As filed with the U.S. Securities and Exchange Commission on January 28, 2022
Registration No. 333-258260
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1/A
(Amendment No. 3)
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
KIMBELL TIGER ACQUISITION CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of
incorporation or organization)
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6770
(Primary Standard Industrial
Classification Code Number)
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86-3513156
(I.R.S. Employer
Identification Number)
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777 Taylor St.
Fort Worth, Texas 76102
Telephone: (817) 945-9700
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Zachary M. Lunn
Kimbell Tiger Acquisition Corporation
777 Taylor St.
Fort Worth, Texas 76102
Telephone: (817) 945-9700
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
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Jason A. Rocha
Andrew J. Ericksen
Daniel E. Nussen
White & Case LLP
609 Main Street, Suite 2900
Houston, TX 77002
(713) 496-9700
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Steven R. Burwell
Proskauer Rose LLP
Eleven Times Square
New York, New York 10036
(212) 969-3000
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Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
☒
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Smaller reporting company
☐
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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 to Section 7(a)(2)(B) of the Securities Act. ☐
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CALCULATION OF REGISTRATION FEE
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Title of Each Class of Security Being Registered
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Amount Being
Registered
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Proposed Maximum
Offering
Price per Security(1)
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Proposed
Maximum Aggregate
Offering Price(1)
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Amount of
Registration
Fee
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Units, each consisting of one share of Class A common stock, $0.0001 par value per share, and one-half of one redeemable warrant(2)
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23,000,000 Units
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$
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10.00
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$
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230,000,000
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$
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25,093
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Shares of Class A common stock included as part of the units
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23,000,000 Shares
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—
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—
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—(4)
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Redeemable warrants included as part of the units(3)
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11,500,000 Warrants
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—
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—
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—(4)
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Shares of Class A common stock underlying our redeemable warrants
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11,500,000 Shares
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$
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11.50
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$
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132,250,000
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$
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14,428.48
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Total
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$
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362,250,000
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$
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39,521.48(5)
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(1)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended, or the Securities Act.
(2)
Includes 3,000,000 units, consisting of 3,000,000 shares of Class A common stock and 1,500,000 redeemable 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 under the Securities Act, there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions.
(4)
No fee pursuant to Rule 457(g) under the Securities Act.
(5)
Previously paid.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
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PRELIMINARY PROSPECTUS
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SUBJECT TO COMPLETION, DATED JANUARY 28, 2022
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$200,000,000
Kimbell Tiger Acquisition Corporation
20,000,000 Units
Kimbell Tiger Acquisition Corporation, which we refer to as our “company” or “TGR” throughout this prospectus, is a newly incorporated blank check company, incorporated as a Delaware corporation, formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. We have not selected any business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to our initial business combination. We intend to focus our search for a target business in the energy and natural resources industry in North America. This is an initial public offering of our securities.
Each unit has an offering price of $10.00 and consists of one share of our Class A common stock and one-half of one redeemable warrant, as described in more detail in this prospectus. Each whole warrant entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as described in this prospectus, and only whole warrants are exercisable. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. The warrants will become exercisable 30 days after the completion of our initial business combination and will expire five years after the completion of our initial business combination or earlier upon redemption or liquidation, as described in this prospectus. Subject to the terms and conditions described in this prospectus, we may redeem the warrants once the warrants become exercisable.
We have also granted the underwriter a 45-day option to purchase up to an additional 3,000,000 units to cover over-allotments, if any.
We are an “emerging growth company” under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in our securities involves risks. See “
Risk Factors” beginning on page
41 for a discussion of information that should be considered in connection with an investment in our securities. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
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Price to Public
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Underwriting
Commissions(1)
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Proceeds, before
expenses, to us
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Per Unit
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$
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10.00
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$
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0.55
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$
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9.45
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Total
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$
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200,000,000
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$
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11,000,000
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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 (or up to $8,050,000 if the underwriter’s over-allotment option is exercised in full) in the aggregate, payable to the underwriter for deferred underwriting commissions to be placed in a trust account located in the United States as described herein. The deferred underwriting commissions will be released only on completion of our initial business combination, as described in this prospectus. Does not include certain fees and expenses payable to the underwriter in connection with this offering. See also “Underwriting” 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 warrants described in this prospectus, $206.0 million, or $236.9 million if the underwriter’s over-allotment option is exercised in full ($10.30 per unit), will be deposited into a U.S.-based trust account with Continental Stock Transfer & Trust Company acting as trustee. Except with respect to interest earned on the funds held in the trust account that may be released to us to pay tax obligations of the company or Opco (as defined below), the funds held in the trust account will not be released from the trust account until the earliest of: (1) the completion of our initial business combination (including the release of funds to pay any amounts due to any public stockholders who properly exercise their redemption rights in connection therewith); (2) the redemption of any public shares (other than sponsor shares (as defined below)) properly submitted in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation (A) in a manner that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options, as described herein) or (B) with respect to any other provision relating to the rights of holders of our Class A common stock or pre-initial business combination activity; and (3) the redemption of our public shares and any Class A Units of Opco (as defined below) (other than those held by TGR) if we have not completed our initial business
combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.
We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of our Class A common stock upon the completion of our initial business combination at a per-share price described in this prospectus, payable in cash, subject to the limitations described herein. If we have not completed our initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), we will redeem 100% of the public shares at a per-share price described in this prospectus, payable in cash, subject to applicable law.
Our sponsor, Kimbell Tiger Acquisition Sponsor, LLC, a Delaware limited liability company (which we refer to as our “sponsor” throughout this prospectus), is an indirect subsidiary of Kimbell Royalty Partners, LP, a Delaware limited partnership (which we refer to as “KRP” throughout this prospectus). Our sponsor will commit to purchase an aggregate of 12,750,000 warrants (or 14,100,000 warrants if the underwriter’s over-allotment option is exercised in full) at a price of $1.00 per warrant ($12,750,000 in the aggregate, or $14,100,000 in the aggregate 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. Each private placement warrant entitles the holder thereof to purchase for $11.50 one share of our Class A common stock, subject to adjustment as described in this prospectus.
As of the date of this prospectus, our sponsor holds 5,750,100 shares of Class B common stock, 5,750,000 Class B Units of our operating subsidiary, Kimbell Tiger Operating Company, LLC (which we refer to as “Opco’’ throughout this prospectus) (up to 750,000 of which shares of Class B common stock and Class B Units of Opco are subject to forfeiture depending on the extent to which the underwriter’s over-allotment option is exercised), 100 Class A Units of Opco and 2,500 shares of our Class A common stock. The Class B Units of Opco will automatically convert into Class A Units of Opco in connection with our initial business combination on a one-for-one basis, subject to adjustment as provided herein. We refer to the Class B Units of Opco (or the Class A Units of Opco into which such Class B Units will convert), together with a corresponding number of shares of our non-economic Class B common stock, collectively as the “founder shares” throughout this prospectus. The founder shares will be exchangeable for shares of our Class A common stock at the time of our initial business combination on a one-for-one basis, subject to adjustment as provided herein.
On any vote to approve our initial business combination or on any other matter submitted to a vote of our stockholders prior to our initial business combination, holders of our Class A common stock and holders of our Class B common stock will generally vote together as a single class, except as required by Delaware law or stock exchange rule, with each share of our common stock entitling the holder to one vote. Following our initial business combination, holders of our Class A common stock and holders of our Class B common stock will generally vote together as a single class on all matters presented for a stockholder vote, except as required by Delaware law or stock exchange rule, with each share of our common stock entitling the holder to one vote.
Prior to this offering, there has been no public market for our units, Class A common stock or warrants. Our units have been approved for listing on the New York Stock Exchange (the “NYSE”) under the symbol “TGR.U.” We expect that our units will be listed on the NYSE on or promptly after the date of this prospectus. We expect that the Class A common stock and warrants constituting the units will begin separate trading on the 52nd day following the date of this prospectus (or, if such date is not a business day, the following business day), unless UBS Securities LLC informs us of its decision to allow earlier separate trading, subject to certain conditions. Once the securities constituting the units begin separate trading, we expect that the Class A common stock and warrants will be listed on the NYSE under the symbols “TGR” and “TGR.WS,” respectively.
The underwriter is offering the units for sale on a firm commitment basis. Delivery of the units will be made on or about , 2022.
Sole Book-Running Manager
UBS Investment Bank
The date of this prospectus is , 2022
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Page
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2
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37
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38
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41
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84
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88
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89
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91
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Page
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98
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134
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143
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151
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177
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187
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187
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We are responsible for the information contained in this prospectus. We have not, and the underwriter has not, authorized anyone to provide any information or to make any representations other than those contained in this prospectus. We and the underwriter take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the units offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.
SUMMARY
This summary only highlights the more detailed information appearing elsewhere in this prospectus. As this is a summary, it does not contain all of the information that you should consider in making an investment decision. You should read this entire prospectus carefully, including the information under “Risk Factors” and our financial statements and the related notes included elsewhere in this prospectus, before investing.
Unless otherwise stated in this prospectus or the context otherwise requires, references to:
➤
“amended and restated certificate of incorporation” are to our certificate of incorporation to be in effect upon the completion of this offering;
➤
“common stock” are to our Class A common stock and our Class B common stock;
➤
“DGCL” are to the General Corporation Law of the State of Delaware;
➤
“directors” are to our current directors and director nominees;
➤
“equity-linked securities” are to any securities of our company or any of our subsidiaries which are convertible into, or exchangeable or exercisable for, equity securities of our company or such subsidiary, including any securities issued by our company or any of our subsidiaries which are pledged to secure any obligation of any holder to purchase equity securities of our company or any of our subsidiaries, and including Opco Units;
➤
“extension option” are to the option of the sponsor, upon deposit of the extension fee into the trust account, to cause us to extend the available time to consummate our initial business combination by three months; the sponsor may exercise the extension option up to two times, allowing for up to an additional six months (for a total of 21 months) to complete an initial business combination;
➤
“extension fee” are to an amount equal to $0.10 per public share (a total of $2,000,000, or $2,300,000 if the underwriters’ over-allotment option is exercised in full) that the sponsor may deposit into the trust account in order to exercise the extension option;
➤
“founder shares” are to Class B Units of Opco initially issued to our sponsor in a private placement prior to this offering (or the Class A Units of Opco into which such Class B Units of Opco will convert) and a corresponding number of shares of our non-economic Class B common stock;
➤
“initial stockholders” are to holders of our founder shares and sponsor shares prior to this offering;
➤
“KRP” are to Kimbell Royalty Partners, LP (NYSE: KRP);
➤
“KRP Opco” are to Kimbell Royalty Partners Operating, LLC, a subsidiary of KRP and the managing member of our sponsor;
➤
“management” or our “management team” are to our officers and directors;
➤
“Opco” are to our operating subsidiary, Kimbell Tiger Operating Company, LLC;
➤
“Opco LLC Agreement” are to the limited liability company agreement of Opco;
➤
“Opco Units” are to the Class A Units and Class B Units of Opco;
➤
“private placement warrants” are to the warrants to purchase shares of our Class A common stock issued to our sponsor in a private placement simultaneously with the closing of this offering and warrants that may be issued upon conversion of working capital loans (as described herein);
➤
“public shares” are to shares of our Class A common stock sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market) and, unless otherwise stated herein, the 2,500 shares of our Class A common stock forming part of the sponsor shares;
➤
“public stockholders” are to the holders of our public shares, including our sponsor, officers and directors to the extent our sponsor, officers or directors purchase public shares, provided that each of their status as a “public stockholder” shall only exist with respect to such public shares;
➤
“public warrants” are to our warrants sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market);
➤
“related companies” are to KRP, KRP Opco and their respective subsidiaries and certain other entities with an executive management team that may from time to time include one or more members of our management team;
➤
“sponsor” are to Kimbell Tiger Acquisition Sponsor, LLC, a Delaware limited liability company and a subsidiary of KRP Opco;
➤
“sponsor shares” are to the 100 Class A Units of Opco and corresponding number of shares of our non-economic Class B common stock (which together will be exchangeable into shares of Class A common stock after our initial business combination on a one-for-one basis) and the 2,500 shares of our Class A common stock purchased by our sponsor in a private placement prior to this offering;
➤
“warrants” are to the public warrants and the private placement warrants; and
➤
“we,” “us,” “our,” “company,” “our company,” or “TGR” are to Kimbell Tiger Acquisition Corporation, a Delaware corporation, or, where applicable, members of its management team.
Unless we tell you otherwise, the information in this prospectus assumes that the underwriter will not exercise its over-allotment option and the forfeiture by our sponsor of an aggregate of 750,000 founder shares.
General
TGR is a newly organized blank check company, incorporated as a Delaware corporation, formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our “initial business combination.” We have not selected any business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to our initial business combination.
Although we may pursue an initial business combination in any industry, we intend to capitalize on our management team’s core competencies to focus our search in the energy and natural resources industry in North America. Our management team has extensive experience in identifying and executing large, complex transactions in the energy industry, and significant hands-on experience working with private companies in preparing for and executing an initial public offering. Our team has a history of being active owners and directors by working closely with companies to create value in the public markets.
In 2017, as a part of its IPO process, KRP, which is the ultimate parent of our sponsor, negotiated the combination of assets and entities from multiple contributing parties to create the KRP public entity. We believe that this ability to form partnerships with private owners to build an entity of scale that is preferred by the public markets differentiates us as we look at potential business combinations. Our team is knowledgeable and experienced in public and private M&A dynamics across a range of sizes, and adept at using an Up-C structure such as ours to acquire assets and businesses. KRP has a proven track record of value accretive M&A using equity as acquisition currency and of returning capital to shareholders through a variable dividend. KRP has returned ~34% of its IPO unit price via cash dividends in fewer than five years.
We will also benefit from our management team’s extensive market knowledge across the United States. With KRP’s mineral and royalty interests spanning 28 states and in every major onshore basin in the U.S. Lower 48, our team has insight on every corner of the market and expertise in technical evaluation of comparable oil and gas assets. This broad exposure and basin-agnostic approach has allowed our team to focus on value maximization rather than basin concentration. Furthermore, we believe that our
relationship with our sponsor will provide expanded access to deal flow and potential targets. KRP’s long history in the minerals and royalties space has allowed members of our team to develop extensive relationships with both exploration and production companies and individual land / mineral owners, which will lead to strong support for a yield-oriented consolidation vehicle with value uplift.
We believe that our management team is well positioned to effectuate a successful business combination and provide attractive risk-adjusted returns in the marketplace. Our management believes that its ability to identify and implement value creation initiatives differentiates its acquisition strategy from others in the market.
Kimbell Royalty Partners, LP and our sponsor
Our sponsor is a wholly owned subsidiary of KRP Opco, which is in turn a subsidiary of KRP. KRP is a leading publicly traded oil and gas mineral and royalty company based in Fort Worth, Texas with more than 42 MBoe of proved reserves (43.3% liquids). KRP owns mineral and royalty interests in approximately 9.1 million gross acres and overriding royalty interests in approximately 4.6 million gross acres. KRP’s reach extends across 28 states and in every major onshore basin in the U.S. Lower 48, including ownership in more than 97,000 gross wells. KRP has ~21% of its overall production from conventional assets, including certain Enhanced Oil Recovery (EOR) projects. KRP believes that this conventional production provides a base level of production stability that helps facilitate overall organic production growth as new, unconventional wells come online.
KRP completed its IPO in 2017 by negotiating the combination of assets and entities from multiple parties to create the KRP public entity. Since its IPO, KRP has been a leading consolidator in the U.S. oil and gas mineral and royalty sector, having completed acquisitions totaling approximately $950 million in cash and equity consideration. KRP’s Up-C structure has been helpful in facilitating acquisitions, with owners of target companies generally preferring to receive equity of KRP Opco (which is taxed as a pass-through partnership for federal income tax purposes) rather than shares of KRP itself (which is taxed as a corporation for federal income tax purposes). Selected acquisitions include:
➤
Haymaker Minerals & Royalties acquired for approximately $444.0 million in cash and equity (ultimately in the form of equity of KRP Opco);
➤
Phillips Energy Partners acquired for approximately $171.6 million in equity (in the form of equity of KRP Opco); and
➤
Springbok Energy acquired for approximately $123.1 million in cash and equity (in a combination of equity of KRP Opco and KRP itself).
Our Management Team and Board of Directors
Our management team and Board of Directors (our “Board”) collectively have over 100 years of experience in sourcing, evaluating and underwriting numerous acquisitions across the U.S. Lower 48. We believe that the track record and industry network of our management team and Board will provide for a robust and privileged set of business combination opportunities. As officers and directors of energy companies, our team has significant experience creating value in the public markets, which we believe will differentiate us, from both an M&A and capital markets perspective, among other potential counterparties when evaluating similar business combinations.
Zachary Lunn—President and Chief Executive Officer: Zachary Lunn has extensive operating experience in the E&P sector, including conventional and unconventional reservoirs across multiple states and basins. Mr. Lunn began his career with Nexen Petroleum USA, gaining experience in operations, business development, and reservoir engineering while working assets in the Gulf of Mexico. Following the $15.1 billion sale of Nexen to CNOOC, Mr. Lunn pursued a production/operations position with Petro-Hunt LLC, where he supervised the company’s operated production, including all conventional and unconventional reservoirs in Texas, Louisiana, Mississippi, North Dakota, Montana, and Wyoming. Further, Mr. Lunn created a development plan for 500,000 Bakken acres and played an integral role on the divestiture team, resulting in $1.45 billion in M&A activity. In 2014, Mr. Lunn joined Enduro Resource Partners and was responsible for 550 wellsites in North Dakota, Texas, and Louisiana. In July 2018,
upon learning that Enduro Resource Partners planned to sell their assets, Mr. Lunn partnered with the principals of Cobra Oil & Gas Corporation and acquired the properties. Upon acquisition, Mr. Lunn managed all day-to-day activities of Cobra Oil & Gas Corporation including operations, marketing, business development, and finance. Under Mr. Lunn’s stewardship, Cobra Oil & Gas grew production while maintaining high levels of free cash flow. Mr. Lunn is a member of the Society of Petroleum Engineers, American Association of Drilling Engineers, and Fort Worth Wildcatters. He received his Bachelor of Science degree in Petroleum Engineering from Louisiana State University.
R. Blayne Rhynsburger—Controller: Blayne Rhynsburger has served as the Controller of the general partner of KRP since February 2017. Mr. Rhynsburger previously served as the Controller of KRP’s predecessor from November 2015 until KRP’s IPO. Prior to that time, Mr. Rhynsburger served as audit manager from July 2014 to November 2015, audit senior from July 2011 to June 2014, and audit staff from September 2009 to June 2011 at Whitley Penn LLP, where he specialized in assurance and advisory services for clients in multiple industries, primarily energy clients in the public and private sectors. Mr. Rhynsburger also has served as an adjunct professor of petroleum accounting in the graduate school of Texas Christian University’s Neeley School of Business since 2015. Mr. Rhynsburger holds a Bachelor of Business Administration degree in Accounting and Finance and a Master of Accounting degree from Texas Christian University. He is also a member of the Texas Society of Certified Public Accountants.
Robert D. Ravnaas—Chairman: Bob Ravnaas has served as Chief Executive Officer of the general partner of KRP and chairman of its board of directors since November 2015. Mr. R. Ravnaas served as President of Cawley, Gillespie & Associates, Inc., a petroleum engineering firm, from 2011 until February 2017. He also served as President and director of Rivercrest Royalties II, LLC from 2014 until December 2017, and as President and director of Rivercrest Royalties, LLC from 2013 until KRP’s IPO. Prior to joining Cawley, Gillespie & Associates, Inc. in 1983, he worked as a Production Engineer for Amoco Production Company from 1981 to 1983. Mr. R. Ravnaas received a Bachelor of Science degree with special honors in Chemical Engineering from the University of Colorado at Boulder and a Master of Science degree in Petroleum Engineering from the University of Texas at Austin. He is a registered professional engineer in Texas and a member of the Society of Petroleum Engineers, the Society of Petroleum Evaluation Engineers and the American Association of Petroleum Geologists.
R. Davis Ravnaas—Director and Strategic Advisor: Davis Ravnaas has served as President and Chief Financial Officer of the general partner of KRP since November 2015. Mr. D. Ravnaas co-founded Rivercrest Royalties, LLC, which was the predecessor to KRP, in October 2013, served as its Vice President and Chief Financial Officer from November 2013 to October 2015 and served as its President and Chief Financial Officer from October 2015 until KRP’s IPO. He has also served as Vice President and Chief Financial Officer of Rivercrest Royalties Holdings II, LLC and/or its predecessor, Rivercrest Royalties II, LLC, since August 2014, and he is a partial owner of other companies that have contributed assets to KRP in the past and may do so in the future. From 2010 to 2012, Mr. D. Ravnaas was responsible for sourcing, evaluating and monitoring investments in energy and industrials companies as an associate investment professional with Crestview Partners, a New York based private equity fund. Mr. D. Ravnaas left Crestview Partners in 2012 to attend the Stanford Graduate School of Business, where he earned his Master in Business Administration in 2014. Mr. D. Ravnaas also has an AB in Economics from Princeton University and a MSc in Finance and Economics from the London School of Economics.
Matthew S. Daly—Director and Strategic Advisor: Matthew S. Daly has served as Chief Operating Officer of the general partner of KRP since May 2017. Mr. Daly previously served as Senior Vice President—Corporate Development of the General Partner of KRP beginning in September 2016 and he served as Senior Vice President—Corporate Development of KRP’s predecessor from August 2016 until KRP’s IPO. Prior to joining Kimbell, Mr. Daly spent 11 years in investment management, most recently at Kleinheinz Capital Partners, Inc. and Hirzel Capital Management, LLC, two Texas-based investment firms, where he helped manage both the public and private energy investments. He was also Chairman of Delta Biofuels, Inc., a portfolio company of Kleinheinz Capital Partners, Inc. Prior to this, Mr. Daly was an investment banker at Wasserstein Perella & Co. in New York City and later Lazard Frères & Co., where he was a Vice President in the Mergers and Acquisitions group. Within this role, he advised on transactions totaling over $10 billion in value including acquisitions, divestitures, corporate restructurings and special committee assignments relating to takeover defense. He began his career at Arthur Andersen LLP in
Dallas. He has a BBA from the University of Texas at Austin and an MBA from the Booth School at the University of Chicago.
Kimberly DeWoody—Director Nominee: Ms. DeWoody is the Finance Director for the Southwestern Exposition and Livestock Show (Fort Worth Stock Show & Rodeo), where she oversees all aspects of the Show’s accounting and finance functions. Prior to joining the Show in November 2020, Ms. DeWoody spent a total of 13 years at Whitley Penn LLP where she became an audit partner effective January 1, 2017. Throughout her time at Whitley Penn, Ms. DeWoody had extensive experience providing audit and assurance services to a broad range of industries, with a significant focus on the oil and gas sector, and her clients included both publicly traded and privately held companies. Ms. DeWoody has substantial knowledge of U.S. accounting and auditing standards gained through her public accounting career. Additionally, while at Whitley Penn, Ms. DeWoody had international and IFRS experience through her participation in the Nexia International Secondment Program where she worked at Smith & Williamson’s London office. She began in her career in public accounting at Ernst & Young in Houston, Texas. Ms. DeWoody was awarded “Forty Under 40” by Hart Energy’s Oil & Gas Investor. Additionally, Ms. DeWoody was awarded “Forty Under 40” by the Fort Worth Business Press and is a graduate of Leadership Fort Worth. She was awarded the Legacy of Women Award by SafeHaven of Tarrant County. Ms. DeWoody holds Bachelor of Business Administration and Master of Accountancy degrees from Baylor University. She is a certified public accountant, licensed in the state of Texas, and a member of the American Institute of Certified Public Accountants, Texas Society of Certified Public Accountants (TXCPA), and Fort Worth Chapter of TXCPA.
Fred N. Reynolds—Director Nominee: Mr. Reynolds is the principal owner of Fred S. Reynolds and Associates, a petroleum engineering consulting firm located in Fort Worth, Texas. Mr. Reynolds graduated in 1979 with a Bachelor of Science in Petroleum Engineering from the University of Oklahoma. Following graduation, Mr. Reynolds worked for Chevron U.S.A. and Equity Oil Company as a drilling and completion engineer and Engineering Manager, before joining his father and forming the petroleum engineering consulting firm of Fred S. Reynolds and Associates in 1983. The consulting business consults in all aspects of petroleum engineering with the emphasis on reservoir evaluations, reserve determinations, and economic projections for the purposes of determining fair market value, loan values, and prospect screening. The firm’s clients are oil and gas companies, individual royalty and working interest owners, estate planning attorneys, and bank trust and energy lending departments.
None of our officers or directors have served as a sponsor, director or officer of any blank check companies or special purpose acquisition companies in the past.
Market Opportunity
Our team’s extensive expertise will allow us to source and evaluate targets in the energy and natural resources sector, a sector that we believe is attractive for numerous reasons.
The target market is expansive, as the sector is populated with many stranded assets across North America, and there is currently no natural consolidator of longer-lived, mature, shallow-decline assets. There is also limited liquidity for existing owners of non-core upstream assets that TGR would target for consolidation, leaving many owners with limited opportunities to either further develop or monetize their assets. We also believe that many operators will continue to seek to divest assets, primarily as a result of limited traditional capital markets access available to them and a general transition to capital discipline rather than growth strategies. Moreover, the bar has been raised for energy investing, creating room only for seasoned management teams with an efficient cost structure.
Further, many assets are not of significant scale and fail to attract strong and well-capitalized buyers. These targets also invite a limited buyer universe, as buyers typically do not focus on out-of-favor basins or out-of-favor assets within popular basins. We believe these targets also present an opportunity for value accretion from consolidation and professional operations brought by seasoned operators. Therefore, even targets that demonstrate shallow declines, predictable production and associated cash flow profile could be overlooked and undercapitalized.
We believe this confluence of overlooked, illiquid and undercapitalized assets presents a unique opportunity for a yield-oriented consolidation vehicle with an experienced management team that can maximize free
cash flow potential. We believe that substantial synergies are possible when these assets are consolidated, and we believe that our management team is well-equipped to take advantage of these potential synergies due to its extensive experience within the industry.
Our Business Strategy
Although our efforts to identify a prospective target business will not necessarily be limited to a particular industry, sector or region, we intend to capitalize on our relationships, knowledge, experience and expertise in the energy and natural resources industry to identify, acquire and, after our initial business combination, build a company in the energy and natural resources industry in North America that complements the experience of our management team and can benefit from its operational expertise and executive oversight.
Our acquisition will leverage our team’s network of potential proprietary and public transaction sources where we believe a combination of our relationships, knowledge and experience in the energy and natural resources industry could effect a positive transformation or augmentation of existing businesses or properties to improve their overall value proposition. Our goal is to form a focused business with multiple competitive advantages and the potential to generate cash flow in excess of its capital. We would expect to grow the business over time, both organically and through acquisitions, with a focus on consistently achieving attractive returns on capital and maintaining conservative balance sheet metrics. We believe that SPACs that are led by teams with experience in the industry of the target company that they acquire have, following their initial business combinations, outperformed (on a share price basis) other companies that were the subject of SPAC transactions in which the SPAC team did not have experience in the industry of the target company. However, you should not rely on the historical record or performance of other public companies as indicative of the future performance of an investment in us or the returns we will or may generate going forward. See “Risk Factors—Risks Relating to Our Search for, and Consummation of or Inability to Consummate, a Business Combination—We may seek acquisition opportunities in industries or sectors that may be outside of our management team’s areas of expertise.”
Our management team is deeply familiar with the trends of our target industries and brings an investing approach that offers multiple competitive advantages in sourcing, evaluating and executing on opportunities, including:
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Stockholder Centric: TGR is intended to be a yield vehicle with the goal of maximizing free cash flow to stockholders. In order to achieve this goal, we will focus on mature, shallow decline assets with low reinvestment rates in order to seek to provide stability in both volumes and cashflows. We will also target assets with potential for value uplift through operational improvements, increasing cash flow potential.
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Consolidation Vehicle within the Upstream Space: If our team determines to acquire upstream oil and gas businesses or assets, TGR is expected to provide a vehicle by which it could consolidate previously stranded and fragmented working interest assets that have suffered from a lack of liquidity, thereby creating an avenue by which private equity sponsors and private companies could seek to optimize their investments in the upstream space.
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Differentiated Target Sourcing: Our team plans to consider targets in both traditionally favored basins as well as non-core assets in older basins that suffer from a lack of operational attention. These traditionally non-core assets in older basins are likely to have lower decline rates and opportunities for value uplift from management’s operational abilities. We have a strong industry network that we will utilize in order to effectively and efficiently source these targets, and we intend to focus our search in states with regulatory climates favorable to the energy and natural resources industry.
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Long-Term Strategy: Our management team intends to be involved in growing and improving the business over time organically and through pursuing accretive and complementary acquisitions.
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Conservative Balance Sheet: We intend to focus on maintaining low net leverage and conservative balance sheet metrics as we seek to consistently achieve attractive returns on capital.
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Advantaged Business Structure: Our Up-C structure is an advantage with potential sellers due to incentives not offered through a traditional publicly traded corporation. We believe that our Up-C structure provides us with significant advantages as it provides flexibility in structuring a variety of business combinations, including the flexibility to retain an Up-C structure following the business combination or restructure as a result of the business combination, depending on the nature and structure of the target and the efficiency and administrability of retaining our post-offering structure after the business combination. See “—Our Structure.”
Acquisition Criteria
Consistent with our business strategy, we have identified the following general criteria and guidelines, which we believe are important in evaluating prospective target businesses. We will use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial business combination with a target that does not meet these criteria and guidelines. We plan to acquire upstream assets that possess the following characteristics:
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Mature, Low-decline, Long-lived Assets: We seek to acquire assets with a stable production history and shallow decline profile. These assets will typically have predictable production profiles and low capital intensity.
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Generation of Stable Free Cash Flow: We seek to acquire mature, shallow decline assets that generate free cash flow and are conducive to a yield vehicle.
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Benefits from Our Talented and Incentivized Management Team: We seek to acquire a business or asset whose performance and cash flow generation can be improved by the deep industry expertise of our management and sponsor.
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Unrecognized or Underutilized Value: We seek to acquire a business or asset that exhibits unrecognized or underutilized value that would benefit from management attention and expertise, capital deployment and synergies with future complementary acquisitions.
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Subject to an Inefficient Capital Structure: We seek to acquire a business that has an inefficient capital structure or offers the potential to improve the efficiency of the capital structure.
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Benefit from a Public Currency and Access to Public Equity Markets: We seek to provide sellers access to the public equity markets that will allow the target company to utilize additional forms of capital, enhancing its ability to pursue accretive acquisitions, high-return capital projects, and/or strengthen its balance sheet.
These criteria and guidelines are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general criteria and guidelines, as well as other considerations, factors and criteria deemed relevant by our management in effecting our initial business combination consistent with our business objectives. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our shareholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of tender offer documents or proxy solicitation materials that we would file with the Securities and Exchange Commission (the “SEC”).
Our Acquisition Process
In evaluating a prospective target business, we expect to conduct a thorough due diligence review which may encompass, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial, operational, legal and other information that will be made available to us.
We will leverage the vast experience of our management team and Board to evaluate the asset’s technical merits and relative risk return profile. Acquisition evaluations will benefit from an extensive expertise in technical evaluation and deep industry connectivity which we believe will result in a robust deal pipeline.
We have not selected any business combination target we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to out initial business combination.
Certain members of our management team will indirectly own our securities following this offering, and accordingly, they may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.
As described under “Proposed Business—Conflicts of Interest” and “Management—Conflicts of Interest,” each of our officers and directors has, and any of them in the future may have, additional fiduciary or contractual obligations to one or more other entities pursuant to which such officer or director may be required to present a business combination opportunity to such entities before he or she presents such opportunity to us. Also, none of KRP, our sponsor or any of our directors and officers is prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity to which he or she has then-current fiduciary or contractual obligations to present such opportunity to another entity, he or she may only present such opportunity to us if such other entity rejects the opportunity. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company; such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue; and such person has no fiduciary or contractual obligation to present the opportunity to any other person or entity. Additionally, none of KRP, our sponsor or any other entity currently has any obligation or duty to provide us with any potential business combination opportunity.
In addition, KRP will adopt a policy pursuant to which any business combination opportunity that is a corporate opportunity of KRP that may also be a business combination opportunity for our company will first be presented to the conflicts committee of the board of directors of KRP, which is made up solely of independent directors, for consideration as to whether KRP desires to pursue such business combination opportunity as a direct investment or to present such opportunity to our company for consideration. The members of the conflicts committee of the board of directors of KRP will not serve in any fiduciary capacity at our company.
For more information, including a list of our executive officers and directors and entities for which a conflict of interest may or does exist between such officers and the company, see “Proposed Business—Conflicts of Interest” and “Management—Conflicts of Interest.”
We do not believe, however, that the fiduciary, contractual or other obligations or duties of our officers or directors or the KRP policy described above will materially affect our ability to complete our initial business combination.
We may pursue an acquisition opportunity jointly with our sponsor, or one or more affiliates, including KRP or its affiliates, which we refer to as an “Affiliated Joint Acquisition.” Any such parties may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the acquisition by selling assets to such parties or issuing to such parties a class of equity or equity-linked securities. Our sponsor and its affiliates have no obligation to make any such investment, and may compete with us for potential business combinations. Any such issuance of equity or equity-linked securities would, on a fully diluted basis, reduce the percentage ownership of our then-existing stockholders. Notwithstanding the foregoing, pursuant to the anti-dilution provisions of our founder shares, issuances or deemed issuances of our Class A common stock or equity-linked securities would result in an adjustment to the number of Class A Units of Opco into which the Class B Units of Opco will convert (unless the holders of a majority of the outstanding founder shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that, after all founder shares have been exchanged for shares of our Class A common stock, the aggregate number of shares of our Class A common stock received by holders in exchange for founder shares would equal 20% of the sum of the total
outstanding shares of our Class A common stock upon the completion of this offering (excluding the sponsor shares and any shares issuable upon exercise of any warrants) plus all shares of our Class A common stock and equity-linked securities issued or deemed issued in connection with the business combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the business combination).
In connection with an Affiliated Joint Acquisition, we may raise additional proceeds to consummate our initial business combination by selling a royalty interest in the underlying assets of the target business to KRP or its affiliates. A royalty interest is an interest that gives an owner the right to a portion of the resources or revenues derived from the underlying working interest assets. We expect that we will consider a sale of royalty interests to KRP or its affiliates if we seek to acquire a company that owns working interest oil and gas assets. However, KRP and its affiliates have no obligation to purchase any such royalty interest or make any other additional investment in us in connection with our initial business combination. Working interest oil and gas companies pay royalties (and other similar fees) to holders of mineral and royalty interests as oil and gas is produced from their properties. As such, if the post-business combination company sold a royalty interest to KRP or its affiliates, the net amount of revenues ultimately received by the post-business combination company would be reduced by the amount of any royalties paid to KRP, its affiliates and any other holders of such interests. Holders of royalty interests do not have to share the burden of any costs of development of the underlying assets, which means that the post-business combination company’s costs of development would not be reduced by the sale of a royalty interest to KRP or its affiliates.
We may elect to offer to sell a royalty interest to KRP or its affiliates to, among other reasons, (i) increase the amount of committed capital available to consummate our initial business combination, including in the event that the market for issuing securities to unaffiliated investors in a private investment in public equity, or PIPE, is challenging or difficult to consummate at the desired issue price, (ii) reduce dilution in connection with raising equity capital for our initial business combination, and (iii) demonstrate synergies among KRP and/or its affiliates and the target business, especially in light of KRP’s knowledge and expertise in the oil and gas sector, its royalty interest ownership and the industry network of KRP’s management team and board of directors. We believe that our relationship with KRP provides us with a competitive advantage compared to other special purpose acquisition companies in the event we seek to consummate our initial business combination with a working interest oil and gas company.
Any decision regarding the sale of a royalty interest to KRP or its affiliates will be subject to our related party transaction policy that will be adopted in connection with this offering and will be subject to review and approval by the audit committee of our board of directors. Please see “Certain relationships and related party transactions—Related party policy.”
You should not rely on the historical record or performance of KRP, Mr. R. Ravnaas or other members of our management team as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. See “Risk Factors—General Risk Factors—Past performance by KRP, Mr. Ravnaas and other members of our management team may not be indicative of future performance of an investment in us.”
Initial Business Combination
The rules of the NYSE require that we must consummate an initial business combination with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the trust account (excluding the amount of any deferred underwriting discount held in trust ) at the time of our signing a definitive agreement in connection with our initial business combination. Our Board will make the determination as to the fair market value of a target business or businesses. If our Board is not able to independently determine the fair market value of a target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”), or an independent accounting 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 or there is a significant amount of uncertainty as to the value of the company’s assets or prospects.
We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares will, together with Opco, own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders or for other reasons, including an Affiliated Joint Acquisition as described above. However, we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise is not 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-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares 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 stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If we control less than 100% of the equity interests or assets of a target business or businesses, the portion of such business or businesses that is controlled 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 transactions and we will treat the target businesses together as the initial business combination for seeking stockholder approval or for purposes of a tender offer, as applicable. Notwithstanding the foregoing, if we are not then listed on the NYSE for whatever reason, we would no longer be required to meet the foregoing 80% of net assets test.
Prior to the effectiveness of the registration statement of which this prospectus forms a part, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the completion of our initial business combination.
Corporate Information
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion (as adjusted for inflation pursuant to SEC rules from time to time), or (c) in which we are deemed to be a large accelerated filer, which means the market value of our
Class A common stock that is held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter; and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.
Our executive offices are located at 777 Taylor Street, Suite 810, Fort Worth, Texas 76102 and our telephone number is (817) 945-9700. Upon completion of this offering, our corporate website address will be kimbelltiger.com. Our website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this prospectus or the registration statement of which this prospectus forms a part. You should not rely on any such information in making your decision whether to invest in our securities.
Our Structure
This offering is conducted through an “Up-C” structure. Following the offering, investors in this offering will hold a direct economic equity ownership interest in TGR in the form of shares of our Class A common stock, and an indirect ownership interest in Opco through TGR’s ownership of Class A Units of Opco. By contrast, our initial stockholders will own founder shares and sponsor shares, which include direct economic interests in Opco in the form of Class A and Class B Units of Opco and a corresponding non-economic voting equity interest in TGR in the form of shares of our Class B common stock, as well as a direct economic and voting interest in the form of our Class A common stock. Shares of our Class A common stock and Class B common stock are entitled to vote on the same basis. Sponsor shares were purchased for $10.00 each and, in the absence of an initial business combination, will generally participate in liquidation or other payments on a pari passu basis with the shares of our Class A common stock purchased as part of units in this offering. However, given the small number of sponsor shares relative to the other public shares, in many cases the economic, governance or other effects of the sponsor shares are not material to the holders of our Class A common stock or warrants, and for simplicity, portions of this disclosure may not fully describe or reflect these immaterial effects. Following this offering, TGR will own a number of Class A Units of Opco equivalent to the number of shares of our Class A common stock outstanding after this offering, as well as a number of warrants to acquire Class A Units of Opco equivalent to the number of warrants to acquire shares of our Class A common stock outstanding after this offering, and will be the sole managing member of Opco. Opco will hold all of our material assets, including the trust account. The Opco Units are entitled to different economics by virtue of being held directly, rather than through TGR, which is subject to corporate income tax. Please see the risk factor entitled “Our organizational structure confers certain benefits upon our initial stockholders that will not benefit the holders of our Class A common stock to the same extent as it will benefit our initial stockholders” for additional information.
In connection with our initial business combination, the Class B Units of Opco will convert into Class A Units of Opco on a one-for-one basis, subject to adjustment as provided under the caption in the offering summary “Founder shares exchange and anti-dilution.” The Class A Units and Class B Units of Opco are substantially similar other than certain distribution rights. In addition, following our initial business combination, our initial stockholders will have the right, subject to certain limitations and our option to purchase for cash, as further described herein, to exchange Class A Units of Opco (and a corresponding number of shares of our Class B common stock) for shares of our Class A common stock on a one-for-one basis, subject to adjustment as provided under the caption in the offering summary “Founder shares exchange and anti-dilution.” The shares of our Class B common stock comprising a portion of the founder shares and sponsor shares cannot be transferred without transferring a corresponding number of Class A Units or Class B Units of Opco, as applicable, and vice versa. Following any exchange of Class A Units of Opco, TGR will retain such Class A Units and cancel the corresponding shares of our Class B common stock. Please read “Certain Relationships and Related Party Transactions—Opco LLC Agreement.” In connection with our initial business combination, we might choose to issue additional Opco Units (and corresponding shares of our Class B common stock) to participants in the business combination, such as sellers of assets or entities or financing sources.
