if, the last reported sales price (the “closing price”) of our Class A ordinary shares
equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities — Warrants — Public Shareholders’ Warrants — Anti-Dilution Adjustments”) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders.
We will not redeem the warrants as described above unless an effective registration statement under the Securities Act covering the Class A ordinary shares issuable upon exercise of the warrants is effective and a current prospectus relating to those Class A ordinary shares is available throughout the 30-day redemption period. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Except as set forth below, none of the private placement warrants will be redeemable by us so long as they are held by our sponsor or its permitted transferees.
Redemption of warrants for Class A ordinary shares when the price per Class A ordinary share equals or exceeds $10.00
Once the warrants become exercisable, we may redeem the outstanding warrants:
•
in whole and not in part;
•
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table set forth under “Description of Securities — Warrants — Public Shareholders’ Warrants” based on the redemption date and the “fair market value” of our Class A ordinary shares (as defined below) except as otherwise described in “Description of Securities — Warrants — Public Shareholders’ Warrants”;
•
if, and only if, the closing price of our Class A ordinary shares equals or exceeds $10.00 per public share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant described under the heading “Description of Securities — Warrants — Public Shareholders’ Warrants — Anti-dilution Adjustments”) for any 20 trading days within the 30-trading day period ending three trading days before we send the notice of redemption to the warrant holders; and
•
if the closing price of the Class A ordinary shares for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities — Warrants — Public Shareholders’ Warrants — Anti-dilution Adjustments”), the private placement warrants must also be concurrently called for redemption on the same terms as the outstanding public warrants, as described above.
The “fair market value” of our Class A ordinary shares for the above purpose shall mean the volume weighted average price of our Class A ordinary shares during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. 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 Class A ordinary shares per warrant (subject to adjustment).
No fractional Class A ordinary shares will be issued upon redemption. If, upon redemption, a holder would be entitled to receive a fractional interest in a share, we will round down to the nearest whole number of the number of Class A ordinary shares to be issued to the holder. Please see the section entitled “Description of Securities — Warrants — Public Shareholders’ Warrants” for additional information.
On January 21, 2021, we issued to our sponsor 5,750,000 founder shares in exchange for a capital contribution of $25,000, or approximately $0.004 per share. Up to 750,000 founder shares held by our sponsor will be subject to forfeiture in the event the underwriter’s over-allotment option is not exercised. On February 16, 2021, our Sponsor transferred 40,000 founder shares to each of Peter Attia, David A. Sinclair and Jonathan Christodoro, our independent director nominees.
Prior to the initial investment in the company of $25,000 by the sponsor, the company had no assets, tangible or intangible. The per share price of the founder shares was determined by dividing the amount contributed to the company by the number of founder shares issued. If we increase or decrease the size of this offering, we will effect a share capitalization or a share surrender or redemption or other appropriate mechanism, as applicable, with respect to our Class B ordinary shares immediately prior to the consummation of this offering in such amount as to maintain the ownership of our initial shareholders (and their permitted transferees), on an as-converted basis, at
20% of our issued and outstanding ordinary shares (excluding the private placement shares underlying the private placement units) upon the consummation of this offering. Up to 750,000 founder shares held by our sponsor are subject to forfeiture, depending on the extent to which the underwriter’s over-allotment option is exercised.
The founder shares are identical to the Class A ordinary shares included in the units being sold in this offering, except that:
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only holders of the founder shares have the right to vote on the appointment of directors prior to the completion of our initial business combination and holders of a majority of our founder shares may remove a member of the board of directors for any reason;
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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 and our management team have entered into an agreement with us, pursuant to which they have agreed to (i) waive their redemption rights with respect to any founder shares, private placement shares and public shares they hold, (ii) to waive their redemption rights with respect to any founder shares, private placement shares and any public shares purchased during or after this offering in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares and (iii) waive their rights to liquidating distributions from the trust account with respect to any founder shares or private placement shares they hold if we fail to consummate an initial business combination within 24 months from the closing of this offering (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within 24 months from the closing of this offering). If we seek shareholder approval, we will complete our initial business combination only if we receive the approval of an ordinary resolution under Cayman Islands law being the affirmative vote of a majority of the shareholders who attend and vote
at a general meeting of the company. In such case, our sponsor and each member of our management team have agreed to vote their founder shares, private placement shares and any public shares purchased during or after this offering in favor of our initial business combination. As a result, in addition to our initial shareholders’ founder shares and private placement shares, we would need 7,200,001, or 36%, of the 20,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all issued and outstanding shares are voted, the private placement shares to be issued to our sponsor are voted in favor of the transaction and the over-allotment option is not exercised);
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the founder shares will automatically convert into our Class A ordinary shares at the time of our initial business combination as described below adjacent to the caption “Founder shares conversion and anti-dilution rights” and in our amended and restated memorandum and articles of association; and
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the founder shares are entitled to registration rights.
Transfer restrictions on founder shares and private placement units
Except as described herein, our sponsor and our management team have agreed not to transfer, assign or sell (i) any of their founder shares until the earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property, and (ii) any of their private placement units, private placement shares, private placement warrants and Class A ordinary shares issued upon conversion or exercise thereof until 30 days after the completion of our initial business combination. Any permitted transferees would be subject to the same restrictions and other agreements of our sponsor and management team with respect to any founder shares, private placement units, private placement shares, private placement warrants and Class A ordinary shares issued upon conversion or exercise thereof.
Founder shares conversion and anti-dilution rights
The founder shares are designated as Class B ordinary shares and will automatically convert into Class A ordinary
shares following the consummation of our initial business combination at a ratio such that the number of Class A ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding (excluding the private placement shares underlying the private placement units) upon the consummation of this offering, plus (ii) the sum of the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities (as defined herein) or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial business combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to our sponsor, members of our management team or any of their affiliates upon conversion of working capital loans. Any conversion of Class B ordinary shares described herein will take effect as a compulsory redemption of Class B ordinary shares and an issuance of Class A ordinary shares as a matter of Cayman Islands law. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one.
The term “equity-linked securities” refers to any debt or equity securities that are convertible, exercisable or exchangeable for our Class A ordinary shares issued in a financing transaction in connection with our initial business combination, including, but not limited to, a private placement of equity or debt.
Appointment of directors; Voting rights
Prior to the completion of our initial business combination, holders of our founder shares are the only shareholders of the company which will have the right to vote on the appointment of directors. Holders of our public shares will not be entitled to vote on the appointment of directors during such time. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. These provisions of our amended and restated memorandum and articles of association may only be amended by a special resolution passed by holders representing at least two-thirds of our ordinary shares who attend and vote at our general meeting which shall include the affirmative vote of a simple majority of our Class B ordinary shares. With respect to any other matter submitted to a vote of our shareholders, including any vote in connection with our initial business combination, except as required by law or the applicable rules of Nasdaq then in effect, holders of our founder shares and holders of our public shares will vote together as a single class, with each share entitling the holder to one vote.
Our amended and restated memorandum and articles of association will provide that our board of directors will be divided into three classes with only one class of directors being elected in each year and each class (except for those directors appointed prior to our first annual meeting of shareholders) serving a three-year term.
Our sponsor has committed, pursuant to a written agreement, to purchase 600,000 private placement units (or 660,000 private placement units if the underwriter’s over-allotment option is exercised in full), at a price of $10.00 per unit ($6,000,000 in the aggregate or $6,600,000 if the underwriter’s over-allotment option is exercised in full), in a private placement that will close simultaneously with the closing of this offering. The private placement units are identical to the units sold in this offering, subject to certain limited exceptions as described in this prospectus. If we do not consummate an initial business combination within 24 months from the closing of this offering, the proceeds from the sale of the private placement units 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 units (and the underlying securities) will expire worthless. The private placement warrants included in the private placement units will be non-redeemable by us (except as set forth under “Description of Securities — Warrants — Public Shareholders’ Warrants — Redemption of warrants for Class A ordinary shares when the price per Class A ordinary share equals or exceeds $10.00”) and exercisable on a cashless basis so long as they are held by our sponsor or its permitted transferees (see “Description of Securities — Warrants — Private Placement Warrants”). If the private placement warrants are held by holders other than our sponsor or its permitted transferees, the private placement warrants will be redeemable by us in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering.
Cashless exercise of private placement warrants
If holders of private placement warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering their warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “historical fair market value” over the exercise price of the warrants by (y) the historical fair market value. The “historical fair market value” will mean the average reported closing price of the Class A ordinary shares for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent. The reason that we have agreed that these warrants will be exercisable on a cashless basis so long as they are held by the sponsor or its permitted transferees is because it is not known at this time whether they will be
affiliated with us following a business combination. If they remain affiliated with us, their ability to sell our securities in the open market will be significantly limited. We expect to have policies in place that restrict insiders from selling our securities except during specific periods.
Proceeds to be held in trust account
The Nasdaq rules provide that at least 90% of the gross proceeds from this offering and the sale of the private placement units be deposited in a trust account. Of the proceeds we will receive from this offering and the sale of the private placement units described in this prospectus, $200.0 million, or $230.0 million if the underwriter’s over-allotment option is exercised in full ($10.00 per unit in either case), will be deposited into a segregated trust account located in the United States at J.P. Morgan Chase Bank, N.A. with Continental Stock Transfer & Trust Company acting as trustee and approximately $1,000,000 will be used to pay expenses in connection with the closing of this offering and approximately $1,000,000 will be used for working capital following this offering. The proceeds to be placed in the trust account include $7,000,000 (or $8,050,000 if the underwriter’s over-allotment option is exercised in full) in deferred underwriting commissions.
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, our amended and restated memorandum and articles of association, as discussed below and subject to the requirements of law and regulation, will provide that the proceeds from this offering and the sale of the private placement units held in the trust account will not be released from the trust account (1) to us, until the completion of our initial business combination, or (2) to our public shareholders, until the earliest of (a) the completion of our initial business combination, and then only in connection with those Class A ordinary shares that such shareholders properly elected to redeem, subject to the limitations described herein, (b) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, and (c) the redemption of our public shares if we have not consummated our business combination within 24 months from the closing of this offering, subject to applicable law. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (b) in the preceding sentence shall not be entitled to funds from the trust account upon the subsequent completion of an initial business combination or liquidation if we have not consummated an initial business
combination within 24 months from the closing of this offering, with respect to such Class A ordinary shares so redeemed. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public shareholders.
Anticipated expenses and funding
sources
Unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use, except the withdrawal of interest income (if any) to pay our taxes, if any. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Assuming an interest rate of 0.2% per year, we estimate the interest earned on the trust account will be approximately $400,000 per year; however, we can provide no assurances regarding this amount. Unless and until we complete our initial business combination, we may pay our expenses only from:
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the net proceeds of this offering and the sale of the private placement units not held in the trust account, which will be approximately $1,000,000 in working capital after the payment of approximately $1,000,000 in expenses relating to this offering; and
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any loans or additional investments from our sponsor or an affiliate of our sponsor or certain of our officers and directors, although they are under no obligation to advance funds or invest in us, and provided any such loans will not have any claim on the proceeds held in the trust account unless such proceeds are released to us upon completion of our initial business combination. Up to $1,500,000 of such loans may be convertible into private placement warrants, at a price of $1.50 per warrant, at the option of the lender.
Conditions to completing our initial business combination
Nasdaq rules require that our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of our assets held in the trust account (excluding the amount of deferred underwriting discounts held in trust and taxes payable on the interest earned on the trust account) at the time of signing the agreement to enter into the initial business combination. If our board of directors is not able to independently determine the fair market value of the target business or businesses or we are considering an initial business combination with an affiliated entity, we will obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent valuation
or accounting firm with respect to the satisfaction of such criteria. Our shareholders may not be provided with a copy of such opinion nor will they be able to rely on such opinion.
We will complete our initial business combination only if the post-business combination company in which our public shareholders own shares will own or acquire 50% or more of the outstanding voting securities of the target or is otherwise not required to register as an investment company under the Investment Company Act. Even if the post-business combination company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the completion of our initial business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination transaction. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-business combination company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test, provided that in the event that the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking shareholder approval, as applicable.
Permitted purchases and other transactions with respect to our securities
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. Additionally, at any time at or prior to the completion of our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), our sponsor, directors, executive officers, advisors or their affiliates may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds held in the trust account will be used to purchase public shares or warrants in such transactions. If our sponsor, directors, executive officers, advisors or their affiliates engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material nonpublic information not
disclosed to the seller or if such purchases are prohibited by Regulation M under the Securities Exchange Act of 1934, as amended, or the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will be required to comply with such rules. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. See “Proposed Business-Permitted Purchases and Other Transactions with Respect to Our Securities” for a description of how our sponsor, directors, executive officers, advisors or their affiliates will select which shareholders to purchase securities from in any private transaction.
The purpose of any such transaction could be to (1) vote in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination, (2) reduce the number of public warrants outstanding or vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination or (3) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our Class A ordinary shares or public warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Redemption rights for public shareholders upon completion of our initial business combination
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of then-outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 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 underwriter. The redemption rights may include the requirement that a beneficial holder must identify itself in order to validly redeem its shares.
There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Further, we will not proceed with redeeming our public shares, even if a public shareholder has properly elected to redeem its shares, if a business combination does not close. Our sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares, private placement shares and any public shares purchased during or after this offering in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares.
Limitations on redemptions
Our amended and restated memorandum and articles of association will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules). However, a greater net tangible asset or cash requirement may be contained in the agreement relating to our initial business combination. For example, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination.
Furthermore, although we will not redeem shares in an amount that would cause our net tangible assets to fall below $5,000,001, we do not have a maximum redemption threshold based on the percentage of shares sold in this offering, as many blank check companies do. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all Class A ordinary shares submitted for redemption will be returned to the
holders thereof, and we instead may search for an alternate business combination.
Manner of conducting redemptions
We will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either (i) in connection with a general meeting called to approve the business combination or (ii) by means of a tender offer. The decision as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under applicable law or stock exchange listing requirement. Asset acquisitions and share purchases would not typically require shareholder approval, while direct mergers with our company and any transactions where we issue more than 20% of our outstanding ordinary shares (excluding the private placement shares underlying the private placement units) or seek to amend our amended and restated memorandum and articles of association would typically require shareholder approval. We currently intend to conduct redemptions in connection with a shareholder vote unless shareholder approval is not required by applicable law or stock exchange rule or we choose to conduct redemptions pursuant to the tender offer rules of the SEC for business or other reasons.
If we hold a shareholder vote to approve our initial business combination, we will:
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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.
If we seek shareholder approval, we will complete our initial business combination only if we receive the approval of an ordinary resolution being the affirmative vote of a simple majority of the shareholders, represented in person or by proxy and entitled to vote thereon, who attend and vote at a general meeting of the company. In such case, our sponsor and our management team have agreed to vote their founder shares, private placement shares and any public shares purchased during or after this offering in favor of our initial business combination. As a result, in addition to our initial shareholders’ founder shares and private placement shares, we would need 7,200,001, or 36%, of the 20,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all issued and outstanding shares are voted, the private placement shares to be issued to our sponsor are voted in
favor of the transaction and the over-allotment option is not exercised). Each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction or vote at all. Our amended and restated memorandum and articles of association will require that at least five days’ notice will be given of any such general meeting.
If we conduct redemptions pursuant to the tender offer rules of the SEC, we will, pursuant to our amended and restated memorandum and articles of association:
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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, if we elect to conduct redemptions pursuant to the tender offer rules, we and our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase our Class A ordinary shares in the open market, in order to comply with Rule 14e-5 under the Exchange Act. In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public shareholders not tendering more than the number of public shares we are permitted to redeem. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination.
Limitation on redemption rights of shareholders holding more than 15% of the shares sold in this offering if we hold a shareholder vote
Notwithstanding the foregoing redemption rights, if we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in this offering, without
our prior consent. We believe the restriction described above will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to redeem their shares as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public shareholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights against a business combination if such holder’s shares are not purchased by us, our sponsor or our management team at a premium to the then-current market price or on other undesirable terms. By limiting our shareholders’ ability to redeem to no more than 15% of the shares sold in this offering, we believe we will limit the ability of a small group of shareholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash.
However, we would not be restricting our shareholders’ ability to vote all of their shares (including all shares held by those shareholders that hold more than 15% of the shares sold in this offering) for or against our initial business combination.
Release of funds in trust account on closing of our initial business combination
On the completion of our initial business combination, the funds held in the trust account will be disbursed directly by the trustee to pay amounts due to any public shareholders who properly exercise their redemption rights as described above adjacent to the caption “Redemption rights for public shareholders upon completion of our initial business combination,” to pay the underwriter its 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 redemptions of our Class A ordinary shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of post-business combination businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
Redemption of public shares and distribution and liquidation if no initial business combination
Our amended and restated memorandum and articles of association will provide that we will have only 24 months
from the closing of this offering to consummate our initial business combination. If we do not consummate an initial business combination within 24 months from the closing of this offering, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to consummate an initial business combination within 24 months from the closing of this offering.
Our sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to any founder shares or private placement shares they hold if we fail to consummate an initial business combination within 24 months from the closing of this offering (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within 24 months from the closing of this offering).
The underwriter has agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not consummate an initial business combination within 24 months from the closing of this offering and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares.
Our sponsor, executive officers, directors and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this
offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares; unless we provide our public shareholders with the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitations described above adjacent to the caption “Limitations on redemptions.” For example, our board of directors may propose such an amendment if it determines that additional time is necessary to complete our initial business combination. In such event, we will conduct a proxy solicitation and distribute proxy materials pursuant to Regulation 14A of the Exchange Act seeking shareholder approval of such proposal and, in connection therewith, provide our public shareholders with the redemption rights described above upon shareholder approval of such amendment. This redemption right shall apply in the event of the approval of any such amendment, whether proposed by an affiliate of our sponsor, any executive officer, director or director nominee, or any other person.
Our amended and restated memorandum and articles of association will provide that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.
Limited payments to insiders
There will be no finder’s fees, reimbursements or cash payments made by the company to our sponsor, officers or directors, or their affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination, other than the following payments, none of which will be made from the proceeds of this offering and the sale of the private placement units held in the trust account prior to the completion of our initial business combination:
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repayment of up to an aggregate of $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses;
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reimbursement for office space, secretarial and administrative services provided to us by an affiliate of our sponsor, in the amount of $10,000 per month;
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reimbursement for any out-of-pocket expenses related to identifying, investigating, negotiating and completing an initial business combination; and
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repayment of loans which may be made by our
sponsor or an affiliate of our sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial business combination. Up to $1,500,000 of such loans may be convertible into warrants of the post-business combination company at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants.
Except for the foregoing, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans.
Any such payments will be made either (i) prior to the completion of our initial business combination using proceeds of this offering and the sale of the private placement units held outside the trust account or from loans made to us by our sponsor or an affiliate of our sponsor or certain of our officers and directors or (ii) in connection with or after the consummation of our initial business combination.
We will establish and maintain an audit committee, which will be composed entirely of independent directors. Among its responsibilities, the audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers or directors, or their affiliates and monitor compliance with the other terms relating to this offering. If any noncompliance is identified, then the audit committee will be charged with the responsibility to promptly take all action necessary to rectify such noncompliance or otherwise to cause compliance with the terms of this offering. For more information, see the section entitled “Management — Committees of the Board of Directorse — Audit Committee.”
Risks
Summary of Risk Factors
An investment in our securities involves a high degree of risk. The occurrence of one or more of the events or circumstances described in the section titled “Risk Factors,” alone or in combination with other events or circumstances, may materially adversely affect our business, financial condition and operating results. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. Such risks include, but are not limited to:
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We are a recently incorporated exempted company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
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Past performance by our management team or their respective affiliates may not be indicative of future performance of an investment in us.
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Our shareholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our shareholders do not support such a combination.
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Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.
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If we seek shareholder approval of our initial business combination, our initial shareholders and members of our management team have agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote.
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Our executive officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.
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The ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.
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The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.
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The requirement that we consummate an initial business combination within 24 months (or such later date as approved by our shareholders) after the closing of this offering may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our shareholders.
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Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus (COVID-19) outbreak and the status of debt and equity markets.
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If we seek shareholder approval of our initial business combination, our initial shareholders, directors, executive officers, advisors and their affiliates may elect to purchase public shares or warrants, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A ordinary shares or public warrants.
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If a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
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You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
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Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
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You will not be entitled to protections normally afforded to investors of many other blank check companies.
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Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we have not consummated our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
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If the net proceeds of this offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for the 24 months following the closing of this offering, it could limit the amount available to fund our search for a target business or businesses and our ability to complete our initial business combination, and we will depend on loans from our sponsor, its affiliates or members of our management team to fund our search and to complete our initial business combination.
SUMMARY FINANCIAL DATA
The following table summarizes the relevant financial data for our business and should be read with our financial statements, which are included in this prospectus. We have not had any significant operations to date, so only balance sheet data is presented.
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January 20, 2021
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Balance Sheet Data:
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Working capital (deficiency)
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$
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(25,076)
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Total assets
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$
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64,924
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Total liabilities
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$
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45,000
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Shareholder’s equity
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$
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19,924
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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 shareholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our shareholders do not support such a combination.
We may not hold a shareholder vote to approve our initial business combination unless the business combination would require shareholder approval under applicable Cayman Islands law or stock exchange listing requirements or if we decide to hold a shareholder vote for business or other reasons. For instance, the Nasdaq rules currently allow us to engage in a tender offer in lieu of a general meeting but would still require us to obtain shareholder approval if we were seeking to issue more than 20% of our issued and outstanding shares (excluding the private placement shares underlying the private placement units) to a target business as consideration in any business combination.
Therefore, if we were structuring a business combination that required us to issue more than 20% of our issued and outstanding ordinary shares (excluding the private placement shares underlying the private placement units), we would seek shareholder approval of such business combination. However, except as required by applicable law or stock exchange rule, the decision as to whether we will seek shareholder approval of a proposed business combination or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval. Accordingly, we may consummate our initial business combination even if holders of a majority of the outstanding ordinary shares do not approve of the business combination we consummate. Please see the section entitled “Proposed Business-Shareholders May Not Have the Ability to Approve Our Initial Business Combination” for additional information.
Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.
At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of any target businesses. Since our board of directors may complete a business combination without seeking shareholder approval, public shareholders may not have the right or opportunity to vote on the business combination, unless we seek such shareholder approval. Accordingly, your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public shareholders in which we describe our initial business combination.
If we seek shareholder approval of our initial business combination, our sponsor and members of our management team have agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote.
Our initial shareholders will own, on an as-converted basis, 20% of our outstanding ordinary shares (excluding the private placement shares underlying the private placement units) immediately following the completion of this offering. Our sponsor and members of our management team also may from time to time purchase Class A ordinary shares prior to the completion of our initial business combination. Our amended and restated memorandum and articles of association will provide that, if we seek shareholder approval, we will complete our initial business combination only if we receive the approval of an ordinary resolution being the affirmative vote of a majority of the shareholders, represented in person or by proxy and entitled to vote thereon, who attend and vote at a general meeting of the company. As a result, in addition to our
initial shareholders’ founder shares and private placement shares, we would need 7,200,001, or 36%, of the 20,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all issued and outstanding shares are voted, the private placement shares to be issued to our sponsor are voted in favor of the transaction and the over-allotment option is not exercised).
Accordingly, if we seek shareholder approval of our initial business combination, the agreement by our sponsor and our management team to vote in favor of our initial business combination will increase the likelihood that we will receive the requisite shareholder approval for such initial business combination.
You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
Our public shareholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i) our completion of an initial business combination, and then only in connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, and (iii) the redemption of our public shares if we have not consummated an initial business within 24 months from the closing of this offering, subject to applicable law and as further described herein. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the trust account upon the subsequent completion of an initial business combination or liquidation if we have not consummated an initial business combination within 24 months from the closing of this offering, with respect to such Class A ordinary shares so redeemed. In no other circumstances will a shareholder have any right or interest of any kind to or in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
The ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.
We may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public shareholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules). Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.
The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.
At the time we enter into an agreement for our initial business combination, we will not know how many shareholders may exercise their redemption rights, and therefore will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If a large number of shares are submitted for redemption, we may need to restructure the transaction to reserve a
greater portion of the cash in the trust account or arrange for additional third party financing. Raising additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital structure. The amount of the deferred underwriting commissions payable to the underwriter will not be adjusted for any shares that are redeemed in connection with an initial business combination. The per-share amount we will distribute to shareholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and after such redemptions, the amount held in trust will continue to reflect our obligation to pay the entire deferred underwriting commissions.
The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful is increased. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the funds in the trust account until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your shares in the open market.
The requirement that we consummate an initial business combination within 24 months after the closing of this offering may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our shareholders.
Any potential target business with which we enter into negotiations concerning a business combination will be aware that we must consummate an initial business combination within 24 months from the closing of this offering.
Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial business combination within the required time period with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus (COVID-19) outbreak and the status of debt and equity markets.
In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (“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 and a significant outbreak of other infectious diseases could result in a widespread health crisis that could adversely affect the economies and financial markets worldwide, and the business of any potential target business with which we consummate a business combination could be materially and adversely affected.
Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 continue to restrict travel, limit the ability to have meetings with potential investors or the target
company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected. In addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all.
We may not be able to consummate an initial business combination within 24 months after the closing of this offering, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate.
We may not be able to find a suitable target business and consummate an initial business combination within 24 months after the closing of this offering. Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the debt and equity markets and the other risks described herein. For example, the outbreak of 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 COVID-19 outbreak may negatively impact businesses we may seek to acquire. If we have not consummated an initial business combination within such applicable time period, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. Our amended and restated memorandum and articles of association will provide that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law. In either such case, our public shareholders may receive only $10.00 per public share, or less than $10.00 per public share, on the redemption of their shares, and our warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per public share” and other risk factors herein.
If we seek shareholder approval of our initial business combination, our sponsor, directors, executive officers, advisors and their affiliates may elect to purchase public shares or warrants, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A ordinary shares or public warrants.
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation to do so. However, other than as expressly stated herein, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase public shares or warrants in such transactions.
In the event that our sponsor, directors, executive officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. The purpose of any such transaction could be to (1) vote in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination, (2) reduce the number of public warrants outstanding or vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination or (3) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our Class A ordinary shares or public warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. See “Proposed Business-Permitted Purchases and Other Transactions with Respect to Our Securities” for a description of how our sponsor, directors, executive officers, advisors or their affiliates will select which shareholders to purchase securities from in any private transaction.
If a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
We will comply with the proxy rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these rules, if a shareholder fails to receive our proxy solicitation or tender offer materials, as applicable, such shareholder may not become aware of the opportunity to redeem its shares. In addition, the proxy solicitation or tender offer materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly redeem or tender public shares. In the event that a shareholder fails to comply with these procedures, its shares may not be redeemed. See “Proposed Business — Effecting Our Initial Business Combination — Tendering Share Certificates in Connection with a Tender Offer or Redemption Rights.”
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 do not complete our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
We expect to encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds of this offering and the sale of the private placement units, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are obligated to offer holders of our public shares the right to redeem their shares for cash at the time of our initial business combination in conjunction with a shareholder vote or via a tender offer. Target companies will be aware that this may reduce the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination. If we have not consummated our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account
and our warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per public share” and other risk factors herein.
If the net proceeds of this offering and the sale of the private placement units not being held in the trust account are insufficient to allow us to operate for the 24 months following the closing of this offering, 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 and to complete our initial business combination.
Of the net proceeds of this offering and the sale of the private placement units, only $1,000,000 will be available to us initially outside the trust account to fund our working capital requirements. We believe that, upon the closing of this offering, the funds available to us outside of the trust account, together with funds available from loans from our sponsor, members of our management team or any of their affiliates will be sufficient to allow us to operate for at least the 24 months following the closing of this offering; however, our estimate may not be accurate, and our sponsor, members of our management team or any of their affiliates are under no obligation to advance funds to us in such circumstances. Of the funds available to us, we expect to use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.
In the event that our offering expenses exceed our estimate of $1,000,000, we may fund such excess with funds not to be held in the trust account. In such case, unless funded by the proceeds of loans available from our sponsor, members of our management team or any of their affiliates, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $1,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. The amount held in the trust account will not be impacted as a result of such increase or decrease. If we are required to seek additional capital, we would need to borrow funds from our sponsor, members of our management team or any of their affiliates or other third parties to operate or may be forced to liquidate. Neither our sponsor, members of our management team nor any of their affiliates is under any obligation to advance funds to us in such circumstances. Any such advances may be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. Up to $1,500,000 of such loans may be convertible into warrants of the post-business combination entity at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor, members of our management team or any of their affiliates as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account. If we do not complete our initial business combination within the required time period because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently, our public shareholders may only receive an estimated $10.00 per public share, or possibly less, on our redemption of our public shares, and our warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per public share” and other risk factors herein.
We may seek business combination opportunities with a high degree of complexity that require significant operational improvements, which could delay or prevent us from achieving our desired results.
We may seek business combination opportunities with large, highly complex companies that we believe would benefit from operational improvements. While we intend to implement such improvements, to the
extent that our efforts are delayed or we are unable to achieve the desired improvements, the business combination may not be as successful as we anticipate.
To the extent we complete our initial business combination with a large complex business or entity with a complex operating structure, we may also be affected by numerous risks inherent in the operations of the business with which we combine, which could delay or prevent us from implementing our strategy. Although our management team will endeavor to evaluate the risks inherent in a particular target business and its operations, we may not be able to properly ascertain or assess all of the significant risk factors until we complete our business combination. If we are not able to achieve our desired operational improvements, or the improvements take longer to implement than anticipated, we may not achieve the gains that we anticipate. Furthermore, some of these risks and complexities may be outside of our control and leave us with no ability to control or reduce the chances that those risks and complexities will adversely impact a target business. Such combination may not be as successful as a combination with a smaller, less complex organization.
We may not hold an annual meeting of shareholders until after the consummation of our initial business combination.
In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our first fiscal year end following our listing on Nasdaq. As an exempted company, there is no requirement under the Companies Act for us to hold annual or extraordinary general meetings to appoint directors. Until we hold an annual general meeting, public shareholders may not be afforded the opportunity to appoint directors and to discuss company affairs with management. Our board of directors is divided into three classes with only one class of directors being appointed in each year and each class (except for those directors appointed prior to our first annual meeting of shareholders) serving a three-year term.
We may seek acquisition opportunities in industries or sectors which may or may not be outside of our management’s area of expertise.
We will consider a business combination outside of our management’s area of expertise if a business combination target is presented to us and we determine that such candidate offers an attractive acquisition opportunity for our company. Although our management will endeavor to evaluate the risks inherent in any particular business combination target, we may not adequately ascertain or assess all of the significant risk factors. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors in this offering than a direct investment, if an opportunity were available, in a business combination target. In the event we elect to pursue an acquisition outside of the areas of our management’s expertise, our management’s expertise may not be directly applicable to its evaluation or operation, and the information contained in this prospectus regarding the areas of our management’s expertise would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all of the significant risk factors.
Accordingly, any holders who choose to retain their securities following our initial business combination could suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material misstatement or material omission.
Our initial shareholders may receive additional Class A ordinary shares if we issue shares to consummate an initial business combination.
The founder shares will automatically convert into Class A ordinary shares following the consummation of our initial business combination at a ratio such that the number of Class A ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding (excluding the private placement shares underlying the private placement units) upon completion of this offering, plus (ii) the sum of the total number
of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial business combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to our sponsor, members of our management team or any of their affiliates upon conversion of working capital loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one to one.
We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which a substantial majority of our shareholders do not agree.
Our amended and restated memorandum and articles of association will not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules). As a result, we may be able to complete our initial business combination even though a substantial majority of our public shareholders do not agree with the transaction and have redeemed their shares or, if we seek shareholder approval of our initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or any of their affiliates. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all Class A ordinary shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
In order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and other governing instruments, including their warrant agreements. We may seek to amend our amended and restated memorandum and articles of association or governing instruments in a manner that will make it easier for us to complete our initial business combination that our shareholders may not support.
In order to effectuate a business combination, blank check companies have, in the recent past, amended various provisions of their charters and governing instruments, including their warrant agreements. For example, blank check companies have amended the definition of business combination, increased redemption thresholds, extended the time to consummate a business combination and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. Amending our amended and restated memorandum and articles of association will require at least a special resolution of our shareholders as a matter of Cayman Islands law, meaning the approval of holders of at least two-thirds of our shareholders who attend and vote at a general meeting of the company, and amending our warrant agreement will require a vote of holders of at least 65% of the public warrants and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants, 50% of the number of the then outstanding private placement warrants. In addition, our amended and restated memorandum and articles of association will require us to provide our public shareholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares. To the extent any of such amendments would be deemed to fundamentally change the nature of any of the securities offered through this registration statement, we would register, or seek an exemption from registration for, the affected securities.
Our initial shareholders control a substantial interest in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support.
Upon the closing of this offering, our initial shareholders will own, on an as-converted basis, 20% of our issued and outstanding ordinary shares (excluding the private placement shares underlying the private placement units and assuming they do not purchase any units in this offering). Accordingly, they may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support, including amendments to our amended and restated memorandum and articles of association. If our initial shareholders purchases any units in this offering or if our initial shareholders purchases any additional Class A ordinary shares in the aftermarket or in privately negotiated transactions, this would increase their control. Neither our sponsor nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed in this prospectus. Factors that would be considered in making such additional purchases would include consideration of the current trading price of our Class A ordinary shares. In addition, our board of directors, whose members were elected by our sponsor, is and will be divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. We may not hold an annual meeting of shareholders to elect new directors prior to the completion of our initial business combination, in which case all of the current directors will continue in office until at least the completion of the business combination. If there is an annual meeting, as a consequence of our “staggered” board of directors, only a minority of the board of directors will be considered for appointment and our sponsor, because of its ownership position, will control the outcome, as only holders of our Class B ordinary shares will have the right to vote on the appointment of directors and to remove directors prior to our initial business combination. Accordingly, our sponsor will continue to exert control at least until the completion of our initial business combination. In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor.
After our initial business combination, it is possible that a majority of our directors and officers will live outside the United States and all of our assets will be located outside the United States; therefore investors may not be able to enforce federal securities laws or their other legal rights.
It is possible that after our initial business combination, a majority of our directors and officers will reside outside of the United States and all of our assets will be located outside of the United States. As a result, it may be difficult, or in some cases not possible, for investors in the United States to enforce their legal rights, to effect service of process upon all of our directors or officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties on our directors and officers under United States laws.
In particular, there is uncertainty as to whether the courts of the Cayman Islands or any other applicable jurisdictions would recognize and enforce judgments of U.S. courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States or entertain original actions brought in the Cayman Islands or any other applicable jurisdiction’s courts against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States. For a more detailed discussion, see the section of this prospectus captioned “Description of Securities — Certain Differences in Corporate Law.”
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 units are intended to be used to complete an initial business combination with a target business that has not been selected, we may be deemed to be a “blank check” company under the United States securities laws. However, because we will have net tangible assets in excess of $5,000,000 upon the completion of this offering and the sale of the private placement units and will file a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means our units will be immediately tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, if this offering were subject to Rule 419, that rule would prohibit the release of any interest
earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial business combination. For a more detailed comparison of our offering to offerings that comply with Rule 419, please see “Proposed Business — Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.”
Subsequent to our completion of our initial business combination, we may be required to take write- downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the share price of our securities, which could cause you to lose some or all of your investment.
Even if we conduct due diligence on a target business with which we combine, this diligence may not surface all material issues with a particular target business. In addition, factors outside of the target business and outside of our control may later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly, any holders who choose to retain their securities following the business combination could suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material misstatement or material omission.
If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per public share.
Our placing of funds in the trust account may not protect those funds from third party claims against us. Although we will seek to have all vendors, service providers (excluding our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, such parties may not execute such agreements, or even if they execute such agreements, they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.
Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we have not consummated an initial business combination within 24 months from the closing of this offering, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by public shareholders could be less than the $10.00 per public share initially held in the trust account, due to claims of such creditors.
Pursuant to the letter agreement the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (excluding 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 amounts in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity of the underwriter of this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third party claims.
However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our sponsor’s only assets are securities of our company. Our sponsor may not 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 directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public shareholders.
In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per public share and (ii) the actual amount per share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public shareholders may be reduced below $10.00 per public share.
If, after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy or winding up petition or an involuntary bankruptcy or winding up petition is filed against us that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.
If, after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy or winding up petition or an involuntary bankruptcy or winding up petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy or insolvency court could seek to recover some or all amounts received by our shareholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors.
If, before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy or winding up petition or an involuntary bankruptcy or winding up petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy or winding up petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
Because we are neither limited to evaluating a target business in a particular industry sector nor have we selected any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.
We may pursue business combination opportunities in any sector, except that we will not, under our amended and restated memorandum and articles of association, be permitted to effectuate our initial business combination solely with another blank check company or similar company with nominal operations. Because we have not yet selected or approached any specific target business with respect to a business combination, there is no basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may not 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. An investment in our units may not ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any holders who choose to retain their securities following our initial business combination could suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material misstatement or material omission.
Although we have identified general criteria 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 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.
Although we have identified general criteria 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, such combination may not be as successful as a combination with a business that does meet all of our general criteria. In addition, if we announce a prospective business combination with a target that does not meet our general criteria, a greater number of shareholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if shareholder approval of the transaction is required by applicable law or stock exchange rule, or we decide to obtain shareholder approval for business or other reasons, it may be more difficult for us to attain shareholder approval of our initial business combination if the target business does not meet our general criteria. If we do not complete our initial business combination within the required time period, our public shareholders may receive only
approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
We are not required to obtain an opinion from an independent accounting or investment banking firm, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our shareholders from a financial point of view.
Unless we complete our initial business combination with an affiliated entity, we are not required to obtain an opinion from an independent accounting firm or independent investment banking firm which is a member of FINRA that the price we are paying is fair to our shareholders from a financial point of view. If no opinion is obtained, our shareholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our proxy solicitation or tender offer materials, as applicable, related to our initial business combination.
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 do not complete our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per public share, or less 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 do not complete our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate a business combination, require substantial financial and management resources, and increase the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December 31, 2021. Only in the event we are deemed to be a large accelerated filer or an accelerated filer and no longer qualify as an emerging growth company, will we 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.
The provisions of our amended and restated memorandum and articles of association that relate to our pre-business combination activity (and corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval of a special resolution which requires the approval of the holders of at least two-thirds of our shareholders who attend and vote at a general meeting of the company, which is a lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated memorandum and articles of association to facilitate the completion of an initial business combination that some of our shareholders may not support.
Some other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including those which relate to a company’s pre-business combination activity,
without approval by a certain percentage of the company’s shareholders. In those companies, amendment of these provisions typically requires approval by between 90% and 100% of the company’s shareholders. Our amended and restated memorandum and articles of association will provide that any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds of this offering and the sale of the private placement units into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public shareholders as described herein) may be amended if approved by special resolution, meaning holders of at least two-thirds of our shareholders who attend and vote at a general meeting of the company, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of at least 65% of our ordinary shares; provided that the provisions of our amended and restated memorandum and articles of association governing the appointment or removal of directors prior to our initial business combination may only be amended by a special resolution passed by holders representing at least two-thirds of our outstanding Class B ordinary shares. Our initial shareholders, and their permitted transferees, if any, who will collectively beneficially own, on an as-converted basis, 20% of our Class A ordinary shares upon the closing of this offering (excluding the private placement shares underlying the private placement units and assuming they do not purchase any units in this offering), will participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated memorandum and articles of association which govern our pre-business combination behavior more easily than some other blank check companies, and this may increase our ability to complete a business combination with which you do not agree. Our shareholders may pursue remedies against us for any breach of our amended and restated memorandum and articles of association.
Our sponsor, executive officers, directors and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares; unless we provide our public shareholders with the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of the then-outstanding public shares. Our shareholders are not parties to, or third-party beneficiaries of, this agreement and, as a result, will not have the ability to pursue remedies against our sponsor, executive officers, directors or director nominees for any breach of this agreement. As a result, in the event of a breach, our shareholders would need to pursue a shareholder derivative action, subject to applicable law.
We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination. If we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
Since we have not yet selected any prospective target business we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of this offering and the sale of the private placement units prove to be insufficient, either because of the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number of shares from shareholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the proposed business combination. Such financing may not be available on acceptable terms, if at all. The current economic environment may make difficult for companies to obtain acquisition financing. To the extent that additional financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. If we do not complete our initial business combination within the
required time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless. In addition, even if we do not need additional financing to complete our initial business combination, we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our officers, directors or shareholders is required to provide any financing to us in connection with or after our initial business combination.
We may have a limited ability to assess the management of a prospective target business and, as a result, may affect our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target business’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target business’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any holders who choose to retain their securities following our initial business combination could suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy for such reduction in value.
We may issue notes or other debt, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our shareholders’ investment in us.
Although we have no commitments as of the date of this prospectus to issue any notes or other debt, or to otherwise incur debt following this offering, we may choose to incur substantial debt to complete our initial business combination. We and our officers have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no issuance of debt will affect the per share amount available for redemption from the trust account.
Nevertheless, the incurrence of debt could have a variety of negative effects, including:
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default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
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acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
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our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
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our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;
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our inability to pay dividends on our Class A ordinary shares;
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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
We may only be able to complete one business combination with the proceeds of this offering and the sale of the private placement 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 units will provide us with up to $193,000,000 (or $221,950,000 if the underwriter’s over-allotment option is exercised in full) that we may use to complete our initial business combination (after taking into account the $7,000,000, or $8,050,000 if the over- allotment option is exercised in full, of deferred underwriting commissions being held in the trust account and the estimated expenses of this offering).
We may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able to effectuate our initial business combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success may be:
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solely dependent upon the performance of a single business, property or asset; or
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dependent upon the development or market acceptance of a single or limited number of products, processes or services.
This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
We may attempt to complete our initial business combination with a private 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.
Because we must furnish our shareholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses.
The federal proxy rules require that a proxy statement with respect to a vote on our proposed business combination include historical and/or pro forma financial statement disclosure. We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or international financial reporting standards as issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within 24 months from the closing of this offering.
If we do not consummate an initial business combination within 24 months from the closing of this offering, our public shareholders may be forced to wait beyond such 24 months before redemption from our trust account.
If we do not consummate an initial business combination within 24 months from the closing of this offering, the proceeds then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein. Any redemption of public shareholders from the trust account will be effected automatically by function of our amended and restated memorandum and articles of association prior to any voluntary winding up. If we are required to wind up, liquidate the trust account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies Act. In that case, investors may be forced to wait beyond 24 months from the closing of this offering before the redemption proceeds of our trust account become available to them, and they receive the return of their pro rata portion of the proceeds from our trust account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless, prior thereto, we consummate our initial business combination or amend certain provisions of our amended and restated memorandum and articles of association, and only then in cases where investors have sought to redeem their Class A ordinary shares. Only upon our redemption or any liquidation will public shareholders be entitled to distributions if we do not complete our initial business combination and do not amend certain provisions of our amended and restated memorandum and articles of association. Our amended and restated memorandum and articles of association will provide that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.
If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
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restrictions on the nature of our investments; and
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restrictions on the issuance of securities,
each of which may make it difficult for us to complete our initial business combination.
In addition, we may have imposed upon us burdensome requirements, including:
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registration as an investment company with the SEC;
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adoption of a specific form of corporate structure; and
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reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject to.
In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business will be to identify and complete a business combination and thereafter to operate the post-business combination business or assets for the long term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act. This offering is not intended for persons who are seeking a return on investments in government securities or investment securities. The trust account is intended as a holding place for funds pending the earliest to occur of either: (i) the completion of our initial business combination; (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, and (iii) the redemption of our public shares if we have not consummated an initial business within 24 months from the closing of this offering, subject to applicable law and as further described herein. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete a business combination. If we do not complete our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
As the number of special purpose acquisition companies evaluating targets increases, attractive targets may become scarcer and there may be more competition for attractive targets. This could increase the cost of our initial business combination and could even result in our inability to find a target or to consummate an initial business combination.
Recently, the number of special purpose acquisition companies that have been formed has increased substantially. Many potential targets for special purpose acquisition companies have already entered into an initial business combination, and there are still many special purpose acquisition companies preparing for an initial public offering, as well as many such companies currently in registration. As a result, at times, fewer attractive targets may be available to consummate an initial business combination.
In addition, because there are more special purpose acquisition companies seeking to enter into an initial business combination with available targets, the competition for available targets with attractive fundamentals or business models may increase, which could cause targets companies to demand improved financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions, or increases in the cost of additional capital needed to close business combinations or operate targets post-business combination. This could increase the cost of, delay
or otherwise complicate or frustrate our ability to find and consummate an initial business combination, and may result in our inability to consummate an initial business combination on terms favorable to our investors altogether.
Because we intend to seek a business combination with a target business in the healthcare industry, we expect our future operations to be subject to risks associated with this industry.
Because we intend to seek a business combination with a target business in the healthcare industry, we expect our future operations to be subject to risks associated with this industry.
Healthcare related companies are generally subject to greater governmental regulation than most other industries at the U.S. state and federal levels, and internationally. In recent years, both local and national governmental budgets have come under pressure to reduce spending and control healthcare costs, which could both adversely affect regulatory processes and public funding available for healthcare products, services and facilities. In March 2010, comprehensive healthcare reform legislation was enacted in the United States. These laws are intended to increase health insurance coverage through individual and employer mandates, subsidies offered to lower income individuals, tax credits available to smaller employers and broadening of Medicaid eligibility.
While one intent of healthcare reform is to expand health insurance coverage to more individuals, it may also involve additional regulatory mandates and other measures designed to constrain medical costs, including coverage and reimbursement for healthcare services. Healthcare reform has had a significant impact on the healthcare sector in the United States and consequently has the ability to affect companies within the healthcare industry. The ultimate effects of federal healthcare reform or any future legislation or regulation, or healthcare initiatives, if any, on the healthcare sector, whether implemented at the federal or state level or internationally, cannot be predicted with certainty and such reform, legislation, regulation or initiatives may adversely affect the performance of a potential business combination.
Changes in governmental policies may have a material effect on the demand for or costs of certain products and services. A healthcare related company must receive government approval before introducing new drugs and medical devices or procedures. This process may delay the introduction of these products and services to the marketplace, resulting in increased development costs, delayed cost recovery and loss of competitive advantage to the extent that rival companies have developed competing products or procedures, adversely affecting the company’s revenues and profitability. Failure to obtain governmental approval of a key drug or device or other regulatory action could have a material adverse effect on the business of a target company. Additionally, expansion of facilities by healthcare related providers is subject to “determinations of need” by the appropriate government authorities. This process not only increases the time and cost involved in these expansions, but also makes expansion plans uncertain, limiting the revenue and profitability growth potential of healthcare related facilities operators.
Certain healthcare related companies depend on the exclusive rights or patents for the products they develop and distribute. Patents have a limited duration and, upon expiration, other companies may market substantially similar “generic” products that are typically sold at a lower price than the patented product, causing the original developer of the product to lose market share and/or reduce the price charged for the product, resulting in lower profits for the original developer. As a result, the expiration of patents may adversely affect the profitability of these companies. The profitability of healthcare related companies may also be affected, among other factors, by restrictions on government reimbursement for medical expenses, rising or falling costs of medical products and services, pricing pressure, an increased emphasis on outpatient services, a limited product offering, industry innovation, changes in technologies and other market developments. Finally, because the products and services of healthcare related companies affect the health and well-being of many individuals, these companies are especially susceptible to product liability lawsuits.
The healthcare industry spends heavily on research and development. Research findings (e.g., regarding side effects or comparative benefits of one or more particular treatments, services or products) and technological innovation (together with patent expirations) may make any particular treatment, service or product less attractive if previously unknown or underappreciated risks are revealed, or if a more effective, less costly or less risky solution is or becomes available. Any such development could have a material adverse effect on the companies that are target businesses for investment.
Risks Relating to our Securities
Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
If we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover some or all amounts received by our shareholders. Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, thereby exposing themselves and our company to claims, by paying public shareholders from the trust account prior to addressing the claims of creditors. Claims may be brought against us for these reasons. We and our directors and officers who knowingly and willfully authorized or permitted any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable for a fine of $18,292.68 and imprisonment for five years in the Cayman Islands.
The securities in which we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than $10.00 per share.
The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that we are unable to complete our initial business combination or make certain amendments to our amended and restated certificate of incorporation, our public shareholders are entitled to receive their prorate share of the proceeds held in the trust account, plus any interest income, net of taxes paid or payable (less, in the case we are unable to complete our initial business combination, $100,000 of interest). Negative interest rates could reduce the value of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than $10.00 per share.
If we seek shareholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders are deemed to hold in excess of 15% of our Class A ordinary shares, you will lose the ability to redeem all such shares in excess of 15% of our Class A ordinary shares.
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in this offering, which we refer to as the “Excess Shares,” without our prior consent. However, we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And as a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially at a loss.
Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
We intend to apply to have our units listed on Nasdaq on the date of this prospectus and our Class A ordinary shares and warrants on or promptly after their date of separation. Although after giving effect to this offering we expect to meet, on a pro forma basis, the minimum initial listing standards set forth in Nasdaq’s listing standards, our securities may not be, or may not continue to be, listed on Nasdaq in the future or prior to the completion of our initial business combination. In order to continue listing our securities on Nasdaq prior to the completion of our initial business combination, we must maintain certain financial, distribution and share price levels. Generally, we must maintain a minimum amount in shareholders’ equity (generally $50,000,000) and a minimum number of holders of our securities (generally 300 public holders). Additionally, our units will not be traded after completion of our initial business combination and, 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 instance, the share price of our securities would generally be required to be at least $4.00 per share and our shareholders’ equity would generally be required to be at least $5,000,000 and we would be required to have a minimum of 300 round-lot holders (with at least 50% of such round lot holders holding securities with a market value of at least $2,500). We may not be able to meet those initial listing requirements at that time.
If Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our 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; reduced liquidity for our securities;
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a determination that our Class A ordinary shares are a “penny stock” which will require brokers trading in our Class A ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
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a limited amount of news and analyst coverage; and
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a decreased ability to issue additional securities or obtain additional financing in the future.
The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because we expect that our units and eventually our Class A ordinary shares and warrants will be listed on Nasdaq, our units, Class A ordinary shares and warrants will qualify as covered securities under the statute. Although the states are preempted from regulating the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not qualify as covered securities under the statute and we would be subject to regulation in each state in which we offer our securities.
Our sponsor contributed $25,000, or approximately $0.004 per founder share, and, accordingly, you will experience immediate and substantial dilution from the purchase of our Class A ordinary shares.
The difference between the public offering price per share (allocating all of the unit purchase price to the Class A ordinary share and none to the warrant included in the unit) and the pro forma net tangible book value per Class A ordinary share after this offering constitutes the dilution to you and the other investors in this offering. Our sponsor acquired the founder shares at a 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 shareholders will incur an immediate and substantial dilution of approximately 92.5% (or $9.25 per share, assuming no exercise of the underwriter’s over-allotment option), the difference between the pro forma net tangible book value per share of $0.75 and the initial
offering price of $10.00 per unit. This dilution would increase to the extent that the anti-dilution provisions of the founder shares result in the issuance of Class A ordinary shares on a greater than one- to-one basis upon conversion of the founder shares at the time of our initial business combination and would become exacerbated to the extent that public shareholders seek redemptions from the trust for their public shares. In addition, because of the anti-dilution protection in the founder shares, any equity or equity-linked securities issued in connection with our initial business combination would be disproportionately dilutive to our Class A ordinary shares.
We may issue additional Class A ordinary shares or preference shares to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue Class A ordinary shares upon the conversion of the founder shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated memorandum and articles of association. Any such issuances would dilute the interest of our shareholders and likely present other risks.
Our amended and restated memorandum and articles of association will authorize the issuance of up to 500,000,000 Class A ordinary shares, par value $0.0001 per share, 50,000,000 Class B ordinary shares, par value $0.0001 per share, and 5,000,000 preference shares, par value $0.0001 per share. Immediately after this offering, there will be 479,400,000 and 45,000,000 (assuming in each case that the underwriter has not exercised their over-allotment option) authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the Class B ordinary shares, if any. The Class B ordinary shares are automatically convertible into Class A ordinary shares at the time of our initial business combination as described herein and in our amended and restated memorandum and articles of association. Immediately after this offering, there will be no preference shares issued and outstanding.
We may issue a substantial number of additional Class A ordinary shares or preference shares to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue Class A ordinary shares to redeem the warrants as described in “Description of Securities- Warrants-Public Shareholders’ Warrants-Redemption of warrants for Class A ordinary shares when the price per Class A ordinary share equals or exceeds $10.00” or upon conversion of the Class B ordinary shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions as set forth herein. However, our amended and restated memorandum and articles of association will provide, among other things, that prior to the completion of our initial business combination, we may not issue additional shares that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business combination or on any other proposal presented to shareholders prior to or in connection with the completion of an initial business combination. These provisions of our amended and restated memorandum and articles of association, like all provisions of our amended and restated memorandum and articles of association, may be amended with a shareholder vote. The issuance of additional ordinary or preference shares:
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may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;
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may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares;
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could cause a change in control if a substantial number of our Class A ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
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may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us;
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may adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants; and
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may not result in adjustment to the exercise price of our warrants.
We are not registering the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants and causing such warrants to expire worthless.
We are not registering the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of the warrant agreement, we have agreed to use our commercially reasonable efforts to file a registration statement under the Securities Act covering such shares and to maintain the effectiveness of such registration statement and a current prospectus relating to the Class A ordinary shares issuable upon exercise of the warrants until the expiration or redemption of the warrants in accordance with the provisions of the warrant agreement. We may not able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current, complete or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants are not registered under the Securities Act, we will be required to permit holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, unless an exemption is available. Notwithstanding the above, if our Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. 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 the Securities Act or applicable state securities laws. 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 will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the Class A ordinary shares included in the units. There may be a circumstance where an exemption from registration exists for holders of our private placement warrants to exercise their warrants while a corresponding exemption does not exist for holders of the warrants included as part of units sold in this offering. In such an instance, our sponsor and its transferees (which may include our management team) would be able to exercise their warrants and sell the ordinary shares underlying their warrants while holders of our public warrants would not be able to exercise their warrants and sell the underlying ordinary shares. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Holders of Class A ordinary shares will not be entitled to vote on any appointment of directors we hold prior to the completion of our initial business combination.
Prior to the completion of our initial business combination, holders of our founder shares are the only shareholders of the company which will have the right to vote on the appointment of directors. Holders of our public shares will not be entitled to vote on the appointment of directors during such time. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. Accordingly, you may not have any say in the management of our company prior to the consummation of an initial business combination.
We may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 65% of the then outstanding public warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of our Class A ordinary shares purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the
warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision 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, but requires the approval by the holders of at least 65% of the then-outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 65% of the then-outstanding public warrants approve of such amendment and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants, 65% of the number of the then outstanding private placement warrants. Although our ability to amend the terms of the public warrants with the consent of at least 65% of the then- outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash, shorten the exercise period or decrease the number of Class A ordinary shares purchasable upon exercise of a warrant. We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise the warrants. Redemption of the outstanding warrants could force you to (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants.
In addition, we may redeem your warrants at any time after they become exercisable and prior to their expiration at a price of $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that the closing price of our Class A ordinary shares equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities — Warrants — Public Shareholders’ Warrants — Anti-Dilution Adjustments”) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met, including that holders will be able to exercise their warrants prior to redemption for a number of Class A ordinary shares determined based on the redemption date and the fair market value of our Class A ordinary shares. Please see “Description of Securities- Redeemable Warrants-Public Shareholders’ Warrants-Redemption of warrants for Class A ordinary shares when the price per Class A ordinary share equals or exceeds $10.00.” The value received upon exercise of the warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the warrants, including because the number of ordinary shares received is capped at 0.361 Class A ordinary shares per warrant (subject to adjustment) irrespective of the remaining life of the warrants. None of the private placement warrants will be redeemable by us (except as set forth under “Description of Securities — Warrants — Public Shareholders’ Warrants — Redemption of warrants for Class A ordinary shares when the price per Class A ordinary share equals or exceeds $10.00”) so long as they are held by our sponsor or its permitted transferees.
Our warrants may have an adverse effect on the market price of our Class A ordinary shares and make it more difficult to effectuate our initial business combination.
We will be issuing public warrants to purchase 6,666,667 of our Class A ordinary shares (or up to 7,666,667 Class A ordinary shares if the underwriter’s over-allotment option is exercised in full) as part of
the units offered by this prospectus and, simultaneously with the closing of this offering, we will be issuing in a private placement 600,000 private placement units (or 660,000 private placement units if the underwriter’s over-allotment option is exercised in full). The private placement units will have underlying warrants to purchase an aggregate of 200,000 Class A ordinary shares (or up to 220,000 if the underwriter’s over-allotment option is exercised in full) at $11.50 per share. In addition, if the sponsor makes any working capital loans, it may convert up to $1,500,000 of such loans into up to an additional 1,000,000 private placement warrants, at the price of $1.50 per warrant. Our public warrants are also redeemable by us for Class A ordinary shares as described in “Description of Securities-Warrants-Public Shareholders’ Warrants-Redemption of warrants for Class A ordinary shares when the price per Class A ordinary share equals or exceeds $10.00.” To the extent we issue ordinary shares to effectuate a business transaction, the potential for the issuance of a substantial number of additional Class A ordinary shares upon exercise of these warrants could make us a less attractive acquisition vehicle to a target business. Such warrants, when exercised, will increase the number of issued and outstanding Class A ordinary shares and reduce the value of the Class A ordinary shares issued to complete the business transaction. Therefore, our warrants may make it more difficult to effectuate a business transaction or increase the cost of acquiring the target business.
Because each unit contains one-third of one 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-third of one warrant. Pursuant to the warrant agreement, no fractional warrants will be issued upon separation of the units, and only whole units will trade. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number of Class A ordinary shares to be issued to the warrant holder. This is different from other offerings similar to ours whose units include one ordinary share and one warrant to purchase one whole share. We have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants will be exercisable in the aggregate for one-third 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 merger partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if it included a warrant to purchase one whole share.
A provision of our warrant agreement may make it more difficult for us to consummate an initial business combination.
Unlike some blank check companies, if (i) we issue additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at a Newly Issued Price of less than $9.20 per ordinary share, (ii) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (iii) the Market Value is below $9.20 per share, then the exercise price of the warrants will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger prices described below under “Description of Securities — Warrants — Public Shareholders’ Warrants — Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described below under “Description of Securities — Warrants — Public Shareholders’ Warrants — Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price. This may make it more difficult for us to consummate an initial business combination with a target business.
The warrants may become exercisable and redeemable for a security other than the Class A ordinary shares, and you will not have any information regarding such other security at this time.
In certain situations, including if we are not the surviving entity in our initial business combination, the warrants may become exercisable for a security other than the Class A ordinary shares. As a result, if the surviving company redeems your warrants for securities pursuant to the warrant agreement, you may receive a security in a company of which you do not have information at this time. Pursuant to the warrant
agreement, the surviving company will be required to use commercially reasonable efforts to register the issuance of the security underlying the warrants within twenty business days of the closing of an initial business combination.
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 underwriter. In determining the size of this offering, management held customary organizational meetings with the underwriter, both prior to our inception and thereafter, with respect to the state of capital markets, generally, and the amount the underwriter believed they reasonably could raise on our behalf. Factors considered in determining the size of this offering, prices and terms of the units, including the Class A ordinary shares 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; prior offerings of those companies;
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our prospects for acquiring an operating business at attractive values; a review of debt-to-equity ratios in leveraged transactions;
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our capital structure;
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an assessment of our management and their experience in identifying operating companies; general conditions of the securities markets at the time of this offering; and
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other factors as were deemed relevant.
Although these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities of an operating company in a particular industry since we have no historical operations or financial results.
There is currently no market for our securities and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities.
There is currently no market for our securities. Shareholders therefore have no access to information about prior market history on which to base their investment decision. Following this offering, the price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions, including as a result of the COVID-19 outbreak. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained.
Provisions in our amended and restated memorandum and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A ordinary shares and could entrench management.
Our amended and restated memorandum and articles of association will contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best interests. These provisions will include a staggered board of directors, the ability of the board of directors to designate the terms of and issue new series of preference shares, and the fact that prior to the completion of our initial business combination only holders of our Class B ordinary shares, which have been issued to our sponsor, are entitled to vote on the appointment of directors, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
The grant of registration rights to our initial shareholders may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our Class A ordinary shares.
Pursuant to an agreement to be entered into concurrently with the issuance and sale of the securities in this offering, our initial shareholders, and their permitted transferees can demand that we register the Class A
ordinary shares into which founder shares are convertible, the private placement units, the private placement shares and the private placement warrants and the Class A ordinary shares issuable upon exercise of the private placement warrants, and warrants that may be issued upon conversion of working capital loans and the Class A ordinary shares issuable upon conversion of such warrants. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our Class A ordinary shares. In addition, the existence of the registration rights may make our initial business combination more costly or difficult to conclude. This is because the shareholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our securities that is expected when the securities owned by our initial shareholders or their permitted transferees are registered for resale.
Our ability to require holders of our warrants to exercise such warrants on a cashless basis after we call the warrants for redemption or if there is no effective registration statement covering the Class A ordinary shares issuable upon exercise of these warrants will cause holders to receive fewer Class A ordinary shares upon their exercise of the warrants than they would have received had they been able to pay the exercise price of their warrants in cash.
If we call the warrants for redemption, we will have the option, in our sole discretion, to require all holders that wish to exercise warrants to do so on a cashless basis. If we choose to require holders to exercise their warrants on a cashless basis or if holders elect to do so when there is no effective registration statement, the number of Class A ordinary shares received by a holder upon exercise will be fewer than it would have been had such holder exercised his or her warrant for cash. For example, if the holder is exercising 875 public warrants at $11.50 per share through a cashless exercise when the Class A ordinary shares have a fair market value of $17.50 per share, then upon the cashless exercise, the holder will receive 300 Class A ordinary shares. The holder would have received 875 Class A ordinary shares if the exercise price was paid in cash. This will have the effect of reducing the potential “upside” of the holder’s investment in our company because the warrantholder will hold a smaller number of Class A ordinary shares upon a cashless exercise of the warrants they hold.
Risks Relating to our Sponsor and Management Team
Involvement of members of our management and board of directors and companies with which they are affiliated in media and regulatory scrutiny, proceedings, investigations and litigation unrelated to our business affairs could impact our ability to consummate an initial business combination.
During the course of their careers, members of our management team and board of directors have had significant experience, including as founders, board members, officers or executives of other companies. As a result of their actions during the course of their careers, including their involvement and positions in other companies, certain persons were, are now, or may in the future become, involved in media and regulatory scrutiny, litigation, investigations or other proceedings. Any actual or perceived misconduct of, or violation by, any of the members of our management team and board of directors of applicable laws and regulations, including fraudulent or illegal activities such as money laundering, insider trading, securities fraud, fraudulent misrepresentation, interference and unjust enrichment, could lead to media and regulatory scrutiny, litigation, investigations or other proceedings. Additionally, we could be subject to regulatory sanctions and significant legal liability, as a result of illegal or suspicious activities or other misconduct by members of our management team and board of directors. Any of the foregoing may divert our management team’s and board’s attention and resources away from identifying and selecting a target business or businesses for our initial business combination and may negatively affect our reputation and financial condition, which may impede our ability to complete an initial business combination, even if none of such claims were asserted against us or our sponsor.
Past performance by our management team or their affiliates may not be indicative of future performance of an investment in us.
Information regarding performance by, or businesses associated with, our management team or their affiliates is presented for informational purposes only. Any past experience of and performance by our management team or their affiliates is not a guarantee either: (1) that we will be able to successfully identify
asuitable candidate for our initial business combination; or (2) of any results with respect to any initial business combination we may consummate. You should not rely on the historical record of our management team, Falcon Edge Capital, Apeiron or any of their affiliates’ or managed fund'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 Falcon Edge Capital or Apeiron.
We are dependent upon our executive officers and directors and their loss could adversely affect our ability to operate.
Our operations are dependent upon a relatively small group of individuals and, in particular, our executive officers and directors. We believe that our success depends on the continued service of our officers and directors, at least until we have completed our initial business combination. In addition, our executive officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating their time among various business activities, including identifying potential business combinations and monitoring the related due diligence. In particular, certain of our officers and directors serve as an officer and/or director of Pioneer Merger Corp., which is a blank check company sponsored by an affiliate of Falcon Edge Capital and Patriot Global Management. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or executive officers. The unexpected loss of the services of one or more of our directors or executive officers could have a detrimental effect on us.
Our ability to successfully effect our initial business combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination business.
Our ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory positions following our initial business combination, it is likely that some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination, and a particular business combination may be conditioned on the retention or resignation of such key personnel. These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.
Our key personnel may be able to remain with our company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the business combination. Such negotiations also could make such key personnel’s retention or resignation a condition to any such agreement. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business. In addition, pursuant to an agreement to be entered into on or prior to the closing of this offering, our sponsor, upon and following consummation of an initial business combination, will be entitled to nominate three individuals for appointment to our board of directors, as long as the sponsor holds any securities covered by the registration and shareholder rights agreement, which is described under the section of this prospectus entitled “Description of Securities-Registration and Shareholder Rights.”
The officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The loss of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business.
The role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
Our executive officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs. In particular, certain of our officers and directors serve as an officer and/or director of Pioneer Merger Corp., which is a blank check company sponsored by an affiliate of Falcon Edge Capital and Patriot Global Management, and in the future we expect they may be officers and/or directors of other future special purpose acquisition companies. Our independent directors also serve as officers and board members for other entities. If our executive officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination. For a complete discussion of our executive officers’ and directors’ other business affairs, please see “Management — Officers, Directors and Director Nominees.”
Our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations to other entities, including another blank check company, and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
Following the completion of this offering and until we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses. Each of our officers and directors presently has, and any of them in the future may have, additional fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity, subject to his or her fiduciary duties under Cayman Islands law. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. Our directors and officers affiliated with Falcon Edge Capital and Apeiron may in particular have conflicts affiliated with Falcon Edge Capital and Apeiron, and/or other funds or investment vehicles formed by Falcon Edge Capital or Apeiron in the future. While these other funds and investment vehicles are not expected to pursue investment objectives identical to ours, in certain circumstances investment objectives may overlap and these conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us, subject to their fiduciary duties under Cayman Islands law.
In addition, our founders and our directors and officers, Falcon Edge Capital and Apeiron, or their affiliates expect in the future to become affiliated with other public blank check companies that may have acquisition objectives that are similar to ours. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to such other blank check companies, prior to its presentation to us, subject to our officers’ and directors’ fiduciary duties under Cayman Islands law. Our amended and restated memorandum and articles of association will provide that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or
similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other.
For a complete discussion of our executive officers’ and directors’ business affiliations and the potential conflicts of interest that you should be aware of, please see “Management — Officers, Directors and Director Nominees,” “Management — Conflicts of Interest” and “Certain Relationships and Related Party Transactions.”
Our executive officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits our directors, executive officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or executive officers, although we do not intend to do so. 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.
The personal and financial interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination. Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in our shareholders’ best interest. If this were the case, it would be a breach of their fiduciary duties to us as a matter of Cayman Islands law and we or our shareholders might have a claim against such individuals for infringing on our shareholders’ rights. See the section titled “Description of Securities — Certain Differences in Corporate Law — Shareholders’ Suits” for further information on the ability to bring such claims. However, we might not ultimately be successful in any claim we may make against them for such reason.
We may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, executive officers, directors or initial shareholders which may raise potential conflicts of interest.
In light of the involvement of our sponsor, executive officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, executive officers, directors or initial shareholders. Our directors also serve as officers and board members for other entities, including, without limitation, those described under “Management — Conflicts of Interest.” Our sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. Such entities may compete with us for business combination opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with which they are affiliated, and there have been no substantive discussions concerning a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business combination as set forth in “Proposed Business — Effecting Our Initial Business Combination — Evaluation of a Target Business and Structuring of Our Initial Business Combination” and such transaction was approved by a majority of our independent and disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent valuation or accounting firm regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our sponsor, executive officers, directors or initial shareholders, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public shareholders as they would be absent any conflicts of interest.
Our management may not be able to maintain control of a target business after our initial business combination. Upon the loss of control of a target business, new management may not possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure our initial business combination so that the post-business combination company in which our public shareholders own shares will own less than 100% of the equity interests or assets of a target business, but we will only complete such business combination if the post-business combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-business combination company owns 50% or more of the voting securities of the target, our shareholders prior to the completion of our initial business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial number of new Class A ordinary shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new Class A ordinary shares, our shareholders immediately prior to such transaction could own less than a majority of our outstanding Class A ordinary shares subsequent to such transaction. In addition, other minority shareholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s shares than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain control of the target business.
Since our sponsor, executive officers and directors will lose their entire investment in us if our initial business combination is not completed (other than with respect to public shares they may acquire during or after this offering), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
On January 21, 2021, we issued to our sponsor 5,750,000 founder shares in exchange for a capital contribution of $25,000, or approximately $0.004 per share (up to 750,000 Class B ordinary shares of which are subject to forfeiture depending on the extent to which the underwriter’s over-allotment option is exercised). On February 16, 2021, our Sponsor transferred 40,000 founder shares to each of Peter Attia, David A. Sinclair and Jonathan Christodoro, our independent director nominees. Prior to the initial investment in the company of $25,000 by the sponsor, the company had no assets, tangible or intangible. The per share price of the founder shares was determined by dividing the amount contributed to the company by the number of founder shares issued. The founder shares will be worthless if we do not complete an initial business combination. In addition, our sponsor has committed, pursuant to a written agreement, to purchase 600,000 private placement units (or 660,000 private placement units if the underwriter’s over-allotment option is exercised in full), at a price of $10.00 per unit ($6,000,000 in the aggregate or $6,600,000 if the underwriter’s over-allotment option is exercised in full), in a private placement that will close simultaneously with the closing of this offering. If we do not consummate an initial business within 24 months from the closing of this offering, the private placement units (and the underlying securities) will expire worthless. The personal and financial interests of our executive officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following the initial business combination. This risk may become more acute as the 24-month anniversary of the closing of this offering nears, which is the deadline for our consummation of an initial business combination.
We may not have sufficient funds to satisfy indemnification claims of our directors and executive officers.
We have agreed to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account and to not seek recourse against the trust account for any reason whatsoever (except to the extent they are entitled to funds from the trust account due to their ownership of public shares). Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination. Our obligation to indemnify our officers and directors may discourage shareholders from bringing a lawsuit against our
officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
General Risk Factors Related to Our Proposed Business
We are a recently incorporated company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a recently incorporated company established under the laws of the Cayman Islands with no operating results, and we will not commence operations until obtaining funding through this offering. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target businesses. We have no plans, arrangements or understandings with any prospective target business concerning a business combination and may be unable to complete our initial business combination. If we fail to complete our initial business combination, we will never generate any operating revenues.
Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.
We depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial loss.
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.
We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to “emerging growth companies” or “smaller reporting companies,” this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As a
result, our shareholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class A ordinary shares held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non- emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds $250 million as of the prior June 30, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.
Our warrant agreement will designate the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.
Our warrant agreement will provide that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
Notwithstanding the foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented to the forum provisions in our warrant agreement.
If any action, the subject matter of which is within the scope of the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce
the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.
Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited.
We are an exempted company incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States upon our directors or executive officers, or enforce judgments obtained in the United States courts against our directors or officers.
Our corporate affairs and the rights of shareholders will be governed by our amended and restated memorandum and articles of association, the Companies Act (as the same may be supplemented or amended from time to time) and the common law of the Cayman Islands. We will also be subject to the federal securities laws of the United States. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the United States. For a more detailed discussion of the principal differences between the provisions of the Companies Act applicable to us and, for example, the laws applicable to companies incorporated in the United States and their shareholders, see the section of this prospectus captioned “Description of Securities — Certain Differences in Corporate Law.”
Shareholders of Cayman Islands exempted companies like the Company have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of the register of members of these companies. Our directors have discretion under our amended and restated memorandum and articles of association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.
We have been advised by our Cayman Islands legal counsel that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with
a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a United States company.
An investment in this offering may result in uncertain or adverse U.S. federal income tax consequences.
An investment in this offering may result in uncertain U.S. federal income tax consequences. For instance, because there are no authorities that directly address instruments similar to the units we are issuing in this offering, the allocation an investor makes with respect to the purchase price of a unit between the Class A ordinary shares and the one-third of a warrant to purchase one Class A ordinary share included in each unit could be challenged by the IRS or courts. Furthermore, the U.S. federal income tax consequences of a cashless exercise of warrants included in the units we are issuing in this offering is unclear under current law. Finally, it is unclear whether the redemption rights with respect to our ordinary shares suspend the running of a U.S. Holder’s (as defined below in “Taxation — United States Federal Income Tax Considerations — General”) holding period for purposes of determining whether any dividend we pay would be considered “qualified dividends” for U.S. federal income tax purposes. See the section titled “Taxation — United States Federal Income Tax Considerations” for a summary of the U.S. federal income tax considerations of an investment in our securities. Prospective investors are urged to consult their tax advisors with respect to these and other tax consequences when purchasing, holding or disposing of our securities.
We may be a passive foreign investment company, or “PFIC,” which could result in adverse U.S. federal income tax consequences to U.S. investors.
If we are a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder (as defined in the section of this prospectus captioned “Taxation—United States Federal Income Tax Considerations—General”) of our Class A ordinary shares or warrants, the U.S. Holder may be subject to adverse U.S. federal income tax consequences and may be subject to additional reporting requirements. Our PFIC status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up exception (see the section of this prospectus captioned “Taxation—United States Federal Income Tax Considerations—U.S. Holders—Passive Foreign Investment Company Rules”). Depending on the particular circumstances, the application of the start-up exception may be subject to uncertainty, and there cannot be any assurance that we will qualify for the start-up exception.
Accordingly, there can be no assurances with respect to our status as a PFIC for our current taxable year or any subsequent taxable year. Our actual PFIC status for any taxable year, however, will not be determinable until after the end of such taxable year. Moreover, if we determine we are a PFIC for any taxable year, upon written request, we will endeavor to provide to a U.S. Holder such information as the Internal Revenue Service (“IRS”) may require, including a PFIC Annual Information Statement, in order to enable the U.S. Holder to make and maintain a “qualified electing fund” election, but there can be no assurance that we will timely provide such required information, and such election would be unavailable with respect to our warrants in all cases. We urge U.S. investors to consult their tax advisors regarding the possible application of the PFIC rules. For a more detailed discussion of the tax consequences of PFIC classification to U.S. Holders, see the section of this prospectus captioned “Taxation—United States Federal Income Tax Considerations—U.S. Holders—Passive Foreign Investment Company Rules.”
We may reincorporate, migrate to or merge with and into another entity as surviving company in another jurisdiction in connection with our initial business combination and such reincorporation, migration or merger may result in taxes imposed on shareholders.
We may, in connection with our initial business combination and subject to requisite shareholder approval under the Companies Act, reincorporate, migrate to or merger with and into another entity as
surviving company, in the jurisdiction in which the target company or business is located or in another jurisdiction. The transaction may require a shareholder or warrantholder to recognize taxable income in the jurisdiction in which the shareholder or warrantholder is a tax resident or in which its members are resident if it is a tax transparent entity. We do not intend to make any cash distributions to shareholders or warrantholders to pay such taxes. Shareholders or warrantholders may be subject to withholding taxes or other taxes with respect to their ownership of us after the reincorporation, migration or merger (as the case may be).
We are subject to changing law and regulations regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance.
We are subject to rules and regulations by various governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from seeking a business combination target.
Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed.
Risks Relating to Acquiring and Operating a Business in Foreign Countries
If we pursue a target company with operations or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection with investigating, agreeing to and completing such initial business combination, and if we effect such initial business combination, we would be subject to a variety of additional risks that may negatively impact our operations.
If we pursue a target 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 jurisdiction, having such transaction approved by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.
If we effect our initial business combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following:
•
costs and difficulties inherent in managing cross-border business operations; rules and regulations regarding currency redemption;
•
complex corporate withholding taxes on individuals;
•
laws governing the manner in which future business combinations may be effected;
•
exchange listing and/or delisting requirements;
•
tariffs and trade barriers;
•
regulations related to customs and import/export matters;
•
local or regional economic policies and market conditions;
•
unexpected changes in regulatory requirements;
•
longer payment cycles;
•
tax issues, such as tax law changes and variations in tax laws as compared to the United States;
•
currency fluctuations and exchange controls;
•
rates of inflation;
•
challenges in collecting accounts receivable;
•
cultural and language differences;
•
employment regulations;
•
underdeveloped or unpredictable legal or regulatory systems;
•
corruption;
•
protection of intellectual property;
•
social unrest, crime, strikes, riots and civil disturbances;
•
regime changes and political upheaval;
•
terrorist attacks, natural disasters and wars; and
•
deterioration of political relations with the United States.
We may not be able to adequately address these additional risks. If we were unable to do so, we may be unable to complete such initial business combination, or, if we complete such combination, our operations might suffer, either of which may adversely impact our business, financial condition and results of operations.
If our management following our initial business combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory issues.
Following our initial business combination, our management may resign from their positions as officers or directors of the company and the management of the target business at the time of the business combination will remain in place. Management of the target business may not be familiar with United States securities laws. If new management is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.
After our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue may be derived from our operations in such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political and social conditions and government policies, developments and conditions in the country in which we operate.
The economic, political and social conditions, as well as government policies, of the country in which our operations are located could affect our business. Economic growth could be uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future. If in the future such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our ability to find an attractive target business with which to consummate our initial business combination and if we effect our initial business combination, the ability of that target business to become profitable.
Exchange rate fluctuations and currency policies may cause a target business’ ability to succeed in the international markets to be diminished.
In the event we acquire a non-U.S. target, all revenues and income would likely be received in a foreign currency, and the dollar equivalent of our net assets and distributions, if any, could be adversely affected by reductions in the value of the local currency. The value of the currencies in our target regions fluctuate and are affected by, among other things, changes in political and economic conditions. Any change in the relative value of such currency against our reporting currency may affect the attractiveness of any target business or, following consummation of our initial business combination, our financial condition and results of operations. Additionally, if a currency appreciates in value against the dollar prior to the consummation of our initial business combination, the cost of a target business as measured in dollars will increase, which may make it less likely that we are able to consummate such transaction.
We may reincorporate in another jurisdiction in connection with our initial business combination, and the laws of such jurisdiction may govern some or all of our future material agreements and we may not be able to enforce our legal rights.
In connection with our initial business combination, we may relocate the home jurisdiction of our business from the Cayman Islands to another jurisdiction. If we determine to do this, the laws of such jurisdiction may govern some or all of our future material agreements. The system of laws and the enforcement of existing laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this prospectus may include, for example, statements about:
•
our ability to select an appropriate target business or businesses;
•
our ability to complete our initial business combination;
•
our expectations around the performance of a prospective target business or businesses;
•
our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;
•
our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination;
•
our potential ability to obtain additional financing to complete our initial business combination;
•
our pool of prospective target businesses;
•
our ability to consummate an initial business combination due to the uncertainty resulting from the recent COVID-19 pandemic;
•
the ability of our officers and directors to generate a number of potential business combination opportunities;
•
our public securities’ potential liquidity and trading;
•
the lack of a market for our securities;
•
the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;
•
the trust account not being subject to claims of third parties; or
•
our financial performance following this offering.
The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
USE OF PROCEEDS
We are offering 20,000,000 units at an offering price of $10.00 per unit. We estimate that the net proceeds of this offering, together with the funds we will receive from the sale of the private placement units, will be used as set forth in the following table.
|
|
|
|
WITHOUT
OVER-
ALLOTMENT
OPTION
|
|
|
OVER-
ALLOTMENT
OPTION
EXERCISED
|
|
|
Gross proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross proceeds from units offered to public(1)
|
|
|
|
$
|
200,000,000
|
|
|
|
|
$
|
230,000,000
|
|
|
|
Gross proceeds from sale of the private placement units offered in
a private
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
placement to the sponsor
|
|
|
|
$
|
6,000,000
|
|
|
|
|
$
|
6,600,000
|
|
|
|
Total gross proceeds
|
|
|
|
$
|
206,000,000
|
|
|
|
|
$
|
236,600,000
|
|
|
|
Estimated Offering expenses(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting commissions (2.0% of gross proceeds from units offered to public, excluding deferred portion)(3)
|
|
|
|
$
|
4,000,000
|
|
|
|
|
$
|
4,600,000
|
|
|
|
Legal fees and expenses
|
|
|
|
|
325,000
|
|
|
|
|
|
325,000
|
|
|
|
Printing and engraving expenses
|
|
|
|
|
30,000
|
|
|
|
|
|
30,000
|
|
|
|
Accounting fees and expenses
|
|
|
|
|
60,000
|
|
|
|
|
|
60,000
|
|
|
|
SEC/FINRA Expenses
|
|
|
|
|
40,722
|
|
|
|
|
|
40,722
|
|
|
|
Travel and road show
|
|
|
|
|
20,000
|
|
|
|
|
|
20,000
|
|
|
|
Nasdaq listing and filing fees
|
|
|
|
|
55,000
|
|
|
|
|
|
55,000
|
|
|
|
Director & Officer liability insurance premiums
|
|
|
|
|
450,000
|
|
|
|
|
|
450,000
|
|
|
|
Miscellaneous
|
|
|
|
|
19,278
|
|
|
|
|
|
19,278
|
|
|
|
Total estimated offering expenses (excluding underwriting commissions)
|
|
|
|
$
|
1,000,000
|
|
|
|
|
$
|
1,000,000
|
|
|
|
Proceeds after estimated offering expenses
|
|
|
|
$
|
201,000,000
|
|
|
|
|
$
|
231,000,000
|
|
|
|
Held in trust account(3)
|
|
|
|
$
|
200,000,000
|
|
|
|
|
$
|
230,000,000
|
|
|
|
% of public offering size
|
|
|
|
|
100%
|
|
|
|
|
|
100%
|
|
|
|
Not held in trust account
|
|
|
|
$
|
1,000,000
|
|
|
|
|
$
|
1,000,000
|
|
|
The following table shows the use of the $1,000,000 of net proceeds not held in the trust account.(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMOUNT
|
|
|
% OF
TOTAL
|
|
|
Legal, accounting, due diligence, travel, and other expenses in connection with any business combination(5)
|
|
|
|
|
350,000
|
|
|
|
|
|
35.0%
|
|
|
|
Legal and accounting fees related to regulatory reporting obligations
|
|
|
|
|
150,000
|
|
|
|
|
|
15.0%
|
|
|
|
Consulting, travel and miscellaneous expenses incurred during search for initial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
business combination target
|
|
|
|
|
100,000
|
|
|
|
|
|
10.0%
|
|
|
|
Payment for office space, administrative and support services
|
|
|
|
|
240,000
|
|
|
|
|
|
24.0%
|
|
|
|
Nasdaq continued listing fees
|
|
|
|
|
55,000
|
|
|
|
|
|
5.5%
|
|
|
|
Working capital to cover miscellaneous expenses and reserves
|
|
|
|
|
105,000
|
|
|
|
|
|
10.5%
|
|
|
|
Total
|
|
|
|
$
|
1,000,000
|
|
|
|
|
|
100.0%
|
|
|
(1)
Includes amounts payable to public shareholders who properly redeem their shares in connection with our successful completion of our initial business combination.
(2)
In addition, 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. To date, we have not borrowed under the promissory note with our sponsor. These loans will be repaid upon completion of this offering out of the $1,000,000 of offering proceeds that has been allocated for the payment of offering expenses (other than underwriting commissions) and not to be held in the trust account. In the event that offering expenses are less than 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 underwriter has agreed to defer underwriting commissions of 3.5% of the gross proceeds of this offering. Upon and concurrently with the completion of our initial business combination, $7,000,000, which constitutes the underwriter’s deferred commissions (or $8,050,000 if the underwriter’s over-allotment option is exercised in full) will be paid to the underwriter from the funds held in the trust account. See “Underwriting.” The remaining funds, less amounts released to the trustee to pay redeeming shareholders, will be released to us and can be used to pay all or a portion of the purchase price of the business or businesses with which our initial business combination occurs or for general corporate purposes, including payment of principal or interest on indebtedness incurred in connection with our initial business combination, to fund the purchases of other companies or for working capital. The underwriter will not be entitled to any interest accrued on the deferred underwriting discounts and commissions.
(4)
These expenses are estimates only. Our actual expenditures for some or all of these items may differ from the estimates set forth herein. For example, we may incur greater legal and accounting expenses than our current estimates in connection with negotiating and structuring our initial business combination based upon the level of complexity of such business combination. In the event we identify a business combination target in a specific industry subject to specific regulations, we may incur additional expenses associated with legal due diligence and the engagement of special legal counsel. In addition, our staffing needs may vary and as a result, we may engage a number of consultants to assist with legal and financial due diligence. We do not anticipate any change in our intended use of proceeds, other than fluctuations among the current categories of allocated expenses, which fluctuations, to the extent they exceed current estimates for any specific category of expenses, would not be available for our expenses. The amount in the table above does not include interest available to us from the trust account. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Assuming an interest rate of 0.2% per year, we estimate the interest earned on the trust account will be approximately $400,000 per year; however, we can provide no assurances regarding this amount.
(5)
Includes estimated amounts that may also be used in connection with our initial business combination to fund a “no shop” provision and commitment fees for financing.
The rules of Nasdaq provide that at least 90% of the gross proceeds from this offering and the sale of the private placement units be deposited in a trust account. Of the $206,000,000 in proceeds we receive from this offering and the sale of the private placement units described in this prospectus, or $236,600,000 if the underwriter’s over- allotment option is exercised in full, $200,000,000 ($10.00 per unit), or $230,000,000 if the underwriter’s over- allotment option is exercised in full ($10.00 per unit), will be deposited into a trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and $6,000,000, or up to $6,600,000 if the underwriter’s over-allotment option is exercised in full, will be used to pay expenses in connection with the closing of this offering (including the portion of the underwriting commissions payable upon closing of this offering) and for working capital following this offering. We will not be permitted to withdraw any of the principal or interest held in the trust account, except 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, until the earliest of (i) the completion of our initial business combination, (ii) the redemption of our public shares if we have not consummated an initial business combination within 24 months from the closing of this offering, subject to applicable law, and (iii) the redemption of our public shares properly submitted in
connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares. Based on current interest rates, we expect that interest income earned on the trust account will be sufficient to pay our taxes (if any).
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 redemptions of our Class A ordinary shares, we may apply the balance of the cash released from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-business combination company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital. There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination.
We believe that amounts not held in trust, together with funds available to us from loans from our sponsor, members of our management team or any of their affiliates will be sufficient to pay the costs and expenses to which such proceeds are allocated. However, if our estimate of the costs of undertaking in-depth due diligence and negotiating a business combination is less than the actual amount necessary to do so, we may be required to raise additional capital, the amount, availability and cost of which is currently unascertainable. If we are required to seek additional capital, we could seek such additional capital through loans or additional investments from our sponsor, members of our management team or any of their affiliates, but such persons are not under any obligation to advance funds to, or invest in, us.
We will reimburse an affiliate of our sponsor for office space, secretarial and administrative services provided to members of our management team, in the amount of $10,000 per month. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.
Our sponsor has agreed to loan us up to $300,000 to be used for a portion of the expenses of this offering. To date, we have not borrowed under the promissory note with our sponsor. These loans are non-interest bearing, unsecured and are due at the earlier of June 30, 2021 and the closing of this offering. The loans will be repaid upon the closing of this offering out of the $1,000,000 of offering proceeds that has been allocated to the payment of offering expenses.
In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans would be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants of the post-business combination company at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants. Except as set forth above, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor, members of our management team or any of their affiliates as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
DIVIDEND POLICY
We have not paid any cash dividends on our ordinary shares to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time, and we will only pay such dividend out of our profits or share premium (subject to solvency requirements) as permitted under Cayman Islands law. If we increase the size of this offering, we will effect a share capitalization or other appropriate mechanism immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares, on an as- converted basis, at 20% of our issued and outstanding ordinary shares (excluding the private placement shares underlying the private placement units) upon the consummation of this offering. Further, if we incur any indebtedness in connection with a business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
DILUTION
The difference between the public offering price per Class A ordinary share, assuming no value is attributed to the warrants included in the units we are offering pursuant to this prospectus or the private placement warrants, and the pro forma net tangible book value per Class A ordinary share after this offering constitutes the dilution to investors in this offering. Such calculation does not reflect any dilution associated with the sale and exercise of warrants, including the private placement warrants, which would cause the actual dilution to the public shareholders to be higher, particularly where a cashless exercise is utilized. Net tangible book value per share is determined by dividing our net tangible book value, which is our total tangible assets less total liabilities (including the value of Class A ordinary shares which may be redeemed for cash), by the number of outstanding Class A ordinary shares.
At January 20, 2021, our net tangible book deficit was $(25,076), or approximately $(0.00) per ordinary share. After giving effect to the sale of 20,000,000 Class A ordinary shares included in the units we are offering by this prospectus (or 23,000,000 Class A ordinary shares if the underwriter’s over-allotment option is exercised in full), the sale of the private placement units and the deduction of underwriting commissions and estimated expenses of this offering, our pro forma net tangible book value at January 20, 2021 would have been $5,000,004, or $0.75 per share (or $5,000,004, or $0.66 per share, if the underwriter’s over-allotment option is exercised in full), representing an immediate increase in net tangible book value (as decreased by the value of 18,901,992 Class A ordinary shares that may be redeemed for cash, or 21,796,992 Class A ordinary shares if the underwriter’s over-allotment option is exercised in full) of $0.75 per share (or $0.66 if the underwriter’s over-allotment option is exercised in full) to our sponsor as of the date of this prospectus and an immediate dilution to public shareholders from this offering of $10.00 per public share. Total dilution to public shareholders from this offering will be $9.25 per share (or $9.34 if the underwriter’s over-allotment option is exercised in full).