We believe that our Up-C structure provides us with significant advantages as it provides flexibility in structuring a variety of business combinations, including the flexibility to retain an Up-C structure following
the business combination or restructure as a result of the business combination, depending on the nature and structure of the target and the efficiency and administrability of retaining our post-offering structure after the business combination. In addition, if we retain our Up-C structure, subsequent exchanges of Opco Units for shares of Class A common stock by the initial stockholders, or by owners of the target of a business combination, to the extent they receive Opco Units as consideration, may result in adjustments to the tax basis of the assets held by Opco at the time of the exchange, which adjustments would be allocated to TGR. These adjustments would not have been available to TGR absent such exchanges and may increase (for tax purposes) TGR’s depreciation and amortization deductions and may also decrease TGR’s gains (or increase its losses) on future dispositions of certain assets to the extent the increase in tax basis is allocated to those assets. Such increased deductions and losses and reduced gains may reduce the amount of tax that TGR would otherwise be required to pay in the future. While our Up-C structure differs from the structure of other special purpose acquisition companies, the terms of this offering are generally consistent with those of other special purpose acquisition companies. Please read “Proposed Business—Comparison of This Offering to Offerings by Other Special Purpose Acquisition Companies.”
The following diagram illustrates our simplified ownership structure after giving effect to this offering and the concurrent private placement of warrants to our sponsor.
The Offering
In making your decision whether to invest in our securities, you should take into account not only the identity of our sponsor and the experience of our management team, but also the special risks we face as a blank check company and the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. You will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. You should carefully consider these and the other risks set forth in the section below entitled “Risk Factors” in this prospectus.
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 share of Class A common stock; and
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one-half of one redeemable warrant to purchase one share of Class A common stock.
Units: “TGR.U”
Class A Common Stock: “TGR”
Warrants: “TGR.WS”
Trading commencement and separation of Class A common stock and
warrants
The units will begin trading on or promptly after the date of this prospectus. The Class A common stock and warrants constituting the units will begin separate trading on the 52nd day following the date of this prospectus (or, if such date is not a business day, the following business day), unless UBS Securities LLC 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 shares of Class A common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into shares of Class A common stock and warrants. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least two units, you will not be able to receive or trade a whole warrant.
Additionally, the units will automatically separate into their component parts and will not be traded after completion of our initial business combination.
Separate trading of the Class A common stock and warrants is prohibited until we have filed a Current Report on
Form 8-K
In no event will the Class A common stock and warrants be traded separately until we have filed with the SEC a Current Report on Form 8-K that includes an audited balance sheet of our company reflecting our receipt of the gross proceeds at the closing of this offering. We will file the Current Report on Form 8-K promptly after the closing of this offering. If the 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
20,000,000(1)
Common stock:
Number outstanding before this
offering
2,500 shares of our Class A common stock and 5,750,100 shares of our Class B common stock(2)(3)
Number outstanding after this offering
20,002,500 shares of our Class A common stock and 5,000,100 shares of our Class B common stock(1)(3)
Warrants:
Number of private placement warrants to be sold in a private placement simultaneously with this offering
12,750,000(1)
Number of warrants to be outstanding after this offering and the sale of private placement warrants
22,750,000(1)
Each whole warrant entitles the holder thereof to purchase one share of our Class A common stock, subject to adjustment as provided herein, and only whole warrants are exercisable. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Upon the exercise of a warrant to purchase one share of our Class A common stock, TGR will exercise a corresponding warrant to acquire one Class A Unit of Opco.
We structured each unit to contain one-half of one warrant, with each whole warrant exercisable for one share of Class A common stock, as compared to units issued by some other similar blank check companies which contain whole warrants exercisable for one whole share, in order to reduce the dilutive effect of the warrants upon completion of our initial business combination as compared to units that each contain a warrant to purchase one whole share, thus making us, we believe, a more attractive business combination partner for target businesses.
(1)
Assumes no exercise of the underwriter’s over-allotment option and the forfeiture by our sponsor of 750,000 founder shares. The shares of common stock included in the units are shares of our Class A common stock.
(2)
Includes up to 750,000 shares of our founder shares that are subject to forfeiture by our sponsor depending on the extent to which the underwriter’s over-allotment option is exercised.
(3)
The Class B common stock comprise a portion of the founder shares and the sponsor shares. For each share of our Class B common stock there is a corresponding Class A or Class B Unit of Opco. Class B Units of Opco will automatically convert into Class A Units of Opco in connection with our initial business combination on a one-for-one basis, subject to adjustment as provided herein. See “—Founder shares conversion.” The Class A Units of Opco (together with the corresponding shares of our Class B common stock) that comprise the founder shares and sponsor shares will be exchangeable into shares of our Class A common stock after the time of our initial business combination on a one-for-one basis. Each share of our Class B common stock has no economic rights but entitles its holder to one vote.
$11.50 per whole share, subject to adjustment as described herein.
In addition, if (x) we issue additional shares of our Class A common stock or equity-linked securities for capital raising purposes in connection with the consummation of our initial business combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by our Board 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 KRP or its other subsidiaries, as applicable) (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 completion of our initial business combination (net of redemptions), and (z) the volume weighted average trading price of our Class A common stock during the 20 trading day period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price described below under “Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
The warrants will become exercisable 30 days after the completion of our initial business combination provided that we have an effective registration statement under the Securities Act covering the issuance of the shares of our Class A common stock issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement).
We have agreed that as soon as practicable, but in no event later than 20 business days after the consummation of our initial business combination, we will use our commercially reasonable efforts to file a post-effective amendment to the registration statement for this offering or a new registration statement with the SEC under the Securities Act covering the shares of Class A common stock issuable upon exercise of the warrants. We will use our commercially reasonable efforts to cause the same to become effective and to maintain the effectiveness of such registration statement or post-effective amendment to the registration statement for this offering, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions
of the warrant agreement. Notwithstanding the above, if our Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
The warrants will expire at 5:00 p.m., New York City time, five years after the completion of our initial business combination or earlier upon redemption or liquidation. On the exercise of any warrant, the warrant exercise price will be paid directly to us and not placed in the trust account.
Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00
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 a price of $0.01 per warrant;
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upon a minimum of 30 days’ prior written notice of redemption, which we refer to as the 30-day redemption period; and
➤
if, and only if, the last reported sale price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Warrants—Public Stockholders’ Warrants—Anti-dilution Adjustments”) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrantholders.
We will not redeem the warrants for cash unless a registration statement under the Securities Act covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of Class A common stock is available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
If we call the warrants for redemption as described above, our management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In determining whether to require all holders to exercise
their warrants on a “cashless basis,” our management will consider, among other factors, our cash position, the number of warrants that are outstanding and the dilutive effect on our stockholders of issuing the maximum number of shares of Class A common stock issuable upon the exercise of our warrants. In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the excess of the “fair market value” of our Class A common stock (defined below) over the exercise price of the warrants by (y) the fair market value. See “Description of Securities—Warrants—Public Stockholders’ Warrants” for additional information.
The “fair market value” of our shares of Class A common stock shall mean the volume weighted average price of our shares of Class A common stock as reported during the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. This redemption feature differs from the typical warrant redemption features used in other blank check offerings.
Extensions of time to complete business combination
If we anticipate that we may not be able to consummate our initial business combination within 15 months, the sponsor may cause us to extend the available time to consummate our initial business combination by up to two successive three-month periods. In order to exercise each three-month extension option, our sponsor must deposit into the trust account $0.10 per public share (a total of $2,000,000, or $2,300,000 if the underwriters’ over-allotment option is exercised in full) on or prior to the date of the applicable deadline. The sponsor may exercise the extension option up to two times, allowing for up to an additional six months (for a total of 21 months) to complete an initial business combination. The sponsor or its affiliates or designees will receive a non-interest bearing, unsecured promissory note equal to the amount of any such deposit that will not be repaid in the event that we are unable to complete an initial business combination unless there are funds available outside the trust account to do so. Such notes would either be paid upon consummation of our initial business combination, or, at the sponsor’s discretion, converted upon consummation of our initial business combination into additional private placement warrants at a price of $1.00 per warrant. In the event that we receive notice from the sponsor five days prior to the applicable deadline of its intent to exercise an extension option, we intend to issue a press release announcing such intention to exercise the extension option at least three days prior to the applicable deadline. In addition, we intend to issue a press release the day after the applicable deadline announcing whether the funds were timely deposited. The sponsor and its affiliates or designees are not
obligated to fund the trust account to extend the time for us to complete our initial business combination. Any notes issued pursuant to these loans would be in addition to any notes issued pursuant to working capital loans made to us.
With respect to any matter submitted to a vote of our stockholders, including any vote in connection with our initial business combination, except as required by applicable law or stock exchange rule, holders of our Class A common stock and holders of our Class B common stock will vote together as a single class, with each share entitling the holder to one vote.
Following our initial business combination, holders of our Class A common stock and holders of our Class B common stock will generally vote together as a single class on matters presented for a stockholder vote, except as required by Delaware law or stock exchange rule, with each share of our common stock entitling the holder to one vote.
In May 2021, our sponsor purchased an aggregate of 5,750,000 shares of Class B common stock, par value $0.0001 per share, for an aggregate purchase price of $25,000 and our sponsor was issued an aggregate of 5,750,000 Class B Units of Opco, which together comprise the founder shares. The number of founder shares issued was determined based on the expectation that the founder shares would represent 20% of the outstanding shares of common stock upon the completion of this offering.
Prior to the initial investment in the company of $25,000 by our sponsor, the company had no assets, tangible or intangible. If we increase or decrease the size of this offering, we will effect a stock dividend or share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of the outstanding shares of our common stock upon the consummation of this offering (and Opco will make similar adjustments to the corresponding Class B Units of Opco). Up to an aggregate of 750,000 founder shares are subject to forfeiture by our sponsor depending on the extent to which the underwriter’s over-allotment option is exercised so that the founder shares held will continue to represent 20% of the outstanding shares of our common stock upon the consummation of this offering.
Together, the founder shares are substantially similar to the shares of Class A common stock included in the units being sold in this offering, except that:
➤
the founder shares consist of Class B Units of Opco (and any Class A Units of Opco into which such Class B Units are converted) and a corresponding number of shares of our Class B common stock, which together will be exchangeable for shares of our Class A common stock after the time of our initial business combination
on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described herein;
➤
following our initial business combination, holders of our Class A common stock and holders of our Class B common stock will generally vote together as a single class on matters presented for a stockholder vote, except as required by Delaware law or stock exchange rule, with each share of our common stock entitling the holder to one vote;
➤
the founder shares are subject to certain transfer restrictions, as described in more detail below;
➤
pursuant to the Opco LLC Agreement and a letter agreement that our sponsor, officers and directors have entered into with us, they have agreed (i) that any founder shares and sponsor shares held by them will not be entitled to redemption rights, and they will waive any such redemption rights for any public shares held by them, in connection with the completion of our initial business combination, (ii) that any founder shares and sponsor shares held by them will not be entitled to redemption rights, and they will waive any such redemption rights for any public shares held by them, in connection with a stockholder vote to amend our amended and restated certificate of incorporation in a manner that would affect the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 15 months from the closing of this offering (or up to 21 months if the sponsor exercises its extension options), (iii) that any founder shares held by them are subject to forfeiture, and thus will not be entitled to liquidating distributions from the trust account, and they will waive any such rights to liquidating distributions for any founder shares, if we fail to complete our initial business combination within 15 months from the closing of this offering (or up to 21 months if the sponsor exercises its extension options) (although they will be entitled to liquidating distributions from the trust account with respect to any public shares and sponsor shares they hold if we fail to complete our business combination within the prescribed time frame), and (iv) in certain limited circumstances the Class B Units of Opco will have more limited rights to current or liquidating distributions from us. If we submit our initial business combination to our public stockholders for a vote, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the initial business combination. Our initial stockholders have agreed to vote any founder shares and sponsor shares held by them 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 stockholders’ founder shares and sponsor shares, we would need 7,500,001, or 37.5% (assuming
all outstanding shares are voted and the over-allotment option is not exercised), or 1,250,001, or 6.25% (assuming only the minimum number of shares representing a quorum are voted and the over-allotment option is not exercised), of the 20,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have such initial business combination approved; and
➤
the Class A common stock into which the founder shares are exchangeable are entitled to registration rights.
Transfer restrictions on founder
shares
Our initial stockholders have agreed not to transfer, assign or sell any founder shares or sponsor shares held by them, and any shares of our Class A common stock acquired upon exchange of founder shares or sponsor shares, until the earlier to occur of: (1) one year after the completion of our initial business combination; and (2) subsequent to our initial business combination, (x) the date on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property or (y) if the last reported sale price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations, and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, subject to certain exceptions described herein under “Principal Stockholders—Transfers of Founder Shares and Private Placement Warrants.” Any permitted transferees as described herein under “Principal Stockholders—Transfers of Founder Shares and Private Placement Warrants” would be subject to the same restrictions and other agreements as our sponsor with respect to any founder shares. We refer to such transfer restrictions throughout this prospectus as the lock-up.
The shares of our Class B common stock comprising a portion of the founder shares and sponsor shares cannot be transferred without transferring a corresponding number of Class B Units of Opco (or the Class A Units of Opco into which such Class B Units will convert in connection with our initial business combination) and vice versa.
In May 2021, our sponsor purchased 100 Class A Units of Opco and a corresponding number of shares of our Class B common stock (which together will be exchangeable into shares of Class A common stock after our initial business combination on a one-for-one basis) and 2,500 shares of our Class A common stock.
Founder shares conversion
We have outstanding 5,750,000 founder shares, which include shares of our Class B common stock and Class B Units of Opco (or the Class A Units of Opco into which such Class B Units will convert in connection with our initial business combination). The Class B Units of Opco will
convert into Class A Units of Opco in connection with our initial business combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, subject to further adjustment and subject, in part, to forfeiture if the underwriter’s over-allotment option is not exercised as provided herein. The founder shares consist of Class B Units of Opco (and any Class A Units of Opco into which such Class B Units are converted) and a corresponding number of shares of our Class B common stock, which together will be exchangeable for shares of our Class A common stock after the time of our initial business combination (as described above) on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like and subject to further adjustment as provided herein. In the case that additional shares of our Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in this offering and related to the closing of the initial business combination, the number of Class A Units of Opco into which the Class B Units of Opco will convert may be adjusted (unless the holders of a majority of the outstanding founder shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that, after all founder shares have been exchanged for shares of our Class A common stock, the aggregate number of shares of our Class A common stock received by holders in exchange for founder shares would equal 20% of the sum of the total outstanding shares of our Class A common stock upon the completion of this offering (excluding the sponsor shares and any shares issuable upon exercise of any warrants) plus all shares of our Class A common stock and equity-linked securities issued or deemed issued in connection with the business combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the business combination). In addition, the number of outstanding shares of our Class B common stock will be adjusted through a stock split or stock dividend so that the total number of outstanding shares of our Class B common stock corresponds to the total number of Class A Units of Opco outstanding (other than those held by TGR) plus the total number of Class A Units of Opco into which the Class B Units of Opco are entitled to convert.
Private placement warrants
Our sponsor expects to purchase an aggregate of 12,750,000 private placement warrants (or 14,100,000 if the underwriter’s over-allotment option is exercised in full) at a price of $1.00 per warrant ($12,750,000 in the aggregate, or $14,100,000 in the aggregate 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. Each private placement warrant entitles the holder thereof to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. A portion of the purchase price of the private placement
warrants will be added to the proceeds from this offering to be held in the trust account.
If we do not complete our initial business combination within 15 months from the closing of this offering (or up to 21 months if the sponsor exercises its extension options), the proceeds of the sale of the private placement warrants held in the trust account will be used to fund the redemption of our public shares and any Class A Units of Opco (other than those held by TGR) (subject to the requirements of applicable law) and the private placement warrants will expire worthless.
Transfer restrictions on private placement warrants
The private placement warrants will not be transferable, assignable or saleable until 30 days after the completion of our initial business combination, except as described below under “Principal Stockholders—Transfers of Founder Shares and Private Placement Warrants.”
Proceeds to be held in trust account
The rules of the NYSE provide that at least 90% of the gross proceeds from this offering and the sale of the private placement warrants be deposited in a trust account. We will use the proceeds we receive from this offering and the sale of the private placement warrants to purchase Class A Units and warrants in Opco. Opco will deposit approximately $206.0 million, or $10.30 per unit (approximately $236.9 million, or $10.30 per unit, if the underwriter’s over-allotment option is exercised in full), into a U.S.-based trust account with Continental Stock Transfer & Trust Company acting as trustee and will use $4.95 million to pay expenses in connection with the closing of this offering and for working capital following this offering. The proceeds to be placed in the trust account include $7.0 million (or $8.1 million if the underwriter’s over-allotment option is exercised in full) in deferred underwriting commissions. The funds in the trust account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries.
Except with respect to interest earned on the funds held in the trust account that may be released to us to pay tax obligations of the Company or Opco, if any, the funds held in the trust account will not be released from the trust account until the earliest of: (1) the completion of our initial business combination (including the release of funds to pay any amounts due to any public stockholders who properly exercise their redemption rights in connection therewith); (2) the redemption of any public shares (other than sponsor shares) properly submitted in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation (A) in a manner that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options) or (B) with respect to any other provision relating to the rights of holders of our Class A
common stock or pre-initial business combination activity; and (3) the redemption of our public shares and any Class A Units of Opco (other than those held by TGR) if we have not completed our initial business combination within 15 months from the closing of this offering (or up to 21 months if the sponsor exercises its extension options), subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.
Anticipated expenses and funding
sources
Unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use, except the withdrawal of interest to pay taxes or to redeem our public shares in connection with an amendment to our certificate of incorporation, as described above. The funds in the trust account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. Assuming that the proceeds held in the trust account are only invested in such money market funds at a current interest rate of 0.01% per year, we estimate the interest earned on the trust account will be approximately $20,600 per year; however, we can provide no assurances regarding this amount. Unless and until we complete our initial business combination, we may pay our expenses only from:
➤
the net proceeds of this offering and the sale of the private placement warrants not held in the trust account, which will be approximately $3.45 million (including $1.2 million in expenses the underwriter has agreed to reimburse us) in working capital after the payment of approximately $1.5 million in expenses relating to this offering; and
➤
any loans or additional investments from our sponsor, members of our management team or KRP or any of its subsidiaries or other third parties, although they are under no obligation or other duty to loan funds to, or invest in, us, and provided that any such loans will not have any claim on the proceeds held in the trust account unless such proceeds are released to us upon completion of our initial business combination. If we complete our initial business combination, we expect to repay any such loaned amounts out of the proceeds of the trust account released to us. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans made to us by our sponsor, KRP or its subsidiaries may be convertible into warrants at a price of $1.00 per warrant
at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor.
Conditions to completing our initial business combination
There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination. The NYSE listing rules require that our initial business combination must be with one or more target businesses that have an aggregate fair market value equal to at least 80% of the value of the trust account (excluding any deferred underwriting commissions and taxes payable on interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination.
If our Board is not able to independently determine the fair market value of the target business or businesses or we are considering an initial business combination with an affiliated entity, we will obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm. Our stockholders may not be provided with a copy of such opinion nor will they be able to rely on such opinion.
We anticipate structuring our initial business combination so that we will control 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that we control less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders or for other reasons, including, but not limited to, an Affiliated Joint Acquisition. However, we will only complete such business combination if we control 50% or more of the outstanding voting securities of the target or otherwise are not required to register as an investment company under the Investment Company Act. Even if we control 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination transaction. If we control less than 100% of the equity interests or assets of a target business or businesses, the portion of such business or businesses that is controlled is what will be taken into account for purposes of the NYSE’s 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 transactions and we will treat the transactions together as our initial business combination for purposes of seeking stockholder approval or for purposes of a tender offer, as applicable.
Permitted purchases and other transactions with respect to our securities by our sponsor, insiders and the related companies
If we seek stockholder approval of our initial business combination and we do not conduct redemptions or
repurchases in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, or advisors or any of the related companies and their directors, officers and advisors may purchase public shares or public warrants or a combination thereof in privately negotiated transactions or in the open market, either prior to or following the completion of our initial business combination, although they are under no obligation or other duty to do so. There is no limit on the number of securities such persons may purchase, or any restriction on the price that they may pay. Any such price per share may be different than the amount per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. Additionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material non-public information), our sponsor, directors, officers, or advisors or any of the related companies and their directors, officers and advisors may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares. However, such persons have no current commitments, plans or intentions to engage in such purchases or other transactions and have not formulated any terms or conditions for any such purchases or other transactions. None of the funds in the trust account will be used to purchase public shares or public warrants in such transactions. Such persons will be subject to restrictions in making any such purchases when they are in possession of any material non-public information or if such purchases are prohibited by Regulation M under the Exchange Act. See “Proposed Business—Permitted purchases and other transactions with respect to our securities” for a description of how our sponsor, directors, officers, advisors or any of their affiliates will select which stockholders to purchase securities from in any private transaction.
The purpose of any such transaction could be to (1) vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder approval of the initial business combination, (2) reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrantholders for approval in connection with our initial business combination or (3) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the consummation of our initial business combination, where it appears that such requirement would otherwise not be met. Any such transactions may result in the completion of our initial business combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our shares of Class A common stock or warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the
quotation, listing or trading of our securities on a national securities exchange.
There is no limit on the number of public shares and public warrants that our sponsor, directors, officers, advisors or any of their affiliates may purchase pursuant to the transactions described above.
Redemption rights for public stockholders upon completion of our initial business combination
We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account and not previously released to pay taxes of the company or Opco, divided by the number of then outstanding public shares and Class A Units of Opco (other than those held by TGR), subject to the limitations described herein. The amount in the trust account is initially anticipated to be approximately $10.30 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. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Pursuant to the Opco LLC Agreement and a letter agreement that our sponsor, officers and directors have entered into with us, they have agreed that any founder shares and sponsor shares held by them will not be entitled to redemption rights, and they will waive any such redemption rights for any public shares held by them, in connection with the completion of our initial business combination. In connection with the redemption of any public shares, a corresponding number of Class A Units of Opco held by us will also be redeemed.
Limitations on redemptions
Our amended and restated certificate of incorporation will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. In addition, our proposed initial business combination may impose a minimum cash requirement for (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. In the event the aggregate cash consideration we would be required to pay for all shares of our Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares in connection with such initial business combination, and all shares of our Class A common stock submitted for redemption will be returned to the holders thereof.
Manner of conducting redemptions
We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either: (1) in connection with a stockholder meeting called to approve the business combination; or (2) by means of a tender offer. Except as required by Delaware law or stock exchange rule, the decision as to whether we will seek stockholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction. Asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation would typically require stockholder approval. We intend to conduct redemptions or repurchases without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by applicable law or stock exchange rule or we choose to seek stockholder approval for business or other reasons.
If we hold a stockholder vote to approve our initial business combination, we will:
➤
conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and
➤
file proxy materials with the SEC.
If we seek stockholder approval, we will complete our initial business combination only if a majority of the shares of our common stock voted are voted in favor of the business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting. Our initial stockholders will count toward this quorum and have agreed to vote their founder shares, sponsor shares and any public shares purchased during or after this offering in favor of our initial business combination. For purposes of seeking approval of the majority of our outstanding shares of common stock voted, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. As a result, in addition to our sponsor’s founder shares and sponsor shares, we would need 7,500,001, or 37.5% (assuming all outstanding shares are voted and the over-allotment option is not exercised), or 1,250,001, or 6.25% (assuming only the minimum number of shares representing a quorum are voted and the over-allotment option is not exercised), of the 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. We intend to give approximately 30 days (but
not less than 10 days nor more than 60 days) prior written notice of any such meeting, if required, at which a vote shall be taken to approve our initial business combination. These quorum and voting thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction or vote at all.
We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the proxy solicitation or tender offer materials mailed to such holders, or up to two business days prior to the initially scheduled vote on the proposal to approve the business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. We believe that this will allow our transfer agent to efficiently process any redemptions without the need for further communication or action from the redeeming public stockholders, which could delay redemptions and result in additional administrative cost. If the proposed business combination is not approved and we continue to search for a target business, we will promptly return any certificates delivered, or shares tendered electronically, by public stockholders who elected to redeem their shares.
If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation:
➤
conduct the redemptions or repurchases pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and
➤
file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. Although we are not required to do so, we currently intend to comply with the substantive and procedural requirements of Regulation 14A in connection with any stockholder vote even if we are not able to maintain our NYSE listing or Exchange Act registration.
Upon the public announcement of our initial business combination, if we elect to conduct redemptions or repurchases pursuant to the tender offer rules, we and our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our Class A common stock in the open market, in order to comply with Rule 14e-5 under the Exchange Act.
In the event we conduct redemptions or repurchases pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than the number of public shares we are permitted to redeem. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination. In addition, if we conduct redemptions in connection with a stockholder vote, we intend to require a public stockholder seeking redemption of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the scheduled vote in which the name of the beneficial owner of such shares is included.
Limitation on redemption rights of stockholders holding 20% or more of our Class A common stock if we hold stockholder vote
Notwithstanding the foregoing redemption rights, if we seek stockholder approval of our initial business combination and we do not conduct redemptions or repurchases in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 20% of our Class A common stock, without our prior consent. We believe the restriction described above will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to redeem their shares as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 20% of our Class A common stock could threaten to exercise its redemption rights against a business combination if such holder’s shares are not purchased by us, our sponsor or our management at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem to no more than 20% of our Class A common stock, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including all shares held by those stockholders that hold more than 20% of our Class A common stock) for or against our initial business combination.
Redemption rights in connection with proposed amendments to our certificate of incorporation
Some other blank check companies have a provision in their charter which prohibits the amendment of certain charter provisions. Our amended and restated certificate of incorporation will provide that any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds of this offering and the private placement warrants into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of 65% of our common stock entitled to vote thereon, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our common stock entitled to vote thereon. In all other instances, our amended and restated certificate of incorporation may be amended by holders of a majority of our outstanding common stock entitled to vote thereon, subject to applicable provisions of the DGCL or applicable stock exchange rules.
Our initial stockholders, who will beneficially own shares representing 20% of the total outstanding shares of our Class A common stock upon the closing of this offering (assuming the exchange of all the founder shares for Class A common stock and that they do not purchase any units in this offering and excluding the sponsor shares), will participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. Our sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 15 months from the closing of this offering (or up to 21 months if the sponsor exercises its extension options), unless we provide our public stockholders with the opportunity to redeem their shares of our Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to pay taxes of the company or Opco, divided by the number of then outstanding public shares and Class A Units of Opco (other than those held by TGR), subject to the limitations described above under “Limitations on redemptions.” For example, our Board may propose such an amendment if it determines that additional time is necessary to complete our initial business combination. Pursuant to our amended and restated certificate of incorporation, such an amendment would need to be approved by the affirmative vote of the holders of at least 65% of all then outstanding shares of our common stock. In such event, we will conduct
a proxy solicitation and distribute proxy materials pursuant to Regulation 14A of the Exchange Act seeking stockholder approval of such proposal, and in connection therewith, provide our public stockholders with the redemption rights described above upon stockholder approval of such amendment. This redemption right shall apply in the event of the approval of any such amendment, whether proposed by our sponsors, any executive officer, director or director nominee, or any other person. In connection with the redemption of any public shares, a corresponding number of Class A Units of Opco held by us will also be redeemed.
Release of funds in trust account on consummation of our initial business combination
On the completion of our initial business combination, all amounts held in the trust account will be disbursed directly by the trustee or released to us to pay amounts due to any public stockholders who properly exercise their redemption rights as described above under “Redemption rights for public stockholders upon completion of our initial business combination,” to pay the 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 redemption of our public shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other businesses, for share repurchases or for working capital.
Redemption of public shares and distribution and liquidation if no initial business combination
Our sponsor, executive officers and directors will agree that we will have only 15 months from the closing of this offering to complete our initial business combination (or up to 21 months if the sponsor exercises its extension options). In the event that we receive notice from the sponsor five days prior to the applicable deadline of its intent to exercise an extension option, we intend to issue a press release announcing such intention to exercise the extension option at least three days prior to the applicable deadline. In addition, we intend to issue a press release the day after the applicable deadline announcing whether the funds were timely deposited. If we have not completed our initial business combination within such 15-month period (or up to 21-month period if the sponsor exercises its extension options), we will:
(1)
cease all operations except for the purpose of winding up;
(2)
as promptly as reasonably possible but not more than
10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less an amount required to satisfy taxes of the company and Opco and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares and Class A Units of Opco (other than those held by TGR), which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and
(3)
as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within such 15-month period (or up to 21-month period if the sponsor exercises its extension options).
Pursuant to the Opco LLC Agreement and a letter agreement that our sponsor, officers and directors have entered into with us, they have agreed that any founder shares are subject to forfeiture, and thus will not be entitled to liquidating distributions from the trust account, and they will waive any such rights to liquidating distributions for any founder shares, if we fail to complete our initial business combination within 15 months from the closing of this offering (or up to 21 months if the sponsor exercises its extension options). However, if our initial stockholders or management team acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares and the sponsor shares if we fail to complete our initial business combination within the allotted 15-month time period (or up to 21-month period if the sponsor exercises its extension options).
The underwriter has agreed to waive its rights to their deferred underwriting commission held in the trust account in the event we do not complete our initial business combination and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares and any Class A Units of Opco (other than those held by TGR).
Limited payments to insiders
There will be no finder’s fees, reimbursements or cash payments made by us to our sponsor, KRP or its other subsidiaries, or their officers or directors, for services rendered to us prior to or in connection with the completion of our initial business combination, other than the following payments, none of which will be made from the proceeds of this offering and the sale of the private placement warrants held in the trust account prior to the completion of our initial business combination:
➤
repayment of an aggregate of $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses;
➤
payment to certain subsidiaries of KRP of a total of $25,000 per month for administrative and support services;
➤
payment of an annual fee of $60,000, payable in cash, to each of our independent directors for service on our Board;
➤
reimbursement for any out-of-pocket expenses related to identifying, investigating and completing our initial business combination; and
➤
repayment of loans which may be made by our sponsor or KRP or its other subsidiaries to finance transaction costs in connection with an intended initial business combination, the terms of which have not been determined nor have any written agreements been executed with respect thereto. Up to $1,500,000 of such loans made to us may be convertible into warrants at a price of $1.00 per warrant at the option of the lender.
These payments may be funded using the net proceeds of this offering and the sale of the private placement warrants, in each case to the extent not held in the trust account or, upon the consummation of the initial business combination, from any amounts remaining from the proceeds of the trust account released to us in connection therewith.
In addition, we have agreed, pursuant to the administrative services agreement with our sponsor relating to the monthly reimbursement for office space and administrative services described above, that we will indemnify our sponsor from any claims arising out of or relating to this offering or the company’s or Opco’s operations or conduct of the company’s or Opco’s business or any claim against our sponsor alleging any expressed or implied management or endorsement by our sponsor of any of the company’s or Opco’s activities or any express or implied association between our sponsor and the company or Opco or any of their affiliates, which agreement will provide that the indemnified parties cannot access the funds held in our trust account.
Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers or directors or KRP or its other subsidiaries.
Prior to the effectiveness of the registration statement of which this prospectus forms a part, we will have established and will maintain an audit committee to, among other things, monitor compliance with the terms described above. If any noncompliance is identified, then the audit committee will be charged with the responsibility to promptly take all action necessary to rectify such noncompliance or otherwise to cause compliance with the terms of this offering. See “Management—Committees of the Board of Directors—Audit Committee.”
As described under “Proposed Business—Conflicts of Interest” and “Management—Conflicts of Interest,” each of our officers and directors has, and any of them in the future may have, additional fiduciary or contractual obligations to one or more other entities pursuant to which such officer or director may be required to present a business combination opportunity to such entities before he or she presents such opportunity to us. Also, none of KRP, our sponsor or any of our directors and officers is prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity to which he or she has then-current fiduciary or contractual obligations to present such opportunity to another entity, he or she may only present such opportunity to us if such other entity rejects the opportunity. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company; such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue; and such person has no fiduciary or contractual obligation to present the opportunity to any other person or entity. Additionally, none of KRP, our sponsor or any other entity currently has any obligation or duty to provide us with any potential business combination opportunity.
In addition, KRP will adopt a policy pursuant to which any business combination opportunity that is a corporate opportunity of KRP that may also be a business combination opportunity for our company will first be presented to the conflicts committee of the board of directors of KRP, which is made up solely of independent directors, for consideration as to whether KRP desires to pursue such business combination opportunity as a direct investment or to present such opportunity to our company for consideration. The members of the conflicts committee of the board of directors of KRP will not serve in any fiduciary capacity at our company.
For more information, including a list of our executive officers and directors and entities for which a conflict of interest may or does exist between such officers and the company, see “Proposed Business—Conflicts of Interest” and “Management—Conflicts of Interest.”
We do not believe, however, that the fiduciary, contractual or other obligations or duties of our officers or directors or the KRP policy described above will materially affect our ability to complete our initial business combination.
Our sponsor will agree that it will be liable to us if and to the extent any claims by a third party (other than our
independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below the lesser of: (1) $10.30 per public share (or $10.40 or $10.50, if applicable); and (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes of the company or Opco, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the 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. We have not independently verified whether our sponsor, which is a newly formed entity, has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such obligations.
Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.30 per public share (or $10.40 or $10.50 per public share, if applicable). 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.
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.
|
|
|
September 30, 2021
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|
|
|
|
Actual
|
|
|
As Adjusted
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets(1)
|
|
|
|
$
|
603,873
|
|
|
|
|
$
|
209,176,000
|
|
|
Total liabilities(2)
|
|
|
|
$
|
929,173
|
|
|
|
|
$
|
7,000,000
|
|
|
Working capital (deficiency)(3)
|
|
|
|
$
|
(325,300)
|
|
|
|
|
$
|
3,176,000
|
|
|
Value of common stock that may be redeemed in connection with our initial business combination ($10.30 per share)(4)
|
|
|
|
$
|
—
|
|
|
|
|
$
|
206,000,000
|
|
|
Total stockholders’ equity (deficit)(5)
|
|
|
|
$
|
(325,300)
|
|
|
|
|
$
|
(3,824,000)
|
|
|
(1)
“As adjusted” total assets includes $206,000,000 cash held in trust from the proceeds of this offering and the sale of the private placement warrants (assuming the over-allotment is not exercised), plus $3,150,000 in cash held outside the trust account (including $1,900,000 in expenses the underwriter has agreed to reimburse us), plus $26,000 of actual cash as of September 30, 2021.
(2)
The “as adjusted” total liabilities includes $7,000,000 of deferred underwriter’s commission.
(3)
“As adjusted” working capital includes $3,150,000 in cash held outside the trust account (including $1,900,000 in expenses the underwriter has agreed to reimburse us), plus $26,000 of actual cash as of September 30, 2021.
(4)
“As adjusted” value of common stock that may be redeemed in connection with our initial business combination includes all public shares included in the units sold in this offering, assuming the over-allotment option is not exercised.
(5)
“As adjusted” shareholder’s deficit equals “as adjusted” total assets, minus “as adjusted” total liabilities, minus “as adjusted” value of common stock that may be redeemed in connection with our initial business combination.
If no business combination is completed within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), 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 pay taxes of the company or Opco (less an amount required to satisfy taxes of the company and Opco and up to $100,000 of interest to pay dissolution expenses), will be used to fund the redemption of our public shares and any Class A Units of Opco (other than those held by TGR). Pursuant to the Opco LLC Agreement and a letter agreement that our sponsor, officers and directors have entered into with us, they have agreed that any founder shares are subject to forfeiture, and thus will not be entitled to liquidating distributions from the trust account and they will waive any such rights to liquidating distributions for any founder shares, if we fail to complete our initial business combination within such 15-month time period (or up to 21-month time period if the sponsor exercises its extension options).
Risk Factor Summary
We are providing the following summary of the risk factors contained in this prospectus to enhance the readability and accessibility of our risk factor disclosures. We encourage you to carefully review the full risk factors contained under the section entitled “Risk Factors” in this prospectus in their entirety for additional information regarding the risks and uncertainties that could affect our actual results.
➤
We are a blank check company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
➤
Our public stockholders may not be afforded an opportunity to vote on our proposed business combination, and even if we seek stockholder approval, our initial stockholders and management may vote in favor regardless of how our public stockholders vote.
➤
The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target and may not allow us to optimize our capital structure.
➤
The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.
➤
Because our trust account is expected to contain approximately $10.30 per public share (or $10.40 or $10.50 per public share if the sponsor exercises one or two extension options, respectively) at the time of our initial business combination, public shareholders may be more incentivized to redeem their public shares at the time of our initial business combination.
➤
The requirement that we complete our initial business combination within the prescribed time frame may give potential target businesses leverage over us in negotiating a business combination and could undermine our ability to complete our business combination on terms that would produce value for our stockholders.
➤
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 coronavirus (COVID-19) pandemic, or the worsening thereof, and the status of the debt and equity markets.
➤
We may not be able to complete our initial business combination within the 15 months after the closing of this offering (or up to 21 months if the sponsor exercises its extension options), in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may receive only their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants will expire without value to the holder.
➤
If a stockholder fails to receive notice of our offer to redeem or repurchase our public shares in connection with our business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
➤
If we seek stockholder approval of our initial business combination and we do not conduct redemptions or repurchases pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold in excess of 20% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 20% of our Class A common stock.
➤
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 the funds not being held in the trust account are insufficient to allow us to operate for at least the next 15 months following the closing of this offering (or up to 21 months if the sponsor exercises its extension options), we may be unable to complete our initial business combination, in which case our public stockholders may only receive $10.30 per public share (or $10.40 or $10.50 per public share, if applicable), or less than such amount in certain circumstances, and our warrants will expire worthless.
➤
Because we are not limited to a particular industry, sector or any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.
➤
Because we intend to seek a business combination with a target business in the energy and natural resources industry in North America, we expect our future operations to be subject to risks associated with this sector.
➤
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.
➤
We may seek business combination opportunities with an early stage company, a financially unstable business or an entity lacking an established record of revenue or earnings, which could subject us to volatile revenues, cash flows or earnings or difficulty in retaining key personnel.
➤
Unlike some other similarly structured blank check companies, our initial stockholders will receive additional Class A Units of Opco if we issue shares to consummate an initial business combination.
➤
We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of your investment in us.
➤
We may only be able to complete one business combination with the proceeds of this offering and the sale of the private placement warrants, which will cause us to be solely dependent on a single business which may have a limited number of products or services.
➤
Transactions in connection with or in anticipation of our initial business combination may be structured in a manner that is not tax-efficient for our stockholders and/or warrantholders, and our stockholders and warrantholders may be subject to additional income, withholding or other taxes with respect to their ownership of us in connection with our initial business combination. In addition, as a result of our business combination, our tax obligations may be more complex, burdensome and uncertain.
➤
An investment in our securities, and certain subsequent transactions with respect to our securities, may result in uncertain or adverse U.S. federal income tax consequences, including uncertainty with respect to the allocation of basis among the components of our units, the tax treatment of a cashless exercise of warrants and the applicable holding period of our Class A common stock.
➤
You will not have any rights or interests in funds from the trust account, except under certain limited circumstances, so to liquidate your investment, you may be forced to sell your public shares or warrants.
➤
If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.30 per public share (or $10.40 or $10.50 per public share, if applicable).
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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 stockholders.
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If, before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.
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Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
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You will not be permitted to exercise your warrants unless we register and qualify the issuance of the underlying Class A common stock or certain exemptions are available.
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The grant of registration rights to our initial stockholders 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 common stock.
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We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants without value to you.
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We may issue additional shares of our Class A common stock, preferred stock or Opco Units (and a corresponding number of shares of our Class B common stock) to complete our initial business combination or under an employee incentive plan after completion of our initial business combination.
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We may seek acquisition opportunities outside of our target industries or sectors.
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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.
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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.
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Certain of our officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and may have conflicts of interest.
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Our sponsor, officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
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The nominal purchase price paid by our sponsor for the founder shares may result in significant dilution to the implied value of your public shares upon the consummation of our initial business combination.
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Since our sponsor, officers and directors will lose their entire initial investment in us if our business combination is not completed, a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
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Our management team may not be able to maintain control of a target business after our initial business combination.
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Our initial stockholders will control the election of our board of directors until consummation of our initial business combination and will hold a substantial interest in us, and may therefore exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.
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We may sell a royalty interest in the post-business combination company’s underlying assets to KRP or its affiliates, which would reduce the net amount of revenues ultimately received by the post-business combination company without also reducing the cost of development of its underlying properties.
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Provisions in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us and may have the effect of discouraging lawsuits against our directors and officers.
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
If we seek stockholder approval of our initial business combination, our initial stockholders and management team have agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote.
Our initial stockholders will own 20% of our shares of common stock immediately following the completion of this offering (assuming they do not purchase any units in this offering and excluding the sponsor shares). Our initial stockholders and management team also may from time to time purchase shares of our Class A common stock prior to our initial business combination. Our amended and restated certificate of incorporation will provide that, if we seek stockholder approval of an initial business combination, such initial business combination will be approved if we receive the affirmative vote of a majority of the shares voted at such meeting, including the founder shares and sponsor shares. As a result, in addition to our sponsor’s founder shares and sponsor shares, we would need 7,500,001, or 37.5% (assuming all outstanding shares are voted and the over-allotment option is not exercised), or 1,250,001, or 6.25% (assuming only the minimum number of shares representing a quorum are voted and the over-allotment option is not exercised), of the 20,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have such initial business combination approved (assuming all outstanding shares are voted and the over-allotment option is not exercised). Accordingly, if we seek stockholder approval of our initial business combination, the agreement by our initial stockholders and management team to vote in favor of our initial business combination will increase the likelihood that we will receive the requisite stockholder approval for such initial business combination.
Our public stockholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination.
We may choose not to hold a stockholder vote to approve our initial business combination if the business combination would not require stockholder approval under applicable law or stock exchange listing requirements. Except as required by applicable law or stock exchange requirement, the decision as to whether we will seek stockholder approval of a proposed business combination or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval. Accordingly, we may complete our initial business combination even if holders of a majority of our public shares do not approve of the business combination we complete. See the section entitled “Proposed Business—Stockholders May Not Have the Ability to Approve Our Initial Business Combination” for additional information.
Unless we seek stockholder approval of such business combination, your only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash.
At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of any target businesses. Additionally, since our Board may complete a business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote on the business combination. Accordingly, if we do not seek stockholder approval,
your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial business combination.
The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.
We may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 or make us unable 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. Unlike some other similar blank check companies, we will only have 15 months (or up to 21 months, if the sponsor exercises its extension options) to consummate an initial business combination.
The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.
At the time we enter into an agreement for our initial business combination, we will not know how many stockholders may exercise their redemption rights and, therefore, we will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements or arrange for third-party financing. In addition, if a larger number of shares is submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third-party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital structure. Unlike some other similar blank check companies, we will only have 15 months (or up to 21 months, if the sponsor exercises its extension options) to consummate an initial business combination.
The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.
If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful increases. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time our stock may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your stock in the open market. Unlike some other similar blank check companies, we will only have 15 months (or up to 21 months, if the sponsor exercises its extension options) to consummate an initial business combination.
Because our trust account is expected to contain approximately $10.30 per public share (or $10.40 or $10.50 per public share if the sponsor exercises one or two extension options, respectively) at the time of our initial business combination, public shareholders may be more incentivized to redeem their public shares at the time of our initial business combination.
Our trust account will initially contain $10.30 per public share (or $10.40 or $10.50 per public share if the sponsor exercises one or two extension options, respectively). This is different from some other similarly structured blank check companies the trust account of which might only contain $10.00 per public share. As a result of the additional funds receivable by public shareholders upon redemption of their public shares, our public shareholders may be more incentivized to redeem their public shares.
The requirement that we complete our initial business combination within the prescribed timeframe may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders.
Unlike some other similar blank check companies, we will only have 15 months (or up to 21 months, if the sponsor exercises its extension options) to consummate an initial business combination. Any potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options). Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the end of the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
We may not be able to complete our initial business combination within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may receive only $10.30 per public share (or $10.40 or $10.50 per public share, if applicable), or less than such amount in certain circumstances, and our warrants will expire worthless.
Our sponsor will agree that we must complete our initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options). We may not be able to find a suitable target business and complete our initial business combination within such time period. Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein, including as a result of terrorist attacks, natural disasters or a significant outbreak of infectious diseases.
If we have not completed our initial business combination within such time period, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less an amount required to satisfy taxes of the company and Opco and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case, our public stockholders may receive only $10.30 per public share (or $10.40 or $10.50 per public share, if applicable), or less than such amount, on the redemption of their shares, and our warrants will expire worthless. See “—If third parties bring claims against us, the proceeds held in the trust account could
be reduced and the per-share redemption amount received by stockholders may be less than $10.30 per public share (or $10.40 or $10.50 per public share, if applicable)” and other risk factors herein.
Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the COVID-19 outbreak and other events and the status of debt and equity markets.
The COVID-19 outbreak has adversely affected, and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) could adversely affect, economies and financial markets worldwide, business operations and the conduct of commerce generally, and the business of any potential target business with which we consummate a business combination could be, or may already have been, materially and adversely affected. Furthermore, we may be unable to complete a business combination if concerns relating to COVID-19 continue to restrict travel or limit the ability to have meetings with potential investors, or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and any actions taken to mitigate the severity of COVID-19 or to treat its impact, among others. If the disruptions posed by COVID-19 or other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.
In addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases), including as a result of increased market volatility and decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all.
Finally, the COVID-19 pandemic may also have the effect of heightening many of the other risks described in this “Risk Factors” section, such as those related to the market for our securities and cross border transactions.
If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors and their affiliates may elect to purchase shares or public warrants from public stockholders or public warrantholders, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A common stock.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions or repurchases in connection with our business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares or public warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation to do so. There is no limit on the number of shares our sponsor, directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and the rules of the NYSE. 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 shares or public warrants in such transactions. Such purchases may include a contractual acknowledgment that such stockholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights.
In the event that our sponsor, directors, officers, or advisors or any of their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. The purpose of any such purchases of shares could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business
combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrantholders for approval in connection with our initial business combination. Any such purchases of our securities may result in the completion of our business combination that may not otherwise have been possible. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent the purchasers are subject to such reporting requirements. See “Proposed Business—Permitted Purchases of our Securities” for a description of how our sponsor, directors, officers, advisors or any of their affiliates will select which stockholders to purchase securities from in any private transaction.
In addition, if such purchases are made, the public “float” of our Class A common stock or warrants and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
If a stockholder fails to receive notice of our offer to redeem or repurchase our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
We will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions or repurchases in connection with our initial business combination. Despite our compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly tender or redeem public shares. For example, we may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the scheduled vote on the proposal to approve the initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. In addition, if we conduct redemptions in connection with a stockholder vote, we intend to require a public stockholder seeking redemption of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the scheduled vote in which the name of the beneficial owner of such shares is included. In the event that a stockholder fails to comply with these procedures, its shares may not be redeemed or repurchased. See “Proposed Business—Tendering stock certificates in connection with a tender offer or redemption rights.”
If we seek stockholder approval of our initial business combination and we do not conduct redemptions or repurchases pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold in excess of 20% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 20% of our Class A common stock.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions or repurchases in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 20% of our Class A common stock without our prior consent, which we refer to as the “Excess Shares.” However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our 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 business combination. And as a result, you will continue to hold that
number of shares exceeding 20% and, in order to dispose of such shares, would be required to sell your stock in open market transactions, potentially at a loss.
Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”
Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern” and states that our ability to continue as a going concern is dependent on the consummation of this offering. The consolidated financial statements do not include any adjustments that might result from our inability to consummate this offering or our ability to continue as a going concern. Moreover, there is no assurance that we will consummate our initial business combination. These factors raise substantial doubt about our ability to continue as a going concern.
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, our public stockholders may receive only their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, 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 our competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds of this offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. For example, we may be unable or unwilling to fund a deposit or similar down payment in connection with a potential business combination, which could put us at a competitive disadvantage compared to other companies who are willing to do so. These and other competitive limitations give 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 stockholder vote or via a tender offer. Target businesses 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 do not complete our initial business combination, our public stockholders may receive only their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.30 per public share (or $10.40 or $10.50 per public share, if applicable) upon our liquidation. See “—If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.30 per public share (or $10.40 or $10.50 per public share, if applicable)” and other risk factors below.
If the funds not being held in the trust account are insufficient to allow us to operate for at least the 15 months following the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), we may be unable to complete our initial business combination, in which case our public stockholders may only receive $10.30 per public share (or $10.40 or $10.50 per public share, if applicable), or less than such amount in certain circumstances, and our warrants will expire worthless.
The funds available to us outside of the trust account may not be sufficient to allow us to operate for at least the 15 months following the closing of this offering (or up to 21 months, if the sponsor exercises its
extension options), assuming that our initial business combination is not completed during that time. We expect to incur significant costs in pursuit of our acquisition plans. Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent or merger agreements designed to keep target businesses from “shopping” around for transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into a letter of intent or merger agreement 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.
Management’s plans to address this need for capital through this offering and potential loans from certain entities are discussed in the section of this prospectus titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” However, those entities, including KRP, are not obligated to make loans to us in the future, and we may not be able to raise additional financing from other parties necessary to fund our expenses. Any such event in the future may negatively impact the analysis regarding our ability to continue as a going concern at such time. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.30 per share (or $10.40 or $10.50 per public share, if applicable), or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless. See “—If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.30 per public share (or $10.40 or $10.50 per public share, if applicable)” and other risk factors herein.
If the net proceeds of this offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for at least the next 15 months (or up to 21 months, if the sponsor exercises its extension options), it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination and we will depend on loans from our sponsor or management team to fund our search, to pay our taxes and to complete our initial business combination. If we are unable to obtain such loans, we may be unable to complete our initial business combination.
Of the net proceeds of this offering and the sale of the private placement warrants, only approximately $3.45 million (including $1.2 million in expenses the underwriter has agreed to reimburse us) will be available to us initially outside the trust account to fund our working capital requirements. In the event that our offering expenses exceed our estimate of $1.5 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 $1.5 million, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. If we are required to seek additional capital, we would need to borrow funds from our sponsor, KRP or its subsidiaries or other third parties to operate or may be forced to liquidate. None of our sponsor, KRP or its subsidiaries is under any obligation or other duty to loan funds to, or invest in, us in such circumstances. Any such loans may be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In such case, our public stockholders may receive only $10.30 per public share (or $10.40 or $10.50 per public share, if applicable), or less in certain circumstances, and our warrants will expire worthless. See “—If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.30 per public share (or $10.40 or $10.50 per public share, if applicable)” and other risk factors herein.
Our independent directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public stockholders.
In the event that the proceeds in the trust account are reduced below the lesser of: (1) $10.30 per public share (or $10.40 or $10.50 per public share, if applicable); and (2) such lesser amount per public share held
in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in certain instances. For example, the cost of such legal action may be deemed by the independent directors to be too high relative to the amount recoverable or the independent directors may determine that a favorable outcome is not likely. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.30 per public share (or $10.40 or $10.50 per public share, if applicable).
The securities in which we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.30 per public share (or $10.40 or $10.50 per public share, if applicable).
The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act that invest only in direct U.S. government treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that we do not complete our initial business combination allotted time frame or make certain amendments to our amended and restated certificate of incorporation, our public stockholders are entitled to receive their pro-rata share of the proceeds held in the trust account, plus any interest income, net of taxes paid or payable (less, in the case we are unable to complete our initial business combination, $100,000 of interest). Negative interest rates could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.30 per public share (or $10.40 or $10.50 per public share, if applicable).
If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our Board may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our Board and us to claims of punitive damages.
If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. In addition, our Board may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith by paying public stockholders from the trust account prior to addressing the claims of creditors, thereby exposing itself and us to claims of punitive damages.
If, before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share amount that would otherwise be received by our stockholders in connection with any liquidation may be reduced.
If, before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in
the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by our public stockholders in connection with any liquidation would be reduced.
If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
➤
restrictions on the nature of our investments; and
➤
restrictions on the issuance of securities;
each of which may make it difficult for us to complete our initial business combination.
In addition, we may have imposed upon us burdensome requirements, including:
➤
registration as an investment company with the SEC;
➤
adoption of a specific form of corporate structure; and
➤
reporting, record keeping, voting, proxy and disclosure requirements and compliance with other rules and regulations that we are currently not subject to.
In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business will be to identify and complete a business combination and thereafter to operate the post-transaction business or assets for the long term. We do not plan to buy businesses or assets with a view to resell or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act 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: (i) the completion of our initial business combination (including the release of funds to pay any amounts due to any public stockholders who properly exercise their redemption rights in connection therewith); (ii) the redemption of any public shares (other than sponsor shares) properly submitted in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation (A) in a manner that would affect the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options) or (B) with respect to any other provision relating to the rights of holders of our Class A common stock or pre-initial business combination activity; and (iii) the redemption of our public shares and any Class A Units of Opco (other than those held by TGR) if we do not complete our business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), subject to applicable law. 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, or may result in our liquidation. If we do not complete our initial business combination, our public stockholders may only receive their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.30 per public share (or $10.40 or $10.50 per public share, if applicable) on the redemption of their shares. See “—If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.30 per public share (or $10.40 or $10.50 per public share, if applicable)” and other risk factors herein.
Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination, and results of operations.
We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial business combination, and results of operations.
If we have not completed our initial business combination within 15 months of the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), our public stockholders may be forced to wait beyond such time period before redemption from our trust account.
If we have not completed our initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), we will distribute the aggregate amount then on deposit in the trust account, including interest (less an amount required to satisfy taxes of the company and Opco and less up to $100,000 of interest to pay dissolution expenses), pro rata to our public stockholders by way of redemption and cease all operations except for the purposes of winding up of our affairs, as further described herein. Any redemption of public stockholders from the trust account shall be effected automatically by function of our amended and restated certificate of incorporation prior to any voluntary winding up. If we are required to windup, liquidate the trust account and distribute such amount therein, pro rata, to our public stockholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the DGCL. In that case, investors may be forced to wait beyond the initial 15 months (or up to 21 months, if the sponsor exercises its extension options) before the redemption proceeds of our trust account become available to them and they receive the return of their pro rata portion of the proceeds from our trust account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless, prior thereto, we consummate our initial business combination or amend certain provisions of our amended and restated certificate of incorporation and then only in cases where investors have properly sought to redeem their shares of Class A common stock. Only upon our redemption or any liquidation will public stockholders be entitled to distributions if we have not completed our initial business combination within the required time period or do not amend certain provisions of our amended and restated certificate of incorporation prior thereto.
Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within the required time period may be considered a liquidating
distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is our intention to redeem our public shares as soon as reasonably possible following the 15th month (or 18th or 21st months, as applicable, if the sponsor exercises its extension options) from the closing of this offering in the event we do not complete our initial business combination and, therefore, we do not intend to comply with the foregoing procedures.
Because we do not intend to comply with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, consultants, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within the required time period is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution.
The grant of registration rights to our initial stockholders 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 common stock.
Pursuant to an agreement to be entered into concurrently with the issuance and sale of the securities in this offering, our initial stockholders and their permitted transferees can demand that we register the shares of our Class A common stock into which founder shares and sponsor shares are exchangeable, holders of our private placement warrants and their permitted transferees can demand that we register the private placement warrants and the shares of our Class A common stock issuable upon exercise of the private placement warrants or upon exchange of any Class A Units of Opco issued upon exercise of the private placement warrants and holders of warrants that may be issued upon conversion of working capital loans may demand that we register such warrants or the Class A common stock issuable upon exercise of such warrants or upon exchange of any Class A Units of Opco issued upon exercise of such warrants. Assuming the founder shares and sponsor shares are exchanged on a one for one basis and no warrants are issued upon conversion of working capital loans, an aggregate of up to 5,000,000 shares of our Class A common stock and up to 12,750,000 warrants (or up to 5,750,000 shares of our Class A common stock and up to 14,100,000 warrants if the over-allotment option is exercised in full) are subject to registration under these agreements. We will bear the cost of registering these securities. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our Class A common stock. In addition, the existence of the registration rights may make our initial business combination more costly or difficult to complete. This is because the stockholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A common stock that is expected when the securities owned by our initial stockholders, holders of our private placement warrants, holders of working capital loans or their respective permitted transferees are registered.
Because we are neither limited to evaluating target businesses in a particular industry, sector or geographic area nor have we selected any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.
Although we expect to focus our search for a target business in the energy and natural resources industry, we may complete a business combination with an operating company in any industry or sector. However, we will not, under our amended and restated certificate of incorporation, be permitted to effectuate our 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 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 revenues or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any stockholders who choose to remain stockholders following the business combination could suffer a reduction in the value of their securities. Such stockholders 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.
Because we intend to seek a business combination with a target business in the energy and natural resources industry in North America, we expect our future operations to be subject to risks associated with this sector.
We intend to focus our search for a target business in the energy and natural resources industry. Because we have not yet identified or approached any specific target business, we cannot provide specific risks of any business combination. However, risks inherent in investments in the energy and natural resources industry include, but are not limited to, the following:
➤
volatility of oil and natural gas prices;
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price and availability of alternative fuels, such as solar, coal, nuclear and wind energy;
➤
significant federal, state and local regulation, taxation and regulatory approval processes as well as changes in applicable legislation, laws and regulations;
➤
denial or delay of receiving requisite regulatory approvals and/or permits;
➤
the speculative nature of and high degree of risk involved in investments in the upstream, midstream and energy services sectors, including relying on estimates of oil and gas reserves and the impacts of regulatory and tax changes;
➤
exploration and development risks, which could lead to environmental damage, injury and loss of life or the destruction of property;
➤
drilling, exploration and development risks, including encountering unexpected formations or pressures, premature declines of reservoirs, blow-outs, equipment failures and other accidents, cratering, sour gas releases, uncontrollable flows of oil, natural gas or well fluids, adverse weather conditions, pollution, fires, spills and other environmental risks, any of which could lead to environmental damage, injury and loss of life or the destruction of property;
➤
proximity and capacity of oil, natural gas and other transportation and support infrastructure to production facilities;
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availability of key inputs, such as strategic consumables and raw materials and drilling and processing equipment;
➤
available pipeline, storage and other transportation capacity;
➤
changes in global supply and demand and prices for commodities;
➤
impact of energy conservation efforts;
➤
technological advances affecting energy production and consumption;
➤
overall domestic and global economic conditions;
➤
availability of, and potential disputes with, independent contractors;
➤
global warming, adverse weather conditions, natural disasters or other events (such as equipment malfunctions, explosions, fires or spills);
➤
value of U.S. dollar relative to the currencies of other countries; and
➤
terrorist acts.
We may seek acquisition opportunities in industries or sectors that may be outside of our management team’s areas of expertise.
We will consider a business combination outside of our management team’s areas of expertise if such business combination candidate is presented to us and we determine that such candidate offers an attractive acquisition opportunity for our company. In the event we elect to pursue an acquisition outside of the areas of our management team’s expertise, our management team’s expertise may not be directly applicable to its evaluation or operation, and the information contained in this prospectus regarding the areas of our management team’s expertise would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all of the significant risk factors relevant to such acquisition. Accordingly, any stockholders or warrantholders who choose to remain a stockholder or warrantholder following our initial business combination could suffer a reduction in the value of their securities. Such stockholders or warrantholders are unlikely to have a remedy for such reduction in value.
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.
In recent years, 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 target companies to demand improved financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions, or increases in the cost of additional capital needed to close business combinations or operate targets post-business combination.
This could increase the cost of, delay or otherwise complicate or frustrate our ability to find and consummate an initial business combination, and may result in our inability to consummate an initial business combination on terms favorable to our investors, or at all.
Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not have all of these positive attributes. If we complete our initial business combination with a target that does not meet some or all of these criteria and guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a business that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval of the transaction is required by applicable law or stock exchange rule, or we decide to obtain stockholder approval for business or other reasons, it may be more difficult for us to attain stockholder approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.30 per public share (or $10.40 or $10.50 per public share, if applicable), or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
We may seek acquisition opportunities with an early stage company, a financially unstable business or an entity lacking an established record of revenue or earnings, which could subject us to volatile revenues or earnings, intense competition and difficulties in obtaining and retaining key personnel.
To the extent we complete our initial business combination with an early stage company, a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks include investing in a business without a proven business model and with limited historical financial data, volatile revenues or earnings, intense competition and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
We are not required to obtain an opinion from an independent investment banking firm or from an independent accounting firm, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our company from a financial point of view.
Unless we complete our business combination with an affiliated entity, we are not required to obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm that the price we are paying is fair to our company from a financial point of view. If no opinion is obtained, our stockholders will be relying on the judgment of our Board, 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. If our Board is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking firm. However, our stockholders may not be provided with a copy of such opinion, nor will they be able to rely on such opinion.
We may issue additional shares of our Class A common stock, preferred stock or Opco Units (and a corresponding number of shares of our Class B common stock) to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. The number of Class A Units of Opco into which the Class B Units of Opco will convert may be adjusted after the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated certificate of incorporation. Any such issuances would dilute the interest of our stockholders and likely present other risks.
Our amended and restated certificate of incorporation will authorize the issuance of up to 225,000,000 shares of our Class A common stock, par value $0.0001 per share, 25,000,000 shares of our Class B common stock, par value $0.0001 per share, and 1,000,000 undesignated shares of preferred stock, par value $0.0001 per share. Immediately after this offering, there will be 205,000,000 and 19,250,000 (assuming, in each case, that the underwriter has not exercised its over-allotment option) authorized but unissued shares of our Class A common stock and Class B common stock, respectively, available for issuance, which amount does not take into account shares of our Class A common stock reserved for issuance upon exercise of outstanding warrants, or shares issuable upon exchange of founder shares or other Class A Units of Opco (and corresponding shares of our Class B common stock). Immediately after the consummation of this offering, there will be no shares of preferred stock issued and outstanding. The Class A Units of Opco (and corresponding shares of our Class B common stock) are exchangeable for shares of our Class A common stock at a one-for-one ratio but subject to adjustment as set forth herein.
We may issue a substantial number of additional Opco Units (and corresponding shares of our Class B common stock), shares of our Class A common stock or preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue additional shares of our Class A common stock upon exchange of the founder shares, as a result of adjustments to the number of Class A Units of Opco into which the Class B Units of Opco will convert after the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated certificate of incorporation. However, our amended and restated certificate of incorporation will provide, among other things, that prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business combination. These provisions of our amended and restated certificate of incorporation, like all provisions of our amended and restated certificate of incorporation, may be amended with a stockholder vote.
The issuance of additional Opco Units (and corresponding shares of our Class B common stock), shares of Class A common stock or preferred stock:
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may significantly dilute the equity interest of investors in this offering;
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may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;
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could cause a change in control if a substantial number of shares of our common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
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may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us;
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may adversely affect prevailing market prices for our units, Class A common stock and/or warrants; and
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may not result in adjustment to the exercise price of our warrants.
Unlike some other similarly structured blank check companies, our initial stockholders will receive additional Class A Units of Opco if we issue shares to consummate an initial business combination.
The founder shares consist of Class B Units of Opco (and any Class A Units of Opco into which such Class B Units are converted) and a corresponding number of shares of our Class B common stock, which
together will be exchangeable for shares of our Class A common stock after the time of our initial business combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like and subject to further adjustment as provided herein. In the case that additional shares of our Class A common stock or equity-linked securities convertible or exercisable for shares of our Class A common stock are issued or deemed issued in excess of the amounts sold in this offering and related to the closing of our initial business combination, the number of Class A Units of Opco into which the Class B Units of Opco will convert may be adjusted so that, after all founder shares have been exchanged for shares of our Class A common stock, the aggregate number of shares of our Class A common stock received by holders in exchange for founder shares would equal 20% of our total outstanding common stock upon completion of this offering plus the number of shares of our Class A common stock and equity-linked securities issued or deemed issued in connection with our initial business combination, excluding any shares of our Class A common stock or equity-linked securities issued, or to be issued, to any seller in our initial business combination. In addition, the number of outstanding shares of our Class B common stock will be adjusted through a stock split or stock dividend so that the total number of outstanding shares of our Class B common stock corresponds to the total number of Class A Units of Opco outstanding (other than those held by TGR) plus the total number of Class A Units of Opco into which the Class B Units of Opco are entitled to convert.
Resources could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.30 per public share (or $10.40 or $10.50 per public share, if applicable), or less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
We anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.30 per public share (or $10.40 or $10.50 per public share, if applicable), or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless. See “—If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.30 per public share (or $10.40 or $10.50 per public share, if applicable)” and other risk factors herein.
We are dependent upon our executive officers and directors who must allocate their time among our business and other businesses. The departure of our executive officers or directors or conflicts of interest in their determination as to how much time to devote to our affairs could have a negative impact on our ability to complete our initial business combination.
Our operations are dependent upon a relatively small group of individuals. We believe that our success depends on the continued service of our officers and directors, at least until we have completed our initial business combination. Our officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations, including our search for an initial business combination, and these other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination, nor do we have any employment agreement with, or key-man insurance on the life of any of our directors or officers. The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us.
In addition, certain of our officers and directors are employed by or otherwise provide service to KRP or other companies that may make investments in, or operate in, industries we may target for our initial business combination. Our independent directors also serve as officers and board members for other entities. If our officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination. For a complete discussion of our officers’ and directors’ other business affairs, see “Proposed Business—Conflicts of Interest” and “Management—Conflicts of Interest.”
The nominal purchase price paid by our sponsor for the founder shares may result in significant dilution to the implied value of your public shares upon the consummation of our initial business combination.
We are offering our units at an offering price of $10.00 per unit and the amount in our trust account is initially anticipated to be $10.30 per public share, implying an initial value of $10.30 per public share. However, prior to this offering, our sponsor paid a nominal aggregate purchase price of $25,000 for the founder shares, or approximately $0.004 per share. As a result, the value of your public shares may be significantly diluted upon the consummation of our initial business combination, when the founder shares are converted into public shares. For example, the following table shows the dilutive effect of the founder shares on the implied value of the public shares upon the consummation of our initial business combination assuming that our equity value at that time is $199,000,000, which is the amount we would have for our initial business combination in the trust account assuming the underwriters’ over-allotment option is not exercised, no interest is earned on the funds held in the trust account, and no public shares are redeemed in connection with our initial business combination, and without taking into account any other potential impacts on our valuation at such time, such as the trading price of our public shares, the business combination transaction costs (other than payment of $7,000,000 of deferred underwriting commissions), any equity issued or cash paid to the target’s sellers or other third parties, or the target’s business itself, including its assets, liabilities, management and prospects, as well as the value of our public and private warrants. At such valuation, each of our public shares would have an implied value of $7.73 per share upon consummation of our initial business combination, which is a 24% decrease as compared to the initial implied value per public share of $10.30.
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Public shares
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20,000,000
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|
|
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Founder shares
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|
|
|
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5,750,000
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Total shares
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|
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25,750,000
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|
|
|
Total funds in trust available for initial business combination (after payment of $7,000,000 of deferred underwriting commissions)
|
|
|
|
$
|
199,000,000
|
|
|
|
Initial implied value per public share
|
|
|
|
$
|
10.30
|
|
|
|
Implied value per share upon consummation of initial business combination
|
|
|
|
$
|
7.73
|
|
|
|
Sponsor’s investment per share
|
|
|
|
$
|
0.0004
|
|
|
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 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 business combination, it is likely that some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
In addition, the officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The departure of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business. The role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place. The loss of key personnel could negatively impact the operations and profitability of our post-combination business.
Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination, 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 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 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.
Our current officers may not remain in their positions following our business combination. We may have a limited ability to assess the management of a prospective target business and, as a result, may effect our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company, which could, in turn, negatively impact the value of our stockholders’ investment in us.
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 stockholders who choose to remain stockholders following the business combination could suffer a reduction in the value of their securities. Such stockholders 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.
From time to time, we and members of our management team may be subject to legal proceedings, regulatory disputes, and governmental inquiries that could cause us to incur significant expenses, divert our management’s attention, and materially harm our financial condition.
From time to time, we may be subject to claims, lawsuits, government investigations, and other proceedings involving competition and antitrust, securities, tax, commercial disputes, and other matters that could adversely affect our financial condition. Litigation and regulatory proceedings may be protracted and expensive, and the results are difficult to predict. Additionally, such litigation and regulatory proceedings require a great deal of financial resources and attention from us and our management team. Adverse
outcomes with respect to litigation or any of these legal proceedings may result in significant settlement costs or judgments, or penalties and fines, and could negatively affect our ability to identify and complete an initial business combination and may have an adverse effect on the price of our securities.
Members of our management team have been involved in a wide variety of businesses. Such involvement has, and may lead to, media coverage and public awareness. As a result, members of our management team and the related companies may from time to time be involved in civil disputes or governmental investigations unrelated to our business. Any such claims or investigations may be detrimental to our reputation and could negatively affect our ability to identify and complete an initial business combination and may have an adverse effect on the price of our securities.
Our officers, directors and security holders may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits our directors, officers, security holders or any other entities from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business combination with a business that is owned by our sponsor or any of the related companies, or its or their officers or directors, or make the acquisition through a joint venture or other form of shared ownership with our sponsor or any of the related companies, or its or their officers or directors, although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.
In particular, members of our sponsor and its affiliates are focused on investments in the energy and natural resources industry. As a result, there may be substantial overlap between companies that would be a suitable business combination for us and companies that would make an attractive target for such affiliates.
We may engage in a business combination with one or more target businesses that may be owned by our sponsor or one or more of the related companies, or its or their officers or directors, which may raise potential conflicts of interest.
In light of the involvement of our sponsor, officers and directors with other entities, including KRP, we may decide to acquire one or more businesses affiliated with our sponsor, KRP or either of their officers, directors or existing holders, including one or more groups or entities that own or control the general partner of KRP. Our officers and directors also serve as officers and board members for other entities, including, without limitation, those described under “Management—Conflicts of Interest.” They may also have investments in target businesses. Such entities may compete with us for business combination opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our business combination with any entities with which they are affiliated, and there have been no preliminary discussions concerning a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business combination as set forth in “Proposed Business—Effecting our Initial Business Combination—Selection of a Target Business and Structuring of our Initial Business Combination” and such transaction was approved by a majority of our independent and disinterested directors. Despite our obligation to obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our sponsor, officers or directors, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public stockholders as they would be absent any conflicts of interest.
Moreover, we may pursue an Affiliated Joint Acquisition opportunity with one or more affiliates of our sponsor. Any such parties may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the business combination by issuing to such parties a class of equity or equity-linked securities. Accordingly, such persons or entities may have a conflict between their interests and ours.
Since our sponsor, officers and directors will lose their entire investment in us if our business combination is not completed (other than with respect to sponsor shares and 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.
In May 2021, our sponsor received founder shares comprised of an aggregate of 5,750,000 Class B Units of Opco and 5,750,000 shares of our Class B common stock, as well as the sponsor shares. The number of founder shares issued was determined based on the expectation that the total size of this offering would be a maximum of 23,000,000 units if the underwriter’s over-allotment option is exercised in full, and therefore that such founder shares would represent 20% of the total outstanding equity after this offering (excluding the sponsor shares and any shares issuable upon exercise of any warrants). Our sponsor will forfeit up to 750,000 founder shares depending on the extent to which the underwriter’s over-allotment option is not exercised.
The founder shares will be worthless if we do not complete an initial business combination. In addition, our sponsor will commit, pursuant to a written agreement, to purchase an aggregate of 12,750,000 private placement warrants (or 14,100,000 private placement warrants if the underwriter’s over-allotment option is exercised in full), each exercisable to purchase for $11.50 one share of our Class A common stock for an aggregate purchase price of $12,750,000 (or $14,100,000 if the underwriter’s over-allotment option is exercised in full), or $1.00 per warrant, that will also be worthless if we do not complete a business combination.
Together, the founder shares are substantially similar to the shares of our Class A common stock included in the units being sold in this offering, except that they include Units in Opco that will be exchangeable for shares of our Class A common stock after the time of our initial business combination on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described herein, and in certain limited circumstances the Class B Units of Opco will have more limited rights to current or liquidating distributions from us. However, the holders have agreed (A) to vote any shares owned by them in favor of any proposed business combination and (B) not to redeem any founder shares or sponsor shares in connection with a stockholder vote to approve a proposed initial business combination. In addition, we may obtain loans from our sponsor, affiliates of our sponsor or an officer or director. The personal and financial interests of our officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following our initial business combination. This risk may become more acute as the 15-month anniversary of the closing of this offering nears (or the 18-month or 21-month anniversary, as applicable, if the sponsor exercises its extension options), which is the deadline for our completion of an initial business combination.
The value of the founder shares following completion of our initial business combination is likely to be substantially higher than the nominal price paid for them, even if the trading price of our public shares at such time is substantially less than $10.30 per share.
Upon the closing of this offering, our initial shareholders will have invested in us an aggregate of $12,775,000, comprised of the $25,000 purchase price for the founder shares and the $12,750,000 purchase price for the private placement warrants. Assuming a trading price of $10.00 per share upon consummation of our initial business combination, the 5,750,000 founder shares would have an aggregate implied value of $57,500,000. Even if the trading price of our public shares were as low as $2.05 per share, and the private placement warrants are worthless, the value of the founder shares would be greater than the sponsor’s initial investment in us. As a result, our sponsor is likely to be able to make a substantial profit on its investment in us at a time when our public shares have lost significant value. Accordingly, our management team, which owns interests in us and our sponsor, may be more willing to pursue a business combination with a riskier or less-established target business than would be the case if our sponsor had paid the same per-share price for the founder shares as our public shareholders paid for their public shares.
We may only be able to complete one business combination with the proceeds of this offering and the sale of the private placement warrants, which will cause us to be solely dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively impact our operations and profitability.
Of the net proceeds from this offering and the sale of the private placement warrants, up to approximately $207 million (or up to approximately $238 million if the underwriter’s over-allotment option is exercised in full) will be available to complete our business combination and pay related fees and expenses (which includes $7.0 million, or up to approximately $8.1 million if the over-allotment option is exercised in full, for payment of deferred underwriting commissions). Of the up to approximately $207 million (or up to approximately $238 million if the underwriter’s over-allotment option is exercised in full), approximately $3.45 million (or approximately $3.63 million if the underwriter’s over-allotment option is exercised in full) (including $1.2 million in expenses the underwriter has agreed to reimburse us) will be held outside the trust account for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses.
We may effectuate our 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 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. In addition, we intend to focus our search for an initial business combination in a single industry. Accordingly, the prospects for our success may be:
➤
solely dependent upon the performance of a single business, property or asset; or
➤
dependent upon the development or market acceptance of a single or limited number of products, processes or services.
This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
We may attempt to complete our initial business combination with a private company about which little information is available, which may result in a business combination with a company that is not as profitable as we suspected, if at all.
In pursuing our acquisition strategy, we may seek to effectuate our initial business combination with a privately held company. Very little public information generally exists about private companies, and we
could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information, which may result in a business combination with a company that is not as profitable as we suspected, if at all.
We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which a substantial majority of our stockholders do not agree.
Our amended and restated certificate of incorporation will not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. In addition, our proposed initial business combination may impose a minimum cash requirement for (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. As a result, we may be able to complete our initial business combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions or repurchases in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or any of their affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares in connection with such initial business combination, all shares of Class A common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
In order to effectuate our initial business combination, we may seek to amend our amended and restated certificate of incorporation or other governing instruments in a manner that will make it easier for us to complete our initial business combination but that our stockholders or warrantholders may not support.
In order to effectuate a business combination, we may amend various provisions of our charter and governing instruments, including the warrant agreement, the underwriting agreement relating to this offering, the letter agreement among us and our sponsor, officers and directors, and the registration rights agreement among us and our initial stockholders. These agreements contain various provisions that our public stockholders might deem to be material. While we do not expect our Board to approve any amendment to any of these agreements prior to our initial business combination, it may be possible that our Board, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to any such agreement in connection with the consummation of our initial business combination. Except in relation to the charter, any such amendments would not require approval from our stockholders and may have an adverse effect on the value of an investment in our securities. We cannot assure you that we will not seek to amend our charter or other governing instruments or change our industry focus in order to effectuate our initial business combination.
Certain agreements related to this offering may be amended without stockholder approval.
The underwriting agreement relating to this offering, the letter agreement between us and our sponsor, executive officers and directors, the investor rights agreement among us, our sponsor and KRP, the administrative services agreement among us, Opco and an affiliate of our sponsor, may be amended without stockholder approval. These agreements contain various provisions, including transfer restrictions on our founder shares and preemptive rights held by our sponsor, that our public stockholders might deem to be material.
While we do not expect our Board to approve any amendment to any of these agreements prior to our initial business combination, it may be possible that our Board, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to any such agreement in connection with the completion of our initial business combination. Any such amendments would not
require approval from our stockholders, may result in the completion of our initial business combination that may not otherwise have been possible, and may have an adverse effect on the value of an investment in our securities.
We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination.
Although we believe that the net proceeds of this offering, the sale of the private placement warrants will be sufficient to allow us to complete our initial business combination, because we have not yet selected any target business we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of this offering and the sale of the private placement warrants prove to be insufficient, either because of the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number of shares from stockholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the proposed business combination. We cannot assure you that such financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. In addition, even if we do not need additional financing to complete our initial business combination, we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our officers, directors or stockholders is required to provide any financing to us in connection with or after our initial business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.30 per public share (or $10.40 or $10.50 per public share, if applicable), or less in certain circumstances, on the liquidation of our trust account, and our warrants will expire worthless.
Our warrants and founder shares may have an adverse effect on the market price of our Class A common stock and make it more difficult to effectuate our business combination.
We will be issuing warrants to purchase 10,000,000 shares of our Class A common stock (or up to 11,500,000 shares of our Class A common stock 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 private placements an aggregate of 12,750,000 private placement warrants (or up to 14,100,000 private placement warrants if the underwriter’s over-allotment option is exercised in full), each exercisable to purchase for $11.50 one share of our Class A common stock. The founder shares are exchangeable for shares of our Class A common stock on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like and subject to further adjustment as set forth herein. In addition, if our sponsor makes any working capital loans, it may convert up to $1,500,000 of such loans into private placement warrants, at the price of $1.00 per warrant. To the extent we issue shares of our Class A common stock to effectuate a business combination, the potential for the issuance of a substantial number of additional shares of our Class A common stock upon exercise of these warrants and exchange rights could make us a less attractive acquisition vehicle to a target business. Any such issuance will increase the number of issued and outstanding shares of our Class A common stock and reduce the value of the shares of our Class A common stock issued to complete the business combination. Therefore, our warrants and founder shares may make it more difficult to effectuate a business combination or increase the cost of acquiring the target business.
A provision of our warrant agreement may make it more difficult for us to consummate an initial business combination.
If we issue additional shares of common stock 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 share of common stock, then the exercise price of the warrants will be adjusted to equal 115% of the newly issued price. This may make it more difficult for us to consummate an initial business combination with a target business.
Because we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses.
The federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or international financial reporting standards as issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame.
Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources, and increase the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December 31, 2022. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome for us as compared to other public companies because a target business with which we seek to complete our business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
Our initial business combination and our structure thereafter may not be tax-efficient to our stockholders and warrantholders. As a result of our business combination, our tax obligations may be more complex, burdensome and uncertain.
Although we will attempt to structure our initial business combination in a tax-efficient manner, tax structuring considerations are complex, the relevant facts and law are uncertain and may change, and we may prioritize commercial and other considerations over tax considerations. For example, in connection with our initial business combination and subject to any requisite stockholder approval, we may structure our business combination in a manner that requires stockholders and/or warrantholders to recognize gain or income for tax purposes, effect a business combination with a target company in another jurisdiction, or reincorporate in a different jurisdiction (including, but not limited to, the jurisdiction in which the target company or business is located). We do not intend to make any cash distributions to stockholders or warrant holders to pay taxes in connection with our business combination or thereafter. Accordingly, a stockholder or a warrant holder may need to satisfy any liability resulting from our initial business combination with cash from its own funds or by selling all or a portion of the shares received. In addition, stockholders and warrantholders may also be subject to additional income, withholding or other taxes with respect to their ownership of us after our initial business combination.
Further, we may effect a business combination with a target company that has business operations outside of the United States, and possibly, business operations in multiple jurisdictions. If we effect such a business combination, we could be subject to significant income, withholding and other tax obligations in a number of jurisdictions with respect to income, operations and subsidiaries related to those jurisdictions. Due to the complexity of tax obligations and filings in other jurisdictions, we may have a heightened
risk related to audits or examinations by U.S. federal, state, local and non-U.S. taxing authorities. This additional complexity and risk could have an adverse effect on our after-tax profitability and financial condition.
An investment in our securities, and certain subsequent transactions with respect to our securities, may result in uncertain or adverse U.S. federal income tax consequences.
An investment in our securities, and certain subsequent transactions with respect to our securities, may result in uncertain or adverse U.S. federal income tax consequences. For instance, because there is no authority that directly addresses the U.S. federal income tax implications of any instrument similar to the units we are issuing in this offering, the allocation an investor makes of the purchase price of a unit between the share of Class A common stock and one-half of one warrant to purchase Class A common stock included in each unit could be challenged by the Internal Revenue Service. Furthermore, the U.S. federal income tax consequences of a cashless exercise of warrants is unclear under current law. Additionally, it is unclear whether the redemption rights with respect to our shares of Class A common stock suspend the running of a U.S. holder’s holding period for purposes of determining whether any gain or loss realized by such holder on the sale or exchange of Class A common stock is long-term capital gain or loss and for determining whether any dividend we pay would be eligible for favorable U.S. federal income tax treatment. See “United States Federal Income Tax Considerations” below for a summary of the principal U.S. federal income tax consequences of an investment in our securities. Each prospective investor is urged to consult its own tax advisors with respect to these and other tax consequences when purchasing, holding or disposing of our securities.