The following table illustrates the dilution to the public shareholders on a per-share basis, assuming no value is attributed to the warrants included in the units or the private placement warrants:
|
|
|
|
Without Over-allotment
|
|
|
With Over-allotment
|
|
|
Public offering price
|
|
|
|
|
|
|
|
|
|
$
|
10.00
|
|
|
|
|
|
|
|
|
|
|
$
|
10.00
|
|
|
|
Net tangible book deficit before this offering
|
|
|
|
|
(0.00)
|
|
|
|
|
|
|
|
|
|
|
|
(0.00)
|
|
|
|
|
|
|
|
|
|
Increase attributable to public shareholders
|
|
|
|
|
0.75
|
|
|
|
|
|
|
|
|
|
|
|
0.66
|
|
|
|
|
|
|
|
|
|
Pro forma net tangible book value after this offering and
the sale of the private placement warrants
|
|
|
|
|
|
|
|
|
|
|
0.75
|
|
|
|
|
|
|
|
|
|
|
|
0.66
|
|
|
|
Dilution to public shareholders
|
|
|
|
|
|
|
|
|
|
$
|
9.25
|
|
|
|
|
|
|
|
|
|
|
$
|
9.34
|
|
|
|
Percentage of dilution to public shareholders
|
|
|
|
|
|
|
|
|
|
|
92.5%
|
|
|
|
|
|
|
|
|
|
|
|
93.4%
|
|
|
For purposes of presentation, we have reduced our pro forma net tangible book value after this offering (assuming no exercise of the underwriter’s over-allotment option) by $189,019,920 because holders of up to approximately 91.8% of our public shares may redeem their shares for a pro rata share of the aggregate amount then on deposit in the trust account at a per share redemption price equal to the amount in the trust account as set forth in our tender offer or proxy materials (initially anticipated to be the aggregate amount held in trust two business days prior to the commencement of our tender offer or shareholders meeting, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of the then- outstanding public shares).
The following table sets forth information with respect to our initial shareholders, who hold our Class B ordinary shares and the private placement units, and the public shareholders:
|
|
|
|
SHARES PURCHASED
|
|
|
TOTAL
CONSIDERATION
|
|
|
AVERAGE
PRICE
PER
SHARE
|
|
|
|
|
|
NUMBER
|
|
|
PERCENTAGE
|
|
|
AMOUNT
|
|
|
PERCENTAGE
|
|
|
|
|
|
|
|
|
Class B Ordinary Shares(1)
|
|
|
|
|
5,000,000
|
|
|
|
|
|
19.53%
|
|
|
|
|
$
|
25,000
|
|
|
|
|
|
0.01%
|
|
|
|
|
$
|
0.004
|
|
|
|
Private Placement Unitholders
|
|
|
|
|
600,000
|
|
|
|
|
|
2.34%
|
|
|
|
|
|
6,000,000
|
|
|
|
|
|
2.91%
|
|
|
|
|
$
|
10.00
|
|
|
|
Public Shareholders
|
|
|
|
|
20,000,000
|
|
|
|
|
|
78.13%
|
|
|
|
|
|
200,000,000
|
|
|
|
|
|
97.08%
|
|
|
|
|
$
|
10.00
|
|
|
|
|
|
|
|
|
25,600,000
|
|
|
|
|
|
100.00%
|
|
|
|
|
$
|
206,250,000
|
|
|
|
|
|
100.00%
|
|
|
|
|
|
|
|
|
(1)
Assumes no exercise of the underwriter’s over-allotment option and the corresponding forfeiture of 750,000 Class B ordinary shares held by our sponsor.
The pro forma net tangible book value per share after this offering is calculated as follows:
|
|
|
|
Without
Over-
allotment
|
|
|
With Over-
allotment
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net tangible book deficit before this offering
|
|
|
|
$
|
(25,076)
|
|
|
|
|
$
|
(25,076)
|
|
|
|
Net proceeds from this offering and sale of the private placement
warrants(1)
|
|
|
|
|
201,000,000
|
|
|
|
|
|
231,000,000
|
|
|
|
Plus: Offering costs accrued for or paid in advance, excluded from tangible book value
before this offering
|
|
|
|
|
45,000
|
|
|
|
|
|
45,000
|
|
|
|
Less: Deferred underwriting commissions
|
|
|
|
|
(7,000,000)
|
|
|
|
|
|
(8,050,000)
|
|
|
|
Less: Proceeds held in trust subject to redemption(2)
|
|
|
|
|
(189,019,920)
|
|
|
|
|
|
(217,969,920)
|
|
|
|
|
|
|
|
$
|
5,000,004
|
|
|
|
|
$
|
5,000,004
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares outstanding prior to this offering
|
|
|
|
|
5,750,000
|
|
|
|
|
|
5,750,000
|
|
|
|
Ordinary shares forfeited if over-allotment is not exercised
|
|
|
|
|
(750,000)
|
|
|
|
|
|
—
|
|
|
|
Ordinary shares included in the units offered
|
|
|
|
|
20,600,000
|
|
|
|
|
|
23,660,000
|
|
|
|
Less: Ordinary shares subject to redemption
|
|
|
|
|
(18,901,992)
|
|
|
|
|
|
(21,796,992)
|
|
|
|
|
|
|
|
|
6,698,008
|
|
|
|
|
|
7,553,008
|
|
|
(1)
Expenses applied against gross proceeds include offering expenses of $1,000,000 and underwriting commissions of $4,000,000 or $4,600,000 if the underwriter exercises its over-allotment option (excluding deferred underwriting fees). See “Use of Proceeds.”
(2)
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. In the event of any such purchases of our shares prior to the completion of our initial business combination, the number of Class A ordinary shares subject to redemption will be reduced by the amount of any such purchases, increasing the pro forma net tangible book value per share. See “Proposed Business — Effecting Our Initial Business Combination — Permitted Purchases and Other Transactions with Respect to Our Securities.”
CAPITALIZATION
The following table sets forth our capitalization at January 20, 2021, and as adjusted to give effect to the filing of our amended and restated memorandum and articles of association, the sale of our units in this offering and the private placement units and the application of the estimated net proceeds derived from the sale of such securities:
|
|
|
|
January 20, 2021
|
|
|
|
|
|
Actual
|
|
|
As Adjusted(1)
|
|
|
Note payable — related party(2)
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
Deferred underwriting commissions
|
|
|
|
|
—
|
|
|
|
|
|
7,000,000
|
|
|
|
Class A ordinary shares; -0- and 18,901,992 shares subject to possible redemption, actual and as adjusted, respectively(3)
|
|
|
|
|
—
|
|
|
|
|
|
189,019,920
|
|
|
|
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding, actual and as adjusted
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Class A ordinary shares, $0.0001 par value, 500,000,000 shares authorized; -0- and 1,698,008 shares issued and outstanding (excluding -0- and 18,901,992 shares subject to possible redemption), actual and as adjusted, respectively(3)
|
|
|
|
|
—
|
|
|
|
|
|
170
|
|
|
|
Class B ordinary shares, $0.0001 par value, 50,000,000 shares authorized;
5,750,000 and 5,000,000 shares issued and outstanding, actual and as adjusted,
respectively
|
|
|
|
|
575
|
|
|
|
|
|
500
|
|
|
|
Additional paid-in capital
|
|
|
|
|
24,425
|
|
|
|
|
|
5,004,410
|
|
|
|
Accumulated deficit
|
|
|
|
|
(5,076)
|
|
|
|
|
|
(5,076)
|
|
|
|
Total shareholders’ equity
|
|
|
|
$
|
19,924
|
|
|
|
|
$
|
5,000,004
|
|
|
|
Total capitalization
|
|
|
|
$
|
19,924
|
|
|
|
|
$
|
201,019,924
|
|
|
(1)
Assumes no exercise of the underwriter’s over-allotment option and the corresponding forfeiture of 750,000 Class B ordinary shares held by our sponsor.
(2)
Our sponsor may loan us up to $300,000 under an unsecured promissory note to be used for a portion of the expenses of this offering. To date, we have not borrowed from our sponsor to cover for expenses in connection with this offering.
(3)
$0.35 per Unit, or $7 million in the aggregate, will be payable to the underwriter for deferred underwriting commissions. The deferred underwriting commissions will become payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. The Company records deferred underwriting commissions upon the closing of the initial public offering as a reduction of additional paid-in capital. Since the actual additional paid-in capital was reduced by the recording of the accrued deferred underwriting commission, total capitalization, as adjusted, includes the amount of the deferred underwriting commission to reflect total capitalization.
(4)
Upon the completion of our initial business combination, we will provide our public shareholders with the opportunity to redeem their public shares for cash at a per share price equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitations described herein whereby redemptions cannot cause our net tangible assets to be less than $5,000,001 and any limitations (including, but not limited to, cash requirements) created by the terms of the proposed business combination.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
We are a blank check company incorporated on January 15, 2021 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the sale of the private placement units, our shares, debt or a combination of cash, equity and debt.
The issuance of additional shares in a business combination:
•
may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;
•
may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares;
•
could cause a change in control if a substantial number of our Class A ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
•
may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us;
•
may adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants; and
•
may not result in adjustment to the exercise price of our warrants.
Similarly, if we issue debt or otherwise incur significant debt, it could result in:
•
default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
•
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
•
our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
•
our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;
•
our inability to pay dividends on our Class A ordinary shares;
•
using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
•
limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
•
increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
•
limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
As indicated in the accompanying financial statements, as of January 20, 2021, we had no cash, prepaid assets of approximately $20,000 and deferred offering costs of $45,000. Further, we expect to incur significant costs in the pursuit of our initial business combination. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful.
Results of Operations and Known Trends or Future Events
We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for this offering. Following this offering, we will not generate any operating revenues until after completion of our initial business combination. 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 a $25,000 capital contribution from our sponsor in exchange for the issuance of the founder shares to our sponsor and a commitment from our sponsor to loan up to $300,000 to us to cover our expenses in connection with this offering. We estimate that the net proceeds from (i) the sale of the units in this offering, after deducting offering expenses of $1.0 million, underwriting commissions of $4,000,000, or $4,600,000 if the underwriter’s over-allotment option is exercised in full (excluding deferred underwriting commissions of $7,000,000, or $8,050,000 if the underwriter’s over-allotment option is exercised in full), and (ii) the sale of the private placement units for a purchase price of $6,000,000 (or $6,600,000 if the underwriter’s over-allotment option is exercised in full) will be $201.0 million (or $231.0 million if the underwriter’s over-allotment option is exercised in full). $200.0 million (or $230.0 million if the underwriter’s over- allotment option is exercised in full) will be held in the trust account, which includes the deferred underwriting commissions described above. The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. The remaining $1.0 million will not be held in the trust account. In the event that our offering expenses exceed our estimate of $1.0 million, 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 $1.0 million, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.
We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (less taxes payable and deferred underwriting commissions), to complete our initial business combination. We may withdraw interest income (if any) to pay taxes, if any. Our annual tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. We expect the interest income earned on the amount in the trust account will be sufficient to pay our taxes (if any). To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
Prior to the completion of our initial business combination, we will have available to us the $1.0 million of proceeds held outside the trust account, as well as certain funds from loans from our sponsor, members of our management team or any of their affiliates. We will use these funds to primarily identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a business combination.
We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business prior to the completion of our initial business combination, other than funds available from loans from our sponsor, members of our management team or any of their affiliates. 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 the completion of our initial business combination. In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants of the post-business combination company at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor, members of our management team or any of their affiliates as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
We expect our primary liquidity requirements during that period to include approximately $350,000 for legal, accounting, due diligence, travel and other expenses in connection with any business combinations; $150,000 for legal and accounting fees related to regulatory reporting obligations; $100,000 for consulting, travel and miscellaneous expenses incurred during the search for an initial business combination target; $55,000 for Nasdaq continued listing fees; and $105,000 for general working capital that will be used for miscellaneous expenses and reserves. We will also reimburse an affiliate of our sponsor for office space, secretarial and administrative services provided to us in the amount of $10,000 per month ($240,000 in the aggregate).
These amounts are estimates and may differ materially from our actual expenses. In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a “no-shop” provision (a provision designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into an agreement where we paid for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a “no-shop” provision would be determined based on the terms of the specific business combination and the amount of our available funds at the time. Our forfeiture of such funds (whether as a result of our breach or otherwise) could result in our not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses.
Moreover, we may need to obtain additional financing to complete our initial business combination, either because the transaction requires more cash than is available from the proceeds held in our trust account, or because we become obligated to redeem a significant number of our public shares upon completion of the business combination, in which case we may issue additional securities or incur debt in connection with such business combination. If we have not consummated our initial business combination within 24 months from the closing of this offering because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account.
Controls and Procedures
We are not currently required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act. We will be required to comply with the internal control requirements of the Sarbanes-Oxley Act for the fiscal year ending December 31, 2021. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer and no longer qualify as an emerging growth company would we be required to comply with the independent registered public accounting firm attestation requirement on internal control over financial reporting. Further, for as long as we remain an emerging
growth company as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirement.
Prior to the closing of this offering, we have not completed an assessment, nor have our auditors tested our systems, of our internal controls. We expect to assess the internal controls of our target business or businesses prior to the completion of our initial business combination and, if necessary, to implement and test additional controls as we may determine are necessary in order to state that we maintain an effective system of internal controls. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding the adequacy of internal controls. Many small and mid-sized target businesses we may consider for our initial business combination may have internal controls that need improvement in areas such as:
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staffing for financial, accounting and external reporting areas, including segregation of duties; 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 our independent auditors to audit and render an opinion on such report when required by Section 404 of the Sarbanes-Oxley Act. The independent auditors may identify additional issues concerning a target business’s internal controls while performing their audit of internal control over financial reporting.
Quantitative and Qualitative Disclosures about Market Risk
The net proceeds of this offering and the sale of the private placement units held in the trust account will be invested in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.
Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results
As of January 20, 2021, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations. No unaudited quarterly operating data is included in this prospectus as we have not conducted any operations to date.
JOBS Act
The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our
financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.
PROPOSED BUSINESS
Introduction
We are a newly incorporated blank check company incorporated as a Cayman Islands exempted company and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. We have not identified any potential business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target.
Our objective is to identify, acquire, and operate a business to generate attractive risk-adjusted returns for our shareholders by effecting a business combination with a target company that is rapidly growing and ready for public market ownership. While we may pursue an initial business combination opportunity in any business, industry, sector or geographic area, we intend to capitalize on the ability of our management team to identify promising opportunities at the intersection of the healthcare and technology industries, specifically within the biotechnology sector.
Apeiron Investment Group and Falcon Edge Capital
Our sponsor is an affiliate of Apeiron and Falcon Edge Capital.
Apeiron is the family office and merchant banking business of Christian Angermayer. Apeiron focuses across a number of industries including life sciences, financial services, deep technology, media and entertainment and real estate. Apeiron invests across all phases and stages of a company’s life cycle, with a particular focus on non-listed seed / start-up investments and larger size restructuring and special situations transactions (frequently involving listed assets) with significant value creation opportunities. Apeiron is a team of more than 20 professionals with extensive experience at top-tier investment banks, private equity and venture capital funds prior to Apeiron, led by Mr. Angermayer.
Apeiron has a strong track record of success within the healthcare and technology industries. Within the biotechnology sector Apeiron’s investments include COMPASS Pathways, AbCellera, atai Life Sciences, Cambrian Biopharma and Rejuveron Life Sciences. Within the financial technology, cryptocurrency and deep technology sectors Apeiron has invested in Deposit Solutions, Block One, Northern Data, Flatex, Mynaric and ISAR Aerospace amongst others.
Founded in 2012, Falcon Edge Capital is a diversified global alternative asset manager led by Rick Gerson, Ryan Khoury and Navroz Udwadia. Falcon Edge Capital offers a variety of investment products that cover a number of asset classes, themes, and geographies and employs an investment philosophy that emphasizes creative, and fact-based research. The firm has a team of highly experienced investment and operational professionals with diverse and differentiated expertise across sectors, industries, and geographies. The firm has over 40 employees across its offices in New York, London, Bangalore and Abu Dhabi.
Falcon Edge Capital manages approximately $4.3 billion of client assets across a range of private investment funds and separately managed accounts following long/short equity, venture capital and special situations investment mandates. Falcon Edge Capital has been investing in venture capital and private equity since 2014 and has since deployed over $2 billion in total capital. The firm has a track record of successfully identifying category and industry leaders. Some of Falcon Edge Capital’s prior investments in the private markets include: SpaceX, Ant Financial, Ola, Alibaba, Uber, Lyft and AbCellera.
We believe that a partnership between Apeiron and Falcon Edge Capital is well suited for the SPAC structure. The firms have a history of investments within innovative healthcare and technology companies and across the entire life cycle of SPAC investing from sponsorship, IPO, PIPE and secondary market and collectively have a strong track record of identifying, investing and supporting promising business opportunities, with an aggregate of over 20 years of board level experience. We believe that our sector expertise and broad network of relationships will allow us to add significant value in identifying potential business combination targets and supporting their growth post an initial business combination. We expect to collaborate with founders, senior management and key leaders through a long-term partnership to create value for all stakeholders.
Our Founders / Management Team
Our management team is led by Christian Angermayer as Chief Executive Officer, Ryan Khoury and Rick Gerson as Co-Presidents, Scott Carpenter as Chief Operating Officer and Matthew Corey as Chief Financial Officer. Our board of directors will consist of Peter Attia and David A. Sinclair as Co-Chairmen, Jonathan Christodoro, Christian Angermayer and Rick Gerson.
Christian Angermayer is the founder of Apeiron and a serial entrepreneur and investor. In 2000, Mr. Angermayer co-founded Ribopharma which merged with U.S. peer Alnylam in 2003 and subsequently went public and became the first commercial RNAi technology company. Since then, Mr. Angermayer has created, co-founded and invested in numerous successful companies, has raised approximately $2 billion for his portfolio companies and has been involved in more than 40 successful IPO and M&A transactions either as an entrepreneur, investor or advisor. Through his experience as an investor and entrepreneur Mr. Angermayer has also developed a network of deep relationships with leading investors and thought leaders globally. Mr. Angermayer is a Young Global Leader of the World Economic Forum, a partner of the Munich Security Conference, a member of the Milken Institute Young Leaders Circle, a member of The Court of the London School of Hygiene and Tropical Medicine and a member of the Global Advisory Council of the Wilson Center, one of the leading institutions for in-depth research and dialogue to inform actionable ideas on global issues.
Rick Gerson is the Founder, Chairman and Chief Investment Officer of Falcon Edge Capital. Prior to founding Falcon Edge Capital, Mr. Gerson was a Founding Member and Managing Director of Blue Ridge Capital, a New York-based investment firm. Mr. Gerson is a member of the Cleveland Clinic International Leadership Board, a founding member of the Board of Trustees of PAVE (a charter school in Brooklyn), and is a member of the board of 92nd Street Y (a cultural and community center in New York). Mr. Gerson is also a member of the Belfer Center’s International Council at the John F. Kennedy School of Government at Harvard University. Mr. Gerson graduated from the University of Virginia, McIntire School of Commerce with a BS in Commerce with a concentration in Finance.
Ryan Khoury is a co-Founder and Partner of Falcon Edge Capital. Prior to joining Falcon Edge Capital, Mr. Khoury worked at Eton Park in London, where he focused on special situations and distressed credit investments in Europe, Middle East and Africa. Before Eton Park, Mr. Khoury worked with Goldman Sachs’ Financial Institutions Group, where he worked on transactions including: ABN Amro’s sale and breakup to RBS, Santander and Fortis, Allianz offer for AGF and the Bank of Ireland’s sale of Davy. Prior to that he worked at JP Morgan in their Financial Institutions Group. Mr. Khoury graduated from the London School of Economics with First Class Honors in Economics and completed his MSc. in financial mathematics at Stanford University.
Matthew Corey is the Chief Financial Officer of Falcon Edge Capital. Prior to joining Falcon Edge, Matthew worked for Gruss Capital Management for 10 years in a variety of roles including Chief Financial Officer, Controller and Senior Accountant. Matthew worked on all aspects of fund accounting, management accounting, tax, operations, treasury and investor reporting at Gruss Capital Management. Matthew started his career as an auditor with Rothstein Kass from 2006 to 2009, where he conducted a variety of private company audits and prepared private company tax returns. Matthew graduated from Lehigh University with a Bachelor of Science in Accounting and completed a Master of Science in Jurisprudence from the Seton Hall School of Law. Matthew is a Certified Public Accountant licensed in New York.
Scott Carpenter is the Chief Operating Officer of Falcon Edge Capital. He is responsible for the non-investment side of the business. He was a founding member of the firm when he joined at the beginning of 2012. Prior to joining Falcon Edge, Scott was the Global Head of Operations at CQS in London for eight years where he held a variety of responsibilities including Company Secretary for the CQS Management entities. Prior to joining CQS in 2004, Scott worked for Credit Suisse for 10 years in a variety of operational management roles in London, New York, Brisbane, Sydney, Wellington and Singapore.
Our Independent Director Nominees
Our efforts to seek a suitable business combination target will be augmented by the expertise and network of relationships of our directors, each of whom has extensive healthcare, science and/or business experience.
David A. Sinclair, Ph.D, A.O. has agreed to serve on our board of directors and will be our Co-Chairman. Dr. Sinclair is a Professor in the Department of Genetics, co-Director of the Paul F. Glenn Center for Biology of Aging Research at Harvard Medical School, and a NY Times bestselling author. He is renowned for his work on understanding why we age and how to slow and reverse its effects. Dr. Sinclair is co-founder of several biotechnology companies, including Sirtris Pharma (acquired by GSK), Genocea, Cohbar, Life Biosciences, MetroBiotech, ArcBio, and Liberty Biosecurity, and serves on the boards of several others. He has received over 25 awards and honors including The Merck Prize, The ASBMB Medal, The Genzyme Award, TIME100’s “most influential people in the world”, and TIME's “Top 50 in healthcare.” He is an inventor on approximately 50 patents and co-author more than 200 scientific papers. Dr. Sinclair obtained his Ph.D. in Molecular Genetics from the University of New South Wales, Sydney and worked as a postdoctoral researcher at the Massachusetts Institute of Technology before being hired as an Assistant Professor at Harvard Medical School. In 2018, he became an Officer of the Order of Australia (AO).
Peter Attia has agreed to serve on our board of directors and will be our Co-Chairman. Dr. Attia is a physician focusing on the applied science of longevity. His practice deals extensively with nutritional interventions, exercise physiology, sleep physiology, emotional and mental health, and pharmacology to increase lifespan (how long you live), while simultaneously improving healthspan (the quality of your life). Dr. Attia is the co-founder and Chief Medical Officer of the fasting app Zero. Dr. Attia co-founded and served as the first President of Nutrition Science Initiative in 2012. He is an advisor to, and/or investor in, the companies Virta Health, Hu Kitchen, Oura Health Oy, Magic Spoon Cereal, Inevitable Ventures, Salutoceuticals, Dexcom, Kia Hawaii, and Supercast. Dr. Attia earned his M.D. from Stanford University and holds a B.Sc. in mechanical engineering and applied mathematics. Dr. Attia trained for five years at the Johns Hopkins Hospital in general surgery, where he was the recipient of several awards, including resident of the year. He spent two years at NIH as a surgical oncology fellow at the National Cancer Institute where his research focused on immune-based therapies for melanoma.
Jonathan Christodoro has agreed to serve on our board of directors. Mr. Christodoro has served as the Chief Investment Officer and President at Patriot Global Management, LP since 2018. Prior to that, Mr. Christodoro previously served as a Managing Director of Icahn Capital LP, the entity through which Carl Icahn manages investment funds. Prior to joining Icahn Capital, Mr. Christodoro served in various investment and research roles. Mr. Christodoro began his career as an investment banking analyst at Morgan Stanley, where he focused on merger and acquisition transactions across a variety of industries. Mr. Christodoro currently serves as a director on the board of PayPal, Xerox and SandRidge Energy and Pioneer Merger Corp.. He was previously a board member of eBay, Lyft, Hologic, Herbalife, Talisman Energy, Enzon Pharmaceuticals, American Railcar Industries and Cheniere Energy. Mr. Christodoro received an M.P.H. from the Harvard T.H. Chan School of Public Health, an M.B.A. from the University of Pennsylvania’s Wharton School of Business with Distinction, and a B.S. in Applied Economics and Management Magna Cum Laude with Honors Distinction in Research from Cornell University. He also served in the United States Marine Corps.
Business Strategy
Our business strategy is to identify and complete our initial business combination with a leading or emerging private company that is a potential industry disruptor or innovator. We believe that our management team’s extensive experience of founding and investing in companies, established network across business leaders, and proven deal-sourcing capabilities presents an opportunity to create significant long-term value for our shareholders. Although we may pursue an opportunity in any business, industry, sector or geographic area, our management team believes that opportunities at the intersection of the healthcare and technology industries represent among the most attractive opportunities for growth and innovation. We are particularly focused on biotechnology opportunities that may be enhanced through the application of technology solutions, for example, but not limited to, artificial intelligence, machine learning, microfluidics or single cell sequencing. We also believe in our ability to support founders and management teams as they take their business to the next level, a public listing.
Our investment highlights and value proposition include:
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Track record of early identification of disruptive companies and themes across sectors: Our management team has significant experience founding, investing in and supporting innovative
companies across multiple sectors with a particular focus on the biotechnology, financial technology, cryptocurrency, and deep technology industries. Within biotechnology, specifically, our management team has invested in COMPASS Pathways and AbCellera both of which completed successful initial public offerings in the second half of 2020 and co-founded and invested in atai Life Sciences which is aiming to pioneer mental health innovation as well as Rejuveron Life Sciences, a fully integrated biotechnology platform company with the aim to improve healthy aging and prolong lifespan. Within the financial technology, cryptocurrency and deep technology sectors our management team has invested in Deposit Solutions, Block One, Northern Data, Flatex, Mynaric and ISAR Aerospace amongst others.
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Broad and diversified set of investor relationships: We are committed to developing and leveraging our relationships with leading public and private market investors in the US, Europe, Middle East and Asia. The management team’s deep network of investor contacts provides access to potential target opportunities as well as resources and expertise and potentially further sources of capital.
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Deep industry and geopolitical connections: We believe our management team’s extensive network across industries within key global markets will be a key source of opportunities for potential business combination targets. As well as operational, investment and board level experience within a corporate setting, our management team has a strong ecosystem of contacts within the geopolitical domain. In particular Mr. Angermayer has an active political network, including heads of state, particularly in Western Europe, and leads a ‘think tank’ and event series “Angermayer Policy and Innovation Forum” which regularly features leading global politicians.
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Capital markets focus and creativity: Collectively our management team has invested over $2 billion of capital in venture capital and private equity, raised approximately $2 billion for portfolio companies and been involved in more than 24 successful IPOs either as an entrepreneur, investor or advisor. We have extensive experience across the capital markets, including various deal structures such as traditional venture and IPO financings, pre-IPO convertible structures, EU to U.S. cross-listings, take-privates and re-listings.
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Synergistic collaboration between Apeiron and Falcon Edge: We believe that a partnership between Apeiron and Falcon Edge Capital is well suited for the SPAC structure. The firms have a history of investments within innovative healthcare and technology companies and across the entire life cycle of SPAC investing from sponsorship, IPO, PIPE and secondary market and collectively have a strong track record of identifying, investing and supporting promising business opportunities, with an aggregate of over 20 years of board level experience. We believe that our sector expertise and broad network of relationships will allow us to add significant value in identifying potential business combination targets and supporting the growth post an initial business combination. We expect to collaborate with founders, senior management and key leaders through a long-term partnership to create value for all stakeholders.
Acquisition Strategy / Criteria and Target Identification
Our acquisition strategy is to complete a business combination that will create value for our shareholders over time. We will seek to capitalize on Apeiron and Falcon Edge Capital’s experience and capabilities through the leadership of Christian Angermayer, Ryan Khoury and Rick Gerson, combined with the expertise of the other members of our management team and board of directors, in consummating our initial business combination. We plan to identify a high-quality private company at the intersection of data science and life sciences which has many of the following key characteristics:
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Significant advancements in data science have game changing implications for life sciences;
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Focus on extending healthy lifespans through the convergence of life sciences and data science;
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Identify visionary life sciences founders;
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Reasonable entry valuation with significant asymmetric risk-reward potential for all stakeholders.
These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management team may deem relevant. In the event that
we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our 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.
Industry Opportunity
While we may acquire a business in any sector, our focus will be on innovative companies at the intersection of healthcare and technology, particularly within the biotechnology industry. With a broadening set of applications for biotechnology that includes therapeutics, diagnostics, research and development tools and technologies and data applications, the sector offers compelling opportunities for growth and innovation. We believe these industries are attractive for a number of key reasons:
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Large addressable market with strong growth: Total U.S. national health expenditure was $3.8 trillion in 2019 and, according to the Centers for Medicare & Medicaid Services, is projected to grow at an average annual rate of 5.4 percent between 2019 and 2028 reaching $6.2 trillion. This growth is expected to be 1.1 percentage points faster than Gross Domestic Product per year over the 2019-28 period. Furthermore prescription drug expenditure in the U.S. is expected to grow more than 5 percent per year on average over the 2019-28 period driven in part by projected new drug approvals. New drug approvals by the U.S. FDA has accelerated in recent years, with the number of novel drug approvals increasing approximately 48 percent for the 2015-2020 period compared to the 2009-2014 period. We believe the momentum of innovation across science and technology offers compelling opportunities.
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Transformational opportunities. Technology can be used as a disruptor within the healthcare sector to improve the quality of care provided to patients or the accessibility of care. Furthermore there is significant scope for transformational innovation within the healthcare and technology industries separately. Our management team has experience founding, operating and investing across multiple disrupters within biotechnology, financial technology, cryptocurrency and deep technology.
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Strong macroeconomic trends. The global population is aging and according to the United Nations the population aged 60 years or over is expected to more than double between 2017 and 2050. This represents a significant global healthcare challenge but also an opportunity for innovative companies focused on extending healthy lifespans.
Our Acquisition Process
In evaluating a prospective target business, we expect to conduct a thorough due diligence review which will encompass, among other things, meetings with incumbent management and employees, document reviews and inspection of facilities, as well as a review of financial, operational, legal and other information that will be made available to us. Our comprehensive due diligence review will help us to determine the quality and intrinsic value of the company.
We are not prohibited from pursuing an initial business combination with a company in which our sponsor, officers or directors are invested or affiliated. In the event we seek to complete our initial business combination with a company in which our sponsor, officers or directors are invested or affiliated, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm that is a member of the Financial Industry Regulatory Authority, or FINRA, or from an independent valuation or appraisal firm, that our initial business combination is fair to our company from a financial point of view.
Members of our management team may directly or indirectly own our ordinary shares and/or private placement warrants following this offering, and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, 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.
We currently do not have any specific business combination under consideration. Our officers and directors have neither individually identified nor considered a target business for our initial business combination. Apeiron and Falcon Edge Capital 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 (nor has anyone on our behalf) contacted any prospective target business or had any discussions, formal or otherwise, with any business combination target. Additionally, we have not, nor has anyone on our behalf, taken any measure, directly or indirectly, to identify or locate any suitable acquisition candidate for us, nor have we engaged or retained any agent or other representative to identify or locate any such acquisition candidate.
Each of our officers and directors presently has, and any of them in the future may have, additional fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, subject to his or her fiduciary duties under Cayman Islands law. We expect that if an opportunity is presented to one of our officers or directors in his or her capacity as an officer or director of one of those other entities, such opportunity would be presented to such other entity and not to us. For more information on the entities to which our officers and directors currently have fiduciary or contractual obligations, please refer to “Management — Conflicts of Interest.” We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination. We believe this conflict of interest will be naturally mitigated by the differing nature of the investments that Apeiron and/or Falcon Edge Capital typically considers most attractive for its funds or investment vehicles and the types of acquisitions we expect to find most attractive for our company. Although Apeiron’s and Falcon Edge Capital’s activities may involve investing in private companies, such investments are typically not a controlling stake in the private company and/or the investments are not of a similar size as the target companies expected to be most attractive for our company. As a result, we may become aware of a potential transaction that is not a fit for the traditional private investment activities of Apeiron and/or Falcon Edge Capital but that is an attractive opportunity for us.
In addition, Apeiron, Falcon Edge Capital and our officers and directors may sponsor, form or participate in other blank check companies similar to ours, beginning after we have executed a letter of intent, agreement in principle or definitive agreement for an initial business combination. Any such companies may present additional conflicts of interest in pursuing an acquisition target. However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.
Initial Business Combination
So long as our securities are then listed on Nasdaq, our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the net assets held in the trust account (excluding the deferred underwriting commissions and taxes payable, if any, on the interest earned on the trust account) at the time of signing a definitive agreement in connection with our initial business combination. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm or an independent valuation or appraisal firm with respect to the satisfaction of such criteria. While we consider it unlikely that our board will not be able to make an independent determination of the fair market value of a target business or businesses, it may be unable to do so if the board is less familiar or experienced with the target company’s business, there is a significant amount of uncertainty as to the value of the company’s assets or prospects, including if such company is at an early stage of development, operations or growth, or if the anticipated transaction involves a complex financial analysis or other specialized skills and the board determines that outside expertise would be helpful or necessary in conducting such analysis. Since any opinion, if obtained, would merely state that the fair market value of the target business meets the 80% of net assets threshold, unless such opinion includes material information regarding the valuation of a target business or the consideration to be provided, it is not anticipated that copies of such opinion would be distributed to our shareholders. However, if required under
applicable law, any proxy statement that we deliver to shareholders and file with the SEC in connection with a proposed transaction will include such opinion.
We anticipate structuring our initial business combination so that the post-business combination company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-business combination company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-business combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act. Even if the post-business combination company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding shares, capital stock or other equity interests of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-business combination company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses. If our securities are not then listed on Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% of net asset test. However, we intend to satisfy the 80% requirement even if our securities are not listed on Nasdaq at the time of our initial business combination. In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor.
If we target businesses with enterprise values that are greater than we could acquire with the net proceeds of this offering and the sale of the private placement units, and, as a result, if the cash portion of the purchase price exceeds the amount available from the trust account, net of amounts needed to satisfy any redemptions by public shareholders, we may be required to seek additional financing to complete such proposed initial business combination. We may also obtain financing prior to the closing of our initial business combination to fund our working capital needs and transaction costs in connection with our search for and completion of our initial business combination. There is no limitation on our ability to raise funds through the issuance of equity or equity-linked securities or through loans, advances or other indebtedness in connection with our initial business combination, including pursuant to forward purchase agreements or backstop agreements we may enter into following consummation of this offering. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the 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 addition, following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
To the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.
Other Considerations
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor or any of our officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that such initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
We currently do not have any specific business combination under consideration. Our officers and directors have neither individually selected nor considered a target business nor have they had any substantive discussions regarding possible target businesses among themselves or with our underwriter or other advisors. Our management team is regularly made aware of potential business opportunities, one or more of which we may desire to pursue for a business combination, but we have not (nor has anyone on our behalf) contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to a business combination transaction with our company. Additionally, we have not, nor has anyone on our behalf, taken any substantive measure, directly or indirectly, to identify or locate any suitable acquisition candidate for us, nor have we engaged or retained any agent or other representative to identify or locate any such acquisition candidate.
In addition, certain of our officers and directors presently have, and any of them in the future are expected to have additional, fiduciary and contractual duties to other entities. As a result, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he, she or it has then-current fiduciary or contractual obligations, then, subject to their fiduciary duties under Cayman Islands law, he, she or it will need to honor such fiduciary or contractual obligations to present such business combination opportunity to such entity, before we can pursue such opportunity. If these other entities decide to pursue any such opportunity, we may be precluded from pursuing the same. However, we do not expect these duties to materially affect our ability to complete our initial business combination because we do not currently anticipate any meaningful overlap of investment objectives. Our amended and restated memorandum and articles of association provide that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other.
Our sponsor, officers and directors may sponsor, form or participate in other blank check companies similar to ours during the period in which we are seeking an initial business combination. In particular, affiliates of our sponsor currently sponsor a blank check company, Pioneer Merger Corp., of which Mr. Gerson is the Co-President, Mr. Khoury is the Chief Executive Officer, Mr. Carpenter is the Chief Operating Officer, and Mr. Corey is the Chief Financial Officer. Pioneer Merger Corp. may seek to complete a business combination in any industry or location. Any such companies may present additional conflicts of interest in pursuing an acquisition target, particularly in the event there is overlap among investment mandates. In addition, our sponsor, officers and directors, are not required to commit any specified amount of time to our affairs, and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. Moreover, certain of our officers and directors have time and attention requirements for private investment funds of which Apeiron and/or Falcon Edge Capital are the investment managers.
Status as a Public Company
We believe our structure will make us an attractive business combination partner to target businesses. As an existing public company, we offer a target business an alternative to the traditional initial public offering through a merger or other business combination with us. In a business combination transaction with us, the owners of the target business may, for example, exchange their shares or stock in the target business for our Class A ordinary shares (or shares of a new holding company) or for a combination of our Class A ordinary shares and cash, allowing us to tailor the consideration to the specific needs of the sellers. We
believe target businesses will find this method a more expeditious and cost effective method to becoming a public company than the typical initial public offering. The typical initial public offering process takes a significantly longer period of time than the typical business combination transaction process, and there are significant expenses in the initial public offering process, including underwriting discounts and commissions, that may not be present to the same extent in connection with a business combination with us.
Furthermore, once a proposed business combination is completed, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriter’s ability to complete the offering, as well as general market conditions, which could delay or prevent the offering from occurring or have negative valuation consequences. Once public, we believe the target business would then have greater access to capital, an additional means of providing management incentives consistent with shareholders’ interests and the ability to use its shares as currency for acquisitions. Being a public company can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.
While we believe that our structure and our management team’s backgrounds will make us an attractive business partner, some potential target businesses may view our status as a blank check company, such as our lack of an operating history and our ability to seek shareholder approval of any proposed initial business combination, negatively.
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved, If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that are held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of any fiscal year for so long as either (1) the market value of our ordinary shares held by non-affiliates did not exceed $250 million as of the prior June 30, or (2) our annual revenues did not exceed $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates did not exceed $700 million as of the prior June 30.
Financial Position
With funds available for a business combination initially in the amount of $193,000,000, after payment of the estimated expenses of this offering and $7,000,000 of deferred underwriting fees (or $221,950,000 after payment of the estimated expenses of this offering and $8,050,000 of deferred underwriting fees if the underwriter’s over- allotment option is exercised in full), we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of
its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third party financing and there can be no assurance it will be available to us.
Effecting Our Initial Business Combination
General
We are not presently engaged in, and we will not engage in, any operations for an indefinite period of time following this offering. We intend to effectuate our initial business combination using cash from the proceeds of this offering, the sale of the private placements units, our equity, debt or a combination of these as the consideration to be paid in our initial business combination. We may seek to complete our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If our initial business combination is paid for using equity or debt, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemptions of our Class A ordinary shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-business combination company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions with any business combination target. Additionally, we have not engaged or retained any agent or other representative to identify or locate any suitable acquisition candidate, to conduct any research or take any measures, directly or indirectly, to locate or contact a target business, other than our officers and directors.
Accordingly, there is no current basis for investors in this offering to evaluate the possible merits or risks of the target business with which we may ultimately complete our initial business combination. Although our management will assess the risks inherent in a particular target business with which we may combine, we cannot assure you that this assessment will result in our identifying all risks that a target business may encounter. Furthermore, some of those risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that those risks will adversely affect a target business.
We may need to obtain additional financing to complete our initial business combination, either because the transaction requires more cash than is available from the proceeds held in our trust account, or because we become obligated to redeem a significant number of our public shares upon completion of the business combination, in which case we may issue additional securities or incur debt in connection with such business combination. There are no prohibitions on our ability to issue securities or incur debt in connection with our initial business combination. We are not currently a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities, the incurrence of debt or otherwise.
Sources of Target Businesses
Our process of identifying acquisition targets will leverage Falcon Edge Capital, Apeiron and our management team’s unique industry experiences, proven deal sourcing capabilities and broad and deep network of relationships in numerous industries, including executives and management teams, private equity groups and other institutional investors, large business enterprises, lenders, investment bankers and other investment market participants, restructuring advisers, consultants, attorneys and accountants, which we believe should provide us with a number of business combination opportunities. We expect that the collective experience, capability and network of Falcon Edge Capital, Apeiron, our founders, directors and officers,
combined with their individual and collective reputations in the investment community, will help to create prospective business combination opportunities.
In addition, we anticipate that target business candidates may be brought to our attention from various unaffiliated sources, including investment bankers and private investment funds. Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us through calls or mailings. These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources will have read this prospectus and know what types of businesses we are targeting. Our officers and directors, as well as their affiliates, may also bring to our attention target business candidates of which they become aware through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions.
While we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. We will engage a finder only to the extent our management determines that the use of a finder may bring opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our best interest to pursue. Payment of a finder’s fee is customarily tied to completion of a transaction, in which case any such fee will be paid out of the funds held in the trust account. In no event, however, will our sponsor or any of our existing officers or directors, or any entity with which they are affiliated, be paid any finder’s fee, consulting fee or other compensation by the company prior to, or for any services they render in order to effectuate, the completion of our initial business combination (regardless of the type of transaction that it is). None of our sponsor, executive officers or directors, or any of their respective affiliates, will be allowed to receive any compensation, finder’s fees or consulting fees from a prospective business combination target in connection with a contemplated acquisition of such target by us. We have agreed to pay an affiliate of our sponsor a total of $10,000 per month for office space, secretarial and administrative support and to reimburse our sponsor for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination. Some of our officers and directors may enter into employment or consulting agreements with the post-business combination company following our initial business combination.
We are not prohibited from pursuing an initial business combination or subsequent transaction with a company that is affiliated with Falcon Edge Capital, Apeiron or our sponsor, founders, officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with Falcon Edge Capital or Apeiron, our sponsor or any of our founders, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent valuation or accounting firm that such initial business combination or transaction is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities, including any future special purpose acquisition companies we expect they may be involved in and entities that are affiliates of our sponsor, pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then- current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, subject to their fiduciary duties under Cayman Islands law. See “Management — Conflicts of Interest.”
Evaluation of a Target Business and Structuring of Our Initial Business Combination
In evaluating a prospective target business, we expect to conduct a thorough due diligence review which may encompass, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial,
operational, legal and other information which will be made available to us. If we determine to move forward with a particular target, we will proceed to structure and negotiate the terms of the business combination transaction.
The time required to identify and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of, and negotiation with, a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination. The company will not pay any consulting fees to members of our management team, or any of their respective affiliates, for services rendered to or in connection with our initial business combination. In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor.
Lack of Business Diversification
For an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. By completing our initial business combination with only a single entity, our lack of diversification may:
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subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination; and
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cause us to depend on the marketing and sale of a single product or limited number of products or services.
Limited Ability to Evaluate the Target’s Management Team
Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial business combination with that business, our assessment of the target business’s management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated with any certainty. The determination as to whether any of the members of our management team will remain with the combined company will be made at the time of our initial business combination. While it is possible that one or more of our directors will remain associated in some capacity with us following our initial business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial business combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations of the particular target business.
We cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination.
Following a business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Shareholders May Not Have the Ability to Approve Our Initial Business Combination
We may conduct redemptions without a shareholder vote pursuant to the tender offer rules of the SEC subject to the provisions of our amended and restated memorandum and articles of association. However, we will seek shareholder approval if it is required by applicable law or stock exchange rule, or we may decide to seek shareholder approval for business or other reasons.
Under Nasdaq’s listing rules, shareholder 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) ordinary shares that will either (a) be equal to or in excess of 20% of the number of ordinary shares then issued and outstanding (excluding the private placement shares underlying the private placement units) or (b) have voting power equal to or in excess of 20% of the voting power then issued and outstanding (excluding the private placement shares underlying the private placement units);
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any of our directors, officers or substantial shareholders (as defined by Nasdaq rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of ordinary shares could result in an increase in outstanding ordinary shares or voting power of 5% or more; or
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the issuance or potential issuance of ordinary shares will result in our undergoing a change of control.
The Companies Act and Cayman Islands law do not currently require, and we are not aware of any other applicable law that will require, shareholder approval of our initial business combination.
The decision as to whether we will seek shareholder approval of a proposed business combination in those instances in which shareholder approval is not required by law will be made by us, solely in our discretion, and will be based on business and legal reasons, which include a variety of factors, including, but not limited to:
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the timing of the transaction, including in the event we determine shareholder approval would require additional time and there is either not enough time to seek shareholder approval or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company;
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the expected cost of holding a shareholder vote;
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the risk that the shareholders would fail to approve the proposed business combination; other time and budget constraints of the company; and
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additional legal complexities of a proposed business combination that would be time-consuming and burdensome to present to shareholders.
Permitted Purchases and Other Transactions with Respect to Our Securities
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. Additionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), our sponsor, directors, executive officers, advisors or their affiliates may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase public shares or warrants in such transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act.
In the event that our sponsor, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights or submitted a proxy to vote against our initial business combination, such selling shareholders would be required to revoke their prior elections to redeem their shares and any proxy to vote against our initial business combination. We do not currently anticipate that such purchases, if any, would constitute a tender offer
subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will be required to comply with such rules.
The purpose of any such transactions could be to (i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination, (ii) to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met or (iii) reduce the number of public warrants outstanding or vote such warrants or any matter submitted to the warrant holders for approval in connection with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public “float” of our Class A ordinary shares or public warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Our sponsor, officers, directors and/or their affiliates anticipate that they may identify the shareholders with whom our sponsor, officers, directors or their affiliates may pursue privately negotiated transactions by either the shareholders contacting us directly or by our receipt of redemption requests submitted by shareholders (in the case of Class A ordinary shares) following our mailing of tender offer or proxy materials in connection with our initial business combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter into a private transaction, they would identify and contact only potential selling or redeeming shareholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against our initial business combination, whether or not such shareholder has already submitted a proxy with respect to our initial business combination but only if such shares have not already been voted at the general meeting related to our initial business combination. Our sponsor, executive officers, directors, advisors or their affiliates will select which shareholders to purchase shares from based on the negotiated price and number of shares and any other factors that they may deem relevant, and will be restricted from purchasing shares if such purchases do not comply with Regulation M under the Exchange Act and the other federal securities laws.
Our sponsor, officers, directors and/or their affiliates will be restricted from making purchases of shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. We expect any such purchases would be reported by such person pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.
Redemption Rights for Public Shareholders upon Completion of Our Initial Business Combination
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 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 underwriter. The redemption rights may include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Further, we will not proceed with redeeming our public shares, even if a public shareholder has properly elected to redeem its shares, if a business combination does not close. Our sponsor and our management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares, private placement shares and any public shares purchased during or after this offering in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance
or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares.
Limitations on Redemptions
Our amended and restated memorandum and articles of association provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules). However, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all Class A ordinary shares submitted for redemption will be returned to the holders thereof.
Manner of Conducting Redemptions
We will provide our public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination either (i) in connection with a general meeting called to approve the business combination or (ii) by means of a tender offer. The decision as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under applicable law or stock exchange listing requirement or whether we were deemed to be a foreign private issuer (which would require a tender offer rather than seeking shareholder approval under SEC rules). Asset acquisitions and share purchases would not typically require shareholder approval while direct mergers with our company and any transactions where we issue more than 20% of our issued and outstanding ordinary shares (excluding the private placement shares underlying the private placement units) or seek to amend our amended and restated memorandum and articles of association would typically require shareholder approval. We currently intend to conduct redemptions in connection with a shareholder vote unless shareholder approval is not required by applicable law or stock exchange rule or we choose to conduct redemptions pursuant to the tender offer rules of the SEC for business or other reasons.
If we held a shareholder vote to approve our initial business combination, we will, pursuant to our amended and restated memorandum and articles of association:
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conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and
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file proxy materials with the SEC.
In the event that we seek shareholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public shareholders with the redemption rights described above upon completion of the initial business combination.
If we seek shareholder approval, we will complete our initial business combination only if we receive an ordinary resolution being the affirmative vote of a simple majority of the shareholders, represented in person or by proxy and entitled to vote thereon, who attend and vote at a general meeting of the company. In such case, our sponsor and each member of our management team have agreed to vote their founder shares, private placement shares and public shares purchased during or after this offering in favor of our initial business combination. As a result, in addition to our initial shareholders’ founder shares and private placement shares, we would need 7,200,001, or 36%, of the 20,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all issued and outstanding shares are voted, the private placement shares to be issued to our
sponsor are voted in favor of the transaction and the over-allotment option is not exercised). Each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction or vote at all. In addition, our sponsor and our management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares, private placement shares and any public shares purchased during or after this offering in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares.
If we conduct redemptions pursuant to the tender offer rules of the SEC, we will, pursuant to our amended and restated memorandum and articles of association:
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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 or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase Class A ordinary shares 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 shareholders not tendering more than the number of public shares we are permitted to redeem. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination.
Limitation on Redemption upon Completion of Our Initial Business Combination If We Seek Shareholder Approval
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to Excess Shares, without our prior consent. We believe this restriction will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public shareholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights if such holder’s shares are not purchased by us, our sponsor or our management team at a premium to the then- current market price or on other undesirable terms. By limiting our shareholders’ ability to redeem no more than 15% of the shares sold in this offering without our prior consent, we believe we will limit the ability of a small group of shareholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash.
However, we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
Tendering Share Certificates in Connection with a Tender Offer or Redemption Rights
Public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” will be required to either tender their certificates (if any) to our transfer agent prior to the date set forth in the proxy solicitation or tender offer materials, as applicable, mailed to such holders, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/ Withdrawal At Custodian) System, at the holder’s option, in each case up to two business days prior to the initially scheduled vote to approve the business combination. The proxy solicitation or tender offer materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate the applicable delivery requirements, which may include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. Accordingly, a public shareholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two business days prior to the initially scheduled vote on the proposal to approve the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short period in which to exercise redemption rights, it is advisable for shareholders to use electronic delivery of their public shares.
There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker a fee of approximately $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.
In order to perfect redemption rights in connection with their business combinations, many blank check companies would distribute proxy materials for the shareholders’ vote on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his or her redemption rights. After the business combination was approved, the company would contact such shareholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the shareholder then had an “option window” after the completion of the business combination during which he or she could monitor the price of the company’s shares in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open market before actually delivering his or her shares to the company for cancellation. As a result, the redemption rights, to which shareholders were aware they needed to commit before the general meeting, would become “option” rights surviving past the completion of the business combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming shareholder’s election to redeem is irrevocable once the business combination is approved.
Any request to redeem such shares, once made, may be withdrawn at any time up to two business days prior to the initially scheduled vote on the proposal to approve the business combination, unless otherwise agreed to by us. Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly after the completion of our initial business combination.
If our initial business combination is not approved or completed for any reason, then our public shareholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.
If our initial proposed business combination is not completed, we may continue to try to complete a business combination with a different target until 24 months from the closing of this offering.
Redemption of Public Shares and Liquidation If No Initial Business Combination
Our amended and restated memorandum and articles of association will provide that we will have only 24 months from the closing of this offering to consummate an initial business combination. If we do not
consummate an initial business combination within 24 months from the closing of this offering, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to consummate an initial business combination within 24 months from the closing of this offering. Our amended and restated memorandum and articles of association will provide that, if we wind up for any other reason prior to the consummation of our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.
Our sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to any founder shares or private placement shares they hold if we fail to consummate an initial business combination within 24 months from the closing of this offering (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within 24 months from the closing of this offering).
Our sponsor, executive officers, directors and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, unless we provide our public shareholders with the opportunity to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of the then-outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules). If this optional redemption right is exercised with respect to an excessive number of public shares such that we cannot satisfy the net tangible asset requirement, we would not proceed with the amendment or the related redemption of our public shares at such time. This redemption right shall apply in the event of the approval of any such amendment, whether proposed by our sponsor, any executive officer, director or director nominee, or any other person.
We expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the $1,000,000 of proceeds held outside the trust account plus up to $100,000 of funds from the trust account available to us to pay dissolution expenses, although we cannot assure you that there will be sufficient funds for such purpose.
If we were to expend all of the net proceeds of this offering and the sale of the private placement units, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption amount received by shareholders upon our dissolution would be $10.00. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public shareholders. We cannot assure you that the actual per-share redemption amount received by shareholders will not be less than $10.00. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.
Although we will seek to have all vendors, service providers (excluding our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. The underwriter will not execute agreements with us waiving such claims to the monies held in the trust account. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. In order to protect the amounts held in the trust account, our sponsor has agreed that it will be liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims under our indemnity of the underwriter of this offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third party claims. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our sponsor’s only assets are securities of our company. Our sponsor may not be able to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less than $10.00 per public share.
We will seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (excluding our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable as to any claims under our indemnity of the underwriter of this offering against certain liabilities, including liabilities under the Securities Act. We will have access to up to $1,000,000 from the proceeds of this offering and the sale of the private placement units with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). In the event that we liquidate and it is
subsequently determined that the reserve for claims and liabilities is insufficient, shareholders who received funds from our trust account could be liable for claims made by creditors; however such liability will not be greater than the amount of funds from our trust account received by any such shareholder. In the event that our offering expenses exceed our estimate of $1,000,000, we may fund such excess with funds from the funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $1,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.
If we file a bankruptcy 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 shareholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return $10.00 per public share to our public shareholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by shareholders 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 shareholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our public shareholders will be entitled to receive funds from the trust account only (i) in the event of the redemption of our public shares if we do not consummate an initial business combination within 24 months from the closing of this offering, (ii) in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, and (iii) if they redeem their respective shares for cash upon the completion of the initial business combination. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the trust account upon the subsequent completion of an initial business combination or liquidation if we have not consummated an initial business combination within 24 months from the closing of this offering, with respect to such Class A ordinary shares so redeemed. In no other circumstances will a shareholder have any right or interest of any kind to or in the trust account. In the event we seek shareholder approval in connection with our initial business combination, a shareholder’s voting in connection with the business combination alone will not result in a shareholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such shareholder must have also exercised its redemption rights described above. These provisions of our amended and restated memorandum and articles of association, like all provisions of our amended and restated memorandum and articles of association, may be amended with a shareholder vote.
Comparison of Redemption or Purchase Prices in Connection with Our Initial Business Combination and If We Fail to Complete Our Initial Business Combination.
The following table compares the redemptions and other permitted purchases of public shares that may take place in connection with the completion of our initial business combination and if we do not consummate an initial business combination within 24 months from the closing of this offering.
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REDEMPTIONS IN
CONNECTION WITH OUR
INITIAL BUSINESS
COMBINATION
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OTHER PERMITTED
PURCHASES OF PUBLIC
SHARES BY OUR
AFFILIATES
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REDEMPTIONS IF WE
FAIL TO COMPLETE AN
INITIAL BUSINESS
COMBINATION
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Calculation of redemption price
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Redemptions at the time of our initial business combination may be made pursuant to a tender offer or in connection with a shareholder vote. The redemption price will be the same whether we conduct redemptions pursuant to a tender offer or in connection with a shareholder vote. In either case, our public shareholders may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination (which is initially anticipated to be $10.00 per share), including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of the then- outstanding public shares, subject to the limitation that no redemptions will take place if all of the redemptions would cause our net tangible assets to be less than $5,000,001 and any limitations (including but not limited to cash requirements) agreed to
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If we seek shareholder approval of our initial business combination, our sponsor, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following completion of our initial business combination. There is no limit to the prices that our sponsor, directors, officers, advisors or their affiliates may pay in these transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going- private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such
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If we do not consummate an initial business combination within 24 months from the closing of this offering, we will redeem all public shares at a per-share price, payable in cash, equal to the aggregate amount, then on deposit in the trust account (which is initially anticipated to be $10.00 per share), including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public shares.
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REDEMPTIONS IN
CONNECTION WITH OUR
INITIAL BUSINESS
COMBINATION
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OTHER PERMITTED
PURCHASES OF PUBLIC
SHARES BY OUR
AFFILIATES
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REDEMPTIONS IF WE
FAIL TO COMPLETE AN
INITIAL BUSINESS
COMBINATION
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in connection with the negotiation of terms of a proposed business combination.
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purchases that the purchases are subject to such rules, the purchasers will be required to comply with such rules.
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Impact to remaining shareholders
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The redemptions in connection with our initial business combination will reduce the book value per share for our remaining shareholders, who will bear the burden of the deferred underwriting commissions and taxes payable.
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If the permitted purchases described above are made, there would be no impact to our remaining shareholders because the purchase price would not be paid by us.
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The redemption of our public shares if we fail to complete our initial business combination will reduce the book value per share for the shares held by our sponsor, who will be our only remaining shareholder after such redemptions.
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Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419
The following table compares the terms of this offering to the terms of an offering by a blank check company subject to the provisions of Rule 419. This comparison assumes that the gross proceeds, underwriting commissions and underwriting expenses of our offering would be identical to those of an offering undertaken by a company subject to Rule 419, and that the underwriter will not exercise its 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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$200,000,000 of the net proceeds of this offering and the sale of the private placement units will be deposited into a trust account located in the United States with Continental Stock Transfer & Trust Company acting as trustee.
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Approximately $170,100,000 of the offering proceeds would be required to be deposited into either an escrow account with an insured depositary institution or in a separate bank account established by a broker-dealer in which the broker-dealer acts as trustee for persons having the beneficial interests in the account.
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Investment of net proceeds
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$200,000,000 of the net proceeds of this offering and the sale of the private placement units held in trust will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations.
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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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TERMS OF OUR OFFERING
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TERMS UNDER A RULE 419
OFFERING
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Receipt of interest on escrowed funds
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Interest income (if any) on proceeds from the trust account to be paid to shareholders is reduced by (i) any taxes paid or payable and (ii) in the event of our liquidation for failure to complete our initial business combination within the allotted time, up to $100,000 of net interest that may be released to us should we have no or insufficient working capital to fund the costs and expenses of our dissolution and liquidation.
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Interest income on funds in escrow account would be held for the sole benefit of investors, unless and only after the funds held in escrow were released to us in connection with our completion of a business combination.
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Limitation on fair value or net assets of target business
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Our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of our assets held in the trust account (excluding the amount of deferred underwriting discounts held in trust and taxes payable, if any, on the interest earned on the trust account) at the time of signing the agreement to enter into the initial business combination.
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The fair value or net assets of a target business must represent at least 80% of the maximum offering proceeds.
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Trading of securities issued
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The units are expected to begin trading on or promptly after the date of this prospectus. The Class A ordinary shares and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus unless Credit Suisse informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. We will file the Current Report on Form 8-K promptly after the closing of this offering. If the over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8- K will be filed to provide updated financial information to reflect the exercise of the over-allotment option.
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No trading of the units or the underlying Class A ordinary shares and warrants would be permitted until the completion of a business combination. During this period, the securities would be held in the escrow or trust account.
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TERMS OF OUR OFFERING
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TERMS UNDER A RULE 419
OFFERING
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The units will automatically separate into their component parts and will not be traded after completion of our initial business combination.
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Exercise of the warrants
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The warrants cannot be exercised until the later of 30 days after the completion of our initial business combination and 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 shareholders with the opportunity to redeem their public shares for cash at a per share price equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of the then-outstanding public shares, upon the completion of our initial business combination, subject to the limitations described herein. We may not be required by applicable law or stock exchange rule to hold a shareholder vote. If we are not required by applicable law or stock exchange rule and do not otherwise decide to hold a shareholder vote, we will, pursuant to our amended and restated memorandum and articles of association, conduct the redemptions pursuant to the tender offer rules of the SEC and file tender offer documents with the SEC which will contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, we hold a shareholder vote, we will, like many blank check companies,
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A prospectus containing information pertaining to the business combination required by the SEC would be sent to each investor. Each investor would be given the opportunity to notify the company in writing, within a period of no less than 20 business days and no more than 45 business days from the effective date of a post-effective amendment to the company’s registration statement, to decide if he, she or it elects to remain a shareholder of the company or require the return of his, her or its investment. If the company has not received the notification by the end of the 45th business day, funds and interest or dividends, if any, held in the trust or escrow account are automatically returned to the shareholder. Unless a sufficient number of investors elect to remain investors, all funds on deposit in the escrow account must be returned to all of the investors and none of the securities are issued.
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TERMS OF OUR OFFERING
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TERMS UNDER A RULE 419
OFFERING
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offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If we seek shareholder approval, we will complete our initial business combination only if we receive an ordinary resolution being the affirmative vote of a simple majority of the shareholders, represented in person or by proxy and entitled to vote thereon, who attend and vote at a general meeting of the company. Additionally, each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction or vote at all. Our amended and restated memorandum and articles of association will require that at least five days’ notice will be given of any such general meeting.
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Business combination deadline
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If we do not consummate an initial business combination within 24 months from the closing of this offering, we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably
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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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TERMS OF OUR OFFERING
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TERMS UNDER A RULE 419
OFFERING
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possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
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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, until the earliest of (i) the completion of our initial business combination, (ii) the redemption of our public shares if we have not consummated an initial business combination within 24 months from the closing of this offering, subject to applicable law and (iii) the redemption of our public shares properly submitted in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares. Based on current interest rates, we expect that interest income earned on the trust account will be sufficient to pay our taxes (if any).
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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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Competition
In identifying, evaluating and selecting a target business for our initial business combination, we may encounter intense competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, public companies, operating
businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than us. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay cash in connection with our public shareholders 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 certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business combination.
Facilities
We currently maintain our executive offices at 660 Madison Avenue, 19th Floor, New York, NY 10065. The cost for our use of this space is included in the $10,000 per month fee we will pay to an affiliate of our sponsor for office space, administrative and support services. We consider our current office space adequate for our current operations.
Employees
We currently have four executive officers. These individuals are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time they will devote in any time period will vary based on whether a target business has been selected for our initial business combination and the stage of the business combination process we are in. We do not intend to have any full time employees prior to the completion of our initial business combination.
Periodic Reporting and Financial Information
We will register our units, Class A ordinary shares and warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports will contain financial statements audited and reported on by our independent registered public accountants.
We will provide shareholders with audited financial statements of the prospective target business as part of the proxy solicitation or tender offer materials, as applicable, sent to shareholders. These financial statements may be required to be prepared in accordance with, or reconciled to, GAAP, or IFRS, depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within 24 months from the closing of this offering. We cannot assure you that any particular target business identified by us as a potential acquisition candidate will have financial statements prepared in accordance with the requirements outlined above, or that the potential target business will be able to prepare its financial statements in accordance with the requirements outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential acquisition candidates, we do not believe that this limitation will be material.
We will be required to evaluate our internal control procedures for the fiscal year ending December 31, 2021 as required by the Sarbanes-Oxley Act. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer and no longer qualify as an emerging growth company would we be required to comply with the independent registered public accounting firm attestation requirement on internal control over financial reporting. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
Prior to the date of this prospectus, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
We are a Cayman Islands exempted company. Exempted companies are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Act. As an exempted company, we applied for and received a tax exemption undertaking from the Cayman Islands government that, in accordance with Section 6 of the Tax Concessions Act (As Revised) of the Cayman Islands, for a period of 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations will apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i) on or in respect of our shares, debentures or other obligations or (ii) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us.
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that are held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates exceeds $250 million as of the prior June 30, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30.
Legal Proceedings
There is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such.
MANAGEMENT
Officers and Directors
Our officers and directors are as follows:
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Name
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Age
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Position
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Rick Gerson
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45
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Director and Co-President
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Christian Angermayer
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42
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Chief Executive Officer
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Ryan Khoury
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37
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Co-President
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Matthew Corey
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36
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Chief Financial Officer
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Scott Carpenter
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49
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Chief Operating Officer
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David A. Sinclair
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51
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Director Nominee
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Peter Attia
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47
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Director Nominee
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Jonathan Christodoro
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44
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Director Nominee
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Rick Gerson, 45, serves as a director and Co-President. Mr. Gerson is the Founder, Chairman and Chief Investment Officer of Falcon Edge Capital. Prior to founding Falcon Edge Capital, Mr. Gerson was a Founding Member and Managing Director of Blue Ridge Capital, a New York-based investment firm. Mr. Gerson is a member of the Cleveland Clinic International Leadership Board, a founding member of the Board of Trustees of PAVE (a charter school in Brooklyn), and is a member of the board of 92nd Street Y (a cultural and community center in New York). Mr. Gerson is also a member of the Belfer Center’s International Council at the John F. Kennedy School of Government at Harvard University. Mr. Gerson graduated from the University of Virginia, McIntire School of Commerce with a BS in Commerce with a concentration in Finance.
Christian Angermayer, 42, serves as our Chief Executive Officer and has agreed to join our board of directors. Mr. Angermayer is the founder of Apeiron and a serial entrepreneur and investor. In 2000, Mr. Angermayer co-founded Ribopharma which merged with U.S. peer Alnylam in 2003 and subsequently went public and became the first commercial RNAi technology company. Since then, Mr. Angermayer has created, co-founded and invested in numerous successful companies, has raised approximately $2 billion for his portfolio companies and has been involved in more than 40 successful IPO and M&A transactions either as an entrepreneur, investor or advisor. Through his experience as an investor and entrepreneur Mr. Angermayer has also developed a network of deep relationships with leading investors and thought leaders globally. Mr. Angermayer is a Young Global Leader of the World Economic Forum, a partner of the Munich Security Conference, a member of the Milken Institute Young Leaders Circle, a member of The Court of the London School of Hygiene and Tropical Medicine and a member of the Global Advisory Council of the Wilson Center, one of the leading institutions for in-depth research and dialogue to inform actionable ideas on global issues.
Ryan Khoury, 37, serves as our Co-President. Mr. Khoury is a co-Founder and Partner of Falcon Edge Capital. Prior to joining Falcon Edge Capital, Mr. Khoury worked at Eton Park in London, where he focused on special situations and distressed credit investments in Europe, Middle East and Africa. Before Eton Park, Mr. Khoury worked with Goldman Sach’s Financial Institutions Group where he worked on transactions including: ABN Amro’s sale and breakup to RBS, Santander and Fortis, Allianz offer for AGF and the Bank of Ireland’s sale of Davy. Prior to that he worked at JP Morgan in their Financial Institutions Group. Mr. Khoury graduated from the London School of Economics with First Class Honors in Economics and completed his MSc. in financial mathematics at Stanford University.
Scott Carpenter, 49, serves as our Chief Operating Officer. Mr. Carpenter is the Chief Operating Officer of Falcon Edge Capital. He is responsible for the non-investment side of the business. He was a founding member of the firm when he joined at the beginning of 2012. Prior to joining Falcon Edge, Scott was the Global Head of Operations at CQS in London for eight years where he held a variety of responsibilities including Company Secretary for the CQS Management entities. Prior to joining CQS in 2004, Scott worked for Credit Suisse for ten years in a variety of operational management roles in London, New York, Brisbane, Sydney, Wellington and Singapore.
Matthew Corey, 36, serves as our Chief Financial Officer. Mr. Corey is the Chief Financial Officer of Falcon Edge Capital, Prior to joining Falcon Edge, Matthew worked for Gruss Capital Management for ten years in a variety of roles including Chief Financial Officer, Controller and Senior Accountant. Matthew worked on all aspects of fund accounting, management accounting, tax, operations, treasury and investor reporting at Gruss Capital Management. Matthew started his career as an auditor with Rothstein Kass from 2006 to 2009 where he conducted a variety of private company audits and prepared private company tax returns. Matthew graduated from Lehigh University with a Bachelor of Science in Accounting and completed a Master of Science in Jurisprudence from the Seton Hall School of Law. Matthew is a Certified Public Accountant licensed in New York.
David A. Sinclair, Ph.D, A.O., 51, has agreed to serve on our board of directors and will be our Co-Chairman. Dr. Sinclair is a Professor in the Department of Genetics, co-Director of the Paul F. Glenn Center for Biology of Aging Research at Harvard Medical School, and a NY Times bestselling author. He is renowned for his work on understanding why we age and how to slow and reverse its effects. Dr. Sinclair is co-founder of several biotechnology companies, including Sirtris Pharma (acquired by GSK), Genocea, Cohbar, Life Biosciences, MetroBiotech, ArcBio, and Liberty Biosecurity, and serves on the boards of several others. He has received over 25 awards and honors including The Merck Prize, The ASBMB Medal, The Genzyme Award, TIME100’s “most influential people in the world”, and TIME’s “Top 50 in healthcare.” He is an inventor on approximately 50 patents and co-author more than 200 scientific papers. Dr. Sinclair obtained his Ph.D. in Molecular Genetics from the University of New South Wales, Sydney and worked as a postdoctoral researcher at the Massachusetts Institute of Technology before being hired as an Assistant Professor at Harvard Medical School. In 2018, he became an Officer of the Order of Australia (AO).
Peter Attia, 47, has agreed to serve on our board of directors and will be our Co-Chairman. Dr. Attia is a physician focusing on the applied science of longevity. His practice deals extensively with nutritional interventions, exercise physiology, sleep physiology, emotional and mental health, and pharmacology to increase lifespan (how long you live), while simultaneously improving healthspan (the quality of your life). Dr. Attia is the co-founder and Chief Medical Officer of the fasting app Zero. Dr. Attia co-founded and served as the first President of Nutrition Science Initiative in 2012. He is an advisor to, and/ or investor in, the companies Virta Health, Hu Kitchen, Oura Health Oy, Magic Spoon Cereal, Inevitable Ventures, Salutoceuticals, Dexcom, Kia Hawaii, and Supercast. Dr. Attia earned his M.D. from Stanford University and holds a B.Sc. in mechanical engineering and applied mathematics. Dr. Attia trained for five years at the Johns Hopkins Hospital in general surgery, where he was the recipient of several awards, including resident of the year. He spent two years at NIH as a surgical oncology fellow at the National Cancer Institute where his research focused on immune-based therapies for melanoma.
Jonathan Christodoro, 44, has agreed to serve on our board of directors. Mr. Christodoro has served as the Chief Investment Officer and President at Patriot Global Management, LP since 2018. Prior to that, Mr. Christodoro previously served as a Managing Director of Icahn Capital LP, the entity through which Carl Icahn manages investment funds. Prior to joining Icahn Capital, Mr. Christodoro served in various investment and research roles. Mr. Christodoro began his career as an investment banking analyst at Morgan Stanley, where he focused on merger and acquisition transactions across a variety of industries. Mr. Christodoro currently serves as a director on the board of PayPal, Xerox and SandRidge Energy and Pioneer Merger Corp. He was previously a board member of eBay, Lyft, Hologic, Herbalife, Talisman Energy, Enzon Pharmaceuticals, American Railcar Industries and Cheniere Energy. Mr. Christodoro received an M.P.H. from the Harvard T.H. Chan School of Public Health, an M.B.A. from the University of Pennsylvania's Wharton School of Business with Distinction, and a B.S. in Applied Economics and Management Magna Cum Laude with Honors Distinction in Research from Cornell University. He also served in the United States Marine Corps.
Number and Terms of Office of Officers and Directors
Our board of directors is divided into three classes, with only one class of directors being elected in each year, and with each class (except for those directors appointed prior to our first annual meeting of shareholders) serving a three-year term. The term of office of the first class of directors, consisting of Rick Gerson, will expire at our first annual meeting of shareholders. The term of office of the second class of directors, consisting of Christian Angermayer and Jonathan Christodoro, will expire at our second annual
meeting of shareholders. The term of office of the third class of directors, consisting of Peter Attia and David A. Sinclair, will expire at our third annual meeting of shareholders.
Prior to the completion of an initial business combination, any vacancy on the board of directors may be filled by a nominee chosen by holders of a majority of our founder shares. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason.
Pursuant to an agreement to be entered into on or prior to the closing of this offering, our sponsor, upon and following consummation of an initial business combination, will be entitled to nominate three individuals for appointment to our board of directors, as long as the sponsor holds any securities covered by the registration and shareholder rights agreement.
Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our amended and restated memorandum and articles of association as it deems appropriate. Our amended and restated memorandum and articles of association will provide that our officers may consist of one or more chairman of the board, chief executive officer, chief financial officer, chief business officer, president, vice presidents, secretary, treasurer and such other offices as may be determined by the board of directors.
Director Independence
Nasdaq listing standards require that a majority of our board of directors be independent. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship with the company which in the opinion of the company’s board of directors, could interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Upon the effectiveness of the registration statement of which this prospectus forms a part, we expect to have “independent directors” as defined in Nasdaq’s listing standards and applicable SEC rules. Our board of directors has determined that Jonathan Christodoro, Peter Attia and David A. Sinclair are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. Our independent directors will have regularly scheduled meetings at which only independent directors are present.
Executive Officer and Director Compensation
None of our executive officers or directors have received any cash compensation for services rendered to us. Commencing on the date that our securities are first listed on the Nasdaq through the earlier of consummation of our initial business combination and our liquidation, we will reimburse an affiliate of our sponsor for office space, secretarial and administrative services provided to us in the amount of $10,000 per month. In addition, our sponsor, executive officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, executive officers or directors, or our or their affiliates. Any such payments prior to an initial business combination will be made using funds held outside the trust account. Other than quarterly audit committee review of such reimbursements, we do not expect to have any additional controls in place governing our reimbursement payments to our directors and executive officers for their out-of-pocket expenses incurred in connection with our activities on our behalf in connection with identifying and consummating an initial business combination. Other than these payments and reimbursements, no compensation of any kind, including finder’s and consulting fees, will be paid by the company to our sponsor, executive officers and directors, or any of their respective affiliates, prior to completion of our initial business combination.
After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting or management fees from the combined company. All of these fees will be fully disclosed to shareholders, to the extent then known, in the proxy solicitation materials or tender offer materials furnished to our shareholders in connection with a proposed business combination. We have not established any limit on the amount of such fees that may be paid by the combined company
to our directors or members of management. It is unlikely the amount of such compensation will be known at the time of the proposed business combination, because the directors of the post-combination business will be responsible for determining executive officer and director compensation. Any compensation to be paid to our executive officers will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our board of directors.
We do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation of our initial business combination, although it is possible that some or all of our executive officers and directors may negotiate employment or consulting arrangements to remain with us after our initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions with us may influence our management’s motivation in identifying or selecting a target business but we do not believe that the ability of our management to remain with us after the consummation of our initial business combination will be a determining factor in our decision to proceed with any potential business combination. We are not party to any agreements with our executive officers and directors that provide for benefits upon termination of employment.
Committees of the Board of Directors
Upon the effectiveness of the registration statement of which this prospectus forms a part, our board of directors will have three standing committees: an audit committee, a nominating committee and a compensation committee. Subject to phase-in rules and a limited exception, the rules of 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. Each committee will operate under a charter that has been approved by our board and will have the composition and responsibilities described below. The charter of each committee will be available on our website.
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. Jonathan Christodoro, Peter Attia and David A. Sinclair will serve as members of our audit committee. Our board of directors has determined that each of Jonathan Christodoro, Peter Attia and David A. Sinclair are independent. Jonathan Christodoro will serve as the Chairman of the audit committee. Each member of the audit committee meets the financial literacy requirements of Nasdaq and our board of directors has determined that qualifies as an “audit committee financial expert” as defined in applicable SEC rules and has accounting or related financial management expertise.
The audit committee is responsible for:
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meeting with our independent registered public accounting firm regarding, among other issues, audits, and adequacy of our accounting and control systems;
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monitoring the independence of the independent registered public accounting firm;
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verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law;
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inquiring and discussing with management our compliance with applicable laws and regulations;
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pre-approving all audit services and permitted non-audit services to be performed by our independent registered public accounting firm, including the fees and terms of the services to be performed;
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appointing or replacing the independent registered public accounting firm;
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determining the compensation and oversight of the work of the independent registered public accounting firm (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work;
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establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies;
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monitoring compliance on a quarterly basis with the terms of this offering and, if any noncompliance is identified, immediately taking all action necessary to rectify such noncompliance or otherwise causing compliance with the terms of this offering; and
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reviewing and approving all payments made to our existing shareholders, executive officers or directors and their respective affiliates. Any payments made to members of our audit committee will be reviewed and approved by our board of directors, with the interested director or directors abstaining from such review and approval.
Nominating Committee
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish a nominating committee of our board of directors. The members of our nominating committee will be Peter Attia and David A. Sinclair, and David A. Sinclair will serve as chairman of the nominating committee. Our board of directors has determined that each of David A. Sinclair and Peter Attia are independent.
The nominating committee is responsible for overseeing the selection of persons to be nominated to serve on our board of directors. The nominating committee considers persons identified by its members, management, shareholders, investment bankers and others.
Guidelines for Selecting Director Nominees
The guidelines for selecting nominees, which will be specified in a charter to be adopted by us, generally provide that persons to be nominated:
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should have demonstrated notable or significant achievements in business, education or public service;
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should possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and
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should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the shareholders.
The nominating committee will consider a number of qualifications relating to management and leadership experience, background and integrity and professionalism in evaluating a person’s candidacy for membership on the board of directors. The nominating committee may require certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members. The nominating committee does not distinguish among nominees recommended by shareholders and other persons.
Compensation Committee
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish a compensation committee of our board of directors. The members of our compensation committee will be Peter Attia and David A. Sinclair, and Peter Attia will serve as chairman of the compensation committee.
Our board of directors has determined that each of David A. Sinclair and Peter Attia are independent. We will adopt a compensation committee charter, which will detail the principal functions of the compensation committee, including:
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reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s, President’s, Chief Financial Officer’s and Chief Operating Officer’s, evaluating our Chief Executive Officer’s, President’s, Chief Financial Officer’s and Chief Operating Officer’s
performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer’s, President, Chief Financial Officer and Chief Operating Officer based on such evaluation;
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reviewing and approving the compensation of all of our other Section 16 executive officers;
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reviewing our executive compensation policies and plans;
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implementing and administering our incentive compensation equity-based remuneration plans;
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assisting management in complying with our proxy statement and annual report disclosure requirements;
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approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees;
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producing a report on executive compensation to be included in our annual proxy statement; and
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reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
The charter will also provide that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.
Compensation Committee Interlocks and Insider Participation
None of our executive officers currently serves, and in the past year has not served, as a member of the compensation committee of any entity that has one or more executive officers serving on our board of directors.
Code of Ethics
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will have adopted a Code of Ethics applicable to our directors, officers and employees. A copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.
Conflicts of Interest
Under Cayman Islands law, directors and officers owe the following fiduciary duties:
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duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole;
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duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose;
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directors should not improperly fetter the exercise of future discretion;
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duty to exercise powers fairly as between different sections of shareholders;
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duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests; and
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duty to exercise independent judgment.
In addition to the above, directors also owe a duty of care which is not fiduciary in nature. This duty has been defined as a requirement to act as a reasonably diligent person having both the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and the general knowledge skill and experience of that director.
As set out above, directors have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of their position. However, in some instances what would otherwise be a breach of this duty can be forgiven and/or authorized in advance by the shareholders provided that there is full disclosure by the directors. This can be done by way of permission granted in the amended and restated memorandum and articles of association or alternatively by shareholder approval at general meetings.
Certain of our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations to other entities, including entities that are affiliates of our sponsor, pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. In particular, affiliates of our sponsor currently sponsor a blank check company, Pioneer Merger Corp., of which Mr. Gerson is the Co-President, Mr. Khoury is the Chief Executive Officer, Mr. Carpenter is the Chief Operating Officer, and Mr. Corey is the Chief Financial Officer. Pioneer Merger Corp. may seek to complete a business combination in any industry or location. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, subject to their fiduciary duties under Cayman Islands law. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination.
Below is a table summarizing the entities to which our executive officers and directors currently have fiduciary duties, contractual obligations or other material management relationships:
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INDIVIDUAL
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ENTITY
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ENTITY’S BUSINESS
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AFFILIATION
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Rick Gerson
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Falcon Edge Capital
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Investment
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Chairman and Chief Investment Officer
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Pioneer Merger Corp.
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Special Purpose Acquisition Company
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Co-President
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Christian Angermayer
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Film House Germany AG
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Movie Production
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Supervisory Board Chairman
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Apeiron SICAV Ltd.
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Investment
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Director
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Apeiron Feeder SICAV plc.
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Investment
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Director
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Rejuveron Life Sciences AG
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Pharmaceutical
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Non-executive Board Member
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Cambrian Biopharma Inc.
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Pharmaceutical
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Non-executive Board Member
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Ryan Khoury
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Falcon Edge Capital
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Investment
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Partner
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Pioneer Merger Corp.
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Special Purpose Acquisition Company
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Chief Executive Officer
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Scott Carpenter
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Falcon Edge Capital
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Investment
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Chief Operating Officer
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Pioneer Merger Corp.
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Special Purpose Acquisition Company
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Chief Operating Officer
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Matthew Corey
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Falcon Edge Capital
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Investment
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Chief Financial Officer
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Pioneer Merger Corp.
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Special Purpose Acquisition Company
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Chief Financial Officer
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David A. Sinclair
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Life Biosciences
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Biotechnology
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Director
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Iduna Therapeutics
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Biotechnology
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Director
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DaVinci Logic
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Investment
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Director
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Alterity Therapeutics
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Pharmaceutical
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Director
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EdenRoc Sciences, LLC
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Biotechnology
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Director
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Immetas Therapeutics
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Biotechnology
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Director
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Galilei Biosciences
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Biotechnology
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Director
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INDIVIDUAL
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ENTITY
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ENTITY’S BUSINESS
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AFFILIATION
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Peter Attia
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Zero
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Health, Wellness and Fitness
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Chief Medical Officer
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Jonathan Christodoro
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Patriot Global Management, L.P.
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Investment
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President and Chief Investment Officer
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PayPal
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Technology
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Director
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Xerox
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Technology
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Director
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SandRidge Energy
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Oil and Gas
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Director
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Pioneer Merger Corp.
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Special Purpose Acquisition Company
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Director
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Potential investors should also be aware of the following other potential conflicts of interest:
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Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our executive officers is engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs.
•
Our sponsor subscribed for founder shares prior to the date of this prospectus and will purchase private placement units in a transaction that will close simultaneously with the closing of this offering. Our sponsor and our management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares, private placement shares and any public shares purchased during or after this offering in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares. Additionally, our sponsor has agreed to waive its rights to liquidating distributions from the trust account with respect to its founder shares if we fail to complete our initial business combination within the required time period. If we do not complete our initial business combination within the required time period, the private placement units and the underlying securities will expire worthless. Except as described herein, our sponsor and our management team have agreed not to transfer, assign or sell any of their founder shares until the earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Warrants — Public Shareholders’ Warrants — Anti-dilution Adjustments”) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property. With certain limited exceptions, the private placement units, the private placement shares, the private placement warrants and the Class A ordinary shares underlying such warrants, will not be transferable until 30 days following the completion of our initial business combination. Because each of our executive officers and director nominees will own ordinary shares or warrants directly or indirectly, they may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination.
•
Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.
We are not prohibited from pursuing an initial business combination or subsequent transaction with a company that is affiliated with our sponsor, founders, officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor or any of our founders, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent valuation or accounting firm that such initial business combination or transaction is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context. Furthermore, in no event will our sponsor or any of our existing officers or directors, or any of their respective affiliates, be paid by us any finder’s fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the completion of our initial business combination. Further, commencing on the date our securities are first listed on the Nasdaq, we will also reimburse an affiliate of our our sponsor for office space, secretarial and administrative services provided to us in the amount of $10,000 per month.
We cannot assure you that any of the above mentioned conflicts will be resolved in our favor.
If we seek shareholder approval, we will complete our initial business combination only if we receive an ordinary resolution, being the affirmative vote of a simple majority of the shareholders, represented in person or by proxy and entitled to vote thereon, who attend and vote at a general meeting of the company. In such case, our sponsor and each member of our management team have agreed to vote their founder shares, private placement shares and public shares purchased during or after this offering in favor of our initial business combination.
Limitation on Liability and Indemnification of Officers and Directors
Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against willful default, willful neglect, civil fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association will provide for indemnification of our officers and directors to the maximum extent permitted by law, including for any liability incurred in their capacities as such, except through their own actual fraud, willful default or willful neglect. We will enter into agreements with our directors and officers to provide contractual indemnification in addition to the indemnification provided for in our amended and restated memorandum and articles of association. We expect to purchase a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.
Our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account, and have agreed to waive any right, title, interest or claim of any kind they may have in the future as a result of, or arising out of, any services provided to us and will not seek recourse against the trust account for any reason whatsoever (except to the extent they are entitled to funds from the trust account due to their ownership of public shares). Accordingly, any indemnification provided will only be able to be satisfied by us if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination.
Our indemnification obligations may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
We believe that these provisions, the insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.
PRINCIPAL SHAREHOLDERS
The following table sets forth information regarding the beneficial ownership of our ordinary shares as of the date of this prospectus, and as adjusted to reflect the sale of our Class A ordinary shares included in the units offered by this prospectus, and assuming no purchase of units in this offering, by:
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each person known by us to be the beneficial owner of more than 5% of our issued and outstanding ordinary shares;
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each of our executive officers and directors; and
•
all our executive officers and directors as a group.
Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all of our ordinary shares beneficially owned by them. The following table does not reflect record or beneficial ownership of the private placement warrants as these warrants are not exercisable within 60 days of the date of this prospectus.
On January 21, 2021, we issued to our sponsor 5,750,000 founder shares (of which, 750,000 are subject to forfeiture if the underwriter does not exercise its over-allotment option ) in exchange for a capital contribution of $25,000, or approximately $0.004 per share. On February 16, 2021, our Sponsor transferred 40,000 founder shares to each of Peter Attia, David A. Sinclair and Jonathan Christodoro, our independent director nominees. In addition, our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 600,000 private placement units for a purchase price of $10.00 per unit in a private placement that will occur simultaneously with the closing of this offering (assuming the underwriter does not exercise its over-allotment option ). Prior to the initial investment in the company of $25,000 by the sponsor, the company had no assets, tangible or intangible. The per share price of the founder shares was determined by dividing the amount contributed to the company by the number of founder shares issued. The number of shares beneficially owned and post-offering percentages in the following table assume that the underwriter does not exercise its over-allotment option and that there are 25,600,000 ordinary shares, consisting of (i) 20,000,000 Class A ordinary shares, (ii) 5,000,000 Class B ordinary shares, and (iii) 600,000 Class A ordinary shares underlying the private placement units, issued and outstanding after this offering.
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NAME AND ADDRESS OF BENEFICIAL OWNER(1)
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NUMBER OF
SHARES
BENEFICIALLY
OWNED(2)
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APPROXIMATE
PERCENTAGE OF
OUTSTANDING
ORDINARY
SHARES
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BEFORE
OFFERING
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AFTER
OFFERING
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Frontier Acquisition Sponsor LLC (our sponsor)
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5,630,000(3)(4)
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97.9%
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19.1%(4)
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Rick Gerson
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5,630,000(3)(4)
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97.9%
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19.1%(4)
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Jonathan Christodoro
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40,000(5)
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*
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*
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Peter Attia
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40,000(5)
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*
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*
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David A. Sinclair
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40,000(5)
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*
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*
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All officers, directors and director nominees as a group (eight individuals)
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5,750,000
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100.0%
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21.9%
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*
Less than one percent.
(1)
Unless otherwise noted, the business address of each of the following entities or individuals is 660 Madison Avenue, 19th Floor, New York, NY 10065.
(2)
Interests shown consist solely of founder shares, classified as Class B ordinary shares. The Class B ordinary shares will automatically convert into Class A ordinary shares following the consummation of our initial business combination as described in the section entitled “Description of Securities.”
(3)
The shares reported above are held in the name of our sponsor. Our Sponsor is controlled by Rick Gerson .
(4)
Includes 600,000 Class A ordinary shares underlying the private placement units.
(5)
Does not include any shares indirectly owned by this individual as a result of any ownership interest in our sponsor.
Immediately after this offering, our initial shareholders will beneficially own approximately 20% of the then issued and outstanding ordinary shares (excluding the private placement shares underlying the private placement units and assuming they do not purchase any units in this offering) and will have the right to elect all of our directors prior to the completion of our initial business combination. If we increase or decrease the size of this offering, we will effect a share capitalization or a share surrender or other appropriate mechanism, as applicable, with respect to our Class B ordinary shares immediately prior to the consummation of the offering in such amount as to maintain the ownership of our initial shareholders (and their permitted transferees, if any) at 20% of the issued and outstanding ordinary shares (excluding the private placement shares underlying the private placement units) upon the consummation of this offering. Holders of our public shares will not have the right to elect any directors to our board of directors prior to the completion of our initial business combination. Because of this ownership block, our initial shareholders may be able to effectively influence the outcome of all other matters requiring approval by our shareholders, including amendments to our amended and restated memorandum and articles of association and approval of significant corporate transactions including our initial business combination.
Our sponsor and our management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares, private placement shares and any public shares purchased during or after this offering in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares. Further, our sponsor and each member of our management team have agreed to vote their founder shares, private placement shares and public shares purchased during or after this offering in favor of our initial business combination.
Our sponsor is deemed to be our “promoter” as such term is defined under the federal securities laws.
Transfers of Founder Shares and Private Placement Units
The founder shares, private placement units, private placement shares, private placement warrants and any Class A ordinary shares issued upon conversion or exercise thereof are each subject to transfer restrictions pursuant to lock-up provisions in the agreement entered into by our sponsor and management team. Our sponsor and our management team have agreed not to transfer, assign or sell (i) any of their founder shares until the earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Warrants — Public Shareholders’ Warrants — Anti-dilution Adjustments”) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property, and (ii) any of their private placement units, private placement shares, private placement warrants and Class A ordinary shares issued upon conversion or exercise thereof until 30 days after the completion of our initial business combination. The foregoing restrictions are not applicable to transfers (a) to our officers or directors, any affiliates or family members of any of our officers or directors, any members or partners of our sponsor or their affiliates, any affiliates of our sponsor, or any employees of such affiliates; (b) in the case of an individual, by gift to a member of one of the individual’s immediate family or to a trust, the beneficiary of which is a member of the individual’s immediate family, an affiliate of such person or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with the consummation of a business combination at prices no greater than the price at which the founder shares, private placement warrants or Class A ordinary shares, as applicable, were originally purchased; (f) by virtue of our sponsor’s organizational documents upon liquidation or dissolution of our sponsor; (g) to the Company for no value for cancellation in connection with the consummation of our initial business combination; (h) in the event of our liquidation prior to the
completion of our initial business combination; or (i) in the event of our completion of a liquidation, merger, share exchange or other similar transaction which results in all of our public shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property subsequent to our completion of our initial business combination; provided, however, that in the case of clauses (a) through (f) these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions and the other restrictions contained in the letter agreement.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
On January 21, 2021, we issued 5,750,000 founder shares to our sponsor in exchange for a capital contribution of $25,000, or approximately $0.004 per share. Such shares will be subject to forfeiture in the event the underwriter’s over-allotment option is not exercised. The number of founder shares issued was determined based on the expectation that such founder shares would represent 20% of the issued and outstanding shares (excluding the private placement shares underlying the private placement units) upon completion of this offering. On February 16, 2021, our Sponsor transferred 40,000 founder shares to each of Peter Attia, David A. Sinclair and Jonathan Christodoro, our independent director nominees. If we increase or decrease the size of this offering, we will effect a share capitalization or a share surrender or other appropriate mechanism, as applicable, with respect to our Class B ordinary shares immediately prior to the consummation of the offering in such amount as to maintain the ownership of our initial shareholders (and their permitted transferees, if any) at 20% of the issued and outstanding ordinary shares (excluding the private placement shares underlying the private placement units) upon the consummation of this offering. Up to 750,000 founder shares held by our sponsor are subject to forfeiture by our sponsor depending on the extent to which the underwriter’s over-allotment option is exercised. The founder shares (including the Class A ordinary shares issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder.