Our organizational structure confers certain benefits upon our initial stockholders that will not benefit the holders of our Class A common stock to the same extent as it will benefit our initial stockholders.
We are a holding company and will not have material assets other than our ownership of Opco Units. Subject to the obligation of Opco to make tax distributions and to reimburse us for our corporate and other overhead expenses, we will have the right to determine whether to cause Opco to make non-liquidating distributions, and the amount of any such distributions. We do not anticipate causing Opco to make any such distributions (other than tax distributions) to holders of Opco Units (including TGR) prior to our initial business combination, other than required redemptions of Class A Units of Opco held by us in connection with a redemption of public shares. If Opco makes distributions after our initial business combination, the initial stockholders will be entitled to receive equivalent distributions from Opco on a pro rata basis. However, because we must pay taxes, amounts we may distribute as dividends to holders of our Class A common stock are expected to be less on a per share basis than the amounts distributed by Opco to the initial stockholders on a per unit basis.
We will not have a majority of independent directors at completion of this offering and may not have an audit committee consisting of three independent directors for up to a year following our initial public offering. You may not know at the time of this offering the identities of independent directors that may be responsible for evaluating an initial business combination.
The NYSE listing standards require that a majority of our Board be independent. In conformity with the NYSE’s “phase-in” rules, within one year of our initial public offering, a majority of our Board will be independent. At the closing of this offering, we will have two independent directors. Thus, upon our initial public offering we will not, and for up to a year afterwards we may not, have a majority of independent directors and may not have an audit committee consisting of three independent directors. As a result, investors will not know the identities of all of the independent directors and will be unable to evaluate the qualifications and backgrounds of such additional independent directors or the full composition of the Board at the time of this offering. Also, at the time of this offering, investors will not know the independent directors that may be responsible for evaluating an initial business combination. After additional independent directors are appointed, those additional independent directors will be available to evaluate any initial business combination. In addition, while we may add more independent directors after completion of our initial public offering, we cannot assure you that we will be able to do so in time for them to evaluate the risks associated with an initial business combination as described above.
We may engage our underwriter or its affiliates to provide additional services to us after this offering, which may include acting as financial advisor in connection with an initial business combination or as placement agent in connection with a related financing transaction. Our underwriter is entitled to receive deferred commissions that will be released from the trust only upon completion of an initial business combination. These financial incentives may cause them to have potential conflicts of interest in rendering any such additional services to us after this offering, including, for example, in connection with the sourcing and consummation of an initial business combination.
We may engage our underwriter or one of its affiliates to provide additional services to us after this offering, including, for example, identifying potential targets, providing financial advisory services, acting as a placement agent in a private offering or arranging debt financing. We may pay such underwriter or its affiliate fair and reasonable fees or other compensation that would be determined at that time in an arm’s length negotiation; provided that no agreement will be entered into with the underwriter or its affiliates and no fees or other compensation for such services will be paid to the underwriter or its affiliates prior to the date that is 60 days from the date of this prospectus, unless such payment would not be deemed underwriter’s compensation in connection with this offering. The underwriter is also entitled to receive deferred commissions that are conditioned on the completion of an initial business combination. The underwriter’s or its respective affiliates’ financial interests tied to the consummation of a business combination transaction may give rise to potential conflicts of interest in providing any such additional services to us, including potential conflicts of interest in connection with the sourcing and consummation of an initial business combination.
Risks Relating to the Pre-Business Combination Company
Past performance by KRP and members of our management team and directors may not be indicative of future performance of an investment in us.
Information regarding performance by, or businesses associated with, our management team or KRP is presented for informational purposes only. Past experience and performance, including related to acquisitions, of our management team, directors or KRP is not a guarantee either: (1) that we will be able to successfully identify a suitable candidate for our initial business combination; or (2) of any results with respect to any business combination we may consummate. You should not rely on the historical record or performance of KRP, or members of our management team and directors or any related investment’s performance as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. An investment in us is not an investment in KRP.
You will not be entitled to protections normally afforded to investors of many other blank check companies.
Since the net proceeds of this offering and the sale of the private placement warrants are intended to be used to complete an initial business combination with a business that has not been selected, we may be deemed to be a “blank check” company under the U.S. securities laws. However, because we will have net tangible assets in excess of $5,000,000 upon the successful completion of this offering and the sale of the private placement warrants and will file a Current Report on Form 8-K, including an audited balance sheet of our company demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means our units will be immediately tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, if this offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of our initial business combination. For a more detailed comparison of our offering to offerings that comply with Rule 419, see “Proposed Business—Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.”
If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.30 per public share (or $10.40 or $10.50 per public share, if applicable).
Our placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent registered
public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If a third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management team will consider whether competitive alternatives are reasonably available to it and will only enter into an agreement with such third party if management believes that such third party’s engagement would be in the best interests of our company under the circumstances. Making such a request of potential target businesses may make our acquisition proposal less attractive to them and, to the extent prospective target businesses refuse to execute such a waiver, it may limit the field of potential target businesses that we might pursue.
Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where we are unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we have not completed our initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by public stockholders could be less than the $10.30 per public share initially held in the trust account, due to claims of such creditors.
Our sponsor will agree that it will be liable to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below the lesser of: (1) $10.30 per public share (or $10.40 or $10.50 per public share, if applicable); and (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the 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. We have not independently verified whether our sponsor, which is a newly formed entity, has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such obligations. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.30 per public share (or $10.40 or $10.50 per public share, if applicable). 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.
We may not hold an annual meeting of stockholders until after the completion of our initial business combination and you will not be entitled to any of the corporate protections provided by such a meeting.
In accordance with the NYSE 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 the NYSE.
Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws unless such election is made by written consent in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination, and thus, we may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.
Our company has overlapping directors and management with other entities, which may lead to conflicting interests. Additionally, certain of our officers and directors have, and in the future may have, additional fiduciary or contractual obligations to one or more other entities, which may lead to additional conflicting interests.
Some of our officers and directors also serve as executive officers and directors of one or more of the related companies, including KRP. Our officers and members of our Board have fiduciary duties to our stockholders. Likewise, any such persons who serve in similar capacities at any of the related companies have fiduciary duties to that company’s stockholders. Therefore, such persons may have conflicts of interest or the appearance of conflicts of interest with respect to matters involving or affecting us and one or more of the related companies to which they owe fiduciary duties.
Some of our officers and directors have, and any of them in the future may have, additional fiduciary or contractual obligations to one or more other entities (including, without limitation, the entities listed in “Management—Conflicts of Interest”) pursuant to which such officer or director may be required to present a business combination opportunity to such entities before he or she presents such opportunity to us. Also, none of KRP, our sponsor or any of our directors and officers is prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity to which he or she has then-current fiduciary or contractual obligations to present such opportunity to another entity, he or she may only present such opportunity to us if such other entity rejects the opportunity. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company; such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue; and such person has no fiduciary or contractual obligation to present the opportunity to any other person or entity.
One or more of the related companies may compete with us for acquisition opportunities. If these entities decide to pursue any such opportunities, we may be precluded from procuring such opportunities. In addition, investment ideas generated within KRP may be suitable for both us and for one or more other entities and may be directed to such entity rather than to us.
In addition, KRP will adopt a policy pursuant to which any business combination opportunity that is a corporate opportunity of KRP that may also be a business combination opportunity for our company will first be presented to the conflicts committee of the board of directors of KRP, which is made up solely of independent directors, for consideration as to whether KRP desires to pursue such business combination opportunity as a direct investment or to present such opportunity to our company for consideration. The members of the conflicts committee of the board of directors of KRP will not serve in any fiduciary capacity at our company.
Furthermore, we may enter into transactions with one or more of the related companies. While any potential conflict that qualifies as a “related party transaction” (as defined in Item 404 of Regulation S-K under the Securities Act) is subject to review by an independent committee of the applicable issuer’s board of directors in accordance with its corporate governance guidelines, there can be no assurance that the terms of any such transactions will be as favorable to us as would be the case where there is no overlapping officer or director. See “—We may engage in a business combination with one or more target businesses that may be owned by our sponsor or one or more of the related companies, or its or their officers or directors, which may raise potential conflicts of interest.”
We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our stockholders’ investment in us.
Although we have no commitments as of the date of this prospectus to issue any notes or other debt securities, or to otherwise incur outstanding debt following this offering, we may choose to incur substantial debt to complete our initial business combination. We have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no issuance of debt will affect the per-share amount available for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:
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default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
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acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
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our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
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our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;
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our inability to pay dividends on our common stock;
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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and
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other disadvantages compared to our competitors who have less debt.
The provisions of our amended and restated certificate of incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval of holders of 65% of our common stock, which is a lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated certificate of incorporation and the trust agreement to facilitate the completion of an initial business combination that some of our stockholders may not support.
Some other blank check companies have a provision in their charter that prohibits the amendment of certain of its provisions, including those relating to a company’s pre-business combination activity, without approval by a certain percentage of the company’s stockholders. In those companies, amendment of these provisions requires approval by between 90% and 100% of the company’s public stockholders. Our amended and restated certificate of incorporation will provide that any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds of this offering and the private placement warrants into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of 65% of our common stock entitled to vote thereon, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our common stock entitled to vote thereon. In all other instances, our amended and restated certificate of incorporation may be amended by holders of a majority of our
outstanding common stock entitled to vote thereon, subject to applicable provisions of the DGCL or applicable stock exchange rules. Our initial stockholders, who will beneficially own shares representing 20% of the total outstanding shares of our Class A common stock upon the closing of this offering (assuming the exchange of all the founder shares for Class A common stock and that they do not purchase any units in this offering and excluding the sponsor shares), will participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation which 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 stockholders may pursue remedies against us for any breach of our amended and restated certificate of incorporation.
Our sponsor, officers, directors and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), unless we provide our public stockholders with the opportunity to redeem their shares of our Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to pay taxes of the company or Opco, divided by the number of then outstanding public shares and Class A Units of Opco (other than those held by TGR). These agreements are contained in a letter agreement, the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part, that we have entered into with our sponsor, officers, directors and director nominees. Our stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, officers, directors or director nominees for any breach of these agreements. As a result, in the event of a breach, our stockholders would need to pursue a stockholder derivative action, subject to applicable law.
Our initial stockholders will control the election of our Board until consummation of our initial business combination and will hold a substantial interest in us. As a result, they will elect all of our directors prior to our initial business combination and may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.
Upon the closing of this offering, our initial stockholders will own shares representing 20% of our shares of common stock (assuming they do not purchase any units in this offering and excluding the sponsor shares). Accordingly, our initial stockholders may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation and approval of major corporate transactions. If our initial stockholders purchase any units in this offering or if our initial stockholders purchase any additional shares of common stock in the aftermarket or in privately negotiated transactions, this would increase their control. Neither our initial stockholders 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 common stock.
In addition, our Board, whose members were elected by our initial stockholders, 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 to elect new directors prior to the completion of our 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, only a minority of the Board will be considered for election and our initial stockholders, because of their ownership position, will have considerable influence regarding the outcome. Accordingly, our initial stockholders will continue to exert control at least until the completion of our business combination.
Risks Relating to the Post-Business Combination Company
We may sell a royalty interest in the post-business combination company’s underlying assets to KRP or its affiliates, which would reduce the net amount of revenues ultimately received by the post-business combination company without also reducing the cost of development of its underlying properties.
We may seek to raise additional proceeds to consummate our initial business combination by selling a royalty interest in the underlying assets of the target business to KRP or its affiliates. A royalty interest is an interest that gives an owner the right to a portion of the resources or revenues derived from the underlying working interest assets. We expect that we would seek to sell such a royalty interest to KRP or its affiliates if we seek to acquire a company that owns working interest oil and gas assets. However, our sponsor, including KRP, and its affiliates have no obligation to purchase any such royalty interest or make any other additional investment in us in connection with our business combination.
Working interest oil and gas companies pay royalties (and other similar fees) to holders of mineral and royalty interests as oil and gas is produced from their properties. As such, if the post-business combination company sold a royalty interest to KRP or its affiliates, the net amount of revenues ultimately received by the post-business combination company would be reduced by the amount of any royalties paid to KRP, its affiliates and any other holders of such interests. Holders of royalty interests do not have to share the burden of any costs of development of the underlying assets, which means that the post-business combination company’s costs of development would not be reduced by the sale of a royalty interest to KRP or its affiliates.
We may elect to offer to sell a royalty interest to KRP or its affiliates to, among other reasons, (i) increase the amount of committed capital available to consummate our initial business combination, including in the event that the market for issuing securities to unaffiliated investors in a private placement in public equity, or PIPE, may be challenging or difficult to consummate at the desired issue price, (ii) reduce dilution in connection with raising capital for our initial business combination, and (iii) demonstrate synergies among KRP and/or its affiliates and the target business, in particular if the target business operates in a sector in which KRP has a proven knowledge, royalty interest ownership or a network of contacts and partners. We believe that our affiliation with KRP and its experience with and ownership of royalty interests may provide us with a competitive advantage compared to other special purpose acquisition companies in the event we seek to consummate our initial business combination with a working interest oil and gas company.
Any decision regarding the sale of a royalty interest to KRP or its affiliates will be subject to our related party transaction policy that will be adopted in connection with this offering and will be subject to review and approval by the audit committee of our board of directors. Please see “Certain Relationships and Related Party Transactions—Related party policy.”
Subsequent to our completion of our initial business combination, we may be required to subsequently take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you to lose some or all of your investment.
Even if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will identify all material issues that may be present with a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of
assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly, any stockholders or warrantholders who choose to remain a stockholder or warrantholder following our initial business combination could suffer a reduction in the value of their securities. Such stockholders or warrantholders are unlikely to have a remedy for such reduction in value.
If our management team pursues a company with operations or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection with investigating, agreeing to and completing such combination, and if we effect such initial business combination, we would be subject to a variety of additional risks that may negatively impact our operations.
If our management team pursues a company with operations or opportunities outside of the United States for our initial business combination, we would be subject to risks associated with cross-border business combinations, including in connection with investigating, agreeing to and completing our initial business combination, conducting due diligence in a foreign market, having such transaction approved by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.
If we effect our initial business combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following:
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costs and difficulties inherent in managing cross-border business operations and complying with commercial and legal requirements of overseas markets;
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rules and regulations regarding currency redemption;
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complex corporate withholding taxes on individuals;
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laws governing the manner in which future business combinations may be effected;
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tariffs and trade barriers;
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regulations related to customs and import/export matters;
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longer payment cycles;
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changes in local regulations as part of a response to the COVID-19 outbreak or a significant outbreak of other infectious diseases;
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tax consequences;
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currency fluctuations and exchange controls;
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rates of inflation;
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challenges in collecting accounts receivable;
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cultural and language differences;
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employment regulations;
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crime, strikes, riots, civil disturbances, terrorist attacks and wars;
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deterioration of political relations with the United States;
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obligatory military service by personnel; and
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government appropriation of assets.
We may not be able to adequately address these additional risks. If we were unable to do so, we may be unable to complete such business combination or, if we complete such business combination, our operations might suffer, either of which may adversely impact our results of operations and financial condition.
Our management may not be able to maintain control of a target business after our initial business combination. We cannot provide assurance that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure our initial business combination so that the post-transaction company in which our public stockholders own or acquire shares will own less than 100% of the outstanding equity interests or assets of a target business, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting power of the outstanding capital stock of the target or otherwise acquires an interest in the target business sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-transaction company owns or acquires 50% or more of the outstanding voting power of the outstanding capital stock of the target, our stockholders prior to our initial business combination (including our sponsor) may collectively own a minority interest (economic and/or voting) in the post business combination company, depending on, among other things, valuations ascribed to the target and us in our initial business combination and any changes in our post business combination capital structure. For example, we could pursue a transaction in which we issue a substantial number of new shares of common stock in exchange for all of the outstanding capital stock of a target, issue a substantial number of new shares to third-parties in connection with financing our initial business combination or our sponsor could convert some or all of its Class B common stock into Class A common stock. In such cases, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new shares of common stock or other changes in our capital structure, our stockholders immediately prior to such transaction (including our sponsor) could own less than a majority of our outstanding shares of common stock subsequent to such transaction, and therefore a minority interest (economic and/or voting) in the post-transaction company. In addition, other minority stockholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s stock than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain our control of the target business.
If our management 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, any or all of our management team could resign from their positions as officers of the post-business combination company, and the management of the target business at the time of the business combination could remain in place. Management of the target business may not be familiar with U.S. securities laws. If new management is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues, which may adversely affect our operations.
The officers and directors of a prospective target business may resign upon the completion of our initial business combination, which could negatively impact the operations and profitability of our post-combination business.
The officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The departure of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business. The role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
Provisions in our amended and restated certificate of incorporation and Delaware law may have the effect of discouraging lawsuits against our directors and officers.
Our amended and restated certificate of incorporation will require, unless we consent in writing to the selection of an alternative forum, that (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee to
us or our stockholders, (iii) any action asserting a claim against us, our directors, officers or employees arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or bylaws, or (iv) any action asserting a claim against us, our directors, officers or employees governed by the internal affairs doctrine may be brought only in the Court of Chancery in the State of Delaware, except any claim (A) as to which the Court of Chancery of the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery or (C) for which the Court of Chancery does not have subject matter jurisdiction. If an action is brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel. This provision may have the effect of discouraging lawsuits against our directors and officers, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder. In addition this provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us and our directors, officers or other employees and may have the effect of discouraging lawsuits against our directors and officers.
Notwithstanding the foregoing, our amended and restated certificate of incorporation will provide that the exclusive forum provision will not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Additionally, unless we consent in writing to the selection of an alternative forum, our amended and restated certificate of incorporation will provide that the federal courts will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act against us or any of our directors, officers, other employees or agents. Section 22 of the Securities Act, however, created concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce such provisions, and the enforceability of similar choice of forum provisions in other companies’ charter documents has been challenged in legal proceedings. While the Delaware courts have determined that such exclusive forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions, and there can be no assurance that such provisions will be enforced by a court in those other jurisdictions.
Provisions in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A common stock and could entrench management.
Our amended and restated certificate of incorporation will contain provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These provisions include a staggered Board and the ability of the Board to designate the terms of and issue new series of preferred stock, which may make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
Risks Relating to our Securities
Our sponsor was issued Class B Units of Opco for no consideration and paid an aggregate of $25,000 for the corresponding shares of our Class B common stock and the sponsor shares, and, accordingly, you will experience immediate and substantial dilution from the purchase of our Class A common stock to the benefit of our sponsor and certain of our directors and officers.
The difference between the public offering price per share (allocating all of the unit purchase price to the Class A common stock and none to the warrant included in the unit) and the pro forma net tangible book
value per share of our Class A common stock after this offering constitutes the dilution to you and the other investors in this offering. Our sponsor acquired its initial investment for a small amount, significantly contributing to this dilution. Upon the closing of this offering, and assuming no value is ascribed to the warrants included in the units, you and the other public stockholders will incur an immediate and substantial dilution of approximately 108% (or $10.77 per share, assuming no exercise of the underwriter’s over-allotment option), the difference between the pro forma net tangible book value per share after this offering of $(0.77) 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 an increase in the number of Class A Units of Opco into which the Class B Units of Opco will convert after the time of our initial business combination and would become exacerbated to the extent that public stockholders 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 common stock. Moreover, although we are of the view that our sponsor, directors and officers paid fair value for their initial investment (or, in the case of the Class B Units of Opco, that such units were ascribed no value), there is no assurance that a taxing authority would agree with us, and if a taxing authority were to successfully assert otherwise, we may be subject to material withholding and other tax liabilities that could adversely affect our financial condition.
You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares or warrants, potentially at a loss.
Our public stockholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (i) the redemption of any public shares properly submitted in connection with our completion of an initial business combination (including the release of funds to pay any amounts due to any public stockholders who properly exercise their redemption rights in connection therewith), (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation that would modify the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), or (iii) the redemption of our public shares and any Class A Units of Opco (other than those held by TGR) if we do not complete an initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), subject to applicable law and as further described herein. In addition, if we do not complete an initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options) for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in our trust account. In that case, public stockholders may be forced to wait beyond 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options) before they receive funds from our trust account. In no other circumstances will a public stockholder have any right or interest of any kind in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
You will not be permitted to exercise your warrants unless we register and qualify the underlying Class A common stock or certain exemptions are available.
If the issuance of the Class A common stock upon exercise of the warrants is not registered, qualified or exempt from registration or qualification under the Securities Act and applicable state securities laws, holders of warrants will not be entitled to exercise such warrants and such warrants 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 common stock included in the units.
We are registering the Class A common stock issuable upon exercise of the warrants in the registration statement of which this prospectus forms a part because the warrants will become exercisable 30 days after the completion of our initial business combination, which may be within one year of this offering. However, because the warrants will be exercisable until their expiration date of up to five years after the
completion of our initial business combination, in order to comply with the requirements of Section 10(a)(3) of the Securities Act following the consummation of our initial business combination, 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 post-effective amendment to the registration statement of which this prospectus forms a part or a new registration statement covering the registration under the Securities Act of the Class A common stock issuable upon exercise of the warrants and thereafter will use our commercially reasonable efforts to cause the same to become effective within 60 business days following our initial business combination and to maintain a current prospectus relating to the Class A common stock issuable upon exercise of the warrants until the expiration of the warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order.
If the Class A common stock issuable upon exercise of the warrants are not registered under the Securities Act, under the terms of the warrant agreement, holders of warrants who seek to exercise their warrants will not be permitted to do so for cash and, instead, will be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act or another exemption.
In no event will warrants be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration or qualification is available.
If our Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities Act, we may, at our option, not permit holders of warrants who seek to exercise their warrants to do so for cash and, instead, require them to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act; in the event we so elect, we will not be required to file or maintain in effect a registration statement or register or qualify the shares underlying the warrants under applicable state securities laws, and in the event we do not so elect, we will use our commercially reasonable efforts to register or qualify the shares underlying the warrants under applicable state securities 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 (other than upon a cashless exercise as described above) 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.
You may only be able to exercise your public warrants on a “cashless basis” under certain circumstances, and if you do so, you will receive fewer shares of Class A common stock from such exercise than if you were to exercise such warrants for cash.
The warrant agreement provides that in the following circumstances holders of warrants who seek to exercise their warrants will not be permitted to do for cash and will, instead, be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act: (i) if the Class A common stock issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the terms of the warrant agreement; (ii) if we have so elected and the Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities Act; and (iii) if we have so elected and we call the warrants for redemption. If you exercise your warrants on a cashless basis, you would pay the warrant exercise price by surrendering the warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the excess of the “fair market value” of our Class A common stock (as defined in the next sentence) over the exercise price of the warrants by (y) the fair market value. The “fair market value” of our shares of Class A common stock shall mean the volume weighted average price of our shares of Class A common stock as reported during the 10 trading days ending on
the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. As a result, you would receive fewer shares of Class A common stock from such exercise than if you were to exercise such warrants for cash.
The NYSE 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.
Our units have been approved for listing on the NYSE on or promptly after the date of this prospectus and we expect our Class A common stock and warrants will be listed on or promptly after their date of separation. Although after giving effect to this offering we expect to meet, on a pro forma basis, the minimum initial listing standards set forth in the NYSE listing standards, we cannot assure you that our securities will continue to be listed on the NYSE in the future or prior to our initial business combination. In order to continue listing our securities on the NYSE prior to our initial business combination, we must maintain certain financial, distribution and stock price levels. Generally, we must maintain a minimum number of holders of our securities (generally 300 round lot holders). Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with the NYSE’s initial listing requirements, which are more rigorous than the NYSE’s continued listing requirements, in order to continue to maintain the listing of our securities on the NYSE. For instance, our stock price would generally be required to be at least $4.00 per share, our aggregate market value would be required to be at least $100,000,000, and the market value of our publicly-held shares would be required to be at least $80,000,000. We cannot assure you that we will be able to meet those initial listing requirements at that time.
If the NYSE 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:
➤
a limited availability of market quotations for our securities;
➤
reduced liquidity for our securities;
➤
a determination that our Class A common stock is a “penny stock” which will require brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
➤
a limited amount of news and analyst coverage; and
➤
a decreased ability to issue additional securities or obtain additional financing in the future.
The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because we expect our units and eventually our Class A common stock and warrants will be listed on the NYSE, our units, Class A common stock and warrants will be covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the state of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on the NYSE, our securities would not be covered securities and we would be subject to regulation in each state in which we offer our securities.
We may amend the terms of the warrants in a manner that may be adverse to holders of warrants with the approval by the holders of at least 50% of the then outstanding warrants. As a result, the exercise price of your warrants could be increased, the warrants could be converted into cash or stock, the exercise period could be shortened and the number of shares of our Class A common stock purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that (a) the terms
of the warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity or correct any mistake, including to conform the provisions of the warrant agreement to the description of the terms of the warrants and the warrant agreement set forth in this prospectus, or defective provision or (ii) adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of the warrants and (b) all other modifications or amendments require the vote or written consent of at least 50% of the then outstanding warrants. Accordingly, we may amend the terms of the warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding warrants approve of such amendment. Although our ability to amend the terms of the warrants with the consent of at least 50% of the then outstanding warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash or stock (at a ratio different than initially provided), shorten the exercise period or decrease the number of shares of our common stock purchasable upon exercise of a warrant.
Our warrant agreement will designate the courts of the State of 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 warrantholders 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 will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
Notwithstanding the foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented to the forum provisions in our warrant agreement. If any action, the subject matter of which is within the scope the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state courts located in the State of New York and the federal courts in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrantholder in any such enforcement action by service upon such warrantholder’s counsel in the foreign action as agent for such warrantholder.
This choice-of-forum provision may limit a warrantholder’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.
We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant if, among other things, the last reported sales price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Warrants—Public Stockholders’ Warrants—Anti-dilution Adjustments”) for
any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send the notice of redemption to the warrantholders. 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: (1) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so; (2) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants; or (3) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, we expect would be substantially less than the market value of your warrants.
Because each unit contains one-half of one redeemable warrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.
Each unit contains one-half of one redeemable warrant. Pursuant to the warrant agreement, no fractional warrants will be issued upon separation of the units, and only whole units will trade. This is different from some other offerings similar to ours whose units include one share of Class A common stock and one whole warrant to purchase one share. We have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants will be exercisable in the aggregate for a fifth of the number of shares compared to units that each contain a whole warrant to purchase one share, thus making us, we believe, a more attractive business combination partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if they included a warrant to purchase one whole share.
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 common stock issuable upon exercise of these warrants will cause holders to receive fewer shares of our Class A common stock 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 the shares of our Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that the shares of our Class A common stock satisfy the definition of a “covered security” under Section 18(b)(I) of the Securities Act, we may, at our option, require holders of 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 be required to use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. “Cashless exercise” means the warrantholder pays the exercise price by giving up some of the shares for which the warrant is being exercised, with those shares valued at the then current market price. Accordingly, each holder would pay the exercise price by surrendering the warrants for that number of shares of our Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of our Class A common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” by (y) the fair market value. The “fair market value” shall mean volume weighted average price of our Class A common stock as reported during 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants.
In addition, if a registration statement covering the shares of our Class A common stock issuable upon exercise of the warrants is not effective within a specified period following the consummation of our initial business combination, warrantholders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis. For purposes of calculating the number of shares issuable upon such cashless exercise, the “fair market value” of warrants shall be calculated using the volume weighted average sale price of the Class A common stock for the 10 trading days ending on the trading day prior to the date on which notice of exercise is received by the warrant agent.
If we choose to require holders to exercise their warrants on a cashless basis, which we may do at our sole discretion, or if holders elect to do so when there is no effective registration statement, the number of shares of our Class A common stock 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 shares of our Class A common stock have a fair market value per share of $17.50 per share, then upon the cashless exercise, the holder will receive 300 shares of our Class A common stock. The holder would have received 875 shares of our Class A common stock 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 shares of our Class A common stock upon a cashless exercise of the warrants they hold.
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 representatives of the underwriter with respect to the state of capital markets, generally, and the amount the underwriter believed it 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 common stock and warrants underlying the units, include:
➤
the history and prospects of companies whose principal business is the acquisition of other companies;
➤
prior offerings of those companies;
➤
our prospects for acquiring an operating business at attractive values;
➤
a review of debt to equity ratios in leveraged transactions;
➤
our capital structure;
➤
an assessment of our management and their experience in identifying suitable business combination opportunities;
➤
general conditions of the securities markets at the time of this offering; and
➤
other factors as were deemed relevant.
Although these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities of an operating company in a particular industry since we have no historical operations or financial results.
Our sponsor’s equity ownership may create or appear to create conflicts of interest.
Our sponsor’s ownership, and our officers’ and certain of our directors’ indirect ownership through KRP’s ownership of our sponsor, of our Class B common stock may create or appear to create conflicts of interest when they are faced with decisions that could have different implications for the holders of Class A common stock, including the structure of our initial business combination, any financing or private placement in connection with our initial business combination, amendments of our organizational documents and any merger, consolidation or sale of all or substantially all of our assets.
There is currently no market for our securities and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities.
There is currently no market for our securities. Stockholders therefore have no access to information about prior market history on which to base their investment decision. Following this offering, the price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions, including as a result of the COVID-19 pandemic and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases).
Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained.
General Risk Factors
We are a blank check company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a blank check company with no operating results, and we will not commence operations until obtaining funding through this offering. 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.
We are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our common stock held by non-affiliates exceeds $700 million as of the end of any second fiscal quarter of a fiscal year, in which case we would no longer be an emerging growth company as of the end of such fiscal year. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.
We will depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure
of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial loss.
Cautionary note regarding forward-looking statements
Some statements contained in this prospectus are forward-looking in nature. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following risks, uncertainties and other factors:
➤
our being a newly incorporated company with no operating history and no revenues;
➤
our ability to select an appropriate target business or businesses;
➤
our ability to complete our initial business combination;
➤
our expectations around the performance of a prospective target business or businesses;
➤
our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;
➤
our directors and officers allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination;
➤
actual and potential conflicts of interest relating to KRP, our sponsor and other entities in which members of our management team are involved;
➤
our potential ability to obtain additional financing to complete our initial business combination including from our sponsor, KRP or other third parties;
➤
our pool of prospective target businesses, including the location and industry of such target businesses;
➤
our ability to consummate an initial business combination due to the uncertainty resulting from the recent COVID-19 pandemic and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases);
➤
the ability of our officers and directors to generate a number of potential business combination opportunities;
➤
our public securities’ potential liquidity and trading;
➤
the lack of a market for our securities;
➤
the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;
➤
the trust account not being subject to claims of third parties;
➤
our financial performance following this offering; and
➤
the other risks and uncertainties discussed in “Risk Factors” and elsewhere in this prospectus.
Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Use of proceeds
We are offering 20,000,000 units at an offering price of $10.00 per unit. We estimate that the net proceeds of this offering together with the funds we will receive from the sale of the private placement warrants will be used as set forth in the following table.
|
|
|
Without
Over-Allotment
Option
|
|
|
Over-Allotment
Option Exercised
|
|
Gross proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross proceeds from units offered to public(1)
|
|
|
|
$
|
200,000,000
|
|
|
|
|
$
|
230,000,000
|
|
|
Gross proceeds from private placement warrants offered in the private
placement
|
|
|
|
|
12,750,000
|
|
|
|
|
|
14,100,000
|
|
|
Total gross proceeds
|
|
|
|
$
|
212,750,000
|
|
|
|
|
$
|
244,100,000
|
|
|
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
|
|
|
|
|
500,000
|
|
|
|
|
|
500,000
|
|
|
Accounting fees and expenses
|
|
|
|
|
50,000
|
|
|
|
|
|
50,000
|
|
|
Printing and engraving expenses
|
|
|
|
|
35,000
|
|
|
|
|
|
35,000
|
|
|
Travel and road show expenses
|
|
|
|
|
15,000
|
|
|
|
|
|
15,000
|
|
|
SEC expenses
|
|
|
|
|
40,000
|
|
|
|
|
|
40,000
|
|
|
FINRA expenses
|
|
|
|
|
55,000
|
|
|
|
|
|
55,000
|
|
|
NYSE listing and filing fees
|
|
|
|
|
85,000
|
|
|
|
|
|
85,000
|
|
|
Miscellaneous expenses(4)
|
|
|
|
|
720,000
|
|
|
|
|
|
720,000
|
|
|
Total estimated offering expenses (other than underwriting commissions)
|
|
|
|
$
|
1,500,000
|
|
|
|
|
$
|
1,500,000
|
|
|
Reimbursed Expenses(5)
|
|
|
|
$
|
1,900,000
|
|
|
|
|
$
|
2,185,000
|
|
|
Proceeds after estimated offering expenses(5)
|
|
|
|
$
|
209,150,000
|
|
|
|
|
$
|
240,185,000
|
|
|
Held in trust account(1)(3)
|
|
|
|
$
|
206,000,000
|
|
|
|
|
$
|
236,900,000
|
|
|
% of public offering size
|
|
|
|
|
103%
|
|
|
|
|
|
103%
|
|
|
Not held in trust account(5)
|
|
|
|
$
|
3,150,000
|
|
|
|
|
$
|
3,285,000
|
|
|
The following table shows the use of the approximately $3,150,000 of net proceeds not held in the trust account.(6)
|
|
|
Amount
|
|
|
% of Total
|
|
Legal, accounting, due diligence, travel and other expenses in connection with any business combination
|
|
|
|
$
|
550,000
|
|
|
|
|
|
17.00%
|
|
|
Legal and accounting fees related to regulatory reporting obligations
|
|
|
|
|
100,000
|
|
|
|
|
|
3.00%
|
|
|
Payment for administrative and support services
|
|
|
|
|
700,000
|
|
|
|
|
|
22.00%
|
|
|
Independent director cash compensation
|
|
|
|
|
240,000
|
|
|
|
|
|
8.00%
|
|
|
Directors and officers liability insurance premiums(7) . . . . . . . . . . . .
|
|
|
|
|
500,000
|
|
|
|
|
|
16.00%
|
|
|
Capital markets advisory fees(8)
|
|
|
|
|
200,000
|
|
|
|
|
|
6.00%
|
|
|
Reserve for litigation
|
|
|
|
|
100,000
|
|
|
|
|
|
3.00%
|
|
|
Other miscellaneous expenses
|
|
|
|
|
760,000
|
|
|
|
|
|
24.00%
|
|
|
Total
|
|
|
|
$
|
3,150,000
|
|
|
|
|
|
100.00%
|
|
|
(1)
Includes amounts payable to public stockholders who properly redeem their shares in connection with our successful completion of our initial business combination.
(2)
A portion of the offering expenses will be paid from the proceeds of loans from our sponsor of up to $300,000 as described in
this prospectus. These loans will be repaid upon completion of this offering out of the $3.45 million of offering proceeds (including $1.2 million in expenses the underwriter has agreed to reimburse us) that have been allocated for the payment of offering expenses (other than underwriting commissions) and which is 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 equal to 3.5% of the gross proceeds of this offering. Upon completion of our initial business combination, $7,000,000, which constitutes the underwriter’s deferred commissions (or up to $8,050,000 if the underwriter’s over-allotment option is exercised in full) will be paid to the underwriter as described below from the funds held in the trust account and the remaining funds, less amounts used to pay redeeming stockholders, will be released to us and can be used to pay all or a portion of the purchase price of the business or businesses with which our initial business combination occurs or for general corporate purposes, including payment of principal or interest on indebtedness incurred in connection with our initial business combination, to fund the purchases of other companies or for working capital. The underwriter will not be entitled to any interest accrued on the deferred underwriting commissions.
(4)
Includes organizational and administrative expenses and may include amounts related to above-listed expenses in the event actual amounts exceed estimates.
(5)
The underwriter has agreed to reimburse certain of our expenses, not to exceed $1,900,000 (or $2,185,000, if the underwriter’s over-allotment option is exercised in full). This reimbursement will have the effect of increasing the proceeds available to us outside of the trust account. In addition, the underwriter has agreed to separately reimburse certain of our expenses in an amount not to exceed $2,100,000 (or $2,415,000, if the underwriter’s over-allotment option is exercised in full) on the date, if any, on which the Trustee pays the deferred commissions to the underwriter in accordance with the underwriting agreement.
(6)
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 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 that the proceeds held in the trust account are only invested in such money market funds at a current interest rate of 0.01% per year, we estimate the interest earned on the trust account will be approximately $20,600 per year; however, we can provide no assurances regarding this amount.
(7)
This amount represents the approximate amount of annualized director and officer liability insurance premiums we anticipate paying following the completion of this offering and until we complete a business combination.
(8)
Tudor, Pickering, Holt & Co. Securities, LLC (“TPH”) is acting as our capital markets advisor in connection with the initial public offering and initial business combination. We or an affiliate of our sponsor will pay TPH a fee of up to $200,000 in its capacity as capital markets advisor at the closing of this offering. For more information, please read “Underwriting—Capital markets advisor.”
The rules of the NYSE provide that at least 90% of the gross proceeds from this offering and the sale of the private placement warrants be deposited in a trust account. We will use the proceeds we receive from this offering to purchase Class A Units and warrants of Opco. Opco will deposit $206,000,000, or $10.30 per unit (or $236,900,000, or $10.30 per unit, if the underwriter’s over-allotment option is exercised in full), of which $7,000,000 (or $8,050,000 if the underwriter’s over-allotment option is exercised in full) may be required to pay deferred underwriting commissions, into a U.S.-based trust account with Continental Stock Transfer & Trust Company acting as trustee, and will use $4,950,000 to pay expenses in connection with the closing of this offering and for working capital following this offering. The proceeds held in the trust account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Assuming that the proceeds held in the trust account are only invested in such money market funds at a current interest rate of 0.01% per year, we estimate the interest earned on the trust account will be approximately $20,600 per year; however, we can provide no assurances regarding this amount.
Except with respect to interest earned on the funds held in the trust account that may be released to us to pay tax obligations of the Company or Opco, if any, the funds held in the trust account will not be released from the trust account until the earliest of: (1) the completion of our initial business combination (including the release of funds to pay any amounts due to any public stockholders who properly exercise their redemption rights in connection therewith); (2) the redemption of any public shares (other than sponsor shares) properly submitted in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation (A) in a manner that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business
combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options) or (B) with respect to any other provision relating to the rights of holders of our Class A common stock or pre-initial business combination activity; and (3) the redemption of our public shares and any Class A Units of Opco (other than those held by TGR) if we have not completed our initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.
The net proceeds held in the trust account may be used as consideration to pay the sellers of a target business with which we ultimately complete our initial business combination. If our initial business combination is paid for using equity or debt or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemption of our public shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other business, for share repurchases or for working capital. There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination.
Amounts not held in trust are intended to cover estimated costs and expenses to which such proceeds are allocated. In order to limit expenses, while we may begin preliminary due diligence of a target business in connection with an indication of interest, we intend to undertake in-depth due diligence, depending on the circumstances of the relevant prospective acquisition, only after we have negotiated and signed a letter of intent or other preliminary agreement that addresses the terms of a business combination. We may be required to raise additional capital, the amount, availability and cost of which is currently unascertainable. If we are required to seek additional capital, we could seek such additional capital through loans or additional investments from our sponsor, KRP or its subsidiaries, but such persons are not under any obligation or other duty to loan funds to, or invest in, us.
We will enter into an administrative services agreement pursuant to which we will pay KRP or certain of its subsidiaries $25,000 per month for administrative and support services. Upon completion of our initial business combination or any liquidation, we may cease paying some or all of these fees.
We have agreed, pursuant to the administrative services agreement with our sponsor relating to the monthly reimbursement for office space and administrative services described above, that we will indemnify our sponsor from any claims arising out of or relating to this offering or the company’s or Opco’s operations or conduct of the company’s or Opco’s business or any claim against our sponsor alleging any expressed or implied management or endorsement by our sponsor of any of the company’s or Opco’s activities or any express or implied association between our sponsor and the company or Opco or any of their affiliates, which agreement will provide that the indemnified parties cannot access the funds held in our trust account.
Prior to the closing of this offering, our sponsor loaned us $300,000 to be used for a portion of the expenses of this offering. These loans are non-interest bearing, unsecured and are due at the closing of this offering. The loan will be repaid upon the closing of this offering as part of the estimated $1,500,000 of offering expenses.