Our sponsor has committed, pursuant to a written agreement, to purchase 600,000 private placement units (or 660,000 private placement units if the over-allotment option is exercised in full) for a purchase price of $10.00 per unit in a private placement that will occur simultaneously with the closing of this offering. As such, our sponsor’s interest in this transaction is valued at between $6,000,000 and $6,600,000, depending on the number of private placement units purchased. The private placement units (including the private placement shares, private placement warrants and Class A ordinary shares issued upon the exercise or conversion thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder.
As more fully discussed in the section of this prospectus entitled “Management — Conflicts of Interest,” if any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity. Our officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.
We currently maintain our executive offices at 660 Madison Avenue, 19th Floor, New York, NY 10065. The cost for our use of this space is included in the $10,000 per month fee we will pay to an affiliate of our sponsor for office space, administrative and support services, commencing on the date that our securities are first listed on the Nasdaq. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.
No compensation of any kind, including finder’s and consulting fees, will be paid to our sponsor, officers and directors, or any of their respective affiliates, for services rendered prior to or in connection with the completion of an initial business combination. However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers, directors or our or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
Our sponsor may loan us funds to be used for a portion of the expenses of this offering. These loans would be non-interest bearing, unsecured and are due at the earlier of June 30, 2021 and the closing of this offering. The loan will be repaid upon the closing of this offering out of the estimated $1,000,000 of offering proceeds that has been allocated to the payment of offering expenses and that is not held in the trust account.
In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are
not obligated to, loan us funds as may be required. If we complete an initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. In the event that the initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor, members of our management team or any of their affiliates as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
After our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to our shareholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our shareholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a general meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation.
We will enter into a registration and shareholder rights agreement pursuant to which our initial shareholders, and their permitted transferees, if any, will be entitled to certain registration rights with respect to the private placement units, the private placement shares, the private placement warrants, the securities issuable upon conversion of working capital loans (if any) and the Class A ordinary shares issuable upon exercise of the foregoing and upon conversion of the founder shares. Further, pursuant to an agreement to be entered into on or prior to the closing of this offering, our sponsor, upon and following consummation of an initial business combination, will be entitled to nominate three individuals for appointment to our board of directors, as long as the sponsor holds any securities covered by the registration and shareholder rights agreement, which is described under the section of this prospectus entitled “Description of Securities — Registration and Shareholder Rights.”
Policy for Approval of Related Party Transactions
The audit committee of our board of directors will adopt a charter, providing for the review, approval and/or ratification of “related party transactions,” which are those transactions required to be disclosed pursuant to Item 404 of Regulation S-K as promulgated by the SEC, by the audit committee. At its meetings, the audit committee shall be provided with the details of each new, existing, or proposed related party transaction, including the terms of the transaction, any contractual restrictions that the company has already committed to, the business purpose of the transaction, and the benefits of the transaction to the company and to the relevant related party. Any member of the committee who has an interest in the related party transaction under review by the committee shall abstain from voting on the approval of the related party transaction, but may, if so requested by the chairman of the committee, participate in some or all of the committee’s discussions of the related party transaction. Upon completion of its review of the related party transaction, the committee may determine to permit or to prohibit the related party transaction.
DESCRIPTION OF SECURITIES
We are a Cayman Islands exempted company and our affairs will be governed by our amended and restated memorandum and articles of association, the Companies Act and the common law of the Cayman Islands. Pursuant to our amended and restated memorandum and articles of association which will be adopted prior to the consummation of this offering, we will be authorized to issue 500,000,000 Class A ordinary shares and 50,000,000 Class B ordinary shares, as well as 5,000,000 preference shares, $0.0001 par value each. The following description summarizes certain terms of our shares as set out more particularly in our amended and restated memorandum and articles of association. Because it is only a summary, it may not contain all the information that is important to you.
Units
Each unit has an offering price of $10.00 and consists of one Class A ordinary share and one-third of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment as described in this prospectus. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of the company’s Class A ordinary shares. This means only a whole warrant may be exercised at any given time by a warrant holder.
The Class A ordinary shares and warrants comprising the units are expected to begin separate trading on the 52nd day following the date of this prospectus unless Credit Suisse informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. Once the Class A ordinary shares and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into Class A ordinary shares and warrants. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least three units, you will not be able to receive or trade a whole warrant.
In no event will the Class A ordinary shares and warrants be traded separately until we have filed with the SEC a Current Report on Form 8-K which includes an audited balance sheet reflecting our receipt of the gross proceeds of this offering and the sale of the private placement units. We will file a Current Report on Form 8-K which includes this audited balance sheet promptly after the completion of this offering. If the underwriter’s 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 underwriter’s over-allotment option.
Additionally, the units will automatically separate into their component parts and will not be traded after completion of our initial business combination.
Private Placement Units
The private placement units (including the private placement shares, the private placement warrants and Class A ordinary shares issuable upon exercise of such warrants) will not be transferable or salable until 30 days after the completion of our initial business combination (except, among other limited exceptions as described under “Principal Shareholders — Transfers of Founder Shares and Private Placement Units,” to our officers and directors and other persons or entities affiliated with our sponsor) and the private placement warrants included therein will not be redeemable by us (except as described below under “— Warrants — Public Shareholders’ Warrants — Redemption of warrants for Class A ordinary shares when the price per Class A ordinary share equals or exceeds $10.00”) so long as they are held by our sponsor or its permitted transferees. Holders of our private placement units are entitled to certain registration rights. If we do not consummate an initial business combination within 24 months from the closing of this offering, the proceeds from the sale of the private placement units 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 units (and the underlying securities) will expire worthless. Further, if we seek shareholder approval, we will complete our initial business combination only if we receive an ordinary resolution being the affirmative vote of a simple majority of the shareholders, represented in person or by proxy and entitled to vote
thereon, who attend and vote at a general meeting of the company. In such case, our sponsor and each member of our management team have agreed to vote their founder shares, private placement shares and any public shares purchased during or after this offering in favor of our initial business combination. Otherwise, the private placement units are identical to the units sold in this offering.
Our sponsor and our management team have agreed not to transfer, assign or sell any of their private placement units, private placement shares, the private placement warrants and any Class A ordinary shares issued upon conversion or exercise thereof until 30 days after the completion of our initial business combination, except that, among other limited exceptions as described under the section of this prospectus entitled “Principal Shareholders — Transfers of Founder Shares and Private Placement Units,” to our officers and directors and other persons or entities affiliated with our sponsor” made to our officers and directors and other persons or entities affiliated with our sponsor.
Ordinary Shares
Prior to the date of this prospectus, there were 5,750,000 Class B ordinary shares issued and outstanding, all of which were held of record by our initial shareholders, so that our initial shareholders will own approximately 20% of our issued and outstanding shares (excluding the private placement shares underlying the private placement units and assuming our initial shareholders do not purchase any units in this offering) after this offering. Upon the closing of this offering, 25,600,000 of our ordinary shares will be outstanding (assuming no exercise of the underwriter’s over-allotment option) including:
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20,000,000 Class A ordinary shares underlying the units issued as part of this offering;
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600,000 Class A ordinary shares underlying the private placement units issued simultaneously with the closing of this offering; and
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5,000,000 Class B ordinary shares held by our initial shareholders.
If we increase or decrease the size of this offering, we will effect a share capitalization or share compulsory redemption or redemption or other appropriate mechanism, as applicable, with respect to our Class B ordinary shares immediately prior to the consummation of this offering in such amount as to maintain the ownership of our initial shareholders (and their permitted transferees, if any) at 20% of our issued and outstanding ordinary shares (excluding the private placement shares underlying the private placement units) upon the consummation of this offering.
Ordinary shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders. Except as described below, holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of our shareholders except as required by law. Unless specified in our amended and restated memorandum and articles of association, or as required by applicable provisions of the Companies Act or applicable stock exchange rules, the affirmative vote of a majority of our shareholders who attend and vote at a general meeting is required to approve any such matter voted on by our shareholders. Approval of certain actions will require a special resolution under Cayman Islands law, being the affirmative vote of at least two-thirds of our shareholders who attend and vote at a general meeting of the company, and pursuant to our amended and restated memorandum and articles of association; such actions include amending our amended and restated memorandum and articles of association and approving a statutory merger or consolidation with another company. Our board of directors is divided into three classes, each of which will generally serve for terms of three years with only one class of directors being elected in each year. There is no cumulative voting with respect to the appointment of directors, with the result that the holders of more than 50% of the shares voted for the appointment of directors can appoint all of the directors. Our shareholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor. Prior to our initial business combination, holders of our founder shares are the only shareholders of the company which will have the right to vote on the appointment of directors. Holders of our public shares will not be entitled to vote on the appointment of directors during such time. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. The provisions of our amended and restated memorandum and articles of association governing the appointment or removal of directors prior to our initial business
combination may only be amended by a special resolution passed by holders representing at least two-thirds of our outstanding Class B ordinary shares.
Because our amended and restated memorandum and articles of association will authorize the issuance of up to 500,000,000 Class A ordinary shares, if we were to enter into a business combination, we may (depending on the terms of such a business combination) be required to increase the number of Class A ordinary shares which we are authorized to issue at the same time as our shareholders vote on the business combination to the extent we seek shareholder approval in connection with our initial business combination.
Our board of directors is divided into three classes with only one class of directors being elected in each year and each class (except for those directors appointed prior to our first annual meeting of shareholders) serving a three-year term. In accordance with 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. As an exempted company, there is no requirement under the Companies Act for us to hold annual or extraordinary general meetings to appoint directors. We may not hold an annual meeting of shareholders to elect new directors prior to the consummation of our initial business combination. Prior to the completion of an initial business combination, any vacancy on the board of directors may be filled by a nominee chosen by holders of a majority of our founder shares. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason.
We will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 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 underwriter. The redemption rights may include the requirement that a beneficial owner must identify itself in order to valid redeem its shares. Our sponsor and our management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares, private placement shares and any public shares purchased during or after this offering in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares. Unlike many blank check companies that hold shareholder votes and conduct proxy solicitations in conjunction with their initial business combinations and provide for related redemptions of public shares for cash upon completion of such initial business combinations even when a vote is not required by law, if a shareholder vote is not required by applicable law or stock exchange rule and we do not decide to hold a shareholder vote for business or other reasons, we will, pursuant to our amended and restated memorandum and articles of association, conduct the redemptions pursuant to the tender offer rules of the SEC, and file tender offer documents with the SEC prior to completing our initial business combination. Our amended and restated memorandum and articles of association will require these tender offer documents to contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, a shareholder approval of the transaction is required by applicable law or stock exchange rule, or we decide to obtain shareholder approval for business or other reasons, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If we seek shareholder approval, we will complete our initial business combination only if we receive an ordinary resolution being the affirmative vote of a majority of the shareholders, represented in person or by proxy and entitled to vote thereon, who attend and vote at a general meeting of the company. However, the participation of our sponsor, officers, directors, advisors or their affiliates in privately-negotiated transactions (as described in this prospectus), if any, could result in the approval of our initial business
combination even if a majority of our public shareholders vote, or indicate their intention to vote, against such initial business combination unless restricted by applicable Nasdaq rules. For purposes of seeking approval of the majority of our issued and outstanding ordinary shares, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. Our amended and restated memorandum and articles of association will require that at least five days’ notice will be given of any general meeting.
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to Excess Shares, without our prior consent. However, we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Our shareholders’ inability to redeem the Excess Shares will reduce their influence over our ability to complete our initial business combination, and such shareholders could suffer a material loss in their investment if they sell such Excess Shares on the open market. Additionally, such shareholders will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And, as a result, such shareholders will continue to hold that number of shares exceeding 15% and, in order to dispose such shares would be required to sell their shares in open market transactions, potentially at a loss.
If we seek shareholder approval, we will complete our initial business combination only if we receive an ordinary resolution being the affirmative vote of a simple majority of the shareholders, represented in person or by proxy and entitled to vote thereon, who attend and vote at a general meeting of the company. In such case, our sponsor and each member of our management team have agreed to vote their founder shares, private placement shares and public shares purchased during or after this offering in favor of our initial business combination. As a result, in addition to our initial shareholders’ founder shares and private placement shares, we would need 7,200,001, or 36%, of the 20,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all issued and outstanding shares are voted, the private placement shares to be issued to our sponsor are voted in favor of the transaction and the over-allotment option is not exercised). The other members of our management team are subject to the same arrangements with respect to any public shares acquired by them in or after this offering. Additionally, each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction or vote at all.
Pursuant to our amended and restated memorandum and articles of association, if we do not consummate an initial business combination within 24 months from the closing of this offering, we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case of clause (ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. Our sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to any founder shares or private placement shares they hold if we fail to consummate an initial business combination within 24 months from the closing of this offering (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within 24 months from the closing of this offering).
In the event of a liquidation, dissolution or winding up of the company after a business combination, our shareholders are entitled to share ratably in all assets remaining available for distribution to them after
payment of liabilities and after provision is made for each class of shares, if any, having preference over the ordinary shares. Our shareholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the ordinary shares, except that we will provide our public shareholders with the opportunity to redeem their public shares for cash at a per share price equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of the then-outstanding public shares, upon the completion of our initial business combination, subject to the limitations described herein.
Founder Shares
The founder shares are designated as Class B ordinary shares and, except as described below, are identical to the Class A ordinary shares included in the units being sold in this offering, and holders of founder shares have the same shareholder rights as public shareholders, except that:
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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 and our management team have entered into an agreement with us, pursuant to which they have agreed to (i) waive their redemption rights with respect to any founder shares, private placement shares and public shares they hold, (ii) to waive their redemption rights with respect to any founder shares, private placement shares and any public shares purchased during or after this offering in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares and (iii) waive their rights to liquidating distributions from the trust account with respect to any founder shares or private placement shares they hold if we fail to consummate an initial business combination within 24 months from the closing of this offering (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within 24 months from the closing of this offering);
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the founder shares will automatically convert into our Class A ordinary shares at the time of our initial business combination as described below adjacent to the caption “Founder shares conversion and anti-dilution rights” and in our amended and restated memorandum and articles of association; and
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the founder shares are entitled to registration rights.
If we submit our initial business combination to our public shareholders for a vote, our sponsor and our management team have agreed to vote their founder shares, private placement shares and any public shares purchased during or after this offering in favor of our initial business combination. If we seek shareholder approval, we will complete our initial business combination only if we receive an ordinary resolution, being a simple majority of the shareholders, represented in person or by proxy and entitled to vote thereon, who attend and vote at a general meeting of the company. In such case, our sponsor and each member of our management team have agreed to vote their founder shares, private placement shares and any public shares purchased during or after this offering in favor of our initial business combination. As a result, in addition to our initial shareholders’ founder shares and private placement shares, we would need 7,200,001, or 36%, of the 20,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all issued and outstanding shares are voted, the private placement shares to be issued to our sponsor are voted in favor of the transaction and the over-allotment option is not exercised);
The founder shares will automatically convert into Class A ordinary shares following the consummation of our initial business combination at a ratio such that the number of Class A ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding (excluding the private placement shares underlying the private placement units) upon completion of this offering, plus (ii) the sum of the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any
equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial business combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to our sponsor, members of our management team or any of their affiliates upon conversion of working capital loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one to one.
Except as described herein, our sponsor and our management team have agreed not to transfer, assign or sell any of their founder shares until the earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Warrants — Public Shareholders’ Warrants — Anti-dilution Adjustments”) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property. Any permitted transferees will be subject to the same restrictions and other agreements of our sponsor and management team with respect to any founder shares, private placement units, private placement shares, private placement warrants and Class A ordinary shares issued upon conversion or exercise thereof. We refer to such transfer restrictions throughout this prospectus as the lock-up. Notwithstanding the foregoing, if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Warrants — Public Shareholders’ Warrants — Anti-dilution Adjustments”) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, the founder shares will be released from the lock-up.
Prior to the completion of our initial business combination, holders of our founder shares are the only shareholders of the company which will have the right to vote on the appointment of directors. Holders of our public shares will not be entitled to vote on the appointment of directors during such time. In addition, prior to the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. These provisions of our amended and restated memorandum and articles of association may only be amended by a special resolution passed by holders representing at least two-thirds of our outstanding Class B ordinary shares. With respect to any other matter submitted to a vote of our shareholders, including any vote in connection with our initial business combination, except as required by law, holders of our founder shares and holders of our public shares will vote together as a single class, with each share entitling the holder to one vote.
Register of Members
Under the Companies Act, we must keep a register of members and there should be entered therein:
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the names and addresses of the members of the company, a statement of the shares held by each member, which:
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distinguishes each share by its number (so long as the share has a number);
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confirms the amount paid, or agreed to be considered as paid, on the shares of each member; confirms the number and category of shares held by each member; and
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confirms whether each relevant category of shares held by a member carries voting rights under the Articles, and if so, whether such voting rights are conditional;
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the date on which the name of any person was entered on the register as a member; and
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the date on which any person ceased to be a member.
For these purposes, “voting rights” means rights conferred on shareholders, including the right to appoint or remove directors, in respect of their shares to vote at general meetings of the company on all or substantially all matters. A voting right is conditional where the voting right arises only in certain circumstances.
Under Cayman Islands law, the register of members of our company is prima facie evidence of the matters set out therein (i.e. the register of members will raise a presumption of fact on the matters referred to above unless rebutted) and a member registered in the register of members will be deemed as a matter of Cayman Islands law to have legal title to the shares as set against its name in the register of members. Upon the closing of this public offering, the register of members will be immediately updated to reflect the issue of shares by us. Once our register of members has been updated, the shareholders recorded in the register of members will be deemed to have legal title to the shares set against their name. However, there are certain limited circumstances where an application may be made to a Cayman Islands court for a determination on whether the register of members reflects the correct legal position. Further, the Cayman Islands court has the power to order that the register of members maintained by a company should be rectified where it considers that the register of members does not reflect the correct legal position. If an application for an order for rectification of the register of members were made in respect of our ordinary shares, then the validity of such shares may be subject to re-examination by a Cayman Islands court.
Preference Shares
Our amended and restated memorandum and articles of association will authorize 5,000,000 preference shares and will provide that preference shares may be issued from time to time in one or more series. Our board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. Our board of directors will be able to, without shareholder approval, issue preference shares with voting and other rights that could adversely affect the voting power and other rights of the holders of the ordinary shares and could have anti-takeover effects. The ability of our board of directors to issue preference shares without shareholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of existing management. We have no preference shares issued and outstanding at the date hereof. Although we do not currently intend to issue any preference shares, we cannot assure you that we will not do so in the future. No preference shares are being issued or registered in this offering.
Warrants
Public Shareholders’ Warrants
Each whole warrant entitles the registered holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing on the later of one year from the closing of this offering and 30 days after the completion of our initial business combination, provided in each case that we have an effective registration statement under the Securities Act covering the Class A ordinary shares issuable upon exercise of the warrants and a current prospectus relating to them is available (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement) 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. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of Class A ordinary shares. This means only a whole warrant may be exercised at a given time by a warrant holder. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least three units, you will not be able to receive or trade a whole warrant. The warrants will expire five years after the completion of our initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
We will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares underlying the warrants is then effective and a prospectus relating thereto is current, subject to our satisfying our obligations described below with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable and we will not be obligated to issue a Class A ordinary share upon exercise of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such
warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will we be required to net cash settle any warrant. In the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the Class A ordinary share underlying such unit.
We have agreed that as soon as practicable, but in no event later than 20 business days after the closing of our initial business combination, we will use our commercially reasonable efforts to file with the SEC a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants, and we will use our commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of our initial business combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement; provided that if our Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th day after the closing of the initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when we will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption, but we will use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In such event, each holder would pay the exercise price by surrendering the warrants for that number of Class A ordinary shares equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair market value” (defined below) less the exercise price of the warrants by (y) the fair market value and (B) 0.361. The “fair market value” as used in this paragraph shall mean the volume weighted average price of the Class A ordinary shares for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent.
Redemptions for warrants for cash when the price per Class A ordinary share equals or exceeds $18.00. Once the warrants become exercisable, we may call the warrants for redemption (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 not less than 30 days’ prior written notice of redemption to each warrant holder; and
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if, and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Warrants-Public Shareholders’ Warrants-Anti-Dilution Adjustments”) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which notice of the redemption is given to the warrant holders.
We will not redeem the warrants as described above unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants is then effective and a current prospectus relating to those Class A ordinary shares is available throughout the 30-day redemption period. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
We have established the last of the redemption 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 his, her or its warrant prior to the scheduled redemption date. However, the price of the Class A ordinary shares may fall below the $18.00 redemption trigger price (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading
“— Warrants — Public Shareholders’ Warrants — Anti-dilution Adjustments”) as well as the $11.50 (for whole shares) warrant exercise price after the redemption notice is issued.
Redemption of warrants for Class A ordinary shares when the price per Class A ordinary share equals or exceeds $10.00. Once the warrants become exercisable, we may redeem the outstanding warrants:
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in whole and not in part;
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at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table below, based on the redemption date and the “fair market value” of our Class A ordinary shares (as defined below) except as otherwise described below;
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if, and only if, the closing price of our Class A ordinary shares equals or exceeds $10.00 per public share (as adjusted for share subdivisions, share dividends, reorganizations, reclassifications, recapitalizations and the like) on the trading day before we send the notice of redemption to the warrant holders; and
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if the closing price of the Class A ordinary shares for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Warrants — Public Shareholders’ Warrants — Anti-dilution Adjustments”), the private placement warrants must also be concurrently called for redemption on the same terms as the outstanding public warrants, as described above.
Beginning on the date the notice of redemption is given until the warrants are redeemed or exercised, holders may elect to exercise their warrants on a cashless basis. The numbers in the table below represent the number of Class A ordinary shares that a warrant holder will receive upon exercise in connection with a redemption by us pursuant to this redemption feature, based on the “fair market value” of our Class A ordinary shares on the corresponding redemption date (assuming holders elect to exercise their warrants and such warrants are not redeemed for $0.10 per warrant), determined for these purposes based on volume weighted average price of our Class A ordinary shares during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants, and the number of months that the corresponding redemption date precedes the expiration date of the warrants, each as set forth in the table below. We will provide our warrant holders with the final fair market value no later than one business day after the 10-trading day period described above ends.
Pursuant to the warrant agreement, references above to Class A ordinary shares shall include a security other than Class A ordinary shares into which the Class A ordinary shares have been converted or exchanged for in the event we are not the surviving company in our initial business combination. The numbers in the table below will not be adjusted when determining the number of Class A ordinary shares to be issued upon exercise of the warrants if we are not the surviving entity following our initial business combination.
The share prices set forth in the column headings of the table below will be adjusted as of any date on which the number of shares issuable upon exercise of a warrant or the exercise price of a warrant is adjusted as set forth under the heading “— Anti-dilution Adjustments” below. If the number of shares issuable upon exercise of a warrant is adjusted, the adjusted share prices in the column headings will equal the share prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the number of shares deliverable upon exercise of a warrant immediately prior to such adjustment and the denominator of which is the number of shares deliverable upon exercise of a warrant as so adjusted. The number of shares in the table below shall be adjusted in the same manner and at the same time as the number of shares issuable upon exercise of a warrant. If the exercise price of a warrant is adjusted, (a) in the case of an adjustment pursuant to the fifth paragraph under the heading “— Anti-dilution Adjustments” below, the adjusted share prices in the column headings will equal the unadjusted share price multiplied by a fraction, the numerator of which is the higher of the Market Value and the Newly Issued Price as set forth under the heading “— Anti-dilution Adjustments” and the denominator of which is $10.00 and (b) in the case of an adjustment pursuant to the second paragraph under the heading “— Anti-dilution Adjustments”
below, the adjusted share prices in the column headings will equal the unadjusted share price less the decrease in the exercise price of a warrant pursuant to such exercise price adjustment.
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Redemption Date
(period to expiration of warrants)
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Fair Market Value of Class A Ordinary Shares
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|
|
|
≤$10.00
|
|
|
11.00
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|
|
12.00
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|
|
13.00
|
|
|
14.00
|
|
|
15.00
|
|
|
16.00
|
|
|
17.00
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|
|
≥18.00
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|
|
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
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|
|
|
|
|
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
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|
|
|
|
|
0.351
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|
|
|
|
|
0.361
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|
|
|
27 months
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|
|
|
|
0.185
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|
|
|
|
|
0.214
|
|
|
|
|
|
0.242
|
|
|
|
|
|
0.268
|
|
|
|
|
|
0.291
|
|
|
|
|
|
0.313
|
|
|
|
|
|
0.332
|
|
|
|
|
|
0.350
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|
|
|
|
|
0.361
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|
|
|
24 months
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|
|
|
|
0.173
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|
|
|
|
|
0.204
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|
|
|
|
|
0.233
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|
|
|
|
|
0.260
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|
|
|
|
|
0.285
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|
|
|
|
|
0.308
|
|
|
|
|
|
0.329
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|
|
|
|
|
0.348
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|
|
|
|
|
0.361
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|
|
|
21 months
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|
|
|
|
0.161
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|
|
|
|
|
0.193
|
|
|
|
|
|
0.223
|
|
|
|
|
|
0.252
|
|
|
|
|
|
0.279
|
|
|
|
|
|
0.304
|
|
|
|
|
|
0.326
|
|
|
|
|
|
0.347
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|
|
|
|
|
0.361
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|
|
|
18 months
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|
|
|
|
0.146
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|
|
|
|
|
0.179
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|
|
|
|
|
0.211
|
|
|
|
|
|
0.242
|
|
|
|
|
|
0.271
|
|
|
|
|
|
0.298
|
|
|
|
|
|
0.322
|
|
|
|
|
|
0.345
|
|
|
|
|
|
0.361
|
|
|
|
15 months
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|
|
|
|
0.130
|
|
|
|
|
|
0.164
|
|
|
|
|
|
0.197
|
|
|
|
|
|
0.230
|
|
|
|
|
|
0.262
|
|
|
|
|
|
0.291
|
|
|
|
|
|
0.317
|
|
|
|
|
|
0.342
|
|
|
|
|
|
0.361
|
|
|
|
12 months
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|
|
|
|
0.111
|
|
|
|
|
|
0.146
|
|
|
|
|
|
0.181
|
|
|
|
|
|
0.216
|
|
|
|
|
|
0.250
|
|
|
|
|
|
0.282
|
|
|
|
|
|
0.312
|
|
|
|
|
|
0.339
|
|
|
|
|
|
0.361
|
|
|
|
9 months
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|
|
|
|
0.090
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|
|
|
|
|
0.125
|
|
|
|
|
|
0.162
|
|
|
|
|
|
0.199
|
|
|
|
|
|
0.237
|
|
|
|
|
|
0.272
|
|
|
|
|
|
0.305
|
|
|
|
|
|
0.336
|
|
|
|
|
|
0.361
|
|
|
|
6 months
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|
|
|
|
0.065
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|
|
|
|
|
0.099
|
|
|
|
|
|
0.137
|
|
|
|
|
|
0.178
|
|
|
|
|
|
0.219
|
|
|
|
|
|
0.259
|
|
|
|
|
|
0.296
|
|
|
|
|
|
0.331
|
|
|
|
|
|
0.361
|
|
|
|
3 months
|
|
|
|
|
0.034
|
|
|
|
|
|
0.065
|
|
|
|
|
|
0.104
|
|
|
|
|
|
0.150
|
|
|
|
|
|
0.197
|
|
|
|
|
|
0.243
|
|
|
|
|
|
0.286
|
|
|
|
|
|
0.326
|
|
|
|
|
|
0.361
|
|
|
|
0 months
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
0.042
|
|
|
|
|
|
0.115
|
|
|
|
|
|
0.179
|
|
|
|
|
|
0.233
|
|
|
|
|
|
0.281
|
|
|
|
|
|
0.323
|
|
|
|
|
|
0.361
|
|
|
The exact fair market value and redemption date may not be set forth in the table above, in which case, if the fair market value is between two values in the table or the redemption date is between two redemption dates in the table, the number of Class A ordinary shares to be issued for each warrant exercised will be determined by a straight-line interpolation between the number of shares set forth for the higher and lower fair market values and the earlier and later redemption dates, as applicable, based on a 365 or 366-day year, as applicable. For example, if the volume weighted average price of our Class A ordinary shares as reported during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of the warrants is $11.00 per share, and at such time there are 57 months until the expiration of the warrants, holders may choose to, in connection with this redemption feature, exercise their warrants for 0.277 Class A ordinary shares for each whole warrant. For an example where the exact fair market value and redemption date are not as set forth in the table above, if the volume weighted average price of our Class A ordinary shares as reported during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of the warrants is $13.50 per share, and at such time there are 38 months until the expiration of the warrants, holders may choose to, in connection with this redemption feature, exercise their warrants for 0.298 Class A ordinary shares for each whole warrant. In no event will the warrants be exercisable on a cashless basis in connection with this redemption feature for more than 0.361 Class A ordinary shares per warrant (subject to adjustment). Finally, as reflected in the table above, if the warrants are out of the money and about to expire, they cannot be exercised on a cashless basis in connection with a redemption by us pursuant to this redemption feature, since they will not be exercisable for any Class A ordinary shares.
This redemption feature differs from the typical warrant redemption features used in some other blank check offerings, which may only provide for a redemption of warrants for cash (other than the private placement warrants) when the trading price for the Class A ordinary shares exceeds $18.00 per share for a
specified period of time. This redemption feature is structured to allow for all of the outstanding warrants to be redeemed when the Class A ordinary shares are trading at or above $10.00 per public share, which may be at a time when the trading price of our Class A ordinary shares is below the exercise price of the warrants. We have established this redemption feature to provide us with the flexibility to redeem the warrants without the warrants having to reach the $18.00 per share threshold set forth above under “— Redemption of warrants for cash when the price per Class A ordinary share equals or exceeds $18.00.” Holders choosing to exercise their warrants in connection with a redemption pursuant to this feature will, in effect, receive a number of shares for their warrants based on an option pricing model with a fixed volatility input as of the date of this prospectus. This redemption right provides us with an additional mechanism by which to redeem all of the outstanding warrants, and therefore have certainty as to our capital structure as the warrants would no longer be outstanding and would have been exercised or redeemed. We will be required to pay the applicable redemption price to warrant holders if we choose to exercise this redemption right and it will allow us to quickly proceed with a redemption of the warrants if we determine it is in our best interest to do so. As such, we would redeem the warrants in this manner when we believe it is in our best interest to update our capital structure to remove the warrants and pay the redemption price to the warrant holders.
As stated above, we can redeem the warrants when the Class A ordinary shares are trading at a price starting at $10.00, which is below the exercise price of $11.50, because it will provide certainty with respect to our capital structure and cash position while providing warrant holders with the opportunity to exercise their warrants on a cashless basis for the applicable number of shares. If we choose to redeem the warrants when the Class A ordinary shares are trading at a price below the exercise price of the warrants, this could result in the warrant holders receiving fewer Class A ordinary shares than they would have received if they had chosen to wait to exercise their warrants for Class A ordinary shares if and when such Class A ordinary shares were trading at a price higher than the exercise price of $11.50.
No fractional Class A ordinary shares will be issued upon exercise. If, upon exercise, a holder would be entitled to receive a fractional interest in a share, we will round down to the nearest whole number of the number of Class A ordinary shares to be issued to the holder. If, at the time of redemption, the warrants are exercisable for a security other than the Class A ordinary shares pursuant to the warrant agreement (for instance, if we are not the surviving company in our initial business combination), the warrants may be exercised for such security. At such time as the warrants become exercisable for a security other than the Class A ordinary shares, the Company (or surviving company) will use its commercially reasonable efforts to register under the Securities Act the security issuable upon the exercise of the warrants.
Redemption procedures. A holder of a warrant may notify us in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the warrant agent’s actual knowledge, would beneficially own in excess of 9.8% (or such other amount as a holder may specify) of the Class A ordinary shares issued and outstanding immediately after giving effect to such exercise.
Anti-dilution Adjustments. If the number of outstanding Class A ordinary shares is increased by a capitalization or share dividend paid in Class A ordinary shares to all or substantially all holders of Class A ordinary shares, or by a split-up of Class A ordinary shares or other similar event, then, on the effective date of such capitalization or share dividend, split-up or similar event, the number of Class A ordinary shares issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding Class A ordinary shares. A rights offering made to all or substantially all holders of ordinary shares entitling holders to purchase Class A ordinary shares at a price less than the “historical fair market value” (as defined below) will be deemed a share dividend of a number of Class A ordinary shares equal to the product of (i) the number of Class A ordinary shares actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for Class A ordinary shares) and (ii) one minus the quotient of (x) the price per Class A ordinary share paid in such rights offering and (y) the historical fair market value. For these purposes, (i) if the rights offering is for securities convertible into or exercisable for Class A ordinary shares, in determining the price payable for Class A ordinary shares, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) “historical fair market value” means the volume weighted average price of Class A ordinary shares as reported during the 10 trading day period ending on the trading day prior to the first date on which the Class A ordinary shares trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
In addition, if we, at any time while the warrants are outstanding and unexpired, pay a dividend or make a distribution in cash, securities or other assets to all or substantially all the holders of Class A ordinary shares on account of such Class A ordinary shares (or other securities into which the warrants are convertible), other than (a) as described above, (b) any cash dividends or cash distributions which, when combined on a per share basis with all other cash dividends and cash distributions paid on the Class A ordinary shares during the 365-day period ending on the date of declaration of such dividend or distribution does not exceed $0.50 (as adjusted to appropriately reflect any other adjustments and excluding cash dividends or cash distributions that resulted in an adjustment to the exercise price or to the number of Class A ordinary shares issuable on exercise of each warrant) but only with respect to the amount of the aggregate cash dividends or cash distributions equal to or less than $0.50 per share, (c) to satisfy the redemption rights of the holders of Class A ordinary shares in connection with a proposed initial business combination, (d) to satisfy the redemption rights of the holders of Class A ordinary shares in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, or (e) in connection with the redemption of our public shares upon our failure to complete our initial business combination, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each Class A ordinary share in respect of such event.
If the number of outstanding Class A ordinary shares is decreased by a consolidation, combination, reverse share split or reclassification of Class A ordinary shares or other similar event, then, on the effective date of such consolidation, combination, reverse share split, reclassification or similar event, the number of Class A ordinary shares issuable on exercise of each warrant will be decreased in proportion to such decrease in outstanding Class A ordinary shares.
Whenever the number of Class A ordinary shares purchasable upon the exercise of the warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of Class A ordinary shares purchasable upon the exercise of the warrants immediately prior to such adjustment and (y) the denominator of which will be the number of Class A ordinary shares so purchasable immediately thereafter.
In addition, if (x) we issue additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our sponsor or its affiliates, without taking into account any founder shares held by our sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (z) the volume weighted average trading price of our Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price described above under “— Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described above under “— Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
In case of any reclassification or reorganization of the outstanding Class A ordinary shares (other than those described above or that solely affects the par value of such Class A ordinary shares), or in the case of any merger or consolidation of us with or into another corporation (other than a consolidation or merger in
which we are the continuing corporation and that does not result in any reclassification or reorganization of our outstanding Class A ordinary shares), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially as an entirety in connection with which we are dissolved, the holders of the warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the warrants and in lieu of the Class A ordinary shares immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of Class A ordinary shares or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the warrants would have received if such holder had exercised their warrants immediately prior to such event. However, if such holders were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets for which each warrant will become exercisable will be deemed to be the weighted average of the kind and amount received per share by such holders in such consolidation or merger that affirmatively make such election, and if a tender, exchange or redemption offer has been made to and accepted by such holders (other than a tender, exchange or redemption offer made by the company in connection with redemption rights held by shareholders of the company as provided for in the company’s amended and restated memorandum and articles of association or as a result of the redemption of Class A ordinary shares by the company if a proposed initial business combination is presented to the shareholders of the company for approval) under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group(within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the issued and outstanding Class A ordinary shares, the holder of a warrant will be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a shareholder if such warrant holder had exercised the warrant prior to the expiration of such tender or exchange offer, accepted such offer and all of the Class A ordinary shares held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustment (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in the warrant agreement. If less than 70% of the consideration receivable by the holders of Class A ordinary shares in such a transaction is payable in the form of Class A ordinary shares in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the warrant properly exercises the warrant within thirty days following public disclosure of such transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the Black-Scholes value (as defined in the warrant agreement) of the warrant. The purpose of such exercise price reduction is to provide additional value to holders of the warrants when an extraordinary transaction occurs during the exercise period of the warrants pursuant to which the holders of the warrants otherwise do not receive the full potential value of the warrants. The purpose of such exercise price reduction is to provide additional value to holders of the warrants when an extraordinary transaction occurs during the exercise period of the warrants pursuant to which the holders of the warrants otherwise do not receive the full potential value of the warrants.
The warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity or correct any mistake, including to conform the provisions of the warrant agreement to the description of the terms of the warrants and the warrant agreement set forth in this prospectus, or defective provision (ii) amending the provisions relating to cash dividends on ordinary shares as contemplated by and in accordance with the warrant agreement or (iii) adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of the warrants, provided that the approval by the holders of at least 65% of the then-outstanding public warrants is required to make any change that adversely affects the interests of the registered holders. You should review a copy of the warrant agreement, which will be filed as an exhibit to the registration statement of which this prospectus is a part, for a complete description of the terms and conditions applicable to the warrants.
The warrant holders do not have the rights or privileges of holders of ordinary shares and any voting rights until they exercise their warrants and receive Class A ordinary shares. After the issuance of Class A ordinary shares upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by shareholders.
No fractional warrants will be issued upon separation of the units and only whole warrants will trade. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number of Class A ordinary shares to be issued to the warrant holder.
We have agreed that, subject to applicable law, any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and we irrevocably submit to such jurisdiction, which jurisdiction will be the exclusive forum for any such action, proceeding or claim. See “Risk Factors-Our warrant agreement will designate the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.” This provision applies to claims under the Securities Act but does not apply to claims under the Exchange Act or any claim for which the federal district courts of the United States of America are the sole and exclusive forum.
Private Placement Warrants
Except as described below, the private placement warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in this offering. The private placement warrants (including the Class A ordinary shares issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business combination (except pursuant to limited exceptions as described under “Principal Shareholders — Transfers of Founder Shares and Private Placement Units,” to our officers and directors and other persons or entities affiliated with the initial purchasers of the private placement warrants) and they will not be redeemable by us (except as described above under “— Public Shareholders’ Warrants — Redemption of warrants for Class A ordinary shares when the price per Class A ordinary share equals or exceeds $10.00”) so long as they are held by our sponsor or its permitted transferees. Our sponsor, or its permitted transferees, has the option to exercise the private placement warrants on a cashless basis. If the private placement warrants are held by holders other than our sponsor or its permitted transferees, the private placement warrants will be redeemable by us in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering. Any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants will require a vote of holders of at least 65% of the number of the then outstanding private placement warrants.
Except as described above under “— Public Shareholders’ Warrants-Redemption procedures and cashless exercise,” if holders of the private placement warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering his, her or its warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “historical fair market value” (defined below) over the exercise price of the warrants by (y) the historical fair market value. The “historical fair market value” will mean the average reported closing price of the Class A ordinary shares for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the holders of warrants. 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 permitted transferees is because it is not known at this time whether they will be affiliated with us following a business combination. If they remain affiliated with us, their ability to sell our securities in the open market will be significantly limited. We expect to have policies in place that restrict insiders from selling our securities except during specific periods of time. Even during such periods of time when insiders will be permitted to sell our securities, an insider cannot trade in our securities if he or she is in possession of material non-public information. Accordingly, unlike public shareholders who could exercise their warrants and sell the Class A ordinary shares received upon such exercise freely in
the open market in order to recoup the cost of such exercise, the insiders could be significantly restricted from selling such securities. As a result, we believe that allowing the holders to exercise such warrants on a cashless basis is appropriate.
In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. Up to $1,500,000 of such loans may be convertible into warrants of the post-business combination company at a price of $1.50 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants.
Dividends
We have not paid any cash dividends on our ordinary shares to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time, and we will only pay such dividend out of our profits or share premium (subject to solvency requirements) as permitted under Cayman Islands law. If we increase the size of this offering, we will effect a share capitalization or other appropriate mechanism immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares, on an as- converted basis, at 20% of our issued and outstanding ordinary shares (excluding the private placement shares underlying the private placement units) upon the consummation of this offering. Further, if we incur any indebtedness in connection with a business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
Our Transfer Agent and Warrant Agent
The transfer agent for our ordinary shares and warrant agent for our warrants is Continental Stock Transfer & Trust Company. We have agreed to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent and warrant agent, its agents and each of its shareholders, directors, officers and employees against all claims and losses that may arise out of acts performed or omitted for its activities in that capacity, except for any claims and losses due to any gross negligence or intentional misconduct of the indemnified person or entity.
Certain Differences in Corporate Law
Cayman Islands companies are governed by the Companies Act. The Companies Act is modeled on English Law but does not follow recent English Law statutory enactments, and differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of the material differences between the provisions of the Companies Act applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.
Mergers and Similar Arrangements. In certain circumstances, the Companies Act allows for mergers or consolidations between two Cayman Islands companies, or between a Cayman Islands exempted company and a company incorporated in another jurisdiction (provided that is facilitated by the laws of that other jurisdiction) so as to form a single surviving company.
Where the merger or consolidation is between two Cayman Islands companies, the directors of each company must approve and enter into a written plan of merger or consolidation containing certain prescribed information. That plan or merger or consolidation must then be authorized by either (a) a special resolution (usually a majority of two-thirds in value of the voting shares voted at a general meeting) of the shareholders of each company; or (b) such other authorization, if any, as may be specified in such constituent company’s articles of association. No shareholder resolution is required for a merger between a parent company (i.e., a company that owns at least 90% of the issued shares of each class in a subsidiary company) and its subsidiary company. The consent of each holder of a fixed or floating security interest of a constituent company must be obtained, unless the court waives such requirement. If the Cayman Islands
Registrar of Companies is satisfied that the requirements of the Companies Act (which includes certain other formalities) have been complied with, the Registrar of Companies will register the plan of merger or consolidation.
Where the merger or consolidation involves a foreign company, the procedure is similar, save that with respect to the foreign company, the directors of the Cayman Islands exempted company are required to make a declaration to the effect that, having made due enquiry, they are of the opinion that the requirements set out below have been met: (i) that the merger or consolidation is permitted or not prohibited by the constitutional documents of the foreign company and by the laws of the jurisdiction in which the foreign company is incorporated, and that those laws and any requirements of those constitutional documents have been or will be complied with; (ii) that no petition or other similar proceeding has been filed and remains outstanding or order made or resolution adopted to wind up or liquidate the foreign company in any jurisdictions; (iii) that no receiver, trustee, administrator or other similar person has been appointed in any jurisdiction and is acting in respect of the foreign company, its affairs or its property or any part thereof; and (iv) that no scheme, order, compromise or other similar arrangement has been entered into or made in any jurisdiction whereby the rights of creditors of the foreign company are and continue to be suspended or restricted.
Where the surviving company is the Cayman Islands exempted company, the directors of the Cayman Islands exempted company are further required to make a declaration to the effect that, having made due enquiry, they are of the opinion that the requirements set out below have been met: (i) that the foreign company is able to pay its debts as they fall due and that the merger or consolidated is bona fide and not intended to defraud unsecured creditors of the foreign company; (ii) that in respect of the transfer of any security interest granted by the foreign company to the surviving or consolidated company (a) consent or approval to the transfer has been obtained, released or waived; (b) the transfer is permitted by and has been approved in accordance with the constitutional documents of the foreign company; and (c) the laws of the jurisdiction of the foreign company with respect to the transfer have been or will be complied with; (iii) that the foreign company will, upon the merger or consolidation becoming effective, cease to be incorporated, registered or exist under the laws of the relevant foreign jurisdiction; and (iv) that there is no other reason why it would be against the public interest to permit the merger or consolidation.
Where the above procedures are adopted, the Companies Act provides certain limited appraisal rights for dissenting shareholders to be paid a payment of the fair value of his shares upon their dissenting to the merger or consolidation if they follow a prescribed procedure. In essence, that procedure is as follows: (a) the shareholder must give his written objection to the merger or consolidation to the constituent company before the vote on the merger or consolidation, including a statement that the shareholder proposes to demand payment for his shares if the merger or consolidation is authorized by the vote; (b) within 20 days following the date on which the merger or consolidation is approved by the shareholders, the constituent company must give written notice to each shareholder who made a written objection; (c) a shareholder must within 20 days following receipt of such notice from the constituent company, give the constituent company a written notice of his intention to dissent including, among other details, a demand for payment of the fair value of his shares; (d) within seven days following the date of the expiration of the period set out in paragraph (b) above or seven days following the date on which the plan of merger or consolidation is filed, whichever is later, the constituent company, the surviving company or the consolidated company must make a written offer to each dissenting shareholder to purchase his shares at a price that the company determines is the fair value and if the company and the shareholder agree the price within 30 days following the date on which the offer was made, the company must pay the shareholder such amount; and (e) if the company and the shareholder fail to agree a price within such 30 day period, within 20 days following the date on which such 30 day period expires, the company (and any dissenting shareholder) must file a petition with the Cayman Islands Grand Court to determine the fair value and such petition must be accompanied by a list of the names and addresses of the dissenting shareholders with whom agreements as to the fair value of their shares have not been reached by the company. At the hearing of that petition, the court has the power to determine the fair value of the shares together with a fair rate of interest, if any, to be paid by the company upon the amount determined to be the fair value. Any dissenting shareholder whose name appears on the list filed by the company may participate fully in all proceedings until the determination of fair value is reached. These rights of a dissenting shareholder are not available in certain circumstances, for example, to dissenters holding shares of any class in respect of which an open market exists on a recognized
stock exchange or recognized interdealer quotation system at the relevant date or where the consideration for such shares to be contributed are shares of any company listed on a national securities exchange or shares of the surviving or consolidated company.
Moreover, Cayman Islands law has separate statutory provisions that facilitate the reconstruction or amalgamation of companies in certain circumstances, schemes of arrangement will generally be more suited for complex mergers or other transactions involving widely held companies, commonly referred to in the Cayman Islands as a “scheme of arrangement” which may be tantamount to a merger. In the event that a merger was sought pursuant to a scheme of arrangement (the procedures for which are more rigorous and take longer to complete than the procedures typically required to consummate a merger in the United States), the arrangement in question must be approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made and who must in addition represent three-fourth in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meeting summoned for that purpose. The convening of the meetings and subsequently the terms of the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder would have the right to express to the court the view that the transaction should not be approved, the court can be expected to approve the arrangement if it satisfies itself that:
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we are not proposing to act illegally or beyond the scope of our corporate authority and the statutory provisions as to majority vote have been complied with;
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the shareholders have been fairly represented at the meeting in question;
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the arrangement is such as a businessman would reasonably approve; and
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the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act or that would amount to a “fraud on the minority.”
If a scheme of arrangement or takeover offer (as described below) is approved, any dissenting shareholder would have no rights comparable to appraisal rights (providing rights to receive payment in cash for the judicially determined value of the shares), which would otherwise ordinarily be available to dissenting shareholders of United States corporations.
Squeeze-out Provisions. When a tender offer is made and accepted by holders of 90% of the shares to whom the offer relates within four months, the offeror may, within a two-month period, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands, but this is unlikely to succeed unless there is evidence of fraud, bad faith, collusion or inequitable treatment of the shareholders.
Further, transactions similar to a merger, reconstruction and/or an amalgamation may in some circumstances be achieved through means other than these statutory provisions, such as a share capital exchange, asset acquisition or control, or through contractual arrangements of an operating business.
Shareholders’ Suits. Our Cayman Islands counsel is not aware of any reported class action having been brought in a Cayman Islands court. Derivative actions have been brought in the Cayman Islands courts, and the Cayman Islands courts have confirmed the availability for such actions. In most cases, we will be the proper plaintiff in any claim based on a breach of duty owed to us, and a claim against (for example) our officers or directors usually may not be brought by a shareholder. However, based both on Cayman Islands authorities and on English authorities, which would in all likelihood be of persuasive authority and be applied by a court in the Cayman Islands, exceptions to the foregoing principle apply in circumstances in which:
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a company is acting, or proposing to act, illegally or ultra vires (beyond the scope of its authority);
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the act complained of, although not beyond the scope of the authority, could be effected if duly authorized by more than the number of votes which have actually been obtained; or
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those who control the company are perpetrating a “fraud on the minority.”
A shareholder may have a direct right of action against us where the individual rights of that shareholder have been infringed or are about to be infringed.
Enforcement of Civil Liabilities. The Cayman Islands has a different body of securities laws as compared to the United States and provides less protection to investors. Additionally, Cayman Islands companies may not have standing to sue before the Federal courts of the United States.
We have been advised by our Cayman Islands legal counsel that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, and or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
Special Considerations for Exempted Companies. We are an exempted company with limited liability (meaning our public shareholders have no liability, as members of the company, for liabilities of the company over and above the amount paid for their shares) under the Companies Act. The Companies Act distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except for the exemptions and privileges listed below:
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an exempted company does not have to file an annual return of its shareholders with the Registrar of Companies;
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an exempted company’s register of members is not open to inspection;
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an exempted company does not have to hold an annual general meeting;
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an exempted company may issue shares with no par value;
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an exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance);
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an exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;
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an exempted company may register as a limited duration company; and
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an exempted company may register as a segregated portfolio company.
“Limited liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).
Amended and Restated Memorandum and Articles of Association
Our amended and restated memorandum and articles of association will contain provisions designed to provide certain rights and protections relating to this offering that will apply to us until the completion of our initial business combination. These provisions cannot be amended without a special resolution. As a matter of Cayman Islands law, a resolution is deemed to be a special resolution where it has been approved by either (i) the affirmative vote of at least two-thirds (or any higher threshold specified in a company’s articles
of association) of a company’s shareholders entitled to vote and so voting at a general meeting for which notice specifying the intention to propose the resolution as a special resolution has been given; or (ii) if so authorized by a company’s articles of association, by a unanimous written resolution of all of the company’s shareholders. Our amended and restated memorandum and articles of association will provide that special resolutions must be approved either by at least two-thirds of our shareholders who attend and vote at a general meeting of the company (i.e., the lowest threshold permissible under Cayman Islands law), or by a unanimous written resolution of all of our shareholders. Further, our amended and restated memorandum and articles of association will provide that a quorum at our general meetings will consist of one-third of the ordinary shares entitled to vote at such meeting and present in person or by proxy; provided that a quorum in connection with any meeting that is convened to vote on a business combination or any amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares shall be a majority of the ordinary shares entitled to vote at such meeting being individuals present in person or by proxy or if a corporation or other non-natural person by its duly authorized representative or proxy.
Our initial shareholders and their permitted transferees, if any, who will collectively beneficially own approximately 20% of our ordinary shares (excluding the private placement shares underlying the private placement units and assuming they do not purchase any units in this offering) upon the closing of this offering, will participate in any vote to amend our amended and restated memorandum and articles of association and will have the discretion to vote in any manner they choose. Specifically, our amended and restated memorandum and articles of association will provide, among other things, that:
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if we do not consummate an initial business combination within 24 months from the closing of this offering, we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law;
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prior to the completion of our initial business combination, we may not issue additional securities that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote as a class with our public shares (a) on our initial business combination or on any other proposal presented to shareholders prior to or in connection with the completion of an initial business combination or (b) to approve an amendment to our amended and restated memorandum and articles of association to (x) extend the time we have to consummate a business combination beyond 24 months from the closing of this offering or (y) amend the foregoing provisions;
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although we do not intend to enter into a business combination with a target business that is affiliated with our sponsor, our directors or our executive officers, we are not prohibited from doing so. In the event we enter into such a transaction, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent valuation or accounting firm that such a business combination or transaction is fair to our company from a financial point of view;
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if a shareholder vote on our initial business combination is not required by applicable law or stock exchange rule and we do not decide to hold a shareholder vote for business or other reasons, we will offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, and will file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act;
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our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the net assets held in the trust account (excluding the amount of deferred underwriting discounts held in trust and taxes payable on the interest earned on the trust account) at the time of signing the agreement to enter into the initial business combination;
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if our shareholders approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, we will provide our public shareholders with the opportunity to redeem all or a portion of their ordinary shares upon such approval at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of the then-outstanding public shares, subject to the limitations described herein; 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 memorandum and articles of association will provide that under no circumstances will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001.
The Companies Act permits a company incorporated in the Cayman Islands to amend its memorandum and articles of association with the approval of a special resolution. A company’s articles of association may specify that the approval of a higher majority is required but, provided the approval of the required majority is obtained, any Cayman Islands exempted company may amend its memorandum and articles of association regardless of whether its memorandum and articles of association provides otherwise. Accordingly, although we could amend any of the provisions relating to our proposed offering, structure and business plan which are contained in our amended and restated memorandum and articles of association, we view all of these provisions as binding obligations to our shareholders and neither we, nor our officers or directors, will take any action to amend or waive any of these provisions unless we provide dissenting public shareholders with the opportunity to redeem their public shares.
Anti-Money Laundering — Cayman Islands
If any person in the Cayman Islands knows or suspects, or has reasonable grounds for knowing or suspecting, that another person is engaged in criminal conduct or money laundering or is involved with terrorism or terrorist financing and property and the information for that knowledge or suspicion came to their attention in the course of business in the regulated sector or other trade, profession, business or employment, the person will be required to report such knowledge or suspicion to (i) the Financial Reporting Authority of the Cayman Islands, pursuant to the Proceeds of Crime Act (As Revised) of the Cayman Islands if the disclosure relates to criminal conduct or money laundering or (ii) a police officer of the rank of constable or higher, or the Financial Reporting Authority, pursuant to the Terrorism Act (As Revised) of the Cayman Islands, if the disclosure relates to involvement with terrorism or terrorist financing and property. Such a report will not be treated as a breach of confidence or of any restriction upon the disclosure of information imposed by any enactment or otherwise.
Date Protection in the Cayman Islands — Privacy Notice
We have certain duties under the Data Protection Act, 2017 of the Cayman Islands, as amended from time to time and any regulations, codes of practice or orders promulgated pursuant thereto (“DPA”).
The company is committed to processing personal data in accordance with the DPA. In its use of personal data, the company will be characterized under the DPA as a ‘data controller’, whilst certain of the company’s service providers, affiliates and delegates may act as ‘data processors’ under the DPA. These service providers may process personal information for their own lawful purposes in connection with services provided to the company.
By virtue of making an investment in the company, the company and certain of the company’s service providers may collect, record, store, transfer and otherwise process personal data by which individuals may be directly or indirectly identified.
Your personal data will be processed fairly and for lawful purposes, including (a) where the processing is necessary for the company to perform a contract to which you are a party or for taking pre-contractual steps at your request (b) where the processing is necessary for compliance with any legal, tax or regulatory obligation to which the company is subject or (c) where the processing is for the purposes of legitimate interests pursued by the company or by a service provider to whom the data are disclosed. As a data controller, we will only use your personal data for the purposes for which we collected it. If we need to use your personal data for an unrelated purpose, we will contact you.
We anticipate that we will share your personal data with the company’s service providers for the purposes set out in this privacy notice. We may also share relevant personal data where it is lawful to do so and necessary to comply with our contractual obligations or your instructions or where it is necessary or desirable to do so in connection with any regulatory reporting obligations. In exceptional circumstances, we will share your personal data with regulatory, prosecuting and other governmental agencies or departments, and parties to litigation (whether pending or threatened), in any country or territory including to any other person where we have a public or legal duty to do so (e.g. to assist with detecting and preventing fraud, tax evasion and financial crime or compliance with a court order).
Your personal data shall not be held by the company for longer than necessary with regard to the purposes of the data processing.
We will not sell your personal data. Any transfer of personal data outside of the Cayman Islands shall be in accordance with the requirements of the DPA. Where necessary, we will ensure that separate and appropriate legal agreements are put in place with the recipient of that data.
The company will only transfer personal data in accordance with the requirements of the DPA, and will apply appropriate technical and organizational information security measures designed to protect against unauthorized or unlawful processing of the personal data and against the accidental loss, destruction or damage to the personal data.
If you are a natural person, this will affect you directly. If you are a corporate investor (including, for these purposes, legal arrangements such as trusts or exempted limited partnerships) that provides us with personal data on individuals connected to you for any reason in relation to your investment into the company, this will be relevant for those individuals and you should inform such individuals of the content.
You have certain rights under the DPA, including (a) the right to be informed as to how we collect and use your personal data (and this privacy notice fulfils the Company’s obligation in this respect) (b) the right to obtain a copy of your personal data (c) the right to require us to stop direct marketing (d) the right to have inaccurate or incomplete personal data corrected (e) the right to withdraw your consent and require us to stop processing or restrict the processing, or not begin the processing of your personal data (f) the right to be notified of a data breach (unless the breach is unlikely to be prejudicial) (g) the right to obtain information as to any countries or territories outside the Cayman Islands to which we, whether directly or indirectly, transfer, intend to transfer or wish to transfer your personal data, general measures we take to ensure the security of personal data and any information available to us as to the source of your personal data (h) the right to complain to the Office of the Ombudsman of the Cayman Islands and (i) the right to require us to delete your personal data in some limited circumstances.
If you consider that your personal data has not been handled correctly, or you are not satisfied with the company’s responses to any requests you have made regarding the use of your personal data, you have the right to complain to the Cayman Islands’ Ombudsman. The Ombudsman can be contacted by calling +1 (345) 946-6283 or by email at info@ombudsman.ky.
Certain Anti-Takeover Provisions of our Amended and Restated Memorandum and Articles of Association
Our amended and restated memorandum and articles of association will provide that our board of directors will be classified into three classes of directors. As a result, in most circumstances, a person can gain control of our board only by successfully engaging in a proxy contest at two or more annual meetings.
Our authorized but unissued Class A ordinary shares and preference shares are available for future issuances without shareholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved Class A ordinary shares and preference shares could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
Securities Eligible for Future Sale
Immediately after this offering we will have 25,600,000 Class A ordinary shares (or 29,410,000 Class A ordinary shares if the underwriter’s over-allotment option is exercised in full) issued and outstanding on an as-converted basis. Of these shares, the Class A ordinary shares sold in this offering (20,000,000 Class A ordinary shares if the underwriter’s over-allotment option is not exercised and 23,000,000 Class A ordinary shares if the underwriter’s over-allotment option is exercised in full) will be freely tradable without restriction or further registration under the Securities Act, except for any Class A ordinary shares purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act. All of the outstanding founder shares (5,000,000 founder shares if the underwriter’s over-allotment option is not exercised and 5,750,000 founder shares if the underwriter’s over-allotment option is exercised in full) and all of the outstanding private placement units (600,000 private placement units if the underwriter’s over-allotment option is not exercised and 660,000 private placement units if the underwriter’s over-allotment option is exercised in full), and the securities underlying the foregoing, will be restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering.
Rule 144
Pursuant to Rule 144, a person who has beneficially owned restricted shares or warrants for at least six months would be entitled to sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as we were required to file reports) preceding the sale.
Persons who have beneficially owned restricted shares or warrants for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:
•
1% of the total number of ordinary shares then outstanding, which will equal 160,750 shares immediately after this offering (or 184,563 shares if the underwriter exercises its over-allotment option in full); and
•
the average weekly reported trading volume of the Class A ordinary shares during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.
Sales by our affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.
Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies
Rule 144 is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:
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the issuer of the securities that was formerly a shell company has ceased to be a shell company;
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the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
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the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and
•
at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
As a result, our initial shareholders will be able to sell their founder shares and our sponsor will be able to sell its private placement units, and the securities underlying the foregoing, pursuant to Rule 144 without registration one year after we have completed our initial business combination.
Registration and Shareholder Rights
The holders of the founder shares, private placement units, private placement shares, private placement warrants, Class A ordinary shares underlying the private placement warrants and warrants that may be issued upon conversion of working capital loans (and any Class A ordinary shares issuable upon the exercise of the private placement warrants and warrants that may be issued upon conversion of working capital loans) will be entitled to registration rights pursuant to a registration and shareholder rights agreement to be signed prior to or on the effective date of this offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our initial business combination. However, the registration and shareholder rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period, which occurs (i) in the case of the founder shares, as described in the following paragraph, and (ii) in the case of the private placement warrants and the respective Class A ordinary shares underlying such warrants, 30 days after the completion of our initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.
Except as described herein, our sponsor and our management team have agreed not to transfer, assign or sell (i) any of their founder shares until the earliest of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Warrants — Public Shareholders’ Warrants — Anti-dilution Adjustments”) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property, and (ii) any of their private placement units, private placement shares, private placement warrants and Class A ordinary shares issued upon conversion or exercise thereof until 30 days after the completion of our initial business combination. Any permitted transferees will be subject to the same restrictions and other agreements of our sponsor and management team with respect to any founder shares, private placement units, private placement shares, private placement warrants and Class A ordinary shares issued upon conversion or exercise thereof. We refer to such transfer restrictions throughout this prospectus as the lock-up.
In addition, pursuant to an agreement to be entered into on or prior to the closing of this offering, our sponsor, upon and following consummation of an initial business combination, will be entitled to nominate three individuals for appointment to our board of directors, as long as the sponsor holds any securities covered by the registration and shareholder rights agreement.
Listing of Securities
We intend to apply to have our units listed on The Nasdaq Capital Market, or Nasdaq, under the symbol “FRONU” We expect the Class A ordinary shares and warrants comprising the units to begin separate trading on Nasdaq under the symbols “FRON” and “FRONW,” respectively. The units will automatically separate into their component parts and will not be traded following the completion of our initial business combination.
TAXATION
The following summary of certain Cayman Islands and U.S. federal income tax considerations of an investment in our units, each consisting of one Class A ordinary share and one-third of one redeemable warrant, which we refer to collectively as our securities, is based upon laws and relevant interpretations thereof in effect as of the date of this prospectus, all of which are subject to change. This summary does not deal with all possible tax consequences relating to an investment in our Class A ordinary shares and warrants, such as the tax consequences under state, local and other tax laws.
Prospective investors should consult their advisors on the possible tax consequences of investing in our securities under the laws of their country of citizenship, residence or domicile.
Cayman Islands Tax Considerations
The following is a discussion on certain Cayman Islands income tax consequences of an investment in the securities of the Company. The discussion is a general summary of present law, which is subject to prospective and retroactive change. It is not intended as tax advice, does not consider any investor’s particular circumstances, and does not consider tax consequences other than those arising under Cayman Islands law.
Under Existing Cayman Islands Laws
Payments of dividends and capital in respect of our securities will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of the securities nor will gains derived from the disposal of the securities be subject to Cayman Islands income or corporation tax. The Cayman Islands currently have no income, corporate or capital gains tax and no estate duty, inheritance tax or gift tax.
No stamp duty is payable in respect of the issue of the warrants. An instrument of transfer in respect of a warrant is stampable if executed in or brought into the Cayman Islands.
No stamp duty is payable in respect of the issue of our Class A ordinary shares or on an instrument of transfer in respect of such shares.
The Company has been incorporated under the laws of the Cayman Islands as an exempted company with limited liability and, as such, has applied for and has received an undertaking from the Financial Secretary of the Cayman Islands as follows:
THE TAX CONCESSIONS ACT
(As Revised)
UNDERTAKING AS TO TAX CONCESSIONS
In accordance with the provision of Section 6 of The Tax Concessions Act (As Revised), the Financial Secretary undertakes with Frontier Acquisition Corp. (the “Company”):
1.
That no law which is hereafter enacted in the Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to the Company or its operations; and
2.
In addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable:
2.1
On or in respect of the shares, debentures or other obligations of the Company; or
2.2
by way of the withholding in whole or part, of any relevant payment as defined in Section 6(3) of the Tax Concessions Act (2020 Revision).
These concessions shall be for a period of 20 years beginning on 22 January 2021.
United States Federal Income Tax Considerations
General
The following discussion summarizes certain U.S. federal income tax considerations generally applicable to the acquisition, ownership and disposition of our units (each consisting of one Class A ordinary share
and one-third of one redeemable warrant), other than private placement units, that are purchased in this offering by U.S. Holders (as defined below) and Non-U.S. Holders (as defined below). This discussion does not address the U.S. federal income tax considerations generally applicable to the acquisition, ownership and disposition of private placement units and Class B ordinary shares. Because the components of a unit are generally separable at the option of the holder, the holder of a unit generally should be treated, for U.S. federal income tax purposes, as the owner of the underlying Class A ordinary share and warrant components of the unit. As a result, the discussion below with respect to holders of Class A ordinary shares and warrants should also apply to holders of units (as the deemed owners of the underlying Class A ordinary shares and warrants that constitute the units).
This discussion is limited to certain U.S. federal income tax considerations to beneficial owners of our securities who are initial purchasers of a unit (other than a private placement unit) pursuant to this offering and hold the unit and each component of the unit as a capital asset under the U.S. Internal Revenue Code of 1986, as amended (the “Code”). This discussion assumes that the Class A ordinary shares and warrants will trade separately and that any distributions made (or deemed made) by us on our Class A ordinary shares and any consideration received (or deemed received) by a holder in consideration for the sale or other disposition of our securities will be in U.S. dollars. This discussion is a summary only and does not consider all aspects of U.S. federal income taxation that may be relevant to the acquisition, ownership and disposition of a unit by a prospective investor in light of its particular circumstances, including:
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our sponsor, founders, officers or directors;
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banks, financial institutions or financial services entities;
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broker-dealers;
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taxpayers that are subject to the mark-to-market accounting rules;
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S corporations;
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tax-exempt entities;
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governments or agencies or instrumentalities thereof;
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insurance companies;
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regulated investment companies;
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real estate investment trusts;
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controlled foreign corporations;
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passive foreign investment companies;
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expatriates or former long-term residents of the United States;
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persons that actually or constructively own five percent or more of our shares, by vote or by value;
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persons that acquired our securities pursuant to an exercise of employee share options, in connection with employee share incentive plans or otherwise as compensation or in connection with services;
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persons that hold our securities as part of a straddle, constructive sale, hedging, conversion or other integrated or similar transaction; or
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U.S. Holders (as defined below) whose functional currency is not the U.S. dollar.
Moreover, the discussion below is based upon the provisions of the Code, the Treasury regulations promulgated thereunder and administrative and judicial interpretations thereof, all as of the date hereof. Those authorities may be repealed, revoked, modified or subject to differing interpretations, possibly on a retroactive basis, so as to result in U.S. federal income tax consequences different from those discussed below. Furthermore, this discussion does not address any aspect of U.S. federal non-income tax laws, such as gift, estate or Medicare contribution tax laws, or state, local or non-U.S. tax laws.
We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree with the discussion herein, and its determination may
be upheld by a court. Moreover, there can be no assurance that future legislation, regulations, administrative rulings or court decisions will not adversely affect the accuracy of the statements in this discussion.
As used herein, the term “U.S. Holder” means a beneficial owner of units, Class A ordinary shares or warrants that is for U.S. federal income tax purposes: (i) an individual citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) that is created or organized (or treated as created or organized) in or under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source or (iv) a trust if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust, or (B) it has in effect a valid election to be treated as a U.S. person.
This discussion does not consider the tax treatment of partnerships or other pass-through entities or persons who hold our securities through such entities. If a partnership (or other entity or arrangement classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of our securities, the U.S. federal income tax treatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partner and the partnership. A U.S. Holders who is a partner of a partnership holding our securities is urged to consult its tax advisor.
THIS DISCUSSION IS ONLY A SUMMARY OF CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS ASSOCIATED WITH THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES. EACH PROSPECTIVE INVESTOR IN OUR SECURITIES IS URGED TO CONSULT ITS TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO SUCH INVESTOR OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, AND NON-U.S. TAX LAWS.
Allocation of Purchase Price and Characterization of a Unit
No statutory, administrative or judicial authority directly addresses the treatment of a unit or instruments similar to a unit for U.S. federal income tax purposes, and therefore, that treatment is not entirely clear. The acquisition of a unit should be treated for U.S. federal income tax purposes as the acquisition of one share of our Class A ordinary shares and one-third of one warrant, three of which may be combined into a whole warrant exercisable to acquire one share of our Class A ordinary shares. We intend to treat the acquisition of a unit in this manner and, by purchasing a unit, you will agree to adopt such treatment for applicable tax purposes. For U.S. federal income tax purposes, each holder of a unit must allocate the purchase price paid by such holder for such unit between the one Class A ordinary share and the one-third of one warrant based on the relative fair market value of each at the time of issuance. Under U.S. federal income tax law, each investor must make their own determination of such value based on the relevant facts and circumstances. Therefore, we strongly urge each investor to consult their tax advisor regarding the determination of value for this purpose. The price allocated to each Class A ordinary share and one-third of one warrant should constitute the shareholder’s initial tax basis in such share or warrant. Any disposition of a unit should be treated for U.S. federal income tax purposes as a disposition of the Class A ordinary share and one-third of one warrant comprising the unit, and the amount realized on the disposition should be allocated between the Class A ordinary share and warrant based on their respective relative fair market values at the time of disposition (as determined by each U.S. Holder based on all the relevant facts and circumstances). Neither the separation of the Class A ordinary share and the one-third of one warrant constituting a unit nor the combination of thirds of warrants into a single warrant should be a taxable event for U.S. federal income tax purposes.
The foregoing treatment of the units, Class A ordinary shares and warrants and a holder’s purchase price allocation are not binding on the IRS or the courts. Because there are no authorities that directly address instruments that are similar to the units, no assurance can be given that the IRS or the courts will agree with the characterization described above or the discussion below. The balance of this discussion assumes that the characterization of the units described above is respected for U.S. federal income tax purposes.
U.S. Holders
Taxation of Distributions
Subject to the PFIC rules discussed below, a U.S. Holder generally will be required to include in gross income as dividends the amount of any cash distribution paid on our Class A ordinary shares to the extent the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Such dividends paid by us will be taxable to a corporate U.S. Holder at regular rates and will not be eligible for the dividends-received deduction generally allowed to domestic corporations in respect of dividends received from other domestic corporations. Distributions in excess of such earnings and profits generally will be applied against and reduce the U.S. Holder’s basis in its Class A ordinary shares (but not below zero) and, to the extent in excess of such basis, will be treated as gain from the sale or exchange of such Class A ordinary shares (see “—Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Ordinary Shares and Warrants” below).
With respect to non-corporate U.S. Holders, under tax laws currently in effect and subject to certain exceptions (including, but not limited to, dividends treated as investment income for purposes of investment interest deduction limitations), dividends generally will be taxed at the lower applicable long-term capital gains rate (see “—Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Ordinary Shares and Warrants” below) only if our Class A ordinary shares are readily tradable on an established securities market in the United States, the Company is not treated as a PFIC at the time the dividend was paid or in the preceding taxable year and provided certain holding period requirements are met. It is unclear, however, whether certain redemption rights described in this prospectus may suspend the running of the applicable holding period for this purpose. U.S. Holders should consult their tax advisors regarding the availability of such lower rate for any dividends paid with respect to our Class A ordinary shares.
Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Ordinary Shares and Warrants
Subject to the PFIC rules discussed below, a U.S. Holder generally will recognize capital gain or loss on the sale or other taxable disposition of our Class A ordinary shares or warrants (including on our dissolution and liquidation if we do not consummate an initial business combination within the required time period). Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. Holder’s holding period for such Class A ordinary shares or warrants exceeds one year. It is unclear, however, whether certain redemption rights described in this prospectus may suspend the running of the applicable holding period for this purpose.
The amount of gain or loss recognized on a sale or other taxable disposition generally will be equal to the difference between (i) the sum of the amount of cash and the fair market value of any property received in such disposition (or, if the Class A ordinary shares or warrants are held as part of units at the time of the disposition, the portion of the amount realized on such disposition that is allocated to the Class A ordinary shares or warrants based upon the then relative fair market values of the Class A ordinary shares and the warrants included in the units) and (ii) the U.S. Holder’s adjusted tax basis in its Class A ordinary shares or warrants so disposed of. A U.S. Holder’s adjusted tax basis in its Class A ordinary shares and warrants generally will equal the U.S. Holder’s acquisition cost (that is, the portion of the purchase price of a unit allocated to a Class A ordinary share or one-third of one warrant, as described above under “—Allocation of Purchase Price and Characterization of a Unit”) increased by prior amounts received in redemption of Class A Ordinary Shares that are treated as dividends under Section 302 (as described below in “—redemption of Class A Ordinary Shares”) and prior deemed distributions under Section 305 that are treated as dividends (as described below in “—possible Constructive Distributions”), and reduced by any prior distributions treated as a return of capital. Long-term capital gain realized by a non-corporate U.S. Holder is currently eligible to be taxed at reduced rates. See “—Exercise or Lapse of a Warrant” below for a discussion regarding a U.S. Holder’s tax basis in the Class A ordinary share acquired pursuant to the exercise of a warrant. The deduction of capital losses is subject to certain limitations.
Redemption of Class A Ordinary Shares
Subject to the PFIC rules discussed below, in the event that a U.S. Holder’s Class A ordinary shares are redeemed pursuant to the redemption provisions described in this prospectus under “Description of
Securities—Ordinary Shares” or if we purchase a U.S. Holder’s Class A ordinary shares in an open market transaction (referred to herein as a “redemption”), the treatment of the redemption for U.S. federal income tax purposes will depend on whether it qualifies as a sale of the Class A ordinary shares under Section 302 of the Code. If the redemption qualifies as a sale of Class A ordinary shares, the U.S. Holder will be treated as described under “—Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Ordinary Shares and Warrants” above. If the redemption does not qualify as a sale of Class A ordinary shares, the U.S. Holder will be treated as receiving a corporate distribution with the tax consequences described above under “—Taxation of Distributions.” Whether a redemption qualifies for sale treatment will depend largely on the total number of our shares treated as held by the U.S. Holder (including any shares constructively owned by the U.S. Holder described in the following paragraph) relative to all of our shares outstanding both before and after such redemption. The redemption of Class A ordinary shares generally will be treated as a sale of the Class A ordinary shares (rather than as a corporate distribution) if such redemption (i) is “substantially disproportionate” with respect to the U.S. Holder, (ii) results in a “complete termination” of the U.S. Holder’s interest in us or (iii) is “not essentially equivalent to a dividend” with respect to the U.S. Holder. These tests are explained more fully below.
In determining whether any of the foregoing tests is satisfied, a U.S. Holder takes into account not only Class A ordinary shares actually owned by the U.S. Holder, but also our shares that are constructively owned by it. A U.S. Holder may constructively own, in addition to shares owned directly, shares owned by certain related individuals and entities in which the U.S. Holder has an interest or that have an interest in such U.S. Holder, as well as any shares the U.S. Holder has a right to acquire by exercise of an option, which would generally include Class A ordinary shares which could be acquired pursuant to the exercise of the warrants. In order to meet the substantially disproportionate test, the percentage of our outstanding voting shares actually and constructively owned by the U.S. Holder immediately following the redemption of Class A ordinary shares must, among other requirements, be less than 80% of the percentage of our outstanding voting shares actually and constructively owned by the U.S. Holder immediately before the redemption. Prior to the completion of our initial business combination, the Class A ordinary shares 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 (i) all of our shares actually and constructively owned by the U.S. Holder are redeemed or (ii) all of our shares actually owned by the U.S. Holder are redeemed and the U.S. Holder is eligible to waive, and effectively waives in accordance with specific rules, the attribution of shares owned by certain family members and the U.S. Holder does not constructively own any other shares of ours. The redemption of the Class A ordinary shares will not be essentially equivalent to a dividend with respect to a U.S. Holder if it results in a “meaningful reduction” of the U.S. Holder’s proportionate interest in us. Whether the redemption will result in a meaningful reduction in a U.S. Holder’s proportionate interest in us will depend on the particular facts and circumstances. However, the IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority shareholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a “meaningful reduction.” A U.S. Holder should consult with its tax advisors as to the tax consequences of a redemption.
If none of the foregoing tests is satisfied, then the redemption will be treated as a corporate distribution and the tax effects will be as described under “—Taxation of Distributions” above. After the application of those rules, any remaining tax basis of the U.S. Holder in the redeemed Class A ordinary shares will be added to the U.S. Holder’s adjusted tax basis in its remaining shares, or, if it has none, to the U.S. Holder’s adjusted tax basis in its warrants or possibly in other shares constructively owned by it.
Exercise, Lapse or Redemption of a Warrant
Subject to the PFIC rules discussed below and except as discussed below with respect to the cashless exercise of a warrant, a U.S. Holder generally will not recognize gain or loss upon the acquisition of a Class A ordinary share on the exercise of a warrant for cash. A U.S. Holder’s initial tax basis in a Class A ordinary share received upon exercise of the warrant generally will equal the sum of the U.S. Holder’s initial investment in the warrant (that is, the portion of the U.S. Holder’s purchase price for the units that is allocated to the warrant, as described above under “—Allocation of Purchase Price and Characterization of a Unit”) and the exercise price. It is unclear whether a U.S. Holder’s holding period for the Class A ordinary share will commence on the date of exercise of the warrant or the day following the date of
exercise of the warrant; in either case, the holding period will not include the period during which the U.S. Holder held the warrant. If a warrant is allowed to lapse unexercised, a U.S. Holder generally will recognize a capital loss equal to its tax basis in the warrant.
The tax consequences of a cashless exercise of a warrant are not clear under current law. Subject to the PFIC rules discussed below, a cashless exercise may not be taxable, either because the exercise is not a realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either situation, a U.S. Holder’s tax basis in the Class A ordinary shares received generally would equal the U.S. Holder’s tax basis in the warrants. If the cashless exercise was not a realization event, it is unclear whether a U.S. Holder’s holding period for the Class A ordinary share will commence on the date of exercise of the warrant or the day following the date of exercise of the warrant. If the cashless exercise were treated as a recapitalization, the holding period of the Class A ordinary shares would include the holding period of the warrants.
It is also possible that a cashless exercise may be treated as a taxable exchange in which gain or loss would be recognized. In such event, a U.S. Holder may be deemed to have surrendered a number of warrants having a value equal to the exercise price for the total number of warrants to be exercised in exchange for the exercise price. The U.S. Holder would recognize capital gain or loss in an amount equal to the difference between the exercise price and the U.S. Holder’s tax basis in such warrants. In this case, a U.S. Holder’s tax basis in the Class A ordinary shares received would equal the sum of the U.S. Holder’s initial investment in the warrants exercised (i.e., the portion of the U.S. Holder’s purchase price for the units that is allocated to the warrant, as described above under “—Allocation of Purchase Price and Characterization of a Unit”) and the exercise price of such warrants. It is unclear whether a U.S. Holder’s holding period for the Class A ordinary share would commence on the date of exercise of the warrant or the day following the date of exercise of the warrant.
Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise, there can be no assurance which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, a U.S. Holder should consult its tax advisor regarding the tax consequences of a cashless exercise.
While not free from doubt, a redemption of warrants for Class A ordinary shares described in the section of this prospectus entitled “Description of Securities—Warrants—Public Shareholders’ Warrants—Redemption of warrants for Class A ordinary shares when the price per Class A ordinary share equals or exceeds $10.00” should be treated as a “recapitalization” for U.S. federal income tax purposes. Accordingly, subject to the PFIC rules described below, a U.S. Holder should not recognize any gain or loss on the redemption of warrants for Class A ordinary shares. In such event, a U.S. Holder’s aggregate tax basis in the Class A ordinary shares received in the redemption generally should equal the U.S. Holder’s aggregate tax basis in the warrants redeemed and the holding period for the Class A ordinary shares received should include the U.S. Holder’s holding period for the surrendered warrants. However, there is some uncertainty regarding this tax treatment and it is possible such a redemption could be treated in part as a taxable exchange in which gain or loss would be recognized in a manner similar to that discussed above for a cashless exercise of warrants. Accordingly, a U.S. Holder is urged to consult its tax advisor regarding the tax consequences of a redemption of warrants for Class A ordinary shares.
Subject to the PFIC rules described below, if we redeem warrants for cash pursuant to the redemption provisions described in the section of this prospectus entitled “Description of Securities—Warrants—Public Shareholders’ Warrants-Redemption of warrants for cash when the price per Class A ordinary share equals or exceeds $18.00” or if we purchase warrants in an open market transaction, such redemption or purchase generally will be treated as a taxable disposition to the U.S. Holder, taxed as described above under “—Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Ordinary Shares and Warrants.” We intend to treat the exercise of a warrant occurring after our giving notice of an intention to redeem the warrant for $0.10 as described in the section of this prospectus entitled “Description of Securities—Warrants—Public Shareholders’ Warrants—Redemption of warrants for Class A ordinary shares when the price per Class A ordinary share equals or exceeds $10.00” as if we redeemed such warrant for shares as described in the immediately preceding paragraph. However if the redemption were instead to be characterized for U.S. federal income tax purposes as an exercise of the warrant (which we do not
expect), then the tax treatment would instead be treated as described above in the first paragraph under “U.S. Holders—Exercise, Lapse or Redemption of a Warrant.”
Possible Constructive Distributions
The terms of each warrant provide for an adjustment to the number of Class A ordinary shares for which the warrant may be exercised or to the exercise price of the warrant in certain events, as discussed in the section of this prospectus captioned “Description of Securities—Warrants—Public Shareholders’ Warrants.” An adjustment which has the effect of preventing dilution generally is not taxable. The U.S. Holders of the warrants would, however, be treated as receiving a constructive distribution from us if, for example, the adjustment increases the U.S. Holder’s proportionate interest in our assets or earnings and profits (e.g., through an increase in the number of Class A ordinary shares that would be obtained upon exercise) as a result of a distribution of cash or other property to the holders of our Class A ordinary shares which is taxable to the U.S. Holders of such Class A ordinary shares as described under “—Taxation of Distributions” above. Such constructive distribution would be subject to tax as described under that section in the same manner as if the U.S. Holders of the warrants received a cash distribution from us equal to the fair market value of such increased interest and would increase a U.S. Holder’s adjusted tax basis in its warrants to the extent that such distribution is treated as a dividend.
Passive Foreign Investment Company Rules
A foreign (i.e., non-U.S.) corporation will be classified as a PFIC for U.S. federal income tax purposes if either (i) at least 75% of its gross income in a taxable year, including its pro rata share of the gross income of any corporation in which it is considered to own at least 25% of the shares by value, is passive income or (ii) at least 50% of its assets in a taxable year (ordinarily determined based on fair market value and averaged quarterly over the year), including its pro rata share of the assets of any corporation in which it is considered to own at least 25% of the shares by value, are held for the production of, or produce, passive income. Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets.
Because we are a blank check company, with no current active business, we believe that it is likely that we will meet the PFIC asset and/or income test for our current taxable year. However, pursuant to a start-up exception, a corporation will not be a PFIC for the first taxable year the corporation has gross income (the “start-up year”), if (1) no predecessor of the corporation was a PFIC; (2) the corporation satisfies the IRS that it will not be a PFIC for either of the two taxable years following the start-up year; and (3) the corporation is not in fact a PFIC for either of those years. The applicability of the start-up exception to us is uncertain and will not be known until after the close of our current taxable year or, possibly, after the close of our two subsequent taxable years. After the acquisition of a company or assets in a business combination, we may still meet one of the PFIC tests depending on the timing of the acquisition and the amount of our passive income and assets as well as the passive income and assets of the acquired business. If the company that we acquire in a business combination is a PFIC (or we do not complete a business combination by the end of the first taxable year after the taxable year of our formation), then we will likely not qualify for the start-up exception and will be a PFIC for our current taxable year. Our actual PFIC status for our current taxable year or any subsequent taxable year, however, will not be determinable until after the end of such taxable year. Accordingly, there can be no assurance with respect to our status as a PFIC for our current taxable year or any future taxable year.
Although our PFIC status is determined annually, an initial determination that our company is a PFIC will generally apply for subsequent years to a U.S. Holder who held Class A ordinary shares or warrants while we were a PFIC, whether or not we meet the test for PFIC status in those subsequent years. If we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of our Class A ordinary shares or warrants and, in the case of our Class A ordinary shares, the U.S. Holder did not make either a timely qualified electing fund (“QEF”) election or a mark-to-market election for our first taxable year as a PFIC, and in which the U.S. Holder held (or was deemed to hold) Class A ordinary shares, as described below, such U.S. Holder generally will be subject to special and adverse rules with respect to (i) any gain recognized by the U.S. Holder on the sale or other disposition of
its Class A ordinary shares or warrants and (ii) any “excess distribution” made to the U.S. Holder (generally, any distributions to such U.S. Holder during a taxable year of the U.S. Holder that are greater than 125% of the average annual distributions received by such U.S. Holder in respect of the Class A ordinary shares during the three preceding taxable years of such U.S. Holder or, if shorter, such U.S. Holder’s holding period for the Class A ordinary shares).
Under these rules:
•
the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the Class A ordinary shares or warrants;
•
the amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received the excess distribution, or to the period in the U.S. Holder’s holding period before the first day of our first taxable year in which we are a PFIC, will be taxed as ordinary income;
•
the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder; and
•
an additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed on the U.S. Holder with respect to the tax attributable to each such other taxable year of the U.S. Holder.
PFIC Elections
In general, if we are determined to be a PFIC, a U.S. Holder may avoid the adverse PFIC tax consequences described above in respect of our Class A ordinary shares (but not our warrants) by making and maintaining a timely and valid QEF election (if eligible to do so) to include in income its pro rata share of our net capital gains (as long- term capital gain) and other earnings and profits (as ordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends. A U.S. Holder generally may make a separate election to defer the payment of taxes on undistributed income inclusions under the QEF rules, but if deferred, any such taxes will be subject to an interest charge.
A U.S. Holder may not make a QEF election with respect to its warrants to acquire our Class A ordinary shares. As a result, if a U.S. Holder sells or otherwise disposes of such warrants (other than upon exercise of such warrants for cash) and we were a PFIC at any time during the U.S. Holder’s holding period of such warrants, any gain recognized generally will be treated as an excess distribution, taxed as described above. If a U.S. Holder that exercises such warrants properly makes and maintains a QEF election with respect to the newly acquired Class A ordinary shares (or has previously made a QEF election with respect to our Class A ordinary shares), the QEF election will apply to the newly acquired Class A ordinary shares. Notwithstanding such QEF election, the adverse tax consequences relating to PFIC shares, adjusted to take into account the current income inclusions resulting from the QEF election, will continue to apply with respect to such newly acquired Class A ordinary shares (which generally will be deemed to have a holding period for purposes of the PFIC rules that includes the period the U.S. Holder held the warrants), unless the U.S. Holder makes a purging election under the PFIC rules. Under one type of purging election, the U.S. Holder will be deemed to have sold such shares at their fair market value and any gain recognized on such deemed sale will be treated as an excess distribution, as described above. Under another type of purging election, an electing U.S. Holder will be treated as having received as an excess distribution its ratable share of our earnings and profits determined for U.S. federal income tax purposes. In order for a U.S. Holder to make the second election, we must also be a “controlled foreign corporation” as defined in the Code, and there are no assurances that we will so qualify. As a result of either purging election, the U.S. Holder will have a new basis and holding period in the Class A ordinary shares acquired upon the exercise of the warrants for purposes of the PFIC rules.
The QEF election is made on a shareholder-by-shareholder basis and, once made, can be revoked only with the consent of the IRS. A U.S. Holder generally makes a QEF election by attaching a completed IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund), including the information provided in a PFIC Annual Information Statement, to a timely
filed U.S. federal income tax return for the tax year to which the election relates. Retroactive QEF elections generally may be made only by filing a protective statement with such return and if certain other conditions are met or with the consent of the IRS. U.S. Holders should consult their tax advisors regarding the availability and tax consequences of a retroactive QEF election under their particular circumstances.
In order to comply with the requirements of a QEF election, a U.S. Holder must receive a PFIC Annual Information Statement from us. If we determine we are a PFIC for any taxable year, upon written request, we will endeavor to provide to a U.S. Holder such information as the IRS may require, including a PFIC Annual Information Statement, in order to enable the U.S. Holder to make and maintain a QEF election, but there is no assurance that we will timely provide such required information. There is also no assurance that we will have timely knowledge of our status as a PFIC in the future or of the required information to be provided.
If a U.S. Holder has made a QEF election with respect to our Class A ordinary shares, and the excess distribution rules discussed above do not apply to such shares (because of a timely QEF election for our first taxable year as a PFIC in which the U.S. Holder holds (or is deemed to hold) such shares or a purge of the PFIC taint pursuant to a purging election, as described above), any gain recognized on the sale of our Class A ordinary shares generally will be taxable as capital gain and no additional tax charge will be imposed under the PFIC rules. As discussed above, if we are a PFIC for any taxable year, a U.S. Holder of our Class A ordinary shares that has made a QEF election will be currently taxed on its pro rata share of our earnings and profits, whether or not distributed for such year. A subsequent distribution of such earnings and profits that were previously included in income generally should not be taxable when distributed to such U.S. Holder. The tax basis of a U.S. Holder’s shares in a QEF will be increased by amounts that are included in income, and decreased by amounts distributed but not taxed as dividends, under the above rules. In addition, if we are not a PFIC for any taxable year, such U.S. Holder will not be subject to the QEF inclusion regime with respect to our Class A ordinary shares for such taxable year.
Alternatively, if we are a PFIC and our Class A ordinary shares constitute “marketable stock,” a U.S. Holder may avoid the adverse PFIC tax consequences discussed above if such U.S. Holder, at the close of the first taxable year in which it holds (or is deemed to hold) our Class A ordinary shares, makes a mark-to-market election with respect to such shares for such taxable year. Such U.S. Holder generally will include for each of its taxable years as ordinary income the excess, if any, of the fair market value of its Class A ordinary shares at the end of such year over its adjusted basis in its Class A ordinary shares. The U.S. Holder also will recognize an ordinary loss in respect of the excess, if any, of its adjusted basis of its Class A ordinary shares over the fair market value of its Class A ordinary shares at the end of its taxable year (but only to the extent of the net amount of previously included income as a result of the mark-to-market election). The U.S. Holder’s basis in its Class A ordinary shares will be adjusted to reflect any such income or loss amounts, and any further gain recognized on a sale or other taxable disposition of its Class A ordinary shares will be treated as ordinary income. Currently, a mark-to-market election may not be made with respect to warrants.