In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans would be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period. Except as set forth above, the terms of such loans, if any, have not been determined and no written
agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions or repurchases in connection with our business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions either prior to or following the completion of our initial business combination. There is no limit on the number of shares our initial stockholders, directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and the rules of the NYSE. 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. If they engage in such transactions, they will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. Subsequent to the consummation of this offering, we will adopt an insider trading policy which will require insiders to: (1) refrain from purchasing securities during certain blackout periods and when they are in possession of any material non-public information; and (2) to clear all trades with our legal counsel prior to execution. We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as it will be dependent upon several factors, including but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary.
We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.
We may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. If too many public stockholders exercise their redemption rights so that we cannot satisfy the net tangible asset requirement, we would not proceed with the redemption of our public shares or the business combination, and instead may search for an alternate business combination.
A public stockholder will be entitled to receive funds from the trust account only upon the earliest to occur of: (i) the redemption of any public shares properly submitted in connection with our completion of an initial business combination, (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options) or (iii) the redemption of our public shares and any Class A Units of Opco (other than those held by TGR) if we do not complete our business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), subject to applicable law and as further described herein and any limitations (including but not limited to cash requirements) created by the terms of the proposed business combination. In no other circumstances will a public stockholder have any right or interest of any kind to or in the trust account.
Pursuant to the Opco LLC Agreement and a letter agreement that our sponsor, officers and directors have entered into with us, they have agreed that any founder shares and sponsor shares held by them will not be entitled to redemption rights, and they will waive any such redemption rights for any public shares held by them, in connection with the completion of our initial business combination. In addition, our initial stockholders have agreed that any founder shares held by them are subject to forfeiture and will not be entitled to liquidating distributions from the trust account, and they will waive any such rights to liquidating distributions for any founder shares, if we fail to complete our business combination within the prescribed time frame. However, if our sponsor or any of our officers, directors or affiliates acquires public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares and the sponsor shares, if we fail to complete our initial business combination within the prescribed time frame.
Dividend policy
We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our Board at such time. In addition, our Board is not currently contemplating and does not anticipate declaring any other stock dividends in the foreseeable future, except if we increase the size of this offering, in which case we will effect a stock dividend or other appropriate mechanism immediately prior to the consummation of this offering in an amount so that the founder shares continue to represent 20% of our total outstanding equity upon the consummation of this offering (excluding the sponsor shares). Further, if we incur any indebtedness in connection with our initial business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
Dilution
The difference between the public offering price per share of our Class A common stock, assuming no value is attributed to the warrants included in the units we are offering pursuant to this prospectus or the private placement warrants, and the pro forma net tangible book value per share of our Class A common stock after this offering constitutes the dilution to investors in this offering. Such calculation does not reflect any dilution associated with the sale and exercise of warrants, including the private placement warrants, which would cause the actual dilution to the public stockholders to be higher, particularly where a cashless exercise is utilized. Net tangible book value per share is determined by dividing our net tangible book value, which is our total tangible assets less total liabilities (including the value of Class A common stock which may be redeemed for cash), by the number of outstanding shares of our Class A common stock.
At September 30, 2021, our net tangible book value was a deficit of $(325,300) or approximately $(0.06) per share of common stock. After giving effect to the sale of 20,000,000 shares of our Class A common stock included in the units we are offering by this prospectus (or 23,000,000 shares of our Class A common stock if the underwriter’s over-allotment option is exercised in full), the sale of the private placement warrants and the deduction of underwriting commissions and estimated expenses of this offering, our pro forma net tangible book value at September 30, 2021 would have been $(4.175,300), or approximately $(0.83) per share (or $(5,090,300), or $(0.88) per share, if the underwriter’s over-allotment option is exercised in full), representing an immediate decrease in net tangible book value (as decreased by the value of 20,000,000 shares of our Class A common stock that may be redeemed for cash, or 23,000,000 shares of our Class A common stock if the underwriter’s over-allotment option is exercised in full) of $(10.77) per share (or $(10.83) if the underwriter’s over-allotment option is exercised in full) to our initial stockholders as of the date of this prospectus. Total dilution to public stockholders from this offering will be $10.83 per share (or $10.88 if the underwriter’s over-allotment option is exercised in full).
The following table illustrates the dilution to the public stockholders on a per share basis, assuming no value is attributed to the warrants included in the units or the private placement warrants:
|
|
|
Without Over-
allotment
|
|
|
With Over-
allotment
|
|
Public offering price
|
|
|
|
$
|
10.00
|
|
|
|
|
$
|
10.00
|
|
|
Net tangible book value before this offering
|
|
|
|
|
(0.07)
|
|
|
|
|
|
(0.06)
|
|
|
Decrease attributable to public shareholders
|
|
|
|
|
(10.77)
|
|
|
|
|
|
(10.83)
|
|
|
Increase attributable to public shareholders
|
|
|
|
|
10.00
|
|
|
|
|
|
10.00
|
|
|
Pro forma net tangible book value after this offering and the sale of the private placement warrants
|
|
|
|
|
(0.83)
|
|
|
|
|
|
(0.88)
|
|
|
Dilution to public stockholders and sale of private placement warrants
|
|
|
|
$
|
10.83
|
|
|
|
|
$
|
10.88
|
|
|
Percentage of dilution to public stockholders
|
|
|
|
|
108%
|
|
|
|
|
|
108%
|
|
|
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 $206,000,000 because holders of up to approximately 100.0% of our public shares may redeem their shares for a pro rata share of the aggregate amount then on deposit in the trust account at a per share redemption price equal to the amount in the trust account as set forth in our proxy solicitation or tender offer materials, as applicable (initially anticipated to be the aggregate amount held in trust two days prior to the commencement of our stockholders’ meeting or tender offer, including interest earned on the funds held in the trust account and not previously released to pay taxes of the company or Opco), divided by the number of shares of then outstanding public shares and Class A Units of Opco (other than those held by TGR).
The following table sets forth information with respect to our initial stockholders and the public stockholders:
|
|
|
Shares Issued
|
|
|
Total Consideration
|
|
|
Average Price
per Share
|
|
|
|
|
Number
|
|
|
Percentage
|
|
|
Amount
|
|
|
Percentage
|
|
Initial Stockholders(1)
|
|
|
|
|
5,000,100
|
|
|
|
|
|
20.00%
|
|
|
|
|
$
|
25,000
|
|
|
|
|
|
0.01%
|
|
|
|
|
$
|
0.005
|
|
|
Public Stockholders
|
|
|
|
|
20,002,500
|
|
|
|
|
|
80.00%
|
|
|
|
|
|
200,000,000
|
|
|
|
|
|
99.99%
|
|
|
|
|
$
|
10.000
|
|
|
|
|
|
|
|
25,002,600
|
|
|
|
|
|
100.00%
|
|
|
|
|
$
|
200,025,000
|
|
|
|
|
|
100.00%
|
|
|
|
|
|
|
|
|
(1)
Assumes no exercise of the underwriter’s over-allotment option and the corresponding forfeiture of an aggregate of 750,000 founder shares held by our sponsor.
The pro forma net tangible book value per share after the offering is calculated as follows:
|
|
|
Without Over-
allotment
|
|
|
With Over-
allotment
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net tangible book deficit before this offering
|
|
|
|
$
|
(325,300)
|
|
|
|
|
$
|
(325,300)
|
|
|
Net proceeds from this offering and sale of private placement warrants
|
|
|
|
|
209,150,000
|
|
|
|
|
|
240,185,000
|
|
|
Plus: Offering cost paid in advance, excluded from net tangible book value
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
Less: deferred underwriting commissions
|
|
|
|
|
(7,000,000)
|
|
|
|
|
|
(8,050,000)
|
|
|
Less: Proceeds held in trust subject to redemption
|
|
|
|
|
(206,000,000)
|
|
|
|
|
|
(236,900,000)
|
|
|
|
|
|
|
$
|
(4,175,300)
|
|
|
|
|
$
|
(5,090,300)
|
|
|
Denominator
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B common stock outstanding prior to this offering
|
|
|
|
|
5,750,100
|
|
|
|
|
|
5,750,100
|
|
|
Class B common stock forfeited if over allotment is not exercised
|
|
|
|
|
(750,000)
|
|
|
|
|
|
—
|
|
|
Class A common stock outstanding prior to this offering
|
|
|
|
|
2,500
|
|
|
|
|
|
2,500
|
|
|
Class A common stock included in the units offered
|
|
|
|
|
20,000,000
|
|
|
|
|
|
23,000,000
|
|
|
Less: shares subject to redemption
|
|
|
|
|
(20,000,000)
|
|
|
|
|
|
(23,000,000)
|
|
|
|
|
|
|
|
5,002,600
|
|
|
|
|
|
5,752,600
|
|
|
(1)
Expenses applied against gross proceeds include offering expenses of $1,500,000 and 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). See “Use of Proceeds.”
(2)
If we seek stockholder approval of our initial business combination and we do not conduct redemptions or repurchases in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase shares or public 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 shares of our Class A common stock subject to redemption will be reduced by the amount of any such purchases, increasing the pro forma net tangible book value per share. See “Proposed Business—Effecting Our Initial Business Combination—Permitted Purchases of Our Securities.”
Capitalization
The following table sets forth our capitalization at September 30, 2021, and as adjusted to give effect to the sale of our units in this offering and the sale of the private placement warrants and the application of the estimated net proceeds derived from the sale of such securities, assuming no exercise by the underwriter of its over-allotment option:
|
|
|
Actual
|
|
|
As Adjusted(1)
|
|
Note payable to related party(2)
|
|
|
|
$
|
277,057
|
|
|
|
|
$
|
—
|
|
|
Deferred underwriting commissions
|
|
|
|
|
—
|
|
|
|
|
|
7,000,000
|
|
|
Class A common stock subject to possible redemption, 0 and 20,000,000 shares actual and adjusted, respectively(3)
|
|
|
|
|
—
|
|
|
|
|
|
206,000,000
|
|
|
Preferred stock, $0.0001 par value, 1,000,000 shares authorized; no shares
issued or outstanding, actual and as adjusted
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
Class A common stock, $0.0001 par value, 225,000,000 shares authorized;
2,500 shares issued and outstanding, actual; 2,500 shares issued and
outstanding (excluding 20,000,000 shares subject to redemption), as
adjusted
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
Class B common stock, $0.0001 par value, 25,000,000 shares authorized; 5,750,100 and 5,000,100 shares issued and outstanding, actual and as adjusted, respectively
|
|
|
|
|
575
|
|
|
|
|
|
500
|
|
|
Additional paid-in capital
|
|
|
|
|
24,425
|
|
|
|
|
|
12,750,000
|
|
|
Accumulated deficit
|
|
|
|
|
(337,789)
|
|
|
|
|
|
16,561,989
|
|
|
Total TGR equity (deficit)
|
|
|
|
|
(312,789)
|
|
|
|
|
|
(3,811,489)
|
|
|
Non-controlling interest in OpCo
|
|
|
|
|
(12,511)
|
|
|
|
|
|
(12,511)
|
|
|
Total stockholders’ equity (deficit)
|
|
|
|
|
(325,300)
|
|
|
|
|
|
(3,824,000)
|
|
|
Total capitalization
|
|
|
|
|
(48,243)
|
|
|
|
|
|
209,176,000
|
|
|
(1)
Assumes the full forfeiture of founder shares such that after the proposed offering founder shares account for 20% of the sum of the public shares and founder shares. The proceeds from the sale of such shares will not be deposited into the trust account, and the shares will not be eligible for redemption from the trust account.
(2)
Our sponsor loaned us $300,000 in the aggregate under an unsecured promissory note to be used for a portion of the expenses of this offering. As of September 30, 2021, we had borrowed $277,057 under the note. The “as adjusted” information gives effect to the repayment of any loans made under this note out of the proceeds from this offering and a portion of the proceeds from the sale of the private placement warrants.
(3)
Upon the completion of our initial business combination, we will provide our public stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account and not previously released to pay taxes of the company or Opco, divided by the number of then outstanding public shares and Class A Units of Opco (other than those held by TGR), 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. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by changes against additional paid-in capital and accumulated deficit.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview
We are a newly incorporated blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We have not selected any business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the sale of the private placement warrants, our capital stock, debt or a combination of cash, stock and debt.
The issuance of additional Opco Units (and corresponding shares of our Class B common stock) and shares of Class A common stock or preferred stock:
➤
may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the founder shares resulted in an increase in the number of Class A Units of Opco into which the Class B Units of Opco will convert;
➤
may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;
➤
could cause a change of control if a substantial number of shares of our common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
➤
may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; and
➤
may adversely affect prevailing market prices for our units, Class A common stock and/or warrants.
Similarly, if we issue debt securities or otherwise incur significant debt to bank or other lenders or the owners of a target, it could result in:
➤
default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
➤
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
➤
our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
➤
our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;
➤
our inability to pay dividends on our common stock;
➤
using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
➤
limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
➤
increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
➤
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.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
As indicated in the accompanying financial statements, at September 30, 2021, we had cash of $26,000 and deferred offering costs of $577,873. 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 expenses as we conduct due diligence on prospective business combination candidates. 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 completion of this offering through receipt of $25,000 in connection with our sponsor’s initial investment and a loan to us of $300,000 by our sponsor under an unsecured promissory note. We estimate that the net proceeds from (i) the sale of the units in this offering, after deducting offering expenses of approximately $1,500,000, underwriting commissions of $4,000,000 ($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 warrants for a purchase price of $12,750,000 (or approximately $14,100,000 if the over-allotment option is exercised in full), will be $209,150,000 (or $240,185,000 if the underwriter’s over-allotment option is exercised in full). Of this amount, $206,000,000 (or $236,900,000 if the underwriter’s over-allotment option is exercised in full) will be held in the trust account, of which $7,000,000 (or $8,050,000 if the underwriter’s over-allotment option is exercised in full) may be required to pay deferred underwriting commissions. 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. We will disclose in each quarterly and annual report filed with the SEC prior to our initial business combination whether the proceeds deposited in the trust account are invested in U.S. government treasury obligations or money market funds or a combination thereof. The remaining approximately $3,150,000 (including $1,900,000 in expenses the underwriter has agreed to reimburse us) will not be held in the trust account. In the event that our offering expenses exceed our estimate of $1,500,000, we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $1,500,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.
We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (less taxes payable and deferred underwriting commissions) to complete our initial business combination. We may withdraw interest to pay taxes. We estimate our annual franchise tax obligations for the taxable years beginning after the completion of this offering, based on the number of shares of our common stock authorized and outstanding after the completion of this offering, to be $200,000, which is the maximum per annum amount of annual franchise taxes payable by us as a Delaware corporation. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. Based on current interest rates, we expect that the interest earned on the trust account, net of income taxes, will be sufficient to pay Delaware franchise taxes. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
After the closing of this offering, we will have available to us the approximately $3,150,000 of proceeds (including $1,900,000 in expenses the underwriter has agreed to reimburse us) held outside the trust account. We will use these funds primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a business combination.
We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business prior to our initial business combination. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
We expect our primary liquidity requirements during that period to include approximately $550,000 for legal, accounting, due diligence, travel and other expenses in connection with any business combinations; $100,000 for legal and accounting fees related to regulatory reporting requirements; $700,000 for administrative and support services; $240,000 in cash compensation for our independent directors; $500,000 for payment of directors and officers liability insurance premiums; $200,000 in fees for the services of our capital markets advisor, TPH; $100,000 as a reserve for liquidation expenses; and approximately $760,000 for working capital to cover miscellaneous expenses (including franchise taxes net of anticipated interest income).
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 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 do not complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account.
Controls and Procedures
We are not currently required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act. We will be required to comply with the internal control requirements of the
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Sarbanes-Oxley Act for the fiscal year ending December 31, 2022. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer would we be required to comply with the independent registered public accounting firm attestation requirement. Further, for as long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirement.
Prior to the closing of this offering, we have not completed an assessment, nor has our independent registered public accounting firm 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 business combination may have internal controls that need improvement in areas such as:
➤
staffing for financial, accounting and external reporting areas, including segregation of duties;
➤
reconciliation of accounts;
➤
proper recording of expenses and liabilities in the period to which they relate;
➤
evidence of internal review and approval of accounting transactions;
➤
documentation of processes, assumptions and conclusions underlying significant estimates; and
➤
documentation of accounting policies and procedures.
Because it will take time, management involvement and perhaps outside resources to determine what internal control improvements are necessary for us to meet regulatory requirements and market expectations for our operation of a target business, we may incur significant expenses in meeting our public reporting responsibilities, particularly in the areas of designing, enhancing, or remediating internal and disclosure controls. Doing so effectively may also take longer than we expect, thus increasing our exposure to financial fraud or erroneous financing reporting.
Once our management’s report on internal controls is complete, we will retain our independent registered public accounting firm to audit and render an opinion on such report when required by Section 404. The independent registered public accounting firm 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 portion of proceeds from the sale of the private placement warrants held in the trust account will be invested in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.
Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results
As of September 30, 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 conducted no operations to date.
Related Party Transactions
In May 2021, our sponsor received 5,750,000 Class B Units of Opco for no consideration and purchased 5,750,000 corresponding shares of our Class B common stock, 2,500 shares of our Class A common
Management’s Discussion and Analysis of Financial Condition and Results of Operations
stock and 100 Class A Units of Opco and 100 corresponding shares of our Class B common stock for an aggregate of $25,000.
Commencing on the date that our securities are first listed on the NYSE, we have agreed to pay KRP and certain of its subsidiaries a total of $25,000 per month for administrative and support services. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.
We have agreed, pursuant to the administrative services agreement with our sponsor relating to the monthly reimbursement for office space and administrative services described above, that we will indemnify our sponsor from any claims arising out of or relating to this offering or the company’s or Opco’s operations or conduct of the company’s or Opco’s business or any claim against our sponsor alleging any expressed or implied management or endorsement by our sponsor of any of the company’s or Opco’s activities or any express or implied association between our sponsor and the company or Opco or any of their affiliates, which agreement will provide that the indemnified parties cannot access the funds held in our trust account.
Our sponsor, officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
Prior to the consummation of this offering, our sponsor loaned us $300,000 to be used for a portion of the expenses of this offering. These loans are non-interest bearing, unsecured and are due at the closing of this offering. The loan will be repaid upon the closing of this offering as part of the estimated $1,500,000 of offering expenses.
In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. Such 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 or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
Our sponsor has committed to purchase an aggregate of 12,750,000 private placement warrants (or 14,100,000 private placement warrants if the underwriter’s over-allotment option is exercised in full) at a price of $1.00 per warrant ($12,750,000 in the aggregate, or $14,100,000 if the underwriter’s over-allotment option is exercised in full) in a private placement that will occur simultaneously with the closing of this offering. Each private placement warrant is exercisable to purchase for $11.50 one share of our Class A common stock. Our sponsor will be permitted to transfer the private placement warrants held by it to certain permitted transferees, including their officers and directors and other persons or entities affiliated with or related to them, but the transferees receiving such securities will be subject to the same agreements with respect to such securities as the sponsor. Otherwise, these warrants will not, subject to certain limited exceptions, be transferable, assignable or saleable until 30 days after the completion of our business combination. Otherwise, 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, including as to exercise price, exercisability and exercise period.
Pursuant to a registration rights agreement we will enter into with our initial stockholders on or prior to the closing of this offering, we may be required to register certain securities for sale under the Securities Act.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
These holders and holders of warrants issued upon conversion of working capital loans, if any, are entitled under the registration rights agreement to make up to three demands that we register certain of our securities held by them for sale under the Securities Act and to have the securities covered thereby registered for resale pursuant to Rule 415 under the Securities Act. In addition, these holders have the right to include their securities in other registration statements filed by us. We will bear the costs and expenses of registering these securities.
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 independent registered public accounting firm’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the independent registered public accounting firm’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of this offering or until we are no longer an “emerging growth company,” whichever is earlier.
Proposed Business
Overview
We are a blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or assets, which we refer to throughout this prospectus as our “initial business combination.” We have not selected any business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to our initial business combination.
Although we may pursue an initial business combination in any industry, we intend to capitalize on our management team’s core competencies to focus our search in the energy and natural resources industry in North America. Our management team has extensive experience in identifying and executing large, complex transactions in the energy and natural resources industry, and significant hands-on experience working with private companies in preparing for and executing an initial public offering. Our team has a history of being active owners and directors by working closely with companies to create value in the public markets.
In 2017, as a part of its IPO process, KRP, which is the ultimate parent of our sponsor, negotiated the combination of assets and entities from 54 contributing parties to create the KRP public entity. We believe that this ability to form partnerships with private owners to build an entity of scale that is preferred by the public markets differentiates us as we look at potential business combinations. Our team is knowledgeable and experienced in public and private M&A dynamics across a range of sizes, and adept at using an Up-C structure such as ours to acquire assets and businesses. Our sponsor has a proven track record of value accretive M&A using equity as acquisition currency and of returning capital to shareholders through a variable dividend. KRP has returned ~34% of its IPO unit price via cash dividends in fewer than five years.
TGR will also benefit from our management team’s extensive market knowledge across the United States. With KRP’s mineral and royalty interests spanning 28 states and in every major onshore basin in the U.S. Lower 48, our team has insight on every corner of the market and expertise in technical evaluation of comparable oil and gas assets. This broad exposure and basin-agnostic approach has allowed our team to focus on value maximization rather than basin concentration. Furthermore, we believe that our relationship with our sponsor will provide expanded access to deal flow and potential targets. Our sponsor’s long history in the minerals and royalties space has allowed members of our team to develop extensive relationships with both exploration and production companies and individual land / mineral owners, which will lead to strong support for a yield-oriented consolidation vehicle with value uplift.
We believe that our management team is well positioned to effectuate a successful business combination and provide attractive risk-adjusted returns in the marketplace. Our management believes that its ability to identify and implement value creation initiatives differentiates its acquisition strategy from others in the market.
Our Management Team
We believe that the experience of our management team will allow us to source, identify and execute an attractive transaction for our stockholders. Our management team is led by Zachary Lunn as President and Chief Executive Officer and Blayne Rhynsburger as Controller. See “Management—Directors, Director Nominees and Executive Officers.”
Market Opportunity
Our team’s extensive expertise will allow us to source and evaluate targets in the energy and natural resources sector, a sector that we believe is attractive for numerous reasons.
The target market is expansive, as the sector is populated with many stranded assets across the United States, and there is currently no natural consolidator of longer-lived, mature, onshore assets. There is also limited liquidity for existing owners of non-core upstream assets that TGR would target for consolidation,
leaving many owners with limited opportunities to either further develop or monetize their assets. We also believe that many operators will continue to seek to divest assets, primarily as a result of limited traditional capital markets access available to them and a general transition to capital discipline rather than growth strategies. Moreover, the bar has been raised for energy investing, creating room only for seasoned management teams with an efficient cost structure. Further, many assets are not of significant scale and fail to attract strong and well-capitalized buyers.
These targets also invite a limited buyer universe, as buyers typically do not focus on out-of-favor basins or out-of-favor assets within popular basins. We believe these targets also present an opportunity for value accretion from consolidation and professional operations brought by seasoned operators. Therefore, even targets that demonstrate shallow declines, predictable production and associated cash flow profile could be overlooked and undercapitalized.
We believe this confluence of overlooked, illiquid and undercapitalized assets presents a unique opportunity for a yield-oriented consolidation vehicle with an experienced management team that can maximize free cash flow potential. We believe that substantial synergies are possible when these assets are consolidated, and we believe that our management team is well-equipped to take advantage of these potential synergies due to its extensive experience within the industry.
Our Business Strategy
While our efforts to identify a prospective target business will not necessarily be limited to a particular industry, sector or region, we intend to capitalize on our relationships, knowledge, experience and expertise in the energy and natural resources industry to identify, acquire and, after our initial business combination, build a company in the energy and natural resources industry in North America that complements the experience of our management team and can benefit from its operational expertise and executive oversight.
Our acquisition will leverage our team’s network of potential proprietary and public transaction sources where we believe a combination of our relationships, knowledge and experience in the energy and natural resources industry could effect a positive transformation or augmentation of existing businesses or properties to improve their overall value proposition. Our goal is to form a focused business with multiple competitive advantages and the potential to generate cash flow in excess of its capital. We would expect to grow the business over time, both organically and through acquisitions, with a focus on consistently achieving attractive returns on capital and maintaining conservative balance sheet metrics.
Our management team is deeply familiar with the trends of our target industries and brings an investing approach that offers multiple competitive advantages in sourcing, evaluating and executing on opportunities, including:
➤
Stockholder Centric: TGR is intended to be a yield vehicle with the goal of maximizing free cash flow to stockholders. In order to achieve this goal, we will focus on mature, shallow decline assets with low reinvestment rates in order to seek to provide stability in both volumes and cashflows. We will also target assets with potential for value uplift through operational improvements, increasing cash flow potential.
➤
Consolidation Vehicle within the Upstream Space: If our team determines to acquire upstream oil and gas businesses or assets, TGR is expected to provide a vehicle by which it could consolidate previously stranded and fragmented working interest assets that have suffered from a lack of liquidity, thereby creating an avenue by which private equity sponsors and private companies could seek to optimize their investments in the upstream space.
➤
Differentiated Target Sourcing: Our team plans to consider targets in both traditionally favored basins as well as non-core assets in older basins that suffer from a lack of operational attention. These traditionally non-core assets in older basins are likely to have lower decline rates and opportunities for value uplift from management’s operational abilities. We have a strong industry network that we will utilize in order to effectively and efficiently source these targets, and we intend to focus our search in states with regulatory climates favorable to the energy and natural resources industry.
➤
Long-Term Strategy: Our management team will be involved in growing and improving the business over time organically and through pursuing accretive and complementary acquisitions.
➤
Conservative Balance Sheet: We intend to focus on maintaining low net leverage and conservative balance sheet metrics as we seek to consistently achieve attractive returns on capital.
➤
Advantaged Business Structure: Our Up-C structure is an advantage with potential sellers due to incentives not offered through a traditional publicly traded corporation. We believe that our Up-C structure provides us with significant advantages as it provides flexibility in structuring a variety of business combinations, including the flexibility to retain an Up-C structure following the business combination or restructure as a result of the business combination, depending on the nature and structure of the target and the efficiency and administrability of retaining our post-offering structure after the business combination.
Acquisition Criteria
Consistent with our business strategy, we have identified the following general criteria and guidelines, which we believe are important in evaluating prospective target businesses. We will use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial business combination with a target that does not meet these criteria and guidelines. We plan to acquire upstream assets in the U.S. Lower 48 that possess the following characteristics:
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Mature, Low-decline, Long-lived Assets: We seek to acquire assets with a stable production history and shallow decline profile. These assets will typically have predictable production profiles and low capital intensity.
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Generation of Stable Free Cash Flow: We seek to acquire mature, shallow decline assets that generate free cash flow and are conducive to yield vehicle.
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Benefits from Our Talented and Incentivized Management Team: We seek to acquire a business or asset whose performance and cash flow generation can be improved by the deep industry expertise of our management and sponsor.
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Unrecognized or Underutilized Value: We seek to acquire a business or asset that exhibits unrecognized or underutilized value that would benefit from management attention and expertise, capital deployment and synergies with future complementary acquisitions.
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Subject to an Inefficient Capital Structure: We seek to acquire a business that has an inefficient capital structure or offers the potential to improve the efficiency of the capital structure.
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Benefit from a Public Currency and Access to Public Equity Markets: We seek to provide sellers access to the public equity markets that will allow the target company to utilize additional forms of capital, enhancing its ability to pursue accretive acquisitions, high-return capital projects, and/or strengthen its balance sheet.
These criteria and guidelines are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general criteria and guidelines, as well as other considerations, factors and criteria deemed relevant by our management in effecting our initial business combination consistent with our business objectives. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our shareholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of tender offer documents or proxy solicitation materials that we would file with the SEC.
Our Acquisition Process
In evaluating a prospective target business, we expect to conduct a thorough due diligence review which may encompass, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial, operational, legal and other information that will be made available to us.
We will leverage the vast experience of our management team and Board to rigorously evaluate the asset’s technical merits and relative risk return profile. Acquisition evaluations will benefit from an extensive expertise in technical evaluation and deep industry connectivity which we believe will result in a robust deal pipeline.
Presently, we do not have specific targets with which we plan to pursue an initial business combination. Our officers and directors have not had discussions with any potential targets wherein they have directly or indirectly proposed a future business combination with TGR.
Certain members of our management team will indirectly own our securities following this offering, and accordingly, they may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.
The other members of our management team and our sponsor and KRP are from time to time made aware of potential business opportunities, one or more of which we may desire to pursue, for a business combination, but we have not selected any business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us.
As described under “Proposed Business—Conflicts of Interest” and “Management—Conflicts of Interest,” each of our officers and directors has, and any of them in the future may have, additional fiduciary or contractual obligations to one or more other entities pursuant to which such officer or director may be required to present a business combination opportunity to such entities before he or she presents such opportunity to us. Also, none of KRP, our sponsor or any of our directors and officers is prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity to which he or she has then-current fiduciary or contractual obligations to present such opportunity to another entity, he or she may only present such opportunity to us if such other entity rejects the opportunity. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company; such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue; and such person has no fiduciary or contractual obligation to present the opportunity to any other person or entity. Additionally, none of KRP, our sponsor or any other entity currently has any obligation or duty to provide us with any potential business combination opportunity.
In addition, KRP will adopt a policy pursuant to which any business combination opportunity that is a corporate opportunity of KRP that may also be a business combination opportunity for our company will first be presented to the conflicts committee of the board of directors of KRP, which is made up solely of independent directors, for consideration as to whether KRP desires to pursue such business combination opportunity as a direct investment or to present such opportunity to our company for consideration. The members of the conflicts committee of the board of directors of KRP will not serve in any fiduciary capacity at our company.
For more information, including a list of our executive officers and directors and entities for which a conflict of interest may or does exist between such officers and the company, see “Proposed Business—Conflicts of Interest” and “Management—Conflicts of Interest.”
We do not believe, however, that the fiduciary, contractual or other obligations or duties of our officers or directors or the KRP policy described above will materially affect our ability to complete our initial business combination.
We may pursue an acquisition opportunity jointly with our sponsor, or one or more affiliates, including KRP or its affiliates, which we refer to as an “Affiliated Joint Acquisition.” Any such parties may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the acquisition by selling assets to such parties or issuing to such parties a class of equity or equity-linked securities. Our sponsor and its affiliates have no obligation to make any such investment, and may compete with us for potential business combinations. Any such issuance of equity or equity-linked securities would, on a fully diluted basis, reduce the percentage ownership of our then-existing stockholders. Notwithstanding the foregoing, pursuant to the anti-dilution provisions of our
founder shares, issuances or deemed issuances of our Class A common stock or equity-linked securities would result in an adjustment to the number of Class A Units of Opco into which the Class B Units of Opco will convert (unless the holders of a majority of the outstanding founder shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that, after all founder shares have been exchanged for shares of our Class A common stock, the aggregate number of shares of our Class A common stock received by holders in exchange for founder shares would equal 20% of the sum of the total outstanding shares of our Class A common stock upon the completion of this offering (excluding the sponsor shares and any shares issuable upon exercise of any warrants) plus all shares of our Class A common stock and equity-linked securities issued or deemed issued in connection with the business combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the business combination).
In connection with an Affiliated Joint Acquisition, we may raise additional proceeds to consummate our initial business combination by selling a royalty interest in the underlying assets of the target business to KRP or its affiliates. A royalty interest is an interest that gives an owner the right to a portion of the resources or revenues derived from the underlying working interest assets. We expect that we will consider a sale of royalty interests to KRP or its affiliates if we seek to acquire a company that owns working interest oil and gas assets. However, KRP and its affiliates have no obligation to purchase any such royalty interest or make any other additional investment in us in connection with our initial business combination. Working interest oil and gas companies pay royalties (and other similar fees) to holders of mineral and royalty interests as oil and gas is produced from their properties. As such, if the post-business combination company sold a royalty interest to KRP or its affiliates, the net amount of revenues ultimately received by the post-business combination company would be reduced by the amount of any royalties paid to KRP, its affiliates and any other holders of such interests. Holders of royalty interests do not have to share the burden of any costs of development of the underlying assets, which means that the post-business combination company’s costs of development would not be reduced by the sale of a royalty interest to KRP or its affiliates.
We may elect to offer to sell a royalty interest to KRP or its affiliates to, among other reasons, (i) increase the amount of committed capital available to consummate our initial business combination, including in the event that the market for issuing securities to unaffiliated investors in a private investment in public equity, or PIPE, is challenging or difficult to consummate at the desired issue price, (ii) reduce dilution in connection with raising equity capital for our initial business combination, and (iii) demonstrate synergies among KRP and/or its affiliates and the target business, especially in light of KRP’s knowledge and expertise in the oil and gas sector, its royalty interest ownership and the industry network of KRP’s management team and board of directors. We believe that our relationship with KRP provides us with a competitive advantage compared to other special purpose acquisition companies in the event we seek to consummate our initial business combination with a working interest oil and gas company.
Any decision regarding the sale of a royalty interest to KRP or its affiliates will be subject to our related party transaction policy that will be adopted in connection with this offering and will be subject to review and approval by the audit committee of our board of directors. Please see “Certain relationships and related party transactions—Related party policy.”
You should not rely on the historical record or performance of KRP, Mr. R. Ravnaas or other members of our management team as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. See “Risk Factors—General Risk Factors—Past performance by KRP, Mr. Ravnaas and other members of our management team may not be indicative of future performance of an investment in us.”
Initial Business Combination
The NYSE rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the net assets held in trust (net of amounts disbursed to management for working capital purposes and excluding the amount of any deferred underwriting commissions held in trust) at the time of the agreement to enter into the initial business combination. Our Board will make the determination as to the fair market value of a target business or businesses. If our Board is not able to independently determine the fair market value of a target business or businesses, we will obtain an opinion
from an independent investment banking firm that is a member of FINRA, or an independent accounting 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 or there is a significant amount of uncertainty as to the value of the company’s assets or prospects.
We anticipate structuring our initial business combination either (i) in such a way so that we will control 100% of the equity interests or assets of the target business or businesses or (ii) in such a way so that we control less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders or for other reasons, including an Affiliated Joint Acquisition as described above. However, we will only complete a business combination if we control 50% or more of the outstanding voting securities of the target or otherwise are not required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act. Even if we control 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares 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 stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If we control less than 100% of the equity interests or assets of a target business or businesses, the portion of such business or businesses that is controlled 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 transactions and we will treat the target businesses together as the initial business combination for seeking stockholder approval or for purposes of a tender offer, as applicable. Notwithstanding the foregoing, if we are not then listed on the NYSE for whatever reason, we would no longer be required to meet the foregoing 80% of net assets test.
Prior to the effectiveness of the registration statement of which this prospectus forms a part, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the completion of our initial business combination.
Status as a Public Company
We believe our structure will make us an attractive business combination partner to target businesses. As an existing public company, we offer a target business an alternative to the traditional initial public offering through a merger or other business combination with us. In a business combination transaction with us, the owners of the target business may, for example, exchange their shares of stock, shares or other equity interests in the target business for shares of our Class A common stock (or shares of a new holding company), Opco Units (and corresponding shares of our Class B common stock) or for a combination of shares of our Class A common stock, Opco Units (and corresponding shares of our Class B common stock) and cash, allowing us to tailor the consideration to the specific needs of the sellers. Although there are various costs and obligations associated with being a public company, we believe target businesses will find this method a more certain and cost effective method to becoming a public company than the typical initial public offering. 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 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 could 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 stockholders’ interests and the ability to use its equity 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 members’ backgrounds will make us an attractive business partner, some potential target businesses may view our status as a blank check company, such as our lack of an operating history and our ability to seek stockholder approval of any proposed initial business combination, negatively.
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion (as adjusted for inflation pursuant to SEC rules from time to time), or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A common stock that is held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
Financial Position
With funds available for a business combination initially in the amount of up to $199,000,000, after payment of $7,000,000 of deferred underwriting commissions (or up to $228,850,000 after payment of $8,050,000 of deferred underwriting commissions if the underwriter’s over-allotment option is exercised in full), in each case before fees and expenses associated with our initial business combination, 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 or leverage ratio. Because we are able to complete our business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third party financing and there can be no assurance it will be available to us.
Effecting our Initial Business Combination
We are not presently engaged in, and we will not engage in, any operations for an indefinite period of time following this offering. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the private placement warrants, our capital stock, debt or a combination of the foregoing. We may seek to complete our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our business
combination or used for redemptions of purchases of our Class A common stock, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions with any business combination target. Additionally, we have not engaged or retained any agent or other representative to 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. In the case of an initial business combination funded with assets other than the trust account assets, our tender offer documents or proxy materials disclosing the business combination would disclose the terms of the financing and, only if required by applicable law, we would seek stockholder approval of such financing. 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
We anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment market participants, private equity groups, investment banking firms, consultants, accounting firms and large business enterprises. Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us through calls or mailings. These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since 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 that they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions. In addition, we expect to receive a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a result of the track record and business relationships of our officers and directors. While we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. We will engage a finder only to the extent our management determines that the use of a finder may bring opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our best interest to pursue. Payment of 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. We have agreed to pay our sponsor a total of $25,000 per month for administrative and support services 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-transaction company following our initial business combination. In addition, we have agreed, pursuant to the administrative services agreement with our sponsor relating to the monthly reimbursement for office
space and administrative services described above, that we will indemnify our sponsor from any claims arising out of or relating to this offering or the company’s or Opco’s operations or conduct of the company’s or Opco’s business or any claim against our sponsor alleging any expressed or implied management or endorsement by our sponsor of any of the company’s or Opco’s activities or any express or implied association between our sponsor and the company or Opco or any of their affiliates, which agreement will provide that the indemnified parties cannot access the funds held in our trust account. The presence or absence of any such fees or arrangements will not be used as a criterion in our selection process of an acquisition candidate.
We are not prohibited from pursuing an initial business combination with a company that is affiliated with KRP, our sponsor, executive officers or directors, or completing the business combination through a joint venture or other form of shared ownership with our sponsor, executive officers or directors. In the event we seek to complete an initial business combination with a target that is affiliated (as defined in our amended and restated certificate of incorporation) with our sponsor, executive officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm which is a member of FINRA or another independent entity that commonly renders valuation opinions stating that the consideration to be paid by us in such an initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
As more fully discussed in 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 pre-existing fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us. Our officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us. We may pursue an Affiliated Joint Acquisition opportunity with an entity to which an officer or director has a fiduciary or contractual obligation. Any such entity may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the acquisition by issuing to such entity a class of equity or equity-linked securities.
Selection of a Target Business and Structuring of our Initial Business Combination
The NYSE rules require that our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the net assets held in trust (net of amounts disbursed to management for working capital purposes and excluding the amount of any deferred underwriting commissions held in trust) at the time of the agreement to enter into the initial business combination. The fair market value of the target or targets will be determined by our Board based upon one or more standards generally accepted by the financial community, such as discounted cash flow valuation or value of comparable businesses. If our Board 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 that is a member of FINRA or from an independent accounting firm with respect to the satisfaction of such criteria. Subject to this requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will not be permitted to effectuate our initial business combination solely with another blank check company or a similar company with nominal operations.
In any case, we will only complete an initial business combination in which we control 50% or more of the outstanding voting securities of the target or otherwise are not required to register as an investment company under the Investment Company Act. If we control less than 100% of the equity interests or assets of a target business or businesses, the portion of such business or businesses that are controlled is what will be valued for purposes of the NYSE’s 80% of net assets test. There is no basis for investors in this offering to evaluate the possible merits or risks of any target business with which we may ultimately complete our business combination.
To the extent we effect our 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.
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 applicable, as well as a review of financial, operational, legal and other information which will be made available to us. If we determine to move forward with a particular target, we will proceed to structure and negotiate the terms of the business combination transaction.
The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of, and negotiation with, a prospective target business with which our business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination. The company will not pay any consulting fees to members of our management team, or any of their respective affiliates, for services rendered to or in connection with our initial business combination.
Lack of Business Diversification
For an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. In addition, we intend to focus our search for an initial business combination in a single industry. By completing our 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 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 business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our business combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations of the particular target business.
We cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination.
Following a business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Stockholders May Not Have the Ability to Approve our Initial Business Combination
We may conduct redemptions or repurchases without a stockholder vote pursuant to the tender offer rules of the SEC, subject to the provisions of our amended and restated certificate of incorporation. However, we will seek stockholder approval if it is required by law or applicable stock exchange rule, or we may decide to seek stockholder approval for business or other legal reasons. Presented in the table below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder approval is currently required under Delaware law for each such transaction.