The mark-to-market election is available only for “marketable stock,” generally, stock that is regularly traded on a national securities exchange that is registered with the SEC, including Nasdaq (on which we intend to list the Class A ordinary shares), or on a non-U.S. exchange or market that the IRS determines has rules sufficient to ensure that the market price represents a legitimate and sound fair market value. U.S. Holders should consult their tax advisors regarding the availability and tax consequences of a mark-to-market election with respect to our Class A ordinary shares under their particular circumstances.
If we are a PFIC and, at any time, have a non-U.S. subsidiary that is classified as a PFIC, U.S. Holders generally would be deemed to own a portion of the shares of such lower-tier PFIC, and generally could incur liability for the deferred tax and interest charge described above if we receive a distribution from, or dispose of all or part of our interest in, the lower-tier PFIC or the U.S. Holders otherwise were deemed to have disposed of an interest in the lower-tier PFIC. We will endeavor to cause any lower-tier PFIC to provide to a U.S. Holder the information that may be required to make or maintain a QEF election with respect to the lower-tier PFIC. There can be no assurance that we will have timely knowledge of the status of any such lower-tier PFIC. In addition, we may not hold a controlling interest in any such lower-tier PFIC and thus there can be no assurance we will be able to cause the lower-tier PFIC to provide such required information. A mark-to-market election with respect to shares of a lower tier PFIC is available to a U.S. Holder only if
it holds an interest in such lower-tier PFIC directly or indirectly through certain non-U.S. entities described in the Code and accompanying Treasury regulations. U.S. Holders are urged to consult their tax advisors regarding the tax issues raised by lower-tier PFICs.
A U.S. Holder that owns (or is deemed to own) shares in a PFIC during any taxable year of the U.S. Holder, may have to file an IRS Form 8621 (whether or not a QEF or mark-to-market election is made) and such other information as may be required by the U.S. Treasury Department. Failure to do so, if required, will extend the statute of limitations until such required information is furnished to the IRS.
The rules dealing with PFICs and with the QEF and mark-to-market elections are very complex and are affected by various factors in addition to those described above. Accordingly, U.S. Holders of our Class A ordinary shares and warrants should consult their tax advisors concerning the application of the PFIC rules to our securities under their particular circumstances.
Tax Reporting
Certain U.S. Holders may be required to file an IRS Form 926 (Return by a U.S. Transferor of Property to a Foreign Corporation) to report a transfer of property (including cash) to us. Substantial penalties may be imposed on a U.S. Holder that fails to comply with this reporting requirement and the period of limitations on assessment and collection of U.S. federal income taxes will be extended in the event of a failure to comply. Furthermore, certain U.S. Holders who are individuals and certain entities will be required to report information with respect to such U.S. Holder’s investment in “specified foreign financial assets” on IRS Form 8938 (Statement of Specified Foreign Financial Assets), subject to certain exceptions. An interest in the Company constitutes a specified foreign financial asset for these purposes. Persons who are required to report specified foreign financial assets and fail to do so may be subject to substantial penalties and the period of limitations on assessment and collection of U.S. federal income taxes will be extended in the event of a failure to comply. Potential investors are urged to consult their tax advisors regarding the specified foreign financial asset and other reporting obligations and their application to an investment in our Class A ordinary shares and warrants.
Non-U.S. Holders
This section applies to you if you are a “Non-U.S. Holder.” As used herein, the term “Non-U.S. Holder” means a beneficial owner of our units, Class A ordinary shares or warrants (other than a partnership or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) who or that is for U.S. federal income tax purposes:
•
a non-resident alien individual (other than certain former citizens and residents of the United States subject to U.S. tax as expatriates);
•
a non-U.S. corporation; or
•
an estate or trust that is not a U.S. Holder; but generally does not include an individual who is present in the United States for 183 days or more in the taxable year of disposition. A U.S. Holder who is such an individual should consult its tax advisor regarding the U.S. federal income tax consequences of the sale or other disposition of our securities.
Dividends (including constructive dividends) paid or deemed paid to a Non-U.S. Holder in respect of our Class A ordinary shares generally will not be subject to U.S. federal income tax, unless the dividends are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base that such holder maintains in the United States). In addition, a Non-U.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our Class A ordinary shares or warrants unless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base that such holder maintains in the United States), or 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 sale or other disposition and certain other conditions are met (in which case, such gain from the United States sources generally is subject to tax at a 30% rate or a lower applicable treaty rate).
Dividends (including constructive dividends) and gains that are effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to U.S. federal income tax at the same regular U.S. federal income tax rates applicable to a comparable U.S. Holder and, in the case of a Non-U.S. Holder that is a corporation for U.S. federal income tax purposes, also may be subject to an additional branch profits tax at a 30% rate or a lower applicable tax treaty rate.
The characterization for U.S. federal income tax purposes of the redemption of a Non-U.S. Holder’s Class A ordinary shares will generally correspond to the U.S. federal income tax characterization of such a redemption of a U.S. Holder’s Class A ordinary shares, as described under “U.S. Holders—Redemption of Class A Ordinary Shares” above, and the consequences of the redemption to the Non-U.S. Holder will be as described in the paragraphs above under the heading “Non-U.S. Holders” based on such characterization.
The U.S. federal income tax treatment of a Non-U.S. Holder’s exercise of a warrant, or the lapse of a warrant held by a Non-U.S. Holder, generally will correspond to the U.S. federal income tax treatment of the exercise or lapse of a warrant by a U.S. Holder, as described under “—U.S. Holders—Exercise or Lapse of a Warrant,” above, although to the extent a cashless exercise results in a taxable exchange, the consequences would be similar to those described in the preceding paragraphs above for a Non-U.S. Holder’s gain on the sale or other disposition of our Class A ordinary shares and warrants.
Information Reporting and Backup Withholding
Dividend payments with respect to our Class A ordinary shares and proceeds from the sale, exchange or redemption of our Class A ordinary shares may be subject to information reporting to the IRS and possible U.S. backup withholding. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes other required certifications, or who is otherwise exempt from backup withholding and establishes such exempt status. A Non-U.S. Holder generally will eliminate the requirement for information reporting and backup withholding by providing certification of its non-U.S. status, under penalties of perjury, on a duly executed applicable IRS Form W-8 or by otherwise establishing an exemption.
Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a holder’s U.S. federal income tax liability, and a holder generally may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for refund with the IRS and furnishing any required information.
The U.S. federal income tax discussion set forth above is included for general information only and may not be applicable depending upon a holder’s particular situation. Holders are urged to consult their tax advisors with respect to the tax consequences to them of the acquisition, ownership and disposition of our Class A ordinary shares and warrants, including the tax consequences under state, local, estate, non-U.S. and other tax laws and tax treaties and the possible effects of changes in U.S. or other tax laws.
UNDERWRITING
Subject to the terms and conditions set forth in the underwriting agreement, dated as of the date of this prospectus, between us, Credit Suisse Securities (USA) LLC, as the underwriter and sole book-running manager of this offering, we have agreed to sell to the underwriter, and the underwriter has agreed, to purchase from us, the number of units shown opposite its name below:
|
Underwriter
|
|
|
NUMBER
OF UNITS
|
|
|
Credit Suisse Securities (USA) LLC
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
20,000,000
|
|
|
The underwriting agreement provides that the obligations of the underwriter are subject to certain conditions precedent such as the receipt by the underwriter of officers’ certificates and legal opinions and approval of certain legal matters by their counsel. The underwriting agreement provides that the underwriter will purchase all of the units if any of them are purchased. We have agreed to indemnify the underwriter and certain of their controlling persons against certain liabilities, including liabilities under the Securities Act, and to contribute to payments that the underwriter may be required to make in respect of those liabilities.
The underwriter has advised us that, following the completion of this offering, they currently intend to make a market in the units as permitted by applicable laws and regulations. However, the underwriter is not obligated to do so, and the underwriter may discontinue any market-making activities at any time without notice in their sole discretion. Accordingly, no assurance can be given as to the liquidity of the trading market for the units, that you will be able to sell any of the units held by you at a particular time or that the prices that you receive when you sell will be favorable.
The underwriter is offering the units subject to their acceptance of the units from us and subject to prior sale. The underwriter reserves the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part. In addition, the underwriter has advised us that they do not intend to confirm sales to any account over which they exercise discretionary authority.
Commission and Expenses
The underwriter has advised us that they propose to offer the units to the public at the initial public offering price set forth on the cover page of this prospectus and to certain dealers, which may include the underwriter, at that price less a concession not in excess of $ per unit. After the offering, the initial public offering price, concession and reallowance to dealers may be reduced by the underwriter. No such reduction will change the amount of proceeds to be received by us as set forth on the cover page of this prospectus.
The following table summarizes the underwriting discounts and commissions that we will pay to the underwriter, including $0.35 per unit, or $7,000,000 in the aggregate (or $8,05,000 in the aggregate if the underwriter’s over-allotment option is exercised in full) of deferred underwriting commissions that will be paid to the underwriter upon the completion of our initial business. Such amounts are shown assuming both no exercise and full exercise of the underwriter’s option to purchase additional units.
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|
|
|
PAID BY FRONTIER
ACQUISITION CORP.
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|
|
|
|
|
NO
EXERCISE
|
|
|
FULL
EXERCISE
|
|
|
Per Unit(1)
|
|
|
|
$
|
0.55
|
|
|
|
|
$
|
0.55
|
|
|
|
Total(1)
|
|
|
|
$
|
11,000,000
|
|
|
|
|
$
|
12,650,000
|
|
|
(1)
$0.20 per unit, or $4,000,000 in the aggregate (or $4,600,000 in the aggregate if the underwriter’s option to purchase additional units is exercised in full), is payable upon the closing of this offering. $0.35 per unit, or $7,000,000 in the aggregate (or $8,050,000 in the aggregate if the underwriter’s option to purchase additional units is exercised in full) payable to the underwriter for deferred underwriting
commissions will be placed in a trust account located in the United States as described herein. The deferred commissions will be released to the underwriter only on and concurrently with completion of an initial business combination.
If we do not complete our initial business combination within 24 months from the closing of this offering (or such later period, if extended) and subsequently liquidate, the underwriter has agreed that (i) they will forfeit any rights or claims to their deferred underwriting discounts and commissions, including any accrued interest thereon, then in the trust account and (ii) the deferred underwriter’s discounts and commissions will be distributed on a pro rata basis, together with any accrued interest thereon (which interest will be net of taxes payable) to the public shareholders.
We estimate expenses payable by us in connection with this offering, other than the underwriting discounts and commissions referred to above, will be approximately $1,000,000. We have agreed to pay certain out-of pocket expenses of the underwriter, including FINRA-related fees and expenses of the underwriter’s legal counsel, not to exceed $ .
Determination of Offering Price
Prior to this offering, there has not been a public market for our securities. Consequently, the initial public offering price for our units was determined by negotiations between us and the underwriter. Among the factors considered in these negotiations 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 offer no assurances that the initial public offering price will correspond to the price at which the units will trade in the public market subsequent to the offering or that an active trading market for the units will develop and continue after the offering.
Listing
We intend to apply to have our units listed on The Nasdaq Capital Market, or Nasdaq, under the symbol “FRONU” We expect the Class A ordinary shares and warrants comprising the units to begin separate trading on Nasdaq under the symbols “FRON” and “FRONW,” respectively. The units will automatically separate into their component parts and will not be traded following the completion of our initial business combination.
Stamp Taxes
If you purchase units offered in this prospectus, you may be required to pay stamp taxes and other charges under the laws and practices of the country of purchase, in addition to the offering price listed on the cover page of this prospectus.
Option to Purchase Additional Units
We have granted to the underwriter an option, exercisable for 45 days from the date of this prospectus, to purchase, from time to time, in whole or in part, up to an aggregate of 3,000,000 units from us at the public offering price set forth on the cover page of this prospectus, less underwriting discounts and commissions. This option may be exercised only if the underwriter sells more units than the total number set forth on the cover page of this prospectus.
Letter Agreement
We, our sponsor and our officers and directors have agreed that, for a period of 180 days from the date of this prospectus, we and they will not, without the prior written consent of Credit Suisse, offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any units, warrants, Class A ordinary shares or any other securities convertible into, or exercisable, or exchangeable for, Class A ordinary shares; provided, however, that we may (1) issue and sell the private placement units, (2) issue and sell the additional units to cover the underwriter’s 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 founder shares and the private placement units and the securities underlying the foregoing or the warrants and Class A ordinary shares issuable upon exercise of the warrants, and (4) issue securities in connection with an initial business combination. Credit Suisse, in its sole discretion, may release any of the securities subject to this lock-up agreement at any time without notice.
Our initial shareholders have agreed 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) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Warrants — Public Shareholders’ Warrants — Anti-dilution Adjustments”) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property (except as described herein under “Principal Shareholders — Transfers of Founder Shares and Private Placement Units”). Any permitted transferees will be subject to the same restrictions and other agreements of our sponsor and our management team with respect to any founder shares, private placement units, private placement shares, private placement warrants and Class A ordinary shares issued upon conversion or exercise thereof. We refer to such transfer restrictions throughout this prospectus as the lock-up.
The private placement units (including the private placement shares, private placement warrants and Class A ordinary shares issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business combination (except with respect to permitted transferees as described herein under the section of this prospectus entitled “Principal Shareholders — Transfers of Founder Shares and Private Placement Units”).
Stabilization
The underwriter has advised us that they, pursuant to Regulation M under the Exchange Act, and certain persons participating in the offering may engage in short sale transactions, stabilizing transactions, syndicate covering transactions or the imposition of penalty bids in connection with this offering. These activities may have the effect of stabilizing or maintaining the market price of the units at a level above that which might otherwise prevail in the open market. Establishing short sales positions may involve either “covered” short sales or “naked” short sales.
“Covered” short sales are sales made in an amount not greater than the underwriter’s option to purchase additional units in this offering. The underwriter may close out any covered short position by either exercising their option to purchase additional units or purchasing units in the open market. In determining the source of units to close out the covered short position, the underwriter 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 option to purchase additional units.
“Naked” short sales are sales in excess of the option to purchase additional units. The underwriter must close out any naked short position by purchasing units in the open market. A naked short position is more likely to be created if the underwriter is concerned that there may be downward pressure on the price of our units in the open market after pricing that could adversely affect investors who purchase in this offering.
A stabilizing bid is a bid for the purchase of units on behalf of the underwriter for the purpose of fixing or maintaining the price of the units. A syndicate covering transaction is the bid for or the purchase of units on behalf of the underwriter to reduce a short position incurred by the underwriter in connection with the offering. Similar to other purchase transactions, the underwriter’s purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of our units or preventing or retarding a decline in the market price of our units. As a result, the price of our units may be higher than the price that might otherwise exist in the open market. A penalty bid is an arrangement permitting the underwriter to reclaim the selling concession otherwise accruing to a syndicate member in connection with the
offering if the units originally sold by such syndicate member are purchased in a syndicate covering transaction and therefore have not been effectively placed by such syndicate member.
Neither we nor the underwriter make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our units. The underwriter is not obligated to engage in these activities and, if commenced, any of the activities may be discontinued at any time.
The underwriter may also engage in passive market making transactions in our units on Nasdaq in accordance with Rule 103 of Regulation M during a period before the commencement of offers or sales of our units in this offering and extending through the completion of distribution. A passive market maker must display its bid at a price not in excess of the highest independent bid of that security. However, if all independent bids are lowered below the passive market maker’s bid, that bid must then be lowered when specified purchase limits are exceeded.
Electronic Distribution
A prospectus in electronic format may be made available by e-mail or on the web sites or through online services maintained by one or more of the underwriter and its affiliates. In those cases, prospective investors may view offering terms online and may be allowed to place orders online. The underwriter may agree with us to allocate a specific number of units for sale to online brokerage account holders. Any such allocation for online distributions will be made by the underwriter on the same basis as other allocations. Other than the prospectus in electronic format, the information on the underwriter’s web sites and any information contained in any other web site maintained by the underwriter is not part of this prospectus, has not been approved and/or endorsed by us or the underwriter and should not be relied upon by investors.
Other Activities and Relationships
We are not under any contractual obligation to engage the underwriter to provide any services for us after this offering, but we may do so at our discretion. However, the underwriter may introduce us to potential target businesses, provide financial advisory services to us in connection with a business combination or assist us in raising additional capital in the future, including by acting as a placement agent in a private offering or underwriting or arranging debt financing. If the underwriter provides services to us after this offering, we may pay the underwriter fair and reasonable fees that would be determined at that time in an arm’s length negotiation; provided that no agreement will be entered into with the underwriter and no fees for such services will be paid to the underwriter prior to the date that is 60 days from the date of this prospectus, unless FINRA determines that such payment would not be deemed underwriter’s compensation in connection with this offering and we may pay the underwriter 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. Any fees we may pay the underwriter and its affiliates for services rendered to us after this offering may be contingent on the completion of a business combination and may include non-cash compensation. The underwriter and its affiliates that provide these services to us may have a potential conflict of interest given that the underwriter is entitled to the deferred portion of their underwriting compensation for this offering only if an initial business combination is completed within the specified timeframe.
The underwriter and certain of their affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. The underwriter and certain of their affiliates have, from time to time, performed, and may in the future perform, various commercial and investment banking and financial advisory services for us and our affiliates, for which they received or will receive customary fees and expenses.
In the ordinary course of their various business activities, the underwriter and certain of its 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, and such investment and securities activities may involve securities and/or instruments issued by us and our affiliates. The underwriter and certain of their affiliates may also
communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
Selling Restrictions
Canada
Resale Restrictions
The distribution of the securities 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 securities 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 the securities 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 securities 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 the underwriter is relying on the exemption set out in section 3A.3 or 3A.4, if applicable, of National Instrument 33-105 — Underwriting Conflicts from having to provide certain conflict of interest disclosure in this document.
Statutory Rights of Action
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if the prospectus (including any amendment thereto) such as this document contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser of these securities in Canada should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.
Enforcement of Legal Rights
All of our directors and officers as well as the experts named herein may be located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All or a substantial portion of our assets and the assets of those persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons outside of Canada.
Taxation and Eligibility for Investment
Canadian purchasers of the securities should consult their own legal and tax advisors with respect to the tax consequences of an investment in the securities in their particular circumstances and about the eligibility of the securities for investment by the purchaser under relevant Canadian legislation.
Cayman Islands
No offer or invitation, whether directly or indirectly, may be made to the public in the Cayman Islands to subscribe for our securities.
Australia
This prospectus is not a disclosure document for the purposes of Australia’s Corporations Act 2001 (Cth) of Australia, or Corporations Act, has not been lodged with the Australian Securities & Investments Commission and is only directed to the categories of exempt persons set out below. Accordingly, if you receive this prospectus in Australia:
You confirm and warrant that you are either:
•
a “sophisticated investor” under section 708(8)(a) or (b) of the Corporations Act;
•
a “sophisticated investor” under section 708(8)(c) or (d) of the Corporations Act and that you have provided an accountant’s certificate to the Company which complies with the requirements of section 708(8)(c)(i) or (ii) of the Corporations Act and related regulations before the offer has been made;
•
a person associated with the Company under Section 708(12) of the Corporations Act; or
•
a “professional investor” within the meaning of section 708(11)(a) or (b) of the Corporations Act.
To the extent that you are unable to confirm or warrant that you are an exempt sophisticated investor, associated person or professional investor under the Corporations Act any offer made to you under this prospectus is void and incapable of acceptance.
You warrant and agree that you will not offer any of the securities issued to you pursuant to this prospectus for resale in Australia within 12 months of those securities being issued unless any such resale offer is exempt from the requirement to issue a disclosure document under section 708 of the Corporations Act.
European Economic Area
The units are not intended to be offered or sold to and should not be offered or sold to any retail investor in the European Economic Area (the “EEA”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU, as amended (“MiFID II”); or (ii) a customer within the meaning of Directive 2002/92/EC, as amended (the “Insurance Mediation Directive”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in the Directive 2003/71/EC (as amended, the “Prospectus Directive”). No key information document required by Regulation (EU) No 1286/2014, as amended (the “PRIIPs Regulation”) for offering or selling the units or otherwise making them available to retail investors in the EEA has been prepared. Offering or selling the units or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPS Regulation. This prospectus has been prepared on the basis that any offer of the units in any member state of the EEA will be made pursuant to an exemption under the Prospectus Directive from a requirement to publish a prospectus for offers of units. This prospectus is not a prospectus for the purpose of the Prospectus Directive.
Hong Kong
No securities have been offered or sold, and no securities may be offered or sold, in Hong Kong, by means of any document, other than to persons whose ordinary business is to buy or sell shares or debentures, whether as principal or agent; or to “professional investors” as defined in the Securities and Futures
Ordinance (Cap. 571) of Hong Kong (“SFO”) and any rules made under that Ordinance; or in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance (Cap. 32) of Hong Kong (“CO”) or which do not constitute an offer or invitation to the public for the purpose of the CO or the SFO. No document, invitation or advertisement relating to the securities has been issued or may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted under the securities laws of Hong Kong) other than with respect to 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 SFO and any rules made under that Ordinance.
This prospectus has not been registered with the Registrar of Companies in Hong Kong. Accordingly, this prospectus may not be issued, circulated or distributed in Hong Kong, and the securities may not be offered for subscription to members of the public in Hong Kong. Each person acquiring the securities will be required, and is deemed by the acquisition of the securities, to confirm that he is aware of the restriction on offers of the securities described in this prospectus and the relevant offering documents and that he is not acquiring, and has not been offered any securities in circumstances that contravene any such restrictions.
Israel
This document does not constitute a prospectus under the Israeli Securities Law, 5728-1968, or the Securities Law, and has not been filed with or approved by the Israel Securities Authority. In Israel, this prospectus is being distributed only to, and is directed only at, and any offer of the units is directed only at, (i) a limited number of persons in accordance with the Israeli Securities Law and (ii) investors listed in the first addendum, or the Addendum, to the Israeli Securities Law, consisting primarily of joint investment in trust funds, provident funds, insurance companies, banks, portfolio managers, investment advisors, members of the Tel Aviv Stock Exchange, underwriters, venture capital funds, entities with equity in excess of NIS 50 million and “qualified individuals,” each as defined in the Addendum (as it may be amended from time to time), collectively referred to as qualified investors (in each case, purchasing for their own account or, where permitted under the Addendum, for the accounts of their clients who are investors listed in the Addendum). Qualified investors are required to submit written confirmation that they fall within the scope of the Addendum, are aware of the meaning of same and agree to it.
Japan
The offering has not been and will not be registered under the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948 of Japan, as amended), or FIEL, and the Initial Purchaser will not offer or sell any securities, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the FIEL and any other applicable laws, regulations and ministerial guidelines of Japan.
Singapore
This prospectus has not been and will not be lodged or registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the securities may not be circulated or distributed, nor may the securities be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275, of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Where the securities are subscribed or purchased under Section 275 of the SFA by a relevant person which is:
•
a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or
•
a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the securities pursuant to an offer made under Section 275 of the SFA except:
•
to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;
•
where no consideration is or will be given for the transfer;
•
where the transfer is by operation of law;
•
as specified in Section 276(7) of the SFA; or
•
as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 of Singapore.
Switzerland
The securities may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or on any other stock exchange or regulated trading facility in Switzerland. This prospectus has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this prospectus nor any other offering or marketing material relating to the securities or the offering may be publicly distributed or otherwise made publicly available in Switzerland.
Neither this prospectus nor any other offering or marketing material relating to the offering, the Company or the securities have been or will be filed with or approved by any Swiss regulatory authority. In particular, this prospectus will not be filed with, and the offer of securities will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA, and the offer of securities has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes (“CISA”). The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of securities.
United Kingdom
This prospectus is only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive that are also (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) and/or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order and other persons to whom it may lawfully be communicated (each such person being referred to as a “relevant person”).
This prospectus and its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other persons in the United Kingdom. Any person in the United Kingdom that is not a relevant person should not act or rely on this document or any of its contents.
LEGAL MATTERS
Kirkland & Ellis LLP, New York, New York will pass upon the validity of the securities offered in this prospectus with respect to units and warrants. Maples and Calder will pass upon the validity of the securities offered in this prospectus with respect to the ordinary shares and matters of Cayman Islands law. In connection with this offering, Davis Polk & Wardwell LLP, New York, New York advised the underwriter in connection with the offering of the securities.
EXPERTS
The financial statements of Frontier Acquisition Corp. as of January 20, 2021, and for the period from January 15, 2021 (inception) through January 20, 2021, appearing in this prospectus have been audited by WithumSmith+Brown, PC, independent registered public accounting firm, as set forth in their report thereon, appearing elsewhere in this prospectus, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the securities we are offering by this prospectus. This prospectus does not contain all of the information included in the registration statement. For further information about us and our securities, you should refer to the registration statement and the exhibits and schedules filed with the registration statement. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are materially complete but may not include a description of all aspects of such contracts, agreements or other documents, and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document.
Upon completion of this offering, we will be subject to the information requirements of the Exchange Act and will file annual, quarterly and current event reports, proxy statements and other information with the SEC. You can read our SEC filings, including the registration statement, over the Internet at the SEC’s website at www.sec.gov.
INDEX TO FINANCIAL STATEMENTS
Audited Financial Statements for Frontier Acquisition Corp.:
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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 the Board of Directors of
Frontier Acquisition Corp.
Opinion on the Financial Statements
We have audited the accompanying balance sheet of Frontier Acquisition Corp. (the “Company”) as of January 20, 2021, the related statements of operations, changes in shareholder’s equity and cash flows for the period from January 15, 2021(inception) through January 20, 2021, 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 January 20, 2021, and the results of its operations and its cash flows for the period from January 15, 2021(inception) through January 20, 2021, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (the “PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ WithumSmith+Brown, PC
We have served as the Company’s auditor since 2021.
New York, New York
February 1, 2021
FRONTIER ACQUISITION CORP.
BALANCE SHEET
January 20, 2021
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Assets
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Current assets:
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Prepaid expenses
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$
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19,924
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Total current assets
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19,924
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Deferred offering costs associated with proposed public offering
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45,000
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Total Assets
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$
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64,924
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Liabilities and Shareholder’s Equity
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Current liabilities:
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Accrued expenses
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$
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45,000
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Total current liabilities
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45,000
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Commitments and Contingencies
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Shareholder’s Equity
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Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and
outstanding
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—
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Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none issued and
outstanding
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—
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Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 5,750,000 shares issued
and outstanding(1)
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575
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Additional paid-in capital
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24,425
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Accumulated deficit
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(5,076)
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Total shareholder’s equity
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|
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19,924
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Total Liabilities and Shareholder’s Equity
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$
|
64,924
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(1)
This number includes up to 750,000 Class B ordinary shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters.
The accompanying notes are an integral part of these financial statements.
FRONTIER ACQUISITION CORP.
STATEMENT OF OPERATIONS
For the period from January 15, 2021 (inception) through January 20, 2021
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General and administrative expenses
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|
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$
|
5,076
|
|
|
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Net loss
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|
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$
|
(5,076)
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Weighted average shares outstanding, basic and diluted(1)
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|
|
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5,000,000
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|
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Basic and diluted net loss per ordinary share
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|
|
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$
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(0.00)
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(1)
This number excludes an aggregate of up to 750,000 Class B ordinary shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters.
The accompanying notes are an integral part of these financial statements.
FRONTIER ACQUISITION CORP.
STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY
For the period from January 15, 2021 (inception) through January 20, 2021
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Ordinary Shares
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Additional
Paid-in
Capital
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Accumulated
Deficit
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Total
Shareholder’s
Equity
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Class A
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Class B
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Shares
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Amount
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Shares
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Amount
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Balance – January 15, 2021 (inception)
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|
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—
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|
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|
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$
|
—
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|
|
|
|
|
—
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|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
Issuance of Class B ordinary shares to Sponsor(1)
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
5,750,000
|
|
|
|
|
|
575
|
|
|
|
|
|
24,425
|
|
|
|
|
|
—
|
|
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|
|
|
25,000
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|
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Net loss
|
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—
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|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
(5,076)
|
|
|
|
|
|
(5,076)
|
|
|
|
Balance – January 20, 2021
|
|
|
|
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
|
5,750,000
|
|
|
|
|
$
|
575
|
|
|
|
|
$
|
24,425
|
|
|
|
|
$
|
(5,076)
|
|
|
|
|
$
|
19,924
|
|
|
(1)
This number includes up to 750,000 Class B ordinary shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters.
The accompanying notes are an integral part of these financial statements.
FRONTIER ACQUISITION CORP.
STATEMENT OF CASH FLOWS
For the period from January 15, 2021 (inception) through January 20, 2021
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
$
|
(5,076)
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Prepaid expenses
|
|
|
|
|
5,076
|
|
|
|
|
Net cash used in operating activities
|
|
|
|
|
—
|
|
|
|
|
Net change in cash
|
|
|
|
|
—
|
|
|
|
|
Cash – beginning of the period
|
|
|
|
|
—
|
|
|
|
|
Cash – end of the period
|
|
|
|
$
|
—
|
|
|
|
|
Supplemental disclosure of noncash financing activities:
|
|
|
|
|
|
|
|
|
|
Deferred offering costs included in accrued expenses
|
|
|
|
$
|
45,000
|
|
|
|
|
Prepaid expenses paid by Sponsor in exchange for issuance of Class B ordinary shares
|
|
|
|
$
|
25,000
|
|
|
The accompanying notes are an integral part of these financial statements.
Note 1 — Description of Organization, Business Operations
Frontier Acquisition Corp. (the “Company”) was incorporated as a Cayman Islands exempted company on January 15, 2021. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities (the “Business Combination”).
As of January 20, 2021, the Company had not commenced any operations. All activity for the period from January 15, 2021 (inception) through January 20, 2021 relates to the Company’s formation and the proposed initial public offering described below. The Company has minimal activities up to January 20, 2021. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Proposed Public Offering (as defined below). The Company has selected December 31 as its fiscal year end.
The Company’s sponsor is Frontier Acquisition Sponsor LLC, a Cayman Islands 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 20,000,000 units (each, a “Unit” and collectively, the “Units”) at $10.00 per Unit (or 23,000,000 units if the underwriters’ over-allotment option is exercised in full), which is discussed in Note 3, and the sale of 600,000 Units (or 660,000 Units if the underwriters’ over-allotment option is exercised in full) (each, a “Private Placement Unit” and collectively, the “Private Placement Units”), at a price of $10.00 per Private Placement Unit 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 Units, 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 deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of the signing of the agreement to enter into the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Upon the closing 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 the proceeds from the sale of the Private Placement Units, will be held in a trust account (“Trust Account”), located in the United States, with Continental Stock Transfer & Trust Company acting as trustee, and will be invested only in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.
The Company will provide the holders (the “Public Shareholders”) of its Class A ordinary shares, which is discussed in Note 3 (the “Public Shares”), with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay taxes). The per-share amount to be distributed to Public Shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 5).
These Public Shares will be 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.” In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, only if a majority of the ordinary shares, represented in person or by proxy and entitled to vote thereon, voted at a shareholder meeting are voted in favor of the Business Combination. If a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to the amended and restated memorandum and articles of association which the Company will adopt upon the consummation of the Proposed Public Offering (the “Amended and Restated Memorandum and Articles of Association”), 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, shareholder approval of the transactions is required by law, or the Company decides to obtain shareholder approval for business or reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each Public Shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or vote at all. If the Company seeks shareholder approval in connection with a Business Combination, the initial shareholders (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. Subsequent to the consummation of the Proposed Public Offering, the Company will adopt an insider trading policy which will require insiders to: (i) refrain from purchasing shares during certain blackout periods and when they are in possession of any material non-public information and (ii) to clear all trades with the Company’s legal counsel prior to execution. In addition, the initial shareholders have agreed to waive their redemption rights with respect to their Founder Shares, Private Placement Units and Public Shares in connection with the completion of a Business Combination.
Notwithstanding the foregoing, if the Company seeks shareholder approval of its Business Combination and does not conduct redemptions in connection with its Business Combination pursuant to the tender offer rules, the Amended and Restated Memorandum and Articles of Association will provide that a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the 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 Class A ordinary shares sold in the Proposed Public Offering, without the prior consent of the Company.
The Company’s Sponsor, officers and directors (the “initial shareholders”) have agreed not to propose an amendment to the Amended and Restated Memorandum and Articles of Association (a) that would modify the substance or timing of the Company’s obligation to provide holders of its Public Shares the right to have their shares redeemed in connection with a Business Combination or to redeem 100% of the Company’s Public Shares if the Company does not complete its Business Combination within 24 months from the closing of the Proposed Public Offering (the “Combination Period”) or with respect to any other provision relating to the rights of Public Shareholders, unless the Company provides the Public Shareholders with the opportunity to redeem their Class A ordinary shares in conjunction with any such amendment.
If the Company has not completed a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its taxes that were paid by the Company or are payable by the Company, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding Public Shares, which redemption will completely extinguish Public Shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
The initial shareholders have agreed to waive their liquidation rights with respect to the Founder Shares and Private Placement Units held by them if the Company fails to complete a Business Combination within the Combination Period. However, if the initial shareholders 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 their deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution (including Trust Account assets) will be only $10.00 per share initially held in the Trust Account. In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per Public Share due to reductions in the value of the trust assets. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Company’s indemnity of the underwriters of the Proposed Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”).
Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (excluding the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Note 2 — Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC.
The Company does not have sufficient liquidity to meet its anticipated obligations over the next year from the issuance of these financial statements. In connection with the Company’s assessment of going concern considerations in accordance with FASB’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the Company has access to funds from the Sponsor, and the Sponsor has the financial wherewithal to fund the Company, that are sufficient to fund the working capital needs of the Company until the earlier of the consummation of the Proposed Public Offering or one year from the issuance of these financial statements.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that 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.
Net Loss Per Ordinary Share
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 ordinary shares outstanding during the period. Weighted average shares at January 20, 2021 were reduced for the effect of an aggregate of 750,000 Class B ordinary shares that are subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5). At January 20, 2021, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the period presented.
Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet, primarily due to their short-term nature.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the financial statements and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Deferred Offering Costs Associated with the Proposed Public Offering
Deferred offering costs consist of legal fees incurred through the balance sheet date that are directly related to the Proposed Public Offering and that will be charged to shareholder’s equity upon the completion of the Proposed Public Offering. Should the Proposed Public Offering prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations.
Income Taxes
FASB ASC 740, “Income Taxes”, 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 January 20, 2021. The Company’s management determined that the Cayman Islands is the Company’s only major tax
jurisdiction. 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 January 20, 2021. 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.
There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s unaudited condensed financial statements. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting pronouncement if currently adopted would have a material effect on the Company’s financial statements.
Note 3 — Proposed Public Offering
Pursuant to the Proposed Public Offering, the Company intends to offer for sale 20,000,000 Units (or 23,000,000 Units if the underwriter’s over-allotment option is exercised in full) at a price of $10.00 per Unit. Each Unit consists of one Class A ordinary share, and one-third of one redeemable warrant (each, a “Public Warrant”). Each Public Warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 6).
Note 4 — Related Party Transactions
Founder Shares
On January 20, 2021, the Sponsor paid $25,000 to cover certain expenses on behalf of the Company in exchange for issuance of 5,750,000 Class B ordinary shares, par value $0.0001, (the “Founder Shares”). The Sponsor will agree to forfeit up to 750,000 Founder Shares to the extent that the over-allotment option is not exercised in full by the underwriters. The forfeiture will be adjusted to the extent that the over-allotment option is not exercised in full by the underwriters so that the Founder Shares will represent 20.0% of the Company’s issued and outstanding shares after the Proposed Public Offering. If the Company increases or decreases the size of the offering, the Company will effect a share dividend or share contribution back to capital, as applicable, immediately prior to the consummation of the Proposed Public Offering in such amount as to maintain the Founder Share ownership of the Company’s shareholders prior to the Proposed Public Offering at 20.0% of the Company’s issued and outstanding ordinary shares upon the consummation of the Proposed Public Offering.
The initial shareholders will agree, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (a) one year after the completion of the initial Business Combination and (b) subsequent to the initial Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, 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, share exchange or other similar transaction that results in all of the Public Shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.
Private Placement Units
The Sponsor has agreed to purchase 600,000 Units (or 660,000 Units if the underwriter’s over-allotment option is exercised in full), at a price of $10.00 per unit in a private placement to occur concurrently with the Proposed Public Offering for an aggregate purchase price of $6.0 million (or $6.6 million if the over-allotment option is exercised in full), subject to certain limited exceptions. The Private Placement Units are identical to the units to be sold in the Proposed Public Offering, subject to certain limited exceptions.
With certain limited exceptions, the private placement units, the private placement shares, the private placement warrants and the Class A ordinary shares underlying such warrants, will not be transferable until 30 days following the completion of the initial Business Combination.
Related Party Loans
On January 20, 2021, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover for 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 June 30, 2021 and the completion of the Proposed Public Offering. As of January 20, 2021, the Company had not borrowed any amount under the Note.
In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into up to an additional 1,000,000 private placement 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. To date, the Company had no borrowings under the Working Capital Loans.
Administrative Support Agreement
Commencing on the effective date of the prospectus, the Company will agree to pay an affiliate of the Sponsor a total of $10,000 per month for office space, secretarial and administrative services provided to the Company. Upon completion of the initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees.
Note 5 — Commitments and Contingencies
Registration and Shareholder Rights
The holders of the Founder Shares, Private Placement Units, Private Placement Shares, private placement warrants, Class A ordinary shares underlying the private placement warrants and warrants that may be issued upon conversion of working capital loans (and any Class A ordinary shares issuable upon the exercise of the private placement warrants and warrants that may be issued upon conversion of working capital loans) will be entitled to registration rights pursuant to a registration and shareholder rights agreement to be signed prior to or on the effective date of this offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our initial business combination. However, the registration and shareholder rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period, which occurs (i) in the case of the founder shares, as described in the following paragraph, and (ii) in the case of the private placement warrants and the respective Class A ordinary shares underlying such warrants, 30 days after the completion of our initial business combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company will grant the underwriters a 45-day option from the final prospectus relating to the Proposed Public Offering to purchase up to 3,000,000 additional Units to cover over-allotments, if any, at the Proposed Public Offering price less the underwriting discounts and commissions.
The underwriters will be entitled to an underwriting discount of $0.20 per unit, or $4.0 million in the aggregate (or $4.6 million in the aggregate if the underwriters’ over-allotment option is exercised in full), payable upon the closing of the Proposed Public Offering. In addition, $0.35 per unit, or approximately $7.0 million in the aggregate (or approximately $8.1 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 on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, close of the Proposed Public Offering, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Note 6 — Shareholder’s Equity
Class A Ordinary Shares — The Company is authorized to issue 500,000,000 Class A ordinary shares with a par value of $0.0001 per share. As of January 20, 2021, there were no ordinary shares issued or outstanding.
Class B Ordinary Shares — The Company is authorized to issue 50,000,000 Class B ordinary shares with a par value of $0.0001 per share. As of January 20, 2021, there were 5,750,000 Class B ordinary shares issued and outstanding, of which up to 750,000 Class B ordinary shares are subject to forfeiture to the extent that the underwriters’ over-allotment option is not exercised in full or in part, so that the initial shareholders will collectively own approximately 20% of the Company’s issued and outstanding ordinary shares (See Note 4).
Prior to the initial Business Combination, only holders of the Founder Shares will have the right to vote on the appointment of directors. Holders of the Public Shares will not be entitled to vote on the appointment of directors during such time. In addition, prior to the completion of an initial Business Combination, holders of a majority of the Founder Shares may remove a member of the board of directors for any reason. These provisions of the amended and restated memorandum and articles of association may only be amended by a special resolution passed by not less than two-thirds of the ordinary shares who attend and vote at the general meeting which shall include the affirmative vote of a simple majority of the Class B ordinary shares. With respect to any other matter submitted to a vote of the shareholders, including any vote in connection with the initial Business Combination, except as required by law, holders of the Founder Shares and holders of the Public Shares will vote together as a single class, with each share entitling the holder to one vote.
The Class B ordinary shares will automatically convert into Class A ordinary shares following the consummation of the initial Business Combination or earlier at the option of the holders thereof at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of the Proposed Public Offering, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities (as defined herein) or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial Business Combination and any private placement warrants issued to the Sponsor, its affiliates or any member of the management team upon conversion of Working Capital Loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one.
Preference Shares — The Company is authorized to issue 5,000,000 preference shares 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 January 20, 2021, there were no preference shares issued or outstanding.
Warrants — Public Warrants may only be exercised for a whole number of shares. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the Proposed Public Offering; provided in each case that the Company has an effective registration statement under the Securities Act covering the Class A ordinary shares issuable upon exercise of the Public Warrants and a current prospectus relating to them is available (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 will agree that as soon as practicable, but in no event later than twenty (20) business days after the closing of the initial Business Combination, the Company will use its commercially reasonable efforts to file with the SEC a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of the initial Business Combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement provided that if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect a registration statement. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th day after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption, but the Company will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
The warrants have an exercise price of $11.50 per whole share, 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 Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by the board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of 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 Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its 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, and the $18.00 per share redemption trigger price described under “Redemption of warrants when the price per Class A ordinary share 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 under “Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00. Once the warrants become exercisable, the Company may redeem the outstanding warrants (except 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; and
•
if, and only if, the last reported sale price (the “closing price”) of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Warrants — Public Shareholders’ Warrants — Anti-dilution Adjustments”) for any 20 trading days within a 30-trading day period ending 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 as described above unless an registration statement under the Securities Act covering the Class A ordinary shares issuable upon exercise of the warrants is effective and a current prospectus relating to those Class A ordinary shares is available throughout the 30-day redemption period. If and when the warrants become redeemable by the Company, it 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.
Except as set forth below, none of the Private Placement Warrants will be redeemable by the Company so long as they are held by the Sponsor or its permitted transferees.
Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00. Once the warrants become exercisable, the Company may redeem the outstanding warrants:
•
in whole and not in part;
•
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to an agreed table based on the redemption date and the “fair market value” of the Class A ordinary shares;
•
if, and only if, the closing price of Class A ordinary shares equals or exceeds $10.00 per share (as adjusted) on the trading day before the Company sends the notice of redemption to the warrant holders;
•
if, and only if, the private placement warrants are also concurrently called for redemption on the same terms as the outstanding public warrants, as described above; and
•
if, and only if, there is an effective registration statement covering the issuance of the Class A ordinary shares 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 the Class A ordinary shares for the above purpose shall mean the volume weighted average price of Class A ordinary shares during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361 Class A ordinary shares per warrant (subject to adjustment).
If the Company has not completed the initial 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
Management has evaluated subsequent events to determine if events or transactions that occurred after the balance sheet date up to February 1, 2021, the date the financial statements were available for issuance. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
20,000,000 UNITS
FRONTIER ACQUISITION CORP.
PRELIMINARY PROSPECTUS
, 2021
Sole Book-Running Manager
Credit Suisse
Until , 2021 (25 days after the date of this prospectus), all dealers that buy, sell or trade our ordinary shares, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriter and with respect to their unsold allotments or subscriptions.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The estimated expenses payable by us in connection with the offering described in this registration statement (other than the underwriting discount and commissions) will be as follows:
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|
SEC expenses
|
|
|
|
$
|
18,659
|
|
|
|
|
FINRA expenses
|
|
|
|
|
22,063
|
|
|
|
|
Accounting fees and expenses
|
|
|
|
|
60,000
|
|
|
|
|
Printing and engraving expenses
|
|
|
|
|
30,000
|
|
|
|
|
Travel and road show expenses
|
|
|
|
|
20,000
|
|
|
|
|
Legal fees and expenses
|
|
|
|
|
325,000
|
|
|
|
|
Nasdaq listing and filing fees
|
|
|
|
|
55,000
|
|
|
|
|
Director & Officers liability insurance premiums(1)
|
|
|
|
|
450,000
|
|
|
|
|
Miscellaneous
|
|
|
|
|
19,278
|
|
|
|
|
Total
|
|
|
|
$
|
1,000,000
|
|
|
(1)
This amount represents the approximate amount of annual director and officer liability insurance premiums the registrant anticipates paying following the completion of its initial public offering and until it completes a business combination.
Item 14. Indemnification of Directors and Officers.
Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against willful default, willful neglect, civil fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association will provide for indemnification of our officers and directors to the maximum extent permitted by law, including for any liability incurred in their capacities as such, except through their own actual fraud, willful default or willful neglect. We will enter into agreements with our directors and officers to provide contractual indemnification in addition to the indemnification provided for in our amended and restated memorandum and articles of association. We expect to purchase a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.
Our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account, and have agreed to waive any right, title, interest or claim of any kind they may have in the future as a result of, or arising out of, any services provided to us and will not seek recourse against the trust account for any reason whatsoever (except to the extent they are entitled to funds from the trust account due to their ownership of public shares). Accordingly, any indemnification provided will only be able to be satisfied by us if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Item 15. Recent Sales of Unregistered Securities.
On January 21, 2021, we issued to Frontier Acquisition Sponsor LLC, our sponsor, 5,750,000 of our Class B ordinary shares, in exchange for a capital contribution of $25,000, or approximately $0.004 per
share. Such securities were issued in connection with our organization pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. On February 16, 2021, our Sponsor transferred 40,000 founder shares to each of Peter Attia, David A. Sinclair and Jonathan Christodoro, our independent director nominees.
Our sponsor is an accredited investor for purposes of Rule 501 of Regulation D. Each of the equity holders in our sponsor is an accredited investor under Rule 501 of Regulation D. The sole business of Frontier Acquisition Sponsor LLC is to act as the company’s sponsor in connection with this offering.
Our sponsor has committed, pursuant to a written agreement, to purchase 600,000 private placement units (or 660,000 private placement units if the underwriter’s over-allotment option is exercised in full), each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $10.00 per private placement unit ($6,000,000 in the aggregate or $6,600,000 if the underwriter’s over-allotment option is exercised in full), in a private placement that will close simultaneously with the closing of this offering. These issuances will be made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
No underwriting discounts or commissions were paid with respect to such sales.
Item 16. Exhibits and Financial Statement Schedules.
(a)
The Exhibit Index is incorporated herein by reference.
Item 17. Undertakings.
(i) 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.
(ii) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(iii) The undersigned registrant hereby undertakes that:
1.
For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
2.
For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
3.
For the purpose of determining liability under the Securities Act of 1933 of 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.
EXHIBIT INDEX
|
EXHIBIT NO.
|
|
|
DESCRIPTION
|
|
|
1.1
|
|
|
Form of Underwriting Agreement.*
|
|
|
3.1
|
|
|
Memorandum and Articles of Association.
|
|
|
3.2
|
|
|
Form of Amended and Restated Memorandum and Articles of Association.
|
|
|
4.1
|
|
|
Specimen Unit Certificate.
|
|
|
4.2
|
|
|
Specimen Ordinary Share Certificate.
|
|
|
4.3
|
|
|
Specimen Warrant Certificate.
|
|
|
4.4
|
|
|
Form of Warrant Agreement between Continental Stock Transfer & Trust Company and the Registrant.
|
|
|
5.1
|
|
|
Opinion of Kirkland & Ellis LLP.*
|
|
|
5.2
|
|
|
Opinion of Maples & Calder, Cayman Islands Counsel to the Registrant.*
|
|
|
10.1
|
|
|
Form of Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the Registrant.
|
|
|
10.2
|
|
|
Form of Registration and Shareholder Rights Agreement among the Registrant, the Sponsor and the Holders signatory thereto.
|
|
|
10.3
|
|
|
Form of Private Placement Units Purchase Agreement between the Registrant and the Sponsor.
|
|
|
10.4
|
|
|
Form of Indemnity Agreement.
|
|
|
10.5
|
|
|
Form of Administrative Services Agreement between the Registrant and the Sponsor.
|
|
|
10.6
|
|
|
Promissory Note, dated as of January 20, 2021, issued to the Sponsor.
|
|
|
10.7
|
|
|
Securities Subscription Agreement, dated January 20, 2021, between the Registrant and the Sponsor.
|
|
|
10.8
|
|
|
Form of Letter Agreement between the Registrant, the Sponsor and each director and officer of the Registrant
|
|
|
23.1
|
|
|
Consent of WithumSmith+Brown, PC.
|
|
|
23.2
|
|
|
Consent of Kirkland & Ellis LLP (included in Exhibit 5.1).*
|
|
|
23.3
|
|
|
Consent of Maples & Calder (included in Exhibit 5.2).*
|
|
|
24
|
|
|
Power of Attorney (included on the signature page to the initial filing of this Registration Statement).
|
|
|
99.1
|
|
|
Consent of David A. Sinclair
|
|
|
99.2
|
|
|
Consent of Peter Attia
|
|
|
99.3
|
|
|
Consent of Jonathan Christodoro
|
|
*
To be filed by amendment.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 18th day of February, 2021.
FRONTIER ACQUISITION CORP.
By:
/s/ Christian Angermayer
Christian Angermayer
Chief Executive Officer
POWER OF ATTORNEY
Each of the undersigned constitutes and appoints each of Rick Gerson, Christian Angermayer and Matthew Corey, each acting alone, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for such person and in his or her name, place and stead, in any and all capacities, to sign this registration statement on Form S-1 (including all pre-effective and post-effective amendments and registration statements filed pursuant to Rule 462 under the Securities Act of 1933), and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming that any such attorney-in-fact and agent, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
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NAME
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|
POSITION
|
|
|
DATE
|
|
|
|
/s/ Rick Gerson
Rick Gerson
|
|
|
Sole Director
|
|
|
February 18, 2021
|
|
|
|
/s/ Christian Angermayer
Christian Angermayer
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
|
|
February 18, 2021
|
|
|
|
/s/ Matthew Corey
Matthew Corey
|
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
|
February 18, 2021
|
|
SIGNATURE OF AUTHORIZED REPRESENTATIVE IN THE UNITED STATES
Pursuant to the Securities Act of 1933, the undersigned, the duly authorized representative in the United States of Frontier Acquisition Corp. has signed this registration statement or amendment thereto in New York, New York on February 18, 2021.
Authorized U.S. Representative
Frontier Acquisition Corp.
By:
/s/ Ryan Khoury
Name: Ryan Khoury
Title: Co-President
EXHIBIT 3.1
THE COMPANIES ACT (2021 REVISION)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
MEMORANDUM AND ARTICLES OF ASSOCIATION
OF
FRONTIER ACQUISITION CORP.
Auth Code: J12682116510
www.verify.gov.ky
THE COMPANIES
ACT (2021 REVISION)
OF THE CAYMAN
ISLANDS
COMPANY LIMITED BY SHARES
MEMORANDUM OF
ASSOCIATION
OF
FRONTIER ACQUISITION CORP.
|
|
1
|
The name of the Company is Frontier Acquisition Corp.
|
|
|
2
|
The Registered Office of the Company shall be at the offices of Maples Corporate
Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, or at such other place within the Cayman Islands
as the Directors may decide.
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|
3
|
The objects for which the Company is established are unrestricted and the
Company shall have full power and authority to carry out any object not prohibited by the laws of the Cayman Islands.
|
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4
|
The liability of each Member is limited to the amount unpaid on such Member's shares.
|
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5
|
The share capital of the Company is US$55,500 divided into 500,000,000 Class
A ordinary shares of a par value of US$0.0001 each, 50,000,000 Class B ordinary shares of a par value of US$0.0001 each and 5,000,000
preference shares of a par value of US$0.0001 each.
|
|
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6
|
The Company has power to register by way of continuation as a body corporate
limited by shares under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands.
|
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7
|
Capitalised terms that are not defined in this Memorandum of Association bear
the respective meanings given to them in the Articles of Association of the Company.
|
Auth Code: J12682116510
www.verify.gov.ky
WE, the subscriber to this Memorandum of Association, wish
to form a company pursuant to this Memorandum of Association, and we agree to take the number of shares shown opposite our name.
Dated this 15th day of January 2021
|
Signature and Address of Subscriber
|
Number of Shares Taken
|
|
|
|
Maples Corporate Services Limited
of PO Box 309, Ugland House
|
One Class B ordinary share
|
Grand Cayman
KY1-1104
Cayman Islands
acting by:
Salome Laidlaw
Ella Ebanks
Witness to the above signature
Auth Code: J12682116510
www.verify.gov.ky
THE COMPANIES
ACT (2021 REVISION)
OF THE CAYMAN
ISLANDS
COMPANY LIMITED
BY SHARES
ARTICLES OF ASSOCIATION
OF
FRONTIER ACQUISITION CORP.
|
|
1.1
|
In the Articles Table A in the First Schedule to the Statute does not apply
and, unless there is something in the subject or context inconsistent therewith:
|
|
"Articles"
|
means these articles of association of the Company.
|
|
|
|
|
"Auditor"
|
means the person for the time being performing the duties of auditor of the Company (if any).
|
|
|
|
|
"Business Combination"
|
means a merger, amalgamation, share exchange, asset
acquisition, share purchase, reorganisation or similar business combination involving the Company, with one or more businesses
or entities (the "target business"), which Business Combination: (a) must occur with one or more target businesses
that together have an aggregate fair market value of at least 80 per cent of the assets held in the Trust Account (excluding
the deferred underwriting commissions and taxes payable on the income earned on the Trust Account) at the time of the agreement
to enter into such Business Combination; and (b) must not be effectuated with another blank cheque company or a similar company
with nominal operations.
|
|
|
|
|
"Class A Share"
|
means a Class A ordinary share of a par value of US$0.0001 in the share capital of the Company.
|
|
|
|
|
"Class B Share"
|
means a Class B ordinary share of a par value of US$0.0001 in the share capital of the Company.
|
|
|
|
|
"Company"
|
means the above named company.
|
|
|
|
|
"Directors"
|
means the directors for the time being of the Company.
|
Auth Code: J25451986731
www.verify.gov.ky
|
"Dividend"
|
means any dividend (whether interim or final) resolved to be paid on Shares pursuant to the Articles.
|
|
|
|
|
"Electronic Record"
|
has the same meaning as in the Electronic Transactions Act.
|
|
|
|
|
"Electronic Transactions Act"
|
means the Electronic Transactions Act (2003 Revision) of the Cayman Islands.
|
|
|
|
|
"Equity-linked Securities"
|
means any debt or equity securities that are convertible, exercisable or exchangeable for Class A Shares issued in a financing transaction in connection with a Business Combination, including but not limited to a private placement of equity or debt.
|
|
|
|
|
"IPO"
|
means the Company's initial public offering of securities.
|
|
|
|
|
"Member"
|
has the same meaning as in the Statute.
|
|
|
|
|
"Memorandum"
|
means the memorandum of association of the Company.
|
|
|
|
|
"Ordinary Resolution"
|
means a resolution passed by a simple majority of the Members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting, and includes a unanimous written resolution. In computing the majority when a poll is demanded regard shall be had to the number of votes to which each Member is entitled by the Articles.
|
|
|
|
|
"Ordinary Share"
|
means an ordinary share of a par value of US$0.0001 in the share capital of the Company.
|
|
|
|
|
"Preference Share"
|
means a preference share of a par value of US$0.0001 in the share capital of the Company.
|
|
|
|
|
"Register of Members"
|
means the register of Members maintained in accordance with the Statute and includes (except where otherwise stated) any branch or duplicate register of Members.
|
|
|
|
|
"Registered Office"
|
means the registered office for the time being of the Company.
|
|
|
|
|
"Seal"
|
means the common seal of the Company and includes every duplicate seal.
|
|
|
|
|
"Share"
|
means a Class A Share, a Class B Share or a Preference Share and includes a fraction of a share in the Company.
|
Auth Code: J25451986731
www.verify.gov.ky
|
"Share"
|
means an Ordinary Share or a Preference Share and includes a fraction of a share in the Company.
|
|
|
|
|
"Special Resolution"
|
has the same meaning as in the Statute, and includes a unanimous written resolution.
|
|
|
|
|
"Statute"
|
means the Companies Act (2021 Revision) of the Cayman Islands.
|
|
|
|
|
"Subscriber"
|
means the subscriber to the Memorandum.
|
|
|
|
|
"Treasury Share"
|
means a Share held in the name of the Company as a treasury share in accordance with the Statute.
|
|
|
|
|
"Trust Account"
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means the trust account established by the Company upon the consummation of its IPO and into which a certain amount of the net proceeds of the IPO, together with a certain amount of the proceeds of a private placement of warrants simultaneously with the closing date of the IPO, will be deposited.
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(a)
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words importing the singular number include the plural number and vice versa;
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(b)
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words importing the masculine gender include the feminine gender;
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(c)
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words importing persons include corporations as well as any other legal or natural person;
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(d)
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"written" and "in writing" include all modes of representing
or reproducing words in visible form, including in the form of an Electronic Record;
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(e)
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"shall" shall be construed as imperative and "may" shall be construed as permissive;
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(f)
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references to provisions of any law or regulation shall be construed as references
to those provisions as amended, modified, re-enacted or replaced;
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(g)
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any phrase introduced by the terms "including", "include",
"in particular" or any similar expression shall be construed as illustrative and shall not limit the sense of the words
preceding those terms;
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(h)
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the term "and/or" is used herein to mean both "and" as
well as "or." The use of "and/or" in certain contexts in no respects qualifies or modifies the use of the terms "and" or "or" in others. The term "or" shall not be interpreted to be exclusive and the term "and" shall
not be interpreted to require the conjunctive (in each case, unless the context otherwise requires);
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(i)
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headings
are inserted for reference only and shall be ignored in construing the Articles;
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(j)
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any
requirements as to delivery under the Articles include delivery in the form of an Electronic Record;
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(k)
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any
requirements as to execution or signature under the Articles including the execution of the Articles themselves can be
satisfied in the form of an electronic signature as defined in the Electronic Transactions Act;
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(l)
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sections 8 and 19(3) of the Electronic Transactions Act shall not apply;
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(m)
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the
term "clear days" in relation to the period of a notice means that period excluding the day when the notice is
received or deemed to be received and the day for which it is given or on which it is to take effect; and
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(n)
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the term "holder" in
relation to a Share means a person whose name is entered in the Register of Members as the holder of such Share.
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2
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Commencement of Business
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2.1
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The business of the
Company may be commenced as soon after incorporation of the Company as the Directors shall see fit.
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2.2
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The Directors may
pay, out of the capital or any other monies of the Company, all expenses incurred in or about the formation and establishment
of the Company, including the expenses of registration.
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3
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Issue of Shares and other Securities
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3.1
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Subject to the provisions, if any, in the Memorandum (and to any direction
that may be given by the Company in general meeting) and without prejudice to any rights attached to any existing Shares, the Directors
may allot, issue, grant options over or otherwise dispose of Shares (including fractions of a Share) with or without preferred,
deferred or other rights or restrictions, whether in regard to Dividend or other distribution, voting, return of capital or otherwise
and to such persons, at such times and on such other terms as they think proper, and may also (subject to the Statute and the Articles)
vary such rights, save that the Directors shall not allot, issue, grant options over or otherwise dispose of Shares (including
fractions of a Share) to the extent that it may affect the ability of the Company to carry out a Class B Share Conversion set out
in the Articles.
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3.2
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The Company may issue rights, options, warrants or convertible
securities or securities of similar nature conferring the right upon the holders thereof to subscribe for, purchase or
receive any class of Shares or other securities in the Company on such terms as the Directors may from time to time determine.
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3.3
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The Company may issue units of securities in the Company, which may be comprised
of whole or fractional Shares, rights, options, warrants or convertible securities or securities of similar nature conferring the
right upon the holders thereof to subscribe for, purchase or receive any class of Shares or other securities in the Company, upon
such terms as the Directors may from time to time determine.
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3.4
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The Company shall not issue Shares to bearer.
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4
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Register of Members
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4.1
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The Company shall maintain or cause to be maintained the Register of Members in accordance
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with the Statute.
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4.2
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The Directors may
determine that the Company shall maintain one or more branch registers of Members in accordance with the Statute. The
Directors may also determine which register of Members shall constitute the principal register and which shall constitute the
branch register or registers, and to vary such determination from time to time.
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5
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Closing Register of Members or Fixing Record Date
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5.1
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For the purpose of determining Members entitled to notice of, or to vote at
any meeting of Members or any adjournment thereof, or Members entitled to receive payment of any Dividend or other distribution,
or in order to make a determination of Members for any other purpose, the Directors may provide that the Register of Members shall
be closed for transfers for a stated period which shall not in any case exceed forty days.
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5.2
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In lieu of, or apart from, closing the Register of Members, the Directors
may fix in advance or arrears a date as the record date for any such determination of Members entitled to notice of, or to vote
at any meeting of the Members or any adjournment thereof, or for the purpose of determining the Members entitled to receive payment
of any Dividend or other distribution, or in order to make a determination of Members for any other purpose.
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5.3
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If the Register of Members is not so closed and no record date is fixed for
the determination of Members entitled to notice of, or to vote at, a meeting of Members or Members entitled to receive payment
of a Dividend or other distribution, the date on which notice of the meeting is sent or the date on which the resolution of the
Directors resolving to pay such Dividend or other distribution is passed, as the case may be, shall be the record date for such
determination of Members. When a determination of Members entitled to vote at any meeting of Members has been made as provided
in this Article, such determination shall apply to any adjournment thereof.
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6
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Certificates for Shares
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6.1
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A Member shall only be entitled to a share certificate if the Directors resolve
that share certificates shall be issued. Share certificates representing Shares, if any, shall be in such form as the Directors
may determine. Share certificates shall be signed by one or more Directors or other person authorised by the Directors. The Directors
may authorise certificates to be issued with the authorised signature(s) affixed by mechanical process. All certificates for Shares
shall be consecutively numbered or otherwise identified and shall specify the Shares to which they relate. All certificates surrendered
to the Company for transfer shall be cancelled and subject to the Articles no new certificate shall be issued until the former
certificate representing a like number of relevant Shares shall have been surrendered and cancelled.
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6.2
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The Company shall not be bound to issue more than one certificate for Shares
held jointly by more than one person and delivery of a certificate to one joint holder shall be a sufficient delivery to all of
them.
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6.3
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If a share certificate is defaced, worn out, lost or destroyed, it may be
renewed on such terms (if any) as to evidence and indemnity and on the payment of such expenses reasonably incurred by the Company
in investigating evidence, as the Directors may prescribe, and (in the case of defacement or wearing out) upon delivery of the
old certificate.
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6.4
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Every share certificate sent in accordance with the Articles will be sent
at the risk of the Member or other person entitled to the certificate. The Company will not be responsible for any share certificate
lost or delayed in the course of delivery.
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7.1
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Subject to Article 3.1, Shares are transferable subject to the approval of
the Directors by resolution who may, in their absolute discretion, decline to register any transfer of Shares without giving any
reason. If the Directors refuse to register a transfer they shall notify the transferee within two months of such refusal.
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7.2
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The instrument of transfer of any Share shall be in writing and shall be executed
by or on behalf of the transferor (and if the Directors so require, signed by or on behalf of the transferee). The transferor shall
be deemed to remain the holder of a Share until the name of the transferee is entered in the Register of Members.
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8
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Redemption, Repurchase and Surrender of Shares
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8.1
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Subject to the provisions of the Statute the Company may issue Shares that
are to be redeemed or are liable to be redeemed at the option of the Member or the Company. The redemption of such Shares shall
be effected in such manner and upon such other terms as the Company may, by Special Resolution, determine before the issue of the
Shares.
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Auth Code: J25451986731
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8.2
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Subject to the provisions of the Statute, the Company may purchase its own
Shares (including any redeemable Shares) in such manner and on such other terms as the Directors may agree with the relevant Member.
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8.3
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The Company may make a payment in respect of the redemption or purchase of
its own Shares in any manner permitted by the Statute, including out of capital.
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8.4
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The Directors may accept the surrender for no consideration of any fully paid Share.
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9
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Treasury Shares
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9.1
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The
Directors may, prior to the purchase, redemption or surrender of any Share, determine that such Share shall be held as a Treasury Share.
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9.2
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The
Directors may determine to cancel a Treasury Share or transfer a Treasury Share on such terms as they think proper (including, without limitation, for nil consideration).
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10
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Variation of Rights of Shares
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10.1
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If at any time the share capital of the Company is divided into different
classes of Shares, all or any of the rights attached to any class (unless otherwise provided by the terms of issue of the Shares
of that class) may, whether or not the Company is being wound up, be varied without the consent of the holders of the issued Shares
of that class where such variation is considered by the Directors not to have a material adverse effect upon such rights; otherwise,
any such variation shall be made only with the consent in writing of the holders of not less than two thirds of the issued Shares
of that class, or with the approval of a resolution passed by a majority of not less than two thirds of the votes cast at a separate
meeting of the holders of the Shares of that class. For the avoidance of doubt, the Directors reserve the right, notwithstanding
that any such variation may not have a material adverse effect, to obtain consent from the holders of Shares of the relevant class.
To any such meeting all the provisions of the Articles relating to general meetings shall apply mutatis mutandis, except
that the necessary quorum shall be one person holding or representing by proxy at least one third of the issued Shares of the class
and that any holder of Shares of the class present in person or by proxy may demand a poll.
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10.2
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For the purposes of a separate class meeting, the Directors may treat two
or more or all the classes of Shares as forming one class of Shares if the Directors consider that such class of Shares would be
affected in the same way by the proposals under consideration, but in any other case shall treat them as separate classes of Shares.
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10.3
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The rights conferred upon the holders of the Shares of any class issued with
preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the Shares of that class, be
deemed to be varied by the creation or issue of further Shares ranking pari passu therewith.
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11
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Commission on Sale of Shares
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The Company may, in so far
as the Statute permits, pay a commission to any person in consideration of his subscribing or agreeing to subscribe (whether absolutely
or conditionally) or procuring or agreeing to procure subscriptions (whether absolutely or conditionally) for any Shares. Such
commissions may be satisfied by the payment of cash and/or the issue of fully or partly paid-up Shares. The Company may also on
any issue of Shares pay such brokerage as may be lawful.
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12
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Non Recognition of Trusts
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The Company shall not be bound
by or compelled to recognise in any way (even when notified) any equitable, contingent, future or partial interest in any Share,
or (except only as is otherwise provided by the Articles or the Statute) any other rights in respect of any Share other than an
absolute right to the entirety thereof in the holder.
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13.1
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The Company shall have a first and paramount lien on all Shares (whether fully
paid-up or not) registered in the name of a Member (whether solely or jointly with others) for all debts, liabilities or engagements
to or with the Company (whether presently payable or not) by such Member or his estate, either alone or jointly with any other
person, whether a Member or not, but the Directors may at any time declare any Share to be wholly or in part exempt from the provisions
of this Article. The registration of a transfer of any such Share shall operate as a waiver of the Company's lien thereon. The
Company's lien on a Share shall also extend to any amount payable in respect of that Share.
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13.2
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The Company may sell, in such manner as the Directors think fit, any Shares
on which the Company has a lien, if a sum in respect of which the lien exists is presently payable, and is not paid within fourteen
clear days after notice has been received or deemed to have been received by the holder of the Shares, or to the person entitled
to it in consequence of the death or bankruptcy of the holder, demanding payment and stating that if the notice is not complied
with the Shares may be sold.
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13.3
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To give effect to any such sale the Directors may authorise any person to
execute an instrument of transfer of the Shares sold to, or in accordance with the directions of, the purchaser. The purchaser
or his nominee shall be registered as the holder of the Shares comprised in any such transfer, and he shall not be bound to see
to the application of the purchase money, nor shall his title to the Shares be affected by any irregularity or invalidity in the
sale or the exercise of the Company's power of sale under the Articles.
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13.4
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The net proceeds of such sale after payment of costs, shall be applied in
payment of such part of the amount in respect of which the lien exists as is presently payable and any balance shall (subject to
a like lien for sums not presently payable as existed upon the Shares before the sale) be paid to the person entitled to the Shares
at the date of the sale.
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14.1
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Subject to the terms of the allotment and issue of any Shares, the Directors
may make calls upon the Members in respect of any monies unpaid on their Shares (whether in respect of par value or premium), and
each Member shall (subject to receiving at least fourteen clear days' notice specifying the time or times of payment) pay to the
Company at the time or times so specified the amount called on the Shares. A call may be revoked or postponed, in whole or in part,
as the Directors may determine. A call may be required to be paid by instalments. A person upon whom a call is made shall remain
liable for calls made upon him notwithstanding the subsequent transfer of the Shares in respect of which the call was made.
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14.2
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A call shall be deemed to have been made at the time when the resolution of
the Directors authorising such call was passed.
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14.3
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The joint holders of a Share shall be jointly and severally liable to pay all calls in respect
thereof.
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14.4
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If a call remains unpaid after it has become due and payable, the person from
whom it is due shall pay interest on the amount unpaid from the day it became due and payable until it is paid at such rate as
the Directors may determine (and in addition all expenses that have been incurred by the Company by reason of such non-payment),
but the Directors may waive payment of the interest or expenses wholly or in part.
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14.5
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An amount payable in respect of a Share on issue or allotment or at any fixed
date, whether on account of the par value of the Share or premium or otherwise, shall be deemed to be a call and if it is not paid
all the provisions of the Articles shall apply as if that amount had become due and payable by virtue of a call.
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14.6
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The Directors may issue Shares with different terms as to the amount and times
of payment of calls, or the interest to be paid.
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14.7
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The Directors may, if they think fit, receive an amount from any Member willing
to advance all or any part of the monies uncalled and unpaid upon any Shares held by him, and may (until the amount would otherwise
become payable) pay interest at such rate as may be agreed upon between the Directors and the Member paying such amount in advance.
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14.8
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No such amount paid in advance of calls shall entitle the Member paying such
amount to any portion of a Dividend or other distribution payable in respect of any period prior to the date upon which such amount
would, but for such payment, become payable.
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15.1
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If a call or instalment of a call remains unpaid after it has become due and
payable the Directors may give to the person from whom it is due not less than fourteen clear days' notice requiring payment of
the amount unpaid together with any interest which may have accrued and any expenses incurred by the Company by reason of such
non-payment. The notice shall specify where payment is to be made and shall state that
if the notice is not complied with the Shares in respect of which the call was made will be liable to be forfeited.
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15.2
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If the notice is not complied with, any Share in respect of which it was given
may, before the payment required by the notice has been made, be forfeited by a resolution of the Directors. Such forfeiture shall
include all Dividends, other distributions or other monies payable in respect of the forfeited Share and not paid before the forfeiture.
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15.3
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A forfeited Share may be sold, re-allotted or otherwise disposed of on such
terms and in such manner as the Directors think fit and at any time before a sale, re-allotment or disposition the forfeiture may
be cancelled on such terms as the Directors think fit. Where for the purposes of its disposal a forfeited Share is to be transferred
to any person the Directors may authorise some person to execute an instrument of transfer of the Share in favour of that person.
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15.4
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A person any of whose Shares have been forfeited shall cease to be a Member
in respect of them and shall surrender to the Company for cancellation the certificate for the Shares forfeited and shall remain
liable to pay to the Company all monies which at the date of forfeiture were payable by him to the Company in respect of those
Shares together with interest at such rate as the Directors may determine, but his liability shall cease if and when the Company
shall have received payment in full of all monies due and payable by him in respect of those Shares.
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15.5
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A certificate in writing under the hand of one Director or officer of the
Company that a Share has been forfeited on a specified date shall be conclusive evidence of the facts stated in it as against all
persons claiming to be entitled to the Share. The certificate shall (subject to the execution of an instrument of transfer) constitute
a good title to the Share and the person to whom the Share is sold or otherwise disposed of shall not be bound to see to the application
of the purchase money, if any, nor shall his title to the Share be affected by any irregularity or invalidity in the proceedings
in reference to the forfeiture, sale or disposal of the Share.
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15.6
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The provisions of the Articles as to forfeiture shall apply in the case of
non payment of any sum which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the par
value of the Share or by way of premium as if it had been payable by virtue of a call duly made and notified.
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16
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Transmission of Shares
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16.1
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If a Member dies the survivor or survivors (where he was a joint holder) or
his legal personal representatives (where he was a sole holder), shall be the only persons recognised by the Company as having
any title to his Shares. The estate of a deceased Member is not thereby released from any liability in respect of any Share, for
which he was a joint or sole holder.
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16.2
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Any person becoming entitled to a Share in consequence of the death or bankruptcy
or liquidation or dissolution of a Member (or in any other way than by transfer) may, upon such evidence being produced as may
be required by the Directors, elect, by a notice in writing sent by him to the Company, either to become the holder of such Share
or to have some person nominated by him registered as the holder of
such Share. If he elects to have another person registered as the holder of such Share he shall sign an instrument of transfer
of that Share to that person. The Directors shall, in either case, have the same right to decline or suspend registration as they
would have had in the case of a transfer of the Share by the relevant Member before his death or bankruptcy or liquidation or dissolution,
as the case may be.
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Auth Code: J25451986731
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16.3
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A person becoming entitled to a Share by reason of the death or bankruptcy
or liquidation or dissolution of a Member (or in any other case than by transfer) shall be entitled to the same Dividends, other
distributions and other advantages to which he would be entitled if he were the holder of such Share. However, he shall not, before
becoming a Member in respect of a Share, be entitled in respect of it to exercise any right conferred by membership in relation
to general meetings of the Company and the Directors may at any time give notice requiring any such person to elect either to be
registered himself or to have some person nominated by him be registered as the holder of the Share (but the Directors shall, in
either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the Share
by the relevant Member before his death or bankruptcy or liquidation or dissolution or any other case than by transfer, as the
case may be). If the notice is not complied with within ninety days of being received or deemed to be received (as determined pursuant
to the Articles) the Directors may thereafter withhold payment of all Dividends, other distributions, bonuses or other monies payable
in respect of the Share until the requirements of the notice have been complied with.
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17
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Class B Ordinary Share Conversion
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17.1
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The rights attaching to all Shares shall rank pari passu in all respects,
and the Class A Shares and Class B Shares shall vote together as a single class on all matters with the exception that the holder
of a Class B Share shall have the Conversion Rights referred to in this Article.
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17.2
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Class B Shares shall automatically convert into Class A Shares on a one-for-one
basis (the "Initial Conversion Ratio"): (a) at any time and from time to time at the option of the holder thereof;
and (b) automatically on the day
of the closing of a Business Combination.
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17.3
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Notwithstanding the Initial Conversion Ratio, in the case that additional
Class A Shares or any other Equity-linked Securities, are issued or deemed issued in excess of the amounts offered in the IPO and
related to the closing of a Business Combination, all Class B Shares in issue shall automatically convert into Class A Shares at
the time of the closing of a Business Combination at a ratio for which the Class B Shares shall convert into Class A Shares will
be adjusted (unless the holders of a majority of the Class B Shares in issue agree to waive such anti-dilution adjustment with
respect to any such issuance or deemed issuance) so that the number of Class A Shares issuable upon conversion of all Class B Shares
will equal, in the aggregate, 20 per cent of the sum of all Class A Shares and Class B Shares in issue upon completion of the IPO
plus all Class A Shares and Equity-linked Securities issued or deemed issued in connection with a Business Combination, excluding
any Shares or Equity-linked Securities issued, or to be issued, to any seller in a Business Combination.
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Auth Code: J25451986731
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17.4
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Notwithstanding anything to the contrary contained herein, the foregoing adjustment
to the Initial Conversion Ratio may be waived as to any particular issuance or deemed issuance of additional Class A Shares or
Equity-linked Securities by the written consent or agreement of holders of a majority of the Class B Shares then in issue consenting
or agreeing separately as a separate class in the manner provided in the Variation of Rights of Shares Article hereof.
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17.5
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The foregoing conversion ratio shall also be adjusted to account for any subdivision
(by share split, subdivision, exchange, capitalisation, rights issue, reclassification, recapitalisation or otherwise) or combination
(by reverse share split, share consolidation, exchange, reclassification, recapitalisation or otherwise) or similar reclassification
or recapitalisation of the Class A Shares in issue into a greater or lesser number of shares occurring after the original filing
of the Articles without a proportionate and corresponding subdivision, combination or similar reclassification or recapitalisation
of the Class B Shares in issue.
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17.6
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Each Class B Share shall convert into its pro rata number of Class A Shares
pursuant to this Article. The pro rata share for each holder of Class B Shares will be determined as follows: each Class B Share
shall convert into such number of Class A Shares as is equal to the product of 1 multiplied by a fraction, the numerator of which
shall be the total number of Class A Shares into which all of the Class B Shares in issue shall be converted pursuant to this Article
and the denominator of which shall be the total number of Class B Shares in issue at the time of conversion.
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17.7
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References in this Article to "converted", "conversion"
or "exchange" shall mean the compulsory redemption without notice of Class B Shares of any Member and, on behalf
of such Members, automatic application of such redemption proceeds in paying for such new Class A Shares into which the Class B
Shares have been converted or exchanged at a price per Class B Share necessary to give effect to a conversion or exchange calculated
on the basis that the Class A Shares to be issued as part of the conversion or exchange will be issued at par. The Class A Shares
to be issued on an exchange or conversion shall be registered in the name of such Member or in such name as the Member may direct.
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17.8
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Notwithstanding anything to the contrary in this Article, in no event may
any Class B Share convert into Class A Shares at a ratio that is less than one-for-one.
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18
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Amendments of Memorandum and Articles of Association
and Alteration of Capital
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18.1
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The Company may by Ordinary Resolution:
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(a)
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increase its share capital by such sum as the Ordinary Resolution shall prescribe
and with such rights, priorities and privileges annexed thereto, as the Company in general meeting may determine;
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(b)
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consolidate and divide all or any of its share capital into Shares of larger
amount than its existing Shares;
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Auth Code: J25451986731
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(c)
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convert all or any of its paid-up Shares into stock, and reconvert that stock
into paid-up Shares of any denomination;
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(d)
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by subdivision of its existing Shares or any of them divide the whole or any
part of its share capital into Shares of smaller amount than is fixed by the Memorandum or into Shares without par value; and
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(e)
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cancel any Shares that at the date of the passing of the Ordinary Resolution
have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of the Shares
so cancelled.
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18.2
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All new Shares created in accordance with the provisions of the preceding
Article shall be subject to the same provisions of the Articles with reference to the payment of calls, liens, transfer, transmission,
forfeiture and otherwise as the Shares in the original share capital.
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18.3
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Subject to the provisions of the Statute and the provisions of the Articles
as regards the matters to be dealt with by Ordinary Resolution, the Company may by Special Resolution:
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(b)
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alter or add to the Articles;
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(c)
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alter or add to the Memorandum with respect to any objects, powers or other
matters specified therein; and
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(d)
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reduce its share capital or any capital redemption reserve fund.
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19
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Offices and Places of Business
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Subject to the provisions of the Statute, the Company
may by resolution of the Directors change the location of its Registered Office. The Company may, in addition to its Registered
Office, maintain such other offices or places of business as the Directors determine.
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20.1
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All general meetings other than annual general meetings shall be called extraordinary
general meetings.
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20.2
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The Company may, but shall not (unless required by the Statute) be obliged
to, in each year hold a general meeting as its annual general meeting, and shall specify the meeting as such in the notices calling
it. Any annual general meeting shall be held at such time and place as the Directors shall appoint and if no other time and place
is prescribed by them, it shall be held at the Registered Office on the second Wednesday in December of each year at ten o'clock
in the morning. At these meetings the report of the Directors (if any) shall be presented.
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20.3
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The Directors may call general meetings, and they shall on a Members' requisition
forthwith proceed to convene an extraordinary general meeting of the Company.
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20.4
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A Members' requisition is a requisition of Members holding at the date of
deposit of the requisition not less than ten per cent. in par value of the issued Shares which as at that date carry the right
to vote at general meetings of the Company.
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20.5
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The Members' requisition must state the objects of the meeting and must be
signed by the requisitionists and deposited at the Registered Office, and may consist of several documents in like form each signed
by one or more requisitionists.
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20.6
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If there are no Directors as at the date of the deposit of the Members' requisition
or if the Directors do not within twenty-one days from the date of the deposit of the Members' requisition duly proceed to convene
a general meeting to be held within a further twenty-one days, the requisitionists, or any of them representing more than one-half
of the total voting rights of all of the requisitionists, may themselves convene a general meeting, but any meeting so convened
shall be held no later than the day which falls three months after the expiration of the said twenty-one day period.
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20.7
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A general meeting convened as aforesaid by requisitionists shall be convened
in the same manner as nearly as possible as that in which general meetings are to be convened by Directors.
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21
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Notice of General Meetings
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21.1
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At least five clear days' notice shall be given of any general meeting. Every
notice shall specify the place, the day and the hour of the meeting and the general nature of the business to be conducted at the
general meeting and shall be given in the manner hereinafter mentioned or in such other manner if any as may be prescribed by the
Company, provided that a general meeting of the Company shall, whether or not the notice specified in this Article has been given
and whether or not the provisions of the Articles regarding general meetings have been complied with, be deemed to have been duly
convened if it is so agreed:
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(a)
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in the case of an annual general meeting, by all of the Members entitled to
attend and vote thereat; and
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(b)
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in the case of an extraordinary general meeting, by a majority in number of
the Members having a right to attend and vote at the meeting, together holding not less than ninety five per cent. in par value
of the Shares giving that right.
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21.2
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The accidental omission to give notice of a general meeting to, or the non
receipt of notice of a general meeting by, any person entitled to receive such notice shall not invalidate the proceedings of that
general meeting.
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22
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Proceedings at General Meetings
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22.1
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No business shall be transacted at any general meeting unless a quorum is
present. Two Members being individuals present in person or by proxy or if a corporation or other non-natural person by its duly
authorised representative or proxy shall be a quorum unless the Company has only one Member entitled to vote at such general meeting
in which case the quorum shall be that one Member present in person or by proxy or (in the case of a corporation or other non-natural
person) by its duly authorised representative or proxy.
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22.2
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A person may participate at a general meeting by conference telephone or other
communications equipment by means of which all the persons participating in the meeting can communicate with each other. Participation
by a person in a general meeting in this manner is treated as presence in person at that meeting.
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22.3
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A resolution (including a Special Resolution) in writing (in one or more counterparts)
signed by or on behalf of all of the Members for the time being entitled to receive notice of and to attend and vote at general
meetings (or, being corporations or other non-natural persons, signed by their duly authorised representatives) shall be as valid
and effective as if the resolution had been passed at a general meeting of the Company duly convened and held.
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22.4
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If a quorum is not present within half an hour from the time appointed for
the meeting to commence or if during such a meeting a quorum ceases to be present, the meeting, if convened upon a Members' requisition,
shall be dissolved and in any other case it shall stand adjourned to the same day in the next week at the same time and/or place
or to such other day, time and/or place as the Directors may determine, and if at the adjourned meeting a quorum is not present
within half an hour from the time appointed for the meeting to commence, the Members present shall be a quorum.
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22.5
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The Directors may, at any time prior to the time appointed for the meeting
to commence, appoint any person to act as chairman of a general meeting of the Company or, if the Directors do not make any such
appointment, the chairman, if any, of the board of Directors shall preside as chairman at such general meeting. If there is no
such chairman, or if he shall not be present within fifteen minutes after the time appointed for the meeting to commence, or is
unwilling to act, the Directors present shall elect one of their number to be chairman of the meeting.
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22.6
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If no Director is willing to act as chairman or if no Director is present
within fifteen minutes after the time appointed for the meeting to commence, the Members present shall choose one of their number
to be chairman of the meeting.
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22.7
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The chairman may, with the consent of a meeting at which a quorum is present
(and shall if so directed by the meeting) adjourn the meeting from time to time and from place to place, but no business shall
be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.
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22.8
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When a general meeting is adjourned for thirty days or more, notice of the
adjourned meeting shall be given as in the case of an original meeting. Otherwise it shall not be necessary to give any such notice
of an adjourned meeting.
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22.9
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A resolution put to the vote of the meeting shall be decided on a show of
hands unless before, or on the declaration of the result of, the show of hands, the chairman demands a poll, or any other Member
or Members collectively present in person or by proxy (or in the case of a corporation or other non-natural person, by its duly
authorised representative or proxy) and holding at least ten per cent. in par value of the Shares giving a right to attend and
vote at the meeting demand a poll.
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22.10
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Unless a poll is duly demanded and the demand is not withdrawn a declaration
by the chairman that a resolution has been carried or carried unanimously, or by a particular majority, or lost or not carried
by a particular majority, an entry to that effect in the minutes of the proceedings of the meeting shall be conclusive evidence
of that fact without proof of the number or proportion of the votes recorded in favour of or against such resolution.
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22.11
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The demand for a poll may be withdrawn.
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22.12
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Except on a poll demanded on the election of a chairman or on a question of
adjournment, a poll shall be taken as the chairman directs, and the result of the poll shall be deemed to be the resolution of
the general meeting at which the poll was demanded.
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22.13
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A poll demanded on the election of a chairman or on a question of adjournment
shall be taken forthwith. A poll demanded on any other question shall be taken at such date, time and place as the chairman of
the general meeting directs, and any business other than that upon which a poll has been demanded or is contingent thereon may
proceed pending the taking of the poll.
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22.14
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In the case of an equality of votes, whether on a show of hands or on a poll,
the chairman shall be entitled to a second or casting vote.
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23.1
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Subject to any rights or restrictions attached to any Shares, on a show of
hands every Member who (being an individual) is present in person or by proxy or, if a corporation or other non-natural person
is present by its duly authorised representative or by proxy, shall have one vote and on a poll every Member present in any such
manner shall have one vote for every Share of which he is the holder.
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23.2
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In the case of joint holders the vote of the senior holder who tenders a vote,
whether in person or by proxy (or, in the case of a corporation or other non-natural person, by its duly authorised representative
or proxy), shall be accepted to the exclusion of the votes of the other joint holders, and seniority shall be determined by the
order in which the names of the holders stand in the Register of Members.
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23.3
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A Member of unsound mind, or in respect of whom an order has been made
by any court, having jurisdiction in lunacy, may vote, whether on a show of hands or on a poll, by his committee, receiver, curator bonis, or other person on such Member's
behalf appointed by that court, and any such committee, receiver, curator bonis or other person may vote by proxy.
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23.4
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No person shall be entitled to vote at any general meeting unless he is registered
as a Member on the record date for such meeting nor unless all calls or other monies then payable by him in respect of Shares have
been paid.
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23.5
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No objection shall be raised as to the qualification of any voter except at
the general meeting or adjourned general meeting at which the vote objected to is given or tendered and every vote not disallowed
at the meeting shall be valid. Any objection made in due time in accordance with this Article shall be referred to the chairman
whose decision shall be final and conclusive.
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23.6
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On a poll or on a show of hands votes may be cast either personally or by
proxy (or in the case of a corporation or other non-natural person by its duly authorised representative or proxy). A Member may
appoint more than one proxy or the same proxy under one or more instruments to attend and vote at a meeting. Where a Member appoints
more than one proxy the instrument of proxy shall state which proxy is entitled to vote on a show of hands and shall specify the
number of Shares in respect of which each proxy is entitled to exercise the related votes.
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23.7
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On a poll, a Member holding more than one Share need not cast the votes in
respect of his Shares in the same way on any resolution and therefore may vote a Share or some or all such Shares either for or
against a resolution and/or abstain from voting a Share or some or all of the Shares and, subject to the terms of the instrument
appointing him, a proxy appointed under one or more instruments may vote a Share or some or all of the Shares in respect of which
he is appointed either for or against a resolution and/or abstain from voting a Share or some or all of the Shares in respect of
which he is appointed.
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24.1
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The instrument appointing a proxy shall be in writing and shall be executed
under the hand of the appointor or of his attorney duly authorised in writing, or, if the appointor is a corporation or other non
natural person, under the hand of its duly authorised representative. A proxy need not be a Member.
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24.2
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The Directors may, in the notice convening any meeting or adjourned meeting,
or in an instrument of proxy sent out by the Company, specify the manner by which the instrument appointing a proxy shall be deposited
and the place and the time (being not later than the time appointed for the commencement of the meeting or adjourned meeting to
which the proxy relates) at which the instrument appointing a proxy shall be deposited. In the absence of any such direction from
the Directors in the notice convening any meeting or adjourned meeting or in an instrument of proxy sent out by the Company, the
instrument appointing a proxy shall be deposited physically at the Registered Office not less than 48 hours before the time appointed
for the meeting or adjourned meeting to commence at which the person named in the instrument proposes to vote.
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24.3
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The chairman may in any event at his discretion declare that an instrument
of proxy shall be deemed to have been duly deposited. An instrument of proxy that is not deposited in the manner permitted, or
which has not been declared to have been duly deposited by the chairman, shall be invalid.
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24.4
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The instrument appointing a proxy may be in any usual or common form (or such
other form as the Directors may approve) and may be expressed to be for a particular meeting or any adjournment thereof or generally
until revoked. An instrument appointing a proxy shall be deemed to include the power to demand or join or concur in demanding a
poll.
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24.5
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Votes given in accordance with the terms of an instrument of proxy shall be
valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or of the authority under which
the proxy was executed, or the transfer of the Share in respect of which the proxy is given unless notice in writing of such death,
insanity, revocation or transfer was received by the Company at the Registered Office before the commencement of the general meeting,
or adjourned meeting at which it is sought to use the proxy.
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Any corporation or other non-natural person which is
a Member may in accordance with its constitutional documents, or in the absence of such provision by resolution of its directors
or other governing body, authorise such person as it thinks fit to act as its representative at any meeting of the Company or
of any class of Members, and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation
which he represents as the corporation could exercise if it were an individual Member.
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26
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Shares that May Not be Voted
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Shares in the Company that are beneficially owned by
the Company shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining the total number
of outstanding Shares at any given time.
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There shall be a board of Directors consisting of not
less than one person (exclusive of alternate Directors) provided however that the Company may by Ordinary Resolution increase
or reduce the limits in the number of Directors. The first Directors of the Company shall be determined in writing by, or appointed
by a resolution of, the Subscriber.
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28.1
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Subject to the provisions of the Statute, the Memorandum and the Articles
and to any directions given by Special Resolution, the business of the Company shall be managed by the Directors who may exercise
all the powers of the Company. No alteration of the Memorandum or Articles and no such direction shall invalidate any prior act
of the Directors which would have been valid if that alteration had not been made or that direction had not been given. A duly
convened meeting of Directors at which a quorum is present may exercise all powers exercisable by the Directors.
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28.2
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All cheques, promissory notes, drafts, bills of exchange and other negotiable
or transferable instruments and all receipts for monies paid to the Company shall be signed, drawn, accepted, endorsed or otherwise
executed as the case may be in such manner as the Directors shall determine by resolution.
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28.3
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The Directors on behalf of the Company may pay a gratuity or pension or allowance
on retirement to any Director who has held any other salaried office or place of profit with the Company or to his widow or dependants
and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.
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28.4
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The Directors may exercise all the powers of the Company to borrow money and
to mortgage or charge its undertaking, property and assets (present and future) and uncalled capital or any part thereof and to
issue debentures, debenture stock, mortgages, bonds and other such securities whether outright or as security for any debt, liability
or obligation of the Company or of any third party.
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29
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Appointment and Removal of Directors
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29.1
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The Company may by Ordinary Resolution appoint any person to be a Director
or may by Ordinary Resolution remove any Director.
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29.2
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The Directors may appoint any person to be a Director, either to fill a vacancy
or as an additional Director provided that the appointment does not cause the number of Directors to exceed any number fixed by
or in accordance with the Articles as the maximum number of Directors.
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30
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Vacation of Office of Director
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The office of a Director shall be vacated if:
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(a)
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the Director gives notice in writing to the Company that he resigns the office of Director; or
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(b)
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the Director absents himself (for the avoidance of doubt, without being represented
by proxy or an alternate Director appointed by him) from three consecutive meetings of the board of Directors without special leave
of absence from the Directors, and the Directors pass a resolution that he has by reason of such absence vacated office; or
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(c)
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the Director dies, becomes bankrupt or makes any arrangement or composition
with his creditors generally; or
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(d)
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the Director is found to be or becomes of unsound mind; or
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(e)
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all of the other Directors (being not less than two in number) determine that
he should be removed as a Director, either by a resolution passed by all of the other Directors at a meeting of the Directors duly
convened and held in accordance with the Articles or by a resolution in writing signed by all of the other Directors.
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31
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Proceedings of Directors
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31.1
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The quorum for the transaction of the business of the Directors may be fixed
by the Directors, and unless so fixed shall be two if there are two or more Directors, and shall be one if there is only one Director.
A person who holds office as an alternate Director shall, if his appointor is not present, be counted in the quorum. A Director
who also acts as an alternate Director shall, if his appointor is not present, count twice towards the quorum.
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31.2
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Subject to the provisions of the Articles, the Directors may regulate their
proceedings as they think fit. Questions arising at any meeting shall be decided by a majority of votes. In the case of an equality
of votes, the chairman shall have a second or casting vote. A Director who is also an alternate Director shall be entitled in the
absence of his appointor to a separate vote on behalf of his appointor in addition to his own vote.
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31.3
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A person may participate in a meeting of the Directors or any committee of
Directors by conference telephone or other communications equipment by means of which all the persons participating in the meeting
can communicate with each other at the same time. Participation by a person in a meeting in this manner is treated as presence
in person at that meeting. Unless otherwise determined by the Directors the meeting shall be deemed to be held at the place where
the chairman is located at the start of the meeting.
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31.4
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A resolution in writing (in one or more counterparts) signed by all the Directors
or all the members of a committee of the Directors or, in the case of a resolution in writing relating to the removal of any Director
or the vacation of office by any Director, all of the Directors other than the Director who is the subject of such resolution (an
alternate Director being entitled to sign such a resolution on behalf of his appointor and if such alternate Director is also a
Director, being entitled to sign such resolution both on behalf of his appointer and in his capacity as a Director) shall be as
valid and effectual as if it had been passed at a meeting of the Directors, or committee of Directors as the case may be, duly
convened and held.
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31.5
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A Director or alternate Director may, or other officer of the Company on the
direction of a Director or alternate Director shall, call a meeting of the Directors by at least two days' notice in writing to
every Director and alternate Director which notice shall set forth the general nature of the business to be considered unless notice
is waived by all the Directors (or their alternates) either at, before or after the meeting is held. To any such notice of a meeting
of the Directors all the provisions of the Articles relating to the giving of notices by the Company to the Members shall apply
mutatis mutandis.
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31.6
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The continuing Directors (or a sole continuing Director, as the case may be)
may act notwithstanding any vacancy in their body, but if and so long as their number is reduced below the number fixed by or pursuant
to the Articles as the necessary quorum of Directors the continuing Directors or Director may act for the purpose of increasing
the number of Directors to be equal to such fixed number, or of summoning a general meeting of the Company, but for no other purpose.
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31.7
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The Directors may elect a chairman of their board and determine the period
for which he is to hold office; but if no such chairman is elected, or if at any meeting the chairman is not present within five
minutes after the time appointed for the meeting to commence, the Directors present may choose one of their number to be chairman
of the meeting.
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31.8
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All acts done by any meeting of the Directors or of a committee of the Directors
(including any person acting as an alternate Director) shall, notwithstanding that it is afterwards discovered that there was some
defect in the appointment of any Director or alternate Director, and/or that they or any of them were disqualified, and/or had
vacated their office and/or were not entitled to vote, be as valid as if every such person had been duly appointed and/or not disqualified
to be a Director or alternate Director and/or had not vacated their office and/or had been entitled to vote, as the case may be.
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31.9
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A Director but not an alternate Director may be represented at any meetings
of the board of Directors by a proxy appointed in writing by him. The proxy shall count towards the quorum and the vote of the
proxy shall for all purposes be deemed to be that of the appointing Director.
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A Director or alternate Director
who is present at a meeting of the board of Directors at which action on any Company matter is taken shall be presumed to have
assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written
dissent from such action with the person acting as the chairman or secretary of the meeting before the adjournment thereof or shall
forward such dissent by registered post to such person immediately after the adjournment of the meeting. Such right to dissent
shall not apply to a Director or alternate Director who voted in favour of such action.
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33.1
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A Director or alternate Director may hold any other office or place of profit
under the Company (other than the office of Auditor) in conjunction with his office of Director for such period and on such terms
as to remuneration and otherwise as the Directors may determine.
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33.2
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A Director or alternate Director may act by himself or by, through or on behalf
of his firm in a professional capacity for the Company and he or his firm shall be entitled to remuneration for professional services
as if he were not a Director or alternate Director.
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33.3
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A Director or alternate Director may be or become a director or other officer
of or otherwise interested in any company promoted by the Company or in which the Company may be interested as a shareholder, a
contracting party or otherwise, and no such Director or alternate Director shall be accountable to the Company for any remuneration
or other benefits received by him as a director or officer of, or from his interest in, such other company.
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33.4
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No person shall be disqualified from the office of Director or alternate Director
or prevented by such office from contracting with the Company, either as vendor, purchaser or otherwise, nor shall any such contract
or any contract or transaction entered into by or on behalf of the Company in which any Director or alternate
Director shall be in any way interested be or be liable to be avoided, nor shall any Director or alternate Director so contracting
or being so interested be liable to account to the Company for any profit realised by or arising in connection with any such contract
or transaction by reason of such Director or alternate Director holding office or of the fiduciary relationship thereby established.
A Director (or his alternate Director in his absence) shall be at liberty to vote in respect of any contract or transaction in
which he is interested provided that the nature of the interest of any Director or alternate Director in any such contract or transaction
shall be disclosed by him at or prior to its consideration and any vote thereon.
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33.5
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A general notice that a Director or alternate Director is a shareholder, director,
officer or employee of any specified firm or company and is to be regarded as interested in any transaction with such firm or company
shall be sufficient disclosure for the purposes of voting on a resolution in respect of a contract or transaction in which he has
an interest, and after such general notice it shall not be necessary to give special notice relating to any particular transaction.
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The Directors shall cause
minutes to be made in books kept for the purpose of recording all appointments of officers made by the Directors, all proceedings
at meetings of the Company or the holders of any class of Shares and of the Directors, and of committees of the Directors, including
the names of the Directors or alternate Directors present at each meeting.
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35
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Delegation of Directors' Powers
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35.1
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The Directors may delegate any of their powers, authorities and discretions,
including the power to sub-delegate, to any committee consisting of one or more Directors. They may also delegate to any managing
director or any Director holding any other executive office such of their powers, authorities and discretions as they consider
desirable to be exercised by him provided that an alternate Director may not act as managing director and the appointment of a
managing director shall be revoked forthwith if he ceases to be a Director. Any such delegation may be made subject to any conditions
the Directors may impose and either collaterally with or to the exclusion of their own powers and any such delegation may be revoked
or altered by the Directors. Subject to any such conditions, the proceedings of a committee of Directors shall be governed by the
Articles regulating the proceedings of Directors, so far as they are capable of applying.
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35.2
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The Directors may establish any committees, local boards or agencies or appoint
any person to be a manager or agent for managing the affairs of the Company and may appoint any person to be a member of such committees,
local boards or agencies. Any such appointment may be made subject to any conditions the Directors may impose, and either collaterally
with or to the exclusion of their own powers and any such appointment may be revoked or altered by the Directors. Subject to any
such conditions, the proceedings of any such committee, local board or agency shall be governed by the Articles regulating the
proceedings of Directors, so far as they are capable of applying.
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35.3
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The Directors may by power of attorney or otherwise appoint any person to
be the agent of the Company on such conditions as the Directors may determine, provided that the delegation is not to the exclusion
of their own powers and may be revoked by the Directors at any time.
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35.4
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The Directors may by power of attorney or otherwise appoint any company, firm,
person or body of persons, whether nominated directly or indirectly by the Directors, to be the attorney or authorised signatory
of the Company for such purpose and with such powers, authorities and discretions (not exceeding those vested in or exercisable
by the Directors under the Articles) and for such period and subject to such conditions as they may think fit, and any such powers
of attorney or other appointment may contain such provisions for the protection and convenience of persons dealing with any such
attorneys or authorised signatories as the Directors may think fit and may also authorise any such attorney or authorised signatory
to delegate all or any of the powers, authorities and discretions vested in him.
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35.5
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The Directors may appoint such officers of the Company (including, for the
avoidance of doubt and without limitation, any secretary) as they consider necessary on such terms, at such remuneration and to
perform such duties, and subject to such provisions as to disqualification and removal as the Directors may think fit. Unless otherwise
specified in the terms of his appointment an officer of the Company may be removed by resolution of the Directors or Members. An
officer of the Company may vacate his office at any time if he gives notice in writing to the Company that he resigns his office.
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36.1
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Any Director (but not an alternate Director) may by writing appoint any other
Director, or any other person willing to act, to be an alternate Director and by writing may remove from office an alternate Director
so appointed by him.
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36.2
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An alternate Director shall be entitled to receive notice of all meetings
of Directors and of all meetings of committees of Directors of which his appointor is a member, to attend and vote at every such
meeting at which the Director appointing him is not personally present, to sign any written resolution of the Directors, and generally
to perform all the functions of his appointor as a Director in his absence.
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36.3
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An alternate Director shall cease to be an alternate Director if his appointor ceases to be a Director.
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36.4
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Any appointment or removal of an alternate Director shall be by notice to
the Company signed by the Director making or revoking the appointment or in any other manner approved by the Directors.
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36.5
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Subject to the provisions of the Articles, an alternate Director shall be
deemed for all purposes to be a Director and shall alone be responsible for his own acts and defaults and shall not be deemed to
be the agent of the Director appointing him.
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Auth Code: J25451986731
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37
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No Minimum Shareholding
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The Company in general meeting
may fix a minimum shareholding required to be held by a Director, but unless and until such a shareholding qualification is fixed
a Director is not required to hold Shares.
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38
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Remuneration of Directors
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38.1
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The remuneration to be paid to the Directors, if any, shall be such remuneration
as the Directors shall determine. The Directors shall also be entitled to be paid all travelling, hotel and other expenses properly
incurred by them in connection with their attendance at meetings of Directors or committees of Directors, or general meetings of
the Company, or separate meetings of the holders of any class of Shares or debentures of the Company, or otherwise in connection
with the business of the Company or the discharge of their duties as a Director, or to receive a fixed allowance in respect thereof
as may be determined by the Directors, or a combination partly of one such method and partly the other.
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38.2
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The Directors may by resolution approve additional remuneration to any Director
for any services which in the opinion of the Directors go beyond his ordinary routine work as a Director. Any fees paid to a Director
who is also counsel, attorney or solicitor to the Company, or otherwise serves it in a professional capacity shall be in addition
to his remuneration as a Director.
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39.1
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The Company may, if the Directors so determine, have a Seal. The Seal shall
only be used by the authority of the Directors or of a committee of the Directors authorised by the Directors. Every instrument
to which the Seal has been affixed shall be signed by at least one person who shall be either a Director or some officer of the
Company or other person appointed by the Directors for the purpose.
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39.2
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The Company may have for use in any place or places outside the Cayman Islands
a duplicate Seal or Seals each of which shall be a facsimile of the common Seal of the Company and, if the Directors so determine,
with the addition on its face of the name of every place where it is to be used.
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39.3
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A Director or officer, representative or attorney of the Company may without
further authority of the Directors affix the Seal over his signature alone to any document of the Company required to be authenticated
by him under seal or to be filed with the Registrar of Companies in the Cayman Islands or elsewhere wheresoever.
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40
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Dividends, Distributions and Reserve
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40.1
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Subject to the Statute and this Article and except as otherwise provided by
the rights attached to any Shares, the Directors may resolve to pay Dividends and other distributions on Shares in issue and authorise
payment of the Dividends or other distributions out of the funds of the Company lawfully available therefor. A Dividend shall be
deemed to be an interim Dividend unless the terms of the resolution pursuant
to which the Directors resolve to pay such Dividend specifically state that such Dividend shall be a final Dividend. No Dividend
or other distribution shall be paid except out of the realised or unrealised profits of the Company, out of the share premium account
or as otherwise permitted by law.
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Auth Code: J25451986731
www.verify.gov.ky
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40.2
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Except as otherwise provided by the rights attached to any Shares, all Dividends
and other distributions shall be paid according to the par value of the Shares that a Member holds. If any Share is issued on terms
providing that it shall rank for Dividend as from a particular date, that Share shall rank for Dividend accordingly.
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40.3
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The Directors may deduct from any Dividend or other distribution payable to
any Member all sums of money (if any) then payable by him to the Company on account of calls or otherwise.
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40.4
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The Directors may resolve that any Dividend or other distribution be paid
wholly or partly by the distribution of specific assets and in particular (but without limitation) by the distribution of shares,
debentures, or securities of any other company or in any one or more of such ways and where any difficulty arises in regard to
such distribution, the Directors may settle the same as they think expedient and in particular may issue fractional Shares and
may fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made
to any Members upon the basis of the value so fixed in order to adjust the rights of all Members and may vest any such specific
assets in trustees in such manner as may seem expedient to the Directors.
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40.5
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Except as otherwise provided by the rights attached to any Shares, Dividends
and other distributions may be paid in any currency. The Directors may determine the basis of conversion for any currency conversions
that may be required and how any costs involved are to be met.
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40.6
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The Directors may, before resolving to pay any Dividend or other distribution,
set aside such sums as they think proper as a reserve or reserves which shall, at the discretion of the Directors, be applicable
for any purpose of the Company and pending such application may, at the discretion of the Directors, be employed in the business
of the Company.
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40.7
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Any Dividend, other distribution, interest or other monies payable in cash
in respect of Shares may be paid by wire transfer to the holder or by cheque or warrant sent through the post directed to the registered
address of the holder or, in the case of joint holders, to the registered address of the holder who is first named on the Register
of Members or to such person and to such address as such holder or joint holders may in writing direct. Every such cheque or warrant
shall be made payable to the order of the person to whom it is sent. Any one of two or more joint holders may give effectual receipts
for any Dividends, other distributions, bonuses, or other monies payable in respect of the Share held by them as joint holders.
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40.8
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No Dividend or other distribution shall bear interest against the Company.
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40.9
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Any Dividend or other distribution which cannot be paid to a Member and/or which remains
unclaimed after six months from the date on which such Dividend or other distribution becomes payable may, in the discretion
of the Directors, be paid into a separate account in the Company's name, provided that the Company shall not be constituted as
a trustee in respect of that account and the Dividend or other distribution shall remain as a debt due to the Member. Any Dividend
or other distribution which remains unclaimed after a period of six years from the date on which such Dividend or other distribution
becomes payable shall be forfeited and shall revert to the Company.
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Auth Code: J25451986731
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The Directors may at any time
capitalise any sum standing to the credit of any of the Company's reserve accounts or funds (including the share premium account
and capital redemption reserve fund) or any sum standing to the credit of the profit and loss account or otherwise available for
distribution; appropriate such sum to Members in the proportions in which such sum would have been divisible amongst such Members
had the same been a distribution of profits by way of Dividend or other distribution; and apply such sum on their behalf in paying
up in full unissued Shares for allotment and distribution credited as fully paid-up to and amongst them in the proportion aforesaid.
In such event the Directors shall do all acts and things required to give effect to such capitalisation, with full power given
to the Directors to make such provisions as they think fit in the case of Shares becoming distributable in fractions (including
provisions whereby the benefit of fractional entitlements accrue to the Company rather than to the Members concerned). The Directors
may authorise any person to enter on behalf of all of the Members interested into an agreement with the Company providing for such
capitalisation and matters incidental or relating thereto and any agreement made under such authority shall be effective and binding
on all such Members and the Company.
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42.1
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The Directors shall cause proper books of account (including, where applicable,
material underlying documentation including contracts and invoices) to be kept with respect to all sums of money received and expended
by the Company and the matters in respect of which the receipt or expenditure takes place, all sales and purchases of goods by
the Company and the assets and liabilities of the Company. Such books of account must be retained for a minimum period of five
years from the date on which they are prepared. Proper books shall not be deemed to be kept if there are not kept such books of
account as are necessary to give a true and fair view of the state of the Company's affairs and to explain its transactions.
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42.2
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The Directors shall determine whether and to what extent and at what times
and places and under what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection
of Members not being Directors and no Member (not being a Director) shall have any right of inspecting any account or book or document
of the Company except as conferred by Statute or authorised by the Directors or by the Company in general meeting.
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42.3
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The Directors may cause to be prepared and to be laid before the Company in
general meeting profit and loss accounts, balance sheets, group accounts (if any) and such other reports and accounts as may be
required by law.
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Auth Code: J25451986731
www.verify.gov.ky
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43.1
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The Directors may appoint an Auditor of the Company who shall hold office
on such terms as the Directors determine.
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43.2
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Every Auditor of the Company shall have a right of access at all times to
the books and accounts and vouchers of the Company and shall be entitled to require from the Directors and officers of the Company
such information and explanation as may be necessary for the performance of the duties of the Auditor.
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43.3
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Auditors shall, if so required by the Directors, make a report on the accounts
of the Company during their tenure of office at the next annual general meeting following their appointment in the case of a company
which is registered with the Registrar of Companies as an ordinary company, and at the next extraordinary general meeting following
their appointment in the case of a company which is registered with the Registrar of Companies as an exempted company, and at any
other time during their term of office, upon request of the Directors or any general meeting of the Members.
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44.1
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Notices shall be in writing and may be given by the Company to any Member
either personally or by sending it by courier, post, cable, telex, fax or e-mail to him or to his address as shown in the Register
of Members (or where the notice is given by e-mail by sending it to the e-mail address provided by such Member). Any notice, if
posted from one country to another, is to be sent by airmail.
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44.2
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Where a notice is sent by courier, service of the notice shall be deemed to
be effected by delivery of the notice to a courier company, and shall be deemed to have been received on the third day (not including
Saturdays or Sundays or public holidays) following the day on which the notice was delivered to the courier. Where a notice is
sent by post, service of the notice shall be deemed to be effected by properly addressing, pre paying and posting a letter containing
the notice, and shall be deemed to have been received on the fifth day (not including Saturdays or Sundays or public holidays in
the Cayman Islands) following the day on which the notice was posted. Where a notice is sent by cable, telex or fax, service of
the notice shall be deemed to be effected by properly addressing and sending such notice and shall be deemed to have been received
on the same day that it was transmitted. Where a notice is given by e-mail service shall be deemed to be effected by transmitting
the e-mail to the e-mail address provided by the intended recipient and shall be deemed to have been received on the same day that
it was sent, and it shall not be necessary for the receipt of the e-mail to be acknowledged by the recipient.
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44.3
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A notice may be given by the Company to the person or persons which the Company
has been advised are entitled to a Share or Shares in consequence of the death or bankruptcy of a Member in the same manner as
other notices which are required to be given under the Articles and shall be addressed to them by name, or by the title of representatives
of the deceased, or trustee of the bankrupt, or by any like description at the address supplied for that purpose by the persons
claiming to be so entitled, or at the option of the Company
by giving the notice in any manner in which the same might have been given if the death or bankruptcy had not occurred.
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Auth Code: J25451986731
www.verify.gov.ky
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44.4
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Notice of every general meeting shall be given in any manner authorised by
the Articles to every holder of Shares carrying an entitlement to receive such notice on the record date for such meeting except
that in the case of joint holders the notice shall be sufficient if given to the joint holder first named in the Register of Members
and every person upon whom the ownership of a Share devolves by reason of his being a legal personal representative or a trustee
in bankruptcy of a Member where the Member but for his death or bankruptcy would be entitled to receive notice of the meeting,
and no other person shall be entitled to receive notices of general meetings.
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45.1
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If the Company shall be wound up the liquidator shall apply the assets of
the Company in satisfaction of creditors' claims in such manner and order as such liquidator thinks fit. Subject to the rights
attaching to any Shares, in a winding up:
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(a)
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if the assets available for distribution amongst the Members shall be insufficient
to repay the whole of the Company's issued share capital, such assets shall be distributed so that, as nearly as may be, the losses
shall be borne by the Members in proportion to the par value of the Shares held by them; or
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(b)
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if the assets available for distribution amongst the Members shall be more
than sufficient to repay the whole of the Company's issued share capital at the commencement of the winding up, the surplus shall
be distributed amongst the Members in proportion to the par value of the Shares held by them at the commencement of the winding
up subject to a deduction from those Shares in respect of which there are monies due, of all monies payable to the Company for
unpaid calls or otherwise.
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45.2
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If the Company shall be wound up the liquidator may, subject to the rights
attaching to any Shares and with the approval of a Special Resolution of the Company and any other approval required by the Statute,
divide amongst the Members in kind the whole or any part of the assets of the Company (whether such assets shall consist of property
of the same kind or not) and may for that purpose value any assets and determine how the division shall be carried out as between
the Members or different classes of Members. The liquidator may, with the like approval, vest the whole or any part of such assets
in trustees upon such trusts for the benefit of the Members as the liquidator, with the like approval, shall think fit, but so
that no Member shall be compelled to accept any asset upon which there is a liability.
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46
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Indemnity and Insurance
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46.1
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Every Director and officer of the Company (which for the avoidance of doubt,
shall not include auditors of the Company), together with every former Director and former officer of the Company (each an "Indemnified
Person") shall be indemnified out of the assets of the Company against any liability, action, proceeding, claim, demand,
costs, damages or expenses, including legal expenses, whatsoever which
they or any of them may incur as a result of any act or failure to act in carrying out their functions other than such liability
(if any) that they may incur by reason of their own actual fraud or wilful default. No Indemnified Person shall be liable to the
Company for any loss or damage incurred by the Company as a result (whether direct or indirect) of the carrying out of their functions
unless that liability arises through the actual fraud or wilful default of such Indemnified Person. No person shall be found to
have committed actual fraud or wilful default under this Article unless or until a court of competent jurisdiction shall have made
a finding to that effect.
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Auth Code: J25451986731
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46.2
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The Company shall advance to each Indemnified Person reasonable attorneys'
fees and other costs and expenses incurred in connection with the defence of any action, suit, proceeding or investigation involving
such Indemnified Person for which indemnity will or could be sought. In connection with any advance of any expenses hereunder,
the Indemnified Person shall execute an undertaking to repay the advanced amount to the Company if it shall be determined by final
judgment or other final adjudication that such Indemnified Person was not entitled to indemnification pursuant to this Article.
If it shall be determined by a final judgment or other final adjudication that such Indemnified Person was not entitled to indemnification
with respect to such judgment, costs or expenses, then such party shall not be indemnified with respect to such judgment, costs
or expenses and any advancement shall be returned to the Company (without interest) by the Indemnified Person.
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46.3
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The Directors, on behalf of the Company, may purchase and maintain insurance
for the benefit of any Director or other officer of the Company against any liability which, by virtue of any rule of law, would
otherwise attach to such person in respect of any negligence, default, breach of duty or breach of trust of which such person may
be guilty in relation to the Company.
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Unless the Directors otherwise
prescribe, the financial year of the Company shall end on 31st December in each year and, following the year of incorporation,
shall begin on 1st January in each year.
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48
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Transfer by Way of Continuation
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If the Company is exempted
as defined in the Statute, it shall, subject to the provisions of the Statute and with the approval of a Special Resolution, have
the power to register by way of continuation as a body corporate under the laws of any jurisdiction outside the Cayman Islands
and to be deregistered in the Cayman Islands.
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49
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Mergers and Consolidations
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The Company shall have the
power to merge or consolidate with one or more other constituent companies (as defined in the Statute) upon such terms as the Directors
may determine and (to the extent required by the Statute) with the approval of a Special Resolution.
Auth Code: J25451986731
www.verify.gov.ky
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Dated this 15th day of January 2021.
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Signature and Address of Subscriber
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Maples Corporate Services Limited
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of PO Box 309, Ugland House
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Grand Cayman
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KY1-1104
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Cayman Islands
acting by:
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Salome Laidlaw
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Ella Ebanks
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Witness to the above signature
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Auth Code: J25451986731
www.verify.gov.ky
Exhibit 3.2
THE COMPANIES ACT (AS REVISED)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
MEMORANDUM AND ARTICLES OF ASSOCIATION
OF
Frontier
Acquisition Corp.
(adopted
by special resolution dated [DATE] and effective on [DATE])
THE COMPANIES ACT (AS REVISED)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
MEMORANDUM OF ASSOCIATION
OF
Frontier
Acquisition Corp.
(adopted
by special resolution dated [DATE] and effective on [DATE])
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1
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The name of the Company is Frontier Acquisition Corp.
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2
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The Registered Office of the Company shall be at the offices of Maples Corporate Services Limited,
PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, or at such other place within the Cayman Islands as the Directors
may decide.
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3
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The objects for which the Company is established are unrestricted and the Company shall have full
power and authority to carry out any object not prohibited by the laws of the Cayman Islands.
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4
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The liability of each Member is limited to the amount unpaid on such Member's shares.
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5
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The share capital of the Company is US$55,500 divided into 500,000,000 Class A ordinary shares
of a par value of US$0.0001 each, 50,000,000 Class B ordinary shares of a par value of US$0.0001 each and 5,000,000 preference
shares of a par value of US$0.0001 each.
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6
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The Company has power to register by way of continuation as a body corporate limited by shares
under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands.
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7
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Capitalised terms that are not defined in this Amended and Restated Memorandum of Association bear
the respective meanings given to them in the Amended and Restated Articles of Association of the Company.
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THE COMPANIES ACT (AS REVISED)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
OF
Frontier
Acquisition Corp.
(adopted
by special resolution dated [DATE] and effective on [DATE])
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1.1
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In the Articles Table A in the First Schedule to the Statute does not apply and, unless there is
something in the subject or context inconsistent therewith:
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"Affiliate"
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in respect of a person, means any other person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such person, and (a) in the case of a natural person, shall include, without limitation, such person’s spouse, parents, children, siblings, mother-in-law and father-in-law and brothers and sisters-in-law, whether by blood, marriage or adoption or anyone residing in such person’s home, a trust for the benefit of any of the foregoing, a company, partnership or any natural person or entity wholly or jointly owned by any of the foregoing and (b) in the case of an entity, shall include a partnership, a corporation or any natural person or entity which directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such entity.
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"Applicable Law"
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means, with respect to any person, all provisions of laws, statutes, ordinances, rules, regulations, permits, certificates, judgments, decisions, decrees or orders of any governmental authority applicable to such person.
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"Articles"
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means these amended and restated articles of association of the Company.
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"Audit Committee"
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means the audit committee of the board of directors of the Company established pursuant to the Articles, or any successor committee.
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"Auditor"
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means the person for the time being performing the duties of auditor of the Company (if any).
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"Business Combination"
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means a merger, share exchange, asset acquisition, share purchase, reorganisation or similar business combination involving the Company, with one or more businesses or entities (the "target business"), which Business Combination: (a) as long as the securities of the Company are listed on the Nasdaq Capital Market, must occur with one or more target businesses that together have an aggregate fair market value of at least 80 per cent of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the income earned on the Trust Account) at the time of the signing of the definitive agreement to enter into such Business Combination; and (b) must not be solely effectuated with another blank cheque company or a similar company with nominal operations.
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"business day"
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means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorised or obligated by law to close in New York City.
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"Clearing House"
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means a clearing house recognised by the laws of the jurisdiction in which the Shares (or depositary receipts therefor) are listed or quoted on a stock exchange or interdealer quotation system in such jurisdiction.
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"Class A Share"
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means a Class A ordinary share of a par value of US$0.0001 in the share capital of the Company.
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"Class B Share"
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means a Class B ordinary share of a par value of US$0.0001 in the share capital of the Company.
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"Company"
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means the above named company.
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"Company’s Website"
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means the website of the Company and/or its web-address or domain name (if any).
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"Compensation Committee"
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means the compensation committee of the board of directors of the Company established pursuant to the Articles, or any successor committee.
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"Designated Stock Exchange"
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means any United States national securities exchange on which the securities of the Company are listed for trading, including the Nasdaq Capital Market.
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"Directors"
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means the directors for the time being of the Company.
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"Dividend"
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means any dividend (whether interim or final) resolved to be paid on Shares pursuant to the Articles.
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"Electronic Communication"
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means a communication sent by electronic means, including electronic posting to the Company’s Website, transmission to any number, address or internet website (including the website of the Securities and Exchange Commission) or other electronic delivery methods as otherwise decided and approved by the Directors.
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"Electronic Record"
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has the same meaning as in the Electronic Transactions Act.
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"Electronic Transactions Act"
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means the Electronic Transactions Act (As Revised) of the Cayman Islands.
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"Equity-linked Securities"
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means any debt or equity securities that are convertible, exercisable or exchangeable for Class A Shares issued in a financing transaction in connection with a Business Combination, including but not limited to a private placement of equity or debt.
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"Exchange Act"
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means the United States Securities Exchange Act of 1934, as amended, or any similar U.S. federal statute and the rules and regulations of the Securities and Exchange Commission thereunder, all as the same shall be in effect at the time.
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"Founders"
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means all Members immediately prior to the consummation of the IPO.
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"Independent Director"
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has the same meaning as in the rules and regulations of the Designated Stock Exchange or in Rule 10A-3 under the Exchange Act, as the case may be.
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"IPO"
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means the Company's initial public offering of securities.
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"Member"
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has the same meaning as in the Statute.
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"Memorandum"
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means the amended and restated memorandum of association of the Company.
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"Nominating Committee"
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means the nominating committee of the board of directors of the Company established pursuant to the Articles, or any successor committee.
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"Officer"
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means a person appointed to hold an office in the Company.
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"Ordinary Resolution"
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means a resolution passed by a simple majority of the Members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting, and includes a unanimous written resolution. In computing the majority when a poll is demanded regard shall be had to the number of votes to which each Member is entitled by the Articles.
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"Ordinary Share"
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means an ordinary share of a par value of US$0.0001 in the share capital of the Company.
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"Over-Allotment Option"
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means the option of the Underwriters to purchase up to an additional 15 per cent of the firm units (as described in the Articles) issued in the IPO at a price equal to US$10 per unit, less underwriting discounts and commissions.
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"Preference Share"
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means a preference share of a par value of US$0.0001 in the share capital of the Company.
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"Public Share"
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means a Class A Share issued as part of the units (as described in the Articles) issued in the IPO.
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"Redemption Notice"
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means a notice in a form approved by the Company by which a holder of Public Shares is entitled to require the Company to redeem its Public Shares, subject to any conditions contained therein.
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"Register of Members"
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means the register of Members maintained in accordance with the Statute and includes (except where otherwise stated) any branch or duplicate register of Members.
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"Registered Office"
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means the registered office for the time being of the Company.
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"Representative"
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means a representative of the Underwriters.
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"Seal"
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means the common seal of the Company and includes every duplicate seal.
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"Securities and Exchange Commission"
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means the United States Securities and Exchange Commission.
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"Share"
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means a Class A Share, a Class B Share, or a Preference Share and includes a fraction of a share in the Company.
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"Special Resolution"
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subject to Article 29.4, has the same meaning as in the Statute, and includes a unanimous written resolution.
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"Sponsor"
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means Frontier Acquisition Sponsor LLC, a Cayman Islands limited liability company, and its successors or assigns.
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"Statute"
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means the Companies Act (As Revised) of the Cayman Islands.
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"Tax Filing Authorised Person"
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means such person as any Director shall designate from time to time, acting severally.
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"Treasury Share"
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means a Share held in the name of the Company as a treasury share in accordance with the Statute.
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"Trust Account"
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means the trust account established by the Company upon the consummation of its IPO and into which a certain amount of the net proceeds of the IPO, together with a certain amount of the proceeds of a private placement of units simultaneously with the closing date of the IPO, will be deposited.
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"Underwriter"
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means an underwriter of the IPO from time to time and any successor underwriter.
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(a)
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words importing the singular number include the plural number and vice versa;
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(b)
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words importing the masculine gender include the feminine gender;
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(c)
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words importing persons include corporations as well as any other legal or natural person;
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(d)
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"written" and "in writing" include all modes of representing or reproducing
words in visible form, including in the form of an Electronic Record;
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(e)
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"shall" shall be construed as imperative and "may" shall be construed as permissive;
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(f)
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references to provisions of any law or regulation shall be construed as references to those provisions
as amended, modified, re-enacted or replaced;
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(g)
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any phrase introduced by the terms "including", "include", "in particular"
or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms;
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(h)
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the term "and/or" is used herein to mean both "and" as well as "or."
The use of "and/or" in certain contexts in no respects qualifies or modifies the use of the terms "and" or
"or" in others. The term "or" shall not be interpreted to be exclusive and the term "and" shall not
be interpreted to require the conjunctive (in each case, unless the context otherwise requires);
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(i)
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headings are inserted for reference only and shall be ignored in construing the Articles;
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(j)
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any requirements as to delivery under the Articles include delivery in the form of an Electronic
Record;
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(k)
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any requirements as to execution or signature under the Articles including the execution of the
Articles themselves can be satisfied in the form of an electronic signature as defined in the Electronic Transactions Act;
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(l)
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sections 8 and 19(3) of the Electronic Transactions Act shall not apply;
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(m)
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the term "clear days" in relation to the period of a notice means that period excluding
the day when the notice is received or deemed to be received and the day for which it is given or on which it is to take effect;
and
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(n)
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the term "holder" in relation to a Share means a person whose name is entered in the
Register of Members as the holder of such Share.
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2
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Commencement of Business
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2.1
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The business of the Company may be commenced as soon after incorporation of the Company as the
Directors shall see fit.
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2.2
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The Directors may pay, out of the capital or any other monies of the Company, all expenses incurred
in or about the formation and establishment of the Company, including the expenses of registration.
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3
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Issue of Shares and other Securities
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3.1
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Subject to the provisions, if any, in the Memorandum (and to any direction that may be given by
the Company in general meeting) and, where applicable, the rules and regulations of the Designated Stock Exchange, the Securities
and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law, and without prejudice
to any rights attached to any existing Shares, the Directors may allot, issue, grant options over or otherwise dispose of Shares
(including fractions of a Share) with or without preferred, deferred or other rights or restrictions, whether in regard to Dividends
or other distributions, voting, return of capital or otherwise and to such persons, at such times and on such other terms as they
think proper, and may also (subject to the Statute and the Articles) vary such rights, save that the Directors shall not allot,
issue, grant options over or otherwise dispose of Shares (including fractions of a Share) to the
extent that it may affect the ability of the Company to carry out a Class B Ordinary Share Conversion set out in the Articles.
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3.2
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The Company may issue rights, options, warrants or convertible securities or securities of similar
nature conferring the right upon the holders thereof to subscribe for, purchase or receive any class of Shares or other securities
in the Company on such terms as the Directors may from time to time determine.
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3.3
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The Company may issue units of securities in the Company, which may be comprised of whole or fractional
Shares, rights, options, warrants or convertible securities or securities of similar nature conferring the right upon the holders
thereof to subscribe for, purchase or receive any class of Shares or other securities in the Company, upon such terms as the Directors
may from time to time determine. The securities comprising any such units which are issued pursuant to the IPO can only be traded
separately from one another on the 52nd day following the date of the prospectus relating to the IPO unless the Representative(s)
determines that an earlier date is acceptable, subject to the Company having filed a current report on Form 8-K with the Securities
and Exchange Commission and a press release announcing when such separate trading will begin. Prior to such date, the units can
be traded, but the securities comprising such units cannot be traded separately from one another.
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3.4
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The Company shall not issue Shares to bearer.
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4.1
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The Company shall maintain or cause to be maintained the Register of Members in accordance with
the Statute.
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4.2
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The Directors may determine that the Company shall maintain one or more branch registers of Members
in accordance with the Statute. The Directors may also determine which register of Members shall constitute the principal register
and which shall constitute the branch register or registers, and to vary such determination from time to time.
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5
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Closing Register of Members or Fixing Record Date
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5.1
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For the purpose of determining Members entitled to notice of, or to vote at any meeting of Members
or any adjournment thereof, or Members entitled to receive payment of any Dividend or other distribution, or in order to make a
determination of Members for any other purpose, the Directors may, after notice has been given by advertisement in an appointed
newspaper or any other newspaper or by any other means in accordance with the rules and regulations of the Designated Stock Exchange,
the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law, provide
that the Register of Members shall be closed for transfers for a stated period which shall not in any case exceed forty days.
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5.2
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In lieu of, or apart from, closing the Register of Members, the Directors may fix in advance or
arrears a date as the record date for any such determination of Members entitled to notice of, or to vote at any meeting of the
Members or any adjournment thereof, or for the purpose of determining the Members entitled to receive payment of any Dividend or
other distribution, or in order to make a determination of Members for any other purpose.
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5.3
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If the Register of Members is not so closed and no record date is fixed for the determination of
Members entitled to notice of, or to vote at, a meeting of Members or Members entitled to receive payment of a Dividend or other
distribution, the date on which notice of the meeting is sent or the date on which the resolution of the Directors resolving to
pay such Dividend or other distribution is passed, as the case may be, shall be the record date for such determination of Members.
When a determination of Members entitled to vote at any meeting of Members has been made as provided in this Article, such determination
shall apply to any adjournment thereof.
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6
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Certificates for Shares
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6.1
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A Member shall only be entitled to a share certificate if the Directors resolve that share certificates
shall be issued. Share certificates representing Shares, if any, shall be in such form as the Directors may determine. Share certificates
shall be signed by one or more Directors or other person authorised by the Directors. The Directors may authorise certificates
to be issued with the authorised signature(s) affixed by mechanical process. All certificates for Shares shall be consecutively
numbered or otherwise identified and shall specify the Shares to which they relate. All certificates surrendered to the Company
for transfer shall be cancelled and, subject to the Articles, no new certificate shall be issued until the former certificate representing
a like number of relevant Shares shall have been surrendered and cancelled.
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6.2
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The Company shall not be bound to issue more than one certificate for Shares held jointly by more
than one person and delivery of a certificate to one joint holder shall be a sufficient delivery to all of them.
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6.3
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If a share certificate is defaced, worn out, lost or destroyed, it may be renewed on such terms
(if any) as to evidence and indemnity and on the payment of such expenses reasonably incurred by the Company in investigating evidence,
as the Directors may prescribe, and (in the case of defacement or wearing out) upon delivery of the old certificate.
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6.4
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Every share certificate sent in accordance with the Articles will be sent at the risk of the Member
or other person entitled to the certificate. The Company will not be responsible for any share certificate lost or delayed in the
course of delivery.
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6.5
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Share certificates shall be issued within the relevant time limit as prescribed by the Statute,
if applicable, or as the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or
any other competent regulatory authority or otherwise under Applicable Law may from time to time determine, whichever is shorter,
after the allotment or, except in the case of a Share transfer which the Company is for the time being entitled to refuse to register
and does not register, after lodgement of a Share transfer with the Company.
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7.1
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Subject to the terms of the Articles, any Member may transfer all or any of his Shares by an instrument
of transfer provided that such transfer complies with the rules and regulations of the Designated Stock Exchange, the Securities
and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law. If the Shares in question
were issued in conjunction with rights, options or warrants issued pursuant to the Articles on terms that one cannot be transferred
without the other, the Directors shall refuse to register the transfer of any such Share without evidence satisfactory to them
of the like transfer of such option or warrant.
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7.2
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The instrument of transfer of any Share shall be in writing in the usual or common form or in a
form prescribed by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any
other competent regulatory authority or otherwise under Applicable Law or in any other form approved by the Directors and shall
be executed by or on behalf of the transferor (and if the Directors so require, signed by or on behalf of the transferee) and may
be under hand or, if the transferor or transferee is a Clearing House or its nominee(s), by hand or by machine imprinted signature
or by such other manner of execution as the Directors may approve from time to time. The transferor shall be deemed to remain the
holder of a Share until the name of the transferee is entered in the Register of Members.
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8
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Redemption, Repurchase and Surrender of Shares
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8.1
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Subject to the provisions of the Statute, and, where applicable, the rules and regulations of the
Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise
under Applicable Law, the Company may issue Shares that are to be redeemed or are liable to be redeemed at the option of the Member
or the Company. The redemption of such Shares, except Public Shares, shall be effected in such manner and upon such other terms
as the Company may, by Special Resolution, determine before the issue of such Shares. With respect to redeeming or repurchasing
the Shares:
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(a)
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Members who hold Public Shares are entitled to request the redemption of such Shares in the circumstances
described in the Business Combination Article hereof;
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(b)
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Class B Shares held by the Founders shall be surrendered by the Founders for no consideration on
a pro-rata basis to the extent that the Over-Allotment Option is not exercised in full so that the Founders will own 20 per cent
of the Company's issued Shares after the IPO (exclusive of any securities purchased in a private placement simultaneously with
the IPO); and
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(c)
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Public Shares shall be repurchased by way of tender offer in the circumstances set out in the Business
Combination Article hereof.
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8.2
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Subject to the provisions of the Statute, and, where applicable, the rules and regulations of the
Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority
or otherwise under Applicable Law, the Company may purchase its own Shares (including any redeemable Shares) in such manner and
on such other terms as the Directors may agree with the relevant Member. For the avoidance of doubt, redemptions, repurchases and
surrenders of Shares in the circumstances described in the Article above shall not require further approval of the Members.
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8.3
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The Company may make a payment in respect of the redemption or purchase of its own Shares in any
manner permitted by the Statute, including out of capital.
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8.4
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The Directors may accept the surrender for no consideration of any fully paid Share.
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9.1
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The Directors may, prior to the purchase, redemption or surrender of any Share, determine that
such Share shall be held as a Treasury Share.
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9.2
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The Directors may determine to cancel a Treasury Share or transfer a Treasury Share on such terms
as they think proper (including, without limitation, for nil consideration).
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10
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Variation of Rights of Shares
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10.1
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Subject to Article 3.1, if at any time the share capital of the Company is divided into different
classes of Shares, all or any of the rights attached to any class (unless otherwise provided by the terms of issue of the Shares
of that class) may, whether or not the Company is being wound up, be varied without the consent of the holders of the issued Shares
of that class where such variation is considered by the Directors not to have a material adverse effect upon such rights; otherwise,
any such variation shall be made only with the consent in writing of the holders of not less than two thirds of the issued Shares
of that class (other than with respect to a waiver of the provisions of the Class B Ordinary Share Conversion Article hereof, which
as stated therein shall only require the consent in writing of the holders of a majority of the issued Shares of that class), or
with the approval of a resolution passed by a majority of not less than two thirds of the votes cast at a separate meeting of the
holders of the Shares of that class. For the avoidance of doubt, the Directors reserve the right, notwithstanding that any such
variation may not have a material adverse effect, to obtain consent from the holders of Shares of the relevant class. To any such
meeting all the provisions of the Articles relating to general meetings shall apply mutatis mutandis, except that the necessary
quorum shall be one person holding or representing by proxy at least one third of the issued Shares of the class and that any holder
of Shares of the class present in person or by proxy may demand a poll.
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10.2
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For the purposes of a separate class meeting, the Directors may treat two or more or all the classes
of Shares as forming one class of Shares if the Directors consider that such class of Shares would be affected in the same way
by the proposals under consideration, but in any other case shall treat them as separate classes of Shares.
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10.3
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The rights conferred upon the holders of the Shares of any class issued with preferred or other
rights shall not, unless otherwise expressly provided by the terms of issue of the Shares of that class, be deemed to be varied
by the creation or issue of further Shares ranking pari passu therewith or Shares issued with preferred or other rights.
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11
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Commission on Sale of Shares
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The Company may, in so far as
the Statute permits, pay a commission to any person in consideration of his subscribing or agreeing to subscribe (whether absolutely
or conditionally) or procuring or agreeing to procure subscriptions (whether absolutely or conditionally) for any Shares. Such
commissions may be satisfied by the payment of cash and/or the issue of fully or partly paid-up Shares. The Company may also on
any issue of Shares pay such brokerage as may be lawful.
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12
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Non Recognition of Trusts
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The Company shall not be bound
by or compelled to recognise in any way (even when notified) any equitable, contingent, future or partial interest in any Share,
or (except only as is otherwise provided by the Articles or the Statute) any other rights in respect of any Share other than an
absolute right to the entirety thereof in the holder.
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13.1
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The Company shall have a first and paramount lien on all Shares (whether fully paid-up or not)
registered in the name of a Member (whether solely or jointly with others) for all debts, liabilities or engagements to or with
the Company (whether presently payable or not) by such Member or his estate, either alone or jointly with any other person, whether
a Member or not, but the Directors may at any time declare any Share to be wholly or in part exempt from the provisions of this
Article. The registration of a transfer of any such Share shall operate as a waiver of the Company's lien thereon. The Company's
lien on a Share shall also extend to any amount payable in respect of that Share.
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13.2
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The Company may sell, in such manner as the Directors think fit, any Shares on which the Company
has a lien, if a sum in respect of which the lien exists is presently payable, and is not paid within fourteen clear days after
notice has been received or deemed to have been received by the holder of the Shares, or to the person entitled to it in consequence
of the death or bankruptcy of the holder, demanding payment and stating that if the notice is not complied with the Shares may
be sold.
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13.3
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To give effect to any such sale the Directors may authorise any person to execute an instrument
of transfer of the Shares sold to, or in accordance with the directions of, the purchaser. The purchaser or his nominee shall be
registered as the holder of the Shares comprised in any such transfer, and he shall not be bound to see to the application of the
purchase money, nor shall his title to the Shares be affected by any irregularity or invalidity in the sale or the exercise of
the Company's power of sale under the Articles.
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13.4
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The net proceeds of such sale after payment of costs, shall be applied in payment of such part
of the amount in respect of which the lien exists as is presently payable and any balance shall (subject to a like lien for sums
not presently payable as existed upon the Shares before the sale) be paid to the person entitled to the Shares at the date of the
sale.
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14.1
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Subject to the terms of the allotment and issue of any Shares, the Directors may make calls upon
the Members in respect of any monies unpaid on their Shares (whether in respect of par value or premium), and each Member shall
(subject to receiving at least fourteen clear days' notice specifying the time or times of payment) pay to the Company at the time
or times so specified the amount called on the Shares. A call may be revoked or postponed, in whole or in part, as the Directors
may determine. A call may be required to be paid by instalments. A person upon whom a call is made shall remain liable for calls
made upon him notwithstanding the subsequent transfer of the Shares in respect of which the call was made.
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14.2
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A call shall be deemed to have been made at the time when the resolution of the Directors authorising
such call was passed.
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14.3
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The joint holders of a Share shall be jointly and severally liable to pay all calls in respect
thereof.
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14.4
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If a call remains unpaid after it has become due and payable, the person from whom it is due shall
pay interest on the amount unpaid from the day it became due and payable until it is paid at such rate as the Directors may determine
(and in addition all expenses that have been incurred by the Company by reason of such non-payment), but the Directors may waive
payment of the interest or expenses wholly or in part.
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14.5
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An amount payable in respect of a Share on issue or allotment or at any fixed date, whether on
account of the par value of the Share or premium or otherwise, shall be deemed to be a call and if it is not paid all the provisions
of the Articles shall apply as if that amount had become due and payable by virtue of a call.
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14.6
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The Directors may issue Shares with different terms as to the amount and times of payment of calls,
or the interest to be paid.
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14.7
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The Directors may, if they think fit, receive an amount from any Member willing to advance all
or any part of the monies uncalled and unpaid upon any Shares held by him, and may (until the amount would otherwise become payable)
pay interest at such rate as may be agreed upon between the Directors and the Member paying such amount in advance.
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14.8
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No such amount paid in advance of calls shall entitle the Member paying such amount to any portion
of a Dividend or other distribution payable in respect of any period prior to the date upon which such amount would, but for such
payment, become payable.
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15.1
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If a call or instalment of a call remains unpaid after it has become due and payable the Directors
may give to the person from whom it is due not less than fourteen clear days' notice requiring payment of the amount unpaid together
with any interest which may have accrued and any expenses incurred by the Company by reason of such non-payment. The notice shall
specify where payment is to be made and shall state that if the notice is not complied with the Shares in respect of which the
call was made will be liable to be forfeited.
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15.2
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If the notice is not complied with, any Share in respect of which it was given may, before the
payment required by the notice has been made, be forfeited by a resolution of the Directors. Such forfeiture shall include all
Dividends, other distributions or other monies payable in respect of the forfeited Share and not paid before the forfeiture.
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15.3
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A forfeited Share may be sold, re-allotted or otherwise disposed of on such terms and in such manner
as the Directors think fit and at any time before a sale, re-allotment or disposition the forfeiture may be cancelled on such terms
as the Directors think fit. Where for the purposes of its disposal a forfeited Share is to be transferred to any person the Directors
may authorise some person to execute an instrument of transfer of the Share in favour of that person.
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15.4
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A person any of whose Shares have been forfeited shall cease to be a Member in respect of them
and shall surrender to the Company for cancellation the certificate for the Shares forfeited and shall remain liable to pay to
the Company all monies which at the date of forfeiture were payable by him to the Company in respect of those Shares together with
interest at such rate as the Directors may determine, but his liability shall cease if and when the Company shall have received
payment in full of all monies due and payable by him in respect of those Shares.
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15.5
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A certificate in writing under the hand of one Director or Officer that a Share has been forfeited
on a specified date shall be conclusive evidence of the facts stated in it as against all persons claiming to be entitled to the
Share. The certificate shall (subject to the execution of an instrument of transfer) constitute a good title to the Share and the
person to whom the Share is sold or otherwise disposed of shall not be bound to see to the application of the purchase money, if
any, nor shall his title to the Share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture,
sale or disposal of the Share.
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15.6
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The provisions of the Articles as to forfeiture shall apply in the case of non payment of any sum
which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the par value of the Share or by
way of premium as if it had been payable by virtue of a call duly made and notified.
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16
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Transmission of Shares
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16.1
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If a Member dies, the survivor or survivors (where he was a joint holder), or his legal personal
representatives (where he was a sole holder), shall be the only persons recognised by the Company as having any title to
his Shares. The estate of a deceased Member is not thereby released from any liability in respect of any Share, for which he was
a joint or sole holder.
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16.2
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Any person becoming entitled to a Share in consequence of the death or bankruptcy or liquidation
or dissolution of a Member (or in any other way than by transfer) may, upon such evidence being produced as may be required by
the Directors, elect, by a notice in writing sent by him to the Company, either to become the holder of such Share or to have some
person nominated by him registered as the holder of such Share. If he elects to have another person registered as the holder of
such Share he shall sign an instrument of transfer of that Share to that person. The Directors shall, in either case, have the
same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the relevant Member
before his death or bankruptcy or liquidation or dissolution, as the case may be.
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16.3
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A person becoming entitled to a Share by reason of the death or bankruptcy or liquidation or dissolution
of a Member (or in any other case than by transfer) shall be entitled to the same Dividends, other distributions and other advantages
to which he would be entitled if he were the holder of such Share. However, he shall not, before becoming a Member in respect of
a Share, be entitled in respect of it to exercise any right conferred by membership in relation to general meetings of the Company
and the Directors may at any time give notice requiring any such person to elect either to be registered himself or to have some
person nominated by him be registered as the holder of the Share (but the Directors shall, in either case, have the same right
to decline or suspend registration as they would have had in the case of a transfer of the Share by the relevant Member before
his death or bankruptcy or liquidation or dissolution or any other case than by transfer, as the case may be). If the notice is
not complied with within ninety days of being received or deemed to be received (as determined pursuant to the Articles), the Directors
may thereafter withhold payment of all Dividends, other distributions, bonuses or other monies payable in respect of the Share
until the requirements of the notice have been complied with.
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17
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Class B Ordinary Share Conversion
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17.1
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The rights attaching to the Class A Shares and Class B Shares shall rank pari passu in all
respects, and the Class A Shares and Class B Shares shall vote together as a single class on all matters (subject to the Variation
of Rights of Shares Article and the Appointment and Removal of Directors Article hereof) with the exception that the holder of
a Class B Share shall have the conversion rights referred to in this Article.
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17.2
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Class B Shares shall automatically convert into Class A Shares on a one-for-one basis (the "Initial
Conversion Ratio"): (a) at any time and from time to time at the option of the holders thereof; and (b) automatically
on the day of the closing of a Business Combination.
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17.3
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Notwithstanding the Initial Conversion Ratio, in the case that additional Class A Shares or
any other Equity-linked Securities, are issued, or deemed issued, by the Company in excess of the amounts offered in the IPO
and related to the closing of a Business Combination, all Class B Shares in issue shall automatically convert into Class A
Shares at the time of the closing of a Business Combination at a ratio for which the Class B Shares shall convert into Class
A Shares will be adjusted (unless the
holders of a majority of the Class B Shares in issue agree to waive such anti-dilution adjustment with respect to any such issuance
or deemed issuance) so that the number of Class A Shares issuable upon conversion of all Class B Shares will equal, on an as-converted
basis, in the aggregate, 20 per cent of the sum of all Class A Shares and Class B Shares in issue upon completion of the IPO plus
all Class A Shares and Equity-linked Securities issued or deemed issued in connection with a Business Combination, excluding any
Shares or Equity-linked Securities issued, or to be issued, to any seller in a Business Combination and any private placement units
issued to the Sponsor or its Affiliates upon conversion of working capital loans made to the Company.
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17.4
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Notwithstanding anything to the contrary contained herein, the foregoing adjustment to the Initial
Conversion Ratio may be waived as to any particular issuance or deemed issuance of additional Class A Shares or Equity-linked
Securities by the written consent or agreement of holders of a majority of the Class B Shares then in issue consenting or agreeing
separately as a separate class in the manner provided in the Variation of Rights of Shares Article hereof.
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17.5
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The foregoing conversion ratio shall also be adjusted to account for any subdivision (by share
subdivision, exchange, capitalisation, rights issue, reclassification, recapitalisation or otherwise) or combination (by share
consolidation, exchange, reclassification, recapitalisation or otherwise) or similar reclassification or recapitalisation of the
Class A Shares in issue into a greater or lesser number of shares occurring after the original filing of the Articles without a
proportionate and corresponding subdivision, combination or similar reclassification or recapitalisation of the Class B Shares
in issue.
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17.6
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Each Class B Share shall convert into its pro rata number of Class A Shares pursuant to this Article.
The pro rata share for each holder of Class B Shares will be determined as follows: each Class B Share shall convert into such
number of Class A Shares as is equal to the product of 1 multiplied by a fraction, the numerator of which shall be the total number
of Class A Shares into which all of the Class B Shares in issue shall be converted pursuant to this Article and the denominator
of which shall be the total number of Class B Shares in issue at the time of conversion.
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17.7
|
References in this Article to "converted", "conversion" or "exchange"
shall mean the compulsory redemption without notice of Class B Shares of any Member and, on behalf of such Members, automatic application
of such redemption proceeds in paying for such new Class A Shares into which the Class B Shares have been converted or exchanged
at a price per Class B Share necessary to give effect to a conversion or exchange calculated on the basis that the Class A Shares
to be issued as part of the conversion or exchange will be issued at par. The Class A Shares to be issued on an exchange or conversion
shall be registered in the name of such Member or in such name as the Member may direct.
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17.8
|
Notwithstanding anything to the contrary in this Article, in no event may any Class B Share convert
into Class A Shares at a ratio that is less than one-for-one.
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18
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Amendments of Memorandum and Articles of Association and Alteration of Capital
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18.1
|
The Company may by Ordinary Resolution:
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(a)
|
increase its share capital by such sum as the Ordinary Resolution shall prescribe and with such
rights, priorities and privileges annexed thereto, as the Company in general meeting may determine;
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(b)
|
consolidate and divide all or any of its share capital into Shares of larger amount than its existing
Shares;
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(c)
|
convert all or any of its paid-up Shares into stock, and reconvert that stock into paid-up Shares
of any denomination;
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(d)
|
by subdivision of its existing Shares or any of them divide the whole or any part of its share
capital into Shares of smaller amount than is fixed by the Memorandum or into Shares without par value; and
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(e)
|
cancel any Shares that at the date of the passing of the Ordinary Resolution have not been taken
or agreed to be taken by any person and diminish the amount of its share capital by the amount of the Shares so cancelled.
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18.2
|
All new Shares created in accordance with the provisions of the preceding Article shall be subject
to the same provisions of the Articles with reference to the payment of calls, liens, transfer, transmission, forfeiture and otherwise
as the Shares in the original share capital.
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18.3
|
Subject to the provisions of the Statute, the provisions of the Articles as regards the matters
to be dealt with by Ordinary Resolution and Article 29.4, the Company may by Special Resolution:
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(b)
|
alter or add to the Articles;
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(c)
|
alter or add to the Memorandum with respect to any objects, powers or other matters specified therein;
and
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(d)
|
reduce its share capital or any capital redemption reserve fund.
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19
|
Offices and Places of Business
|
Subject to the provisions of
the Statute, the Company may by resolution of the Directors change the location of its Registered Office. The Company may, in addition
to its Registered Office, maintain such other offices or places of business as the Directors determine.
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20.1
|
All general meetings other than annual general meetings shall be called extraordinary general meetings.
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20.2
|
The Company may, but shall not (unless required by the Statute) be obliged to, in each year hold
a general meeting as its annual general meeting, and shall specify the meeting as such in the notices calling it. Any annual general
meeting shall be held at such time and place as the Directors shall appoint. At these meetings the report of the Directors (if
any) shall be presented.
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20.3
|
The Directors, the chief executive officer or the chairman of the board of Directors may call general
meetings, and, for the avoidance of doubt, Members shall not have the ability to call general meetings.
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20.4
|
Members seeking to bring business before the annual general meeting or to nominate candidates for
appointment as Directors at the annual general meeting must deliver notice to the principal executive offices of the Company not
less than 120 calendar days before the date of the Company’s proxy statement released to Members in connection with the previous
year’s annual general meeting or, if the Company did not hold an annual general meeting the previous year, or if the date
of the current year's annual general meeting has been changed by more than 30 days from the date of the previous year’s annual
general meeting, then the deadline shall be set by the board of Directors with such deadline being a reasonable time before the
Company begins to print and send its related proxy materials.
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21
|
Notice of General Meetings
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21.1
|
At least five clear days' notice shall be given of any general meeting. Every notice shall specify
the place, the day and the hour of the meeting and the general nature of the business to be conducted at the general meeting and
shall be given in the manner hereinafter mentioned or in such other manner if any as may be prescribed by the Company, provided
that a general meeting of the Company shall, whether or not the notice specified in this Article has been given and whether or
not the provisions of the Articles regarding general meetings have been complied with, be deemed to have been duly convened if
it is so agreed:
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(a)
|
in the case of an annual general meeting, by all of the Members entitled to attend and vote thereat;
and
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(b)
|
in the case of an extraordinary general meeting, by a majority in number of the Members having
a right to attend and vote at the meeting, together holding not less than ninety-five per cent in par value of the Shares giving
that right.
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21.2
|
The accidental omission to give notice of a general meeting to, or the non receipt of notice of
a general meeting by, any person entitled to receive such notice shall not invalidate the proceedings of that general meeting.
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22
|
Proceedings at General Meetings
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22.1
|
No business shall be transacted at any general meeting unless a quorum is present. The holders
of a majority of the Shares being individuals present in person or by proxy or if a corporation or other non-natural person by
its duly authorised representative or proxy shall be a quorum.
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22.2
|
A person may participate at a general meeting by conference telephone or other communications equipment
by means of which all the persons participating in the meeting can communicate with each other. Participation by a person in a
general meeting in this manner is treated as presence in person at that meeting.
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22.3
|
A resolution (including a Special Resolution) in writing (in one or more counterparts) signed by
or on behalf of all of the Members for the time being entitled to receive notice of and to attend and vote at general meetings
(or, being corporations or other non-natural persons, signed by their duly authorised representatives) shall be as valid and effective
as if the resolution had been passed at a general meeting of the Company duly convened and held.
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22.4
|
If a quorum is not present within half an hour from the time appointed for the meeting to commence,
the meeting shall stand adjourned to the same day in the next week at the same time and/or place or to such other day, time and/or
place as the Directors may determine, and if at the adjourned meeting a quorum is not present within half an hour from the time
appointed for the meeting to commence, the Members present shall be a quorum.
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22.5
|
The Directors may, at any time prior to the time appointed for the meeting to commence, appoint
any person to act as chairman of a general meeting of the Company or, if the Directors do not make any such appointment, the chairman,
if any, of the board of Directors shall preside as chairman at such general meeting. If there is no such chairman, or if he shall
not be present within fifteen minutes after the time appointed for the meeting to commence, or is unwilling to act, the Directors
present shall elect one of their number to be chairman of the meeting.
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22.6
|
If no Director is willing to act as chairman or if no Director is present within fifteen minutes
after the time appointed for the meeting to commence, the Members present shall choose one of their number to be chairman of the
meeting.
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22.7
|
The chairman may, with the consent of a meeting at which a quorum is present (and shall if so directed
by the meeting) adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned
meeting other than the business left unfinished at the meeting from which the adjournment took place.
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22.8
|
When a general meeting is adjourned for thirty days or more, notice of the adjourned meeting shall
be given as in the case of an original meeting. Otherwise it shall not be necessary to give any such notice of an adjourned meeting.
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22.9
|
If, prior to a Business Combination, a notice is issued in respect of a general meeting and the
Directors, in their absolute discretion, consider that it is impractical or undesirable for any reason to hold that general meeting
at the place, the day and the hour specified in the notice calling such general meeting, the Directors may postpone the general
meeting to another place, day and/or hour provided that notice of the place, the day and the hour of the rearranged general meeting
is promptly given to all Members. No business shall be transacted at any postponed meeting other than the business specified in
the notice of the original meeting.
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22.10
|
When a general meeting is postponed for thirty days or more, notice of the postponed meeting shall
be given as in the case of an original meeting. Otherwise it shall not be necessary to give any such notice of a postponed meeting. All
proxy forms submitted for the original general meeting shall remain valid for the postponed meeting. The Directors may postpone
a general meeting which has already been postponed.
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22.11
|
A resolution put to the vote of the meeting shall be decided on a poll.
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22.12
|
A poll shall be taken as the chairman directs, and the result of the poll shall be deemed to be
the resolution of the general meeting at which the poll was demanded.
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22.13
|
A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith.
A poll demanded on any other question shall be taken at such date, time and place as the chairman of the general meeting directs,
and any business other than that upon which a poll has been demanded or is contingent thereon may proceed pending the taking of
the poll.
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22.14
|
In the case of an equality of votes the chairman shall be entitled to a second or casting vote.
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23.1
|
Subject to any rights or restrictions attached to any Shares, including as set out at Article 29.4,
every Member present in any such manner shall have one vote for every Share of which he is the holder.
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|
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23.2
|
In the case of joint holders the vote of the senior holder who tenders a vote, whether in person
or by proxy (or, in the case of a corporation or other non-natural person, by its duly authorised representative or proxy), shall
be accepted to the exclusion of the votes of the other joint holders, and seniority shall be determined by the order in which the
names of the holders stand in the Register of Members.
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23.3
|
A Member of unsound mind, or in respect of whom an order has been made by any court, having jurisdiction
in lunacy, may vote by his committee, receiver, curator bonis, or other person on such Member's behalf appointed by that court,
and any such committee, receiver, curator bonis or other person may vote by proxy.
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23.4
|
No person shall be entitled to vote at any general meeting unless he is registered as a Member
on the record date for such meeting nor unless all calls or other monies then payable by him in respect of Shares have been paid.
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23.5
|
No objection shall be raised as to the qualification of any voter except at the general meeting
or adjourned general meeting at which the vote objected to is given or tendered and every vote not disallowed at the meeting shall
be valid. Any objection made in due time in accordance with this Article shall be referred to the chairman whose decision shall
be final and conclusive.
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23.6
|
Votes may be cast either personally or by proxy (or in the case of a corporation or other non-natural
person by its duly authorised representative or proxy). A Member may appoint more than one proxy or the same proxy under one or
more instruments to attend and vote at a meeting. Where a Member appoints more than one proxy the instrument of proxy shall specify
the number of Shares in respect of which each proxy is entitled to exercise the related votes.
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|
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23.7
|
A Member holding more than one Share need not cast the votes in respect of his Shares in the same
way on any resolution and therefore may vote a Share or some or all such Shares either for or against a resolution and/or abstain
from voting a Share or some or all of the Shares and, subject to the terms of the instrument appointing him, a proxy appointed
under one or more instruments may vote a Share or some or all of the Shares in respect of which he is appointed either for or against
a resolution and/or abstain from voting a Share or some or all of the Shares in respect of which he is appointed.
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|
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24.1
|
The instrument appointing a proxy shall be in writing and shall be executed under the hand of the
appointor or of his attorney duly authorised in writing, or, if the appointor is a corporation or other non natural person, under
the hand of its duly authorised representative. A proxy need not be a Member.
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|
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24.2
|
The Directors may, in the notice convening any meeting or adjourned meeting, or in an instrument
of proxy sent out by the Company, specify the manner by which the instrument appointing a proxy shall be deposited and the place
and the time (being not later than the time appointed for the commencement of the meeting or adjourned meeting to which the proxy
relates) at which the instrument appointing a proxy shall be deposited. In the absence of any such direction from the Directors
in the notice convening any meeting or adjourned meeting or in an instrument of proxy sent out by the Company, the instrument appointing
a proxy shall be deposited physically at the Registered Office not less than 48 hours before the time appointed for the meeting
or adjourned meeting to commence at which the person named in the instrument proposes to vote.
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|
|
24.3
|
The chairman may in any event at his discretion declare that an instrument of proxy shall be deemed
to have been duly deposited. An instrument of proxy that is not deposited in the manner permitted, or which has not been declared
to have been duly deposited by the chairman, shall be invalid.
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|
|
24.4
|
The instrument appointing a proxy may be in any usual or common form (or such other form as the
Directors may approve) and may be expressed to be for a particular meeting or any adjournment thereof or generally
until revoked. An instrument appointing a proxy shall be deemed to include the power to demand or join or concur in demanding a
poll.
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|
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24.5
|
Votes given in accordance with the terms of an instrument of proxy shall be valid notwithstanding
the previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy was executed,
or the transfer of the Share in respect of which the proxy is given unless notice in writing of such death, insanity, revocation
or transfer was received by the Company at the Registered Office before the commencement of the general meeting, or adjourned meeting
at which it is sought to use the proxy.
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|
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25.1
|
Any corporation or other non-natural person which is a Member may in accordance with its constitutional
documents, or in the absence of such provision by resolution of its directors or other governing body, authorise such person as
it thinks fit to act as its representative at any meeting of the Company or of any class of Members, and the person so authorised
shall be entitled to exercise the same powers on behalf of the corporation which he represents as the corporation could exercise
if it were an individual Member.
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|
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25.2
|
If a Clearing House (or its nominee(s)), being a corporation, is a Member, it may authorise such
persons as it sees fit to act as its representative at any meeting of the Company or at any meeting of any class of Members provided
that the authorisation shall specify the number and class of Shares in respect of which each such representative is so authorised.
Each person so authorised under the provisions of this Article shall be deemed to have been duly authorised without further evidence
of the facts and be entitled to exercise the same rights and powers on behalf of the Clearing House (or its nominee(s)) as if such
person was the registered holder of such Shares held by the Clearing House (or its nominee(s)).
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26
|
Shares that May Not be Voted
|
Shares in the Company that are
beneficially owned by the Company shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining
the total number of outstanding Shares at any given time.
|
|
27.1
|
There shall be a board of Directors consisting of not less than one person provided however that
the Company may by Ordinary Resolution increase or reduce the limits in the number of Directors.
|
|
|
27.2
|
The Directors shall be divided into three classes: Class I, Class II and Class III. The
number of Directors in each class shall be as nearly equal as possible. Upon the adoption of the Articles, the existing
Directors shall by resolution classify themselves as Class I, Class II or Class III Directors. The Class I Directors shall
stand appointed for a term expiring at the Company’s first annual general meeting, the Class II Directors shall stand
appointed for a term expiring at the Company’s second annual general meeting and the Class III Directors shall stand
appointed for a term expiring at the Company’s
third annual general meeting. Commencing at the Company’s first annual general meeting, and at each annual general meeting
thereafter, Directors appointed to succeed those Directors whose terms expire shall be appointed for a term of office to expire
at the third succeeding annual general meeting after their appointment. Except as the Statute or other Applicable Law may otherwise
require, in the interim between annual general meetings or extraordinary general meetings called for the appointment of Directors
and/or the removal of one or more Directors and the filling of any vacancy in that connection, additional Directors and any vacancies
in the board of Directors, including unfilled vacancies resulting from the removal of Directors for cause, may be filled by the
vote of a majority of the remaining Directors then in office, although less than a quorum (as defined in the Articles), or by the
sole remaining Director. All Directors shall hold office until the expiration of their respective terms of office and until their
successors shall have been appointed and qualified. A Director appointed to fill a vacancy resulting from the death, resignation
or removal of a Director shall serve for the remainder of the full term of the Director whose death, resignation or removal shall
have created such vacancy and until his successor shall have been appointed and qualified.
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|
|
28.1
|
Subject to the provisions of the Statute, the Memorandum and the Articles and to any directions
given by Special Resolution, the business of the Company shall be managed by the Directors who may exercise all the powers of the
Company. No alteration of the Memorandum or Articles and no such direction shall invalidate any prior act of the Directors which
would have been valid if that alteration had not been made or that direction had not been given. A duly convened meeting of Directors
at which a quorum is present may exercise all powers exercisable by the Directors.
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|
|
28.2
|
All cheques, promissory notes, drafts, bills of exchange and other negotiable or transferable instruments
and all receipts for monies paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed as the case may
be in such manner as the Directors shall determine by resolution.
|
|
|
28.3
|
The Directors on behalf of the Company may pay a gratuity or pension or allowance on retirement
to any Director who has held any other salaried office or place of profit with the Company or to his widow or dependants and may
make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.
|
|
|
28.4
|
The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge
its undertaking, property and assets (present and future) and uncalled capital or any part thereof and to issue debentures, debenture
stock, mortgages, bonds and other such securities whether outright or as security for any debt, liability or obligation of the
Company or of any third party.
|
|
|
29
|
Appointment and Removal of Directors
|
|
|
29.1
|
Prior to the closing of a Business Combination, the Company may by Ordinary Resolution of the holders
of the Class B Shares appoint any person to be a Director or may by Ordinary Resolution of the holders of the Class B
Shares remove any Director. For the avoidance of doubt, prior to the closing of a Business Combination, holders of Class A Shares
shall have no right to vote on the appointment or removal of any Director.
|
|
|
29.2
|
The Directors may appoint any person to be a Director, either to fill a vacancy or as an additional
Director provided that the appointment does not cause the number of Directors to exceed any number fixed by or in accordance with
the Articles as the maximum number of Directors.
|
|
|
29.3
|
After the closing of a Business Combination, the Company may by Ordinary Resolution appoint any
person to be a Director or may by Ordinary Resolution remove any Director.
|
|
|
29.4
|
Prior to the closing of a Business Combination, Article 29.1 may only be amended by a Special Resolution
passed by at least two-thirds of such Members (which shall include a simple majority of the holders of Class B Shares) as, being
entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting of which notice specifying the intention
to propose the resolution as a special resolution has been given, or by way of unanimous written resolution.
|
|
|
30
|
Vacation of Office of Director
|
The office of a Director shall
be vacated if:
|
|
(a)
|
the Director gives notice in writing to the Company that he resigns the office of Director; or
|
|
|
(b)
|
the Director absents himself (for the avoidance of doubt, without being represented by proxy) from
three consecutive meetings of the board of Directors without special leave of absence from the Directors, and the Directors pass
a resolution that he has by reason of such absence vacated office; or
|
|
|
(c)
|
the Director dies, becomes bankrupt or makes any arrangement or composition with his creditors
generally; or
|
|
|
(d)
|
the Director is found to be or becomes of unsound mind; or
|
|
|
(e)
|
all of the other Directors (being not less than two in number) determine that he should be removed
as a Director, either by a resolution passed by all of the other Directors at a meeting of the Directors duly convened and held
in accordance with the Articles or by a resolution in writing signed by all of the other Directors.
|
|
|
31
|
Proceedings of Directors
|
|
|
31.1
|
The quorum for the transaction of the business of the Directors may be fixed by the Directors,
and unless so fixed shall be a majority of the Directors then in office.
|
|
|
31.2
|
Subject to the provisions of the Articles, the Directors may regulate their proceedings as they
think fit. Questions arising at any meeting shall be decided by a majority of votes. In the case of an equality of votes, the chairman
shall have a second or casting vote.
|
|
|
31.3
|
A person may participate in a meeting of the Directors or any committee of Directors by conference
telephone or other communications equipment by means of which all the persons participating in the meeting can communicate with
each other at the same time. Participation by a person in a meeting in this manner is treated as presence in person at that meeting.
Unless otherwise determined by the Directors, the meeting shall be deemed to be held at the place where the chairman is located
at the start of the meeting.
|
|
|
31.4
|
A resolution in writing (in one or more counterparts) signed by all the Directors or all the members
of a committee of the Directors or, in the case of a resolution in writing relating to the removal of any Director or the vacation
of office by any Director, all of the Directors other than the Director who is the subject of such resolution shall be as valid
and effectual as if it had been passed at a meeting of the Directors, or committee of Directors as the case may be, duly convened
and held.
|
|
|
31.5
|
A Director may, or other Officer on the direction of a Director shall, call a meeting of the Directors
by at least two days' notice in writing to every Director which notice shall set forth the general nature of the business to be
considered unless notice is waived by all the Directors either at, before or after the meeting is held. To any such notice of a
meeting of the Directors all the provisions of the Articles relating to the giving of notices by the Company to the Members shall
apply mutatis mutandis.
|
|
|
31.6
|
The continuing Directors (or a sole continuing Director, as the case may be) may act notwithstanding
any vacancy in their body, but if and so long as their number is reduced below the number fixed by or pursuant to the Articles
as the necessary quorum of Directors the continuing Directors or Director may act for the purpose of increasing the number of Directors
to be equal to such fixed number, or of summoning a general meeting of the Company, but for no other purpose.
|
|
|
31.7
|
The Directors may elect a chairman of their board and determine the period for which he is to hold
office; but if no such chairman is elected, or if at any meeting the chairman is not present within five minutes after the time
appointed for the meeting to commence, the Directors present may choose one of their number to be chairman of the meeting.
|
|
|
31.8
|
All acts done by any meeting of the Directors or of a committee of the Directors shall, notwithstanding
that it is afterwards discovered that there was some defect in the appointment of any Director, and/or that they or any of them
were disqualified, and/or had vacated their office and/or were not entitled to vote, be as valid as if every such person had been
duly appointed and/or not disqualified to be a Director and/or had not vacated their office and/or had been entitled to vote, as
the case may be.
|
|
|
31.9
|
A Director may be represented at any meetings of the board of Directors by a proxy appointed in
writing by him. The proxy shall count towards the quorum and the vote of the proxy shall for all purposes be deemed to be that
of the appointing Director.
|
A Director who is present at
a meeting of the board of Directors at which action on any Company matter is taken shall be presumed to have assented to the action
taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent from such action
with the person acting as the chairman or secretary of the meeting before the adjournment thereof or shall forward such dissent
by registered post to such person immediately after the adjournment of the meeting. Such right to dissent shall not apply to a
Director who voted in favour of such action.
|
|
33.1
|
A Director may hold any other office or place of profit under the Company (other than the office
of Auditor) in conjunction with his office of Director for such period and on such terms as to remuneration and otherwise as the
Directors may determine.
|
|
|
33.2
|
A Director may act by himself or by, through or on behalf of his firm in a professional capacity
for the Company and he or his firm shall be entitled to remuneration for professional services as if he were not a Director.
|
|
|
33.3
|
A Director may be or become a director or other officer of or otherwise interested in any company
promoted by the Company or in which the Company may be interested as a shareholder, a contracting party or otherwise, and no such
Director shall be accountable to the Company for any remuneration or other benefits received by him as a director or officer of,
or from his interest in, such other company.
|
|
|
33.4
|
No person shall be disqualified from the office of Director or prevented by such office from contracting
with the Company, either as vendor, purchaser or otherwise, nor shall any such contract or any contract or transaction entered
into by or on behalf of the Company in which any Director shall be in any way interested be or be liable to be avoided, nor shall
any Director so contracting or being so interested be liable to account to the Company for any profit realised by or arising in
connection with any such contract or transaction by reason of such Director holding office or of the fiduciary relationship thereby
established. A Director shall be at liberty to vote in respect of any contract or transaction in which he is interested provided
that the nature of the interest of any Director in any such contract or transaction shall be disclosed by him at or prior to its
consideration and any vote thereon.
|
|
|
33.5
|
A general notice that a Director is a shareholder, director, officer or employee of any specified
firm or company and is to be regarded as interested in any transaction with such firm or company shall be sufficient disclosure
for the purposes of voting on a resolution in respect of a contract or transaction in which he has an interest, and after such
general notice it shall not be necessary to give special notice relating to any particular transaction.
|
The Directors shall cause minutes
to be made in books kept for the purpose of recording all appointments of Officers made by the Directors, all proceedings at meetings
of the Company or the holders of any class of Shares and of the Directors, and of committees of the Directors, including the names
of the Directors present at each meeting.
|
|
35
|
Delegation of Directors' Powers
|
|
|
35.1
|
The Directors may delegate any of their powers, authorities and discretions, including the power
to sub-delegate, to any committee consisting of one or more Directors (including, without limitation, the Audit Committee, the
Compensation Committee and the Nominating Committee). Any such delegation may be made subject to any conditions the Directors may
impose and either collaterally with or to the exclusion of their own powers and any such delegation may be revoked or altered by
the Directors. Subject to any such conditions, the proceedings of a committee of Directors shall be governed by the Articles regulating
the proceedings of Directors, so far as they are capable of applying.
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35.2
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The Directors may establish any committees, local boards or agencies or appoint any person to be
a manager or agent for managing the affairs of the Company and may appoint any person to be a member of such committees, local
boards or agencies. Any such appointment may be made subject to any conditions the Directors may impose, and either collaterally
with or to the exclusion of their own powers and any such appointment may be revoked or altered by the Directors. Subject to any
such conditions, the proceedings of any such committee, local board or agency shall be governed by the Articles regulating the
proceedings of Directors, so far as they are capable of applying.
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35.3
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The Directors may adopt formal written charters for committees. Each of these committees shall
be empowered to do all things necessary to exercise the rights of such committee set forth in the Articles and shall have such
powers as the Directors may delegate pursuant to the Articles and as required by the rules and regulations of the Designated Stock
Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable
Law. Each of the Audit Committee, the Compensation Committee and the Nominating Committee, if established, shall consist of such
number of Directors as the Directors shall from time to time determine (or such minimum number as may be required from time to
time by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent
regulatory authority or otherwise under Applicable Law). For so long as any class of Shares is listed on the Designated Stock Exchange,
the Audit Committee, the Compensation Committee and the Nominating Committee shall be made up of such number of Independent Directors
as is required from time to time by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission
and/or any other competent regulatory authority or otherwise under Applicable Law.
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35.4
|
The Directors may by power of attorney or otherwise appoint any person to be the agent of the Company
on such conditions as the Directors may determine, provided that the delegation is not to the exclusion of their own powers and
may be revoked by the Directors at any time.
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35.5
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The Directors may by power of attorney or otherwise appoint any company, firm, person or body of
persons, whether nominated directly or indirectly by the Directors, to be the attorney or authorised signatory of the Company for
such purpose and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under
the Articles) and for such period and subject to such conditions as they may think fit, and any such powers of attorney or other
appointment may contain such provisions for the protection and convenience of persons dealing with any such attorneys or authorised
signatories as the Directors may think fit and may also authorise any such attorney or authorised signatory to delegate all or
any of the powers, authorities and discretions vested in him.
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35.6
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The Directors may appoint such Officers as they consider necessary on such terms, at such remuneration
and to perform such duties, and subject to such provisions as to disqualification and removal as the Directors may think fit. Unless
otherwise specified in the terms of his appointment an Officer may be removed by resolution of the Directors or Members. An Officer
may vacate his office at any time if he gives notice in writing to the Company that he resigns his office.
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36
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No Minimum Shareholding
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The Company in general meeting
may fix a minimum shareholding required to be held by a Director, but unless and until such a shareholding qualification is fixed
a Director is not required to hold Shares.
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37
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Remuneration of Directors
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37.1
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The remuneration to be paid to the Directors, if any, shall be such remuneration as the Directors
shall determine, provided that no cash remuneration shall be paid to any Director by the Company prior to the consummation of a
Business Combination. The Directors shall also, whether prior to or after the consummation of a Business Combination, be entitled
to be paid all travelling, hotel and other expenses properly incurred by them in connection with their attendance at meetings of
Directors or committees of Directors, or general meetings of the Company, or separate meetings of the holders of any class of Shares
or debentures of the Company, or otherwise in connection with the business of the Company or the discharge of their duties as a
Director, or to receive a fixed allowance in respect thereof as may be determined by the Directors, or a combination partly of
one such method and partly the other.
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37.2
|
The Directors may by resolution approve additional remuneration to any Director for any services
which in the opinion of the Directors go beyond his ordinary routine work as a Director. Any fees paid to a Director who is also
counsel, attorney or solicitor to the Company, or otherwise serves it in a professional capacity shall be in addition to his remuneration
as a Director.
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38.1
|
The Company may, if the Directors so determine, have a Seal. The Seal shall only be used by the
authority of the Directors or of a committee of the Directors authorised by the Directors. Every instrument to which the Seal
has been affixed shall be signed by at least one person who shall be either a Director or some Officer or other person appointed
by the Directors for the purpose.
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38.2
|
The Company may have for use in any place or places outside the Cayman Islands a duplicate Seal
or Seals each of which shall be a facsimile of the common Seal of the Company and, if the Directors so determine, with the addition
on its face of the name of every place where it is to be used.
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38.3
|
A Director or Officer, representative or attorney of the Company may without further authority
of the Directors affix the Seal over his signature alone to any document of the Company required to be authenticated by him under
seal or to be filed with the Registrar of Companies in the Cayman Islands or elsewhere wheresoever.
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39
|
Dividends, Distributions and Reserve
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39.1
|
Subject to the Statute and this Article and except as otherwise provided by the rights attached
to any Shares, the Directors may resolve to pay Dividends and other distributions on Shares in issue and authorise payment of the
Dividends or other distributions out of the funds of the Company lawfully available therefor. A Dividend shall be deemed to be
an interim Dividend unless the terms of the resolution pursuant to which the Directors resolve to pay such Dividend specifically
state that such Dividend shall be a final Dividend. No Dividend or other distribution shall be paid except out of the realised
or unrealised profits of the Company, out of the share premium account or as otherwise permitted by law.
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39.2
|
Except as otherwise provided by the rights attached to any Shares, all Dividends and other distributions
shall be paid according to the par value of the Shares that a Member holds. If any Share is issued on terms providing that it shall
rank for Dividend as from a particular date, that Share shall rank for Dividend accordingly.
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39.3
|
The Directors may deduct from any Dividend or other distribution payable to any Member all sums
of money (if any) then payable by him to the Company on account of calls or otherwise.
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39.4
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The Directors may resolve that any Dividend or other distribution be paid wholly or partly by the
distribution of specific assets and in particular (but without limitation) by the distribution of shares, debentures, or securities
of any other company or in any one or more of such ways and where any difficulty arises in regard to such distribution, the Directors
may settle the same as they think expedient and in particular may issue fractional Shares and may fix the value for distribution
of such specific assets or any part thereof and may determine that cash payments shall be made to any Members upon the basis of
the value so fixed in order to adjust the rights of all Members and may vest any such specific assets in trustees in such manner
as may seem expedient to the Directors.
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39.5
|
Except as otherwise provided by the rights attached to any Shares, Dividends and other distributions
may be paid in any currency. The Directors may determine the basis of conversion for any currency conversions that may be required
and how any costs involved are to be met.
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39.6
|
The Directors may, before resolving to pay any Dividend or other distribution, set aside such sums
as they think proper as a reserve or reserves which shall, at the discretion of the Directors, be applicable for any purpose of
the Company and pending such application may, at the discretion of the Directors, be employed in the business of the Company.
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39.7
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Any Dividend, other distribution, interest or other monies payable in cash in respect of Shares
may be paid by wire transfer to the holder or by cheque or warrant sent through the post directed to the registered address of
the holder or, in the case of joint holders, to the registered address of the holder who is first named on the Register of Members
or to such person and to such address as such holder or joint holders may in writing direct. Every such cheque or warrant shall
be made payable to the order of the person to whom it is sent. Any one of two or more joint holders may give effectual receipts
for any Dividends, other distributions, bonuses, or other monies payable in respect of the Share held by them as joint holders.
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39.8
|
No Dividend or other distribution shall bear interest against the Company.
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39.9
|
Any Dividend or other distribution which cannot be paid to a Member and/or which remains unclaimed
after six months from the date on which such Dividend or other distribution becomes payable may, in the discretion of the Directors,
be paid into a separate account in the Company's name, provided that the Company shall not be constituted as a trustee in respect
of that account and the Dividend or other distribution shall remain as a debt due to the Member. Any Dividend or other distribution
which remains unclaimed after a period of six years from the date on which such Dividend or other distribution becomes payable
shall be forfeited and shall revert to the Company.
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The Directors may at any time
capitalise any sum standing to the credit of any of the Company's reserve accounts or funds (including the share premium account
and capital redemption reserve fund) or any sum standing to the credit of the profit and loss account or otherwise available for
distribution; appropriate such sum to Members in the proportions in which such sum would have been divisible amongst such Members
had the same been a distribution of profits by way of Dividend or other distribution; and apply such sum on their behalf in paying
up in full unissued Shares for allotment and distribution credited as fully paid-up to and amongst them in the proportion aforesaid.
In such event the Directors shall do all acts and things required to give effect to such capitalisation, with full power given
to the Directors to make such provisions as they think fit in the case of Shares becoming distributable in fractions (including
provisions whereby the benefit of fractional entitlements accrue to the Company rather than to the Members concerned). The Directors
may authorise any person to enter on behalf of all of the Members interested into an agreement with the Company providing for such
capitalisation and matters incidental or relating thereto and any agreement made under such authority shall be effective and binding
on all such Members and the Company.
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41.1
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The Directors shall cause proper books of account (including, where applicable, material underlying
documentation including contracts and invoices) to be kept with respect to all sums of money received and expended by the Company
and the matters in respect of which the receipt or expenditure takes place, all sales and purchases of goods by the Company and
the assets and liabilities of the Company. Such books of account must be retained for a minimum period of five years from the date
on which they are prepared. Proper books shall not be deemed to be kept if there are not kept such books of account as are necessary
to give a true and fair view of the state of the Company's affairs and to explain its transactions.
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41.2
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The Directors shall determine whether and to what extent and at what times and places and under
what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of Members
not being Directors and no Member (not being a Director) shall have any right of inspecting any account or book or document of
the Company except as conferred by Statute or authorised by the Directors or by the Company in general meeting.
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41.3
|
The Directors may cause to be prepared and to be laid before the Company in general meeting profit
and loss accounts, balance sheets, group accounts (if any) and such other reports and accounts as may be required by law.
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42.1
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The Directors may appoint an Auditor of the Company who shall hold office on such terms as the
Directors determine.
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42.2
|
Without prejudice to the freedom of the Directors to establish any other committee, if the Shares
(or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange, and if required by the rules and regulations
of the Designated Stock Exchange, the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise
under Applicable Law, the Directors shall establish and maintain an Audit Committee as a committee of the Directors and shall adopt
a formal written Audit Committee charter and review and assess the adequacy of the formal written charter on an annual basis. The
composition and responsibilities of the Audit Committee shall comply with the rules and regulations of the Designated Stock Exchange,
the Securities and Exchange Commission and/or any other competent regulatory authority or otherwise under Applicable Law. The Audit
Committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.
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42.3
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If the Shares (or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange,
the Company shall conduct an appropriate review of all related party transactions on an ongoing basis and shall utilise the Audit
Committee for the review and approval of potential conflicts of interest.
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42.4
|
The remuneration of the Auditor shall be fixed by the Audit Committee (if one exists).
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42.5
|
If the office of Auditor becomes vacant by resignation or death of the Auditor, or by his becoming
incapable of acting by reason of illness or other disability at a time when his services are required, the Directors shall fill
the vacancy and determine the remuneration of such Auditor.
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42.6
|
Every Auditor of the Company shall have a right of access at all times to the books and accounts
and vouchers of the Company and shall be entitled to require from the Directors and Officers such information and explanation as
may be necessary for the performance of the duties of the Auditor.
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42.7
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Auditors shall, if so required by the Directors, make a report on the accounts of the Company during
their tenure of office at the next annual general meeting following their appointment in the case of a company which is registered
with the Registrar of Companies as an ordinary company, and at the next extraordinary general meeting following their appointment
in the case of a company which is registered with the Registrar of Companies as an exempted company, and at any other time during
their term of office, upon request of the Directors or any general meeting of the Members.
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42.8
|
Any payment made to members of the Audit Committee (if one exists) shall require the review and
approval of the Directors, with any Director interested in such payment abstaining from such review and approval.
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42.9
|
The Audit Committee shall monitor compliance with the terms of the IPO and, if any non-compliance
is identified, the Audit Committee shall be charged with the responsibility to take all action necessary to rectify such non-compliance
or otherwise cause compliance with the terms of the IPO.