Type of Transaction
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Whether
Stockholder
Approval is
Required
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Purchase of assets
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No
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Purchase of stock of target not involving a merger with the company
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No
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Merger of target into a subsidiary of the company
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No
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Merger of the company with a target
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Yes
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Under the NYSE’s listing rules, stockholder approval would be required for our initial business combination if, for example:
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we issue shares of our Class A common stock, or securities convertible or exercisable for Class A common stock (including Opco Units (and corresponding shares of our Class B common stock), that will be equal to or in excess of 20% of the number of shares of our common stock or voting power then outstanding;
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any of our directors, officers or substantial security holders (as defined by the NYSE rules) has a 5% or greater interest, directly or indirectly, in the target business or assets to be acquired and if the number of shares of our Class A common stock to be issued, or if the number of shares of our Class A common stock into which the securities may be convertible or exercisable, exceeds either (a) 1% of the number of shares of common stock or 1% of the voting power outstanding before the issuance in the case of any of our directors or officers (b) 5% of the number of shares of common stock or 5% of the voting power outstanding before the issuance in the case of any substantial security holders; or
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the issuance or potential issuance of shares of our Class A common stock or securities convertible or exercisable for Class A common stock (including Opco Units (and corresponding shares of our Class B common stock) will result in our undergoing a change of control.
Permitted Purchases of our Securities
If we seek stockholder approval of our initial business combination and we do not conduct redemptions or repurchases in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, or advisors or any of the related companies and their directors, officers and advisors may purchase public shares or public warrants or a combination thereof in privately negotiated transactions or in the open market, either prior to or following the completion of our initial business combination, although they are under no obligation or other duty to do so. There is no limit on the number of securities such persons may purchase, or any restriction on the price that they may pay. Any such price per share may be different than the amount per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. Additionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material non-public information), our sponsor, directors, officers, or advisors or any of the related companies and their directors, officers and advisors may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares. However, such persons have no current commitments, plans or intentions to engage in such purchases or other transactions and have not formulated any terms or conditions for any such purchases or other transactions. None of the funds in the trust account will be used to purchase public shares or public warrants in such transactions. Such persons will
be subject to restrictions in making any such purchases when they are in possession of any material non-public information or if such purchases are prohibited by Regulation M under the Exchange Act.
The purpose of any such transaction could be to (1) vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder approval of the initial business combination, (2) reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrantholders for approval in connection with our initial business combination or (3) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the consummation of our initial business combination, where it appears that such requirement would otherwise not be met. Any such transactions may result in the completion of our initial business combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our shares of Class A common stock or warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
There is no limit on the number of public shares and public warrants that our sponsor, directors, officers, advisors or any of their affiliates may purchase pursuant to the transactions described above.
Our sponsor, officers, directors and/or their affiliates anticipate that they may identify the stockholders with whom our sponsor, officers, directors or their affiliates may pursue privately negotiated purchases by either the stockholders contacting us directly or by our receipt of redemption requests submitted by stockholders (in the class of shares of our Class A common stock) following our mailing of proxy materials in connection with our initial business combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter into a private purchase, they would identify and contact only potential selling stockholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against our initial business combination, whether or not such stockholder has already submitted a proxy with respect to our initial business combination but only if such shares have not already been voted at the stockholder meeting related to our initial business combination. Our sponsor, officers, directors, advisors or any of their affiliates will select which stockholders to purchase shares from based on the negotiated price and number of shares and any other factors that they may deem relevant, and will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws.
Any purchases by our sponsor, officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our sponsor, officers, directors and/or their affiliates will not make purchases of common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.
Redemption Rights for Public Stockholders upon Completion of our Initial Business Combination
We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account and not previously released to pay taxes, divided by the number of then outstanding public shares and Class A Units of Opco (other than those held by TGR), subject to the limitations described herein. The amount in the trust account is initially anticipated to be approximately $10.30 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. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Pursuant to the Opco LLC Agreement and a letter agreement that our sponsor, officers and directors have entered into with us, they have agreed that any founder shares and sponsor shares held by them will not
be entitled to redemption rights, and they will waive any such redemption rights for any public shares held by them, in connection with the completion of our business combination. In connection with the redemption of any public shares, a corresponding number of Class A Units of Opco held by us will also be redeemed.
Limitations on Redemptions
Our amended and restated certificate of incorporation will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001. In addition, our proposed initial business combination may impose a minimum cash requirement for (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. In the event the aggregate cash consideration we would be required to pay for all shares of our Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares in connection with such initial business combination, and all shares of our Class A common stock submitted for redemption will be returned to the holders thereof.
Manner of Conducting Redemptions
We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either: (1) in connection with a stockholder meeting called to approve the business combination; or (2) by means of a tender offer. Except as required by Delaware law or stock exchange rule, the decision as to whether we will seek stockholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction. Asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation would typically require stockholder approval. We intend to conduct redemptions or repurchases without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by applicable law or stock exchange rule or we choose to seek stockholder approval for business or other reasons.
If we hold a stockholder 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 stockholder approval, we will complete our initial business combination only if a majority of the shares of our common stock voted are voted in favor of the business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting. Our initial stockholders will count toward this quorum and have agreed to vote their founder shares, sponsor shares and any public shares purchased during or after this offering in favor of our initial business combination. For purposes of seeking approval of the majority of our outstanding shares of common stock voted, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. As a result, in addition to our sponsor’s founder shares and sponsor shares, we would need 7,500,001, or 37.5% (assuming all outstanding shares are voted and the over-allotment option is not exercised), or 1,250,001, or 6.25% (assuming only the minimum number of shares representing a quorum are voted and the over-allotment option is not exercised), of the 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. We intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any such meeting, if required, at which a vote shall be taken to approve our initial business combination. These quorum and voting thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate our
initial business combination. Each public stockholder may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction or vote at all.
We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the proxy solicitation or tender offer materials mailed to such holders, or up to two business days prior to the initially scheduled vote on the proposal to approve the business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. We believe that this will allow our transfer agent to efficiently process any redemptions without the need for further communication or action from the redeeming public stockholders, which could delay redemptions and result in additional administrative cost. In addition, if we conduct redemptions in connection with a stockholder vote, we intend to require a public stockholder seeking redemption of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the scheduled vote in which the name of the beneficial owner of such shares is included. If the proposed business combination is not approved and we continue to search for a target business, we will promptly return any certificates delivered, or shares tendered electronically, by public stockholders who elected to redeem their shares.
If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation:
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conduct the redemptions or repurchases 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. Although we are not required to do so, we currently intend to comply with the substantive and procedural requirements of Regulation 14A in connection with any stockholder vote even if we are not able to maintain our NYSE listing or Exchange Act registration.
Upon the public announcement of our initial business combination, if we elect to conduct redemptions or repurchases pursuant to the tender offer rules, we and our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our Class A common stock in the open market, in order to comply with Rule 14e-5 under the Exchange Act.
In the event we conduct redemptions or repurchases pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than the number of public shares we are permitted to redeem. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination.
Limitation on Redemption upon Completion of our Initial Business Combination if we Seek Stockholder Approval
Notwithstanding the foregoing redemption rights, if we seek stockholder approval of our initial business combination and we do not conduct redemptions or repurchases in connection with our business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 20% of our Class A common stock, without our prior consent. We believe the restriction described above will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to redeem their shares as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 20% of our Class A common stock could threaten to exercise its redemption rights against a business combination if such holder’s shares are
not purchased by us, our sponsor or our management at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem to no more than 20% of our Class A common stock, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including all shares held by those stockholders that hold more than 20% of our Class A common stock) for or against our business combination.
Tendering Stock Certificates in Connection with a Tender Offer or Redemption Rights
Public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” will be required to either tender their certificates 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 up to two business days prior to the initially scheduled vote on the proposal to approve the business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using the Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option. In addition, if we conduct redemptions in connection with a stockholder vote, we intend to require a public stockholder seeking redemption of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the scheduled vote in which the name of the beneficial owner of such shares is included. 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. Accordingly, a public stockholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two days prior to the vote on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short period in which to exercise redemption rights, it is advisable for stockholders to use electronic delivery of their public shares.
There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker a fee of approximately $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.
The foregoing is different from the procedures used by many blank check companies. In order to perfect redemption rights in connection with their business combinations, many blank check companies would distribute proxy materials for the stockholders’ vote on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his or her redemption rights. After the business combination was approved, the company would contact such stockholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the stockholder then had an “option window” after the completion of the business combination during which he or she could monitor the price of the company’s stock in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open market before actually delivering his or her shares to the company for cancellation. As a result, the redemption rights, to which stockholders were aware they needed to commit before the stockholder meeting, would become “option” rights surviving past the completion of the business combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming holder’s election to redeem is irrevocable once the business combination is approved.
Any request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the tender offer materials or the date of the stockholder meeting set forth in our proxy materials, as applicable. 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 business combination.
If our initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.
If our initial proposed business combination is not completed, we may continue to try to complete a business combination with a different target until 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options).
EXTENSIONS OF TIME TO COMPLETE BUSINESS COMBINATION
If we anticipate that we may not be able to consummate our initial business combination within 15 months, the sponsor may cause us to extend the available time to consummate our initial business combination by three months. In order to exercise the extension option, our sponsor must deposit into the trust account $0.10 per public share (a total of $2,000,000, or $2,300,000 if the underwriters’ over-allotment option is exercised in full) on or prior to the date of the applicable deadline. The sponsor may exercise the extension option up to two times, allowing for up to an additional six months (for a total of 21 months) to complete an initial business combination. The sponsor or its affiliates or designees will receive a non-interest bearing, unsecured promissory note equal to the amount of any such deposit that will not be repaid in the event that we are unable to close a business combination unless there are funds available outside the trust account to do so. Such notes would either be paid upon consummation of our initial business combination or, at the sponsor’s discretion, converted upon consummation of our business combination into additional private placement warrants at a price of $1.00 per warrant. In the event that we receive notice from the sponsor five days prior to the applicable deadline of its intent to exercise an extension option, we intend to issue a press release announcing such intention to exercise the extension option at least three days prior to the applicable deadline. In addition, we intend to issue a press release the day after the applicable deadline announcing whether the funds were timely deposited. The sponsor and its affiliates or designees are not obligated to fund the trust account to extend the time for us to complete our initial business combination. Any notes issued pursuant to these loans would be in addition to any notes issued pursuant to working capital loans made to us.
Redemption of Public Shares and Liquidation if no Initial Business Combination
Our sponsor, executive officers and directors will agree that we will have only 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options) to complete our initial business combination. In the event that we receive notice from the sponsor five days prior to the applicable deadline of its intent to exercise an extension option, we intend to issue a press release announcing such intention to exercise the extension option at least three days prior to the applicable deadline. In addition, we intend to issue a press release the day after the applicable deadline announcing whether the funds were timely deposited. If we have not completed our initial business combination within such period, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less an amount required to satisfy taxes of the company and Opco and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares and Class A Units of Opco (other than those held by TGR), which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within such 15-month period (or 18-month or 21-month period, as applicable, if the sponsor exercises its extension options).
Pursuant to the Opco LLC Agreement and a letter agreement that our sponsor, officers and directors have entered into with us, they have agreed that any founder shares and sponsor shares held by them are subject to forfeiture, and thus will not be entitled to liquidating distributions from the trust account, and they will waive any such rights to liquidating distributions for any founder shares if we fail to complete our initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options). However, if our sponsor, officers or directors continue to own sponsor shares or acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares and the sponsor shares, if we fail to complete our initial business combination within the allotted 15-month time period (or 18-month or 21-month time period, as applicable, if the sponsor exercises its extension options).
Our sponsor, officers, directors and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), unless we provide our public stockholders with the opportunity to redeem their shares of our Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to pay taxes of the company or Opco, divided by the number of then outstanding public shares and Class A Units of Opco (other than those held by TGR). 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. 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. Pursuant to our amended and restated certificate of incorporation, such an amendment would need to be approved by the affirmative vote of the holders of at least 65% of all then outstanding shares of our common stock.
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 as part of the estimated $3,150,000 of cash held outside of the trust account (including $1,900,000 in expenses the underwriter has agreed to reimburse us), although we cannot assure you that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the trust account not required to pay taxes on interest income earned on the trust account balance, we may request the trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If we were to expend all of the net proceeds of this offering and the sale of the private placement warrants, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption amount received by stockholders upon our dissolution would be approximately $10.30 (or $10.40 or $10.50, if applicable). The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure you that the actual per-share redemption amount received by stockholders will not be substantially less than $10.30 (or $10.40 or $10.50, if applicable). Under Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made in full, as applicable, if there are sufficient assets. These claims must be paid or provided for before we make any distribution of our remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.
Although we will seek to have all vendors (other than our independent registered public accounting firm), service providers, prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held
in the trust account. If a third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will consider whether competitive alternatives are reasonably available to it and will only enter into an agreement with such third party if management believes that such third party’s engagement would be in the best interests of our company under the circumstances.
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. Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent public accountants) for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below (i) $10.30 per public share (or $10.40 or $10.50 per public share, if applicable) or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, except as to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) and except as to any claims under our indemnity of the underwriter of this offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor, which is a newly formed entity, has sufficient funds to satisfy its indemnity obligations, and we believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.30 per public share (or $10.40 or $10.50 per public share, if applicable). 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.
In the event that the proceeds in the trust account are reduced below (i) $10.30 per public share (or $10.40 or $10.50 per public share, if applicable) or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so if, for example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. We have not asked our sponsor to reserve for such indemnification obligations and we cannot assure you that our sponsor would be able to satisfy those obligations. 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 $10.30 per public share (or $10.40 or $10.50 per public share, if applicable).
We will seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable as to any claims under our indemnity of the underwriter of this offering against certain liabilities, including liabilities under the Securities Act. We will have access to up to approximately $3,150,000 from the proceeds of this offering (including $1,900,000 in
expenses the underwriter has agreed to reimburse us) with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, stockholders who received funds from our trust account could be liable for claims made by creditors. In the event that our offering expenses exceed our estimate of $1,500,000, 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 $1,500,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.
Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options) may be considered a liquidating distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.
Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options) is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. If we do not complete our business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), 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 pay taxes of the company or Opco (less an amount required to satisfy taxes of the company and Opco and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares and Class A Units of Opco (other than those held by TGR), which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following our 15th month (or 18th or 21st month, if applicable), and, therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such date.
Because we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent 10 years. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. As described above, pursuant to the obligation contained in our underwriting agreement, we will seek to have all
vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account. As a result of this obligation, the claims that could be made against us are significantly limited and the likelihood that any claim that would result in any liability extending to the trust account is remote. Further, our sponsor may be liable only to the extent necessary to ensure that the amounts in the trust account are not reduced below (i) $10.30 per public share (or $10.40 or $10.50 per public share, if applicable) or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest withdrawn to pay taxes and will 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. In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third-party claims.
If we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return $10.30 per public share (or $10.40 or $10.50 per public share, if applicable) to our public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. Furthermore, our Board may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our public stockholders will be entitled to receive funds from the trust account only (i) in the event of the redemption of our public shares and any Class A Units of Opco (other than those held by TGR) if we do not complete our business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), subject to applicable law, (ii) in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options) or (iii) if they redeem their respective shares for cash upon the completion of the initial business combination. In no other circumstances will a stockholder have any right or interest of any kind to or in the trust account. In the event we seek stockholder approval in connection with our initial business combination, a stockholder’s voting in connection with the business combination alone will not result in a stockholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such stockholder must have also exercised its redemption rights described above. These provisions of our amended and restated certificate of incorporation, like all provisions of our amended and restated certificate of incorporation, may be amended with a stockholder vote.
Comparison of Redemption or Purchase Prices in Connection with Our Initial Business Combination and If We Fail to Complete our Initial Business Combination
The following table compares the redemptions and other permitted purchases of public shares that may take place in connection with the completion of our initial business combination and if we do not complete our business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options).
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Redemptions in Connection with Our Initial Business Combination
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Other Permitted Purchases of Public Shares by Us or 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 or repurchases at the time of our initial business combination may be made pursuant to a tender offer or in connection with a stockholder vote. The redemption price will be the same whether we conduct redemptions or repurchases pursuant to a tender offer or in connection with a stockholder vote. In either case, our public stockholders may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination (which is initially anticipated to be $10.30 per public share), including interest earned on the funds held in the trust account and not previously released to pay taxes of the company or Opco, divided by the number of then outstanding public shares and Class A Units of Opco (other than those held by TGR), 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.
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If we seek stockholder 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 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.
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If we do not complete our business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), 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 $10.30 per public share including interest earned on the funds held in the trust account and not previously released to pay taxes of the company or Opco (less an amount required to satisfy taxes of the company and Opco and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares and Class A Units of Opco (other than those held by TGR).
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Impact to remaining stockholders
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The redemptions in connection with our initial business
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If the permitted purchases described above are made there
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The redemption of our public shares and any Class A Units of Opco
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Redemptions in Connection with Our Initial Business Combination
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Other Permitted Purchases of Public Shares by Us or Our Affiliates
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Redemptions if We Fail to Complete an Initial Business Combination
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combination will reduce the book value per share for our remaining stockholders, who will bear the burden of the deferred underwriting commissions and interest withdrawn to pay taxes of the company or Opco (to the extent not paid from amounts accrued as interest on the funds held in the trust account).
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would be no impact to our remaining stockholders because the purchase price would not be paid by us.
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(other than those held by TGR) if we fail to complete our business combination will reduce the book value per share for the shares held by our initial stockholders, who will be our only remaining stockholders 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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The rules of the NYSE provide that at least 90% of the gross proceeds from this offering and the private placement warrants be deposited in a U.S.-based trust account. $206,000,000 of the net proceeds of this offering and the sale of the private placement warrants will be deposited into a US,-based trust account with Continental Stock Transfer & Trust Company acting as trustee.
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Approximately $170,100,000 of the offering proceeds would 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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$206,000,000 of the net offering proceeds and the sale of the private placement warrants held in trust will be invested only in U.S. government treasury 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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Receipt of interest on escrowed funds
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Interest on proceeds from the trust account to be paid to stockholders is reduced by (i) any taxes of the company or Opco paid or payable,
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Interest on funds in escrow account would be held for the sole benefit of investors, unless and only after the funds held in
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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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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escrow were released to us in connection with our completion of a business combination.
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Limitation on fair value or net assets of target business
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The NYSE rules require that our initial business combination must occur with one or more target businesses that together have a fair market value equal to at least 80% of the net assets held in trust (net of amounts disbursed to management for working capital purposes and excluding the amount of any deferred underwriting commissions held in trust) at the time of our signing a definitive agreement in connection with our 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 will begin trading on or promptly after the date of this prospectus. The Class A common stock and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus unless UBS Securities LLC 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, which is anticipated to take place three business days from the date of this prospectus. If the over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the over-allotment option. Additionally, the units will
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No trading of the units or the underlying Class A common stock and warrants would be permitted until the completion of a business combination. During this period, the securities would be held in the escrow or trust account.
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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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 will become exercisable 30 days after the completion of our initial business combination provided that we have an effective registration statement under the Securities Act covering the issuance of the shares of our Class A common stock issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement).
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The warrants could be exercised prior to the completion of a business combination, but securities received and cash paid in connection with the exercise would be deposited in the escrow or trust account.
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Election to remain an investor
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We will provide our public stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account 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 pay taxes of the company or Opco, upon the completion of our initial business combination, subject to the limitations described herein. We may not be required by law to hold a stockholder vote. If we are not required by law and do not otherwise decide to hold a stockholder vote, we will, pursuant to our amended and restated certificate of incorporation, conduct the redemptions or repurchases pursuant to the tender offer rules of the SEC and file tender offer documents with the SEC which will contain substantially the same financial
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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 stockholder of the company or require the return of his, her or its investment. If the company has not received the notification by the end of the 45th business day, funds and interest or dividends, if any, held in the trust or escrow account are automatically returned to the stockholder.
Unless a sufficient number of investors elect to remain investors, all funds on deposit in the escrow account must be returned to all of the investors and none of the
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules.
If, however, we hold a stockholder vote, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the tender offer rules. Pursuant to the tender offer rules, the tender offer period will be not less than 20 business days and, in the case of a stockholder vote, a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the business combination. Additionally, each public stockholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction.
A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting.
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securities are issued.
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Business combination deadline
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If we have not completed an initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), we will: (1) cease all
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If an acquisition has not been completed within 15 months after the effective date of the company’s registration statement, funds held in the trust or escrow account are returned to investors.
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less an amount required to satisfy taxes of the company and Opco and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares and Class A Units of Opco (other than those held by TGR), which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In the event that we receive notice from the sponsor five days prior to the applicable deadline of its intent to exercise an extension option, we intend to issue a press release announcing such intention to exercise the extension option at least three days prior to the applicable deadline. In addition, we intend to issue a press release the day after the applicable deadline announcing whether the funds were timely deposited.
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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 tax obligations of the Company or Opco, if any, the funds held in the trust account will not be released from the trust account until the earliest of: (1) the
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The proceeds held in the escrow account are not released until the earlier of the completion of a business combination and the failure to effect a business combination within the allotted time.
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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completion of our initial business combination (including the release of funds to pay any amounts due to any public stockholders who properly exercise their redemption rights in connection therewith); (2) the redemption of any public shares (other than sponsor shares) properly submitted in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation (A) in a manner that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options) or (B) with respect to any other provision relating to the rights of holders of our Class A common stock or pre-initial business combination activity; and (3) the redemption of our public shares and any Class A Units of Opco (other than those held by TGR) if we have not completed our initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), subject to applicable law.
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Limitation on redemption rights of stockholders holding 20% or more of our Class A common stock if we hold stockholder vote
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If we seek stockholder approval of our initial business combination and we do not conduct redemptions or repurchases in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to
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Most blank check companies provide no restrictions on the ability of stockholders to redeem shares based on the number of shares held by such stockholders in connection with an initial business combination.
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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Excess Shares (more than an aggregate of 20% of our Class A common stock). Our public stockholders’ inability to redeem Excess Shares will reduce their influence over our ability to complete our initial business combination and they could suffer a material loss on their investment in us if they sell Excess Shares in open market transactions.
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Tendering stock certificates in connection with a tender offer or redemption rights
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We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders or up to two business days prior to the initially scheduled vote on the proposal to approve the business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. In addition, if we conduct redemptions in connection with a stockholder vote, we intend to require a public stockholder seeking redemption of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the scheduled vote in which the name of the beneficial owner of such shares is included.
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In order to perfect redemption rights in connection with their business combinations, holders could vote against a proposed business combination and check a box on the proxy card indicating such holders were seeking to exercise their redemption rights. After the business combination was approved, the company would contact such stockholders to arrange for them to deliver their certificate to verify ownership.
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Comparison of This Offering to Offerings by Other Special Purpose Acquisition Companies
While our Up-C structure differs from the structure of other special purpose acquisition companies, the terms of this offering are generally consistent with those of other special purpose acquisition companies. The following table compares the terms of this offering to the typical terms of offerings by other special purpose acquisition companies. This comparison assumes that the gross proceeds, underwriting commissions and underwriting expenses of our offering would be identical to those of offerings by other special purpose acquisition companies, and that the underwriter will not exercise its over-allotment option.
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Terms of Our Offering
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Terms Under Offerings by Other Special Purpose Acquisition Companies
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Units
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We are offering units at an offering price of $10.00 per unit. Each unit consists of one share of Class A
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Same.
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Terms of Our Offering
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Terms Under Offerings by Other Special Purpose Acquisition Companies
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common stock and a fraction of a warrant to purchase one share of Class A common stock at $11.50 per share.
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Warrants
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The warrants will become exercisable 30 days after the completion of our initial business combination provided that we have an effective registration statement under the Securities Act covering the issuance of the shares of our Class A common stock issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement).
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Same.
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Founder Shares
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Our sponsor acquired a number of Class B Units of Opco that equals 25% of the number of units being offered to the public, inclusive of the underwriter’s over-allotment option, for no consideration, together with a corresponding number of shares of our Class B common stock for a small amount.
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Same, except that Opco does not exist, so the sponsor acquires a number of shares of our Class B common stock that equals 25% of the number of units being offered to the public, inclusive of the underwriter’s over-allotment option, for a small amount.
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Sponsor Shares
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Our sponsor acquired 100 shares of Class A Units of Opco (together with a corresponding number of shares of our Class B common stock) and 2,500 shares of our Class A common stock for a small amount.
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Not applicable.
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At Risk Capital
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Our sponsor will purchase warrants for an aggregate purchase price equal to 5% of the gross proceeds from this offering plus $1.2 million.
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Under offerings by other special purpose acquisition companies, the sponsor may purchase warrants for an aggregate purchase price equal to 2% of the gross proceeds of the offering plus $2 million.
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Private Placement Warrants
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Each private placement warrant will be exercisable to purchase for $11.50 one share of our Class A common stock.
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Same, except that Opco does not exist, so each private placement warrant is only exercisable to purchase for $11.50 one share of
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Terms of Our Offering
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Terms Under Offerings by Other Special Purpose Acquisition Companies
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our Class A common stock.
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Voting Rights
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Our shares of our Class A common stock and Class B common stock are entitled to vote on the same basis.
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Same.
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Investment of Net Proceeds
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We will use the proceeds we receive from this offering to purchase Class A Units and warrants in Opco. Opco will deposit approximately $206 million, or $10.30 per unit (approximately $236.9 million, or $10.30 per unit, if the underwriter’s over-allotment option is exercised in full), into a U.S. based trust account with Continental Stock Transfer & Trust Company acting as trustee and will use $4.95 million to pay expenses in connection with this offering and for working capital following this offering.
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Same, except that Opco does not exist, so the company directly deposits generally $206 million, or $10.30 per unit ($236.9 million, or $10.30 per unit, if the underwriter’s over-allotment option is exercised in full), into a U.S. based trust account and uses $4.95 million to pay expenses in connection with this offering and for working capital following this offering.
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Business Combination Deadline
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If we do not complete an initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), we will (1) cease all operations except for the purpose of winding up, (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to pay taxes of the company or Opco (less an amount required to satisfy taxes of the company and Opco and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares and Class A Units of Opco (other than those held by TGR), which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if
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Either the same or limited to 24 months with no extension in the case of an agreement in principle.
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Terms of Our Offering
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Terms Under Offerings by Other Special Purpose Acquisition Companies
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any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
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Redemption Right
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We will provide our public stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account 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 pay taxes of the company or Opco.
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Same.
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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 tax obligations of the Company or Opco, if any, the funds held in the trust account will not be released from the trust account until the earliest of: (1) the completion of our initial business combination (including the release of funds to pay any amounts due to any public stockholders who properly exercise their redemption rights in connection therewith); (2) the redemption of any public shares (other than sponsor shares) properly submitted in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation (A) in a manner that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options) or (B) with
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Same.
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Terms of Our Offering
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Terms Under Offerings by Other Special Purpose Acquisition Companies
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respect to any other provision relating to the rights of holders of our Class A common stock or pre-initial business combination activity; and (3) the redemption of our public shares and any Class A Units of Opco (other than those held by TGR) if we have not completed our initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), subject to applicable law.
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Opco Units
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The Class B Units of Opco will convert into Class A Units of Opco in connection with the initial business combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like and subject to further adjustment as described elsewhere in this prospectus. In addition, following our initial business combination, holders of Class A Units of Opco (other than TGR) will have the right, subject to certain limitations, to exchange Class A Units of Opco (and a corresponding number of shares of our Class B common stock) for, at our option, (i) shares of our Class A common stock on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, or (ii) an equivalent amount of cash.
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Not applicable.
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Competition
In identifying, evaluating and selecting a target business for our 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, and operating businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than we do. 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 stockholders who exercise their redemption rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses.
Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business combination.
Conflicts of Interest
The following discussion describes certain potential conflicts of interest that exist or may exist among the related companies and our company. These are considerations of which investors in our company should be aware, and which may cause conflicts that could disadvantage us. They are not, and are not intended to be, a complete enumeration or explanation of all of the potential conflicts of interest that may arise. Present and future activities of any of the related companies in addition to those described in this “—Conflicts of Interest” or in “Management—Conflicts of Interest” may give rise to additional conflicts of interest. Dealing with conflicts of interest is complex and difficult, and new and different types of conflicts may subsequently arise. There can be no assurance that any of the related companies will be able to resolve all conflicts in a manner that is favorable to us, and any such conflicts may have a material adverse effect on us, including our ability to consummate an initial business combination.
The related companies have direct and indirect interests in subsidiaries and other companies which are engaged broadly in the energy and natural resources industries. Conflicts may arise from KRP’s affiliation with our company, as well as from actions undertaken by any of the related companies. One or more of the related companies may compete with us for acquisition opportunities. If these entities decide to pursue any such opportunities, we may be precluded from procuring such opportunities and, in the case of KRP, we note that all opportunities presented to us will first be subject to consideration by a standing committee of KRP’s board of directors. In addition, investment ideas generated within KRP may be suitable for both us and for one or more of the related companies and may be directed to such entity rather than to us. Moreover, any of the related companies may take commercial steps which may have an adverse effect on us, including on any target we acquire in the initial business combination.
Any potential conflict that qualifies as a “related party transaction” (as defined in Item 404 of Regulation S-K under the Securities Act) is subject to review by an independent committee of the applicable issuer’s board of directors in accordance with its corporate governance guidelines. We may enter into transactions with one or more of the related companies. There can be no assurance that the terms of any such transactions will be as favorable to us as would be the case where there is no overlapping officer or director. See “Risk Factors—We may engage in a business combination with one or more target businesses that may be owned by our sponsor or one or more of the related companies, or its or their officers or directors, which may raise potential conflicts of interest.”
Fiduciary or Other Duties to Other Companies; Competition for Targets
All of our officers also serve as executive officers of one or more of the related companies and certain of our directors serve on the board of directors of one or more of the related companies as well as may serve on the boards of directors of other companies other companies. Our officers and members of our Board have fiduciary duties to our stockholders. Likewise, any such persons who serve in similar capacities at any of the related companies have fiduciary duties to that company’s stockholders. Therefore, such persons may have conflicts of interest or the appearance of conflicts of interest with respect to matters involving or affecting us and one or more of the related companies or other companies to which they owe fiduciary duties.
For example, each of our officers and directors has, and any of them in the future may have, additional fiduciary or contractual obligations to one or more other entities (including, without limitation, to one or more of the entities listed in “Management—Conflicts of Interest”) pursuant to which such officer or director may be required to present a business combination opportunity to such entities before he or she presents such opportunity to us. Also, none of KRP, our sponsor or any of our directors and officers is prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity to which he or she has then-current fiduciary or contractual obligations to present such opportunity to any of the related companies or to any other entity, he or she may only present such opportunity to us if such other entity rejects the opportunity. Our amended and restated certificate of incorporation will provide that we renounce
our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company; such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue; and such person has no fiduciary or contractual obligation to present the opportunity to any other person or entity.
Similarly, as noted above, our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company; such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue; and such person has no fiduciary or contractual obligation to present the opportunity to any other person or entity.
In addition, KRP will adopt a policy pursuant to which any business combination opportunity that is a corporate opportunity of KRP that may also be a business combination opportunity for our company will first be presented to the conflicts committee of the board of directors of KRP, which is made up solely of independent directors, for consideration as to whether KRP desires to pursue such business combination opportunity as a direct investment or to present such opportunity to our company for consideration. The members of the conflicts committee of the board of directors of KRP will not serve in any fiduciary capacity at our company.
Selection of Service Providers
In addition to any services provided under the services agreement with KRP, we expect to engage service providers (including attorneys and consultants) that may also provide services to our sponsor and any of the related companies. We intend to select these service providers based on a number of factors, including expertise and experience, knowledge of related or similar products, quality of service, reputation in the marketplace, relationships with one or more of the related companies or others, and price. These service providers may have business, financial, or other relationships with one or more of the related companies. These relationships may or may not influence our selection of these service providers. In such circumstances, there may be a conflict of interest between us, on the one hand, and one or more of the related companies, on the other hand, if we determine not to engage or continue to engage these service providers. The service providers selected by us may charge different rates to different recipients based on the specific services provided, the personnel providing the services, or other factors. As a result, the rates paid with respect to these service providers by us, on the one hand, may be more or less favorable than the rates paid by KRP, on the other hand.
Sponsor Indemnity
Our sponsor will agree that it will be liable to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below the lesser of: (1) $10.30 per public share (or $10.40 or $10.50 per public share, if applicable); and (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the 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. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such obligations. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.30 per public share (or $10.40 or $10.50 per public share, if applicable). In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in
connection with any redemption of your public shares. None of our officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses. We believe the likelihood of our sponsor having to indemnify the trust account is limited because we will endeavor to have all vendors and prospective target businesses as well as other entities execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account.
Facilities
Our executive offices are located at 777 Taylor Street, Suite 810, Fort Worth, Texas 76102 and our telephone number is (817) 945-9700. The cost for our use of this space is included in the $25,000 per month fee we will pay to our sponsor for administrative and support services. We consider our current office space adequate for our current operations.
Employees
We currently have two 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 that 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.
Periodic Reporting and Financial Information
We have registered our units, Class A common stock and warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports will contain financial statements audited and reported on by our independent registered public accountants.
We will provide stockholders with audited financial statements of the prospective target business as part of the proxy solicitation or tender offer materials (as applicable) sent to stockholders. These financial statements may be required to be prepared in accordance with GAAP, or reconciled to, GAAP, or IFRS, depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame. We cannot assure you that any particular target business identified by us as a potential acquisition candidate will have financial statements prepared in accordance with the requirements outlined above, or that the potential target business will be able to prepare its financial statements in accordance with the requirements outlined above. To the extent that any applicable requirements cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential acquisition candidates, we do not believe that this limitation will be material.
We will be required to evaluate our internal control procedures for the fiscal year ending December 31, 2021 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be required to have our internal control procedures audited. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
Prior to the effectiveness of the registration statement of which this prospectus forms a part, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
We are 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 (i) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion (as adjusted for inflation pursuant to SEC rules from time to time), or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Legal Proceedings
There is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such.
MANAGEMENT
Directors, Director Nominees and Executive Officers
Our directors, director nominees and executive officers are as follows:
Name
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Age
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Title
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Zachary M. Lunn................................
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35
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President & Chief Executive Officer
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R. Blayne Rhynsburger........................
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35
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Controller
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Robert D. Ravnaas..............................
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64
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Chairman of the Board of Directors
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R. Davis Ravnaas................................
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36
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Director and Strategic Advisor
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Matthew S. Daly..................................
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49
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Director and Strategic Advisor
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Kimberly DeWoody.............................
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38
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Director Nominee
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Fred N. Reynolds.................................
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64
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Director Nominee
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Zachary M. Lunn
Zachary Lunn has extensive operating experience in the E&P sector, including conventional and unconventional reservoirs across multiple states and basins. Mr. Lunn began his career with Nexen Petroleum USA, gaining experience in operations, business development, and reservoir engineering while working assets in the Gulf of Mexico. Following the $15.1 billion sale of Nexen to CNOOC, Mr. Lunn pursued a production/operations position with Petro-Hunt LLC, where he supervised the company’s operated production, including all conventional and unconventional reservoirs in Texas, Louisiana, Mississippi, North Dakota, Montana, and Wyoming. Further, Mr. Lunn created a development plan for 500,000 Bakken acres and played an integral role on the divestiture team, resulting in $1.45 billion in M&A activity. In 2014, Mr. Lunn joined Enduro Resource Partners and was responsible for 550 wellsites in North Dakota, Texas, and Louisiana. In July 2018, upon learning that Enduro Resource Partners planned to sell their assets, Mr. Lunn partnered with the principals of Cobra Oil & Gas Corporation and acquired the properties. Upon acquisition, Mr. Lunn managed all day-to-day activities of Cobra Oil & Gas Corporation including operations, marketing, business development, and finance. Under Mr. Lunn’s stewardship, Cobra Oil & Gas grew production while maintaining high levels of free cash flow. Mr. Lunn is a member of the Society of Petroleum Engineers, American Association of Drilling Engineers, and Fort Worth Wildcatters. He received his Bachelor of Science degree in Petroleum Engineering from Louisiana State University.
R. Blayne Rhynsburger
Blayne Rhynsburger has served as the Controller of the general partner of KRP since February 2017. Mr. Rhynsburger previously served as the Controller of KRP’s predecessor from November 2015 until KRP’s IPO. Prior to that time, Mr. Rhynsburger served as audit manager from July 2014 to November 2015, audit senior from July 2011 to June 2014, and audit staff from September 2009 to June 2011 at Whitley Penn LLP, where he specialized in assurance and advisory services for clients in multiple industries, primarily energy clients in the public and private sectors. Mr. Rhynsburger also has served as an adjunct professor of petroleum accounting in the graduate school of Texas Christian University’s Neeley School of Business since 2015. Mr. Rhynsburger holds a Bachelor of Business Administration degree in Accounting and Finance and a Master of Accounting degree from Texas Christian University. He is also a member of the Texas Society of Certified Public Accountants.
Robert D. Ravnaas
Bob Ravnaas has served as Chief Executive Officer of the general partner of KRP and chairman of its board of directors since November 2015. Mr. R. Ravnaas served as President of Cawley, Gillespie & Associates, Inc., a petroleum engineering firm, from 2011 until February 2017. He also served as President and director of Rivercrest Royalties II, LLC from 2014 until December 2017, and as President and director of Rivercrest Royalties, LLC from 2013 until KRP’s IPO. Prior to joining Cawley, Gillespie & Associates, Inc. in 1983, he worked as a Production Engineer for Amoco Production Company from 1981
to 1983. Mr. R. Ravnaas received a Bachelor of Science degree with special honors in Chemical Engineering from the University of Colorado at Boulder and a Master of Science degree in Petroleum Engineering from the University of Texas at Austin. He is a registered professional engineer in Texas and a member of the Society of Petroleum Engineers, the Society of Petroleum Evaluation Engineers and the American Association of Petroleum Geologists. Mr. R. Ravnaas is the father of Davis Ravnaas, one of our directors and strategic advisors. We believe Mr. R. Ravnaas’s extensive background in the energy industry makes him well qualified to serve on our board of directors.
R. Davis Ravnaas
Davis Ravnaas has served as President and Chief Financial Officer of the general partner of KRP since November 2015. Mr. D. Ravnaas co-founded Rivercrest Royalties, LLC, which was the predecessor to KRP, in October 2013, served as its Vice President and Chief Financial Officer from November 2013 to October 2015 and served as its President and Chief Financial Officer from October 2015 until KRP’s IPO. He has also served as Vice President and Chief Financial Officer of Rivercrest Royalties Holdings II, LLC and/or its predecessor, Rivercrest Royalties II, LLC, since August 2014, and he is a partial owner of other companies that have contributed assets to KRP in the past and may do so in the future. From 2010 to 2012, Mr. D. Ravnaas was responsible for sourcing, evaluating and monitoring investments in energy and industrials companies as an associate investment professional with Crestview Partners, a New York based private equity fund with $6.0 billion under management. Mr. D. Ravnaas left Crestview Partners in 2012 to attend the Stanford Graduate School of Business, where he earned his Master in Business Administration in 2014. Mr. D. Ravnaas also has an AB in Economics from Princeton University and a MSc in Finance and Economics from the London School of Economics. Mr. D. Ravnaas is the son of Bob Ravnaas, our Chairman of the Board of Directors. We believe Mr. D. Ravnaas is well qualified to serve on our board of directors due to his industry experience and investment background.
Matthew S. Daly
Matthew S. Daly has served as Chief Operating Officer of the general partner of KRP since May 2017. Mr. Daly previously served as Senior Vice President—Corporate Development of the general partner of KRP beginning in September 2016 and he served as Senior Vice President—Corporate Development of KRP’s predecessor from August 2016 until KRP’s IPO. Prior to joining Kimbell, Mr. Daly spent 11 years in investment management, most recently at Kleinheinz Capital Partners, Inc. and Hirzel Capital Management, LLC, two Texas-based investment firms each with over $1 billion in assets under management, where he helped manage both the public and private energy investments. He was also Chairman of Delta Biofuels, Inc., a portfolio company of Kleinheinz Capital Partners, Inc. Prior to this, Mr. Daly was an investment banker at Wasserstein Perella & Co. in New York City and later Lazard Frères & Co., where he was a Vice President in the Mergers and Acquisitions group. Within this role, he advised on transactions totaling over $10 billion in value including acquisitions, divestitures, corporate restructurings and special committee assignments relating to takeover defense. He began his career at Arthur Andersen LLP in Dallas. He has a BBA from the University of Texas at Austin and an MBA from the Booth School at the University of Chicago. We believe Mr. Daly is well qualified to serve on our board of directors due to his investment background and his extensive experience related to merger and acquisition analysis, execution and integration.