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42.10
|
At least one member of the Audit Committee shall be an "audit committee financial expert"
as determined by the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission and/or any
other competent regulatory authority or otherwise under Applicable Law. The "audit committee financial expert" shall
have such past employment experience in finance or accounting, requisite professional certification in accounting, or any other
comparable experience or background which results in the individual’s financial sophistication.
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43.1
|
Notices shall be in writing and may be given by the Company to any Member either personally or
by sending it by courier, post, cable, telex, fax or e-mail to him or to his address as shown in the Register of Members (or where
the notice is given by e-mail by sending it to the e-mail address provided by such Member). Notice may also be served by Electronic
Communication in accordance with the rules and regulations of the Designated Stock Exchange, the Securities and Exchange Commission
and/or any other competent regulatory authority or by placing it on the Company’s Website.
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43.2
|
Where a notice is sent by:
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|
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(a)
|
courier; service of the notice shall be deemed to be effected by delivery of the notice to a courier
company, and shall be deemed to have been received on the third day (not including Saturdays or Sundays or public holidays) following
the day on which the notice was delivered to the courier;
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|
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(b)
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post; service of the notice shall be deemed to be effected by properly addressing, pre paying and
posting a letter containing the notice, and shall be deemed to have been received on the fifth day (not including Saturdays or
Sundays or public holidays in the Cayman Islands) following the day on which the notice was posted;
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(c)
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cable, telex or fax; service of the notice shall be deemed to be effected by properly addressing
and sending such notice and shall be deemed to have been received on the same day that it was transmitted;
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(d)
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e-mail or other Electronic Communication; service of the notice shall be deemed to be effected
by transmitting the e-mail to the e-mail address provided by the intended recipient and shall be deemed to have been received on
the same day that it was sent, and it shall not be necessary for the receipt of the e-mail to be acknowledged by the recipient;
and
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(e)
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placing it on the Company’s Website; service of the notice shall be deemed to have been effected
one hour after the notice or document was placed on the Company’s Website.
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43.3
|
A notice may be given by the Company to the person or persons which the Company has been advised
are entitled to a Share or Shares in consequence of the death or bankruptcy of a Member in the same manner as other notices which
are required to be given under the Articles and shall be addressed to them by name, or by the title of representatives of the deceased,
or trustee of the bankrupt, or by any like description at the address supplied for that purpose by the persons claiming to be so
entitled, or at the option of the Company by giving the notice in any manner in which the same might have been given if the death
or bankruptcy had not occurred.
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43.4
|
Notice of every general meeting shall be given in any manner authorised by the Articles to every
holder of Shares carrying an entitlement to receive such notice on the record date for such meeting except that in the case of
joint holders the notice shall be sufficient if given to the joint holder first named in the Register of Members and every person
upon whom the ownership of a Share devolves by reason of his being a legal personal representative or a trustee in bankruptcy of
a Member where the Member but for his death or bankruptcy would be entitled to receive notice of the meeting, and no other person
shall be entitled to receive notices of general meetings.
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44.1
|
If the Company shall be wound up, the liquidator shall apply the assets of the Company in satisfaction
of creditors' claims in such manner and order as such liquidator thinks fit. Subject to the rights attaching to any Shares, in
a winding up:
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|
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(a)
|
if the assets available for distribution amongst the Members shall be insufficient to repay the
whole of the Company's issued share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be
borne by the Members in proportion to the par value of the Shares held by them; or
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(b)
|
if the assets available for distribution amongst the Members shall be more than sufficient to repay
the whole of the Company's issued share capital at the commencement of the winding up, the surplus shall be distributed amongst
the Members in proportion to the par value of the Shares held by them at the commencement of the winding up subject to a deduction
from those Shares in respect of which there are monies due, of all monies payable to the Company for unpaid calls or otherwise.
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44.2
|
If the Company shall be wound up the liquidator may, subject to the rights attaching to any Shares
and with the approval of a Special Resolution of the Company and any other approval required by the Statute, divide amongst the
Members in kind the whole or any part of the assets of the Company (whether such assets shall consist of property of the same kind
or not) and may for that purpose value any assets and determine how the division shall be carried out as between the Members or
different classes of Members. The liquidator may, with the like approval, vest the whole or any part of such assets in trustees
upon such trusts for the benefit of the Members as the liquidator, with the like approval, shall think fit, but so that no Member
shall be compelled to accept any asset upon which there is a liability.
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45
|
Indemnity and Insurance
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|
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45.1
|
Every Director and Officer (which for the avoidance of doubt, shall not include auditors of the
Company), together with every former Director and former Officer (each an "Indemnified Person") shall be indemnified
out of the assets of the Company against any liability, action, proceeding, claim, demand, costs, damages or expenses, including
legal expenses, whatsoever which they or any of them may incur as a result of any act or failure to act in carrying out their functions
other than such liability (if any) that they may incur by reason of their own actual fraud, wilful neglect or wilful default. No
Indemnified Person shall be liable to the Company for any loss or damage incurred by the Company as a result (whether direct or
indirect) of the carrying out of their functions unless that liability arises through the actual fraud, wilful neglect or wilful
default of such Indemnified Person. No person shall be found to have committed actual fraud, wilful neglect or wilful default under
this Article unless or until a court of competent jurisdiction shall have made a finding to that effect.
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45.2
|
The Company shall advance to each Indemnified Person reasonable attorneys' fees and other costs
and expenses incurred in connection with the defence of any action, suit, proceeding or investigation involving such Indemnified
Person for which indemnity will or could be sought. In connection with any advance of any expenses hereunder, the Indemnified Person
shall execute an undertaking to repay the advanced amount to the Company if it shall be determined by final judgment or other final
adjudication that such Indemnified Person was not entitled to indemnification pursuant to this Article. If it shall be determined
by a final judgment or other final adjudication that such Indemnified Person was not entitled to indemnification with respect to
such judgment, costs or expenses,
then such party shall not be indemnified with respect to such judgment, costs or expenses and any advancement shall be returned
to the Company (without interest) by the Indemnified Person.
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45.3
|
The Directors, on behalf of the Company, may purchase and maintain insurance for the benefit of
any Director or Officer against any liability which, by virtue of any rule of law, would otherwise attach to such person in respect
of any negligence, default, breach of duty or breach of trust of which such person may be guilty in relation to the Company.
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Unless the Directors otherwise
prescribe, the financial year of the Company shall end on 31st December in each year and, following the year of incorporation,
shall begin on 1st January in each year.
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|
47
|
Transfer by Way of Continuation
|
If the Company is exempted as
defined in the Statute, it shall, subject to the provisions of the Statute and with the approval of a Special Resolution, have
the power to register by way of continuation as a body corporate under the laws of any jurisdiction outside the Cayman Islands
and to be deregistered in the Cayman Islands.
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48
|
Mergers and Consolidations
|
The Company
shall have the power to merge or consolidate with one or more other constituent companies (as defined in the Statute) upon such
terms as the Directors may determine and (to the extent required by the Statute) with the approval of a Special Resolution.
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|
49.1
|
Notwithstanding any other provision of the Articles, this Article shall apply during the period
commencing upon the adoption of the Articles and terminating upon the first to occur of the consummation of a Business Combination
and the full distribution of the Trust Account pursuant to this Article. In the event of a conflict between this Article and any
other Articles, the provisions of this Article shall prevail.
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|
|
49.2
|
Prior to the consummation of a Business Combination, the Company shall either:
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|
|
(a)
|
submit such Business Combination to its Members for approval; or
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|
|
(b)
|
provide Members with the opportunity to have their Shares repurchased by means of a tender offer
for a per-Share repurchase price payable in cash, equal to the aggregate amount then on deposit in the Trust Account, calculated
as of two business days prior to the consummation of such Business Combination, including interest earned on the Trust Account
(net of taxes paid or payable, if any), divided by the number of then issued Public Shares, provided that the Company shall not
repurchase Public Shares in an amount that would cause the Company's net tangible
assets to be less than US$5,000,001 upon consummation of such Business Combination. Such obligation to repurchase Shares is subject
to the completion of the proposed Business Combination to which it relates.
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|
|
49.3
|
If the Company initiates any tender offer in accordance with Rule 13e-4 and Regulation 14E of the
Exchange Act in connection with a proposed Business Combination, it shall file tender offer documents with the Securities and Exchange
Commission prior to completing such Business Combination which contain substantially the same financial and other information about
such Business Combination and the redemption rights as is required under Regulation 14A of the Exchange Act. If, alternatively,
the Company holds a general meeting to approve a proposed Business Combination, the Company will conduct any redemptions in conjunction
with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, and not pursuant to the tender offer rules, and file
proxy materials with the Securities and Exchange Commission.
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|
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49.4
|
At a general meeting called for the purposes of approving a Business Combination pursuant to this
Article, in the event that such Business Combination is approved by Ordinary Resolution, the Company shall be authorised to consummate
such Business Combination, provided that the Company shall not consummate such Business Combination unless the Company has net
tangible assets of at least US$5,000,001 immediately prior to, or upon such consummation of, or any greater net tangible asset
or cash requirement that may be contained in the agreement relating to, such Business Combination.
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|
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49.5
|
Any Member holding Public Shares who is not the Sponsor, a Founder, Officer or Director may, at
least two business days’ prior to any vote on a Business Combination, elect to have their Public Shares redeemed for cash,
in accordance with any applicable requirements provided for in the related proxy materials (the "IPO Redemption"),
provided that no such Member acting together with any Affiliate of his or any other person with whom he is acting in concert or
as a partnership, limited partnership, syndicate, or other group for the purposes of acquiring, holding, or disposing of Shares
may exercise this redemption right with respect to more than 15 per cent of the Public Shares in the aggregate without the prior
consent of the Company and provided further that any beneficial holder of Public Shares on whose behalf a redemption right is being
exercised must identify itself to the Company in connection with any redemption election in order to validly redeem such Public
Shares. If so demanded, the Company shall pay any such redeeming Member, regardless of whether he is voting for or against such
proposed Business Combination, a per-Share redemption price payable in cash, equal to the aggregate amount then on deposit in the
Trust Account calculated as of two business days prior to the consummation of the Business Combination, including interest earned
on the Trust Account (such interest shall be net of taxes payable) and not previously released to the Company to pay its taxes,
divided by the number of then issued Public Shares (such redemption price being referred to herein as the "Redemption Price"),
but only in the event that the applicable proposed Business Combination is approved and consummated. The Company shall not redeem
Public Shares that would cause the Company’s net tangible assets to be less than US$5,000,001 following such redemptions
(the "Redemption Limitation").
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|
|
49.6
|
A Member may not withdraw a Redemption Notice once submitted to the Company unless the Directors
determine (in their sole discretion) to permit the withdrawal of such redemption request (which they may do in whole or in part).
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|
|
49.7
|
In the event that the Company does not consummate a Business Combination by 24 months from the
consummation of the IPO, or such later time as the Members may approve in accordance with the Articles, the Company shall:
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|
|
(a)
|
cease all operations except for the purpose of winding up;
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|
|
(b)
|
as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public
Shares, at a per-Share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest
earned on the funds held in the Trust Account and not previously released to the Company (less taxes payable and up to US$100,000
of interest to pay dissolution expenses), divided by the number of then Public Shares in issue, which redemption will completely
extinguish public Members' rights as Members (including the right to receive further liquidation distributions, if any); and
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|
|
(c)
|
as promptly as reasonably possible following such redemption, subject to the approval of the Company's
remaining Members and the Directors, liquidate and dissolve,
|
subject in
each case to its obligations under Cayman Islands law to provide for claims of creditors and other requirements of Applicable Law.
|
|
49.8
|
In the event that any amendment is made to the Articles:
|
|
|
(a)
|
to modify the substance or timing of the Company's obligation to allow redemption in connection
with a Business Combination or redeem 100 per cent of the Public Shares if the Company does not consummate a Business Combination
within 24 months from the consummation of the IPO, or such later time as the Members may approve in accordance with the Articles;
or
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|
|
(b)
|
with respect to any other provision relating to Members’ rights or pre-Business Combination
activity,
|
each holder
of Public Shares who is not the Sponsor, a Founder, Officer or Director shall be provided with the opportunity to redeem their
Public Shares upon the approval or effectiveness of any such amendment at a per-Share price, payable in cash, equal to the aggregate
amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously
released to the Company to pay its taxes, divided by the number of then outstanding Public Shares. The Company’s ability
to provide such redemption in this Article is subject to the Redemption Limitation.
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49.9
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A holder of Public Shares shall be entitled to receive distributions from the Trust Account only
in the event of an IPO Redemption, a repurchase of Shares by means of a tender offer pursuant to this Article, or a distribution
of the Trust Account pursuant to this Article. In no other circumstance shall a holder of Public Shares have any right or interest
of any kind in the Trust Account.
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49.10
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After the issue of Public Shares, and prior to the consummation of a Business Combination, the
Company shall not issue additional Shares or any other securities that would entitle the holders thereof to:
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(a)
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receive funds from the Trust Account; or
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(b)
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vote as a class with Public Shares on a Business Combination.
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49.11
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The uninterested Independent Directors shall approve any transaction or transactions between the
Company and any of the following parties:
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(a)
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any Member owning an interest in the voting power of the Company that gives such Member a significant
influence over the Company; and
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(b)
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any Director or Officer and any Affiliate of such Director or Officer.
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49.12
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A Director may vote in respect of a Business Combination in which such Director has a conflict
of interest with respect to the evaluation of such Business Combination. Such Director must disclose such interest or conflict
to the other Directors.
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49.13
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As long as the securities of the Company are listed on the Nasdaq Capital Market, the Company must
complete one or more Business Combinations having an aggregate fair market value of at least 80 per cent of the assets held in
the Trust Account (net of amounts previously disbursed to the Company's management for taxes and excluding the amount of deferred
underwriting discounts held in the Trust Account) at the time of the Company's signing a definitive agreement in connection with
a Business Combination. A Business Combination must not be effectuated with another blank cheque company or a similar company with
nominal operations.
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49.14
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The Company may enter into a Business Combination with a target business that is Affiliated with
the Sponsor, a Founder, a Director or an Officer. In the event the Company seeks to consummate a Business Combination with a target
that is Affiliated with the Sponsor, a Founder, a Director or an Officer, the Company, or a committee of Independent Directors,
will obtain an opinion from an independent investment banking firm or another valuation or appraisal firm that regularly renders
fairness opinions on the type of target business the Company is seeking to acquire that is a member of the United States Financial
Industry Regulatory Authority or an independent accounting firm that such a Business Combination is fair to the Company from a
financial point of view.
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Each Tax Filing Authorised Person
and any such other person, acting alone, as any Director shall designate from time to time, are authorised to file tax forms SS-4,
W-8 BEN, W-8 IMY, W-9, 8832 and 2553 and such other similar tax forms as are customary to file with any US state or federal governmental
authorities or foreign governmental authorities in connection with the formation, activities and/or elections of the Company and
such other tax forms as may be approved from time to time by any Director or Officer. The Company further ratifies and approves
any such filing made by any Tax Filing Authorised Person or such other person prior to the date of the Articles.
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51
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Business Opportunities
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51.1
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To the fullest extent permitted by Applicable Law, no individual serving as a Director or an Officer
("Management") shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging
directly or indirectly in the same or similar business activities or lines of business as the Company. To the fullest extent permitted
by Applicable Law, the Company renounces any interest or expectancy of the Company in, or in being offered an opportunity to participate
in, any potential transaction or matter which may be a corporate opportunity for Management, on the one hand, and the Company,
on the other. Except to the extent expressly assumed by contract, to the fullest extent permitted by Applicable Law, Management
shall have no duty to communicate or offer any such corporate opportunity to the Company and shall not be liable to the Company
or its Members for breach of any fiduciary duty as a Member, Director and/or Officer solely by reason of the fact that such party
pursues or acquires such corporate opportunity for itself, himself or herself, directs such corporate opportunity to another person,
or does not communicate information regarding such corporate opportunity to the Company.
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51.2
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Except as provided elsewhere in this Article, the Company hereby renounces any interest or expectancy
of the Company in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate
opportunity for both the Company and Management, about which a Director and/or Officer who is also a member of Management acquires
knowledge.
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51.3
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To the extent a court might hold that the conduct of any activity related to a corporate opportunity
that is renounced in this Article to be a breach of duty to the Company or its Members, the Company hereby waives, to the fullest
extent permitted by Applicable Law, any and all claims and causes of action that the Company may have for such activities. To the
fullest extent permitted by Applicable Law, the provisions of this Article apply equally to activities conducted in the future
and that have been conducted in the past.
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Exhibit 4.1
SPECIMEN UNIT CERTIFICATE
NUMBER UNITS U-
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SEE REVERSE FOR
CERTAIN
DEFINITIONS
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Frontier Acquisition Corp.
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CUSIP [●]
UNITS CONSISTING OF ONE CLASS A ORDINARY
SHARE AND ONE-THIRD OF ONE
REDEEMABLE WARRANT TO PURCHASE ONE CLASS
A ORDINARY SHARE
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THIS CERTIFIES THAT
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is the owner of
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Units.
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Each Unit (“Unit”) consists of one (1) Class A ordinary
share, par value $0.0001 per share (“Ordinary Shares”), of Frontier Acquisition Corp., a Cayman Islands exempted company
(the “Company”), and one-third (1/3) of one redeemable warrant (each whole warrant, a “Warrant”). Each
Warrant entitles the holder to purchase one (1) Ordinary Share for $11.50 per share (subject to adjustment). Each Warrant will
become exercisable on the later of (i) thirty (30) days after the Company’s completion of a merger, share exchange, asset
acquisition, share 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 “Expiration Date”). The Ordinary Shares
and Warrants comprising the Units represented by this certificate are not transferable separately prior to , 2021, unless Credit
Suisse Securities (USA) LLC elects to allow earlier separate trading, subject to the Company’s filing with the Securities
and Exchange Commission of a Current Report on Form 8-K containing an audited balance sheet reflecting the Company’s receipt
of the gross proceeds of the initial public offering and issuing a press release announcing when separate trading will begin. No
fractional warrants will be issued upon separation of the Units and only whole warrants are exerciseable. 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 1 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 Class A Ordinary Shares 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 New York.
Witness the facsimile signatures of its duly authorized officers.
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By
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Chief Executive Officer
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Chief Financial Officer
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Frontier Acquisition Corp.
The Company will furnish without charge to each unitholder who
so requests, a statement of the powers, designations, preferences and relative, participating, optional or other special rights
of each class of shares or series thereof of the Company and the qualifications, limitations or restrictions of such preferences
and/or rights.
The following abbreviations, when used in the inscription on
the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:
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TEN COM
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—
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as tenants in common
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UNIF GIFT
MIN ACT
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—
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Custodian
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(Cust)
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(Minor)
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TEN ENT
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—
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as tenants by the entireties
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under Uniform Gifts to Minors Act
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(State)
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JT TEN
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—
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as joint tenants with right of survivorship and not as tenants in common
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Additional abbreviations may also be used
though not in the above list.
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For value received,
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hereby sells, assigns and transfers unto
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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 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.
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Dated
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Notice: The signature to this assignment must correspond with the name as written upon the face of the certificate in every particular, without alteration or enlargement or any change whatever.
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Signature(s) Guaranteed:
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THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15 OR ANY SUCCESSOR RULES).
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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 Ordinary Shares 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 memorandum and articles of association, as the same may be amended from time to time,
(ii) the Company redeems the Ordinary Shares sold in its initial public offering in connection with a shareholder vote to
amend the Company’s amended and restated memorandum and articles of association (A) that would modify the substance or
timing of the Company’s obligation to provide holders of the Ordinary Shares the right to have their shares redeemed in
connection with the Company’s initial business combination or to redeem 100% of the Ordinary Shares if the Company does
not complete its initial business combination within the time period set forth therein or (B) with respect to any other
provision relating to the rights of holders of the Ordinary Shares, or (iii) if the holder(s) seek(s) to redeem for cash his,
her or its respective Ordinary Shares in connection with a tender offer (or proxy solicitation, solely in the event the
Company seeks shareholder approval of the proposed initial business combination) setting forth the details of a proposed
initial business combination. In no other circumstances shall the holder(s) have any right or interest of any kind in or to
the trust account.
Exhibit 4.2
SPECIMEN CLASS A ORDINARY SHARE CERTIFICATE
FRONTIER ACQUISITION CORP.
INCORPORATED UNDER THE LAWS OF THE CAYMAN
ISLANDS
CLASS A ORDINARY SHARES
SEE REVERSE FOR
CERTAIN DEFINITIONS
CUSIP [●]
This Certifies that is the owner of
FULLY PAID AND NON-ASSESSABLE CLASS A
ORDINARY SHARES OF THE PAR VALUE OF
US$0.0001 EACH OF FRONTIER ACQUISITION
CORP. (THE “COMPANY”)
subject to the Company’s amended
and restated memorandum and articles of association, as the same may be amended from time to time, and transferable on the books
of the Company in person or by duly authorized attorney upon surrender of this certificate properly endorsed.
The Company will be forced to redeem
all of its Class A ordinary shares if it is unable to complete a business combination within the period set forth in the Company’s
amended and restated memorandum and articles of association, as the same may be amended from time to time, 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.
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Chief Executive Officer
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Cayman Islands
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Chief Financial Officer
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FRONTIER ACQUISITION CORP.
The Company will furnish without charge to each shareholder
who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class
of shares or series thereof of the Company and the qualifications, limitations, or restrictions of such preferences and/or rights.
This certificate and the shares represented thereby are issued and shall be held subject to all the provisions of the Company’s
amended and restated memorandum and articles of association, as the same may be amended from time to time, and resolutions of the
Board of Directors providing for the issue of Class A ordinary shares (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
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—
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as tenants in common
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UNIF GIFT MIN ACT
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—
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Custodian
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(Cust)
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(Minor)
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TEN ENT
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—
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as tenants by the entireties
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under Uniform Gifts to Minors Act
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(State)
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JT TEN
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—
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as joint tenants with right of survivorship and not as tenants in common
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Additional abbreviations may also be used though not in the
above list.
For value received, hereby sells, assigns and transfers unto
(PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER(S) OF ASSIGNEE(S))
(PLEASE PRINT OR TYPEWRITE NAME(S) AND ADDRESS(ES),
INCLUDING ZIP CODE, OF
ASSIGNEE(S))
Shares represented by the within Certificate, and does hereby
irrevocably constitute and appoint Attorney to transfer the said shares on the books of the within named Company with full power
of substitution in the premises.
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Dated:
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Shareholder
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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.
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Signature(s) Guaranteed:
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By
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THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15 OR ANY SUCCESSOR RULE).
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 its initial public offering only
in the event that (i) the Company redeems the Class A ordinary shares sold in its initial public offering and liquidates
because it does not consummate an initial business combination within the period of time set forth in the Company’s
amended and restated memorandum and articles of association, as the same may be amended from time to time, (ii) the Company
redeems the Class A ordinary shares sold in its initial public offering in connection with a shareholder vote to amend the
Company’s amended and restated memorandum and articles of association (A) that would modify the substance or timing of
the Company’s obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in
connection with the Company’s initial business combination or to redeem 100% of the Class A ordinary shares if the
Company does not complete its initial business combination within the time period set forth therein or (B) with respect to
any other provision relating to the rights of holders of the Class A ordinary shares, or (iii) if the holder(s) seek(s) to
redeem for cash his, her or its respective Class A ordinary shares in connection with a tender offer (or proxy solicitation,
solely in the event the Company seeks shareholder approval of the proposed initial business combination) setting forth the
details of a proposed initial business combination. In no other circumstances shall the holder(s) have any right or interest
of any kind in or to the trust account.
EXHIBIT 4.3
[FACE]
Number
Warrants
THIS WARRANT SHALL BE VOID IF NOT EXERCISED
PRIOR TO
THE EXPIRATION OF THE EXERCISE PERIOD
PROVIDED FOR
IN THE WARRANT AGREEMENT DESCRIBED BELOW
Frontier Acquisition Corp.
Incorporated Under the Laws of the Cayman
Islands
CUSIP [●]
Warrant Certificate
This Warrant Certificate certifies that
, or registered assigns, is the
registered holder of warrant(s) (the “Warrants” and each, a “Warrant”) to
purchase Class A ordinary shares, $0.0001 par value (“Ordinary Shares”), of Frontier Acquisition
Corp., a Cayman Islands exempted company (the “Company”). Each Warrant entitles the holder, upon
exercise during the period set forth in the Warrant Agreement referred to below, to receive from the Company that number of
fully paid and nonassessable Ordinary Shares as set forth below, at the exercise price (the “Exercise
Price”) as determined pursuant to the Warrant Agreement, payable in lawful money (or through
“cashless exercise” as provided for in the Warrant Agreement) of the United States of America upon
surrender of this Warrant Certificate and payment of the Exercise Price at the office or agency of the Warrant Agent referred
to below, subject to the conditions set forth herein and in the Warrant Agreement. Defined terms used in this Warrant
Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.
Each whole Warrant is initially exercisable for one fully paid
and non-assessable Ordinary Share. Fractional shares shall not be issued upon exercise of any Warrant. If, upon the exercise of
Warrants, a holder would be entitled to receive a fractional interest in an Ordinary Share, the Company shall, upon exercise, round
down to the nearest whole number the number of Ordinary Shares to be issued to the Warrant holder. The number of Ordinary Shares
issuable upon exercise of the Warrants is subject to adjustment upon the occurrence of certain events as set forth in the Warrant
Agreement.
The initial Exercise Price per one Ordinary Share for any Warrant
is equal to $11.50 per share. The Exercise Price is subject to adjustment upon the occurrence of certain events as set forth in
the Warrant Agreement.
Subject to the conditions set forth in the Warrant Agreement,
the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the end of such Exercise Period,
such Warrants shall become void. The Warrants may be redeemed, subject to certain conditions, as set forth in the Warrant Agreement.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof and such further provisions shall for all purposes have the same effect as though fully
set forth at this place.
This Warrant Certificate shall not be valid unless countersigned
by the Warrant Agent, as such term is used in the Warrant Agreement. This Warrant Certificate shall be governed by and construed
in accordance with the internal laws of the State of New York.
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FRONTIER ACQUISITION CORP.
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By:
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Name:
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Scott Carpenter
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Title:
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Authorized Signatory
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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 Certificate]
[Form of Warrant Certificate]
[Reverse]
The Warrants evidenced by this Warrant Certificate are part
of a duly authorized issue of Warrants entitling the holder on exercise to receive Ordinary Shares and are issued or to be issued
pursuant to a Warrant Agreement dated as of [●], 2021 (the “Warrant Agreement”), duly executed
and delivered by the Company to Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (the “Warrant
Agent”), which Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is
hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the
Warrant Agent, the Company and the holders (the words “holders” or “holder”
meaning the Registered Holders or Registered Holder, respectively) of the Warrants. A copy of the Warrant Agreement may be obtained
by the holder hereof upon written request to the Company. Defined terms used in this Warrant Certificate but not defined herein
shall have the meanings given to them in the Warrant Agreement.
Warrants may be exercised at any time during the Exercise Period
set forth in the Warrant Agreement. The holder of Warrants evidenced by this Warrant Certificate may exercise them by surrendering
this Warrant Certificate, with the form of Election to Purchase set forth hereon properly completed and executed, together with
payment of the Exercise Price as specified in the Warrant Agreement (or through “cashless exercise” as provided
for in the Warrant Agreement) at the principal corporate trust office of the Warrant Agent. In the event that upon any exercise
of Warrants evidenced hereby the number of Warrants exercised shall be less than the total number of Warrants evidenced hereby,
there shall be issued to the holder hereof or his, her or its assignee, a new Warrant Certificate evidencing the number of Warrants
not exercised.
Notwithstanding anything else in this Warrant Certificate or
the Warrant Agreement, no Warrant may be exercised unless at the time of exercise (i) a registration statement covering the issuance
of the Ordinary Shares to be issued upon exercise is effective under the Securities Act and (ii) a prospectus thereunder relating
to the Ordinary Shares is current, except through “cashless exercise” as provided for in the Warrant Agreement.
The Warrant Agreement provides that upon the occurrence of certain
events the number of Ordinary Shares issuable upon exercise of the Warrants set forth on the face hereof may, subject to certain
conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof would be entitled to receive a fractional interest
in an Ordinary Share, the Company shall, upon exercise, round down to the nearest whole number of Ordinary Shares to be issued
to the holder of the Warrant.
Warrant Certificates, when surrendered at the principal corporate
trust office of the Warrant Agent by the Registered Holder thereof in person or by legal representative or attorney duly authorized
in writing, may be exchanged, in the manner and subject to the limitations provided in the Warrant Agreement, but without payment
of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor evidencing in the aggregate a like
number of Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in
the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant Certificate, subject
to the limitations provided in the Warrant Agreement, without charge except for any tax or other governmental charge imposed in
connection therewith.
The Company and the Warrant Agent may deem and treat the Registered
Holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of ownership or other writing
hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the holder(s) hereof, and for all other
purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. Neither the Warrants nor
this Warrant Certificate entitles any holder hereof to any rights of a shareholder of the Company.
Election to Purchase
(To Be Executed Upon Exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive Ordinary Shares and herewith tenders payment for such Ordinary Shares to the
order of Frontier Acquisition Corp. (the “Company”) in the amount of $ in accordance with the terms hereof.
The undersigned requests that a certificate for such Ordinary Shares be registered in the name of , whose address is and that such
Ordinary Shares be delivered to whose address is . If said number of Ordinary Shares is less than all of the Ordinary Shares purchasable
hereunder, the undersigned requests that a new Warrant Certificate representing the remaining balance of such Ordinary Shares be
registered in the name of , whose address is and that such Warrant Certificate be delivered to , whose address is .
In the event that the Warrant has been called for redemption
by the Company pursuant to Section 6.2 of the Warrant Agreement and a holder thereof elects to exercise its Warrant pursuant
to a Make-Whole Exercise, the number of Ordinary Shares that this Warrant is exercisable for shall be determined in accordance
with subsection 3.3.1(c) or Section 6.2 of the Warrant Agreement, as applicable.
In the event that the Warrant is a Private Placement Warrant
that is to be exercised on a “cashless” basis pursuant to subsection 3.3.1(c) of the Warrant Agreement, the
number of Ordinary Shares that this Warrant is exercisable for shall be determined in accordance with subsection 3.3.1(c)
of the Warrant Agreement.
In the event that the Warrant is to be exercised on a “cashless”
basis pursuant to Section 7.4 of the Warrant Agreement, the number of Ordinary Shares that this Warrant is exercisable for
shall be determined in accordance with Section 7.4 of the Warrant Agreement.
In the event that the Warrant may be exercised, to the extent
allowed by the Warrant Agreement, through cashless exercise (i) the number of Ordinary Shares that this Warrant is exercisable
for would be determined in accordance with the relevant section of the Warrant Agreement which allows for such cashless exercise
and (ii) the holder hereof shall complete the following: The undersigned hereby irrevocably elects to exercise the right, represented
by this Warrant Certificate, through the cashless exercise provisions of the Warrant Agreement, to receive Ordinary Shares. If
said number of shares is less than all of the Ordinary Shares purchasable hereunder (after giving effect to the cashless exercise),
the undersigned requests that a new Warrant Certificate representing the remaining balance of such Ordinary Shares be registered
in the name of , whose address is and that such Warrant Certificate be delivered to , whose address is .
[Signature Page Follows]
Date: , 2021
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(Signature)
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(Address)
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(Tax Identification Number)
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Signature Guaranteed:
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THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED).
Exhibit 4.4
WARRANT AGREEMENT
FRONTIER ACQUISITION CORP.
and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
Dated [●], 2021
THIS WARRANT AGREEMENT (this “Agreement”),
dated January 12, 2021, is by and between Frontier Acquisition Corp., a Cayman Islands exempted company (the “Company”),
and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (in such capacity, the “Warrant
Agent”).
WHEREAS, it is proposed that the Company enter into that certain
Private Placement Units Purchase Agreement, with Frontier Acquisition Sponsor LLC, a Cayman Islands limited liability company (the
“Sponsor”), pursuant to which the Sponsor will purchase an aggregate of 600,000 units (as defined below)
(or up to 660,000 warrants if the underwriter in the Public Offering (defined below) exercises its Over-allotment Option (as defined
below) in full) simultaneously with the closing of the Offering (and the closing of the Over-allotment Option, if applicable)(the
“Private Placement Units”), The Private Placement Units include an aggregate of 200,000 private placement
warrants (or 220,000 private placement warrants if the Over-allot Option is exercised in full) (the “Private Placement
Warrants”), bearing the legend set forth in Exhibit B hereto. Each Private Placement Warrant entitles the
holder thereof to purchase one Ordinary Share (as defined below) at a price of $11.50 per share, subject to adjustment as described
herein; and
WHEREAS, in order to finance the Company’s transaction
costs in connection with an intended initial merger, share exchange, asset acquisition, share purchase, reorganization or similar
business combination, involving the Company and one or more businesses (a “Business Combination”), the
Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to,
loan the Company funds as the Company may require, of which up to $1,500,000 of such loans may be convertible into up to an additional
1,000,000 Private Placement Warrants at a price of $1.50 per Private Placement Warrant; and
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 Ordinary
Share and one-third of one Public Warrant (as defined below) (the “Units”) and, in connection therewith,
has determined to issue and deliver up to 7,666,667 redeemable warrants (including up to 1,000,000 redeemable warrants subject
to the Over-allotment Option) to public investors in the Offering (the “Public Warrants” and, together
with the Private Placement Warrants, the “Warrants”). Each whole Warrant entitles the holder thereof
to purchase one Class A ordinary share of the Company, par value $0.0001 per share (“Ordinary Shares”),
for $11.50 per share, subject to adjustment as described herein. Only whole Warrants are exercisable. A holder of the Public Warrants
will not be able to exercise any fraction of a Warrant; and
WHEREAS, the Company has filed with the Securities and Exchange
Commission (the “Commission”) a registration statement on Form S-1, File No. 333-[●] 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 Ordinary Shares included in the Units; and
WHEREAS, the Company desires the Warrant Agent to act on behalf
of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange,
redemption and exercise of the Warrants; and
WHEREAS, the Company desires to provide for the form and provisions
of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and
immunities of the Company, the Warrant Agent and the holders of the Warrants; and
WHEREAS, all acts and things have been done and performed which
are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent
(if a physical certificate is issued), as provided herein, the valid, binding and legal obligations of the Company, and to authorize
the execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
1. Appointment of Warrant Agent. The Company hereby appoints
the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant Agent hereby accepts such appointment and agrees
to perform the same in accordance with the terms and conditions set forth in this Agreement.
2. Warrants.
2.1. Form of Warrant. Each Warrant shall initially be
issued in registered form only.
2.2. Effect of Countersignature. If a physical certificate
is issued, unless and until countersigned by the Warrant Agent pursuant to this Agreement, a certificated Warrant shall be invalid
and of no effect and may not be exercised by the holder thereof.
2.3. Registration.
2.3.1. Warrant Register. The Warrant Agent shall maintain
books (the “Warrant Register”), for the registration of original issuance and the registration of transfer
of the Warrants. Upon the initial issuance of the Warrants in book-entry form, the Warrant Agent shall issue and register the Warrants
in the names of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered to
the Warrant Agent by the Company. Ownership of beneficial interests in the Public Warrants shall be shown on, and the transfer
of such ownership shall be effected through, records maintained by institutions that have accounts with The Depository Trust Company
(the “Depositary”) (such institution, with respect to a Warrant in its account, a “Participant”).
If the Depositary subsequently ceases to make its book-entry
settlement system available for the Public Warrants, the Company may instruct the Warrant Agent regarding making other arrangements
for book-entry settlement. In the event that the Public Warrants are not eligible for, or it is no longer necessary to have the
Public Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the Depositary to deliver
to the Warrant Agent for cancellation each book-entry Public Warrant, and the Company shall instruct the Warrant Agent to deliver
to the Depositary definitive certificates in physical form evidencing such Warrants (“Definitive Warrant Certificates”)
which shall be in the form annexed hereto as Exhibit A.
Physical certificates, if issued, shall be signed by, or bear
the facsimile signature of, the Chairman of the Board, Chief Executive Officer, President, Chief Financial Officer, Chief Operating
Officer, General Counsel, Secretary or other principal officer of the Company. In the event the person whose facsimile signature
has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such
Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance.
2.3.2. Registered Holder. Prior to due presentment for
registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person in whose name such Warrant
is registered in the Warrant Register (the “Registered Holder”) as the absolute owner of such Warrant
and of each Warrant represented thereby, for the purpose of any exercise thereof, and for all other purposes, and neither the Company
nor the Warrant Agent shall be affected by any notice to the contrary.
2.4. Detachability of Warrants. The Ordinary Shares
and Public Warrants comprising the Units shall begin separate trading on the 52nd day following the date of the Prospectus
or, if such 52nd day is not on a day, other than a Saturday, Sunday or federal holiday, on which banks in New York City are
generally open for normal business (a “Business Day”), then on the immediately succeeding Business
Day following such date, or earlier (the “Detachment Date”) with the consent of Credit Suisse
Securities (USA) LLC, but in no event shall the Ordinary Shares and the Public Warrants comprising the Units be separately
traded until (A) the Company has filed a Current Report on Form 8-K with the Commission containing an audited balance sheet
reflecting the receipt by the Company of the gross proceeds of the Offering, including the proceeds then received by the
Company from the exercise by the underwriter of its 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
Current Report on Form 8-K, and (B) the Company issues a press release announcing when such separate trading shall begin.
2.5. Fractional Warrants. The Company shall not issue
fractional Warrants other than as part of the Units, each of which is comprised of one Ordinary Share and one-third of one whole
Public Warrant. If, upon the detachment of Public Warrants from the Units or otherwise, a holder of Warrants would be entitled
to receive a fractional Warrant, the Company shall round down to the nearest whole number the number of Warrants to be issued to
such holder.
2.6. Private Placement Warrants. The Private Placement
Warrants shall be identical to the Public Warrants, except that so long as they are held by the Sponsor or any of its Permitted
Transferees (as defined below) the Private Placement Warrants: (i) may be exercised for cash or on a “cashless basis,”
pursuant to subsection 3.3.1(c) hereof, (ii) including the Ordinary Shares issuable upon exercise of the Private Placement
Warrants, may not be transferred, assigned or sold until thirty (30) days after the completion by the Company of an initial Business
Combination, (iii) shall not be redeemable by the Company pursuant to Section 6.1 hereof and (iv) shall only be redeemable
by the Company pursuant to Section 6.2 if the Reference Value (as defined below) is less than $18.00 per share (subject
to adjustment in compliance with Section 4 hereof); provided, however, that in the case of (ii), the Private
Placement Warrants and any Ordinary Shares issued upon exercise of the Private Placement Warrants may be transferred by the holders
thereof:
(a) to the Company’s officers or directors, any affiliates
or family members of any of the Company’s officers or directors, any members or partners of the Sponsor or their affiliates,
any affiliates of the Sponsor, or any employees of such affiliates;
(b) in the case of an individual, by gift to a member of one
of the individual’s immediate family or to a trust, the beneficiary of which is a member of the individual’s immediate
family, an affiliate of such person or to a charitable organization;
(c) in the case of an individual, by virtue of laws of descent
and distribution upon death of the individual;
(d) in the case of an individual, pursuant to a qualified domestic
relations order;
(e) by private sales or transfers made in connection with the
consummation of the Company’s Business Combination at prices no greater than the price at which the Private Placement Warrants
or Ordinary Shares, as applicable, were originally purchased;
(f) by virtue of the Sponsor’s organizational documents
upon liquidation or dissolution of the Sponsor;
(g) to the Company for no value for cancellation in connection
with the consummation of our initial Business Combination;
(h) in the event of the Company’s liquidation prior to
the completion of its initial Business Combination; or
(i) in the event of the Company’s completion of a liquidation,
merger, share exchange or other similar transaction which results in all of the public shareholders having the right to exchange
their Ordinary Shares for cash, securities or other property subsequent to the completion of the Company’s initial Business
Combination;
provided, however, that, in the case of clauses
(a) through (f), these permitted transferees (the “Permitted Transferees”) must enter into a written
agreement with the Company agreeing to be bound by the transfer restrictions in this Agreement.
3. Terms and Exercise of Warrants.
3.1. Warrant Price. Each whole Warrant shall
entitle the Registered Holder thereof, subject to the provisions of such Warrant and of this Agreement, to purchase from the
Company the number of Ordinary Shares stated therein, at the price of $11.50 per share, subject to the adjustments provided
in Section 4 hereof and in the last sentence of this Section 3.1. The term “Warrant
Price” as used in this Agreement shall mean the price per share (including in cash or by payment of Warrants
pursuant to a “cashless exercise,” to the extent permitted hereunder) described in the prior sentence at which
Ordinary Shares may be purchased at the time a Warrant is exercised. The Company in its sole discretion may lower the Warrant
Price at any time prior to the Expiration Date (as defined below) for a period of not less than fifteen Business Days (unless
otherwise required by the Commission, any national securities exchange on which the Warrants are listed or applicable law);
provided that the Company shall provide at least five days’ prior written notice of such reduction to Registered
Holders of the Warrants; and provided further, that any such reduction shall be identical among all of the Warrants.
3.2. Duration of Warrants. A Warrant may be exercised
only during the period (the “Exercise Period”) (A) commencing on the later of: (i) the date that is thirty
(30) days after the first date on which the Company completes a Business Combination, and (ii) the date that is twelve (12) months
from the date of the closing of the Offering, and (B) terminating at the earliest to occur of (x) 5:00 p.m., New York City time
on the date that is five (5) years after the date on which the Company completes its initial Business Combination, (y) the liquidation
of the Company in accordance with the Company’s amended and restated memorandum and articles of association, as amended from
time to time, if the Company fails to complete a Business Combination, and (z) other than with respect to the Private Placement
Warrants then held by the Sponsor or its Permitted Transferees with respect to a redemption pursuant to Section 6.1 hereof
or, if the Reference Value equals or exceeds $18.00 per share (subject to adjustment in compliance with Section 4 hereof),
Section 6.2 hereof, 5:00 p.m., New York City time on the Redemption Date (as defined below) as provided in Section 6.3
hereof (the “Expiration Date”); provided, however, that the exercise of any Warrant shall
be subject to the satisfaction of any applicable conditions, as set forth in subsection 3.3.2 below, with respect to an
effective registration statement or a valid exemption therefrom being available. Except with respect to the right to receive the
Redemption Price (as defined below) (other than with respect to a Private Placement Warrant then held by the Sponsor or its Permitted
Transferees in connection with a redemption pursuant to Section 6.1 hereof or, if the Reference Value equals or exceeds
$18.00 per share (subject to adjustment in compliance with Section 4 hereof), Section 6.2 hereof) in the event of
a redemption (as set forth in Section 6 hereof), each Warrant (other than a Private Placement Warrant then held by the Sponsor
or its Permitted Transferees in the event of a redemption pursuant to Section 6.1 hereof or, if the Reference Value equals
or exceeds $18.00 per share (subject to adjustment in compliance with Section 4 hereof), Section 6.2 hereof) not
exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under
this Agreement shall cease at 5:00 p.m. New York City time on the Expiration Date. The Company in its sole discretion may extend
the duration of the Warrants by delaying the Expiration Date; provided that the Company shall provide at least twenty (20)
days prior written notice of any such extension to Registered Holders of the Warrants and, provided further that any such
extension shall be identical in duration among all the Warrants.
3.3. Exercise of Warrants.
3.3.1. Payment. Subject to the provisions of the Warrant
and this Agreement, a Warrant may be exercised by the Registered Holder thereof by delivering to the Warrant Agent at its corporate
trust department (i) the Definitive Warrant Certificate evidencing the Warrants to be exercised, or, in the case of a Warrant represented
by a book-entry, the Warrants to be exercised (the “Book-Entry Warrants”) on the records of the Depositary
to an account of the Warrant Agent at the Depositary designated for such purposes in writing by the Warrant Agent to the Depositary
from time to time, (ii) an election to purchase (“Election to Purchase”) any Ordinary Shares pursuant
to the exercise of a Warrant, properly completed and executed by the Registered Holder on the reverse of the Definitive Warrant
Certificate or, in the case of a Book-Entry Warrant, properly delivered by the Participant in accordance with the Depositary’s
procedures, and (iii) the payment in full of the Warrant Price for each Ordinary Share as to which the Warrant is exercised and
any and all applicable taxes due in connection with the exercise of the Warrant, the exchange of the Warrant for the Ordinary Shares
and the issuance of such Ordinary Shares, as follows:
(a) in lawful money of the United States, in good certified
check or wire payable to the Warrant Agent;
(b) [Reserved];
(c) with respect to any Private Placement Warrant, so long as
such Private Placement Warrant is held by the Sponsor or a Permitted Transferee, by surrendering the Warrants for that number of
Ordinary Shares equal to (i) if in connection with a redemption of Private Placement Warrants pursuant to Section 6.2 hereof,
as provided in Section 6.2 hereof with respect to a Make-Whole Exercise and (ii) in all other scenarios the quotient obtained
by dividing (x) the product of the number of Ordinary Shares underlying the Warrants, multiplied by the excess of the “Sponsor
Fair Market Value” (as defined in this subsection 3.3.1(c)) less the Warrant Price by (y) the Sponsor Exercise
Fair Market Value. Solely for purposes of this subsection 3.3.1(c), the “Sponsor Fair Market Value”
shall mean the average last reported sale price of the Ordinary Shares for the ten (10) trading days ending on the third (3rd)
trading day prior to the date on which notice of exercise of the Private Placement Warrant is sent to the Warrant Agent;
(d) as provided in Section 6.2 hereof with respect to
a Make-Whole Exercise; or
(e) as provided in Section 7.4 hereof.
3.3.2. Issuance of Ordinary Shares on Exercise. As soon
as practicable after the exercise of any Warrant and the clearance of the funds in payment of the Warrant Price (if payment is
pursuant to subsection 3.3.1(a)), the Company shall issue to the Registered Holder of such Warrant a book-entry position
or certificate, as applicable, for the number of Ordinary Shares to which he, she or it is entitled, registered in such name or
names as may be directed by him, her or it on the register of members of the Company, and if such Warrant shall not have been exercised
in full, a new book-entry position or countersigned Warrant, as applicable, for the number of shares as to which such Warrant shall
not have been exercised. Notwithstanding the foregoing, the Company shall not be obligated to deliver any Ordinary Shares pursuant
to the exercise of a Warrant and shall have no obligation to settle such Warrant exercise unless a registration statement under
the Securities Act with respect to the Ordinary Shares underlying the Public Warrants is then effective and a prospectus relating
thereto is current, subject to the Company’s satisfying its obligations under Section 7.4 or a valid exemption from
registration is available. No Warrant shall be exercisable and the Company shall not be obligated to issue Ordinary Shares upon
exercise of a Warrant unless the Ordinary Shares issuable upon such Warrant exercise have been registered, qualified or deemed
to be exempt from registration or qualification under the securities laws of the state of residence of the Registered Holder of
the Warrants. Subject to Section 4.6 of this Agreement, a Registered Holder of Warrants may exercise its Warrants only for
a whole number of Ordinary Shares. The Company may require holders of Public Warrants to settle the Warrant on a “cashless
basis” pursuant to Section 7.4. If, by reason of any exercise of Warrants on a “cashless basis”, the holder
of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in an Ordinary Share, the
Company shall round down to the nearest whole number, the number of Ordinary Shares to be issued to such holder.
3.3.3. Valid Issuance. All Ordinary Shares issued upon
the proper exercise of a Warrant in conformity with this Agreement and the amended and restated memorandum and articles of association
of the Company shall be validly issued, fully paid and nonassessable.
3.3.4. Date of Issuance. Each person in whose name any
book-entry position or certificate, as applicable, for Ordinary Shares is issued and who is registered in the register of members
of the Company shall for all purposes be deemed to have become the holder of record of such Ordinary Shares on the date on which
the Warrant, or book-entry position representing such Warrant, was surrendered and payment of the Warrant Price was made, irrespective
of the date of delivery of such certificate in the case of a certificated Warrant, except that, if the date of such surrender and
payment is a date when the register of members of the Company or book-entry system of the Warrant Agent are closed, such person
shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the share
transfer books or book-entry system are open.
3.3.5. Maximum Percentage. A holder of a Warrant
may notify the Company in writing in the event it elects to be subject to the provisions contained in this subsection
3.3.5; however, no holder of a Warrant shall be subject to this subsection 3.3.5 unless he, she or it makes
such election. If the election is made by a holder, the Warrant Agent shall not effect the exercise of the holder’s
Warrant, and such holder shall not have the right to exercise such Warrant, to the extent that after giving effect to such
exercise, such person (together with such person’s affiliates), to the Warrant Agent’s actual knowledge, would
beneficially own in excess of 9.8% (the “Maximum Percentage”) of the Ordinary Shares outstanding
immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of Ordinary
Shares beneficially owned by such person and its affiliates shall include the number of Ordinary Shares issuable upon
exercise of the Warrant with respect to which the determination of such sentence is being made, but shall exclude Ordinary
Shares that would be issuable upon (x) exercise of the remaining, unexercised portion of the Warrant beneficially owned by
such person and its affiliates and (y) exercise or conversion of the unexercised or unconverted portion of any other
securities of the Company beneficially owned by such person and its affiliates (including, without limitation, any
convertible notes or convertible preferred shares or warrants) subject to a limitation on conversion or exercise analogous to
the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial
ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). For purposes of the Warrant, in determining the number of outstanding Ordinary
Shares, the holder may rely on the number of outstanding Ordinary Shares as reflected in (1) the Company’s most recent
Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the
Commission as the case may be, (2) a more recent public announcement by the Company or (3) any other notice by the Company or
Continental Stock Transfer & Trust Company, as transfer agent (in such capacity, the “Transfer
Agent”), setting forth the number of Ordinary Shares outstanding. For any reason at any time, upon the written
request of the holder of the Warrant, the Company shall, within two (2) Business Days, confirm orally and in writing to such
holder the number of Ordinary Shares then outstanding. In any case, the number of issued and outstanding Ordinary Shares
shall be determined after giving effect to the conversion or exercise of equity securities of the Company by the holder and
its affiliates since the date as of which such number of issued and outstanding Ordinary Shares was reported. By written
notice to the Company, the holder of a Warrant may from time to time increase or decrease the Maximum Percentage applicable
to such holder to any other percentage specified in such notice; provided, however, that any such increase
shall not be effective until the sixty-first (61st) day after such notice is delivered to the Company.
4. Adjustments.
4.1. Share Capitalizations.
4.1.1. Sub-Divisions. If after the date hereof, and subject
to the provisions of Section 4.6 below, the number of issued and outstanding Ordinary Shares is increased by a capitalization
or share dividend of Ordinary Shares to all or substantially all holders of Ordinary Shares, or by a sub-division of Ordinary Shares
or other similar event, then, on the effective date of such share capitalization, sub-division or similar event, the number of
Ordinary Shares issuable on exercise of each Warrant shall be increased in proportion to such increase in the issued and outstanding
Ordinary Shares. A rights offering made to all or substantially all holders of Ordinary Shares entitling holders to purchase Ordinary
Shares at a price less than the “Historical Fair Market Value” (as defined below) shall be deemed a capitalization
of a number of Ordinary Shares equal to the product of (i) the number of Ordinary Shares actually sold in such rights offering
(or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for the Ordinary
Shares) multiplied by (ii) one (1) minus the quotient of (x) the price per Ordinary Share paid in such rights offering divided
by (y) the Historical Fair Market Value. For purposes of this subsection 4.1.1, (i) if the rights offering is for securities
convertible into or exercisable for Ordinary Shares, in determining the price payable for Ordinary Shares, there shall be taken
into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and
(ii) “Historical Fair Market Value” means the volume weighted average price of the Ordinary Shares during
the ten (10) trading day period ending on the trading day prior to the first date on which the Ordinary Shares trade on the applicable
exchange or in the applicable market, regular way, without the right to receive such rights. No Ordinary Shares shall be issued
at less than their par value.
4.1.2. Extraordinary Dividends. If the Company, at any
time while the Warrants are outstanding and unexpired, pays to all or substantially all of the holders of the Ordinary Shares a
dividend or make a distribution in cash, securities or other assets on account of such Ordinary Shares (or other shares into which
the Warrants are convertible), other than (a) as described in subsection 4.1.1 above, (b) Ordinary Cash Dividends (as defined
below), (c) to satisfy the redemption rights of the holders of the Ordinary Shares in connection with a proposed initial Business
Combination, (d) to satisfy the redemption rights of the holders of the Ordinary Shares in connection with a shareholder vote to
amend the Company’s amended and restated memorandum and articles of association (i) to modify the substance or timing of
the Company’s obligation to provide holders of Ordinary Shares the right to have their shares redeemed in connection with
the Company’s initial Business Combination or to redeem 100% of the Company’s public shares if it does not complete
its initial Business Combination within the time period required by the Company’s Amended and Restated Memorandum and Articles
of Association, as amended from time to time, or (ii) with respect to any other provision relating to the rights of holders of
Ordinary Shares, (e) as a result of the repurchase of Ordinary Shares by the Company if a proposed initial Business Combination
is presented to the shareholders of the Company for approval or (f) in connection with the redemption of public shares upon the
failure of the Company to complete its initial Business Combination and any subsequent distribution of its assets upon its liquidation
(any such non-excluded event being referred to herein as an “Extraordinary Dividend”), then the Warrant
Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, by the amount of cash
and/or the fair market value (as determined by the Company’s board of directors (the “Board”),
in good faith) of any securities or other assets paid on each Ordinary Share in respect of such Extraordinary Dividend. For purposes
of this subsection 4.1.2, “Ordinary Cash Dividends” means any cash dividend or cash distribution
which, when combined on a per share basis, with the per share amounts of all other cash dividends and cash distributions paid on
the Ordinary Shares during the 365-day period ending on the date of declaration of such dividend or distribution to the extent
it does not exceed $0.50 (which amount shall be adjusted to appropriately reflect any of the events referred to in other subsections
of this Section 4 and excluding cash dividends or cash distributions that resulted in an adjustment to the Warrant Price
or to the number of Ordinary Shares issuable on exercise of each Warrant).
4.2. Aggregation of Shares. If after the date hereof,
and subject to the provisions of Section 4.6 hereof, the number of issued and outstanding Ordinary Shares is decreased by
a consolidation, combination, or reclassification of Ordinary Shares or other similar event, then, on the effective date of such
consolidation, combination, reclassification or similar event, the number of Ordinary Shares issuable on exercise of each Warrant
shall be decreased in proportion to such decrease in issued and outstanding Ordinary Shares.
4.3. Adjustments in Exercise Price. Whenever the number
of Ordinary Shares purchasable upon the exercise of the Warrants is adjusted, as provided in subsection 4.1.1 or Section
4.2 above, the Warrant Price shall be adjusted (to the nearest cent) by multiplying such Warrant Price immediately prior to
such adjustment by a fraction (x) the numerator of which shall be the number of Ordinary Shares purchasable upon the exercise of
the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of Ordinary Shares so purchasable
immediately thereafter.
4.4. Raising of the Capital in Connection with the Initial
Business Combination. If (x) the Company issues additional Ordinary Shares or equity-linked securities for capital raising
purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less
than $9.20 per Ordinary Share (with such issue price or effective issue price to be determined in good faith by the Board and,
in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Class B ordinary shares, par
value $0.0001 per share, of the Company held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly
Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity
proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the
completion of the Company’s initial Business Combination (net of redemptions), and (z) the volume-weighted average trading
price of Ordinary Shares during the twenty (20) trading day period starting on the trading day prior to the day on which the Company
consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share,
the Warrant Price shall be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued
Price, the $18.00 per share redemption trigger price described in Section 6.1 and Section 6.2 shall be adjusted (to
the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price and the $10.00 per share redemption
trigger price described in Section 6.2 shall be adjusted (to the nearest cent) to be equal to the higher of the Market Value and
the Newly Issued Price.
4.5. Replacement of Securities upon Reorganization,
etc. In case of any reclassification or reorganization of the issued and outstanding Ordinary Shares (other than a change
under Section 4.1 or Section 4.2 hereof or that solely affects the par value of such Ordinary Shares), or in
the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger
in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the
issued and outstanding Ordinary Shares), or in the case of any sale or conveyance to another corporation or entity of the
assets or other property of the Company as an entirety or substantially as an entirety in connection with which the Company
is dissolved, the holders of the Warrants shall thereafter have the right to purchase and receive, upon the basis and upon
the terms and conditions specified in the Warrants and in lieu of the Ordinary Shares of the Company immediately theretofore
purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares or stock or
other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation,
or upon a dissolution following any such sale or transfer, that the holder of the Warrants would have received if such holder
had exercised his, her or its Warrant(s) immediately prior to such event (the “Alternative
Issuance”); provided, however, that (i) if the holders of the Ordinary Shares were entitled to
exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation
or merger, then the kind and amount of securities, cash or other assets constituting the Alternative Issuance for which each
Warrant shall become exercisable shall be deemed to be the weighted average of the kind and amount received per share by the
holders of the Ordinary Shares in such consolidation or merger that affirmatively make such election, and (ii) if a tender,
exchange or redemption offer shall have been made to and accepted by the holders of the Ordinary Shares (other than a tender,
exchange or redemption offer made by the Company in connection with redemption rights held by shareholders of the Company as
provided for in the Company’s amended and restated memorandum and articles of association or as a result of the
repurchase of Ordinary Shares by the Company if a proposed initial Business Combination is presented to the shareholders of
the Company for approval) under circumstances in which, upon completion of such tender or exchange offer, the maker thereof,
together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of which such maker is a
part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act)
and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of
Rule 13d-3 under the Exchange Act) more than 50% of the issued and outstanding Ordinary Shares, the holder of a Warrant shall
be entitled to receive as the Alternative Issuance, the highest amount of cash, securities or other property to which such
holder would actually have been entitled as a shareholder if such Warrant holder had exercised the Warrant prior to the
expiration of such tender or exchange offer, accepted such offer and all of the Ordinary Shares held by such holder had been
purchased pursuant to such tender or exchange offer, subject to adjustments (from and after the consummation of such tender
or exchange offer) as nearly equivalent as possible to the adjustments provided for in this Section 4; provided
further that if less than 70% of the consideration receivable by the holders of the Ordinary Shares in the applicable
event is payable in the form of shares in the successor entity that is listed for trading on a national securities exchange
or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following
such event, and if the Registered Holder properly exercises the Warrant within thirty (30) days following the public
disclosure of the consummation of such applicable event by the Company pursuant to a Current Report on Form 8-K filed with
the Commission, the Warrant Price shall be reduced by an amount (in dollars) equal to the difference of (i) the Warrant Price
in effect prior to such reduction minus (ii) (A) the Per Share Consideration (as defined below) (but in no event less than
zero) minus (B) the Black-Scholes Warrant Value (as defined below). The “Black-Scholes Warrant
Value” means the value of a Warrant immediately prior to the consummation of the applicable event based on the
Black-Scholes Warrant Model for a Capped American Call on Bloomberg Financial Markets (assuming zero dividends)
(“Bloomberg”). For purposes of calculating such amount, (i) Section 6 of this Agreement
shall be taken into account, (ii) the price of each Ordinary Share shall be the volume weighted average price of the Ordinary
Shares during the ten (10) trading day period ending on the trading day prior to the effective date of the applicable event,
(iii) the assumed volatility shall be the 90 day volatility obtained from the HVT function on Bloomberg determined as of the
trading day immediately prior to the day of the announcement of the applicable event and (iv) the assumed risk-free interest
rate shall correspond to the U.S. Treasury rate for a period equal to the remaining term of the Warrant. “Per
Share Consideration” means (i) if the consideration paid to holders of the Ordinary Shares consists exclusively
of cash, the amount of such cash per Ordinary Share, and (ii) in all other cases, the volume weighted average price of the
Ordinary Shares during the ten (10) trading day period ending on the trading day prior to the effective date of the
applicable event. If any reclassification or reorganization also results in a change in Ordinary Shares covered by subsection
4.1.1, then such adjustment shall be made pursuant to subsection 4.1.1 or Sections 4.2, 4.3 and this Section
4.4. The provisions of this Section 4.4 shall similarly apply to successive reclassifications, reorganizations,
mergers or consolidations, sales or other transfers. In no event shall the Warrant Price be reduced to less than the par
value per share issuable upon exercise of such Warrant.
4.6. Notices of Changes in Warrant. Upon every adjustment
of the Warrant Price or the number of shares issuable upon exercise of a Warrant, the Company shall give written notice thereof
to the Warrant Agent, which notice shall state the Warrant Price resulting from such adjustment and the increase or decrease, if
any, in the number of shares purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method
of calculation and the facts upon which such calculation is based. Upon the occurrence of any event specified in Sections 4.1,
4.2, 4.3, 4.4 or 4.5, the Company shall give written notice of the occurrence of such event to each
holder of a Warrant, at the last address set forth for such holder in the Warrant Register, of the record date or the effective
date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.
4.7. No Fractional Shares. Notwithstanding any provision
contained in this Agreement to the contrary, the Company shall not issue fractional shares upon the exercise of Warrants. If, by
reason of any adjustment made pursuant to this Section 4, the holder of any Warrant would be entitled, upon the exercise
of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise, round down to the nearest
whole number the number of Ordinary Shares to be issued to such holder.
4.8. Form of Warrant. The form of Warrant need not be
changed because of any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the same
Warrant Price and the same number of shares as is stated in the Warrants initially issued pursuant to this Agreement; provided,
however, that the Company may at any time in its sole discretion make any change in the form of Warrant that the Company
may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued or countersigned, whether
in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed.
5. Transfer and Exchange of Warrants.
5.1. Registration of Transfer. The Warrant Agent
shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender of such
Warrant for transfer, properly endorsed with signatures properly guaranteed and accompanied by appropriate instructions for
transfer. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued and the
old Warrant shall be cancelled by the Warrant Agent. In the case of certificated Warrants, the Warrants so cancelled shall be
delivered by the Warrant Agent to the Company from time to time upon request.
5.2. Procedure for Surrender of Warrants. Warrants may
be surrendered to the Warrant Agent, together with a written request for exchange or transfer, and thereupon the Warrant Agent
shall issue in exchange therefor one or more new Warrants as requested by the Registered Holder of the Warrants so surrendered,
representing an equal aggregate number of Warrants; provided, however, that except as otherwise provided herein or
with respect to any Book-Entry Warrant, each Book-Entry Warrant may be transferred only in whole and only to the Depositary, to
another nominee of the Depositary, to a successor depository, or to a nominee of a successor depository; provided further,
however that in the event that a Warrant surrendered for transfer bears a restrictive legend (as in the case of the Private
Placement Warrants), the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange thereof until the Warrant
Agent has received an opinion of counsel for the Company stating that such transfer may be made and indicating whether the new
Warrants must also bear a restrictive legend.
5.3. Fractional Warrants. The Warrant Agent shall not
be required to effect any registration of transfer or exchange which shall result in the issuance of a warrant certificate or book-entry
position for a fraction of a warrant, except as part of the Units.
5.4. Service Charges. No service charge shall be made
for any exchange or registration of transfer of Warrants.
5.5. Warrant Execution and Countersignature. The Warrant
Agent is hereby authorized to countersign and to deliver, in accordance with the terms of this Agreement, the Warrants required
to be issued pursuant to the provisions of this Section 5, and the Company, whenever required by the Warrant Agent, shall
supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.
5.6. Transfer of Warrants. Prior to the Detachment Date,
the Public Warrants may be transferred or exchanged only together with the Unit in which such Warrant is included, and only for
the purpose of effecting, or in conjunction with, a transfer or exchange of such Unit. Furthermore, each transfer of a Unit on
the register relating to such Units shall operate also to transfer the Warrants included in such Unit. Notwithstanding the foregoing,
the provisions of this Section 5.6 shall have no effect on any transfer of Warrants on and after the Detachment Date.
6. Redemption.
6.1. Redemption of Warrants for Cash. Subject to Section
6.5 hereof, not less than all of the outstanding Warrants may be redeemed, at the option of the Company, at any time during
the Exercise Period, at the office of the Warrant Agent, upon notice to the Registered Holders of the Warrants, as described in
Section 6.3 below, at a Redemption Price of $0.01 per Warrant, provided that (a) the Reference Value equals or exceeds
$18.00 per share (subject to adjustment in compliance with Section 4 hereof) and (b) there is an effective registration
statement covering the issuance of the Ordinary Shares issuable upon exercise of the Warrants, and a current prospectus relating
thereto, available throughout the 30-day Redemption Period (as defined in Section 6.3 below).
6.2. Redemption of Warrants for Ordinary Shares. Subject
to Section 6.5 hereof, not less than all of the outstanding Warrants may be redeemed, at the option of the Company, at any
time during the Exercise Period, at the office of the Warrant Agent, upon notice to the Registered Holders of the Warrants, as
described in Section 6.3 below, at a Redemption Price of $0.10 per Warrant, provided that (i) the Reference Value
equals or exceeds $10.00 per share (subject to adjustment in compliance with Section 4 hereof) and (ii) if the Reference
Value is less than $18.00 per share (subject to adjustment in compliance with Section 4 hereof), the Private Placement Warrants
are also concurrently called for redemption on the same terms as the outstanding Public Warrants. During the 30-day Redemption
Period in connection with a redemption pursuant to this Section 6.2, Registered Holders of the Warrants may elect to exercise
their Warrants on a “cashless basis” pursuant to subsection 3.3.1 and receive a number of Ordinary Shares determined
by reference to the table below, based on the Redemption Date (calculated for purposes of the table as the period to expiration
of the Warrants) and the “Redemption Fair Market Value” (as such term is defined in this Section 6.2) (a “Make-Whole
Exercise”). Solely for purposes of this Section 6.2, the “Redemption Fair Market Value”
shall mean the volume weighted average price of the Ordinary Shares for the ten (10) trading days immediately following the date
on which notice of redemption pursuant to this Section 6.2 is sent to the Registered Holders. In connection with any redemption
pursuant to this Section 6.2, the Company shall provide the Registered Holders with the Redemption Fair Market Value no
later than one (1) Business Day after the ten (10) trading day period described above ends.
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|
|
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|
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|
|
|
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|
|
|
|
|
|
|
|
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|
|
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|
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Redemption
Fair Market Value of Ordinary Shares (period to expiration of warrants)
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£
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|
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|
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³
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|
Redemption Date
|
|
10.00
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|
|
11.00
|
|
|
12.00
|
|
|
13.00
|
|
|
14.00
|
|
|
15.00
|
|
|
16.00
|
|
|
17.00
|
|
|
18.00
|
|
|
60
months
|
|
|
0.261
|
|
|
|
0.280
|
|
|
|
0.297
|
|
|
|
0.311
|
|
|
|
0.324
|
|
|
|
0.337
|
|
|
|
0.348
|
|
|
|
0.358
|
|
|
|
0.361
|
|
|
57
months
|
|
|
0.257
|
|
|
|
0.277
|
|
|
|
0.294
|
|
|
|
0.310
|
|
|
|
0.324
|
|
|
|
0.337
|
|
|
|
0.348
|
|
|
|
0.358
|
|
|
|
0.361
|
|
|
54
months
|
|
|
0.252
|
|
|
|
0.272
|
|
|
|
0.291
|
|
|
|
0.307
|
|
|
|
0.322
|
|
|
|
0.335
|
|
|
|
0.347
|
|
|
|
0.357
|
|
|
|
0.361
|
|
|
51
months
|
|
|
0.246
|
|
|
|
0.268
|
|
|
|
0.287
|
|
|
|
0.304
|
|
|
|
0.320
|
|
|
|
0.333
|
|
|
|
0.346
|
|
|
|
0.357
|
|
|
|
0.361
|
|
|
48
months
|
|
|
0.241
|
|
|
|
0.263
|
|
|
|
0.283
|
|
|
|
0.301
|
|
|
|
0.317
|
|
|
|
0.332
|
|
|
|
0.344
|
|
|
|
0.356
|
|
|
|
0.361
|
|
|
45
months
|
|
|
0.235
|
|
|
|
0.258
|
|
|
|
0.279
|
|
|
|
0.298
|
|
|
|
0.315
|
|
|
|
0.330
|
|
|
|
0.343
|
|
|
|
0.356
|
|
|
|
0.361
|
|
|
42
months
|
|
|
0.228
|
|
|
|
0.252
|
|
|
|
0.274
|
|
|
|
0.294
|
|
|
|
0.312
|
|
|
|
0.328
|
|
|
|
0.342
|
|
|
|
0.355
|
|
|
|
0.361
|
|
|
39
months
|
|
|
0.221
|
|
|
|
0.246
|
|
|
|
0.269
|
|
|
|
0.290
|
|
|
|
0.309
|
|
|
|
0.325
|
|
|
|
0.340
|
|
|
|
0.354
|
|
|
|
0.361
|
|
|
36
months
|
|
|
0.213
|
|
|
|
0.239
|
|
|
|
0.263
|
|
|
|
0.285
|
|
|
|
0.305
|
|
|
|
0.323
|
|
|
|
0.339
|
|
|
|
0.353
|
|
|
|
0.361
|
|
|
33
months
|
|
|
0.205
|
|
|
|
0.232
|
|
|
|
0.257
|
|
|
|
0.280
|
|
|
|
0.301
|
|
|
|
0.320
|
|
|
|
0.337
|
|
|
|
0.352
|
|
|
|
0.361
|
|
|
30
months
|
|
|
0.196
|
|
|
|
0.224
|
|
|
|
0.250
|
|
|
|
0.274
|
|
|
|
0.297
|
|
|
|
0.316
|
|
|
|
0.335
|
|
|
|
0.351
|
|
|
|
0.361
|
|
|
27
months
|
|
|
0.185
|
|
|
|
0.214
|
|
|
|
0.242
|
|
|
|
0.268
|
|
|
|
0.291
|
|
|
|
0.313
|
|
|
|
0.332
|
|
|
|
0.350
|
|
|
|
0.361
|
|
|
24
months
|
|
|
0.173
|
|
|
|
0.204
|
|
|
|
0.233
|
|
|
|
0.260
|
|
|
|
0.285
|
|
|
|
0.308
|
|
|
|
0.329
|
|
|
|
0.348
|
|
|
|
0.361
|
|
|
21
months
|
|
|
0.161
|
|
|
|
0.193
|
|
|
|
0.223
|
|
|
|
0.252
|
|
|
|
0.279
|
|
|
|
0.304
|
|
|
|
0.326
|
|
|
|
0.347
|
|
|
|
0.361
|
|
|
18
months
|
|
|
0.146
|
|
|
|
0.179
|
|
|
|
0.211
|
|
|
|
0.242
|
|
|
|
0.271
|
|
|
|
0.298
|
|
|
|
0.322
|
|
|
|
0.345
|
|
|
|
0.361
|
|
|
15
months
|
|
|
0.130
|
|
|
|
0.164
|
|
|
|
0.197
|
|
|
|
0.230
|
|
|
|
0.262
|
|
|
|
0.291
|
|
|
|
0.317
|
|
|
|
0.342
|
|
|
|
0.361
|
|
|
12
months
|
|
|
0.111
|
|
|
|
0.146
|
|
|
|
0.181
|
|
|
|
0.216
|
|
|
|
0.250
|
|
|
|
0.282
|
|
|
|
0.312
|
|
|
|
0.339
|
|
|
|
0.361
|
|
|
9
months
|
|
|
0.090
|
|
|
|
0.125
|
|
|
|
0.162
|
|
|
|
0.199
|
|
|
|
0.237
|
|
|
|
0.272
|
|
|
|
0.305
|
|
|
|
0.336
|
|
|
|
0.361
|
|
|
6
months
|
|
|
0.065
|
|
|
|
0.099
|
|
|
|
0.137
|
|
|
|
0.178
|
|
|
|
0.219
|
|
|
|
0.259
|
|
|
|
0.296
|
|
|
|
0.331
|
|
|
|
0.361
|
|
|
3
months
|
|
|
0.034
|
|
|
|
0.065
|
|
|
|
0.104
|
|
|
|
0.150
|
|
|
|
0.197
|
|
|
|
0.243
|
|
|
|
0.286
|
|
|
|
0.326
|
|
|
|
0.361
|
|
|
0
months
|
|
|
—
|
|
|
|
—
|
|
|
|
0.042
|
|
|
|
0.115
|
|
|
|
0.179
|
|
|
|
0.233
|
|
|
|
0.281
|
|
|
|
0.323
|
|
|
|
0.361
|
|
The exact Redemption Fair Market Value and Redemption Date may
not be set forth in the table above, in which case, if the Redemption Fair Market Value is between two values in the table or the
Redemption Date is between two redemption dates in the table, the number of Ordinary Shares to be issued for each Warrant exercised
in a Make-Whole Exercise shall be determined by a straight-line interpolation between the number of shares set forth for the higher
and lower Redemption Fair Market Values and the earlier and later redemption dates, as applicable, based on a 365- or 366-day year,
as applicable.
The share prices set forth in the column headings of the table
above shall be adjusted as of any date on which the number of shares issuable upon exercise of a Warrant or the Exercise Price
is adjusted pursuant to Section 4 hereof. If the number of shares issuable upon exercise of a Warrant is adjusted pursuant
to Section 4 hereof, the adjusted share prices in the column headings shall equal the share prices immediately prior to such adjustment,
multiplied by
a fraction, the numerator of which is the number of shares deliverable
upon exercise of a Warrant immediately prior to such adjustment and the denominator of which is the number of shares deliverable
upon exercise of a Warrant as so adjusted. The number of shares in the table above shall be adjusted in the same manner and at
the same time as the number of shares issuable upon exercise of a Warrant. If the Exercise Price of a warrant is adjusted, (a)
in the case of an adjustment pursuant to Section 4.4 hereof, the adjusted share prices in the column headings shall equal the share
prices immediately prior to such adjustment multiplied by a fraction, the numerator of which is the higher of the Market Value
and the Newly Issued Price and the denominator of which is $10.00 and (b) in the case of an adjustment pursuant to Section 4.1.2
hereof, the adjusted share prices in the column headings shall equal the share prices immediately prior to such adjustment less
the decrease in the Exercise Price pursuant to such Exercise Price adjustment. In no event shall the number of shares issued in
connection with a Make-Whole Exercise exceed 0.361 Ordinary Shares per Warrant (subject to adjustment)
6.3. Date Fixed for, and Notice of, Redemption;
Redemption Price; Reference Value. In the event that the Company elects to redeem the Warrants pursuant to Sections
6.1 or 6.2, the Company shall fix a date for the redemption (the “Redemption Date”).
Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company not less than thirty (30) days
prior to the Redemption Date (the “30-day Redemption Period”) to the Registered Holders of the
Warrants to be redeemed at their last addresses as they shall appear on the registration books. Any notice mailed in the
manner herein provided shall be conclusively presumed to have been duly given whether or not the Registered Holder received
such notice. As used in this Agreement, (a) “Redemption Price” shall mean the price per Warrant at
which any Warrants are redeemed pursuant to Sections 6.1 or 6.2 and (b) “Reference
Value” shall mean the last reported sales price of the Ordinary Shares for any twenty (20) trading days within
the thirty (30) trading-day period ending on the third trading day prior to the date on which notice of the redemption is
given.
6.4. Exercise After Notice of Redemption. The Warrants
may be exercised, for cash (or on a “cashless basis” in accordance with Section 6.2 of this Agreement) at any
time after notice of redemption shall have been given by the Company pursuant to Section 6.3 hereof and prior to the Redemption
Date. On and after the Redemption Date, the record holder of the Warrants shall have no further rights except to receive, upon
surrender of the Warrants, the Redemption Price.
6.5. Exclusion of Private Placement Warrants. The Company
agrees that (a) the redemption rights provided in Section 6.1 hereof shall not apply to the Private Placement Warrants if
at the time of the redemption such Private Placement Warrants continue to be held by the Sponsor or its Permitted Transferees and
(b) if the Reference Value equals or exceeds $18.00 per share (subject to adjustment in compliance with Section 4 hereof),
the redemption rights provided in Section 6.2 hereof shall not apply to the Private Placement Warrants if at the time of
the redemption such Private Placement Warrants continue to be held by the Sponsor or its Permitted Transferees. However, once such
Private Placement Warrants are transferred (other than to Permitted Transferees in accordance with Section 2.6 hereof),
the Company may redeem the Private Placement Warrants pursuant to Section 6.1 or 6.2 hereof, provided that the criteria
for redemption are met, including the opportunity of the holder of such Private Placement Warrants to exercise the Private Placement
Warrants prior to redemption pursuant to Section 6.4 hereof. Private Placement Warrants that are transferred to persons
other than Permitted Transferees shall upon such transfer cease to be Private Placement Warrants and shall become Public Warrants
under this Agreement, including for purposes of Section 9.8 hereof.
7. Other Provisions Relating to Rights of Holders of Warrants.
7.1. No Rights as Shareholder. A Warrant does not entitle
the Registered Holder thereof to any of the rights of a shareholder of the Company, including, without limitation, the right to
receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as shareholders
in respect of the meetings of shareholders or the election of directors of the Company or any other matter.
7.2. Lost, Stolen, Mutilated, or Destroyed Warrants.
If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent may on such terms as to indemnity or
otherwise as they may in their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof),
issue a new Warrant of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated, or destroyed. Any such new
Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated,
or destroyed Warrant shall be at any time enforceable by anyone.
7.3. Reservation of Ordinary Shares. The Company shall
at all times reserve and keep available a number of its authorized but unissued Ordinary Shares that shall be sufficient to permit
the exercise in full of all outstanding Warrants issued pursuant to this Agreement.
7.4. Registration of Ordinary Shares; Cashless Exercise at
Company’s Option.
7.4.1. Registration of the Ordinary Shares. The
Company agrees that as soon as practicable, but in no event later than twenty (20) Business Days after the closing of its
initial Business Combination, it shall use its commercially reasonable efforts to file with the Commission a registration
statement for the registration, under the Securities Act, of the Ordinary Shares issuable upon exercise of the Warrants. The
Company shall use its commercially reasonable efforts to cause the same to become effective within sixty (60) Business Days
following the closing of its initial Business Combination and to maintain the effectiveness of such registration statement,
and a current prospectus relating thereto, until the expiration or redemption of the Warrants in accordance with the
provisions of this Agreement. If any such registration statement has not been declared effective by the sixtieth
(60th) Business Day following the closing of the Business Combination, holders of the Warrants shall have the right,
during the period beginning on the sixty-first (61st) Business Day after the closing of the Business Combination and
ending upon such registration statement being declared effective by the Commission, and during any other period when the
Company shall fail to have maintained an effective registration statement covering the issuance of the Ordinary Shares
issuable upon exercise of the Warrants, to exercise such Warrants on a “cashless basis,” by exchanging the
Warrants (in accordance with Section 3(a)(9) of the Securities Act or another exemption) for that number of Ordinary Shares
equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of Ordinary Shares underlying the
Warrants, multiplied by the excess of the “Fair Market Value” (as defined below) less the Warrant Price by (y)
the Fair Market Value and (B) 0.361. Solely for purposes of this subsection 7.4.1, “Fair Market
Value” shall mean the volume-weighted average price of the Ordinary Shares as reported during the ten (10)
trading day period ending on the trading day prior to the date that notice of exercise is received by the Warrant Agent from
the holder of such Warrants or its securities broker or intermediary. The date that notice of “cashless exercise”
is received by the Warrant Agent shall be conclusively determined by the Warrant Agent. In connection with the
“cashless exercise” of a Public Warrant, the Company shall, upon request, provide the Warrant Agent with an
opinion of counsel for the Company (which shall be an outside law firm with securities law experience) stating that (i) the
exercise of the Warrants on a “cashless basis” in accordance with this subsection 7.4.1 is not required to
be registered under the Securities Act and (ii) the Ordinary Shares issued upon such exercise shall be freely tradable under
United States federal securities laws by anyone who is not an affiliate (as such term is defined in Rule 144 under the
Securities Act) of the Company and, accordingly, shall not be required to bear a restrictive legend. Except as provided in subsection
7.4.2, for the avoidance of doubt, unless and until all of the Warrants have been exercised or have expired, the Company
shall continue to be obligated to comply with its registration obligations under the first three sentences of this subsection
7.4.1.
7.4.2. Cashless Exercise at Company’s Option. If
the Ordinary Shares are at the time of any exercise of a Public Warrant not listed on a national securities exchange such that
they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may,
at its option, (i) require holders of Public Warrants who exercise Public Warrants to exercise such Public Warrants on a “cashless
basis” in accordance with Section 3(a)(9) of the Securities Act as described in subsection 7.4.1 and (ii) in the event
the Company so elects, the Company shall (x) not be required to file or maintain in effect a registration statement for the registration,
under the Securities Act, of the Ordinary Shares issuable upon exercise of the Warrants, notwithstanding anything in this Agreement
to the contrary, and (y) use its commercially reasonable efforts to register or qualify for sale the Ordinary Shares issuable upon
exercise of the Public Warrant under applicable blue sky laws to the extent an exemption is not available.
8. Concerning the Warrant Agent and Other Matters.
8.1. Payment of Taxes. The Company shall from time to
time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent in respect of the issuance or
delivery of Ordinary Shares upon the exercise of the Warrants, but the Company shall not be obligated to pay any transfer taxes
in respect of the Warrants or such shares.
8.2. Resignation, Consolidation, or Merger of Warrant Agent.
8.2.1. Appointment of Successor Warrant Agent. The Warrant
Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities
hereunder after giving sixty (60) days’ notice in writing to the Company. If the office of the Warrant Agent becomes vacant
by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the
Warrant Agent. If the Company shall fail to make such appointment within a period of thirty (30) days after it has been notified
in writing of such resignation or incapacity by the Warrant Agent or by the holder of a Warrant (who shall, with such notice, submit
his, her or its Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court of the State
of New York for the County of New York for the appointment of a successor Warrant Agent at the Company’s cost. Any successor
Warrant Agent, whether appointed by the Company or by such court, shall be a corporation or other entity organized and existing
under the laws of the State of New York, in good standing and having its principal office in the United States of America, and
authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authority.
After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and
obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further
act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver,
at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and rights
of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge,
and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant
Agent all such authority, powers, rights, immunities, duties, and obligations.
8.2.2. Notice of Successor Warrant Agent. In the event
a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent and the Transfer
Agent for the Ordinary Shares not later than the effective date of any such appointment.
8.2.3. Merger or Consolidation of Warrant Agent. Any
entity into which the Warrant Agent may be merged or with which it may be consolidated or any entity resulting from any merger
or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Agreement without
any further act.
8.3. Fees and Expenses of Warrant Agent.
8.3.1. Remuneration. The Company agrees to pay the Warrant
Agent reasonable remuneration for its services as such Warrant Agent hereunder and shall, pursuant to its obligations under this
Agreement, reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the execution
of its duties hereunder.
8.3.2. Further Assurances. The Company agrees to perform,
execute, acknowledge, and deliver or cause to be performed, executed, acknowledged, and delivered all such further and other acts,
instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions
of this Agreement.
8.4. Liability of Warrant Agent.
8.4.1. Reliance on Company Statement. Whenever in the
performance of its duties under this Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter
be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence
in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed
by
the Chief Executive Officer, the President, the Chief Financial
Officer, Chief Operating Officer, the General Counsel, the Secretary or the Chairman of the Board of the Company and delivered
to the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant
to the provisions of this Agreement.
8.4.2. Indemnity. The Warrant Agent shall be liable hereunder
only for its own gross negligence, willful misconduct, fraud or bad faith. The Company agrees to indemnify the Warrant Agent and
save it harmless against any and all liabilities, including judgments, out-of-pocket costs and reasonable outside counsel fees,
for anything done or omitted by the Warrant Agent in the execution of this Agreement, except as a result of the Warrant Agent’s
gross negligence, willful misconduct, fraud or bad faith.
8.4.3. Exclusions. The Warrant Agent shall have no responsibility
with respect to the validity of this Agreement or with respect to the validity or execution of any Warrant (except its countersignature
thereof). The Warrant Agent shall not be responsible for any breach by the Company of any covenant or condition contained in this
Agreement or in any Warrant. The Warrant Agent shall not be responsible to make any adjustments required under the provisions of
Section 4 hereof or responsible for the manner, method, or amount of any such adjustment or the ascertaining of the existence
of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any Ordinary Shares to be issued pursuant to this Agreement or any Warrant or as to whether
any Ordinary Shares shall, when issued, be valid and fully paid and nonassessable.
8.5. Acceptance of Agency. The Warrant Agent hereby accepts
the agency established by this Agreement and agrees to perform the same upon the terms and conditions herein set forth and among
other things, shall account promptly to the Company with respect to Warrants exercised and concurrently account for, and pay to
the Company, all monies received by the Warrant Agent for the purchase of Ordinary Shares through the exercise of the Warrants.
8.6. Waiver. The Warrant Agent has no right of set-off
or any other right, title, interest or claim of any kind (“Claim”) in, or to any distribution of, the
Trust Account (as defined in that certain Investment Management Trust Agreement, dated as of the date hereof, by and between the
Company and Continental Stock Transfer & Trust Company as trustee thereunder) and hereby agrees not to seek recourse, reimbursement,
payment or satisfaction for any Claim against the Trust Account for any reason whatsoever. The Warrant Agent hereby waives any
and all Claims against the Trust Account and any and all rights to seek access to the Trust Account.
9. Miscellaneous Provisions.
9.1. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective
successors and assigns.
9.2. Notices. Any notice, statement or demand authorized
by this Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company shall be sufficiently
given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5)
days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Company with the
Warrant Agent), as follows:
Frontier Acquisition Corp.
660 Madison Avenue, 19th Floor
New York, NY 10065
Attention: Chief Executive Officer
with a copy to:
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
Attention: Christian O. Nagler
James S. Rowe
Any notice, statement or demand authorized by this Agreement
to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given when
so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after
deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company),
as follows:
Continental Stock Transfer & Trust Company
One State Street, 30th Floor
New York, NY 10004
Attention: Compliance Department
9.3. Applicable Law. The validity, interpretation, and
performance of this Agreement and of the Warrants shall be governed in all respects by the laws of the State of New York. Subject
to applicable law, the Company hereby agrees that any action, proceeding or claim against it arising out of or relating in any
way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court
for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive forum
for any such action, proceeding or claim. The Company hereby waives any objection to such exclusive jurisdiction and that such
courts represent an inconvenient forum. Notwithstanding the foregoing, the provisions of this paragraph will not apply to suits
brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of
the United States of America are the sole and exclusive forum.
Any person or entity purchasing or otherwise acquiring any interest
in the Warrants shall be deemed to have notice of and to have consented to the forum provisions in this Section 9.3. If any action,
the subject matter of which is within the scope the forum provisions above, is filed in a court other than a court located within
the State of New York or the United States District Court for the Southern District of New York (a “foreign action”)
in the name of any warrant holder, such warrant holder shall be deemed to have consented to: (x) the personal jurisdiction of the
state and federal courts located within the State of New York or the United States District Court for the Southern District of
New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”),
and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s
counsel in the foreign action as agent for such warrant holder.
9.4. Persons Having Rights under this Agreement. Nothing
in this Agreement shall be construed to confer upon, or give to, any person, corporation or other entity other than the parties
hereto and the Registered Holders of the Warrants any right, remedy, or claim under or by reason of this Agreement or of any covenant,
condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations, promises, and agreements contained
in this Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors and assigns and of the
Registered Holders of the Warrants.
9.5. Examination of the Warrant Agreement. A copy of
this Agreement shall be available at all reasonable times at the office of the Warrant Agent in the United States of America, for
inspection by the Registered Holder of any Warrant. The Warrant Agent may require any such holder to submit such holder’s
Warrant for inspection by the Warrant Agent.
9.6. Counterparts. This Agreement may be executed in
any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same instrument.
9.7. Effect of Headings. The section headings herein
are for convenience only and are not part of this Agreement and shall not affect the interpretation thereof.
9.8. Amendments. This Agreement may be amended by the
parties hereto without the consent of any Registered Holder for the purpose of (i) curing any ambiguity or to correct any mistake,
including to conform the provisions hereof to the description of the terms of the Warrants and this Agreement set forth in the
Prospectus, or defective provision contained herein, (ii) amending the definition of “Ordinary Cash Dividend” as contemplated
by and in accordance with the second sentence of subsection 4.1.2 or (iii) adding or changing any provisions with respect to matters
or questions arising under this Agreement as the parties may deem necessary or desirable and that the parties deem shall not adversely
affect the rights of the Registered Holders under this Agreement. All other modifications or amendments, including any modification
or amendment to increase the Warrant Price or shorten the Exercise Period and any amendment to the terms of only the Private Placement
Warrants, shall require the vote or written consent of the Registered Holders of 50% of the then-outstanding Public Warrants and,
solely with respect to any amendment to the terms of the Private Placement Warrants or any provision of this Agreement with respect
to the Private Placement Warrants, 50% of the then-outstanding Private Placement Warrants. Notwithstanding the foregoing, the Company
may lower the Warrant Price or extend the duration of the Exercise Period pursuant to Sections 3.1 and 3.2, respectively,
without the consent of the Registered Holders.
9.9. Severability. This Agreement shall be deemed severable,
and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this
Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision,
the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid
or unenforceable provision as may be possible and be valid and enforceable.
Exhibit A Form of Warrant Certificate
Exhibit B Legend — Private Placement Warrants
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date first above written.
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FRONTIER ACQUISITION CORP.
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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
[WARRANT CERTIFICATE TO BE ATTACHED]
EXHIBIT B
LEGEND
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS
OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. IN ADDITION, SUBJECT TO ANY ADDITIONAL LIMITATIONS ON TRANSFER DESCRIBED IN THE
LETTER AGREEMENT BY AND AMONG FRONTIER ACQUISITION CORP. (THE “COMPANY”), FRONTIER ACQUISITION SPONSOR
LLC AND THE OTHER PARTIES THERETO, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED PRIOR TO THE DATE
THAT IS THIRTY (30) DAYS AFTER THE DATE UPON WHICH THE COMPANY COMPLETES ITS INITIAL BUSINESS COMBINATION (AS DEFINED IN SECTION
3 OF THE WARRANT AGREEMENT REFERRED TO HEREIN) EXCEPT TO A PERMITTED TRANSFEREE (AS DEFINED IN SECTION 2 OF THE WARRANT AGREEMENT)
WHO AGREES IN WRITING WITH THE COMPANY TO BE SUBJECT TO SUCH TRANSFER PROVISIONS.