Kimberly DeWoody
Kimberly DeWoody is the Finance Director for the Southwestern Exposition and Livestock Show (Fort Worth Stock Show & Rodeo), where she oversees all aspects of the Show’s accounting and finance functions. Prior to joining the Show in November 2020, Ms. DeWoody spent a total of 13 years at Whitley Penn LLP where she became an audit partner effective January 1, 2017. Throughout her time at Whitley Penn, Ms. DeWoody had extensive experience providing audit and assurance services to a broad range of industries, with a significant focus on the oil and gas sector, and her clients included both publicly traded and privately held companies. Ms. DeWoody has substantial knowledge of U.S. accounting and auditing standards gained through her public accounting career. Additionally, while at Whitley Penn, Ms. DeWoody had international and IFRS experience through her participation in the Nexia International Secondment Program where she worked at Smith & Williamson’s London office. She began in her career in public
accounting at Ernst & Young in Houston, Texas. Ms. DeWoody was awarded “Forty Under 40” by Hart Energy’s Oil & Gas Investor. Additionally, Ms. DeWoody was awarded “Forty Under 40” by the Fort Worth Business Press and is a graduate of Leadership Fort Worth. She was awarded the Legacy of Women Award by SafeHaven of Tarrant County. Ms. DeWoody holds Bachelor of Business Administration and Master of Accountancy degrees from Baylor University. She is a certified public accountant, licensed in the state of Texas, and a member of the American Institute of Certified Public Accountants, Texas Society of Certified Public Accountants (TXCPA), and Fort Worth Chapter of TXCPA. We believe that Ms. DeWoody is well qualified to serve as a director due to her financial and accounting expertise and industry experience.
Fred N. Reynolds
Mr. Reynolds is the principal owner of Fred S. Reynolds and Associates, a petroleum engineering consulting firm located in Fort Worth, Texas. Mr. Reynolds graduated in 1979 with a Bachelor of Science in Petroleum Engineering from the University of Oklahoma. Following graduation, Mr. Reynolds worked for Chevron U.S.A. and Equity Oil Company as a drilling and completion engineer and Engineering Manager, before joining his father and forming the petroleum engineering consulting firm of Fred S. Reynolds and Associates in 1983. The consulting business consults in all aspects of petroleum engineering with the emphasis on reservoir evaluations, reserve determinations, and economic projections for the purposes of determining fair market value, loan values, and prospect screening. The firm’s clients are oil and gas companies, individual royalty and working interest owners, estate planning attorneys, and bank trust and energy lending departments. We believe that Mr. Reynolds is well qualified to serve as a director due to his expertise in the energy industry.
We intend to have five directors upon completion of this offering. Our Board will be divided into three classes with only one class of directors being elected in each year and each class (except for those directors elected prior to our first annual meeting of stockholders) serving a three-year term. The term of office of the first class of directors will expire at our first annual meeting of stockholders. The term of office of the second class of directors will expire at the second annual meeting of stockholders. The term of office of the third class of directors will expire at the third annual meeting of stockholders. We may not hold an annual meeting of stockholders until after we consummate our initial business combination.
Our officers are appointed by the Board and serve at the discretion of the Board, rather than for specific terms of office. Our Board is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws provide that our officers may consist of a Chairman of the Board, Chief Executive Officer, President, Chief Financial Officer, Vice Presidents, Secretary, Treasurer and such other offices as may be determined by the Board.
Director Independence
The NYSE listing standards require that a majority of our Board be independent. In conformity with the NYSE’s “phase-in” rules, within one year of our initial public offering, a majority of our Board will be independent. An “independent director” is defined generally as a person who has no material relationship with the listed company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the company). Our Board has determined that Ms. DeWoody and Mr. Reynolds are “independent directors” as defined in the NYSE listing standards and applicable SEC rules. Our independent directors will have regularly scheduled meetings at which only independent directors are present.
Officer and Director Compensation
None of our officers or directors have received any cash compensation for services rendered to us. Commencing on the date that our securities are first listed on the NYSE through the earlier of consummation of our initial business combination and our liquidation, we have agreed to pay our sponsor a total of $25,000 per month for administrative and support services. 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. In addition, we have agreed, pursuant to the administrative services agreement with our sponsor relating to the monthly reimbursement for office
space and administrative services described above, that we will indemnify our sponsor from any claims arising out of or relating to this offering or the company’s or Opco’s operations or conduct of the company’s or Opco’s business or any claim against our sponsor alleging any expressed or implied management or endorsement by our sponsor of any of the company’s or Opco’s activities or any express or implied association between our sponsor and the company or Opco or any of their affiliates, which agreement will provide that the indemnified parties cannot access the funds held in our trust account. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, 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 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, officers and directors, or any of their respective affiliates, prior to completion of our initial business combination.
After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting or management fees from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in the proxy solicitation or tender offer materials (as applicable) furnished to our stockholders in connection with a proposed business combination. We have not established any limit on the amount of such fees that may be paid by the combined company to our directors or members of our 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 officer and director compensation. Any compensation to be paid to our officers will be determined, or recommended to the Board for determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our Board.
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 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 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 will have three standing committees: an audit committee, a compensation committee and a nominating and corporate governance committee. Subject to phase-in rules and a limited exception, the rules of the NYSE and Rule 10A of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors. Subject to phase-in rules and a limited exception, the rules of the NYSE require that the compensation and nominating and corporate governance committees of a listed company be comprised solely of independent directors. 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. Under the NYSE listing standards and applicable SEC rules, we are required to have at least three members of the audit committee, all of whom must be independent, subject to the exception described below. Because we expect our securities will be listed on the NYSE in connection with our initial public offering, we have one year from the date of this offering to appoint a third member to our audit committee and to have our audit committee be comprised solely of independent members. Ms. DeWoody and Mr. Reynolds will serve as the initial members of our audit committee.
Ms. DeWoody and Mr. Reynolds are independent. We will appoint a third qualifying member to our audit committee within one year from the date of listing to comply with the audit committee requirement.
Ms. DeWoody will serve as chair of the audit committee. Each member of the audit committee is financially literate and our Board has determined that Ms. DeWoody qualifies as an “audit committee financial expert” as defined in applicable SEC rules.
We will adopt an audit committee charter, which will detail the principal functions of the audit committee, including:
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the appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm and any other independent registered public accounting firm engaged by us;
➤
pre-approving all audit and permitted non-audit services to be provided by the independent registered public accounting firm or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures;
➤
reviewing and discussing with the independent registered public accounting firm all relationships the auditors have with us in order to evaluate their continued independence;
➤
setting clear hiring policies for employees or former employees of the independent registered public accounting firm;
➤
setting clear hiring policies for employees or former employees of the independent auditors;
➤
setting clear policies for audit partner rotation in compliance with applicable laws and regulations;
➤
obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (i) the independent registered public accounting firm’s internal quality-control procedures and (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues;
➤
reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and
➤
reviewing with management, the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.
Compensation Committee
Prior to the consummation of this offering, we will establish a compensation committee of the Board. Ms. DeWoody and Mr. Reynolds will serve as the initial members of our compensation committee. Under the NYSE listing standards and applicable SEC rules, and subject to the phase-in rules of the NYSE, we are required to have a fully independent compensation committee. Ms. DeWoody and Mr. Reynolds are independent. Mr. Reynolds will serve as chair of the compensation committee.
We will adopt a compensation committee charter, which will detail the principal functions of the compensation committee, including:
➤
reviewing and approving on an annual basis the corporate goals and objectives relevant to our chief executive officer’s compensation, evaluating our chief executive officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our chief executive officer based on such evaluation;
➤
reviewing and approving on an annual basis the compensation of all of our other officers;
➤
reviewing on an annual basis our executive compensation policies and plans;
➤
implementing and administering our incentive compensation equity-based remuneration plans;
➤
assisting management in complying with our proxy statement and annual report disclosure requirements;
➤
approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees;
➤
if required, producing a report on executive compensation to be included in our annual proxy statement; and
➤
reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
The charter will also provide that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by the NYSE and the SEC.
Nominating and Corporate Governance Committee
Prior to the consummation of this offering, we will establish a nominating and corporate governance committee of the Board. The members of our nominating and corporate governance will be Ms. DeWoody and Mr. Reynolds. Mr. Reynolds will serve as chair of the nominating and corporate governance committee.
The primary purposes of our nominating and corporate governance committee will be to assist the Board in:
➤
identifying, screening and reviewing individuals qualified to serve as directors and recommending to the Board candidates for nomination for election at the annual meeting of stockholders or to fill vacancies on the Board;
➤
developing, recommending to the Board and overseeing implementation of our corporate governance guidelines;
➤
coordinating and overseeing the annual self-evaluation of the Board, its committees, individual directors and management in the governance of the company; and
➤
reviewing on a regular basis our overall corporate governance and recommending improvements as and when necessary.
The nominating and corporate governance committee will be governed by a charter that complies with the rules of the NYSE.
Director Nominations
Our nominating and corporate governance committee will recommend to the Board candidates for nomination for election at the annual meeting of the stockholders. The Board will also consider director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders). Our stockholders that wish to nominate a director for election to our Board should follow the procedures set forth in our bylaws.
We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, our Board considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders. Prior to our initial business combination, holders of our public shares will not have the right to recommend director candidates for nomination to our Board.
Compensation Committee Interlocks and Insider Participation
None of our officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more officers serving on our Board.
Code of Business Conduct and 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. You will be able to review this document by accessing our public filings at the SEC’s web site at www.sec.gov. In addition, 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.
Corporate Governance Guidelines
Our Board will adopt corporate governance guidelines in accordance with the corporate governance rules of the NYSE that serve as a flexible framework within which our Board and its committees operate. These guidelines will cover a number of areas including Board membership criteria and director qualifications, director responsibilities, Board agenda, roles of the chairman of the Board, chief executive officer and presiding director, meetings of independent directors, committee responsibilities and assignments, Board member access to management and independent advisors, director communications with third parties, director compensation, director orientation and continuing education, evaluation of senior management and management succession planning. A copy of our corporate governance guidelines will be posted on our website.
Conflicts of Interest
Members of our sponsor may compete with us for acquisition opportunities. If they decide to pursue any such opportunity, we may be precluded from procuring such opportunities. Neither members of our sponsor nor members of our management team who are members of our sponsor have any obligation to present us with any opportunity for a potential business combination of which they become aware, unless presented to such member solely in his or her capacity as an officer of the company. Members of our sponsor and our management, in their other endeavors, may be required to present potential business combinations to other entities, before they present such opportunities to us. See “Risk Factors—We are dependent upon our executive officers and directors who must allocate their time among our business and other businesses. The departure of our executive officers or directors or conflicts of interest in their determination as to how much time to devote to our affairs could have a negative impact on our ability to complete our initial business combination.”
In addition, members of our sponsor may sponsor other blank check companies similar to ours during the period in which we are seeking an initial business combination, and members of our management team may participate in such blank check companies. Any such companies may present additional conflicts of interest in pursuing an acquisition target, particularly in the event there is overlap among the management teams. However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.
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 opportunity to such other entity. 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 business combination. In addition, we may pursue an Affiliated Joint Acquisition opportunity with an entity to which an officer or director has a fiduciary or contractual obligation. Any such entity may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the acquisition by issuing to such entity a class of equity or equity-linked securities. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is
expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue.
Potential investors should also be aware of the following other potential conflicts of interest:
➤
None of our officers or directors is required to commit his or her full time to our affairs and, accordingly, may have conflicts of interest in allocating his or her time among various business activities.
➤
In the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
➤
Our initial stockholders have agreed that any founder shares will not be entitled to redemption rights, and they will waive any such redemption rights for any public shares held by them, in connection with the consummation of our initial business combination. Additionally, our initial stockholders have agreed that any founder shares held by them will not be entitled to redemption rights, and they will waive any such redemption rights for any public shares held by them, if we fail to consummate our initial business combination within 15 months after the closing of this offering (or up to 21 months, if the sponsor exercises its extension options). If we do not complete our initial business combination within such applicable time period, the portion of the proceeds of the sale of the private placement warrants held in the trust account will be used to fund the redemption of our public shares and any Class A Units of Opco (other than those held by TGR), and the private placement warrants will expire worthless. Furthermore, our initial stockholders have agreed not to transfer, assign or sell any founder shares held by them, and any shares of our Class A common stock acquired upon exchange of founder shares, until one year after the date of the consummation of our initial business combination or earlier if, subsequent to our initial business combination, (i) the last sale price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination or (ii) we consummate a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property. With certain limited exceptions, the private placement warrants and the Class A common stock underlying such warrants will not be transferable, assignable or saleable until 30 days after the completion of our initial business combination. Since our sponsor and officers and directors may directly or indirectly own common stock and warrants following this offering, our officers and directors may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination.
➤
Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.
➤
Our sponsor, officers or directors may have a conflict of interest with respect to evaluating a business combination and financing arrangements as we may obtain loans from our sponsor or an affiliate of our sponsor or any of our officers or directors to finance transaction costs in connection with an intended initial business combination. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period.
The conflicts described above may not be resolved in our favor.
In general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if:
➤
the corporation could financially undertake the opportunity;
➤
the opportunity is within the corporation’s line of business; and
➤
it would not be fair to our company and its stockholders for the opportunity not to be brought to the attention of the corporation.
Accordingly, as a result of multiple business affiliations, our officers and directors may have similar legal obligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities. Furthermore, our amended and restated certificate of incorporation will provide that the doctrine of corporate opportunity will not apply with respect to any of our officers or directors in circumstances where the application of the doctrine would conflict with any fiduciary duties or contractual obligations they may have.
We are not prohibited from pursuing an initial business combination with a company that is affiliated with KRP, our sponsor, executive officers or directors, or completing the business combination through a joint venture or other form of shared ownership with our sponsor, executive officers or directors. In the event we seek to complete an initial business combination with a target that is affiliated (as defined in our amended and restated certificate of incorporation) with our sponsor, executive officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm which is a member of FINRA or another independent entity that commonly renders valuation opinions stating that the consideration to be paid by us in such an initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
We cannot assure you that any of the above mentioned conflicts will be resolved in our favor.
In the event that we submit our initial business combination to our public stockholders for a vote, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the initial business combination. Our initial stockholders have agreed to vote any founder shares held by them and any public shares purchased during or after the offering in favor of our initial business combination and our officers and directors have also agreed to vote any public shares purchased during or after the offering in favor of our initial business combination.
Limitation on Liability and Indemnification of Officers and Directors
Our amended and restated certificate of incorporation will provide that our officers and directors will be indemnified by us to the fullest extent authorized by Delaware law, as it now exists or may in the future be amended. In addition, our amended and restated certificate of incorporation will provide that our directors will not be personally liable for monetary damages to us or our stockholders for breaches of their fiduciary duty as directors, unless they violated their duty of loyalty to us or our stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived an improper personal benefit from their actions as directors.
We will enter into agreements with our officers and directors to provide contractual indemnification in addition to the indemnification provided for in our amended and restated certificate of incorporation. Our bylaws also will permit us to secure insurance on behalf of any officer, director or employee for any liability arising out of his or her actions, regardless of whether Delaware law would permit such indemnification. We 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, and any persons who may become officers or directors prior to the initial business combination will agree, to waive any right, title, interest or claim of any kind in or to any monies in the trust account, and to waive any right, title, interest or claim of any kind they may have in the future as a result of, or arising out of, any services provided to us and will not seek recourse against the trust account for any reason whatsoever. Accordingly, any indemnification provided will only be able to be satisfied by us if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination.
Our indemnification obligations may discourage stockholders 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 stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
We believe that these provisions, the insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding the beneficial ownership of our common stock as of the date of this prospectus, and as adjusted to reflect the sale of our common stock included in the units offered by this prospectus, and assuming no purchase of units in this offering, by:
➤
each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock;
➤
each of our named executive officers, directors and director nominees that beneficially owns shares of our common stock; and
➤
all our executive officers, directors and director nominees as a group.
Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. The following table does not reflect record or beneficial ownership of the private placement warrants as these warrants are not exercisable within 60 days of the date of this prospectus.
In May 2021, our sponsor received an aggregate of 100 Class A Units of Opco, 5,750,000 Class B Units of Opco, 2,500 shares of our Class A common stock and 5,750,100 shares of our Class B common stock. The following table presents the number of shares and percentage of our common stock owned by our initial stockholders before and after this offering. The post-offering numbers and percentages presented assume that the underwriter does not exercise its over-allotment option, that our sponsor forfeits 750,000 founder shares on a pro rata basis, and that there are 25,002,600 shares of our common stock issued and outstanding after this offering.
Name and Address of
Beneficial Owner(1)
|
|
|
Number of
Shares of
Class A
Common
Stock
Beneficially
Owned(2)
|
|
|
Approximate
Percentage of
Outstanding
Shares of Class A
Common Stock
|
|
|
Number of
Shares of
Class B
Common
Stock
Beneficially
Owned(2)
|
|
|
Approximate
Percentage of
Outstanding
Shares of Class B
Common Stock
|
|
|
Before
Offering
|
|
|
After
Offering
|
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Before
Offering
|
|
|
After
Offering
|
|
Kimbell Tiger Acquisition Sponsor, LLC (our sponsor)(3)(4)
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|
|
2,500
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|
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|
100%
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|
|
|
|
|
*
|
|
|
|
|
|
5,750,100
|
|
|
|
|
|
100%
|
|
|
|
|
|
100%
|
|
|
Directors and Named Executive Officers:
|
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|
|
|
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|
|
|
|
|
|
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Zachary M. Lunn(4)
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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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—
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R. Blayne Rhynsburger(4)
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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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|
|
—
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|
|
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|
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—
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Robert D. Ravnaas(4)
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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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—
|
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—
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R. Davis Ravnaas(4)
|
|
|
|
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—
|
|
|
|
|
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—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
Matthew S. Daly(4)
|
|
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|
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—
|
|
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|
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—
|
|
|
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|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
Kimberly DeWoody(4)
|
|
|
|
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—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
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|
|
Fred N. Reynolds(4)
|
|
|
|
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—
|
|
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|
|
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—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
All directors and executive officers as a group (7 individuals)
|
|
|
|
|
2,500
|
|
|
|
|
|
100%
|
|
|
|
|
|
*
|
|
|
|
|
|
5,750,100
|
|
|
|
|
|
100%
|
|
|
|
|
|
100%
|
|
|
*
Less than 1%
(1)
Unless otherwise noted, the business address of each of the following entities or individuals is 777 Taylor Street, Suite 810, Fort Worth, Texas 76102.
(2)
Interests shown consist of founder shares and sponsor shares. The Class A Units of Opco (and corresponding shares of our Class B common stock) comprising a portion of such shares will be exchangeable for shares of our Class A common stock after the time of our initial business combination on a one-for-one basis, subject to adjustment, as described in the section entitled “Description of Securities.”
(3)
KRP Opco is the managing member of our sponsor. KRP Opco has sole voting and investment discretion with respect to the shares held by the sponsor. The managing member of KRP Opco is KRP. KRP may be deemed to beneficially own the shares held by our sponsor by virtue of its direct ownership of our sponsor. KRP is controlled by Kimbell Royalty GP, LLC, which is the general partner of KRP. The general partner of KRP is owned by a holding company that is controlled by entities affiliated with Robert D. Ravnaas, among others. Mr. R. Ravnaas, by virtue of his indirect ownership interest in the entity that owns the general partner of KRP, may be deemed to beneficially own the non-economic general partner interest of KRP held by its general partner. Mr. R. Ravnaas disclaims benefic ownership of this interest.
(4)
Our sponsor is the record holder of such shares. The members of our management team and directors are among the members of our sponsor but do not have voting or investment discretion with respect to the shares held by our sponsor. Each of such individuals disclaims any beneficial ownership of the securities held by our sponsor other than to the extent of any pecuniary interest he or she may have therein, directly or indirectly.
Immediately after this offering, the founder shares held by our initial stockholders will represent 20% of our total outstanding equity (excluding the sponsor shares). Because of this ownership block, our initial stockholders may be able to effectively influence the outcome of all matters requiring approval by our stockholders, amendments to our amended and restated certificate of incorporation and approval of significant corporate transactions, including approval of our initial business combination. Pursuant to the terms of our amended and restated certificate of incorporation, holders of our Class B common stock have the exclusive right to elect, remove and replace any director prior to the consummation of our initial business combination. This provision may only be amended if approved by holders of 90% of our common stock entitled to vote thereon.
The holders of the founder shares and sponsor shares have agreed (A) to vote any shares owned by them in favor of any proposed business combination and (B) not to redeem any shares in connection with a stockholder vote to approve a proposed initial business combination.
Our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 12,750,000 warrants (or 14,100,000 warrants if the underwriter’s over-allotment option is exercised in full) at a price of $1.00 per warrant ($12,750,000 in the aggregate, or $14,100,000 in the aggregate 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 complete our initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), the private placement warrants will expire worthless. The private placement warrants are subject to the transfer restrictions described below. Otherwise, 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.
Our sponsor and our officers and directors are deemed to be our “promoters” as such term is defined under the federal securities laws.
Transfers of Founder Shares and Private Placement Warrants
The founder shares, private placement warrants and any shares of our Class A common stock issued upon conversion or exercise thereof are each subject to transfer restrictions pursuant to a letter agreement to be entered into by our sponsor, directors, officers and us. This letter agreement will provide that the founder shares, and any shares of our Class A common stock acquired upon exchange of founder shares, may not be transferred, assigned or sold until the earlier of (x) one year after the completion of our initial business combination or earlier if, subsequent to our business combination, the last sale price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, capital stock exchange, reorganization or other similar transaction after our initial business combination that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property.
The shares of our Class B common stock comprising a portion of the founder shares and sponsor shares cannot be transferred without transferring a corresponding number of Opco Units and vice versa.
The letter agreement will provide that the private placement warrants may not be transferred, assigned or sold until 30 days following the completion of our initial business combination.
Additionally, in the event of (i) our liquidation prior to the completion of our initial business combination or (ii) the completion of a liquidation, merger, stock exchange or other similar transaction which results in all of our stock holders having the right to exchange their shares of common stock for cash, securities or other property subsequent to our completion of our initial business combination, the lock-up period shall terminate. However, in the case of clauses (a) through (f) below, such securities may be transferred during the lock-up period to certain permitted transferees, provided that they enter into a written agreement agreeing to be bound by these transfer restrictions. Permitted transfers include: (a) transfers to our officers or directors, any affiliates or family members of any of our officers or directors, any members of our sponsor or their affiliates, or any affiliates of our sponsor or any employees of any affiliates of our sponsor; (b) in the case of an individual, transfers by gift to members of the individual’s immediate family or to a trust, the beneficiary of which is a member of one of the individual’s immediate family, an affiliate of such person or to a charitable organization; (c) in the case of an individual, transfers by virtue of laws of descent and distribution upon death of the individual; (d) in the case of an individual, transfers pursuant to a qualified domestic relations order; (e) transfers by virtue of the laws of the state of Delaware or our sponsor’s operating agreement upon dissolution of our sponsor; and (f) transfers by private sales or transfers made in connection with the consummation of a business combination at prices no greater than the price at which the securities were originally purchased.
Permitted transferees would be subject to the same written agreements as our sponsor, directors and officers with respect to (i) voting any founder shares held by them in favor of the initial business combination, (ii) agreeing to not propose any amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of public shares if we do not complete an initial business combination within 15 months (or up to 21 months, if the sponsor exercises its extension options) and (iii) waiving their redemption rights and rights to certain distributions.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Founder Shares
In May 2021, our sponsor received 5,750,000 Class B Units of Opco for no consideration and purchased 5,750,000 corresponding shares of our Class B common stock, 2,500 shares of our Class A common stock and 100 Class A Units of Opco and 100 corresponding shares of our Class B common stock for an aggregate of $25,000. The number of founder shares issued was determined based on the expectation that such founder shares would represent 20% of the total outstanding equity upon completion of this offering (excluding the sponsor shares). Up to 750,000 founder shares 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 common stock issuable upon exchange thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder.
Private Placement Warrants
Our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 12,750,000 private placement warrants (or 14,100,000 private placement warrants if the over-allotment option is exercised in full) for a purchase price of $1.00 per warrant in a private placement that will occur simultaneously with the closing of this offering. As such, our sponsor’s interest in this transaction is valued at between $12,750,000 and $14,100,000 if the underwriter’s over-allotment option is exercised in full, depending on the number of private placement warrants purchased. Each private placement warrant entitles the holder to purchase for $11.50 one share of our Class A common stock. The private placement warrants (including the Class A common stock issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder until 30 days after the completion of our initial business combination.
Opco LLC Agreement
In connection with this offering, we will enter into the Amended and Restated Limited Liability Company Agreement of Opco (the “Opco LLC Agreement”). A form of the Opco LLC Agreement is filed as an exhibit to the registration statement of which this prospectus forms a part, and the following description of the Opco LLC Agreement is qualified in its entirety by reference thereto.
Conversion of Class B Units of Opco and Exchange Right
Our initial stockholders own all of the outstanding Class B Units of Opco. The Class B Units of Opco will convert into Class A Units of Opco in connection with the initial business combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like and subject to further adjustment as described below under “—Founder Shares Anti-Dilution.”
In addition, following our initial business combination, holders of Class A Units of Opco (other than TGR) will have the right (an “exchange right”), subject to certain limitations, to exchange Class A Units of Opco (and a corresponding number of shares of our Class B common stock) for, at our option, (i) shares of our Class A common stock on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, or (ii) a corresponding amount of cash. Our decision to make a cash payment upon an exercise of an exchange right will be made by our independent directors. We will determine whether to issue shares of our Class A common stock or pay cash based on facts in existence at the time of the decision, which we expect would include the relative value of the Class A common stock (including trading prices for the Class A common stock at the time), the cash purchase price, the availability of other sources of liquidity (such as an issuance of preferred stock) to acquire the Class A Units of Opco and alternative uses for such cash.
Holders of Class A Units of Opco (other than TGR) will generally be permitted to exercise the exchange right on a quarterly basis, subject to certain de minimis allowances. In addition, additional exchanges may occur in connection with certain specified events, and any exchanges involving 500,000 or more Class A Units of Opco (subject to our discretion to permit exchanges of a lower number of units) may occur at any time upon ten business days’ advanced notice. The exchange rights will be subject to certain limitations and restrictions intended to reduce the administrative burden of exchanges upon us and ensure that Opco will continue to be treated as a partnership for U.S. federal income tax purposes.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Following any exchange of Class A Units of Opco (and a corresponding number of shares of our Class B common stock), TGR will retain the Class A Units of Opco and cancel the shares of our Class B common stock. As the holders of Class A Units of Opco (other than TGR) exchange their Class A Units of Opco, our membership interest in Opco will be correspondingly increased, the number of shares of our Class A common stock outstanding will be increased, and the number of shares of our Class B common stock outstanding will be reduced.
In connection with our initial business combination, we might choose to issue additional Class A Units of Opco (and corresponding shares of our Class B common stock) to participants in the business combination, such as sellers of assets or entities or financing sources. We expect that any participants receiving Class A Units of Opco in the business combination will have an exchange right on substantially the same terms as described above.
Founder Shares Anti-Dilution
In the case that additional shares of our Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in the offering in connection with the initial business combination, the number of Class A Units of Opco into which the Class B Units of Opco will convert may be adjusted (unless the holders of a majority of the outstanding founder shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that, after all founder shares have been exchanged for shares of our Class A common stock, the aggregate number of shares of our Class A common stock received by holders in exchange for founder shares would equal 20% of the sum of the total outstanding shares of our Class A common stock upon the completion of this offering (excluding the sponsor shares and any shares issuable upon exercise of any warrants) plus all shares of our Class A common stock and equity-linked securities issued or deemed issued in connection with the business combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the business combination). In addition, the number of outstanding shares of our Class B common stock will be adjusted through a stock split or stock dividend so that the total number of outstanding shares of our Class B common stock corresponds to the total number of Class A Units of Opco outstanding (other than those held by TGR) plus the total number of Class A Units of Opco into which the Class B Units of Opco are entitled to convert.
Non-Liquidating Distributions and Allocations of Income and Loss
Our sponsor, executive officers and directors will agree that we will have only 15 months from the closing of this offering to complete our initial business combination (or up to 21 months, if the sponsor exercises its extension options). In the event that we receive notice from the sponsor five days prior to the applicable deadline of its intent to exercise an extension option, we intend to issue a press release announcing such intention to exercise the extension option at least three days prior to the applicable deadline. In addition, we intend to issue a press release the day after the applicable deadline announcing whether the funds were timely deposited. If we have not completed our initial business combination within such 15-month period (or 18-month or 21-month period, as applicable, if the sponsor exercises its extension options), we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less an amount required to satisfy taxes of the company and Opco and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares and Class A Units of Opco (other than those held by TGR), which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within such 15-month period (or 18-month or 21-month period, as applicable, if the sponsor exercises its extension options).
Pursuant to the Opco LLC Agreement and a letter agreement that our sponsor, officers and directors have entered into with us, they have agreed that any founder shares are subject to forfeiture, and thus will not be entitled to liquidating distributions from the trust account, and they will waive any such rights to
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liquidating distributions for any founder shares, if we fail to complete our initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options). However, if our initial stockholders or management team acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares and the sponsor shares if we fail to complete our initial business combination within the allotted 15-month time period (or 18-month or 21-month period, as applicable, if the sponsor exercises its extension options).
The underwriter has agreed to waive its rights to their deferred underwriting commission held in the trust account in the event we do not complete our initial business combination and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares and any Class A Units of Opco (other than those held by TGR).
After our initial business combination, net profits and net losses of Opco generally will be allocated to holders of Opco Units on a pro rata basis in accordance with their respective percentage ownership of Opco Units (except for certain allocations of book income and loss items and book-tax differences that may be specially allocated). After our initial business combination, to the extent cash is available, tax distributions will be made to the holders of Opco Units, on a pro rata basis in accordance with their respective percentage ownership of Opco Units, in an amount sufficient to allow TGR to satisfy its actual tax liabilities.
Issuance of Equity
Except as otherwise determined by us, at any time TGR issues a share of its Class A common stock or any other equity security, the net proceeds received by TGR with respect to such issuance, if any, shall be concurrently invested in Opco, and Opco shall issue to TGR one Class A Unit or other economically equivalent equity interest. Conversely, if at any time any shares of TGR’s Class A common stock are redeemed, repurchased, or otherwise acquired by TGR, including in connection with the exercise of redemption rights by holders of our public shares, Opco shall redeem, repurchase or otherwise acquire an equal number of Opco Units held by TGR, upon the same terms and for the same price, as the shares of our Class A common stock are redeemed, repurchased or otherwise acquired.
Other Transactions with Our Sponsor
As more fully discussed in the section of this prospectus titled “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 business combination 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 may pursue an Affiliated Joint Acquisition opportunity with an entity to which an officer or director has a fiduciary or contractual obligation. Any such entity may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the acquisition by issuing to such entity a class of equity or equity-linked securities.
Commencing on the date that our securities are first listed on the NYSE, we will pay our sponsor a total of $25,000 per month for administrative and support services. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.
We have agreed, pursuant to the administrative services agreement with our sponsor relating to the monthly reimbursement for office space and administrative services described above, that we will indemnify our sponsor from any claims arising out of or relating to this offering or the company’s or Opco’s operations or conduct of the company’s or Opco’s business or any claim against our sponsor alleging any expressed or implied management or endorsement by our sponsor of any of the company’s or Opco’s activities or any express or implied association between our sponsor and the company or Opco or any of their affiliates, which agreement will provide that the indemnified parties cannot access the funds held in our trust account.
Other than these monthly fees, no compensation of any kind, including finder’s and consulting fees, will be paid by the company to our sponsor, officers and directors, or any of their respective affiliates, for
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services rendered prior to or in connection with the completion of an initial business combination. However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
Prior to the closing of this offering, our sponsor loaned us $300,000 to be used for a portion of the expenses of this offering. These loans are non-interest bearing, unsecured and are due at the closing of this offering. The loan will be repaid upon the closing of this offering as part of the estimated $1,500,000 of offering expenses. The value of our sponsor’s interest in this transaction corresponds to the principal amount outstanding under any such loan.
In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete an initial business combination, we would repay such loaned amounts. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period. Except as set forth above, 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. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
After our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to our stockholders, to the extent then known, in the tender offer or proxy solicitation materials (as applicable) furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a stockholder meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation.
We will enter into a registration rights agreement with respect to the private placement warrants, the warrants issuable upon conversion of working capital loans (if any) and the shares of our Class A common stock issuable upon exercise of the private placement warrants and upon exchange of the founder shares, which is described under the heading “Description of Securities—Registration Rights.”
Related Party Policy
We have not yet adopted a formal policy for the review, approval or ratification of related party transactions. Accordingly, the transactions discussed above were not reviewed, approved or ratified in accordance with any such policy.
Prior to the consummation of this offering, we will adopt a code of ethics requiring us to avoid, wherever possible, all conflicts of interests, except under guidelines or resolutions approved by our Board (or the appropriate committee of our Board) or as disclosed in our public filings with the SEC. Under our code of ethics, conflict of interest situations will include any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) involving the company.
In addition, our audit committee, pursuant to a written charter that we will adopt prior to the consummation of this offering, will be responsible for reviewing and approving related party transactions to the extent that we enter into such transactions. An affirmative vote of a majority of the members of the audit committee present at a meeting at which a quorum is present will be required in order to approve a related party transaction. A majority of the members of the entire audit committee will constitute a quorum. Without a meeting, the unanimous written consent of all of the members of the audit committee
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
will be required to approve a related party transaction. We also require each of our directors and executive officers to complete a directors’ and officers’ questionnaire that elicits information about related party transactions.
These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer.
To further minimize conflicts of interest, we will not consummate an initial business combination with an entity that is affiliated with any of our sponsor, officers or directors unless we, or a committee of independent directors, have obtained an opinion from an independent investment banking firm which is a member of FINRA or an independent accounting firm that our initial business combination is fair to our company from a financial point of view. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers or directors, or our or their affiliates.
DESCRIPTION OF SECURITIES
Pursuant to our amended and restated certificate of incorporation, our authorized capital stock consists of 225,000,000 shares of our Class A common stock, $0.0001 par value, 25,000,000 shares of our Class B common stock, $0.0001 par value, and 1,000,000 shares of undesignated preferred stock, $0.0001 par value. The following description summarizes certain terms of our capital stock as set out more particularly in our amended and restated certificate of incorporation. Because it is only a summary, it may not contain all the information that is important to you.
Units
Each unit has an offering price of $10.00 and consists of one whole share of our Class A common stock and one-half of one warrant. Each whole warrant entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as described in this prospectus. Pursuant to the warrant agreement, a warrantholder may exercise its warrants only for a whole number of shares of our Class A common stock. This means that only a whole warrant may be exercised at any given time by a warrantholder. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least two units, you will not be able to receive or trade a whole warrant. The Class A common stock and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus unless UBS Securities LLC 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 shares of our Class A common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into shares of our Class A common stock and warrants. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least two units, you will not be able to receive or trade a whole warrant.
In no event will the Class A common stock and warrants be traded separately until we have filed with the SEC a Current Report on Form 8-K that includes an audited balance sheet reflecting our receipt of the gross proceeds at the closing of this offering. We will file a Current Report on Form 8-K that includes this audited balance sheet upon the completion of this offering, which is anticipated to take place three business days after the date of this prospectus. 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.
Common Stock
Upon the closing of this offering, 25,002,600 shares of our common stock will be outstanding (assuming no exercise of the underwriter’s over-allotment option and the corresponding forfeiture of 750,000 founder shares by our sponsor), consisting of:
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20,002,500 shares of our Class A common stock, including shares underlying the units being offered in this offering and shares included in sponsor shares; and
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5,000,100 shares of our Class B common stock held by our initial stockholders.
If we increase or decrease the size of this offering, we will effect a stock dividend or share contribution back to capital or other appropriate mechanism, as applicable, with respect to our founder shares immediately prior to the consummation of this offering in such amount as to maintain the ownership of founder shares by our initial stockholders prior to this offering at 20% of our total outstanding equity upon the consummation of this offering (excluding the sponsor shares).
Common stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. On any matter submitted to a vote of our stockholders, holders of our Class A common
DESCRIPTION OF SECURITIES
stock and holders of our Class B common stock will vote together as a single class on all matters submitted to a vote of our stockholders except as required by law. Unless specified in our amended and restated certificate of incorporation or bylaws, or as required by applicable provisions of the DGCL or applicable stock exchange rules, the affirmative vote of a majority of our shares of common stock that are voted is required to approve any such matter voted on by our stockholders. Our Board will be divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors. The holders of our Class A common stock are entitled to receive ratable dividends when, as and if declared by the Board out of funds legally available therefor. Holders of our Class B common stock do not have any right to receive a distribution upon a liquidation, dissolution or winding up of TGR.
Because our amended and restated certificate of incorporation authorizes the issuance of up to 225,000,000 shares of our Class A common stock, if we were to enter into a business combination, we may (depending on the terms of such a business combination) be required to increase the number of shares of our Class A common stock which we are authorized to issue at the same time as our stockholders vote on the business combination to the extent we seek stockholder approval in connection with our business combination.
Our Board 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 stockholders) serving a three-year term. In accordance with the NYSE 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 the NYSE. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws, unless such election is made by written consent in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination, and thus, we may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.
We will provide our public stockholders with the opportunity to redeem all or a portion of their 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 pay taxes of the company or Opco, divided by the number of then outstanding public shares and Class A Units of Opco (other than those held by TGR), subject to the limitations described herein. The amount in the trust account is initially anticipated to be approximately $10.30 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. Pursuant to the Opco LLC Agreement and a letter agreement that our sponsor, officers and directors have entered into with us, they have agreed that any founder shares and sponsor shares will not be entitled to redemption rights, and they will waive any such redemption rights for any public shares held by them, in connection with the completion of our business combination. Unlike many blank check companies that hold stockholder votes and conduct proxy solicitations in conjunction with their initial business combinations and provide for related redemptions of public shares for cash upon completion of such initial business combinations even when a vote is not required by law, if a stockholder vote is not required by law and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation, conduct the redemptions pursuant to the tender offer rules of the SEC, and file tender offer documents with the SEC prior to completing our initial business combination. Our amended and restated certificate of incorporation 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, stockholder approval of the transaction is required by law, or we decide to obtain stockholder approval for business or other legal reasons, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer
DESCRIPTION OF SECURITIES
rules. If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting. However, the participation of our sponsor, officers, directors, advisors or their affiliates in privately-negotiated transactions (as described in this prospectus), if any, could result in the approval of our business combination even if a majority of our public stockholders vote, or indicate their intention to vote, against such business combination. For purposes of seeking approval of the majority of our outstanding shares of common stock voted, non-votes will have no effect on the approval of our business combination once a quorum is obtained. We intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any such meeting, if required, at which a vote shall be taken to approve our business combination. These quorum and voting thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate our initial business combination.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions or repurchases in connection with our business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 20% of our Class A common stock, which we refer to as the Excess Shares. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our business combination. Our stockholders’ inability to redeem the Excess Shares will reduce their influence over our ability to complete our business combination, and such stockholders could suffer a material loss in their investment if they sell such Excess Shares on the open market. Additionally, such stockholders will not receive redemption distributions with respect to the Excess Shares if we complete the business combination. And, as a result, such stockholders will continue to hold that number of shares exceeding 20% and, in order to dispose such shares would be required to sell their stock in open market transactions, potentially at a loss.
If we seek stockholder approval in connection with our business combination, our initial stockholders have agreed to vote their founder shares and any public shares purchased during or after this offering in favor of our initial business combination. As a result, in addition to our initial stockholders’ founder shares and sponsor shares, we would need 7,500,001, or 37.5% (assuming all outstanding shares are voted and the over-allotment option is not exercised), or 1,250,001, or 6.25% (assuming only the minimum number of shares representing a quorum are voted and the over-allotment option is not exercised), of the 20,000,000 public shares sold in this offering to be voted in favor of the business combination (assuming all outstanding shares are voted) in order to have our initial business combination approved (assuming the over-allotment option is not exercised). Additionally, each public stockholder may elect to redeem its public shares irrespective of whether it votes for or against the proposed transaction (subject to the limitation described in the preceding paragraph).
Pursuant to our amended and restated certificate of incorporation, if we do not complete our business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), we will (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 the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less an amount required to satisfy taxes of the company and Opco and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares and Class A Units of Opco (other than those held by TGR), which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Pursuant to the Opco LLC Agreement and a letter agreement that our sponsor, officers and directors have entered into with us, they have agreed that any founder shares held by them are subject to forfeiture, and will not be entitled to liquidating distributions from the trust account, and they
DESCRIPTION OF SECURITIES
will waive any such rights to liquidating distributions for any founder shares, if we fail to complete our business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options). However, if our sponsor, officers or directors acquire public shares, other than sponsor shares, in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares and the sponsor shares if we fail to complete our business combination within the prescribed time period.
In the event of a liquidation, dissolution or winding up of the company after a business combination, our stockholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the common stock. Our stockholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the common stock, except that we will provide our public stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account, upon the completion of our initial business combination, subject to the limitations described herein.
Founder Shares
The founder shares include shares of our Class B common stock and Class B Units of Opco (or the Class A Units of Opco into which such Class B Units convert in connection with our initial business combination). The Class B Units of Opco will convert into Class A Units of Opco in connection with our initial business combination one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like and subject to further adjustment as provided herein. The founder shares are exchangeable for shares of our Class A common stock after the time of our initial business combination, subject to adjustment for stock splits, dividends, reorganizations and the like and subject to further adjustment as provided herein.