SECURITIES EVIDENCED BY THIS CERTIFICATE AND CLASS A ORDINARY
SHARES OF THE COMPANY ISSUED UPON EXERCISE OF SUCH SECURITIES SHALL BE ENTITLED TO REGISTRATION RIGHTS UNDER A REGISTRATION AND
SHAREHOLDER RIGHTS AGREEMENT TO BE EXECUTED BY THE COMPANY.
NO. [ ] WARRANT
Exhibit
10.1
INVESTMENT MANAGEMENT TRUST AGREEMENT
This Investment Management Trust Agreement (this “Agreement”)
is made effective as of [●], 2021 by and between Frontier Acquisition Corp., a Cayman Islands exempted company (the “Company”),
and Continental Stock Transfer & Trust Company, a New York corporation (the “Trustee”).
WHEREAS, the Company’s registration statement on Form
S-1, File No. [●] (the “Registration Statement”) and prospectus (the “Prospectus”)
for the initial public offering of the Company’s units (the “Units”), each of which consists of
one of the Company’s Class A ordinary shares, par value $0.0001 per share (the “Ordinary Shares”),
and one-third of one redeemable warrant, each whole warrant entitling the holder thereof to purchase one Ordinary Share (such initial
public offering hereinafter referred to as the “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 Credit Suisse Securities (USA) LLC (the “Underwriter”);
and
WHEREAS, as described in the Prospectus, $200,000,000 of the
gross proceeds of the Offering and sale of the Private Placement Units (as defined in the Underwriting Agreement) (or $230,000,000
if the Underwriter’s option to purchase additional units is exercised in full) will be delivered to the Trustee to be deposited
and held in a segregated trust account located at all times in the United States (the “Trust Account”)
for the benefit of the Company and the holders of the Ordinary Shares included in the Units issued in the Offering as hereinafter
provided (the amount to be delivered to the Trustee (and any interest subsequently earned thereon) is referred to herein as the
“Property,” the shareholders for whose benefit the Trustee shall hold the Property will be referred
to as the “Public Shareholders,” and the Public Shareholders and the Company will be referred
to together as the “Beneficiaries”); and
WHEREAS, pursuant to the Underwriting Agreement, a portion of
the Property equal to $7,000,000, or $8,050,000 if the Underwriter’s option to purchase additional units is exercised in
full, is attributable to deferred underwriting discounts and commissions that will be payable by the Company to the Underwriter
upon the consummation of the Business Combination (as defined below) (the “Deferred Discount”); and
WHEREAS, the Company and the Trustee desire to enter into this
Agreement to set forth the terms and conditions pursuant to which the Trustee shall hold the Property.
NOW THEREFORE, IT IS AGREED:
1. Agreements and Covenants of Trustee. The Trustee hereby
agrees and covenants to:
(a) Hold the Property in trust for the Beneficiaries in accordance
with the terms of this Agreement in the Trust Account established by the Trustee in the United States at J.P. Morgan Chase Bank,
N.A. (or at another U.S. chartered commercial bank with consolidated assets of $100 billion or more) in the United States, maintained
by Trustee and at a brokerage institution selected by the Trustee that is reasonably satisfactory to the Company;
(b) Manage, supervise and administer the Trust Account subject
to the terms and conditions set forth herein;
(c) In a timely manner, upon the written instruction of the
Company, invest and reinvest the Property in United States government securities within the meaning of Section 2(a)(16) of the
Investment Company Act of 1940, as amended, having a maturity of 185 days or less, or in money market funds meeting the conditions
of paragraphs (d)(1), (d)(2), (d)(3) and (d)(4) of Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended (or
any successor rule), which invest only in direct U.S. government treasury obligations, as determined by the Company; the Trustee
may not invest in any other securities or assets, it being understood that the Trust Account will earn no interest while account
funds are uninvested awaiting the Company’s instructions hereunder and the Trustee may earn bank credits or other consideration;
(d) Collect and receive, when due, all principal, interest or
other income arising from the Property, which shall become part of the “Property,” as such term is used
herein;
(e) Promptly notify the Company and the Underwriter of all communications
received by the Trustee with respect to any Property requiring action by the Company;
(f) Supply any necessary information or documents as may be
requested by the Company (or its authorized agents) in connection with the Company’s preparation of the tax returns relating
to assets held in the Trust Account;
(g) Participate in any plan or proceeding for protecting or
enforcing any right or interest arising from the Property if, as and when instructed by the Company to do so;
(h) Render to the Company monthly written statements of the
activities of, and amounts in, the Trust Account reflecting all receipts and disbursements of the Trust Account;
(i) Commence liquidation of the Trust Account only after and
promptly after (x) receipt of, and only in accordance with, the terms of a letter from the Company (“Termination Letter”)
in a form substantially similar to that attached hereto as either Exhibit A or Exhibit B, as applicable, signed on
behalf of the Company by its Chief Executive Officer, Chief Financial Officer or other authorized officer of the Company, and complete
the liquidation of the Trust Account and distribute the Property in the Trust Account, including interest earned on the funds held
in the Trust Account and not previously released to us to pay our income taxes (less up to $100,000 of interest to pay dissolution
expenses), only as directed in the Termination Letter and the other documents referred to therein, or (y) upon the date which is
the later of (1) 24 months after the closing of the Offering and (2) such later date as may be approved by the Company’s
shareholders in accordance with the Company’s amended and restated memorandum and articles of association, if a Termination
Letter has not been received by the Trustee prior to such date, in which case the Trust Account shall be liquidated in accordance
with the procedures set forth in the Termination Letter attached as Exhibit B and the Property in the Trust Account, including
interest earned on the funds held in the Trust Account and not previously released to the Company to pay its income taxes (less
up to $100,000 of interest to pay dissolution expenses), shall be distributed to the Public Shareholders of record as of such date;
(j) Upon written request from the Company, which may be given
from time to time in a form substantially similar to that attached hereto as Exhibit C (a “Tax Payment Withdrawal
Instruction”), withdraw from the Trust Account and distribute to the Company the amount of interest earned on the
Property requested by the Company to cover any tax obligation owed by the Company as a result of assets of the Company or interest
or other income earned on the Property, which amount shall be delivered directly to the Company by electronic funds transfer or
other method of prompt payment, and the Company shall forward such payment to the relevant taxing authority, so long as there is
no reduction in the principal amount per share initially deposited in the Trust Account; provided, however, that
to the extent there is not sufficient cash in the Trust Account to pay such tax obligation, the Trustee shall liquidate such assets
held in the Trust Account as shall be designated by the Company in writing to make such distribution (it being acknowledged and
agreed that any such amount in excess of interest income earned on the Property shall not be payable from the Trust Account). The
written request of the Company referenced above shall constitute presumptive evidence that the Company is entitled to said funds,
and the Trustee shall have no responsibility to look beyond said request;
(k) Upon written request from the Company, which may be given
from time to time in a form substantially similar to that attached hereto as Exhibit D (a “Shareholder Redemption
Withdrawal Instruction”), the Trustee shall distribute to the remitting brokers on behalf of Public Shareholders
redeeming Ordinary Shares the amount required to pay redeemed Ordinary Shares from Public Shareholders pursuant to the Company’s
amended and restated memorandum and articles of association; and
(l) Not make any withdrawals or distributions from the Trust
Account other than pursuant to Section 1(i), (j) or (k) above.
2. Agreements and Covenants of the Company. The Company
hereby agrees and covenants to:
(a) Give all instructions to the Trustee hereunder in
writing, signed by the Company’s Chief Executive Officer, Chief Financial Officer or other authorized officer of the
Company. In addition, except with respect to its duties under Sections 1(i), (j) or (k) hereof, the
Trustee shall be entitled to rely on, and shall be protected in relying on, any verbal or telephonic advice or instruction
which it, in good faith and with reasonable care, believes to be given by any one of the persons authorized above to give
written instructions, provided that the Company shall promptly confirm such instructions in writing;
(b) Subject to Section 4 hereof, hold the Trustee harmless
and indemnify the Trustee from and against any and all expenses, including reasonable counsel fees and disbursements, or losses
suffered by the Trustee in connection with any action taken by it hereunder and in connection with any action, suit or other proceeding
brought against the Trustee involving any claim, or in connection with any claim or demand, which in any way arises out of or relates
to this Agreement, the services of the Trustee hereunder, or the Property or any interest earned on the Property, except for expenses
and losses resulting from the Trustee’s gross negligence, fraud or willful misconduct. Promptly after the receipt by the
Trustee of notice of demand or claim or the commencement of any action, suit or proceeding, pursuant to which the Trustee intends
to seek indemnification under this Section 2(b), it shall notify the Company in writing of such claim (hereinafter referred
to as the “Indemnified Claim”). The Trustee shall have the right to conduct and manage the defense against
such Indemnified Claim; provided that the Trustee shall obtain the consent of the Company with respect to the selection
of counsel, which consent shall not be unreasonably withheld. The Trustee may not agree to settle any Indemnified Claim without
the prior written consent of the Company, which such consent shall not be unreasonably withheld. The Company may participate in
such action with its own counsel;
(c) Pay the Trustee the fees set forth on Schedule A
hereto, including an initial acceptance fee, annual administration fee, and transaction processing fee which fees shall be subject
to modification by the parties from time to time. It is expressly understood that the Property shall not be used to pay such fees
unless and until it is distributed to the Company pursuant to Sections 1(i) through 1(k) hereof. The Company shall
pay the Trustee the initial acceptance fee and the first annual administration fee at the consummation of the 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 shareholders
regarding a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination involving
the Company and one or more businesses (the “Business Combination”), provide to the Trustee an affidavit
or certificate of the inspector of elections for the shareholder meeting verifying the vote of such shareholders regarding such
Business Combination;
(e) Provide the Underwriter with a copy of any Termination Letter(s)
and/or any other correspondence that is sent to the Trustee with respect to any proposed withdrawal from the Trust Account promptly
after it issues the same;
(f) Unless otherwise agreed between the Company and the Underwriter,
ensure that any Instruction Letter (as defined in Exhibit A) delivered in connection with a Termination Letter in the form
of Exhibit A expressly provides that the Deferred Discount is paid directly to the account or accounts directed by the Underwriter
prior to any transfer of the funds held in the Trust Account to the Company or any other person;
(g) Instruct the Trustee to make only those distributions that
are permitted under this Agreement, and refrain from instructing the Trustee to make any distributions that are not permitted under
this Agreement;
(h) If the Company seeks to amend any provisions of its amended
and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to
provide holders of the Ordinary Shares the right to have their shares redeemed in connection with the Company’s initial Business
Combination or to redeem 100% of the Ordinary Shares if the Company does not complete its initial Business Combination within the
time period set forth therein or (B) with respect to any other provision relating to the rights of holders of the Ordinary Shares
(in each case, an “Amendment”), the Company will provide the Trustee with a letter (an “Amendment
Notification Letter”) in the form of Exhibit D providing instructions for the distribution of funds to Public
Shareholders who exercise their redemption option in connection with such Amendment; and
(i) Within five (5) business days after the Underwriter exercise
their option to purchase additional units (or any unexercised portion thereof) or such option to purchase additional units expires,
provide the Trustee with a notice in writing of the total amount of the Deferred Discount.
3. Limitations of Liability. The Trustee shall have no
responsibility or liability to:
(a) Imply obligations, perform duties, inquire or otherwise
be subject to the provisions of any agreement or document other than this Agreement and that which is expressly set forth herein;
(b) Take any action with respect to the Property, other than
as directed in Section 1 hereof, and the Trustee shall have no liability to any third party except for liability arising
out of the Trustee’s gross negligence, fraud or willful misconduct;
(c) Institute any proceeding for the collection of any principal
and income arising from, or institute, appear in or defend any proceeding of any kind with respect to, any of the Property unless
and until it shall have received written instructions from the Company given as provided herein to do so and the Company shall
have advanced or guaranteed to it funds sufficient to pay any expenses incident thereto;
(d) Change the investment of any Property, other than in compliance
with Section 1 hereof;
(e) Refund any depreciation in principal of any Property;
(f) Assume that the authority of any person designated by the
Company to give instructions hereunder shall not be continuing unless provided otherwise in such designation, or unless the Company
shall have delivered a written revocation of such authority to the Trustee;
(g) The other parties hereto or to anyone else for any action
taken or omitted by it, or any action suffered by it to be taken or omitted, in good faith and in the Trustee’s best judgment,
except for the Trustee’s gross negligence, fraud or willful misconduct. The Trustee may rely conclusively and shall be protected
in acting upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Trustee, which
counsel may be the Company’s counsel), statement, instrument, report or other paper or document (not only as to its due execution
and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained)
which the Trustee believes, in good faith and with reasonable care, to be genuine and to be signed or presented by the proper person
or persons. The Trustee shall not be bound by any notice or demand, or any waiver, modification, termination or rescission of this
Agreement or any of the terms hereof, unless evidenced by a written instrument delivered to the Trustee, signed by the proper party
or parties and, if the duties or rights of the Trustee are affected, unless it shall give its prior written consent thereto;
(h) Verify the accuracy of the information contained in the
Registration Statement;
(i) Provide any assurance that any Business Combination entered
into by the Company or any other action taken by the Company is as contemplated by the Registration Statement;
(j) File information returns with respect to the Trust Account
with any local, state or federal taxing authority or provide periodic written statements to the Company documenting the taxes payable
by the Company, if any, relating to any interest income earned on the Property;
(k) Prepare, execute and file tax reports, income or other tax
returns and pay any taxes with respect to any income generated by, and activities relating to, the Trust Account, regardless of
whether such tax is payable by the Trust Account or the Company, including, but not limited to, income tax obligations, except
pursuant to Section 1(j) hereof; or
(l) Verify calculations, qualify or otherwise approve the Company’s
written requests for distributions pursuant to Sections 1(i), 1(j) or 1(k) hereof.
4. Trust Account Waiver. The Trustee has no right of
set-off or any right, title, interest or claim of any kind (“Claim”) to, or to any monies in, the Trust
Account, and hereby irrevocably waives any Claim to, or to any monies in, the Trust Account that it may have now or in the future.
In the event the Trustee has any Claim against the Company under this Agreement, including, without limitation, under Section
2(b) or Section 2(c) hereof, the Trustee shall pursue such Claim solely against the Company and its assets outside the
Trust Account and not against the Property or any monies in the Trust Account.
5. Termination. This Agreement shall terminate as follows:
(a) If the Trustee gives written notice to the Company
that it desires to resign under this Agreement, the Company shall use its reasonable efforts to locate a successor trustee,
pending which the Trustee shall continue to act in accordance with this Agreement. At such time that the Company notifies the
Trustee that a successor trustee has been appointed by the Company and has agreed to become subject to the terms of this
Agreement, the Trustee shall transfer the management of the Trust Account to the successor trustee, including but not limited
to the transfer of copies of the reports and statements relating to the Trust Account, whereupon this Agreement shall
terminate; provided, however, that in the event that the Company does not locate a successor trustee within
ninety (90) days of receipt of the resignation notice from the Trustee, the Trustee may submit an application to have the
Property deposited with any court in the State of New York or with the United States District Court for the Southern District
of New York and upon such deposit, the Trustee shall be immune from any liability whatsoever; or
(b) At such time that the Trustee has completed the liquidation
of the Trust Account and its obligations in accordance with the provisions of Section 1(i) hereof and distributed the Property
in accordance with the provisions of the Termination Letter, this Agreement shall terminate except with respect to Section 2(b).
6. Miscellaneous.
(a) The Company and the Trustee each acknowledge that the Trustee
will follow the security procedures set forth below with respect to funds transferred from the Trust Account. The Company and the
Trustee will each restrict access to confidential information relating to such security procedures to authorized persons. Each
party must notify the other party immediately if it has reason to believe unauthorized persons may have obtained access to such
confidential information, or of any change in its authorized personnel. In executing funds transfers, the Trustee shall rely upon
all information supplied to it by the Company, including, account names, account numbers, and all other identifying information
relating to a Beneficiary, Beneficiary’s bank or intermediary bank. Except for any liability arising out of the Trustee’s
gross negligence, fraud or willful misconduct, the Trustee shall not be liable for any loss, liability or expense resulting from
any error in the information or transmission of the funds.
(b) This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of New York, without giving effect to conflicts of law principles that would result in
the application of the substantive laws of another jurisdiction. This Agreement may be executed in several original or facsimile
counterparts, each one of which shall constitute an original, and together shall constitute but one instrument.
(c) This Agreement contains the entire agreement and understanding
of the parties hereto with respect to the subject matter hereof. Except for Section 1(i), 1(j) and 1(k) hereof
(which sections may not be modified, amended or deleted without the affirmative vote of sixty-five percent (65%) of the then outstanding
Ordinary Shares and Class B ordinary shares, par value $0.0001 per share, of the Company, voting together as a single class; provided
that no such amendment will affect any Public Shareholder who has properly elected to redeem his or her Ordinary Shares in
connection with a shareholder vote to amend this Agreement to modify the substance or timing of the Company’s obligation
to provide for the redemption of the Public Shares in connection with an initial Business Combination or an Amendment or to redeem
100% of its Ordinary Shares if the Company does not complete its initial Business Combination within the time frame specified in
the Company’s amended and restated memorandum and articles of association), this Agreement or any provision hereof may only
be changed, amended or modified (other than to correct a typographical error) by a writing signed by each of the parties hereto.
(d) The parties hereto consent to the jurisdiction and venue
of any state or federal court located in the City of New York, State of New York, for purposes of resolving any disputes hereunder.
AS TO ANY CLAIM, CROSS-CLAIM OR COUNTERCLAIM IN ANY WAY RELATING TO THIS AGREEMENT, EACH PARTY WAIVES THE RIGHT TO TRIAL BY JURY.
(e) Any notice, consent or request to be given in connection
with any of the terms or provisions of this Agreement shall be in writing and shall be sent by express mail or similar private
courier service, by certified mail (return receipt requested), by hand delivery or by electronic mail:
if to the Trustee, to:
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Continental Stock Transfer & Trust Company
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1 State Street, 30th Floor
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New York, New York 10004
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Attn: Francis Wolf & Celeste Gonzalez
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Email: fwolf@continentalstock.com
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cgonzalez@continentalstock.com
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if to the Company, to:
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Frontier Acquisition Corp.
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660 Madison Avenue, 19th Floor
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New York, NY 10065
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Attn: Cathy Weist
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Email: legal@falconedgecap.com
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in each case, with copies to:
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Kirkland & Ellis LLP
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601 Lexington Avenue
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New York, New York 10022
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Attn: Christian O. Nagler
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James S. Rowe
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E-mail: cnagler@kirkland.com
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james.rowe@kirkland.com
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and
Credit Suisse Securities (USA) LLC
11 Madison Avenue
New York, New York 10010
Attn: IB-Legal
Facsimile: (212) 325-4296
and
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Davis Polk & Wardwell LLP
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450 Lexington Avenue
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New York, New York 10013
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Attn.: Derek J. Dostal
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Deanna L. Kirkpatrick
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Email: derek.dostal@davispolk.com
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deanna.kirkpatrick@davispolk.com
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(f) Each of the Company and the Trustee hereby represents that
it has the full right and power and has been duly authorized to enter into this Agreement and to perform its respective obligations
as contemplated hereunder. The Trustee acknowledges and agrees that it shall not make any claims or proceed against the Trust Account,
including by way of set-off, and shall not be entitled to any funds in the Trust Account under any circumstance.
(g) This Agreement is the joint product of the Trustee and the
Company and each provision hereof has been subject to the mutual consultation, negotiation and agreement of such parties and shall
not be construed for or against any party hereto.
(h) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument.
Delivery of a signed counterpart of this Agreement by facsimile or electronic transmission shall constitute valid and sufficient
delivery thereof.
(i) Each of the Company and the Trustee hereby acknowledges
and agrees that the Underwriter on behalf of the Underwriter is a third-party beneficiary of this Agreement.
(j) Except as specified herein, no party to this Agreement may
assign its rights or delegate its obligations hereunder to any other person or entity.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have duly executed this
Investment Management Trust Agreement as of the date first written above.
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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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FRONTIER ACQUISITION CORP.
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By:
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Name:
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Title:
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[Signature Page to Investment Management
Trust Agreement]
SCHEDULE A
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Fee Item
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Time and method of payment
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Amount
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Initial acceptance fee
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Initial closing of IPO by wire transfer
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$
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3,500.00
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Annual fee
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First year, initial closing of IPO by wire transfer; thereafter on the anniversary of the effective date of the IPO by wire transfer or check
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$
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10,000.00
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Transaction processing fee for disbursements to Company under Sections 1(i), (j), and (k)
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Billed by Trustee to Company under Section 1
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$
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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
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf & Celeste Gonzalez
Re: Trust Account - Termination Letter
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section 1(i) of the Investment Management
Trust Agreement between Frontier Acquisition Corp. (the “Company”) and Continental Stock Transfer &
Trust Company (“Trustee”), dated as of [●], 2021 (the “Trust Agreement”),
this is to advise you that the Company has entered into an agreement with ___________ (the “Target Business”)
to consummate a business combination with Target Business (the “Business Combination”) on or about [insert
date]. The Company shall notify you at least seventy-two (72) hours in advance of the actual date (or such shorter time period
as you may agree) of the consummation of the Business Combination (the “Consummation Date”). Capitalized
terms used but not defined herein shall have the meanings set forth in the Trust Agreement.
In accordance with the terms of the Trust Agreement, we hereby
authorize you to commence to liquidate all of the assets of the Trust Account, and to transfer the proceeds into the trust operating
account at 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 the Underwriter (with respect to the Deferred Discount)
and the Company shall direct on the Consummation Date. It is acknowledged and agreed that while the funds are on deposit in said
trust operating account at J.P. Morgan Chase Bank, N.A. awaiting distribution, neither the Company nor the Underwriter will earn
any interest or dividends.
On the Consummation Date (i) counsel for the Company shall deliver
to you written notification that the Business Combination has been consummated, or will be consummated substantially concurrently
with your transfer of funds to the accounts as directed by the Company (the “Notification”), and (ii)
the Company shall deliver to you (a) a certificate of the Chief Executive Officer, Chief Financial Officer or other authorized
officer of the Company, which verifies that the Business Combination has been approved by a vote of the Company’s shareholders,
if a vote is held and (b) joint written instruction signed by the Company and the Underwriter with respect to the transfer of the
funds held in the Trust Account, including payment of the Deferred Discount from the Trust Account (the “Instruction
Letter”). You are hereby directed and authorized to transfer the funds held in the Trust Account immediately upon
your receipt of the Notification and the Instruction Letter, in accordance with the terms of the Instruction Letter. In the event
that certain deposits held in the Trust Account may not be liquidated by the Consummation Date without penalty, you will notify
the Company in writing of the same and the Company shall direct you as to whether such funds should remain in the Trust Account
and be distributed after the Consummation Date to the Company. Upon the distribution of all the funds, net of any payments necessary
for reasonable unreimbursed expenses related to liquidating the Trust Account, your obligations under the Trust Agreement shall
be terminated.
In the event that the Business Combination is not consummated
on the Consummation Date described in the notice thereof and we have not notified you on or before the original Consummation Date
of a new Consummation Date, then upon receipt by the Trustee of written instructions from the Company, the funds held in the Trust
Account shall be reinvested as provided in Section 1(c) of the Trust Agreement on the business day immediately following the Consummation
Date as set forth in such notice as soon thereafter as possible.
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Very truly yours,
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Frontier Acquisition Corp.
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By:
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Name:
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Title:
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cc: Credit Suisse Securities (USA) LLC
EXHIBIT B
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf & Celeste Gonzalez
Re: Trust Account - Termination Letter
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section 1(i) of the Investment Management
Trust Agreement between Frontier Acquisition Corp. (the “Company”) and Continental Stock Transfer &
Trust Company (the “Trustee”), dated as of [●], 2021 (the “Trust Agreement”),
this is to advise you that the Company has been unable to effect a business combination with a Target Business (the “Business
Combination”) within the time frame specified in the Company’s Amended and Restated Memorandum and Articles
of Association, as described in the Company’s Prospectus relating to the Offering. Capitalized terms used but not defined
herein shall have the meanings set forth in the Trust Agreement.
In accordance with the terms of the Trust Agreement, we hereby
authorize you to liquidate all of the assets in the Trust Account and to transfer the total proceeds into the trust operating account
at J.P. Morgan Chase Bank, N.A. to await distribution to the Public Shareholders. The Company has selected __________ as the effective
date for the purpose of determining when the Public Shareholders will be entitled to receive their share of the liquidation proceeds.
It is acknowledged that no interest will be earned by the Company on the liquidation proceeds while on deposit in the trust operating
account You agree to be the Paying Agent of record and, in your separate capacity as Paying Agent, agree to distribute said funds
directly to the Company’s Public Shareholders in accordance with the terms of the Trust Agreement and the Amended and Restated
Memorandum and Articles of Association of the Company. Upon the distribution of all the funds, net of any payments necessary for
reasonable unreimbursed expenses related to liquidating the Trust Account, your obligations under the Trust Agreement shall be
terminated, except to the extent otherwise provided in Section 1(j) of the Trust Agreement.
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Very truly yours,
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Frontier Acquisition Corp.
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By:
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Name:
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Title:
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cc: Credit
Suisse Securities (USA) LLC
EXHIBIT C
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis E. Wolf, Jr. & Celeste Gonzalez
Re: Trust Account No. Tax Payment Withdrawal Instruction
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section 1(j) of the Investment Management
Trust Agreement between Frontier Acquisition Corp. (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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Frontier Acquisition Corp.
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By:
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Name:
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Title:
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cc: Credit
Suisse Securities (USA) LLC
EXHIBIT D
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf & Celeste Gonzalez
Re: Trust Account No. Shareholder Redemption Withdrawal
Instruction
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section 1(k) of the Investment Management
Trust Agreement between Credit Suisse Securities (USA) LLC (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’s shareholders $___________ of the principal and interest income
earned on the Property as of the date hereof. Capitalized terms used but not defined herein shall have the meanings set forth in
the Trust Agreement.
Pursuant to Section 1(k) of the Trust Agreement, this is to
advise you that the Company has sought an Amendment. Accordingly, in accordance with the terms of the Trust Agreement, we hereby
authorize you to liquidate a sufficient portion of the Trust Account and to transfer $[•] of the proceeds of the Trust Account
to the trust operating account at [●] for distribution to the shareholders that have requested redemption of their shares
in connection with such Amendment.
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Very truly yours,
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Frontier Acquisition Corp.
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By:
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Name:
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Title:
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cc: Credit
Suisse Securities (USA) LLC
Exhibit
10.2
REGISTRATION AND SHAREHOLDER RIGHTS AGREEMENT
THIS REGISTRATION AND SHAREHOLDER RIGHTS AGREEMENT (this “Agreement”),
dated as of [●], 2021, is made and entered into by and among Frontier Acquisition Corp., a Cayman Islands exempted company
(the “Company”), Frontier Acquisition Sponsor LLC, a Cayman Islands limited liability company (the “Sponsor”),
and the undersigned parties listed under Holder on the signature page hereto (each such party, together with the Sponsor and any
person or entity who hereafter becomes a party to this Agreement pursuant to Section 6.2 of this Agreement, a “Holder”
and collectively the “Holders”).
RECITALS
WHEREAS, the Sponsor currently owns 5,630,000 Class B
ordinary shares of the Company, par value $0.0001 per share (the “Class B Ordinary Shares”), and the
other Holders currently own an aggregate of 120,000 Class B Ordinary Shares, which were received from the Sponsor;
WHEREAS, the Class B Ordinary Shares are convertible
into the Company’s Class A ordinary shares, par value $0.0001 per share (the “Ordinary Shares”),
at the time of the initial Business Combination on a one-for-one basis, subject to adjustment, on the terms and conditions provided
in the Company’s amended and restated memorandum and articles of association, as may be amended from time to time;
WHEREAS, on [●], 2021, the Company and the Sponsor
entered into that certain Private Placement Units Purchase Agreement, pursuant to which the Sponsor agreed to purchase 600,000
units (or up to 660,000 units if the Underwriter’s (as defined below) option to purchase additional units in connection with
the Company’s initial public offering is exercised in full) (the “Private Placement Units”), in
a private placement transaction occurring simultaneously with the closing of the Company’s initial public offering;
WHEREAS, in order to finance the Company’s transaction
costs in connection with an intended Business Combination (as defined below), the Sponsor or certain of the Company’s officers
or directors may, but are not obligated to, loan the Company funds as the Company may require, of which up to $1,500,000 of such
loans may be convertible into an additional 1,000,000 Private Placement Warrants (the “Working Capital Warrants”);
and
WHEREAS, the Company and the Holders desire to enter
into this Agreement, pursuant to which the Company shall grant the Holders certain registration rights with respect to certain
securities of the Company, as set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual
representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. The terms defined in this Article
I shall, for all purposes of this Agreement, have the respective meanings set forth below:
“Adverse Disclosure” shall mean
any public disclosure of material non-public information, which disclosure, in the good faith judgment of the principal
executive officer or principal financial officer of the Company, after consultation with counsel to the Company, (i) would be
required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or
Prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances
under which they were made) not misleading, (ii) would not be required to be made at such time if the Registration Statement
were not being filed, and (iii) the Company has a bona fide business purpose for not making such information public.
“Agreement” shall have the meaning
given in the Preamble.
“Board” shall mean the Board of Directors
of the Company.
“Business Combination” shall mean
any merger, share exchange, asset acquisition, share purchase, reorganization or other similar business combination with one or
more businesses, involving the Company.
“Commission” shall mean the U.S. Securities
and Exchange Commission.
“Company” shall have the meaning given
in the Preamble.
“Demand Registration” shall have the
meaning given in subsection 2.1.1.
“Demanding Holder” shall have the
meaning given in subsection 2.1.1.
“Exchange Act” shall mean the Securities
Exchange Act of 1934, as it may be amended from time to time.
“Form S-1” shall have the meaning
given in subsection 2.1.1.
“Form S-3” shall have the meaning
given in subsection 2.3.1.
“Founder Shares” shall mean the Class
B Ordinary Shares and shall be deemed to include the Ordinary Shares issuable upon conversion thereof.
“Founder Shares Lock-up Period” shall
mean, with respect to the Founder Shares, the period ending on the earlier of (A) one year after the completion of the Company’s
initial Business Combination and (B) subsequent to the Business Combination, (x) if the last reported sales price of the Ordinary
Shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations
and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Company’s initial
Business Combination or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other
similar transaction that results in all of the Company’s shareholders having the right to exchange their Ordinary Shares
for cash, securities or other property.
“Holders” shall have the meaning given
in the Preamble.
“Insider Letter” shall mean that certain
letter agreement, dated as of the date hereof, by and between the Company, the Sponsor and each of the Company’s officers,
directors and director nominees.
“Maximum Number of Securities” shall
have the meaning given in subsection 2.1.4.
“Misstatement” shall mean an untrue
statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement or Prospectus,
or necessary to make the statements in a Registration Statement or Prospectus (in the case of a Prospectus, in the light of the
circumstances under which they were made) not misleading.
“Nominee” is defined in Section
6.1.
“Ordinary Shares” shall have the meaning
given in the Recitals hereto.
“Permitted Transferees” shall
mean a person or entity to whom a Holder of Registrable Securities is permitted to transfer such Registrable Securities prior
to the expiration of the Founder Shares Lock-up Period or Private Placement Lock-up Period, as the case may be, under the
Insider Letter, the Private Placement Units Purchase Agreement and any other applicable agreement between such Holder and the
Company, and to any transferee thereafter.
“Piggyback Registration” shall have
the meaning given in subsection 2.2.1.
“Private Placement Lock-up Period”
shall mean, with respect to Private Placement Units that are held by the initial purchasers of such Private Placement Units or
their Permitted Transferees, the private placement shares, private placement warrants and the Ordinary Shares issuable upon the
exercise of such Private Placement Warrants, and that are held by the initial purchasers of the Private Placement Units or their
Permitted Transferees, the period ending 30 days after the completion of the Company’s initial Business Combination.
“Private Placement Units” shall have
the meaning given in the Recitals hereto.
“Prospectus” shall mean the prospectus
included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all post-effective
amendments and including all material incorporated by reference in such prospectus.
“Registrable Security” shall mean
(a) the Founder Shares (including any Ordinary Shares or other equivalent equity security issued or issuable upon the conversion
of any such Founder Shares or exercisable for Ordinary Shares), (b) the Private Placement Units (including any Ordinary Shares
and private placement warrants included in such Private Placement Units and any Ordinary shares issued or issuable upon the exercise
of such Private Placement Warrants), (c) the Working Capital Warrants (including any Ordinary Shares issued or issuable upon the
conversion of working capital loans), (d) any outstanding Ordinary Shares or any other equity security (including the Ordinary
Shares issued or issuable upon the exercise of any other equity security) of the Company held by a Holder as of the date of this
Agreement, and (e) any other equity security of the Company issued or issuable with respect to any such Ordinary Shares by way
of a share capitalization or share sub-division or in connection with a combination of shares, recapitalization, merger, consolidation
or reorganization; provided, however, that, as to any particular Registrable Security, such securities shall cease
to be Registrable Securities when: (i) a Registration Statement with respect to the sale of such securities shall have become effective
under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such
Registration Statement; (ii) such securities shall have been otherwise transferred, new certificates for such securities not bearing
a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities
shall not require registration under the Securities Act; (iii) such securities shall have ceased to be outstanding; or (iv) such
securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction.
“Registration” shall mean a registration
effected by preparing and filing a registration statement or similar document in compliance with the requirements of the Securities
Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.
“Registration Expenses” shall mean
the out-of-pocket expenses of a Registration, including, without limitation, the following:
(A) all registration and filing fees (including fees with respect
to filings required to be made with the Financial Industry Regulatory Authority, Inc.) and any securities exchange on which the
Ordinary Shares are then listed;
(B) fees and expenses of compliance with securities or blue
sky laws (including reasonable fees and disbursements of counsel for the Underwriters in connection with blue sky qualifications
of Registrable Securities);
(C) printing, messenger, telephone and delivery expenses;
(D) reasonable fees and disbursements of counsel for the Company;
(E) reasonable fees and disbursements of all independent registered
public accountants of the Company incurred specifically in connection with such Registration; and
(F) reasonable fees and expenses of one (1) legal counsel selected
by the majority-in-interest of the Demanding Holders initiating a Demand Registration to be registered for offer and sale in the
applicable Registration or the Takedown Requesting Holder initiating an Underwritten Shelf Takedown.
“Registration Statement” shall mean
any registration statement that covers the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus
included in such registration statement, amendments (including post-effective amendments) and supplements to such registration
statement, and all exhibits to and all material incorporated by reference in such registration statement.
“Requesting Holder” shall have the
meaning given in subsection 2.1.1.
“Securities Act” shall mean the Securities
Act of 1933, as amended from time to time.
“Shelf” shall have the meaning given
in subsection 2.3.1.
“Sponsor” shall have the meaning given
in the Recitals hereto.
“Sponsor Director” means an individual
elected to the Board that has been nominated by the Sponsor pursuant to this Agreement.
“Subsequent Shelf Registration” shall
have the meaning given in subsection 2.3.2.
“Takedown Requesting Holder” shall
have the meaning given in subsection 2.3.3.
“Underwriter” shall mean a securities
dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such dealer’s
market-making activities.
“Underwritten Registration” or “Underwritten
Offering” shall mean a Registration in which securities of the Company are sold to an Underwriter in a firm commitment
underwriting for distribution to the public.
“Underwritten Shelf Takedown” shall
have the meaning given in subsection 2.3.3.
“Working Capital Warrants” shall have
the meaning given in the Recitals hereto.
ARTICLE 2
REGISTRATIONS
2.1 Demand Registration.
2.1.1 Request for Registration. Subject to the
provisions of subsection 2.1.4 and Section 2.4 hereof, at any time and from time to time on or after the date
the Company consummates the Business Combination, the Holders of at least a majority in interest of the then-outstanding
number of Registrable Securities (the “Demanding Holders”) may make a written demand for
Registration of all or part of their Registrable Securities, which written demand shall describe the amount and type of
securities to be included in such Registration and the intended method(s) of distribution thereof (such written demand a
“Demand Registration”). The Company shall, within five (5) days of the Company’s receipt of
the Demand Registration, notify, in writing, all other Holders of Registrable Securities of such demand, and each Holder of
Registrable Securities who thereafter wishes to include all or a portion of such Holder’s Registrable Securities in a
Registration pursuant to a Demand Registration (each such Holder that includes all or a portion of such Holder’s
Registrable Securities in such Registration, a “Requesting Holder”) shall so notify the Company, in
writing, within three (3) business days after the receipt by the Holder of the notice from the Company. Upon receipt by the
Company of any such written notification from a Requesting Holder(s) to the Company, such Requesting Holder(s) shall be
entitled to have their Registrable Securities included in a Registration pursuant to a Demand Registration and the Company
shall effect, as soon thereafter as practicable, but not more than forty five (45) days immediately after the Company’s
receipt of the Demand Registration, the Registration of all Registrable Securities requested by the Demanding Holders and
Requesting Holders pursuant to such Demand Registration. Under no circumstances shall the Company be obligated to effect more
than an aggregate of three (3) Registrations pursuant to a Demand Registration under this subsection 2.1.1 with
respect to any or all Registrable Securities; provided, however, that a Registration shall not be counted for
such purposes unless a Form S-1 or any similar long-form registration statement that may be available at such time
(“Form S-1”) has become effective and all of the Registrable Securities requested by the Requesting
Holders to be registered on behalf of the Requesting Holders in such Form S-1 Registration have been sold, in accordance with Section
3.1 of this Agreement; provided, further, that an Underwritten Shelf Takedown shall not count as a Demand
Registration.
2.1.2 Effective Registration. Notwithstanding the provisions
of subsection 2.1.1 above or any other part of this Agreement, a Registration pursuant to a Demand Registration shall not
count as a Registration unless and until (i) the Registration Statement filed with the Commission with respect to a Registration
pursuant to a Demand Registration has been declared effective by the Commission and (ii) the Company has complied with all of its
obligations under this Agreement with respect thereto; provided, further, that if, after such Registration Statement
has been declared effective, an offering of Registrable Securities in a Registration pursuant to a Demand Registration is subsequently
interfered with by any stop order or injunction of the Commission, federal or state court or any other governmental agency the
Registration Statement with respect to such Registration shall be deemed not to have been declared effective, unless and until,
(i) such stop order or injunction is removed, rescinded or otherwise terminated and (ii) a majority-in-interest of the Demanding
Holders initiating such Demand Registration thereafter affirmatively elect to continue with such Registration and accordingly notify
the Company in writing, but in no event later than five (5) days, of such election; provided, further, that the Company
shall not be obligated or required to file another Registration Statement until the Registration Statement that has been previously
filed with respect to a Registration pursuant to a Demand Registration becomes effective or is subsequently terminated.
2.1.3 Underwritten Offering. Subject to the provisions
of subsection 2.1.4 and Section 2.4 hereof, if a majority-in-interest of the Demanding Holders so advise the Company
as part of their Demand Registration that the offering of the Registrable Securities pursuant to such Demand Registration shall
be in the form of an Underwritten Offering, then the right of such Demanding Holder or Requesting Holder (if any) to include its
Registrable Securities in such Registration shall be conditioned upon such Holder’s participation in such Underwritten Offering
and the inclusion of such Holder’s Registrable Securities in such Underwritten Offering to the extent provided herein. All
such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this subsection 2.1.3
shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by
the majority-in-interest of the Demanding Holders initiating the Demand Registration.
2.1.4 Reduction of Underwritten Offering. If the managing
Underwriter or Underwriters in an Underwritten Registration pursuant to a Demand Registration, in good faith, advises the Company,
the Demanding Holders and the Requesting Holders (if any) in writing that the dollar amount or number of Registrable Securities
that the Demanding Holders and the Requesting Holders (if any) desire to sell, taken together with all other Ordinary Shares or
other equity securities that the Company desires to sell and the Ordinary Shares, if any, as to which a Registration has been requested
pursuant to separate written contractual piggy-back registration rights held by any other shareholders who desire to sell, exceeds
the maximum dollar amount or maximum number of equity securities that can be sold in the Underwritten Offering without adversely
affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such
maximum dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”),
then the Company shall include in such Underwritten Offering, as follows: (i) first, the Registrable Securities of the Demanding
Holders and the Requesting Holders (if any) (pro rata based on the respective number of Registrable Securities that each Demanding
Holder and Requesting Holder (if any) has requested be included in such Underwritten Registration and the aggregate number of Registrable
Securities that the Demanding Holders and Requesting Holders have requested be included in such Underwritten Registration (such
proportion is referred to herein as “Pro Rata”)) that can be sold without exceeding the Maximum Number
of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause
(i), the Ordinary Shares or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum
Number of Securities; and (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing
clauses (i) and (ii), the Ordinary Shares or other equity securities of other persons or entities that the Company is obligated
to register in a Registration pursuant to separate written contractual arrangements with such persons and that can be sold without
exceeding the Maximum Number of Securities.
2.1.5 Demand Registration Withdrawal. A
majority-in-interest of the Demanding Holders initiating a Demand Registration or a majority-in-interest of the Requesting
Holders (if any), pursuant to a Registration under subsection 2.1.1 shall have the right to withdraw from a
Registration pursuant to such Demand Registration for any or no reason whatsoever upon written notification to the Company
and the Underwriter or Underwriters (if any) of their intention to withdraw from such Registration prior to the effectiveness
of the Registration Statement filed with the Commission with respect to the Registration of their Registrable Securities
pursuant to such Demand Registration. Notwithstanding anything to the contrary in this Agreement, the Company shall be
responsible for the Registration Expenses incurred in connection with a Registration pursuant to a Demand Registration prior
to its withdrawal under this subsection 2.1.5.
2.2 Piggyback Registration.
2.2.1 Piggyback Rights. If, at any time on or after the
date the Company consummates a Business Combination, the Company proposes to file a Registration Statement under the Securities
Act with respect to an offering of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible
into equity securities, for its own account or for the account of shareholders of the Company (or by the Company and by the shareholders
of the Company including, without limitation, pursuant to Section 2.1 hereof), other than a Registration Statement (i) filed
in connection with any employee share option or other benefit plan, (ii) for an exchange offer or offering of securities solely
to the Company’s existing shareholders, (iii) for an offering of debt that is convertible into equity securities of the Company
or (iv) for a dividend reinvestment plan, then the Company shall give written notice of such proposed filing to all of the Holders
of Registrable Securities as soon as practicable but not less than seven (7) days before the anticipated filing date of such Registration
Statement, which notice shall (A) describe the amount and type of securities to be included in such offering, the intended method(s)
of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, in such offering, and (B) offer to
all of the Holders of Registrable Securities the opportunity to register the sale of such number of Registrable Securities as such
Holders may request in writing within three (3) business days after receipt of such written notice (such Registration a “Piggyback
Registration”). The Company shall, in good faith, cause such Registrable Securities to be included in such Piggyback
Registration and shall use its best efforts to cause the managing Underwriter or Underwriters of a proposed Underwritten Offering
to permit the Registrable Securities requested by the Holders pursuant to this subsection 2.2.1 to be included in a Piggyback
Registration on the same terms and conditions as any similar securities of the Company included in such Registration and to permit
the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof.
All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this subsection
2.2.1 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering
by the Company. The notice periods set forth in this subsection 2.2.1 shall not apply to an Underwritten Shelf Takedown
conducted in accordance with subsection 2.3.3.
2.2.2 Reduction of Piggyback Registration. If the managing
Underwriter or Underwriters in an Underwritten Registration that is to be a Piggyback Registration (other than Underwritten Shelf
Takedown), in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration
in writing that the dollar amount or number of the Ordinary Shares that the Company desires to sell, taken together with (i) the
Ordinary Shares, if any, as to which Registration has been demanded pursuant to separate written contractual arrangements with
persons or entities other than the Holders of Registrable Securities hereunder, (ii) the Registrable Securities as to which registration
has been requested pursuant Section 2.2 hereof, and (iii) the Ordinary Shares, if any, as to which Registration has been
requested pursuant to separate written contractual piggy-back registration rights of other shareholders of the Company, exceeds
the Maximum Number of Securities, then:
(a) If the Registration is undertaken for the
Company’s account, the Company shall include in any such Registration (A) first, the Ordinary Shares or other equity
securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (B)
second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the
Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to subsection
2.2.1, Pro Rata, which can be sold without exceeding the Maximum Number of Securities; (C) third, to the extent that the
Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the Ordinary Shares or other
equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and
(D) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and
(C), the Ordinary Shares or other equity securities for the account of other persons or entities that the Company is
obligated to register pursuant to separate written contractual arrangements with such persons or entities, which can be sold
without exceeding the Maximum Number of Securities;
(b) If the Registration is pursuant to a request by
persons or entities other than the Holders of Registrable Securities, then the Company shall include in any such Registration
(A) first, the Ordinary Shares or other equity securities, if any, of such requesting persons or entities, other than the
Holders of Registrable Securities, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the
extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities
of Holders exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1, Pro Rata,
which can be sold without exceeding the Maximum Number of Securities; (C) third, to the extent that the Maximum Number of
Securities has not been reached under the foregoing clauses (A) and (B), the Ordinary Shares or other equity securities that
the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the
extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), the Ordinary
Shares or other equity securities for the account of other persons or entities that the Company is obligated to register
pursuant to separate written contractual arrangements with such persons or entities, which can be sold without exceeding the
Maximum Number of Securities.
2.2.3 Piggyback Registration Withdrawal. Any Holder of
Registrable Securities shall have the right to withdraw from a Piggyback Registration for any or no reason whatsoever upon written
notification to the Company and the Underwriter or Underwriters (if any) of his, her or its intention to withdraw from such Piggyback
Registration prior to the effectiveness of the Registration Statement filed with the Commission with respect to such Piggyback
Registration. The Company (whether on its own good faith determination or as the result of a request for withdrawal by persons
pursuant to separate written contractual obligations) may withdraw a Registration Statement filed with the Commission in connection
with a Piggyback Registration at any time prior to the effectiveness of such Registration Statement. Notwithstanding anything to
the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with the
Piggyback Registration prior to its withdrawal under this subsection 2.2.3.
2.2.4 Unlimited Piggyback Registration Rights. For purposes
of clarity, any Registration effected pursuant to Section 2.2 hereof shall not be counted as a Registration pursuant to
a Demand Registration effected under Section 2.1 hereof.
2.3 Shelf Registrations.
2.3.1 The Holders of Registrable Securities may at any
time, and from time to time, request in writing that the Company, pursuant to Rule 415 under the Securities Act (or any
successor rule promulgated thereafter by the Commission), register the resale of any or all of their Registrable Securities
on Form S-3 or similar short form registration statement that may be available at such time (“Form
S-3”), or if the Company is ineligible to use Form S-3, on Form S-1; a registration statement filed pursuant to
this subsection 2.3.1 (a “Shelf”) shall provide for the resale of the Registrable Securities
included therein pursuant to any method or combination of methods legally available to, and requested by, any Holder. Within
three (3) days of the Company’s receipt of a written request from a Holder or Holders of Registrable Securities for a
Registration on a Shelf, the Company shall promptly give written notice of the proposed Registration to all other Holders of
Registrable Securities, and each Holder of Registrable Securities who thereafter wishes to include all or a portion of such
Holder’s Registrable Securities in such Registration shall so notify the Company, in writing, within three (3) business
days after the receipt by the Holder of the notice from the Company. As soon as practicable thereafter, but not more than ten
(10) days after the Company’s initial receipt of such written request for a Registration on a Shelf, the Company shall
register all or such portion of such Holder’s Registrable Securities as are specified in such written request, together
with all or such portion of Registrable Securities of any other Holder or Holders joining in such request as are specified in
the written notification given by such Holder or Holders; provided, however, that the Company shall not be obligated to
effect any such Registration pursuant to this subsection 2.3.1 if the Holders of Registrable Securities, together with
the Holders of any other equity securities of the Company entitled to inclusion in such Registration, propose to sell the
Registrable Securities and such other equity securities (if any) at any aggregate price to the public of less than
$10,000,000. The Company shall maintain each Shelf in accordance with the terms hereof, and shall prepare and file with the
SEC such amendments, including post-effective amendments, and supplements as may be necessary to keep such Shelf continuously
effective, available for use and in compliance with the provisions of the Securities Act until such time as there are no
longer any Registrable Securities included on such Shelf. In the event the Company files a Shelf on Form S-1, the Company
shall use its commercially reasonable efforts to convert the Form S-1 to a Form S-3 as soon as practicable after the Company
is eligible to use Form S-3.
2.3.2 If any Shelf ceases to be effective under the Securities
Act for any reason at any time while Registrable Securities included thereon are still outstanding, the Company shall use its commercially
reasonable efforts to as promptly as is reasonably practicable cause such Shelf to again become effective under the Securities
Act (including obtaining the prompt withdrawal of any order suspending the effectiveness of such Shelf), and shall use its commercially
reasonable efforts to as promptly as is reasonably practicable amend such Shelf in a manner reasonably expected to result in the
withdrawal of any order suspending the effectiveness of such Shelf or file an additional registration statement (a “Subsequent
Shelf Registration”) registering the resale of all Registrable Securities including on such Shelf, and pursuant to
any method or combination of methods legally available to, and requested by, any Holder. If a Subsequent Shelf Registration is
filed, the Company shall use its commercially reasonable efforts to (i) cause such Subsequent Shelf Registration to become effective
under the Securities Act as promptly as is reasonably practicable after the filing thereof and (ii) keep such Subsequent Shelf
Registration continuously effective, available for use and in compliance with the provisions of the Securities Act until such time
as there are no longer any Registrable Securities included thereon. Any such Subsequent Shelf Registration shall be on Form S-3
to the extent that the Company is eligible to use such form. Otherwise, such Subsequent Shelf Registration shall be on another
appropriate form. In the event that any Holder holds Registrable Securities that are not registered for resale on a delayed or
continuous basis, the Company, upon request of a Holder shall promptly use its commercially reasonable efforts to cause the resale
of such Registrable Securities to be covered by either, at the Company’s option, a Shelf (including by means of a post-effective
amendment) or a Subsequent Shelf Registration and cause the same to become effective as soon as practicable after such filing and
such Shelf or Subsequent Shelf Registration shall be subject to the terms hereof; provided, however, the Company
shall only be required to cause such Registrable Securities to be so covered once annually after inquiry of the Holders.
2.3.3 At any time and from time to time after a Shelf has been
declared effective by the Commission, the Sponsor may request to sell all or any portion of its Registrable Securities in an underwritten
offering that is registered pursuant to the Shelf (each, an “Underwritten Shelf Takedown”); provided
that the Company shall only be obligated to effect an Underwritten Shelf Takedown if such offering shall include securities with
a total offering price (including piggyback securities and before deduction of underwriting discounts) reasonably expected to exceed,
in the aggregate, $10,000,000. All requests for Underwritten Shelf Takedowns shall be made by giving written notice to the Company
at least 48 hours prior to the public announcement of such Underwritten Shelf Takedown, which shall specify the approximate number
of Registrable Securities proposed to be sold in the Underwritten Shelf Takedown and the expected price range (net of underwriting
discounts and commissions) of such Underwritten Shelf Takedown. The Company shall include in any Underwritten Shelf Takedown the
securities requested to be included by any holder (each a “Takedown Requesting Holder”) at least 24 hours
prior to the public announcement of such Underwritten Shelf Takedown pursuant to written contractual piggyback registration rights
of such holder (including to those set forth herein). The Sponsor shall have the right to select the underwriter(s) for such offering
(which shall consist of one or more reputable nationally recognized investment banks), subject to the Company’s prior approval
which shall not be unreasonably withheld, conditioned or delayed. For purposes of clarity, any Registration effected pursuant to
this subsection 2.3.3 shall not be counted as a Registration pursuant to a Demand Registration effected under Section
2.1 hereof.
2.3.4 If the managing Underwriter or Underwriters in an Underwritten
Shelf Takedown, in good faith, advises the Company, the Sponsor and the Takedown Requesting Holders (if any) in writing that the
dollar amount or number of Registrable Securities that the Sponsor and the Takedown Requesting Holders (if any) desire to sell,
taken together with all other Ordinary Shares or other equity securities that the Company desires to sell, exceeds the Maximum
Number of Securities, then the Company shall include in such Underwritten Shelf Takedown, as follows: (i) first, the Registrable
Securities of the Sponsor that can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that
the Maximum Number of Securities has not been reached under the foregoing clause (i), the Ordinary Shares or other equity securities
that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (iii) third, to the
extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the Ordinary Shares
or other equity securities of the Takedown Requesting Holders, if any, that can be sold without exceeding the Maximum Number of
Securities, determined Pro Rata based on the respective number of Registrable Securities that each Takedown Requesting Holder has
so requested to be included in such Underwritten Shelf Takedown.
2.3.5 The Sponsor shall have the right to withdraw from an Underwritten
Shelf Takedown for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if
any) of its intention to withdraw from such Underwritten Shelf Takedown prior to the public announcement of such Underwritten Shelf
Takedown. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses
incurred in connection with an Underwritten Shelf Takedown prior to a withdrawal under this subsection 2.3.5.
2.4 Restrictions on Registration Rights. If (A) during
the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of the filing of,
and ending on a date one hundred and twenty (120) days after the effective date of, a Company initiated Registration and provided
that the Company has delivered written notice to the Holders prior to receipt of a Demand Registration pursuant to subsection 2.1.1
and it continues to actively employ, in good faith, all reasonable efforts to cause the applicable Registration Statement to become
effective; (B) the Holders have requested an Underwritten Registration and the Company and the Holders are unable to obtain the
commitment of underwriters to firmly underwrite the offer; or (C) in the good faith judgment of the Board such Registration would
be seriously detrimental to the Company and the Board concludes as a result that it is essential to defer the filing of such Registration
Statement at such time, then in each case the Company shall furnish to such Holders a certificate signed by the Chairman of the
Board stating that in the good faith judgment of the Board it would be seriously detrimental to the Company for such Registration
Statement to be filed in the near future and that it is therefore essential to defer the filing of such Registration Statement.
In such event, the Company shall have the right to defer such filing for a period of not more than thirty (30) days; provided,
however, that the Company shall not defer its obligation in this manner more than once in any 12-month period. Notwithstanding
anything to the contrary contained in this Agreement, no Registration shall be effected or permitted and no Registration Statement
shall become effective, with respect to any Registrable Securities held by any Holder, until after the expiration of the Founder
Shares Lock-Up Period or the Private Placement Lock-Up Period, as the case may be.
ARTICLE 3
COMPANY PROCEDURES
3.1 General Procedures. If at any time on or after the
date the Company consummates a Business Combination the Company is required to effect the Registration of Registrable Securities,
the Company shall use its best efforts to effect such Registration to permit the sale of such Registrable Securities in accordance
with the intended plan of distribution thereof, and pursuant thereto the Company shall, as expeditiously as possible:
3.1.1 prepare and file with the Commission as soon as practicable
a Registration Statement with respect to such Registrable Securities and use its reasonable best efforts to cause such Registration
Statement to become effective and remain effective until all Registrable Securities covered by such Registration Statement have
been sold;
3.1.2 prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement, and such supplements to the Prospectus, as may be requested by the Holders
or any Underwriter of Registrable Securities or as may be required by the rules, regulations or instructions applicable to the
registration form used by the Company or by the Securities Act or rules and regulations thereunder to keep the Registration Statement
effective until all Registrable Securities covered by such Registration Statement are sold in accordance with the intended plan
of distribution set forth in such Registration Statement or supplement to the Prospectus;
3.1.3 prior to filing a Registration Statement or Prospectus,
or any amendment or supplement thereto, furnish without charge to the Underwriters, if any, and the Holders of Registrable Securities
included in such Registration, and such Holders’ legal counsel, copies of such Registration Statement as proposed to be filed,
each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated
by reference therein), the Prospectus included in such Registration Statement (including each preliminary Prospectus), and such
other documents as the Underwriters and the Holders of Registrable Securities included in such Registration or the legal counsel
for any such Holders may request in order to facilitate the disposition of the Registrable Securities owned by such Holders;
3.1.4 prior to any public offering of Registrable
Securities, use its best efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement
under such securities or “blue sky” laws of such jurisdictions in the United States as the Holders of Registrable
Securities included in such Registration Statement (in light of their intended plan of distribution) may request and (ii)
take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with
or approved by such other governmental authorities as may be necessary by virtue of the business and operations of the
Company and do any and all other acts and things that may be necessary or advisable to enable the Holders of Registrable
Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such
jurisdictions; provided, however, that the Company shall not be required to qualify generally to do business in
any jurisdiction where it would not otherwise be required to qualify or take any action to which it would be subject to
general service of process or taxation in any such jurisdiction where it is not then otherwise so subject;
3.1.5 cause all such Registrable Securities to be listed on
each securities exchange or automated quotation system on which similar securities issued by the Company are then listed;
3.1.6 provide a transfer agent or warrant agent, as applicable,
and registrar for all such Registrable Securities no later than the effective date of such Registration Statement;
3.1.7 advise each seller of such Registrable Securities, promptly
after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness
of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use its reasonable
best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued;
3.1.8 at least five (5) days prior to the filing of any Registration
Statement or Prospectus or any amendment or supplement to such Registration Statement or Prospectus (other than by way of a document
incorporated by reference) furnish a copy thereof to each seller of such Registrable Securities or its counsel;
3.1.9 notify the Holders at any time when a Prospectus relating
to such Registration Statement is required to be delivered under the Securities Act, of the happening of any event as a result
of which the Prospectus included in such Registration Statement, as then in effect, includes a Misstatement, and then to correct
such Misstatement as set forth in Section 3.4 hereof;
3.1.10 permit a representative of the Holders, the Underwriters,
if any, and any attorney or accountant retained by such Holders or Underwriter to participate, at each such person’s own
expense, in the preparation of the Registration Statement, and cause the Company’s officers, directors and employees to supply
all information reasonably requested by any such representative, Underwriter, attorney or accountant in connection with the Registration;
provided, however, that such representatives or Underwriters enter into a confidentiality agreement, in form and
substance reasonably satisfactory to the Company, prior to the release or disclosure of any such information;
3.1.11 obtain a “cold comfort” letter from the Company’s
independent registered public accountants in the event of an Underwritten Registration, in customary form and covering such matters
of the type customarily covered by “cold comfort” letters as the managing Underwriter may reasonably request, and reasonably
satisfactory to a majority-in-interest of the participating Holders;
3.1.12 on the date the Registrable Securities are delivered
for sale pursuant to such Registration, obtain an opinion, dated such date, of counsel representing the Company for the purposes
of such Registration, addressed to the Holders, the placement agent or sales agent, if any, and the Underwriters, if any, covering
such legal matters with respect to the Registration in respect of which such opinion is being given as the Holders, placement agent,
sales agent, or Underwriter may reasonably request and as are customarily included in such opinions and negative assurance letters,
and reasonably satisfactory to a majority in interest of the participating Holders;
3.1.13 in the event of any Underwritten Offering, enter into
and perform its obligations under an underwriting agreement, in usual and customary form, with the managing Underwriter of such
offering;
3.1.14 make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of the Company’s
first full calendar quarter after the effective date of the Registration Statement which satisfies the provisions of Section 11(a)
of the Securities Act and Rule 158 thereunder (or any successor rule promulgated thereafter by the Commission);
3.1.15 if the Registration involves the Registration of
Registrable Securities involving gross proceeds in excess of $50,000,000, use its reasonable efforts to make available senior
executives of the Company to participate in customary “road show” presentations that may be reasonably requested
by the Underwriter in any Underwritten Offering; and
3.1.16 otherwise, in good faith, cooperate reasonably with,
and take such customary actions as may reasonably be requested by the Holders, in connection with such Registration.
3.2 Registration Expenses. The Registration Expenses
of all Registrations shall be borne by the Company. It is acknowledged by the Holders that the Holders shall bear all incremental
selling expenses relating to the sale of Registrable Securities, such as Underwriters’ commissions and discounts, brokerage
fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration Expenses,” all reasonable
fees and expenses of any legal counsel representing the Holders.
3.3 Requirements for Participation in Underwritten Offerings.
No person may participate in any Underwritten Offering for equity securities of the Company pursuant to a Registration initiated
by the Company hereunder unless such person (i) agrees to sell such person’s securities on the basis provided in any underwriting
arrangements approved by the Company and (ii) completes and executes all customary questionnaires, powers of attorney, indemnities,
lock-up agreements, underwriting agreements and other customary documents as may be reasonably required under the terms of such
underwriting arrangements.
3.4 Suspension of Sales; Adverse Disclosure. Upon receipt
of written notice from the Company that a Registration Statement or Prospectus contains a Misstatement, each of the Holders shall
forthwith discontinue disposition of Registrable Securities until it has received copies of a supplemented or amended Prospectus
correcting the Misstatement (it being understood that the Company hereby covenants to prepare and file such supplement or amendment
as soon as practicable after the time of such notice), or until it is advised in writing by the Company that the use of the Prospectus
may be resumed. If the filing, initial effectiveness or continued use of a Registration Statement in respect of any Registration
at any time would require the Company to make an Adverse Disclosure or would require the inclusion in such Registration Statement
of financial statements that are unavailable to the Company for reasons beyond the Company’s control, the Company may, upon
giving prompt written notice of such action to the Holders, delay the filing or initial effectiveness of, or suspend use of, such
Registration Statement for the shortest period of time, but in no event more than thirty (30) days, determined in good faith by
the Company to be necessary for such purpose. In the event the Company exercises its rights under the preceding sentence, the Holders
agree to suspend, immediately upon their receipt of the notice referred to above, their use of the Prospectus relating to any Registration
in connection with any sale or offer to sell Registrable Securities. The Company shall immediately notify the Holders of the expiration
of any period during which it exercised its rights under this Section 3.4.
3.5 Reporting Obligations. As long as any Holder shall
own Registrable Securities, the Company, at all times while it shall be a reporting company under the Exchange Act, covenants to
file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed
by the Company after the date hereof pursuant to Sections 13(a) or 15(d) of the Exchange Act and to promptly furnish the Holders
with true and complete copies of all such filings. The Company further covenants that it shall take such further action as any
Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell Ordinary Shares held
by such Holder without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated
under the Securities Act (or any successor rule promulgated thereafter by the Commission, to the extent that such rule or such
successor rule is available to the Company), including providing any legal opinions. Upon the request of any Holder, the Company
shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements.
ARTICLE 4
INDEMNIFICATION AND CONTRIBUTION
4.1 Indemnification.
4.1.1 The Company agrees to indemnify, to the extent
permitted by law, each Holder of Registrable Securities, its officers and directors and each person who controls such Holder
(within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses (including
attorneys’ fees) caused by any untrue or alleged untrue statement of material fact contained in any Registration
Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged
omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except
insofar as the same are caused by or contained in any information furnished in writing to the Company by such Holder
expressly for use therein. The Company shall indemnify the Underwriters, their officers and directors and each person who
controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with
respect to the indemnification of the Holder.
4.1.2 In connection with any Registration Statement in which
a Holder of Registrable Securities is participating, such Holder shall furnish to the Company in writing such information and affidavits
as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus and, to the extent
permitted by law, shall indemnify the Company, its directors and officers and agents and each person who controls the Company (within
the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including without limitation
reasonable attorneys’ fees) resulting from any untrue statement of material fact contained in the Registration Statement,
Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission of a material fact required
to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement
or omission is contained in any information or affidavit so furnished in writing by such Holder expressly for use therein; provided,
however, that the obligation to indemnify shall be several, not joint and several, among such Holders of Registrable Securities,
and the liability of each such Holder of Registrable Securities shall be in proportion to and limited to the net proceeds received
by such Holder from the sale of Registrable Securities pursuant to such Registration Statement. The Holders of Registrable Securities
shall indemnify the Underwriters, their officers, directors and each person who controls such Underwriters (within the meaning
of the Securities Act) to the same extent as provided in the foregoing with respect to indemnification of the Company.
4.1.3 Any person entitled to indemnification herein shall (i)
give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that
the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure
has not materially prejudiced the indemnifying party) and (ii) unless in such indemnified party’s reasonable judgment a conflict
of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party
to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent
(but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the
defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by
such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest
may exist between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying
party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which
cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the
terms of such settlement) or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in respect to such claim or litigation.
4.1.4 The indemnification provided for under this Agreement
shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer,
director or controlling person of such indemnified party and shall survive the transfer of securities. The Company and each Holder
of Registrable Securities participating in an offering also agrees to make such provisions as are reasonably requested by any indemnified
party for contribution to such party in the event the Company’s or such Holder’s indemnification is unavailable for
any reason.
4.1.5 If the indemnification provided under Section 4.1 hereof
from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the
indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses,
claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of
the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a
material fact, was made by, or relates to information supplied by, such indemnifying party or indemnified party, and the
indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to
correct or prevent such action; provided, however, that the liability of any Holder under this subsection
4.1.5 shall be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such
liability. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be
deemed to include, subject to the limitations set forth in subsections 4.1.1, 4.1.2 and 4.1.3 above, any
legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or
proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this subsection
4.1.5 were determined by pro rata allocation or by any other method of allocation, which does not take account of the
equitable considerations referred to in this subsection 4.1.5. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this subsection
4.1.5 from any person who was not guilty of such fraudulent misrepresentation.
ARTICLE 5
SHAREHOLDER RIGHTS
5.1 Subject to the terms and conditions of this Agreement, at
any time and from time to time on or after the date that the Company consummates a Business Combination and for so long as the
Sponsor holds any Registrable Securities:
5.1.1 The Sponsor shall have the right, but not the obligation,
to designate three individuals to be appointed or nominated, as the case may be, for election to the Board (including any successor,
each, a “Nominee”) by giving written notice to the Company on or before the time such information is
reasonably requested by the Board or the Nominating Committee of the Board, as applicable, for inclusion in a proxy statement for
a meeting of shareholders provided to the Sponsor.
5.1.2 The Company will, as promptly as practicable, use its
best efforts to take all necessary and desirable actions (including, without limitation, calling special meetings of the Board
and the shareholders and recommending, supporting and soliciting proxies) so that there are three Sponsor Directors serving on
the Board at all times.
5.1.3 The Company shall, to the fullest extent permitted by
applicable law, use its best efforts to take all actions necessary to ensure that: (i) each Nominee is included in the Board’s
slate of nominees to the shareholders of the Company for each election of Directors; and (ii) each Nominee is included in the proxy
statement prepared by management of the Company in connection with soliciting proxies for every meeting of the shareholders of
the Company called with respect to the election of members of the Board, and at every adjournment or postponement thereof, and
on every action or approval by written consent of the shareholders of the Company or the Board with respect to the election of
members of the Board.
5.1.4 If a vacancy occurs because of the death, disability,
disqualification, resignation, or removal of a Sponsor Director or for any other reason, the Sponsor shall be entitled to designate
such person’s successor, and the Company will, as promptly as practicable following such designation, use its best efforts
to take all necessary and desirable actions, to the fullest extent permitted by law, within its control such that such vacancy
shall be filled with such successor Nominee.
5.1.5 If a Nominee is not elected because of such Nominee’s
death, disability, disqualification, withdrawal as a nominee or for any other reason, the Sponsor shall be entitled to designate
promptly another Nominee and the Company will take all necessary and desirable actions within its control such that the director
position for which such Nominee was nominated shall not be filled pending such designation or the size of the Board shall be increased
by one and such vacancy shall be filled with such successor Nominee as promptly as practicable following such designation.
5.1.6 As promptly as reasonably practicable following the request
of any Sponsor Director, the Company shall enter into an indemnification agreement with such Sponsor Director, in the form entered
into with the other members of the Board. The Company shall pay the reasonable, documented out-of-pocket expenses incurred by the
Sponsor Director in connection with his or her services provided to or on behalf of the Company, including attending meetings or
events attended explicitly on behalf of the Company at the Company’s request.
5.1.7 The Company shall (i) purchase directors’ and officers’
liability insurance in an amount determined by the Board to be reasonable and customary and (ii) for so long as a Sponsor Director
serves as a Director of the Company, maintain such coverage with respect to such Sponsor Director; provided that upon removal
or resignation of such Sponsor Director for any reason, the Company shall take all actions reasonably necessary to extend such
directors’ and officers’ liability insurance coverage for a period of not less than six years from any such event in
respect of any act or omission occurring at or prior to such event.
5.1.8 For so long as a Sponsor Director serves as a Director
of the Company, the Company shall not amend, alter or repeal any right to indemnification or exculpation covering or benefiting
any Director nominated pursuant to this Agreement as and to the extent consistent with applicable law, whether such right is contained
in the Company’s amended and restated memorandum and articles of association, each as amended, or another document (except
to the extent such amendment or alteration permits the Company to provide broader indemnification or exculpation rights on a retroactive
basis than permitted prior thereto).
5.1.9 Each Nominee may, but does not need to qualify as “independent”
pursuant to listing standards of the New York Stock Exchange (or such other national securities exchange upon which the Company’s
securities are then listed).
5.1.10 Any Nominee will be subject to the Company’s customary
due diligence process, including its review of a completed questionnaire and a background check. Based on the foregoing, the Company
may object to any Nominee provided (a) it does so in good faith, and (b) such objection is based upon any of the following: (i)
such Nominee was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations
and other minor offenses), (ii) such Nominee was the subject of any order, judgment, or decree not subsequently reversed, suspended
or vacated of any court of competent jurisdiction, permanently or temporarily enjoining such proposed director from, or otherwise
limiting, the following activities: (A) engaging in any type of business practice, or (B) engaging in any activity in connection
with the purchase or sale of any security or in connection with any violation of federal or state securities laws, (iii) such Nominee
was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority
barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in
clause (ii)(B), or to be associated with persons engaged in such activity, (iv) such proposed director was found by a court of
competent jurisdiction in a civil action or by the Commission to have violated any federal or state securities law, and the judgment
in such civil action or finding by the Commission has not been subsequently reversed, suspended or vacated, or (v) such proposed
director was the subject of, or a party to any federal or state judicial or administrative order, judgment, decree, or finding,
not subsequently reversed, suspended or vacated, relating to a violation of any federal or state securities laws or regulations.
In the event the Board reasonably finds the Nominee to be unsuitable based upon one or more of the foregoing clauses (i) through
(v) and reasonably objects to the identified director, Sponsor shall be entitled to propose a different nominee to the Board within
30 calendar days of the Company’s notice to Sponsor of its objection to the Nominee and such replacement Nominee shall be
subject to the review process outlined above.
5.1.11 The Company shall take all necessary action to cause
a Nominee chosen by the Sponsor, at the request of such Nominee to be elected to the board of directors (or similar governing body)
of each material operating subsidiary of the Company. The Nominee, as applicable, shall have the right to attend (in person or
remotely) any meetings of the board of directors (or similar governing body or committee thereof) of each subsidiary of the Company.
ARTICLE 6
MISCELLANEOUS
6.1 Notices. Any notice or communication under this
Agreement must be in writing and given by (i) deposit in the United States mail, addressed to the party to be notified,
postage prepaid and registered or certified with return receipt requested, (ii) delivery in person or by courier service
providing evidence of delivery, or (iii) transmission by hand delivery, electronic mail, telecopy, telegram or facsimile.
Each notice or communication that is mailed, delivered, or transmitted in the manner described above shall be deemed
sufficiently given, served, sent, and received, in the case of mailed notices, on the third business day following the date
on which it is mailed and, in the case of notices delivered by courier service, hand delivery, electronic mail, telecopy,
telegram or facsimile, at such time as it is delivered to the addressee (with the delivery receipt or the affidavit of
messenger) or at such time as delivery is refused by the addressee upon presentation. Any notice or communication under this
Agreement must be addressed, if to the Company, to: c/o Falcon Edge Capital, 660 Madison Avenue, 19th
Floor, New York, New York 10065, Attention: Cathy Weist, with copy to: Kirkland & Ellis LLP, 601 Lexington Avenue, New
York, New York 10022, Attention: Christian O. Nagler and James S. Rowe, and, if to any Holder, at such Holder’s address
or facsimile number as set forth in the Company’s books and records. Any party may change its address for notice at any
time and from time to time by written notice to the other parties hereto, and such change of address shall become effective
thirty (30) days after delivery of such notice as provided in this Section 6.1.
6.2 Assignment; No Third Party Beneficiaries.
6.2.1 This Agreement and the rights, duties and obligations
of the Company hereunder may not be assigned or delegated by the Company in whole or in part.
6.2.2 Prior to the expiration of the Founder Shares Lock-up
Period or the Private Placement Lock-up Period, as the case may be, no Holder may assign or delegate such Holder’s rights,
duties or obligations under this Agreement, in whole or in part, except in connection with a transfer of Registrable Securities
by such Holder to a Permitted Transferee.
6.2.3 This Agreement and the provisions hereof shall be binding
upon and shall inure to the benefit of each of the parties and its successors and the permitted assigns of the Holders, which shall
include Permitted Transferees.
6.2.4 This Agreement shall not confer any rights or benefits
on any persons that are not parties hereto, other than as expressly set forth in this Agreement and Section 6.2 hereof.
6.2.5 No assignment by any party hereto of such party’s
rights, duties and obligations hereunder shall be binding upon or obligate the Company unless and until the Company shall have
received (i) written notice of such assignment as provided in Section 6.1 hereof and (ii) the written agreement of the assignee,
in a form reasonably satisfactory to the Company, to be bound by the terms and provisions of this Agreement (which may be accomplished
by an addendum or certificate of joinder to this Agreement). Any transfer or assignment made other than as provided in this Section
6.2 shall be null and void.
6.3 Severability. This Agreement shall be deemed severable,
and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this
Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision,
the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid
or unenforceable provision as may be possible that is valid and enforceable.
6.4 Counterparts. This Agreement may be executed in multiple
counterparts (including facsimile or PDF counterparts), each of which shall be deemed an original, and all of which together shall
constitute the same instrument, but only one of which need be produced.
6.5 Entire Agreement. This Agreement (including all agreements
entered into pursuant hereto and all certificates and instruments delivered pursuant hereto and thereto) constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede all prior and contemporaneous agreements, representations,
understandings, negotiations and discussions between the parties, whether oral or written.
6.6 Governing Law; Venue. NOTWITHSTANDING THE PLACE WHERE
THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO AGREEMENTS AMONG NEW YORK RESIDENTS ENTERED INTO AND TO
BE PERFORMED ENTIRELY WITHIN NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS OF SUCH JURISDICTION.
6.7 WAIVER OF TRIAL BY JURY. EACH PARTY HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT, COUNTERCLAIM OR OTHER PROCEEDING (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF, CONNECTED WITH OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY,
OR THE ACTIONS OF THE SPONSOR IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.
6.8 Amendments and Modifications. Upon the written
consent of the Company and the Holders of at least a majority in interest of the Registrable Securities at the time in
question, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be waived, or any
of such provisions, covenants or conditions may be amended or modified; provided, however, that notwithstanding the
foregoing, any amendment hereto or waiver hereof that adversely affects one Holder, solely in its capacity as a holder of the
shares of the Company, in a manner that is materially different from the other Holders (in such capacity) shall require the
consent of the Holder so affected. No course of dealing between any Holder or the Company and any other party hereto or any
failure or delay on the part of a Holder or the Company in exercising any rights or remedies under this Agreement shall
operate as a waiver of any rights or remedies of any Holder or the Company. No single or partial exercise of any rights or
remedies under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies
hereunder or thereunder by such party.
6.9 Titles and Headings. Titles and headings of sections
of this Agreement are for convenience only and shall not affect the construction of any provision of this Agreement.
6.10 Waivers and Extensions. Any party to this Agreement
may waive any right, breach or default which such party has the right to waive, provided that such waiver will not be effective
against the waiving party unless it is in writing, is signed by such party, and specifically refers to this Agreement. Waivers
may be made in advance or after the right waived has arisen or the breach or default waived has occurred. Any waiver may be conditional.
No waiver of any breach of any agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding
breach thereof nor of any other agreement or provision herein contained. No waiver or extension of time for performance of any
obligations or acts shall be deemed a waiver or extension of the time for performance of any other obligations or acts.
6.11 Remedies Cumulative. In the event that the Company
fails to observe or perform any covenant or agreement to be observed or performed under this Agreement, the Holders may proceed
to protect and enforce its rights by suit in equity or action at law, whether for specific performance of any term contained in
this Agreement or for an injunction against the breach of any such term or in aid of the exercise of any power granted in this
Agreement or to enforce any other legal or equitable right, or to take any one or more of such actions, without being required
to post a bond. None of the rights, powers or remedies conferred under this Agreement shall be mutually exclusive, and each such
right, power or remedy shall be cumulative and in addition to any other right, power or remedy, whether conferred by this Agreement
or now or hereafter available at law, in equity, by statute or otherwise.
6.12 Other Registration Rights. The Company represents
and warrants that no person, other than a Holder of Registrable Securities, has any right to require the Company to register any
securities of the Company for sale or to include such securities of the Company in any Registration filed by the Company for the
sale of securities for its own account or for the account of any other person. Further, the Company represents and warrants that
this Agreement supersedes any other registration rights agreement or agreement with similar terms and conditions and in the event
of a conflict between any such agreement or agreements and this Agreement, the terms of this Agreement shall prevail.
6.13 Term. This Agreement shall terminate upon
the earlier of (i) the tenth anniversary of the date of this Agreement and (ii) the date as of which no Registrable Securities
remain outstanding. The provisions of Section 3.5 and Article IV shall survive any termination.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the undersigned have caused this
Agreement to be executed as of the date first written above.
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COMPANY:
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FRONTIER ACQUISITION CORP.
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[Signature Page to Registration and Shareholder
Rights Agreement]
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HOLDERS:
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FRONTIER ACQUISITION SPONSOR LLC
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[Signature Page to Registration and Shareholder
Rights Agreement]
[Signature Page to Registration and Shareholder
Rights Agreement]
[Signature Page to Registration and Shareholder
Rights Agreement]
[Signature Page to Registration and Shareholder
Rights Agreement]
Exhibit
10.3
PRIVATE PLACEMENT UNITS PURCHASE
AGREEMENT
THIS PRIVATE PLACEMENT UNITS PURCHASE AGREEMENT (as it may from
time to time be amended and including all exhibits referenced herein, this “Agreement”), dated as of
[●], 2021, is entered into by and between Frontier Acquisition Corp., a Cayman Islands exempted company (the “Company”),
and Frontier Acquisition Sponsor LLC, a Cayman Islands limited liability company (the “Purchaser”).
WHEREAS, the Company intends to consummate an initial public
offering of the Company’s units (the “Public Offering”), each unit consisting of one Class A ordinary
share of the Company, par value $0.0001 per share (each, a “Share”), and one-third of one redeemable
warrant, each whole warrant entitling the holder to purchase one Share at an exercise price of $11.50 per Share, as set forth in
the Company’s Registration Statement on Form S-1, filed with the U.S. Securities and Exchange Commission (the “SEC”),
File Number 333-[●] (the “Registration Statement”), under the Securities Act of 1933, as amended
(the “Securities Act”).
WHEREAS, the Purchaser has agreed to purchase an aggregate of
600,000 units (and up to 660,000 additional units if the underwriter in the Public Offering exercises its option to purchase additional
units in full) (the “Private Placement Units”), each Private Placement Unit, including an aggregate of
200,000 private placement warrants (the “Private Placement Warrants”) (or up to 220,000 Private Placement
Warrants if the underwriters exercise their option to purchase additional units in full) and 600,000 Shares (or up to 660,000 Shares
if the underwriters exercise their option to purchase additional units in full).
NOW THEREFORE, in consideration of the mutual promises contained
in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties to this Agreement hereby, intending legally to be bound, agree as follows:
AGREEMENT
Section 1. Authorization, Purchase and Sale; Terms of the
Private Placement Units.
A. Authorization of the Private Placement Units. The
Company has duly authorized the issuance and sale of the Private Placement Units, including the Shares and Private Placement Warrants
underlying the Private Placement Units, to the Purchaser.
B. Purchase and Sale of the Private Placement Units.
(i) On the date of the consummation of the Public Offering (the
“IPO Closing Date”), the Company shall issue and sell to the Purchaser, and the Purchaser shall purchase
from the Company, 600,000 Private Placement Units at a price of $10.00 per Private Placement Unit for an aggregate purchase price
of $6,000,000 (the “Purchase Price”). The Purchaser shall pay the Purchase Price by wire transfer of
immediately available funds in the following amounts: (i) $2,000,000 to the Company at a financial institution to be chosen by
the Company, and (ii) $4,000,000 to the trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee
(the “Trust Account”), in each case in accordance with the Company’s wiring instructions, at least
one (1) business day prior to the IPO Closing Date. On the IPO Closing Date, subject to the receipt of funds pursuant to the immediately
prior sentence, the Company, at its option, shall deliver a certificate evidencing the Private Placement Units purchased on such
date duly registered in the Purchaser’s name to the Purchaser or effect such delivery in book-entry form.
(ii) On the date of the closing of the option to purchase
additional units, if any, in connection with the Public Offering or on such earlier time and date as may be mutually agreed
by the Purchaser and the Company (the “Option Closing Date”, and each Option Closing Date (if any)
and the IPO Closing Date, a “Closing Date”), the Company shall issue and sell to the Purchaser, and
the Purchaser shall purchase from the Company, up to 60,000 Private Placement Units (or, to the extent the option to purchase
additional units is not exercised in full, a lesser number of Private Placement Units in proportion to portion of the option
that is exercised) at a price of $10.00 per Private Placement Unit for an aggregate purchase price of up to $6,600,000 (the
“Option Purchase Price”). The Purchaser shall pay the Option Purchase Price in accordance with the
Company’s wire instruction by wire transfer of immediately available funds to the Trust Account, at least one (1)
business day prior to the Option Closing Date. On the Option Closing Date, subject to the receipt of funds pursuant to the
immediately prior sentence, the Company shall, at its option, deliver a certificate evidencing the Private Placement Units
purchased on such date duly registered in the Purchaser’s name to the Purchaser or effect such delivery in book-entry
form.
C. Terms of the Private Placement Units.
(i) The Private Placement Units are substantially identical
to the units to be offered in the Public Offering except that (a) the Private Placement Units (including the underlying Shares,
Private Placement Warrants and the Shares issuable upon exercise of the Private Placement Warrants) will not, except in limited
circumstances, be transferable or salable until 30 days after the completion of the Company’s initial business combination
(the “Business Combination”) so long as they are held by the Purchaser or its permitted transferees,
and (b) the Private Placement Units are being purchased pursuant to an exemption from the registration requirements of the Securities
Act and will become freely tradable only after the expiration of the lockup described above in clause (a) and they are registered
pursuant to the Registration and Shareholder Rights Agreement (as defined below) or an exemption from registration is available,
and the restrictions described above in clause (a) have expired.
(ii) Each Private Placement Warrant included in the Private
Placement Units shall have the terms set forth in a Warrant Agreement to be entered into by the Company and a warrant agent on
the IPO Closing Date, in connection with the Public Offering (the “Warrant Agreement”).
(iii) On the IPO Closing Date, the Company and the Purchaser
shall enter into a registration and shareholder rights agreement (the “Registration and Shareholder Rights Agreement”)
pursuant to which the Company will grant certain registration rights to the Purchaser relating to the Private Placement Units,
the Private Placement Warrants and the Shares underlying the Private Placement Warrants and the Private Placement Units.
Section 2. Representations and Warranties of the Company.
As a material inducement to the Purchaser to enter into this Agreement and purchase the Private Placement Units, the Company hereby
represents and warrants to the Purchaser (which representations and warranties shall survive each Closing Date) that:
A. Incorporation and Corporate Power. The Company is
an exempted company duly incorporated, validly existing and in good standing under the laws of the Cayman Islands and is qualified
to do business in every jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse
effect on the financial condition, operating results or assets of the Company. The Company possesses all requisite corporate power
and authority necessary to carry out the transactions contemplated by this Agreement and the Warrant Agreement.
B. Authorization; No Breach.
(i) The execution, delivery and performance of this Agreement
and the Private Placement Units, including the Shares and the Private Placement Warrants included in the Private Placement Units,
have been duly authorized by the Company as of the Closing Date. This Agreement constitutes the valid and binding obligation of
the Company, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other laws of general applicability relating to or affecting creditors’ rights and to general equitable principles
(whether considered in a proceeding in equity or law). Upon issuance in accordance with, and payment pursuant to, the terms of
the Warrant Agreement and this Agreement, the Private Placement Units and the Private Placement Warrants included in the Private
Placement Units will constitute valid and binding obligations of the Company, enforceable in accordance with their terms as of
the Closing Date.
(ii) The execution and delivery by the Company of this
Agreement and the Private Placement Units, the issuance and sale of the Private Placement Units, the issuance of the Private
Placement Warrants and the Shares included in the Private Placement Units, the issuance of the Shares upon exercise of the
Private Placement Warrants and the fulfillment of and compliance with the respective terms hereof and thereof by the Company,
do not and will not as of the Closing Date (a) conflict with or result in a breach of the terms, conditions or provisions of,
(b) constitute a default under, (c) result in the creation of any lien, security interest, charge or encumbrance upon the
Company’s share capital or assets under, (d) result in a violation of, or (e) require any authorization, consent,
approval, exemption or other action by or notice or declaration to, or filing with, any court or administrative or
governmental body or agency pursuant to the memorandum and articles of association of the Company (in effect on the date
hereof or as may be amended prior to completion of the Public Offering) or any material law, statute, rule or regulation to
which the Company is subject, or any agreement, order, judgment or decree to which the Company is subject, except for any
filings required after the date hereof under federal or state securities laws.
C. Title to Securities. Upon issuance in accordance
with, and payment pursuant to, the terms hereof and the Warrant Agreement and the amended and restate memorandum and articles
of association of the Company, and upon registration in the Company’s register of members, the Shares included in the
Private Placement Units and the Shares issuable upon exercise of the Private Placement Warrants will be duly and validly
issued, fully paid and nonassessable. On the date of issuance of the Private Placement Units, the Shares included in the
Private Placement Units and the Shares issuable upon exercise of the Private Placement Warrants shall have been reserved for
issuance. Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, and upon
registration in the Company’s register of members, the Purchaser will have good title to the Private Placement Units
purchased by it, the Private Placement Warrants and Shares included in the Private Placement Units and the Shares issuable
upon exercise of such Private Placement Warrants, free and clear of all liens, claims and encumbrances of any kind, other
than (i) transfer restrictions hereunder and under the other agreements contemplated hereby, (ii) transfer restrictions under
federal and state securities laws, and (iii) liens, claims or encumbrances imposed due to the actions of the Purchaser.
D. Governmental Consents. No permit, consent, approval
or authorization of, or declaration to or filing with, any governmental authority is required in connection with the execution,
delivery and performance by the Company of this Agreement or the consummation by the Company of any other transactions contemplated
hereby.
E. Regulation D Qualification. Neither the Company nor,
to its actual knowledge, any of its affiliates, members, officers, directors or beneficial shareholders of 20% or more of its outstanding
securities, has experienced a disqualifying event as enumerated pursuant to Rule 506(d) of Regulation D under the Securities Act.
Section 3. Representations and Warranties of the Purchaser.
As a material inducement to the Company to enter into this Agreement and issue and sell the Private Placement Units to the Purchaser,
the Purchaser hereby represents and warrants to the Company (which representations and warranties shall survive each Closing Date)
that:
A. Organization and Requisite Authority. The Purchaser
possesses all requisite power and authority necessary to carry out the transactions contemplated by this Agreement.
B. Authorization; No Breach.
(i) This Agreement constitutes a valid and binding obligation
of the Purchaser, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other laws of general applicability relating to or affecting creditors’ rights and to general equitable principles
(whether considered in a proceeding in equity or law).
(ii) The execution and delivery by the Purchaser of this Agreement
and the fulfillment of and compliance with the terms hereof by the Purchaser does not and shall not as of each Closing Date (a)
conflict with or result in a breach by the Purchaser of the terms, conditions or provisions of, (b) constitute a default under,
(c) result in the creation of any lien, security interest, charge or encumbrance upon the Purchaser’s equity or assets under,
(d) result in a violation of, or (e) require authorization, consent, approval, exemption or other action by or notice or declaration
to, or filing with, any court or administrative or governmental body or agency pursuant to the Purchaser’s organizational
documents in effect on the date hereof or as may be amended prior to completion of the contemplated Public Offering, or any material
law, statute, rule or regulation to which the Purchaser is subject, or any agreement, instrument, order, judgment or decree to
which the Purchaser is subject, except for any filings required after the date hereof under federal or state securities laws.
C. Investment Representations.
(i) The Purchaser is acquiring the Private Placement Units,
the Shares and Private Placement Warrants included in the Private Placement Units and, upon exercise of the Private Placement Warrants,
the Shares issuable upon such exercise (collectively, the “Securities”) for its own account, for investment
purposes only and not with a view towards, or for resale in connection with, any public sale or distribution thereof.
(ii) The Purchaser is an “accredited investor”
as such term is defined in Rule 501(a)(3) of Regulation D, and the Purchaser has not experienced a disqualifying event as enumerated
pursuant to Rule 506(d) of Regulation D under the Securities Act.
(iii) The Purchaser understands that the Securities are being
offered and will be sold to it in reliance on specific exemptions from the registration requirements of the United States federal
and state securities laws and that the Company is relying upon the truth and accuracy of, and the Purchaser’s compliance
with, the representations and warranties of the Purchaser set forth herein in order to determine the availability of such exemptions
and the eligibility of the Purchaser to acquire such Securities.
(iv) The Purchaser did not decide to enter into this Agreement
as a result of any general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act.
(v) The Purchaser has been furnished with all materials relating
to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have
been requested by the Purchaser. The Purchaser has been afforded the opportunity to ask questions of the executive officers and
directors of the Company. The Purchaser understands that its investment in the Securities involves a high degree of risk and it
has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect
to the acquisition of the Securities.
(vi) The Purchaser understands that no United States federal
or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities
or the fairness or suitability of the investment in the Securities by the Purchaser nor have such authorities passed upon or endorsed
the merits of the offering of the Securities.
(vii) The Purchaser understands that: (a) the Securities have
not been and are not being registered under the Securities Act or any state securities laws, and may not be offered for sale, sold,
assigned or transferred unless (1) subsequently registered thereunder or (2) sold in reliance on an exemption therefrom; and (b)
except as specifically set forth in the Registration and Shareholder Rights Agreement, neither the Company nor any other person
is under any obligation to register the Securities under the Securities Act or any state securities laws or to comply with the
terms and conditions of any exemption thereunder. In this regard, the Purchaser understands that the SEC has taken the position
that promoters or affiliates of a blank check company and their transferees, both before and after an initial Business Combination,
are deemed to be “underwriters” under the Securities Act when reselling the securities of a blank check
company. Based on that position, Rule 144 adopted pursuant to the Securities Act would not be available for resale transactions
of the Securities despite technical compliance with the requirements of such Rule, and the Securities can be resold only through
a registered offering or in reliance upon another exemption from the registration requirements of the Securities Act.
(viii) The Purchaser has such knowledge and experience in financial
and business matters, knowledge of the high degree of risk associated with investments in the securities of companies in the development
stage such as the Company, is capable of evaluating the merits and risks of an investment in the Securities and is able to bear
the economic risk of an investment in the Securities in the amount contemplated hereunder for an indefinite period of time. The
Purchaser has adequate means of providing for its current financial needs and contingencies and will have no current or anticipated
future needs for liquidity which would be jeopardized by the investment in the Securities. The Purchaser can afford a complete
loss of its investments in the Securities.
(ix) The Purchaser understands that the Private Placement Units
and the Shares included in the Private Placement Units shall bear the following legend and appropriate “stop transfer restrictions”:
“THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS, AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND
SUCH LAWS WHICH, IN THE OPINION OF COUNSEL, IS AVAILABLE.
THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO LOCKUP PROVISIONS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF DURING THE TERM OF THE LOCKUP.”
(x) The Purchaser understands that the Private Placement Warrants
shall bear the legend substantially in the form set forth in the Warrant Agreement.
Section 4. Conditions of the Purchaser’s Obligations.
The obligations of the Purchaser to purchase and pay for the Private Placement Units are subject to the fulfillment, on or
before each Closing Date, of each of the following conditions:
A. Representations and Warranties. The representations
and warranties of the Company contained in Section 2 shall be true and correct at and as of the Closing Date as though then made.
B. Performance. The Company shall have performed and
complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied
with by it on or before such Closing Date.
C. No Injunction. No litigation, statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental
authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby,
which prohibits the consummation of any of the transactions contemplated by this Agreement or the Warrant Agreement.
D. Warrant Agreement and Registration and Shareholder Rights
Agreement. The Company shall have entered into the Warrant Agreement, in the form of Exhibit A hereto, and the Registration
and Shareholder Rights Agreement, in the form of Exhibit B hereto, in each case on terms satisfactory to the Purchaser.
Section 5. Conditions of the Company’s Obligations.
The obligations of the Company to the Purchaser under this Agreement are subject to the fulfillment, on or before each Closing
Date, of each of the following conditions:
A. Representations and Warranties. The representations
and warranties of the Purchaser contained in Section 3 shall be true and correct at and as of such Closing Date as though then
made.
B. Performance. The Purchaser shall have performed and
complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied
with by the Purchaser on or before such Closing Date.
C. Corporate Consents. The Company shall have obtained
the consent of its Board of Directors authorizing the execution, delivery and performance of this Agreement and the Warrant Agreement
and the issuance and sale of the Private Placement Units hereunder.
D. No Injunction. No litigation, statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental
authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby,
which prohibits the consummation of any of the transactions contemplated by this Agreement or the Warrant Agreement.
E. Warrant Agreement. The Company shall have entered
into the Warrant Agreement.
Section 6. Miscellaneous.
A. Successors and Assigns. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind
and inure to the benefit of the respective successors of the parties hereto whether so expressed or not. Notwithstanding the foregoing
or anything to the contrary herein, the parties may not assign this Agreement, other than assignments by the Purchaser to affiliates
thereof (including, without limitation one or more of its members).
B. Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this Agreement.
C. Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, none of which need contain the signatures of more than one party, but all such counterparts taken
together shall constitute one and the same agreement. Signatures to this Agreement transmitted via facsimile or e-mail shall be
valid and effective to bind the party so signing.
D. Descriptive Headings; Interpretation. The descriptive
headings of this Agreement are inserted for convenience only and do not constitute a substantive part of this Agreement. The use
of the word “including” in this Agreement shall be by way of example rather than by limitation.
E. Governing Law. This Agreement shall be deemed to be
a contract made under the laws of the State of New York and for all purposes shall be construed in accordance with the internal
laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the
laws of another jurisdiction.
F. Amendments. This Agreement may not be amended, modified
or waived as to any particular provision, except by a written instrument executed by the parties hereto.
[Signature page follows]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
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COMPANY:
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FRONTIER ACQUISITION CORP.
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By:
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Name:
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Title:
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PURCHASER:
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FRONTIER ACQUISITION SPONSOR LLC
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By:
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Name:
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Title:
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EXHIBIT A
Warrant Agreement
EXHIBIT B
Registration and Shareholder Rights
Agreement
EXHIBIT 10.4
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT (this “Agreement”)
is made as of [●], 2021, by and between Frontier Acquisition Corp., a Cayman Islands exempted company (the “Company”),
and (“Indemnitee”).
WHEREAS, highly competent persons
have become more reluctant to serve publicly-held companies and corporations as directors, officers or in other capacities unless
they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and
actions against them arising out of their service to and activities on behalf of such companies and corporations;
WHEREAS, the Board of Directors of
the Company (the “Board”) has determined that, in order to attract and retain qualified individuals,
the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the
Company and its subsidiaries from certain liabilities. The amended and restated memorandum and articles of association of the Company
(the “Articles”) provide for the indemnification of the officers and directors of the Company. Indemnitee
may also be entitled to indemnification pursuant to applicable Cayman Islands law. The Articles provide that the indemnification
provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company
and members of the Board, officers and other persons with respect to indemnification, hold harmless, exoneration, advancement and
reimbursement rights;
WHEREAS, the uncertainties relating
to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined
that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company’s
shareholders and that the Company should act to assure such persons that there will be increased certainty of such protection in
the future;
WHEREAS, it is reasonable, prudent
and necessary for the Company contractually to obligate itself to indemnify, hold harmless, exonerate and to advance expenses on
behalf of, such persons to the fullest extent permitted by applicable law and the Articles so that they will serve or continue
to serve the Company free from undue concern that they will not be so protected against liabilities;
WHEREAS, this Agreement is a supplement
to and in furtherance of the Articles of the Company and any resolutions adopted pursuant thereto, and shall not be deemed a substitute
therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and
WHEREAS, Indemnitee may not
be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such
capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on
the condition that he or she be so indemnified.
NOW, THEREFORE, in consideration
of the premises and the covenants contained herein and subject to the provisions of the letter agreement dated as of [●],
2021, the Company and Indemnitee do hereby covenant and agree as follows:
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1.
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SERVICES TO THE COMPANY
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In consideration of the Company’s
covenants and obligations hereunder, Indemnitee will serve or continue to serve as an officer, director, advisor, key employee
or in any other capacity of the Company, as applicable, for so long as Indemnitee is duly elected or appointed or retained or until
Indemnitee tenders his or her resignation or until Indemnitee is removed. The foregoing notwithstanding, this Agreement shall continue
in full force and effect after Indemnitee has ceased to serve as a director, officer, advisor, key employee or in any other capacity
of the Company, as provided in Section 17. This Agreement, however, shall not impose any obligation on Indemnitee or the Company
to continue Indemnitee’s service to the Company beyond any period otherwise required by law or by other agreements or commitments
of the parties, if any.
As used in this Agreement:
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(a)
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References to “agent” shall mean any person who is or was a director, officer or employee of the
Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person
serving in such capacity as a director, officer, employee, advisor, fiduciary or other official of another company or corporation,
partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or
to represent the interests of the Company or a subsidiary of the Company.
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(b)
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The terms “Beneficial Owner” and “Beneficial Ownership” shall have the
meanings set forth in Rule 13d-3 promulgated under the Exchange Act as in effect on the date hereof.
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(c)
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A “Change in Control” shall be deemed to occur upon the earliest to occur after the date of this
Agreement of any of the following events:
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(i)
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Acquisition of Shares by Third Party. Other than Frontier Acquisition Sponsor LLC (the “Sponsor”)
or an affiliates of the Sponsor, any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company
representing fifteen percent (15%) or more of the combined voting power of the Company’s then outstanding securities entitled
to vote generally in the election of directors, unless (1) the change in the relative Beneficial Ownership of the Company’s
securities by any Person results solely from a reduction in the aggregate number of outstanding shares of securities entitled to
vote generally in the election of directors, or (2) such acquisition was approved in advance by the Continuing Directors and
such acquisition would not constitute a Change in Control under part (iii) of this definition;
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(ii)
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Change in Board of Directors. Individuals who, as of the date hereof, constitute the Board, and any new director whose
election by the Board or nomination for election by the Company’s shareholders was approved
by a vote of at least two thirds of the directors then still in office who were directors on the date hereof or whose election
or nomination for election was previously so approved (collectively, the “Continuing Directors”), cease
for any reason to constitute at least a majority of the members of the Board;
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(iii)
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Corporate Transactions. The effective date of a merger, share exchange, asset acquisition, share purchase, reorganization
or similar business combination, involving the Company and one or more businesses (a “Business Combination”),
in each case, unless, following such Business Combination: (1) all or substantially all of the individuals and entities who
were the Beneficial Owners of securities entitled to vote generally in the election of directors immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 51% of the combined voting power of the then outstanding securities
of the Company entitled to vote generally in the election of directors resulting from such Business Combination (including, without
limitation, a company or corporation which as a result of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more Subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination, of the securities entitled to vote generally in the election of directors; (2) other
than an affiliate of the Sponsor, no Person (excluding any company or corporation resulting from such Business Combination) is
the Beneficial Owner, directly or indirectly, of 15% or more of the combined voting power of the then outstanding securities entitled
to vote generally in the election of directors of the surviving company or corporation except to the extent that such ownership
existed prior to the Business Combination; and (3) at least a majority of the board of directors of the company or corporation
resulting from such Business Combination were Continuing Directors at the time of the execution of the initial agreement, or of
the action of the Board, providing for such Business Combination;
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(iv)
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Liquidation. The approval by the shareholders of the Company of a complete liquidation of the Company or an agreement
or series of agreements for the sale or disposition by the Company of all or substantially all of the Company’s assets, other
than factoring the Company’s current receivables or escrows due (or, if such approval is not required, the decision by the
Board to proceed with such a liquidation, sale, or disposition in one transaction or a series of related transactions); or
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(v)
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Other Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e)
of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Exchange
Act, whether or not the Company is then subject to such reporting requirement.
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(d)
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“Corporate Status” describes the status of a person who is or was a director, officer, trustee, general
partner, manager, managing member, fiduciary, employee or agent of the Company or of any other Enterprise which such person
is or was serving at the request of the Company.
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(e)
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“Delaware Court” shall mean the Court of Chancery of the State of Delaware.
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(f)
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“Disinterested Director” shall mean a director of the Company who is not and was not a party to the
Proceeding in respect of which indemnification is sought by Indemnitee.
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(g)
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“Enterprise” shall mean the Company and any other company or corporation, constituent company or
corporation (including any constituent of a constituent) absorbed in a consolidation or merger to which the Company (or any of
its wholly owned subsidiaries) is a party, limited liability company, partnership, joint venture, trust, employee benefit plan
or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, trustee, general
partner, managing member, fiduciary, employee or agent.
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(h)
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“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
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(i)
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“Expenses” shall include all direct and indirect costs, fees and expenses of any type or nature whatsoever,
including, without limitation, all reasonable attorneys’ fees and costs, retainers, court costs, transcript costs, fees of
experts, witness fees, travel expenses, fees of private investigators and professional advisors, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees, fax transmission charges, secretarial services and all other
disbursements, obligations or expenses in connection with prosecuting, defending, preparing to prosecute or defend, investigating,
being or preparing to be a witness in, settlement or appeal of, or otherwise participating in, a Proceeding, including reasonable
compensation for time spent by the Indemnitee for which he or she is not otherwise compensated by the Company or any third party.
Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation
the principal, premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its
equivalent. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against
Indemnitee.
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(j)
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References to “fines” shall include any excise tax assessed on Indemnitee with respect to any employee
benefit plan.
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(k)
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References to “serving at the request of the Company” shall include any service as a director, officer,
employee, agent or fiduciary of the Company which imposes duties on, or involves services by, such director, officer, employee,
agent or fiduciary with respect to an employee benefit plan, its participants or beneficiaries; and if Indemnitee acted in good
faith and in a manner Indemnitee reasonably believed to be in the best interests of the participants and beneficiaries of an employee
benefit plan, Indemnitee shall be deemed to have acted in a manner “not opposed to the best interests of the Company”
as referred to in this Agreement.
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(l)
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“Independent Counsel” shall mean a law firm or a member of a law firm with significant
experience in matters of corporate law and that neither presently is, nor in the past five years has been, retained to
represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters
concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements); or
(ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term “Independent Counsel” shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or
Indemnitee in an action to determine Indemnitee’s rights under this Agreement.
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(m)
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The term “Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange
Act as in effect on the date hereof; provided, however, that “Person” shall exclude: (i) the Company;
(ii) any Subsidiaries of the Company; (iii) any employment benefit plan of the Company or of a Subsidiary of the Company
or of any company or corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions
as their ownership of shares of the Company; and (iv) any trustee or other fiduciary holding securities under an employee
benefit plan of the Company or of a Subsidiary of the Company or of a company or corporation owned directly or indirectly by the
shareholders of the Company in substantially the same proportions as their ownership of shares of the Company.
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(n)
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The term “Proceeding” shall include any threatened, pending or completed action, suit, arbitration,
mediation, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened
or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil (including intentional
or unintentional tort claims), criminal, administrative, legislative or investigative or related nature, in which Indemnitee was,
is, will or might be involved as a party, potential party, non-party witness, or otherwise by reason of the fact that Indemnitee
is or was a director or officer of the Company, by reason of any action (or failure to act) taken by him or her or of any action
(or failure to act) on his or her part while acting as a director or officer of the Company, or by reason of the fact that he or
she is or was serving at the request of the Company as a director, officer, trustee, general partner, managing member, fiduciary,
employee or agent of any other Enterprise, in each case whether or not serving in such capacity at the time any liability or expense
is incurred for which indemnification, reimbursement, or advancement of expenses can be provided under this Agreement.
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(o)
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The term “Subsidiary,” with respect to any Person, shall mean any company or corporation, limited
liability company, partnership, joint venture, trust or other entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by that Person.
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(p)
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The phrase “to the fullest extent permitted by applicable law and the Articles” shall include,
but not be limited to: (a) to the fullest extent authorized or permitted by the provision of applicable Cayman Islands
law that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment
to or replacement of applicable Cayman Islands law, and (b) to the fullest extent authorized or permitted by any
amendments to or replacements of applicable Cayman Islands law adopted after the date of this Agreement that increase the
extent to which a company or corporation may indemnify its officers and directors.
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3.
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INDEMNITY IN THIRD-PARTY PROCEEDINGS
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To the fullest extent permitted by applicable
law and the Articles, the Company shall indemnify, hold harmless and exonerate Indemnitee in accordance with the provisions of
this Section 3 if Indemnitee was, is, or is threatened to be made, a party to or a participant (as a witness, deponent or
otherwise) in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor by reason
of Indemnitee’s Corporate Status. Pursuant to this Section 3, Indemnitee shall be indemnified, held harmless and
exonerated against all Expenses, judgments, liabilities, fines, penalties and amounts paid in settlement (including all interest,
assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, fines, penalties and
amounts paid in settlement) actually, and reasonably incurred by Indemnitee or on his or her behalf in connection with such Proceeding
or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he or she reasonably believed to be in
or not opposed to the best interests of the Company and, in the case of a criminal Proceeding, had no reasonable cause to believe
that his or her conduct was unlawful; provided, in no event shall Indemnitee be entitled to be indemnified, held harmless or advanced
any amounts hereunder in respect of any Expenses, judgments, liabilities, fines, penalties and amounts paid in settlement (if any)
that Indemnitee may incur by reason of his or her own actual fraud or willful default. Indemnitee shall not be found to have committed
actual fraud or willful default for any purpose of this Agreement unless or until a court of competent jurisdiction shall have
made a finding to that effect.
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4.
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INDEMNITY IN PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY
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To the fullest extent permitted by applicable
law and the Articles, the Company shall indemnify, hold harmless and exonerate Indemnitee in accordance with the provisions of
this Section 4 if Indemnitee was, is, or is threatened to be made, a party to or a participant (as a witness, deponent or
otherwise) in any Proceeding by or in the right of the Company to procure a judgment in its favor by reason of Indemnitee’s
Corporate Status. Pursuant to this Section 4, Indemnitee shall be indemnified, held harmless and exonerated against all
Expenses actually and reasonably incurred by him or her or on his or her behalf in connection with such Proceeding or any claim,
issue or matter therein, if Indemnitee acted in good faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the Company. No indemnification, hold harmless or exoneration for Expenses shall be made under this Section 4
in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court of competent jurisdiction
to be liable to the Company, unless and only to the extent that any court in which the Proceeding was brought or the Delaware Court
shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee
is fairly and reasonably entitled to indemnification, to be held harmless or to exoneration.
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5.
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INDEMNIFICATION FOR EXPENSES OF A PARTY WHO IS WHOLLY OR PARTLY SUCCESSFUL
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Notwithstanding any other provisions of
this Agreement, but subject to Section 27, to the extent that Indemnitee was or is, by reason of Indemnitee’s Corporate
Status, a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any
claim, issue or matter therein, in whole or in part, the Company shall, to the fullest extent permitted by applicable law and the
Articles, indemnify, hold harmless and exonerate Indemnitee against all Expenses actually and reasonably incurred by him or her
in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise,
as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall, to the fullest extent permitted
by applicable law and the Articles, indemnify, hold harmless and exonerate Indemnitee against all Expenses actually and reasonably
incurred by him or her or on his or her behalf in connection with each successfully resolved claim, issue or matter. If Indemnitee
is not wholly successful in such Proceeding, the Company also shall, to the fullest extent permitted by applicable law and the
Articles, indemnify, hold harmless and exonerate Indemnitee against all Expenses reasonably incurred in connection with a claim,
issue or matter related to any claim, issue, or matter on which Indemnitee was successful. For purposes of this Section 5
and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice,
shall be deemed to be a successful result as to such claim, issue or matter.
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6.
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INDEMNIFICATION FOR EXPENSES OF A WITNESS
|
Notwithstanding any other provision of this
Agreement, but subject to Section 27, to the extent that Indemnitee is, by reason of his or her Corporate Status, a witness
or deponent in any Proceeding to which Indemnitee is not a party or threatened to be made a party, he or she shall, to the fullest
extent permitted by applicable law and the Articles, be indemnified, held harmless and exonerated against all Expenses actually
and reasonably incurred by him or her or on his or her behalf in connection therewith.
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7.
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ADDITIONAL INDEMNIFICATION, HOLD HARMLESS AND EXONERATION RIGHTS
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Notwithstanding any limitation in Sections
3, 4 or 5, but subject to Section 27, the Company shall, to the fullest extent permitted by applicable law and the Articles,
indemnify, hold harmless and exonerate Indemnitee if Indemnitee is a party to or threatened to be made a party to any Proceeding
(including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Expenses, judgments,
fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection
with or in respect of such Expenses, judgments, fines, penalties and amounts paid in settlement) actually and reasonably incurred
by Indemnitee in connection with the Proceeding.
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8.
|
CONTRIBUTION IN THE EVENT OF JOINT LIABILITY
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(a)
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To the fullest extent permissible under applicable law and the Articles, if the indemnification, hold harmless and/or exoneration
rights provided for in this Agreement are unavailable to Indemnitee in whole or in part
for any reason whatsoever, the Company, in lieu of indemnifying, holding harmless or exonerating Indemnitee, shall pay, in the
first instance, the entire amount incurred by Indemnitee, whether for judgments, liabilities, fines, penalties, amounts paid or
to be paid in settlement and/or for Expenses, in connection with any Proceeding without requiring Indemnitee to contribute to such
payment, and the Company hereby waives and relinquishes any right of contribution it may have at any time against Indemnitee.
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(b)
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The Company shall not enter into any settlement of any Proceeding in which the Company is jointly liable with Indemnitee (or
would be if joined in such Proceeding) unless such settlement provides for a full and final release of all claims asserted against
Indemnitee.
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(c)
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The Company hereby agrees to fully indemnify, hold harmless and exonerate Indemnitee from any claims for contribution which
may be brought by officers, directors or employees of the Company other than Indemnitee who may be jointly liable with Indemnitee.
Indemnitee shall seek payments or advances from the Company only to the extent that such payments or advances are unavailable from
any insurance policy of the Company covering Indemnitee.
|
Notwithstanding any provision in this Agreement,
but subject to Section 27, the Company shall not be obligated under this Agreement to make any indemnification, advance Expenses,
hold harmless or exoneration payment in connection with any claim made against Indemnitee:
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(a)
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for which payment has actually been received by or on behalf of Indemnitee under any insurance policy or other indemnity or
advancement provision, except with respect to any excess beyond the amount actually received under any insurance policy, contract,
agreement, other indemnity or advancement provision or otherwise;
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(b)
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for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company
within the meaning of Section 16(b) of the Exchange Act (or any successor rule) or similar provisions of state statutory law
or common law; or
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(c)
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except as otherwise provided in Sections 14(f) and (g) hereof, prior to a Change in Control, in connection with any Proceeding
(or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by
Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized
the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, hold
harmless or exoneration payment, in its sole discretion, pursuant to the powers vested in the Company under applicable law and
the Articles.
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10.
|
ADVANCES OF EXPENSES; DEFENSE OF CLAIM
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(a)
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Notwithstanding any provision of this Agreement to the contrary, but subject to Section 27, and to the fullest extent
not prohibited by applicable law and the Articles, the Company shall pay the Expenses incurred by Indemnitee (or reasonably expected
by Indemnitee to be incurred by Indemnitee within three months) in connection with any Proceeding within ten (10) days after
the receipt by the Company of a statement or statements requesting such advances from time to time, prior to the final disposition
of any Proceeding. Advances shall, to the fullest extent permitted by law, be unsecured and interest free. Advances shall, to the
fullest extent permitted by law, be made without regard to Indemnitee’s ability to repay the Expenses and without regard
to Indemnitee’s ultimate entitlement to be indemnified, held harmless or exonerated under the other provisions of this Agreement.
Advances shall include any and all reasonable Expenses incurred pursuing a Proceeding to enforce this right of advancement, including
Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. To the fullest extent required
by applicable law and the Articles, such payments of Expenses in advance of the final disposition of the Proceeding shall be made
only upon the Company’s receipt of an undertaking, by or on behalf of Indemnitee, to repay the advanced amounts to the extent
that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company under the provisions of this
Agreement, applicable law and the Articles or otherwise. If it shall be determined by a final judgment or other final adjudication
that Indemnitee was not so entitled to indemnification, any advancement shall be returned to the Company (without interest) by
the Indemnitee. This Section 10(a) shall not apply to any claim made by Indemnitee for which an indemnification, hold
harmless or exoneration payment is excluded pursuant to Section 9, but shall apply to any Proceeding referenced in Section 9(b) prior
to a final determination that Indemnitee is liable therefor.
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(b)
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The Company will be entitled to participate in the Proceeding at its own expense.
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(c)
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The Company shall not settle any action, claim or Proceeding (in whole or in part) which would impose any Expense, judgment,
fine, penalty or limitation on Indemnitee without Indemnitee’s prior written consent.
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11.
|
PROCEDURE FOR NOTIFICATION AND APPLICATION FOR INDEMNIFICATION
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(a)
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Indemnitee agrees to notify promptly the Company in writing upon being served with any summons, citation, subpoena, complaint,
indictment, information or other document relating to any Proceeding, claim, issue or matter therein which may be subject to indemnification,
hold harmless or exoneration rights, or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company
shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement, or otherwise.
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(b)
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Indemnitee may deliver to the Company a written application to indemnify, hold harmless or exonerate Indemnitee in accordance
with this Agreement. Such application(s) may be delivered from time to time and at such time(s)
as Indemnitee deems appropriate in his or her sole discretion. Following such a written application for indemnification by Indemnitee,
Indemnitee’s entitlement to indemnification shall be determined according to Section 12(a) of this Agreement.
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12.
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PROCEDURE UPON APPLICATION FOR INDEMNIFICATION
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(a)
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A determination, if required by applicable law and the Articles, with respect to Indemnitee’s entitlement to indemnification
shall be made in the specific case by one of the following methods, which shall be at the election of Indemnitee: (i) by a
majority vote of the Disinterested Directors, even though less than a quorum of the Board, (ii) by a committee of such directors
designated by majority vote of such directors, (iii) if there are no Disinterested Directors or if such directors so direct,
by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee, or (iv) by vote
of the shareholders by ordinary resolution. The Company promptly will advise Indemnitee in writing with respect to any determination
that Indemnitee is or is not entitled to indemnification, including a description of any reason or basis for which indemnification
has been denied. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within
ten (10) days after such determination. Indemnitee shall reasonably cooperate with the person, persons or entity making such
determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or
entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure
and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including
reasonable attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity
making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement
to indemnification) and the Company hereby agrees to indemnify and to hold Indemnitee harmless therefrom.
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(b)
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In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to
Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b). The Independent
Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board), and
Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected and
certifying that the Independent Counsel so selected meets the requirements of “Independent Counsel”
as defined in Section 2 of this Agreement. If the Independent Counsel is selected by the Board, the Company shall give
written notice to Indemnitee advising him or her of the identity of the Independent Counsel so selected and certifying that
the Independent Counsel so selected meets the requirements of “Independent Counsel” as defined in
Section 2 of this Agreement. In either event, Indemnitee or the Company, as the case may be, may, within ten
(10) days after such written notice of selection shall have been received, deliver to the Company or to Indemnitee, as
the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the
ground that the Independent Counsel so selected does not meet the requirements of “Independent
Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with particularity
the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent
Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as
Independent Counsel unless and until such objection is withdrawn or a court of competent jurisdiction has determined that
such objection is without merit. If, within twenty (20) days after submission by Indemnitee of a written request for
indemnification pursuant to Section 11(b) hereof, no Independent Counsel shall have been selected and not objected
to, either the Company or Indemnitee may petition the Delaware Court for resolution of any objection which shall have been
made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as
Independent Counsel of a person selected by the Delaware Court, and the person with respect to whom all objections are so
resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof. Upon the due
commencement of any judicial proceeding or arbitration pursuant to Section 14(a) of this
Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject
to the applicable standards of professional conduct then prevailing).
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(c)
|
The Company agrees to pay the reasonable fees and expenses of Independent Counsel and to fully indemnify and hold harmless
such Independent Counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement
or its engagement pursuant hereto.
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13.
|
PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS
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(a)
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In making a determination with respect to entitlement to indemnification hereunder, the person, persons or entity making such
determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request
for indemnification in accordance with Section 11(b) of this Agreement, and the Company shall have the burden of proof to
overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that
presumption. Neither the failure of the Company (including by the Disinterested Directors or Independent Counsel) to have made
a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances
because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by the Disinterested
Directors or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action
or create a presumption that Indemnitee has not met the applicable standard of conduct.
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(b)
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If the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether
Indemnitee is entitled to indemnification shall not have made a determination within thirty (30) days after receipt by
the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest
extent permitted by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent
(i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make
Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a
final judicial determination that any or all such indemnification is expressly prohibited under applicable law and the
Articles; provided, however, that such 30-day period may be extended for a reasonable time, not to exceed an additional
fifteen (15) days, if the person, persons or entity making the determination with respect to entitlement to
indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or
information relating thereto.
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(c)
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The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or
upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself
adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and
in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Company or, with respect to
any criminal Proceeding, that Indemnitee had reasonable cause to believe that his or her conduct was unlawful.
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(d)
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For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s
action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied
to Indemnitee by the directors, manager, or officers of the Enterprise in the course of their duties, or on the advice of legal
counsel for the Enterprise, its Board, any committee of the Board or any director, trustee, general partner, manager or managing
member, or on information or records given or reports made to the Enterprise, its Board, any committee of the Board or any director,
trustee, general partner, manager or managing member, by an independent certified public accountant or by an appraiser or other
expert selected by the Enterprise, its Board, any committee of the Board or any director, trustee, general partner, manager or
managing member. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other
circumstances in which Indemnitee may be deemed or found to have met the applicable standard of conduct set forth in this Agreement.
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(e)
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The knowledge and/or actions, or failure to act, of any other director, officer, trustee, partner, manager, managing member,
fiduciary, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification
under this Agreement.
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14.
|
REMEDIES OF INDEMNITEE
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(a)
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In the event that (i) a determination is made pursuant to Section 12 of this Agreement that Indemnitee is not entitled
to indemnification under this Agreement, (ii) advancement of Expenses, to the fullest extent permitted by applicable law and
the Articles, is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification
shall have been made pursuant to Section 12(a) of this Agreement within thirty (30) days after receipt by the Company
of the request for indemnification, (iv) payment of indemnification is not made pursuant to Sections 5, 6, 7 or the last sentence
of Section 12(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor,
(v) a contribution payment is not made in a timely manner pursuant to Section 8 of this Agreement, (vi) payment
of indemnification pursuant to Section 3 or 4 of this Agreement
is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vii) payment
to Indemnitee pursuant to any hold harmless or exoneration rights under this Agreement or otherwise is not made in accordance with
this Agreement within ten (10) days after receipt by the Company of a written request therefor, Indemnitee shall be entitled
to an adjudication by the Delaware Court to such indemnification, hold harmless, exoneration, contribution or advancement rights.
Alternatively, Indemnitee, at his or her option, may seek an award in arbitration to be conducted by a single arbitrator pursuant
to the Commercial Arbitration Rules and Mediation Procedures of the American Arbitration Association. Except as set forth
herein, the Commercial Arbitration Rules and Mediation Procedures of the American Arbitration Association shall apply to any
such arbitration. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.
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(b)
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In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is
not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted
in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse
determination.
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(c)
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In any judicial proceeding or arbitration commenced pursuant to this Section 14, Indemnitee shall be presumed to be entitled
to be indemnified, held harmless, exonerated to receive advancement of Expenses under this Agreement and the Company shall have
the burden of proving Indemnitee is not entitled to be indemnified, held harmless, exonerated and to receive advancement of Expenses,
as the case may be, and the Company may not refer to or introduce into evidence any determination pursuant to Section 12(a) of
this Agreement adverse to Indemnitee for any purpose. If Indemnitee commences a judicial proceeding or arbitration pursuant to
this Section 14, Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 10
until a final determination is made with respect to Indemnitee’s entitlement to indemnification (as to which all rights of
appeal have been exhausted or lapsed).
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(d)
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If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification,
the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14,
absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification
under applicable law and the Articles.
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(e)
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The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14
that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court
or before any such arbitrator that the Company is bound by all the provisions of this Agreement.
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(f)
|
The Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by law against all Expenses and, if
requested by Indemnitee, shall (within ten (10) days after the Company’s receipt of such written request) pay to Indemnitee,
to the fullest extent permitted by applicable law and the Articles, such Expenses which are incurred by Indemnitee in connection
with any judicial proceeding or arbitration brought by Indemnitee: (i) to enforce his or her rights under, or to recover damages
for breach of, this Agreement or any other indemnification, hold harmless, exoneration, advancement or contribution agreement or
provision of the Articles now or hereafter in effect; or (ii) for recovery or advances under any insurance policy maintained
by any person for the benefit of Indemnitee, regardless of the outcome and whether Indemnitee ultimately is determined to be entitled
to such indemnification, hold harmless or exoneration right, advancement, contribution or insurance recovery, as the case may be
(unless such judicial proceeding or arbitration was not brought by Indemnitee in good faith).
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(g)
|
Interest shall be paid by the Company to Indemnitee at the legal rate under Delaware law for amounts which the Company indemnifies,
holds harmless or exonerates, or advances, or is obliged to indemnify, hold harmless or exonerate or advance for the period commencing
with the date on which Indemnitee requests indemnification, to be held harmless, exonerated, contribution, reimbursement or advancement
of any Expenses and ending with the date on which such payment is made to Indemnitee by the Company.
|
Notwithstanding anything herein to the contrary,
but subject to Section 27, to the extent requested by Indemnitee and approved by the Board, the Company may at any time and
from time to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line
of credit, funded trust or other collateral. Any such security, once provided to Indemnitee, may not be revoked or released without
the prior written consent of Indemnitee.
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16.
|
NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE; SUBROGATION; PRIORITY OF OBLIGATIONS
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(a)
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The rights of Indemnitee as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee
may at any time be entitled under applicable law, the Articles, any agreement, a vote of shareholders or a resolution of directors,
or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right
of Indemnitee under this Agreement in respect of any Proceeding (regardless of when such Proceeding is first threatened, commenced
or completed) or claim, issue or matter therein arising out of, or related to, any action taken or omitted by such Indemnitee in
his or her Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in applicable law and the
Articles, whether by statute or judicial decision, permits greater indemnification, hold harmless or exoneration rights or advancement
of Expenses than would be afforded currently under the Articles or this Agreement, then this Agreement (without any further action
by the parties hereto) shall automatically be deemed to be amended to require that the Company indemnifies the Indemnitee to the
fullest extent permitted by law. No right or remedy herein conferred is intended to be exclusive of any other right or remedy,
and every other right and remedy shall be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other
right or remedy.
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(b)
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The Articles permit the Company to purchase and maintain insurance or furnish similar protection or make other arrangements
including, but not limited to, providing a trust fund, letter of credit, or surety bond (“Indemnification Arrangements”)
on behalf of Indemnitee against any liability asserted against him or her or incurred by or on behalf of him or in such capacity
as a director, officer, employee or agent of the Company, or arising out of his or her status as such, whether or not the Company
would have the power to indemnify him or her against such liability under the provisions of this Agreement and the Articles. The
purchase, establishment, and maintenance of any such Indemnification Arrangement shall not in any way limit or affect the rights
and obligations of the Company or of Indemnitee under this Agreement except as expressly provided herein, and the execution and
delivery of this Agreement by the Company and Indemnitee shall not in any way limit or affect the rights and obligations of the
Company or the other party or parties thereto under any such Indemnification Arrangement.
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(c)
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To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers,
trustees, partners, managers, managing members, fiduciaries, employees, or agents of the Company or of any other Enterprise which
such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its
or their terms to the maximum extent of the coverage available for any such director, officer, trustee, partner, managers, managing
member, fiduciary, employee or agent under such policy or policies. If, at the time the Company receives notice from any source
of a Proceeding as to which Indemnitee is a party or a participant (as a witness, deponent or otherwise), the Company has director
and officer liability insurance in effect, the Company shall give prompt notice of such Proceeding to the insurers in accordance
with the procedures set forth in the respective policies. The Company shall thereafter use commercially reasonable efforts to cause
such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms
of such policies.
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(d)
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In the event of any payment under this Agreement, the Company, to the fullest extent permitted by law, 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 take all
action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit
to enforce such rights. No such payment by the Company shall be deemed to relieve any insurer of its obligations.
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(e)
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The Company’s obligation to indemnify, hold harmless, exonerate or advance Expenses hereunder to Indemnitee who is or
was serving at the request of the Company as a director, officer, trustee, partner, manager, managing member, fiduciary, employee
or agent of any other Enterprise shall be reduced by any amount Indemnitee has actually received as indemnification, hold harmless
or exoneration payments or advancement of expenses from such Enterprise. Notwithstanding any other provision of this Agreement
to the contrary, but subject to Section 27, (i)
Indemnitee shall have no obligation to reduce, offset, allocate, pursue or apportion any indemnification, hold harmless, exoneration,
advancement, contribution or insurance coverage among multiple parties possessing such duties to Indemnitee prior to the Company’s
satisfaction and performance of all its obligations under this Agreement, and (ii) the Company shall perform fully its obligations
under this Agreement without regard to whether Indemnitee holds, may pursue or has pursued any indemnification, advancement, hold
harmless, exoneration, contribution or insurance coverage rights against any person or entity other than the Company.
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(f)
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Notwithstanding anything contained herein, the Company is the primary indemnitor, and any indemnification or advancement obligation
of the Sponsor or its affiliates or members or any other Person is secondary.
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17.
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DURATION OF AGREEMENT
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All agreements and obligations of the Company
contained herein shall continue during the period Indemnitee serves as a director or officer of the Company or as a director, officer,
trustee, partner, manager, managing member, fiduciary, employee or agent of any other corporation, partnership, joint venture,
trust, employee benefit plan or other Enterprise which Indemnitee serves at the request of the Company and shall continue thereafter
so long as Indemnitee shall be subject to any possible Proceeding (including any rights of appeal thereto and any Proceeding commenced
by Indemnitee pursuant to Section 14 of this Agreement) by reason of his or her Corporate Status, whether or not he or she
is acting in any such capacity at the time any liability or expense is incurred for which indemnification or advancement can be
provided under this Agreement.
If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability
of the remaining provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence
of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal
or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted
by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and
the Articles and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the
provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested thereby.
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19.
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ENFORCEMENT AND BINDING EFFECT
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(a)
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The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it
hereby in order to induce Indemnitee to serve as a director, officer or key employee of the Company,
and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director, officer or key employee of
the Company.
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(b)
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Without limiting any of the rights of Indemnitee under the Articles of the Company as they may be amended from time to time,
this Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes
all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter
hereof.
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(c)
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The indemnification, hold harmless, exoneration and advancement of expenses rights provided by or granted pursuant to this
Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including
any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or
assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company
or a director, officer, trustee, general partner, manager, managing member, fiduciary, employee or agent of any other Enterprise
at the Company’s request, and shall inure to the benefit of Indemnitee and his or her spouse, assigns, heirs, devisees, executors
and administrators and other legal representatives.
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(d)
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The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise)
to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and
substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such succession had taken place.
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(e)
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The Company and Indemnitee agree herein that a monetary remedy for breach of this Agreement, at some later date, may be
inadequate, impracticable and difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm.
Accordingly, the parties hereto agree that Indemnitee may, to the fullest extent permitted by law, enforce this Agreement by
seeking, among other things, injunctive relief and/or specific performance hereof, without any necessity of showing actual
damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be
precluded from seeking or obtaining any other relief to which he or she may be entitled. The Company and Indemnitee further
agree that Indemnitee shall, to the fullest extent permitted by law, be entitled to such specific performance and injunctive
relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of
posting bonds or other undertaking in connection therewith. The Company acknowledges that in the absence of a waiver, a bond
or undertaking may be required of Indemnitee by a court of competent jurisdiction, and the Company hereby waives any such
requirement of such a bond or undertaking to the fullest extent permitted by law.
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20.
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MODIFICATION AND WAIVER
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No supplement, modification or amendment
of this Agreement shall be binding unless executed in writing by 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 of this Agreement nor shall any waiver constitute
a continuing waiver.
All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to have been duly given (i) if delivered by hand
and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) if mailed by certified
or registered mail with postage prepaid, on the third (3rd) business day after the date on which it is so mailed:
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(a)
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If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall
provide in writing to the Company.
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(b)
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If to the Company, to:
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Frontier Acquisition Corp.
c/o Falcon Edge Capital
660 Madison Avenue, 19th Floor
New York, New York 10065
Attention: Chief Operating Officer
With a copy, which shall not constitute notice, to:
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
Attn: Christian O. Nagler
James S. Rowe
or to any other address as may have been furnished to Indemnitee
in writing by the Company.
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22.
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APPLICABLE LAW AND THE ARTICLES AND CONSENT TO JURISDICTION
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This Agreement and the legal relations
among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware,
without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to
Section 14(a) of this Agreement, to the fullest extent permitted by law, the Company and Indemnitee hereby
irrevocably and unconditionally: (a) agree that any action or proceeding arising out of or in connection with this
Agreement shall be brought only in the Delaware Court and not in any other state or federal court in the United States of
America or any court in any other country; (b) consent to submit to the exclusive jurisdiction of the Delaware Court for
purposes of any action or proceeding arising out of or in connection with this Agreement; (c) waive any objection to the
laying of venue of any such action or proceeding in the Delaware Court; and (d) waive, and agree not to plead or to make,
any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum,
or is subject (in whole or in part) to a jury trial. To the fullest extent permitted by law, the parties hereby agree that the
mailing of process and other papers in connection with any such action or proceeding in the manner provided by Section 21
or in such other manner as may be permitted by law, shall be valid and sufficient service thereof.
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23.
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IDENTICAL COUNTERPARTS
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This Agreement may be executed in one or
more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute
one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced
to evidence the existence of this Agreement.
The headings of the paragraphs of this Agreement
are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
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25.
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PERIOD OF LIMITATIONS
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No legal action shall be brought and no
cause of action shall be asserted by or in the right of the Company against Indemnitee, Indemnitee’s spouse, heirs,
executors or personal or legal representatives after the expiration of two years from the date of accrual of such cause of action,
and any claim or cause of action of the Company shall be extinguished and deemed released unless asserted by the timely filing
of a legal action within such two-year period; provided, however, that if any shorter period of limitations is otherwise applicable
to any such cause of action such shorter period shall govern.
If for the validation of any of the provisions
in this Agreement any act, resolution, approval or other procedure is required to the fullest extent permitted by law, the Company
undertakes to cause such act, resolution, approval or other procedure to be affected or adopted in a manner that will enable the
Company to fulfill its obligations under this Agreement.
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27.
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WAIVER OF CLAIMS TO TRUST ACCOUNT
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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 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. Accordingly, Indemnitee acknowledges and agrees that any indemnification provided hereto will only be able to
be satisfied by the Company if (i) the Company has sufficient funds outside of the Trust Account to satisfy its obligations
hereunder or (ii) the Company consummates a Business Combination.
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28.
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MAINTENANCE OF INSURANCE
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The Company shall use commercially reasonable
efforts to obtain and maintain in effect during the entire period for which the Company is obligated to indemnify the Indemnitee
under this Agreement, one or more policies of insurance with reputable insurance companies to provide the officers/directors of
the Company with coverage for losses from wrongful acts and omissions and to ensure the Company’s performance of its indemnification
obligations under this Agreement. The Indemnitee shall be covered by such policy or policies in accordance with its or their terms
to the maximum extent of the coverage available for any such director or officer under such policy or policies. In all such insurance
policies, the Indemnitee shall be named as an insured in such a manner as to provide the Indemnitee with the same rights and benefits
as are accorded to the most favorably insured of the Company’s directors and officers.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties hereto have
caused this Indemnity Agreement to be signed as of the day and year first above written.
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FRONTIER ACQUISITION CORP.
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By:
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Name:
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Scott Carpenter
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Title:
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Chief Operating Officer
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[Signature Page
to Indemnity Agreement]
[Signature Page
to Indemnity Agreement]
EXHIBIT 10.5
FRONTIER ACQUISITION CORP.
660 Madison Avenue, 19th Floor
New York, NY 10065
[●], 2021
Frontier Acquisition Sponsor LLC
660 Madison Avenue, 19th Floor
New York, NY 10065
Ladies and Gentlemen:
This letter will confirm our agreement that, commencing on the
effective date (the “Effective Date”) of the registration statement (the “Registration Statement”)
for the initial public offering (the “IPO”) of the securities of Frontier Acquisition Corp. (the “Company”)
and continuing until the earlier of (i) the consummation by the Company of an initial business combination and (ii) the Company’s
liquidation (in each case as described in the Registration Statement) (such earlier date hereinafter referred to as the “Termination
Date”), Frontier Acquisition Sponsor LLC (the “Sponsor”) shall take steps directly or indirectly
to make available to the Company certain office space, secretarial and administrative services as may be required by the Company
from time to time, situated at 660 Madison Avenue, 19th Floor, New York, NY 10065 (or any successor location). In exchange therefor
the Company shall pay the Sponsor a sum of $10,000 per month on the Effective Date and continuing monthly thereafter until the
Termination Date. The Sponsor hereby agrees that it does not have any right, title, interest or claim of any kind (a “Claim”)
in or to any monies that may be set aside in a trust account (the “Trust Account”) that may be established
upon the consummation of the IPO and hereby irrevocably waives any Claim it may have in the future as a result of, or arising out
of, any negotiations, contracts or agreements with the Company and will not seek recourse against the Trust Account for any reason
whatsoever.
This letter agreement 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 between 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 amended, modified or waived
as to any particular provision, except by a written instrument executed by the parties hereto.
The parties may not assign this letter agreement and any of
their rights, interests or obligations hereunder without the consent of the other party.
This letter agreement shall be governed by, construed in accordance
with, and interpreted pursuant to the laws of the State of New York, without giving effect to its choice of laws principles that
might apply the laws of another jurisdiction.
This letter agreement may be executed in one or more counterparts,
each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same agreement.
Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence
of this letter agreement.
[Signature Page Follows]
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Very truly yours,
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FRONTIER ACQUISITION CORP.
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By:
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Name:
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Scott Carpenter
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Title:
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Chief Operating Officer
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AGREED TO AND ACCEPTED BY:
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FRONTIER ACQUISITION SPONSOR LLC
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By:
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Name:
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Scott Carpenter
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Title:
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Chief Operating Officer
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[Signature Page to Administrative Services
Agreement]
Exhibit 10.6
THIS PROMISSORY NOTE (“NOTE”)
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THIS NOTE HAS BEEN ACQUIRED
FOR INVESTMENT ONLY AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF REGISTRATION OF THE RESALE THEREOF UNDER THE
SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY IN FORM, SCOPE AND SUBSTANCE TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED.
PROMISSORY NOTE
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Principal Amount: up to $300,000
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Dated as of January 20, 2021
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(as set forth on the Schedule of Borrowings attached hereto)
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Frontier Acquisition
Corp., a Cayman Islands exempted company and blank check company (the “Maker”), promises to pay to the order
of Frontier Acquisition Sponsor, LLC, a Cayman Islands limited liability company, or its registered assigns or successors in interest
(the “Payee”), or order, the principal sum of up to three hundred thousand U.S. dollars ($300,000) (as set forth
on the Schedule of Borrowings attached hereto) in lawful money of the United States of America, on the terms and conditions described
below. All payments on this Note shall be made by check or wire transfer of immediately available funds or as otherwise determined
by the Maker to such account as the Payee may from time to time designate by written notice in accordance with the provisions of
this Note.
1.
Principal. The principal balance of this Note shall be payable by the Maker on the earlier of: (i) June 30,
2021 or (ii) the date on which Maker consummates an initial public offering of its securities (the “IPO”). The
principal balance may be prepaid at any time. Under no circumstances shall any individual, including but not limited to any officer,
director, employee or shareholder of the Maker, be obligated personally for any obligations or liabilities of the Maker hereunder.
2.
Interest. No interest shall accrue on the unpaid principal balance of this Note.
3.
Drawdown Requests. Maker and Payee agree that Maker may request up to Three Hundred Thousand Dollars ($300,000) for
costs reasonably related to Maker’s initial public offering of its securities. The principal of this Note may be drawn down
from time to time prior to the earlier of: (i) June 30, 2021 or (ii) the date on which Maker consummates an initial public offering
of its securities, upon written request from Maker to Payee (each, a “Drawdown Request”). Each Drawdown Request
must state the amount to be drawn down, and must not be an amount less than One Thousand Dollars ($1,000) unless agreed upon by
Maker and Payee. Payee shall fund each Drawdown Request no later than one (1) business day after receipt of a Drawdown Request;
provided, however, that the maximum amount of drawdowns collectively under this Note is Three Hundred Thousand Dollars ($300,000).
No fees, payments or other amounts shall be due to Payee in connection with, or as a result of, any Drawdown Request by Maker.
4.
Application of Payments. All payments shall be applied first to payment in full of any costs incurred in the collection
of any sum due under this Note, including (without limitation) reasonable attorney’s fees, then to the payment in full of
any late charges and finally to the reduction of the unpaid principal balance of this Note.
5.
Events of Default. The following shall constitute an event of default (“Event of Default”):
(a)
Failure to Make Required Payments. Failure by Maker to pay the principal amount due pursuant to this Note
within five (5) business days of the date specified above.
(b)
Voluntary Bankruptcy, Etc. The commencement by Maker of a voluntary case under any applicable bankruptcy,
insolvency, reorganization, rehabilitation or other similar law, or the consent by it to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of Maker or for any substantial
part of its property, or the making by it of any assignment for the benefit of creditors, or the failure of Maker generally to
pay its debts as such debts become due, or the taking of corporate action by Maker in furtherance of any of the foregoing.
(c)
Involuntary Bankruptcy, Etc. The entry of a decree or order for relief by a court having jurisdiction in
the premises in respect of Maker in an involuntary case under any applicable bankruptcy, insolvency or other similar law, or appointing
a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of Maker or for any substantial part of
its property, or ordering the winding-up or liquidation of its affairs, and the continuance of any such decree or order unstayed
and in effect for a period of 60 consecutive days.
6.
Remedies.
(a)
Upon the occurrence of an Event of Default specified in Section 5(a) hereof, Payee may, by written notice to Maker,
declare this Note to be due immediately and payable, whereupon the unpaid principal amount of this Note, and all other amounts
payable thereunder, shall become immediately due and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived, anything contained herein or in the documents evidencing the same to the contrary notwithstanding.
(b)
Upon the occurrence of an Event of Default specified in Sections 5(b) and 5(c), the unpaid principal balance of this
Note, and all other sums payable with regard to this Note, shall automatically and immediately become due and payable, in all cases
without any action on the part of Payee.
7.
Waivers. Maker and all endorsers and guarantors of, and sureties for, this Note waive presentment for payment, demand,
notice of dishonor, protest, and notice of protest with regard to the Note, all errors, defects and imperfections in any proceedings
instituted by Payee under the terms of this Note, and all benefits that might accrue to Maker by virtue of any present or future
laws exempting any property, real or personal, or any part of the proceeds arising from any sale of any such property, from attachment,
levy or sale under execution, or providing for any stay of execution, exemption from civil process, or extension of time for payment;
and Maker agrees that any real estate that may be levied upon pursuant to a judgment obtained by virtue hereof, on any writ of
execution issued hereon, may be sold upon any such writ in whole or in part in any order desired by Payee.
8.
Unconditional Liability. Maker hereby waives all notices in connection with the delivery, acceptance, performance,
default, or enforcement of the payment of this Note, and agrees that its liability shall be unconditional, without regard to the
liability of any other party, and shall not be affected in any manner by any indulgence, extension of time, renewal, waiver or
modification granted or consented to by Payee, and consents to any and all extensions of time, renewals, waivers, or modifications
that may be granted by Payee with respect to the payment or other provisions of this Note, and agrees that additional makers, endorsers,
guarantors, or sureties may become parties hereto without notice to Maker or affecting Maker’s liability hereunder.
9.
Notices. All notices, statements or other documents which are required or contemplated by this Agreement shall be:
(i) in writing and delivered personally or sent by first class registered or certified mail, overnight courier service or facsimile
or electronic transmission to the address designated in writing, (ii) by facsimile to the number most recently provided to
such party or such other address or fax number as may be designated in writing by such party and (iii) by electronic mail, to the
electronic mail address most recently provided to such party or such other electronic mail address as may be designated in writing
by such party. Any notice or other communication so transmitted shall be deemed to have been given on the day of delivery, if delivered
personally, on the business day following receipt of written confirmation, if sent by facsimile or electronic transmission, one
(1) business day after delivery to an overnight courier service or five (5) days after mailing if sent by mail.
10.
Construction. THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF NEW YORK, WITHOUT REGARD TO
CONFLICT OF LAW PROVISIONS THEREOF.
11.
Severability. Any provision contained in this Note which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.
12.
Trust Waiver. Notwithstanding anything herein to the contrary, the Payee hereby waives any and all right, title,
interest or claim of any kind (“Claim”) in or to any distribution of or from the trust account to be established
in which the proceeds of the IPO conducted by the Maker (including the deferred underwriters discounts and commissions) and certain
of the proceeds of the sale of the warrants issued in a private placement to occur in connection with the consummation of the IPO
are to be deposited, as described in greater detail in the registration statement and prospectus to be filed with the Securities
and Exchange Commission in connection with the IPO, and hereby agrees not to seek recourse, reimbursement, payment or satisfaction
for any Claim against the trust account for any reason whatsoever.
13.
Amendment; Waiver. Any amendment hereto or waiver of any provision hereof may be made with, and only with, the written
consent of the Maker and the Payee.
14.
Assignment. No assignment or transfer of this Note or any rights or obligations hereunder may be made by any party
hereto (by operation of law or otherwise) without the prior written consent of the other party hereto and any attempted assignment
without the required consent shall be void.
[Signature page follows]
IN WITNESS WHEREOF, Maker, intending
to be legally bound hereby, has caused this Note to be duly executed by the undersigned as of the day and year first above written.
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FRONTIER
ACQUISITION CORP.
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a
Cayman Islands exempted company
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By:
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/s/
Scott Carpenter
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Name:
Scott Carpenter
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Title:
Authorized Signatory
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SCHEDULE
OF BORROWINGS
The following increases or decreases in
this Promissory Note have been made:
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Date of Increase or Decrease
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Amount of decrease in
Principal Amount of this
Promissory Note
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Amount of increase in
Principal Amount of
this Promissory Note
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Principal Amount of
this Promissory Note
following such decrease
or increase
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Exhibit 10.7
Frontier Acquisition Corp.
660 Madison Avenue
New York, NY 10065
January 20, 2021
Frontier Acquisition Sponsor LLC
660 Madison Avenue
New York, NY 10065
RE: Securities Subscription Agreement
Gentlemen:
This agreement (this
“Agreement”) is entered into on January 20, 2021 by and between Frontier Acquisition Sponsor LLC, a Cayman Islands
limited liability company (the “Subscriber” or “you”), and Frontier Acquisition Corp.,
a Cayman Islands exempted company (the “Company”). Pursuant to the terms hereof, the Company hereby accepts
the offer the Subscriber has made to purchase 5,750,500 Class B ordinary shares, $0.0001 par value per share (the “Shares”),
up to 750,000 of which are subject to surrender and cancellation by you if the underwriters of the initial public offering (“IPO”)
of units (“Units”) of the Company do not fully exercise their over-allotment option (the “Over-allotment
Option”). The Company and the Subscriber’s agreements regarding such Shares are as follows:
1.
Purchase of Securities.
1.1
Purchase of Shares. For the sum of $25,000 (the “Purchase Price”), which the Company acknowledges
receiving in cash, the Company hereby issues the Shares to the Subscriber, and the Subscriber hereby subscribes for and purchases
the Shares from the Company, 750,000 of which are subject to surrender and cancellation, on the terms and subject to the conditions
set forth in this Agreement. All references in this Agreement to shares of the Company being surrendered and canceled shall take
effect as surrenders and cancellations for no consideration of such shares as a matter of Cayman Islands law.
1.2
Surrender of Subscriber Shares. On the issuance of the Shares, the Subscriber hereby surrenders for no consideration
the one Class B ordinary share of $0.0001 par value that the Subscriber holds in the Company.
2.
Representations, Warranties and Agreements.
2.1
Subscriber’s Representations, Warranties and Agreements. To induce the Company to issue the Shares to the Subscriber,
the Subscriber hereby represents and warrants to the Company and agrees with the Company as follows:
2.1.1
No Government Recommendation or Approval. The Subscriber understands that no federal or state agency has passed upon
or made any recommendation or endorsement of the offering of the Shares.
2.1.2
No Conflicts. The execution, delivery and performance of this Agreement and the consummation by the Subscriber of
the transactions contemplated hereby do not violate, conflict with or constitute a default under (i) the formation and governing
documents of the Subscriber, (ii) any agreement, indenture or instrument to which the Subscriber is a party or (iii) any law, statute,
rule or regulation to which the Subscriber is subject, or any agreement, order, judgment or decree to which the Subscriber is subject.
2.1.3 Registration
and Authority. The Subscriber is a Cayman Islands limited liability company, validly existing and in good standing under
the laws of the Cayman Islands and possesses all requisite power and authority necessary to carry out the transactions
contemplated by this Agreement. Upon execution and delivery by you, this Agreement will be a legal, valid and binding
agreement of Subscriber, enforceable against Subscriber in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance or similar laws affecting the enforcement of
creditors’ rights generally and subject to general principles of equity (regardless of whether enforcement is sought in
a proceeding at law or in equity).
2.1.4
Experience, Financial Capability and Suitability. Subscriber is: (i) sophisticated in financial matters and is able
to evaluate the risks and benefits of the investment in the Shares and (ii) able to bear the economic risk of its investment in
the Shares for an indefinite period of time because the Shares have not been registered under the Securities Act of 1933, as amended
(the “Securities Act”) and therefore cannot be sold unless subsequently registered under the Securities Act
or an exemption from such registration is available. Subscriber is capable of evaluating the merits and risks of its investment
in the Company and has the capacity to protect its own interests. Subscriber must bear the economic risk of this investment until
the Shares are sold pursuant to: (x) an effective registration statement under the Securities Act or (y) an exemption from registration
available with respect to such sale. Subscriber is able to bear the economic risks of an investment in the Shares and to afford
a complete loss of Subscriber’s investment in the Shares.
2.1.5
Access to Information; Independent Investigation. Prior to the execution of this Agreement, the Subscriber has had
the opportunity to ask questions of and receive answers from representatives of the Company concerning an investment in the Company,
as well as the finances, operations, business and prospects of the Company, and the opportunity to obtain additional information
to verify the accuracy of all information so obtained. In determining whether to make this investment, Subscriber has relied solely
on Subscriber’s own knowledge and understanding of the Company and its business based upon Subscriber’s own due diligence
investigation and the information furnished pursuant to this paragraph. Subscriber understands that no person has been authorized
to give any information or to make any representations which were not furnished pursuant to this Section 2 and Subscriber has not
relied on any other representations or information in making its investment decision, whether written or oral, relating to the
Company, its operations and/or its prospects.
2.1.6
Regulation D Offering. Subscriber represents that it is an “accredited investor” as such term is defined
in Rule 501(a) of Regulation D under the Securities Act and acknowledges the sale contemplated hereby is being made in reliance
on a private placement exemption to “accredited investors” within the meaning of Section 501(a) of Regulation D under
the Securities Act or similar exemptions under federal and state law.
2.1.7
Investment Purposes. The Subscriber is purchasing the Shares solely for investment purposes, for the Subscriber’s
own account and not for the account or benefit of any other person, and not with a view towards the distribution or dissemination
thereof. The Subscriber did not decide to enter into this Agreement as a result of any general solicitation or general advertising
within the meaning of Rule 502 of Regulation D under the Securities Act.
2.1.8
Restrictions on Transfer; Shell Company. Subscriber understands the Shares are being offered in a transaction not
involving a public offering within the meaning of the Securities Act. Subscriber understands the Shares will be “restricted
securities” within the meaning of Rule 144(a)(3) under the Securities Act, and Subscriber understands that the certificates
representing the Shares will contain a legend in respect of such restrictions. If in the future the Subscriber decides to offer,
resell, pledge or otherwise transfer the Shares, such Shares may be offered, resold, pledged or otherwise transferred only pursuant
to: (i) registration under the Securities Act, or (ii) an available exemption from registration. Subscriber agrees that if any
transfer of its Shares or any interest therein is proposed to be made, as a condition precedent to any such transfer, Subscriber
may be required to deliver to the Company an opinion of counsel satisfactory to the Company. Absent registration or an exemption,
the Subscriber agrees not to resell the Shares. Subscriber further acknowledges that because the Company is a shell company, Rule
144 may not be available to the Subscriber for the resale of the Shares until one year following consummation of the initial business
combination of the Company, despite technical compliance with the requirements of Rule 144 and the release or waiver of any contractual
transfer restrictions.
2.1.9
No Governmental Consents. No governmental, administrative or other third party consents or approvals are required
or necessary on the part of Subscriber in connection with the transactions contemplated by this Agreement.
2.2
Company’s Representations, Warranties and Agreements. To induce the Subscriber to purchase the Shares, the
Company hereby represents and warrants to the Subscriber and agrees with the Subscriber as follows:
2.2.1
Incorporation and Corporate Power. The Company is a Cayman Islands exempted company and is qualified to do business
in every jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse effect on the
financial condition, operating results or assets of the Company. The Company possesses all requisite corporate power and authority
necessary to carry out the transactions contemplated by this Agreement. Upon execution and delivery by the Company, this Agreement
will be a legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance or similar laws affecting the
enforcement of creditors’ rights generally and subject to general principles of equity (regardless of whether enforcement
is sought in a proceeding at law or in equity).
2.2.2
No Conflicts. The execution, delivery and performance of this Agreement and the consummation by the Company of the
transactions contemplated hereby do not violate, conflict with or constitute a default under (i) the memorandum and articles of
association of the Company, (ii) any agreement, indenture or instrument to which the Company is a party or (iii) any law, statute,
rule or regulation to which the Company is subject, or any agreement, order, judgment or decree to which the Company is subject.
2.2.3
Title to Securities. Upon issuance in accordance with, and payment pursuant to, the terms hereof, and registration
in the Company’s register of members, the Shares will be duly and validly issued, fully paid and nonassessable. Upon issuance
in accordance with, and payment pursuant to, the terms hereof, and registration in the Company’s register of members, the
Subscriber will have or receive good title to the Shares, free and clear of all liens, claims and encumbrances of any kind, other
than (a) transfer restrictions hereunder and other agreements to which the Shares may be subject, (b) transfer restrictions under
federal and state securities laws, and (c) liens, claims or encumbrances imposed due to the actions of the Subscriber.
2.2.4
No Adverse Actions. There are no actions, suits, investigations or proceedings pending, threatened against or affecting
the Company which: (i) seek to restrain, enjoin, prevent the consummation of or otherwise affect the transactions contemplated
by this Agreement or (ii) question the validity or legality of any transactions or seeks to recover damages or to obtain other
relief in connection with any transactions.
3.
Surrender and Cancellation of Shares.
3.1
Partial or No Exercise of the Over-allotment Option. In the event the Over-allotment Option granted to the representative(s)
of the underwriters of the Company’s IPO is not exercised in full, the Subscriber acknowledges and agrees that it shall surrender
for cancellation any and all rights to such number of Shares (up to an aggregate of 750,000 Shares and pro rata based upon the
percentage of the Over-allotment Option exercised) such that immediately following such surrender, the Subscriber (and all other
initial shareholders prior to the IPO, if any) will own an aggregate number of Shares (not including ordinary shares issuable upon
exercise of any warrants or any ordinary shares purchased by Subscriber in the Company’s IPO or in the aftermarket) equal
to 20% of the issued and outstanding ordinary shares of the Company immediately following the IPO.
3.2
Termination of Rights as Shareholder. If any of the Shares are surrendered and cancelled in accordance with this
Section 3, then after such time the Subscriber (or successor in interest), shall no longer have any rights as a holder of such
Shares, and the Company shall take such action as is appropriate to cancel such Shares.
4.
Waiver of Liquidation Distributions; Redemption Rights. In connection with the Shares purchased pursuant to this
Agreement, the Subscriber hereby waives any and all right, title, interest or claim of any kind in or to any distributions by the
Company from the trust account which will be established for the benefit of the Company’s public shareholders and into which
substantially all of the proceeds of the IPO will be deposited (the “Trust Account”), in the event of a liquidation
of the Company upon the Company’s failure to timely complete an initial business combination. For purposes of clarity, in
the event the Subscriber purchases ordinary shares in the IPO or in the aftermarket, any additional Shares so purchased shall be
eligible to receive any liquidating distributions by the Company. However, in no event will the Subscriber have the right to redeem
any ordinary shares into funds held in the Trust Account upon the successful completion of an initial business combination.
5.
Restrictions on Transfer.
5.1
Securities Law Restrictions. In addition to any restrictions to be contained in that certain letter agreement (commonly
known as an “Insider Letter”) to be dated as of the closing of the IPO by and between Subscriber and the Company,
Subscriber agrees not to sell, transfer, pledge, hypothecate or otherwise dispose of all or any part of the Shares unless, prior
thereto (a) a registration statement on the appropriate form under the Securities Act and applicable state securities laws with
respect to the Shares proposed to be transferred shall then be effective or (b) the Company has received an opinion from counsel
reasonably satisfactory to the Company, that such registration is not required because such transaction is exempt from registration
under the Securities Act and the rules promulgated by the Securities and Exchange Commission thereunder and with all applicable
state securities laws.
5.2
Restrictive Legends. Any certificates representing the Shares shall have endorsed thereon legends substantially as
follows:
“THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE
SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE
OPINION OF COUNSEL, IS AVAILABLE.”
“THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO LOCKUP PROVISIONS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED DURING THE
TERM OF THE LOCKUP.”
5.3
Additional Shares or Substituted Securities. In the event of the declaration of a share dividend, the declaration
of an extraordinary dividend payable in a form other than Shares, a spin-off, a share sub-division, an adjustment in conversion
ratio, a recapitalization or a similar transaction affecting the Company’s outstanding Shares without receipt of consideration,
any new, substituted or additional securities or other property which are by reason of such transaction distributed with respect
to any Shares subject to this Section 5 or into which such Shares thereby become convertible shall immediately be subject to this
Section 5 and Section 3. Appropriate adjustments to reflect the distribution of such securities or property shall be made to the
number and/or class of Shares subject to this Section 5 and Section 3.
5.4
Registration Rights. Subscriber acknowledges that the Shares are being purchased pursuant to an exemption from the
registration requirements of the Securities Act and will become freely tradable only after certain conditions are met or they are
registered pursuant to a Registration and Shareholder Rights Agreement to be entered into with the Company prior to the closing
of the IPO.
6.
Other Agreements.
6.1
Further Assurances. Subscriber agrees to execute such further instruments and to take such further action as may
reasonably be necessary to carry out the intent of this Agreement.
6.2
Notices. All notices, statements or other documents which are required or contemplated by this Agreement shall be:
(i) in writing and delivered personally or sent by first class registered or certified mail, overnight courier service or facsimile
or electronic transmission to the address designated in writing, (ii) by facsimile to the number most recently provided to
such party or such other address or fax number as may be designated in writing by such party and (iii) by electronic mail, to the
electronic mail address most recently provided to such party or such other electronic mail address as may be designated in writing
by such party. Any notice or other communication so transmitted shall be deemed to have been given on the day of delivery, if delivered
personally, on the business day following receipt of written confirmation, if sent by facsimile or electronic transmission, one
(1) business day after delivery to an overnight courier service or five (5) days after mailing if sent by mail.
6.3
Entire Agreement. This Agreement, together with that certain Insider Letter to be entered into between Subscriber
and the Company, substantially in the form to be filed as an exhibit to the Registration Statement on Form S-1 associated with
the Company’s IPO, embodies the entire agreement and understanding between the Subscriber and the Company with respect to
the subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter
hereof. No statement, representation, warranty, covenant or agreement of any kind not expressly set forth in this Agreement shall
affect, or be used to interpret, change or restrict, the express terms and provisions of this Agreement.
6.4
Modifications and Amendments. The terms and provisions of this Agreement may be modified or amended only by written
agreement executed by all parties hereto.
6.5
Waivers and Consents. The terms and provisions of this Agreement may be waived, or consent for the departure therefrom
granted, only by a written document executed by the party entitled to the benefits of such terms or provisions. No such waiver
or consent shall be deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this
Agreement, whether or not similar. Each such waiver or consent shall be effective only in the specific instance and for the purpose
for which it was given, and shall not constitute a continuing waiver or consent.
6.6
Assignment. The rights and obligations under this Agreement may not be assigned by either party hereto without the
prior written consent of the other party.
6.7
Benefit. All statements, representations, warranties, covenants and agreements in this Agreement shall be binding
on the parties hereto and shall inure to the benefit of the respective successors and permitted assigns of each party hereto. Nothing
in this Agreement shall be construed to create any rights or obligations except among the parties hereto, and no person or entity
shall be regarded as a third-party beneficiary of this Agreement.
6.8
Governing Law. This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance
with and governed by the laws of New York applicable to contracts wholly performed within the borders of such state, without giving
effect to the conflict of law principles thereof.
6.9
Severability. In the event that any court of competent jurisdiction shall determine that any provision, or any portion
thereof, contained in this Agreement shall be unreasonable or unenforceable in any respect, then such provision shall be deemed
limited to the extent that such court deems it reasonable and enforceable, and as so limited shall remain in full force and effect.
In the event that such court shall deem any such provision, or portion thereof, wholly unenforceable, the remaining provisions
of this Agreement shall nevertheless remain in full force and effect.
6.10
No Waiver of Rights, Powers and Remedies. No failure or delay by a party hereto in exercising any right, power or
remedy under this Agreement, and no course of dealing between the parties hereto, shall operate as a waiver of any such right,
power or remedy of such party. No single or partial exercise of any right, power or remedy under this Agreement by a party hereto,
nor any abandonment or discontinuance of steps to enforce any such right, power or remedy, shall preclude such party from any other
or further exercise thereof or the exercise of any other right, power or remedy hereunder. The election of any remedy by a party
hereto shall not constitute a waiver of the right of such party to pursue other available remedies. No notice to or demand on a
party not expressly required under this Agreement shall entitle the party receiving such notice or demand to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the rights of the party giving such notice or demand
to any other or further action in any circumstances without such notice or demand.
6.11
Survival of Representations and Warranties. All representations and warranties made by the parties hereto in this
Agreement or in any other agreement, certificate or instrument provided for or contemplated hereby, shall survive the execution
and delivery hereof and any investigations made by or on behalf of the parties.
6.12
No Broker or Finder. Each of the parties hereto represents and warrants to the other that no broker, finder or other
financial consultant has acted on its behalf in connection with this Agreement or the transactions contemplated hereby in such
a way as to create any liability on the other. Each of the parties hereto agrees to indemnify and save the other harmless from
any claim or demand for commission or other compensation by any broker, finder, financial consultant or similar agent claiming
to have been employed by or on behalf of such party and to bear the cost of legal expenses incurred in defending against any such
claim.
6.13
Headings and Captions. The headings and captions of the various subdivisions of this Agreement are for convenience
of reference only and shall in no way modify or affect the meaning or construction of any of the terms or provisions hereof.
6.14
Counterparts. This Agreement may be executed in one or more counterparts, all of which when taken together shall
be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered
to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or any other form of electronic delivery, such signature shall create a valid and binding obligation
of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page
were an original thereof.
6.15
Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. If
an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof will arise favoring or disfavoring any party hereto because of the authorship of any
provision of this Agreement. The words “include,” “includes,” and “including”
will be deemed to be followed by “without limitation.” Pronouns in masculine, feminine, and neuter genders will
be construed to include any other gender, and words in the singular form will be construed to include the plural and vice versa,
unless the context otherwise requires. The words “this Agreement,” “herein,” “hereof,”
“hereby,” “hereunder,” and words of similar import refer to this Agreement as a whole and
not to any particular subdivision unless expressly so limited. The parties hereto intend that each representation, warranty, and
covenant contained herein will have independent significance. If any party hereto has breached any representation, warranty, or
covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the
same subject matter (regardless of the relative levels of specificity) which such party hereto has not breached will not detract
from or mitigate the fact that such party hereto is in breach of the first representation, warranty, or covenant.
6.16
Mutual Drafting. This Agreement is the joint product of the Subscriber and the Company and each provision hereof
has been subject to the mutual consultation, negotiation and agreement of such parties and shall not be construed for or against
any party hereto.
7.
Voting and Redemption of Shares. Subscriber agrees to vote the Shares in favor of an initial business combination
that the Company negotiates and submits for approval to the Company’s shareholders and shall not seek redemption with respect
to such Shares. Additionally, the Subscriber agrees not to redeem any Shares in connection with a tender offer presented to the
Company’s shareholders in connection with an initial business combination negotiated by the Company.
[Signature Page Follows]
If the foregoing accurately
sets forth our understanding and agreement, please sign the enclosed copy of this Agreement and return it to us.
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Frontier
Acquisition Corp.
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a
Cayman Islands exempted company
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By:
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/s/ Scott Carpenter
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Name: Scott Carpenter
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Title: Authorized Signatory
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Accepted and agreed as of the date first written above.
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Frontier
Acquisition Sponsor LLC
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a
Cayman Islands limited liability company
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By:
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/s/
Scott Carpenter
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Name:
Scott Carpenter
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Title:
Member
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[Signature Page to Securities Subscription Agreement]
Exhibit 10.8
[●], 2021
Frontier Acquisition Corp.
c/o Falcon Edge Capital
660 Madison Avenue, 19th Floor
New York, New York 10065
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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 by and between Frontier Acquisition Corp., a Cayman Islands exempted company (the “Company”)
and Credit Suisse Securities (USA) LLC as the underwriter (the “Underwriter”), relating to an underwritten
initial public offering (the “Public Offering”) of 23,000,000 of the Company’s units (including
3,000,000 units that may be purchased pursuant to the Underwriter’s option to purchase additional units, the “Units”),
each comprising of one of the Company’s Class A ordinary shares, par value $0.0001 per share (the “Ordinary
Shares”), and one-third of one redeemable warrant (each whole warrant, a “Warrant”). Each
Warrant entitles the holder thereof to purchase one Ordinary Share at a price of $11.50 per share, subject to adjustment. The Units
will be sold in the Public Offering pursuant to a registration statement on Form S-1 and a prospectus (the “Prospectus”)
filed by the Company with the U.S. Securities and Exchange Commission (the “Commission”). Certain capitalized
terms used herein are defined in paragraph 1 hereof.
In order to induce the Company and the Underwriter
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, Frontier Acquisition Sponsor LLC (the “Sponsor”)
and each of the undersigned (each, an “Insider” and, collectively, the “Insiders”)
hereby agree with the Company as follows:
1. Definitions.
As used herein, (i) “Business Combination” shall mean a merger, share exchange, asset acquisition,
share purchase, reorganization or similar business combination with one or more businesses or entities; (ii)
“Founder Shares” shall mean the 5,750,000 Class B ordinary shares of the Company, par value
$0.0001 per share, outstanding prior to the consummation of the Public Offering; (iii) “Private Placement
Units” shall mean the units that will be acquired by the Sponsor for an aggregate purchase price of $6,000,000
(or up to $6,600,000 if the Underwriter exercises its option to purchase additional units in full) in a private placement
that shall close simultaneously with the consummation of the Public Offering (including the Ordinary Shares and private
placement warrants underlying such units and the Ordinary Shares issuable upon exercise of such private placement units
thereof); (iv) “Public Shareholders” shall mean the holders of Ordinary Shares included in the
Units issued in the Public Offering; (v) “Public Shares” shall mean the Ordinary Shares included in
the Units issued in the Public Offering; (vi) “Trust Account” shall mean the trust account into
which a portion of the net proceeds of the Public Offering and the sale of the Private Placement Units shall be deposited;
(vii) “Transfer” shall mean the (a) sale of, offer to sell, contract or agreement to sell,
hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or
indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call
equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Commission promulgated thereunder with respect to, any security, (b) entry into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security,
whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public
announcement of any intention to effect any transaction specified in clause (a) or (b); and (viii)
“Charter” shall mean the Company’s Amended and Restated Memorandum and Articles of
Association, as the same may be amended from time to time.
2.
Representations and Warranties.
(a)
The Sponsor and each Insider, with respect to itself, herself or himself, represent and warrant to the Company that
it, she or he has the full right and power, without violating any agreement to which it, she or he is bound (including, without
limitation, any non-competition or non-solicitation agreement with any employer or former employer), to enter into this Letter
Agreement, as applicable, and to serve as an officer of the Company and/or a director on the Company’s Board of Director
(the “Board”), as applicable, and each Insider hereby consents to being named in the Prospectus, road
show and any other materials as an officer and/or director of the Company, as applicable.
(b)
Each Insider represents and warrants, with respect to herself or himself, that such Insider’s biographical
information furnished to the Company (including any such information included in the Prospectus) is true and accurate in all material
respects and does not omit any material information with respect to such Insider’s background. The Insider’s questionnaire
furnished to the Company is true and accurate in all material respects. Each Insider represents and warrants that such Insider
is not subject to, or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist
or refrain from any act or practice relating to the offering of securities in any jurisdiction; such Insider has never been convicted
of, or pleaded guilty to, any crime (i) involving fraud, (ii) relating to any financial transaction or handling of funds
of another person, or (iii) pertaining to any dealings in any securities and such Insider is not currently a defendant in
any such criminal proceeding; and such Insider has never been suspended or expelled from membership in any securities or commodities
exchange or association or had a securities or commodities license or registration denied, suspended or revoked.
3.
Business Combination Vote. It is acknowledged and agreed that the Company shall not enter into a definitive agreement
regarding a proposed Business Combination without the prior consent of the Sponsor. The Sponsor and each Insider, with respect
to itself or herself or himself, agrees that if the Company seeks shareholder approval of a proposed initial Business Combination,
then in connection with such proposed initial Business Combination, it, she or he, as applicable, shall vote all Founder Shares
and any Public Shares held by it, her or him, as applicable, in favor of such proposed initial Business Combination (including
any proposals recommended by the Board in connection with such Business Combination) and not redeem any Public Shares held by it,
her or him, as applicable, in connection with such shareholder approval.
4.
Failure to Consummate a Business Combination; Trust Account Waiver.
(a)
The Sponsor and each Insider hereby agree, with respect to itself, herself or himself, that in the event that the
Company fails to consummate its initial Business Combination within the time period set forth in the Charter, the Sponsor and each
Insider shall take all reasonable steps to cause the Company to (i) cease all operations except for the purpose of winding
up; (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem 100% of the Public Shares,
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned
on the funds held in the Trust Account and not previously released to the Company to pay the Company’s taxes, if any (less
up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption
will completely extinguish Public Shareholders’ rights as shareholders (including the right to receive further liquidation
distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of
the Company’s remaining shareholders and the Board, liquidate and dissolve, subject in the case of clauses (ii) and
(iii) to the Company’s obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to
the other requirements of applicable law. The Sponsor and each Insider agree not to propose any amendment to the Charter (i) that
would modify the substance or timing of the Company’s obligation to provide holders of the Public Shares the right to have
their shares redeemed in connection with an initial Business Combination or to redeem 100% of the Public Shares if the Company
does not complete an initial Business Combination within the required time period set forth in the Charter or (ii) with respect
to any provision relating to the rights of holders of Public Shares unless the Company provides its Public Shareholders with the
opportunity to redeem their Public Shares upon approval of any such amendment at a per-share price, payable in cash, equal to the
aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not
previously released to the Company to pay taxes, if any, divided by the number of then-outstanding Public Shares.
(b)
The Sponsor and each Insider, with respect to itself, herself or himself, acknowledges that it, she or he has no
right, title, interest or claim of any kind in or to any monies held in the Trust Account or any other asset of the Company as
a result of any liquidation of the Company with respect to the Founder Shares held by it, her or him, if any. The Sponsor and each
of the Insiders hereby further waive, with respect to any Founder Shares and Public Shares held by it, her or him, as applicable,
any redemption rights it, she or he may have in connection with the consummation of a Business Combination, including, without
limitation, any such rights available in the context of a shareholder vote to approve such Business Combination or a shareholder
vote to approve an amendment to the Charter (i) that would modify the substance or timing of the Company’s obligation
to provide holders of the Public Shares the right to have their shares redeemed in connection with an initial Business Combination
or to redeem 100% of the Public Shares if the Company has not consummated an initial Business Combination within the time period
set forth in the Charter or (ii) with respect to any provision relating to the rights of holders of Public Shares (although
the Sponsor and the Insiders shall be entitled to liquidation rights with respect to any Public Shares they hold if the Company
fails to consummate a Business Combination within the required time period set forth in the Charter).
5. Lock-up; Transfer Restrictions.
(a)
The Sponsor and the Insiders agree that they shall not Transfer any Founder Shares (the “Founder Shares
Lock-up”) until the earliest of (A) one year after the completion of an initial Business Combination and (B) the
date following the completion of an initial Business Combination on which the Company completes a liquidation, merger, share exchange
or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Ordinary
Shares for cash, securities or other property (the “Founder Shares Lock-up Period”). Notwithstanding
the foregoing, if, subsequent to a Business Combination, the closing price of the Ordinary Shares equals or exceeds $12.00 per
share (as adjusted for share sub-divisions, share capitalizations, share consolidations, reorganizations, recapitalizations and
the like) for any 20 trading days within a 30-trading day period commencing at least 150 days after the Company’s initial
Business Combination, the Founder Shares shall be released from the Founder Shares Lock-up.
(b)
Subject to the provisions set forth in paragraph 5(c), the Sponsor and Insiders agree that they shall not effectuate
any Transfer of Private Placement Units or the private placement shares and private placement warrants underlying such Private
Placement Units until 30 days after the completion of an initial Business Combination.
(c) Notwithstanding
the provisions set forth in paragraphs 5(a) and (b), Transfers of the Founder Shares, Private Placement
Units and the private placement shares and private placement warrants underlying the Private Placement Units are permitted:
(a) to the Company’s officers or directors, any affiliate or family member of any of the Company’s officers
or directors, any members or partners of the Sponsor or their affiliates, any affiliates of the Sponsor, or any employees of
such affiliates; (b) in the case of an individual, by gift to a member of one of the individual’s immediate family
or to a trust, the beneficiary of which is a member of the individual’s immediate family, an affiliate of such person
or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon
death of the individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by
private sales or transfers made in connection with any forward purchase agreement or similar arrangement or in connection
with the consummation of a Business Combination at prices no greater than the price at which the Founder Shares, Private
Placement Units, private placement shares and private placement warrants underlying the Private Placement Units or
Ordinary Shares, as applicable, were originally purchased; (f) by virtue of the Sponsor’s organizational documents
upon liquidation or dissolution of the Sponsor; (g) to the Company for no value for cancellation in connection with the
consummation of an initial Business Combination; (h) in the event of the Company’s liquidation prior to the
completion of a Business Combination; or (i) in the event of completion of a liquidation, merger, share exchange or
other similar transaction which results in all of the Company’s Public Shareholders having the right to exchange their
Ordinary Shares for cash, securities or other property subsequent to the completion of an initial Business Combination; provided, however,
that in the case of clauses (a) through (f) these permitted transferees must enter into a written agreement agreeing to
be bound by the transfer restrictions set forth in this Agreement.
(d) During
the period commencing on the effective date of the Underwriting Agreement and ending 180 days after such date, the Sponsor
and each Insider shall not, without the prior written consent of the Underwriter, Transfer any Units, Ordinary Shares,
Warrants or any other securities convertible into, or exercisable or exchangeable for, Ordinary Shares held by it, her or
him, as applicable, subject to certain exceptions enumerated in Section 5(g) of the Underwriting Agreement.
6.
Remedies. The Sponsor and each of the Insiders hereby agree and acknowledge that (i) the Underwriter and the Company
would be irreparably injured in the event of a breach by the Sponsor or such Insider of its, her or his obligations, as applicable
under paragraphs 3, 4, 5, 7, 10 and 11, (ii) monetary damages may not be an adequate
remedy for such breach and (iii) the non-breaching party shall be entitled to injunctive relief, in addition to any other
remedy that such party may have in law or in equity, in the event of such breach.
7.
Payments by the Company. Except as disclosed in the Prospectus, neither the Sponsor nor any affiliate of the Sponsor
nor any director or officer of the Company nor any affiliate of the officers shall receive from the Company any finder’s
fee, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation prior to, or in connection
with any services rendered in order to effectuate the consummation of the Company’s initial Business Combination (regardless
of the type of transaction that it is).
8.
Director and Officer Liability Insurance. The Company will use commercially reasonable efforts to maintain an insurance
policy or policies providing directors’ and officers’ liability insurance, and the Insiders shall be covered by such
policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any of the Company’s
directors or officers.
9.
Termination. This Letter Agreement shall terminate on the earlier of (i) the expiration of the Founder Shares
Lock-up Period and (ii) the liquidation of the Company.
10. Indemnification.
In the event of the liquidation of the Trust Account upon the failure of the Company to consummate its initial Business
Combination within the time period set forth in the Charter, the Sponsor (the “Indemnitor”) agrees
to indemnify and hold harmless the Company against any and all loss, liability, claim, damage and expense whatsoever
(including, but not limited to, any and all legal or other expenses reasonably incurred in investigating, preparing or
defending against any litigation, whether pending or threatened) to which the Company may become subject as a result of any
claim by (i) any third party for services rendered or products sold to the Company (except for the Company’s
independent auditors) or (ii) any prospective target business with which the Company has discussed entering into a
transaction agreement (a “Target”); provided, however, that such indemnification of
the Company by the Indemnitor (x) shall apply only to the extent necessary to ensure that such claims by a third party
for services rendered or products sold to the Company or a Target do not reduce the amount of funds in the Trust Account to
below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as
of the date of the liquidation of the Trust Account if less than $10.00 per Public Share due to reductions in the value of
the trust assets, in each case net of interest that may be withdrawn to pay the Company’s tax obligations,
(y) shall not apply to any claims by a third party or Target who executed a waiver of any and all rights to the monies
held in the Trust Account (whether or not such waiver is enforceable) and (z) shall not apply to any claims under the
Company’s indemnity of the Underwriter against certain liabilities, including liabilities under the Securities Act of
1933, as amended. The Indemnitor shall have the right to defend against any such claim with counsel of its choice reasonably
satisfactory to the Company if, within 15 days following written receipt of notice of the claim to the Indemnitor, the
Indemnitor notifies the Company in writing that it shall undertake such defense.
11.
Forfeiture of Founder Shares. To the extent that the Underwriter does not exercise its option to purchase additional
Units within 45 days from the date of the Prospectus in full (as further described in the Prospectus), the Sponsor agrees to automatically
surrender to the Company for no consideration, for cancellation at no cost, an aggregate number of Founder Shares so that the number
of Founder Shares will equal of 20% of the sum of the total number of Ordinary Shares and Founder Shares outstanding at such time.
The Sponsor and Insiders further agree that to the extent that the size of the Public Offering is increased or decreased, the Company
will effect a share capitalization or a share repurchase, as applicable, with respect to the Founder Shares immediately prior to
the consummation of the Public Offering in such amount as to maintain the number of Founder Shares at 20% of the sum of the total
number of Ordinary Shares and Founder Shares outstanding at such time.
12.
Entire Agreement. This Letter Agreement constitutes the entire agreement and understanding of the parties hereto
in respect of the subject matter hereof and supersedes all prior understandings, agreements or representations by or among the
parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof or the transactions contemplated
hereby. This Letter Agreement may not be changed, amended, modified or waived (other than to correct a typographical error) as
to any particular provision, except by a written instrument executed by all parties hereto.
13.
Assignment. No party hereto may assign either this Letter Agreement or any of its rights, interests or obligations
hereunder without the prior written consent of the other parties. Any purported assignment in violation of this paragraph shall
be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee. This Letter
Agreement shall be binding on the Sponsor, each of the Insiders and each of their respective successors, heirs, personal representatives
and assigns and permitted transferees.
14.
Counterparts. This Letter Agreement may be executed in any number of original, electronic 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.
15.
Effect of Headings. The paragraph headings herein are for convenience only and are not part of this Letter Agreement
and shall not affect the interpretation thereof.
16.
Severability. This Letter Agreement shall be deemed severable, and the invalidity or unenforceability of any term
or provision hereof shall not affect the validity or enforceability of this Letter Agreement or of any other term or provision
hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall
be added as a part of this Letter Agreement a provision as similar in terms to such invalid or unenforceable provision as may be
possible and be valid and enforceable.
17.
Governing Law. This Letter Agreement shall be governed by and construed and enforced in accordance with the laws
of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive
laws of another jurisdiction. The parties hereto (i) all agree that any action, proceeding, claim or dispute arising out of,
or relating in any way to, this Letter Agreement shall be brought and enforced in the courts of New York City, in the State of
New York, and irrevocably submit to such jurisdiction and venue, which jurisdiction and venue shall be exclusive, (ii) waive
any objection to such exclusive jurisdiction and venue or that such courts represent an inconvenient forum and (iii) waive any
right to a trial by jury in any action, suit or proceeding to enforce or defend any right under this Letter Agreement, and agree
that any such action, suit or proceeding will be tried before a court and not before a jury.
18.
Notices. Any notice, consent or request to be given in connection with any of the terms or provisions of this Letter
Agreement shall be in writing and shall be sent by express mail or similar private courier service, by certified mail (return receipt
requested), by hand delivery or facsimile transmission.
[Signature Pages Follow]
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Sincerely,
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FRONTIER ACQUISITION SPONSOR LLC
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By:
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Title:
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Chief Operating Officer
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[Signature Page to Letter Agreement]
[Signature Page to Letter Agreement]
[Signature Page to Letter Agreement]
[Signature Page to Letter Agreement]
[Signature Page
to Letter Agreement]
[Signature Page to Letter Agreement]
[Signature Page to Letter Agreement]
[Signature Page to Letter Agreement]
[Signature Page to Letter Agreement]
Acknowledged and Agreed:
FRONTIER ACQUISITION CORP.
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Title:
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Chief Operating Officer
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[Signature Page to Letter Agreement]
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
We hereby consent to the use in the Prospectus
constituting a part of this Registration Statement on Form S-1 of our report dated February 1, 2021, relating to the financial
statements of Frontier Acquisition Corp., which is contained in that Prospectus. We also consent to the reference to us under the
caption “Experts” in the Prospectus.
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/s/ WithumSmith+Brown, PC
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New York, New York
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February 17, 2021
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Exhibit 99.1
CONSENT OF DAVID
SINCLAIR
Frontier Acquisition
Corp. intends to file a Registration Statement on Form S-1 (together with any amendments or supplements thereto, the “Registration
Statement”) registering securities for issuance in its initial public offering. As required by Rule 438 under the Securities
Act of 1933, as amended, the undersigned hereby consents to being named in the Registration Statement as a Director Nominee.
February 18, 2021
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By:
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/s/ David Sinclair
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Name:
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David Sinclair
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Exhibit 99.2
CONSENT OF PETER
ATTIA
Frontier Acquisition
Corp. intends to file a Registration Statement on Form S-1 (together with any amendments or supplements thereto, the “Registration
Statement”) registering securities for issuance in its initial public offering. As required by Rule 438 under the Securities
Act of 1933, as amended, the undersigned hereby consents to being named in the Registration Statement as a Director Nominee.
February 18, 2021
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By:
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/s/ Peter Attia
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Name:
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Peter Attia
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Exhibit 99.3
CONSENT OF JONATHAN
CHRISTODORO
Frontier Acquisition
Corp. intends to file a Registration Statement on Form S-1 (together with any amendments or supplements thereto, the “Registration
Statement”) registering securities for issuance in its initial public offering. As required by Rule 438 under the Securities
Act of 1933, as amended, the undersigned hereby consents to being named in the Registration Statement as a Director Nominee.
February 18, 2021
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By:
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/s/ Jonathan Christodoro
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Name:
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Jonathan Christodoro
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