Together, the founder shares are substantially similar to the shares of Class A common stock included in the units being sold in this offering, except that:
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the founder shares consist of Class B Units of Opco (and any Class A Units of Opco into which such Class B Units are converted) and a corresponding number of shares of our Class B common stock, which together will be exchangeable for shares of our Class A common stock after the time of our initial business combination on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described herein; following our initial business combination, holders of our Class A common stock and holders of our Class B common stock will generally vote together as a single class on matters presented for a stockholder vote, except as required by Delaware law or stock exchange rule, with each share of our common stock entitling the holder to one vote;
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the founder shares are subject to certain transfer restrictions, as described in more detail below;
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pursuant to the Opco LLC Agreement and a letter agreement that our sponsor, officers and directors have entered into with us, they have agreed:
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that any founder shares and sponsor shares held by them will not be entitled to redemption rights, and they will waive any such redemption rights for any public shares held by them, in connection with the completion of our initial business combination;
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that any founder shares and sponsor shares held by them will not be entitled to redemption rights, and they will waive any such redemption rights for any public shares held by them, in connection with a stockholder vote to amend our amended and restated certificate of incorporation in a manner that would affect the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options);
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that any founder shares held by them are subject to forfeiture, and thus will not be entitled to liquidating distributions from the trust account, and they will waive any such rights to liquidating distributions for any founder shares, if we fail to complete our initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options) (although they will be entitled to liquidating distributions from the trust
DESCRIPTION OF SECURITIES
account with respect to any public shares and sponsor shares they hold if we fail to complete our business combination within the prescribed time frame);
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in certain limited circumstances the Class B Units of Opco will have more limited rights to current or liquidating distributions from us. If we submit our initial business combination to our public stockholders for a vote, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the initial business combination. Our initial stockholders have agreed to vote any founder shares and sponsor shares held by them 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 stockholders’ founder shares and sponsor shares, we would need 7,500,001, or 37.5% (assuming all outstanding shares are voted and the over-allotment option is not exercised), or 1,250,001, or 6.25% (assuming only the minimum number of shares representing a quorum are voted and the over-allotment option is not exercised), of the 20,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have such initial business combination approved; and
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the Class A common stock into which the founder shares are exchangeable are entitled to registration rights.
The founder shares consist of Class B Units of Opco (and any Class A Units of Opco into which such Class B Units are converted) and a corresponding number of shares of our Class B common stock, which together will be exchangeable for shares of our Class A common stock after the time of our initial business combination on a one-for-one basis (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like), and subject to further adjustment as provided herein. In the case that additional shares of our Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in this offering and related to the closing of the business combination, the number of Class A Units of Opco into which the Class B Units of Opco will convert may be adjusted (unless the holders of a majority of the outstanding founder shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that, after all founder shares have been exchanged for shares of our Class A common stock, the aggregate number of shares of our Class A common stock received by holders in exchange for founder shares would equal 20% of the sum of the total outstanding shares of our Class A common stock upon completion of this offering (excluding the sponsor shares and any shares issuable upon exercise of any warrants) plus all shares of our Class A common stock and equity-linked securities issued or deemed issued in connection with the business combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the business combination). In addition, the number of outstanding shares of our Class B common stock will be adjusted through a stock split or stock dividend so that the total number of outstanding shares of our Class B common stock corresponds to the total number of Class A Units of Opco outstanding (other than those held by TGR) plus the total number of Class A Units of Opco into which the Class B Units of Opco are entitled to convert.
Sponsor Shares
In May 2021, our sponsor purchased 100 Class A Units of Opco and a corresponding number of shares of our Class B common stock (which together will be exchangeable into shares of Class A common stock after our initial business combination on a one-for-one basis) and 2,500 shares of our Class A common stock.
Our initial stockholders have agreed not to transfer, assign or sell any founder shares or sponsor shares held by them, and any shares of our Class A common stock acquired upon exchange of founder shares, until one year after the date of the consummation of our initial business combination or earlier if, subsequent to our business combination, (i) the last sale price of our common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination or (ii) we consummate a subsequent liquidation, merger, stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property. Our sponsor (or its permitted transferees) will forfeit up to 750,000 founder shares depending on the exercise of the over-allotment option in order to maintain our initial stockholders’
DESCRIPTION OF SECURITIES
ownership of 20% of our total outstanding equity after this offering (excluding the sponsor shares). Together, the founder shares are substantially similar to the shares of common stock included in the units being sold in this offering, other than certain distribution rights. However, the holders have agreed (A) to vote any shares owned by them in favor of any proposed business combination and (B) not to convert any shares in connection with a stockholder vote to approve a proposed initial business combination.
Preferred Stock
Our amended and restated certificate of incorporation will provide that shares of preferred stock may be issued from time to time in one or more series. Our Board 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 will be able to, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover effects. The ability of our Board to issue preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of existing management. We have no preferred stock outstanding at the date hereof. Although we do not currently intend to issue any shares of preferred stock, we cannot assure you that we will not do so in the future. No shares of preferred stock are being issued or registered in this offering.
Warrants
Public Stockholders’ Warrants
Each whole warrant entitles the registered holder to purchase one whole share of our Class A common stock at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing 30 days after the completion of our initial business combination, provided that we have an effective registration statement under the Securities Act covering the shares of our Class A common stock 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 warrantholder may exercise its warrants only for a whole number of shares of our Class A common stock. This means that only a whole warrant may be exercised at any given time by a warrantholder. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least two units, you will not be able to receive or trade a whole warrant. The warrants will expire five years after the completion of our initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation. Upon the exercise of a warrant to purchase one share of our Class A common stock, we will exercise a corresponding warrant to acquire one Class A Unit of Opco.
We will not be obligated to deliver any shares of our Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the shares of our Class A common stock 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. No warrant will be exercisable and we will not be obligated to issue shares of our Class A common stock upon exercise of a warrant unless the Class A common stock 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 share of our Class A common stock underlying such unit.
We are not registering the shares of Class A common stock issuable upon exercise of the warrants at this time. However, we have agreed that as soon as practicable, but in no event later than 20 business days after
DESCRIPTION OF SECURITIES
the consummation of our initial business combination, we will use our commercially reasonable efforts to file a post-effective amendment to the registration statement for this offering or a new registration statement with the SEC under the Securities Act covering the shares of Class A common stock issuable upon exercise of the warrants. We will use our commercially reasonable efforts to cause the same to become effective and to maintain the effectiveness of such registration statement or post-effective amendment to the registration statement for this offering, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if our Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of 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 such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the excess of the “fair market value” (defined below) over the exercise price of the warrants by (y) the fair market value. The “fair market value” as used in this paragraph shall mean the volume weighted average price of our shares of Class A common stock as reported during the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is received by the warrant agent.
Redemption of warrants when our Class A common stock equals or exceeds $18.00.
Once the warrants become exercisable, we may call the warrants for redemption for cash:
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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 (the “30-day redemption period”) to each warrantholder; and
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if, and only if, the reported last sale price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three business days before we send the notice of redemption to the warrantholders.
We will not redeem the warrants for cash unless a registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of Class A common stock is available throughout the 30-day redemption period. Any such exercise would not be on a “cashless” basis and would require the exercising warrantholder to pay the exercise price for each warrant being exercised. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
We have established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and we issue a notice of redemption of the warrants, each warrantholder will be entitled to exercise his, her or its warrant prior to the scheduled redemption date. However, the price of our Class A common stock may fall below the $18.00 redemption trigger price (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) as well as the $11.50 (for whole shares) warrant exercise price after the redemption notice is issued.
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
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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 shares of our Class A common stock outstanding immediately after giving effect to such exercise.
Anti-Dilution Adjustments.
The stock prices set forth in the column headings of the table above shall be adjusted as of any date on which the number of shares issuable upon exercise of a warrant is adjusted pursuant to the following three paragraphs. The adjusted stock prices in the column headings shall equal the stock prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the number of shares 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 number of outstanding shares of our Class A common stock is increased by a stock dividend payable in shares of our Class A common stock, or by a split-up of shares of our Class A common stock or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of our Class A common stock issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding shares of our Class A common stock. A rights offering to holders of our Class A common stock entitling holders to purchase shares of our Class A common stock at a price less than the fair market value will be deemed a stock dividend of a number of shares of our Class A common stock equal to the product of (i) the number of shares of our Class A common stock 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 our Class A common stock) multiplied by (ii) one (1) minus the quotient of (x) the price per share of our Class A common stock paid in such rights offering divided by (y) the fair market value. For these purposes (i) if the rights offering is for securities convertible into or exercisable for our Class A common stock, in determining the price payable for our Class A common stock, 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) fair market value means the volume weighted average price of our Class A common stock as reported during the ten (10) trading day period ending on the trading day prior to the first date on which the shares of our Class A common stock 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 our Class A common stock on account of such shares of our Class A common stock (or other shares of our capital stock into which the warrants are convertible), other than (a) as described above, (b) certain ordinary cash dividends, (c) to satisfy the redemption rights of the holders of our Class A common stock in connection with a proposed initial business combination, (d) to satisfy the redemption rights of the holders of our Class A common stock in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our Class A common stock if we have not consummated our initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), or (e) in connection with the redemption of our public shares upon our failure to complete our initial business combination, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each share of our Class A common stock in respect of such event.
If the number of outstanding shares of our Class A common stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of our Class A common stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of our Class A common stock issuable on exercise of each warrant will be decreased in proportion to such decrease in outstanding shares of our Class A common stock.
Whenever the number of shares of our Class A common stock purchasable upon the exercise of the warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will
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be the number of shares of our Class A common stock purchasable upon the exercise of the warrants immediately prior to such adjustment, and (y) the denominator of which will be the number of shares of our Class A common stock so purchasable immediately thereafter.
In case of any reclassification or reorganization of the outstanding shares of our Class A common stock (other than those described above or that solely affects the par value of such shares of our Class A common stock), 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 shares of our Class A common stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially as an entirety in connection with which we are dissolved, the holders of the warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the warrants and in lieu of the shares of our Class A common stock immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the warrants would have received if such holder had exercised his, her or its warrants immediately prior to such event. If less than 70% of the consideration receivable by the holders of our Class A common stock in such a transaction is payable in the form of common stock in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder 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 warrant exercise price will not be adjusted for other events.
The warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision or mistake (including to conform the terms of the warrants to those described herein, but requires the approval by the holders of at least 50% of the then outstanding warrants to make any change that adversely affects the interests of the registered holders of warrants. 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.
In addition, if we issue additional shares of common stock 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 share of common stock (with such issue price or effective issue price to be determined in good faith by our Board and, in the case of any such issuance to our 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 exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the newly issued price, the $18.00 per share redemption trigger price described above under “—Redemption of Warrants When Our Class A Common Stock Equals or Exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 180% of the newly issued price, and the $10.00 per share redemption trigger price described above under “—Redemption of Warrants When Our Class A Common Stock Equals or Exceeds $10.00” will be adjusted (to the nearest cent) to be equal to the newly issued price.
The warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price (or on a cashless basis, if applicable), by certified or official bank check payable to us, for the number of warrants being exercised. The warrantholders do not have the rights or privileges of holders of our Class A common stock or any voting rights until they exercise their warrants and receive shares of our Class A common stock.
DESCRIPTION OF SECURITIES
After the issuance of shares of our Class A common stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.
No fractional shares of Class A common stock will be issued upon exercise of the warrants on a cashless basis. If, upon exercise of the warrants on a cashless basis, a holder would be entitled to receive a fractional interest in a share, we will round down to the nearest whole number of the number of shares of Class A common stock to be issued to the holder.
Private Placement Warrants
The private placement warrants (including the shares of our Class A common stock issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business combination (except, among other limited exceptions as described under “Principal Stockholders—Transfers of Founder Shares and Private Placement Warrants,” to our officers and directors and other persons or entities affiliated with our sponsor) 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, including as to exercise price, exercisability and exercise period. Upon the exercise of a warrant to purchase one share of our Class A common stock, TGR will exercise a corresponding warrant to acquire one Class A Unit of Opco.
In order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts out of the proceeds of the trust account released to us. 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 at a price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period.
Our sponsor has agreed not to transfer, assign or sell any of the private placement warrants (including the our Class A common stock issuable upon exercise of any of these warrants) until the date that is 30 days after the date we complete our initial business combination, except that, among other limited exceptions as described under “Principal Stockholders—Transfers of Founder Shares and Private Placement Warrants” made to our officers and directors and other persons or entities affiliated with our sponsor.
Dividends
We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of a business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial conditions subsequent to completion of a business combination. The payment of any cash dividends subsequent to a business combination will be within the discretion of our Board at such time. Our Board is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future, except if we increase the size of the offering, in which case we will effect a stock dividend immediately prior to the consummation of the offering in such amount as to maintain the ownership of founder shares by our initial stockholders prior to this offering at 20% of the total outstanding equity upon the consummation of this offering (except the sponsor shares and any shares issuable upon exercise of any warrants). Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
Our Transfer Agent and Warrant Agent
The transfer agent for our common stock 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 stockholders, directors, officers and employees against all claims and losses that may arise out of acts performed or omitted for its activities in that capacity, except for any liability due to any gross negligence, willful misconduct or bad faith of the indemnified person or entity.
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Continental Stock Transfer & Trust Company has agreed that it has no right of set-off or any right, title, interest or claim of any kind to, or to any monies in, the trust account, and has irrevocably waived any right, title, interest or claim of any kind to, or to any monies in, the trust account that it may have now or in the future. Accordingly, any indemnification provided will only be able to be satisfied, or a claim will only be able to be pursued, solely against us and our assets outside the trust account and not against any monies in the trust account or interest earned thereon.
Our Amended and Restated Certificate of Incorporation
Our amended and restated certificate of incorporation will contain certain requirements and restrictions relating to this offering that will apply to us until the completion of our initial business combination. These provisions cannot be amended without the approval of the holders of 65% of our common stock. Our initial stockholders, who will beneficially own shares representing 20% of the total outstanding shares of our Class A common stock upon the closing of this offering (assuming the exchange of all the founder shares for Class A common stock and that they do not purchase any units in this offering and excluding the sponsor shares), will participate in any vote to amend our amended and restated certificate of incorporation and will have the discretion to vote in any manner they choose. Specifically, our amended and restated certificate of incorporation provides, among other things, that:
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If we do not complete our initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), 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 subject to lawfully available funds therefor, redeem 100% of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to pay taxes of the company or Opco (less an amount required to satisfy taxes of the company and Opco up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares and Class A Units of Opco (other than those held by TGR), which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law;
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Prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business combination;
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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, KRP or either of their officers or directors, including TGR and/or one or more of its portfolio companies, 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 that is a member of FINRA or another independent entity that commonly renders valuation opinions stating that the consideration to be paid by us in such an business combination is fair to our company from a financial point of view;
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If a stockholder vote on our initial business combination is not required by law and we do not decide to hold a stockholder vote for business or other legal reasons, we will offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, and will file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act;
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The NYSE rules require that our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the net assets held in trust (net of amounts disbursed to management for working capital purposes and excluding the amount of any deferred underwriting commissions held in trust) at the time of the agreement to enter into the initial business combination;
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If our stockholders approve an amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), we will provide our public stockholders with the opportunity to redeem all or a portion of their shares of our Class A common stock upon such approval at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to pay taxes of the company or Opco, divided by the number of then outstanding public shares and Class A Units of Opco (other than those held by TGR); and
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We will not effectuate our initial business combination solely with another blank check company or a similar company with nominal operations.
In addition, our amended and restated certificate of incorporation will provide that under no circumstances will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001.
Certain Anti-Takeover Provisions of Delaware Law and our Amended and Restated Certificate of Incorporation and Bylaws
We have opted out of Section 203 of the DGCL. However, our amended and restated certificate of incorporation contains similar provisions providing that we may not engage in certain “business combinations” with any “interested stockholder” for a three-year period following the time that the stockholder became an interested stockholder, unless:
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prior to such time, our Board approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
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upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, excluding certain shares; or
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at or subsequent to that time, the business combination is approved by our Board and by the affirmative vote of holders of at least 66-2/3% of the outstanding voting stock that is not owned by the interested stockholder.
Generally, a “business combination” includes a merger, asset or stock sale or certain other transactions resulting in a financial benefit to the interested stockholder. Subject to certain exceptions, an “interested stockholder” is a person who, together with that person’s affiliates and associates, owns, or within the previous three years owned, 20% or more of our voting stock.
Under certain circumstances, this provision will make it more difficult for a person who would be an “interested stockholder” to effect various business combinations with a corporation for a three-year period. This provision may encourage companies interested in acquiring our company to negotiate in advance with our Board because the stockholder approval requirement would be avoided if our Board approves either the business combination or the transaction which results in the stockholder becoming an interested stockholder. These provisions also may have the effect of preventing changes in our Board and may make it more difficult to accomplish transactions which stockholders may otherwise deem to be in their best interests.
Our amended and restated certificate of incorporation provides that our sponsor and its respective affiliates, any of their respective direct or indirect transferees of at least 20% of our outstanding common stock and any group as to which such persons are party to, do not constitute “interested stockholders” for purposes of this provision.
Our amended and restated certificate of incorporation will provide that our Board 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 common stock and preferred stock are available for future issuances without stockholder approval and could be utilized for a variety of corporate purposes, including future
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offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
Exclusive Forum for Certain Lawsuits
Our amended and restated certificate of incorporation will require, unless we consent in writing to the selection of an alternative forum, that (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee to us or our stockholders, (iii) any action asserting a claim against us, our directors, officers or employees arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or bylaws, or (iv) any action asserting a claim against us, our directors, officers or employees governed by the internal affairs doctrine may be brought only in the Court of Chancery in the State of Delaware, except any claim (A) as to which the Court of Chancery of the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery or (C) for which the Court of Chancery does not have subject matter jurisdiction. If an action is brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have the effect of discouraging lawsuits against our directors and officers, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder.
Notwithstanding the foregoing, our amended and restated certificate of incorporation will provide that the exclusive forum provision will not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Additionally, unless we consent in writing to the selection of an alternative forum, our amended and restated certificate of incorporation will provide that the federal courts will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act against us or any of our directors, officers, other employees or agents. Section 22 of the Securities Act, however, created concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce such provisions, and the enforceability of similar choice of forum provisions in other companies’ charter documents has been challenged in legal proceedings. While the Delaware courts have determined that such exclusive forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions, and there can be no assurance that such provisions will be enforced by a court in those other jurisdictions. Any person or entity purchasing or otherwise acquiring any interest in our securities shall be deemed to have notice of and consented to these provisions; however, we note that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.
Special Meeting of Stockholders
Our bylaws provide that special meetings of our stockholders may be called only by a majority vote of our Board, by our Chief Executive Officer or by our Chairman.
Advance Notice Requirements for Stockholder Proposals and Director Nominations
Our bylaws provide that stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual meeting of stockholders must provide timely notice of their intent in writing. To be timely, a stockholder’s notice will need to be received by the company secretary at our principal executive offices not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the anniversary date of the immediately
DESCRIPTION OF SECURITIES
preceding annual meeting of stockholders. Pursuant to Rule 14a-8 under the Exchange Act, proposals seeking inclusion in our annual proxy statement must comply with the notice periods contained therein. Our bylaws also specify certain requirements as to the form and content of a stockholders’ meeting. These provisions may preclude our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders. Our bylaws will allow the chairman of the meeting at a meeting of the stockholders to adopt rules and regulations for the conduct of meetings which may have the effect of precluding the conduct of certain business at a meeting if the rules and regulations are not followed. These provisions may also defer, delay or discourage a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to influence or obtain control of us.
Action by Written Consent
Subsequent to the consummation of the offering, any action required or permitted to be taken by our common stockholders must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders other than with respect to our Class B common stock.
Classified Board of Directors
Our Board will initially be divided into three classes, Class I, Class II and Class III, with members of each class serving staggered three-year terms. Our amended and restated certificate of incorporation will provide that the authorized number of directors may be changed only by resolution of the Board. Subject to the terms of any preferred stock, any or all of the directors may be removed from office at any time, but only for cause and only by the affirmative vote of holders of a majority of the voting power of all then outstanding shares of our capital stock entitled to vote generally in the election of directors, voting together as a single class. Any vacancy on our Board, including a vacancy resulting from an enlargement of our Board, may be filled only by vote of a majority of our directors then in office.
Class B Common Stock Consent Right
For so long as any shares of our Class B common stock remain outstanding, we may not, without the prior vote or written consent of the holders of a majority of the shares of our Class B common stock then outstanding, voting separately as a single class, amend, alter or repeal any provision of our certificate of incorporation, whether by merger, consolidation or otherwise, if such amendment, alteration or repeal of would alter or change the powers, preferences or relative, participating, optional or other or special rights of the Class B common stock. Any action required or permitted to be taken at any meeting of the holders of our Class B common stock may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of the outstanding Class B common stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of our Class B common stock were present and voted.
Securities Eligible for Future Sale
Immediately after the consummation of this offering, we will have 25,002,600 (or 28,752,600 if the underwriter’s over-allotment option is exercised in full) shares of common stock outstanding. Of these shares, the 20,000,000 shares (or 23,000,000 if the underwriter’s over-allotment option is exercised in full) sold in this offering will be freely tradable without restriction or further registration under the Securities Act, except for any shares purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act. All of the remaining 5,002,600 (or 5,752,600 if the underwriter’s over-allotment option is exercised in full) shares and all 12,750,000 private placement warrants (or 14,100,000 private placement warrants if the underwriter’s over-allotment option is exercised in full) are restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering, and the shares of our Class A common stock and Class B common stock and private placement warrants are subject to transfer restrictions as set forth elsewhere in this prospectus. These restricted securities will be subject to registration rights as more fully described below under “—Registration Rights.”
DESCRIPTION OF SECURITIES
Rule 144
Pursuant to Rule 144, a person who has beneficially owned restricted shares of our common stock or warrants for at least six months would be entitled to sell their securities provided that (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 of our common stock or warrants for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:
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1% of the total number of shares of common stock then outstanding, which will equal 250,000 shares immediately after this offering (or 287,500 if the underwriter exercises its over-allotment option in full); or
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the average weekly reported trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.
Sales by our affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.
Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies
Rule 144 is not available for the resale of securities initially issued by shell companies (other than 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 materials required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Current Reports on Form 8-K; and
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at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
As a result, our initial stockholders will be able to sell their founder shares and private placement warrants, as applicable, pursuant to Rule 144 without registration one year after we have completed our initial business combination.
Registration Rights
The holders of the founder shares, private placement warrants and warrants that may be issued upon conversion of working capital loans (and any shares of our Class A common stock issuable upon the exercise of the private placement warrants or exchange of the founder shares issued upon exercise of the private placement warrants and warrants that may be issued upon conversion of working capital loans and upon exchange of the founder shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of the registration statement of which this prospectus forms a part, requiring us to register such securities for resale (in the case of the founder shares, only after they become exchangeable for shares of our Class A common stock). The holders of these securities, having at least $25 million in the aggregate, 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 and rights to require us to register for resale such securities pursuant to Rule 415
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under the Securities Act. We will bear the expenses incurred in connection with the filing of any such registration statements.
Listing of Securities
We have been approved to list our units, Class A common stock and warrants on the NYSE under the symbols “TGR.U,” “TGR” and “TGR.WS,” respectively. We expect that our units will be listed on the NYSE on or promptly after the effective date of the registration statement. Following the date the shares of our Class A common stock and warrants are eligible to trade separately, we anticipate that the shares of our Class A common stock and warrants will be listed separately and as a unit on the NYSE. Additionally, the units will automatically separate into their component parts and will not be traded after completion of our initial business combination.
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of certain material U.S. federal income tax consequences of the acquisition, ownership and disposition of our units, shares of Class A common stock and warrants, which we refer to collectively as our securities. Because the components of a unit are 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 common stock and warrant components of the unit. As a result, the discussion below with respect to actual holders of Class A common stock and warrants should also apply to holders of units (as the deemed owners of the underlying Class A common stock and warrants that comprise 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 pursuant to this offering and hold the unit and each component of the unit as a capital asset within the meaning of Section 1221 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). This discussion assumes that the Class A common stock and warrants will trade separately and that any distributions made (or deemed made) by us on our Class A common stock 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 does not address the U.S. federal income tax consequences to our sponsor, officers or directors, or to holders of private placement warrants. This discussion is a summary only and does not describe all of the tax consequences that may be relevant to you in light of your particular circumstances, including but not limited to the alternative minimum tax, the Medicare tax on certain net investment income and the different consequences that may apply if you are subject to special rules that apply to certain types of investors, including but not limited to:
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banks, financial institutions or financial services entities;
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broker-dealers;
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governments or agencies or instrumentalities thereof;
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regulated investment companies;
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real estate investment trusts;
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expatriates or former long-term residents of the United States;
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except as specifically described below, persons that actually or constructively own five percent or more (by vote or value) of our shares;
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persons that acquired our securities pursuant to an exercise of employee share options, in connection with employee share incentive plans or otherwise as compensation;
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insurance companies;
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dealers or traders subject to a mark-to-market method of accounting with respect to the securities;
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persons holding the securities as part of a “straddle,” constructive sale, hedge, wash sale, conversion or other integrated or similar transaction;
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U.S. holders (as defined below) whose functional currency is not the U.S. dollar;
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tax-exempt entities;
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controlled foreign corporations;
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passive foreign investment companies; and
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partnerships (or entities or arrangements classified as partnerships or other pass-through entities for U.S. federal income tax purposes) and any beneficial owners of such partnerships.
If a partnership (including an entity or arrangement treated as a partnership or other pass-thru entity for U.S. federal income tax purposes) holds our securities, the tax treatment of a partner, member or other beneficial owner in such partnership will generally depend upon the status of the partner, member or
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other beneficial owner, the activities of the partnership and certain determinations made at the partner, member or other beneficial owner level. If you are a partner, member or other beneficial owner of a partnership holding our securities, you are urged to consult your tax advisor regarding the tax consequences of the acquisition, ownership and disposition of our securities.
This discussion is based on the Code, and administrative pronouncements, judicial decisions and final, temporary and proposed Treasury Regulations as of the date hereof, which are subject to change, possibly on a retroactive basis, and changes to any of which subsequent to the date of this prospectus may affect the tax consequences described herein. This discussion does not address any aspect of state, local or non-U.S. taxation, or any U.S. federal taxes other than income taxes (such as gift and estate taxes).
We have not sought, and do not expect to seek, a ruling from the U.S. Internal Revenue Service (the “IRS”) as to any U.S. federal income tax consequence described herein. The IRS may disagree with the discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulations, administrative rulings or court decisions will not adversely affect the accuracy of the statements in this discussion. You are urged to consult your tax advisor with respect to the application of U.S. federal tax laws to your particular situation, as well as any tax consequences arising under the laws of any state, local or foreign jurisdiction.
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 OWN TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO SUCH INVESTOR OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY U.S. FEDERAL NON-INCOME, STATE, LOCAL, AND NON-U.S. TAX LAWS.
Personal Holding Company Status
We could be subject to a second level of U.S. federal income tax on a portion of our income if we are determined to be a personal holding company (a “PHC”) for U.S. federal income tax purposes. A U.S. corporation generally will be classified as a PHC for U.S. federal income tax purposes in a given taxable year if (i) at any time during the last half of such taxable year, five or fewer individuals (without regard to their citizenship or residency and including as individuals for this purpose certain entities such as certain tax-exempt organizations, pension funds and charitable trusts) own or are deemed to own (pursuant to certain constructive ownership rules) more than 50% of the stock of the corporation by value and (ii) at least 60% of the corporation’s adjusted ordinary gross income, as determined for U.S. federal income tax purposes, for such taxable year consists of PHC income (which includes, among other things, dividends, interest, certain royalties, annuities and, under certain circumstances, rents).
Depending on the date and size of our initial business combination, it is possible that at least 60% of our adjusted ordinary gross income may consist of PHC income. In addition, depending on the concentration of our stock in the hands of individuals, including the members of our sponsor and certain tax-exempt organizations, pension funds and charitable trusts, it is possible that more than 50% of our stock may be owned or deemed owned (pursuant to the constructive ownership rules mentioned above) by five or fewer such persons during the last half of a taxable year. Thus, no assurance can be given that we will not be a PHC following this offering or in the future. If we are or were to become a PHC in a given taxable year, we would be subject to an additional PHC tax, currently imposed at a rate of 20%, on our undistributed PHC income, which generally includes our taxable income, subject to certain adjustments.
Allocation of Purchase Price and Characterization of a Unit
No statutory, administrative or judicial authority directly addresses the treatment of a unit or any instrument 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 common stock and one-half of one warrant to acquire one share of our Class A common stock and, by purchasing a unit, you will agree to adopt such treatment for U.S. federal income 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 share of Class A common stock and
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the one-half 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 his or her own determination of such value based on all the relevant facts and circumstances. Therefore, we strongly urge each investor to consult his or her tax advisor regarding the determination of value for these purposes. The price allocated to each share of Class A common stock and the one-half of one warrant should be the stockholder’s tax basis in such share or one-half of one warrant, as the case may be. Any disposition of a unit should be treated for U.S. federal income tax purposes as a disposition of the share of Class A common stock and one-half of one warrant comprising the unit, and the amount realized on the disposition should be allocated between the share of Class A common stock and the one-half of one warrant based on their respective relative fair market values (as determined by each such unit holder based on all the relevant facts and circumstances) at the time of disposition. The separation of shares of Class A common stock and warrants comprising units and the combination of two halves of a warrant into a single warrant should not be a taxable event for U.S. federal income tax purposes.
The foregoing treatment of the units, shares of Class A common stock, and warrants and a holder’s purchase price allocation are not binding on the IRS or the courts. Because there are no authorities that directly address instruments that are similar to the units, no assurance can be given that the IRS or the courts will agree with the characterization described above or the discussion below. Accordingly, each prospective investor is urged to consult its own tax advisors regarding the tax consequences of an investment in a unit (including alternative characterizations of a unit). The balance of this discussion assumes that the characterization of the units described above will be respected for U.S. federal income tax purposes.
U.S. Holders
This section applies to you if you are a “U.S. holder.” A U.S. holder is a beneficial owner of our units, shares of Class A common stock or warrants who or that is, for U.S. federal income tax purposes:
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an individual who is a citizen or resident of the United States;
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a corporation (or other entity taxable as a corporation) organized in or under the laws of the United States, any state thereof or the District of Columbia;
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an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or
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a trust, if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons (as defined in the Code) have authority to control all substantial decisions of the trust or (ii) it has a valid election in effect under Treasury Regulations to be treated as a United States person.
Taxation of Distributions.
If we pay distributions in cash or other property (other than certain distributions of our stock or rights to acquire our stock) to U.S. holders of shares of our Class A common stock, such distributions generally will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of current and accumulated earnings and profits will constitute a return of capital that will be applied against and reduce (but not below zero) the U.S. holder’s adjusted tax basis in our Class A common stock. Any remaining excess will be treated as gain realized on the sale or other disposition of the Class A common stock and will be treated as described under “U.S. Holders—Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants” below.
Dividends we pay to a U.S. holder that is treated as a taxable corporation generally will qualify for the dividends received deduction if the requisite holding period is satisfied. With certain exceptions (including, but not limited to, dividends treated as investment income for purposes of investment interest deduction limitations), and provided certain holding period requirements are met, dividends we pay to a non-corporate U.S. holder may constitute “qualified dividend income” that will be subject to tax at the maximum tax rate accorded to long-term capital gains. It is unclear whether the redemption rights with respect to the Class A common stock described in this prospectus may prevent a U.S. holder from satisfying the applicable
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holding period requirements with respect to the dividends received deduction or the preferential tax rate on qualified dividend income, as the case may be. If the holding period requirements are not satisfied, then corporate U.S. holders may not be able to qualify for the dividends received deduction and would have taxable income equal to the entire dividend amount, and non-corporate U.S. holders may be subject to tax on such dividend at regular ordinary income tax rates instead of the preferential rate that applies to qualified dividend income.
Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants.
Upon a sale or other taxable disposition of our Class A common stock or warrants (which, in general, would include a redemption of Class A common stock or warrants that is treated as a sale of such securities as described below, including as a result of a dissolution and liquidation in the event we do not consummate an initial business combination within the required time period), a U.S. holder generally will recognize capital gain or loss in an amount equal to the difference between the amount realized and the U.S. holder’s adjusted tax basis in the Class A common stock or warrants. Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. holder’s holding period for the Class A common stock or warrants so disposed of exceeds one year. It is unclear, however, whether the redemption rights with respect to the Class A common stock described in this prospectus may suspend the running of the applicable holding period for this purpose. If the running of the holding period for the Class A common stock is suspended, then non-corporate U.S. holders may not be able to satisfy the one-year holding period requirement for long-term capital gain treatment, in which case any gain on a sale or taxable disposition of the shares or warrants would be subject to short-term capital gain treatment and would be taxed at regular ordinary income tax rates. Long-term capital gains recognized by non-corporate U.S. holders may be eligible to be taxed at reduced rates. The deductibility of capital losses is subject to limitations.
Generally, the amount of gain or loss recognized by a U.S. holder is an amount equal to the difference between (i) the sum of the amount of cash and the fair market value of any property received in such disposition (or, if the Class A common stock 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 common stock or the warrants based upon the then relative fair market values of the Class A common stock and the warrants included in the units) and (ii) the U.S. holder’s adjusted tax basis in its Class A common stock or warrants so disposed of. A U.S. holder’s adjusted tax basis in its Class A common stock or warrants generally will equal the U.S. holder’s acquisition cost (that is, as discussed above, the portion of the purchase price of a unit allocated to a share of Class A common stock or one-half of one warrant or, as discussed below, the U.S. holder’s initial basis for Class A common stock received upon exercise of warrants) less, in the case of a share of Class A common stock, any prior distributions treated as a return of capital.
Redemption of Class A Common Stock.
In the event that a U.S. holder’s Class A common stock is redeemed pursuant to the redemption provisions described in this prospectus under the section of this prospectus entitled “Description of Securities—Common Stock” or if we purchase a U.S. holder’s Class A common stock in an open market transaction (such open market purchase of Class A common stock by us is referred to as a “redemption” for the remainder of this discussion), the treatment of the transaction for U.S. federal income tax purposes will depend on whether the redemption qualifies as a sale of Class A common stock under Section 302 of the Code. If the redemption qualifies as a sale of Class A common stock, the U.S. holder will be treated as described under “U.S. Holders—Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants” above. If the redemption does not qualify as a sale of Class A common stock, the U.S. holder will be treated as receiving a corporate distribution with the tax consequences described above under “U.S. Holders—Taxation of Distributions”. Whether a redemption qualifies for sale treatment will depend largely on the total number of shares of our stock treated as held by the U.S. holder (including any stock constructively owned by the U.S. holder as described in the following paragraph) relative to all of our shares outstanding both before and after the redemption. The redemption of Class A common stock generally will be treated as a sale of the Class A common stock (rather than as a
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corporate distribution) if the redemption (i) is “substantially disproportionate” with respect to the U.S. holder, (ii) results in a “complete termination” of the U.S. holder’s interest in us or (iii) is “not essentially equivalent to a dividend” with respect to the U.S. holder. These tests are explained more fully below.
In determining whether any of the foregoing tests are satisfied, a U.S. holder takes into account not only stock actually owned by the U.S. holder, but also shares of our stock that are constructively owned by it. A U.S. holder may constructively own, in addition to stock owned directly, stock owned by certain related individuals and entities in which the U.S. holder has an interest or that have an interest in such U.S. holder, as well as any stock the U.S. holder has a right to acquire by exercise of an option, which would generally include Class A common stock 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 stock actually and constructively owned by the U.S. holder immediately following the redemption of Class A common stock must, among other requirements, be less than 80% of the percentage of our outstanding voting stock actually and constructively owned by the U.S. holder immediately before the redemption. Prior to our initial business combination, the Class A common stock may not be treated as voting stock for this purpose and, consequently, this substantially disproportionate test may not be applicable. There will be a complete termination of a U.S. holder’s interest if either (i) all of the shares of our stock actually and constructively owned by the U.S. holder are redeemed or (ii) all of the shares of our stock actually owned by the U.S. holder are redeemed and the U.S. holder is eligible to waive, and effectively waives in accordance with specific rules, the attribution of stock owned by certain family members and the U.S. holder does not constructively own any other shares of our stock (including any stock constructively owned by the U.S. holder as a result of owning warrants). The redemption of the Class A common stock will not be essentially equivalent to a dividend if a U.S. holder’s redemption results in a “meaningful reduction” of the U.S. holder’s proportionate interest in us. Whether the redemption will result in a meaningful reduction in a U.S. holder’s proportionate interest in us will depend on the particular facts and circumstances. However, the IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority stockholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a “meaningful reduction.” A U.S. holder should consult with its own tax advisors as to the tax consequences of a redemption.
If none of the foregoing tests is satisfied, then the redemption of any Class A common stock will be treated as a corporate distribution and the tax effects will be as described under “U.S. Holders—Taxation of Distributions,” above. After the application of those rules, any remaining tax basis of the U.S. holder in the redeemed Class A common stock will be added to the U.S. holder’s adjusted tax basis in its remaining stock, or, if it has none, to the U.S. holder’s adjusted tax basis in its warrants or possibly in other stock constructively owned by it.
U.S. holders who actually or constructively own five percent (or, if our Class A common stock are not then publicly traded, one percent) or more of our shares (by vote or value) may be subject to special reporting requirements with respect to a redemption of Class A common stock, and such holders are urged to consult with their own tax advisors with respect to their reporting requirements.
Possible Constructive Distributions.
The terms of each warrant provide for an adjustment to the number of shares of Class A common stock 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 entitled “Description of Securities—Warrants—Public Stockholders’ 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 warrant holders’ proportionate interest in our assets or earnings and profits (for example, through an increase in the number of shares of Class A common stock that would be obtained upon exercise or through a decrease in the exercise price of the warrant), which adjustment may be made as a result of a distribution of cash or other property, such as other securities, to the holders of shares of our Class A common stock, or as a result of the issuance of a stock dividend to holders of shares of our Class A common stock, in each case, which is taxable to the holders of such shares as a distribution. Such constructive distribution would be subject to tax as described under “U.S. Holders—Taxation of Distributions” 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. For certain information
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reporting purposes, we are required to determine the date and amount of any such constructive distributions. Proposed Treasury regulations, which we may rely on prior to the issuance of final regulations, specify how the date and amount of constructive distributions are determined.
Exercise, Lapse or Redemption of a Warrant.
A U.S. holder generally will not recognize taxable gain or loss on the acquisition of our Class A common stock upon exercise of a warrant for cash. The U.S. holder’s tax basis in the share of our Class A common stock received upon exercise of the warrant generally will be an amount equal to the sum of the U.S. holder’s initial investment in the warrant (i.e., the portion of the U.S. holder’s purchase price for a unit that is allocated to the warrant, as described above under “Allocation of Purchase Price and Characterization of a Unit”) and the exercise price of such warrant. It is unclear whether the U.S. holder’s holding period for the Class A common stock received upon exercise of the warrants will begin on the date following the date of exercise or on the date of exercise of the warrants; in either case, the holding period will not include the period during which the U.S. holder held the warrants. If a warrant is allowed to lapse unexercised, a U.S. holder generally will recognize a capital loss equal to such holder’s tax basis in the warrant.
The tax consequences of a cashless exercise of a warrant are not clear under current tax law. 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 basis in the Class A common stock received would equal the holder’s basis in the warrants exercised therefor. If the cashless exercise were treated as not being a realization event, it is unclear whether a U.S. holder’s holding period in the Class A common stock would be treated as commencing on the date following the date of exercise or on the date of exercise of the warrant; in either case, the holding period would not include the period during which the U.S. holder held the warrants. If the cashless exercise were treated as a recapitalization, the holding period of the Class A common stock would include the holding period of the warrants exercised therefor.
It is also possible that a cashless exercise could be treated in part as a taxable exchange in which gain or loss would be recognized. In such event, a U.S. holder could be deemed to have surrendered a number of warrants having a value equal to the exercise price for the total number of exercised warrants. In such case, the U.S. holder would recognize capital gain or loss with respect to the warrants deemed surrendered in an amount equal to the difference between the fair market value of the warrants deemed surrendered and the U.S. holder’s tax basis in such warrants. In this case, a U.S. holder’s aggregate tax basis in the Class A common stock received would equal the sum of the U.S. holder’s initial investment in the warrants deemed exercised (i.e., the portion of the U.S. holder’s purchase price for the units that is allocated to the warrants, as described above under “Allocation of Purchase Price and Characterization of a Unit”) and the aggregate exercise price of such warrants. In either case, it is unclear whether a U.S. holder’s holding period for the Class A common stock would commence on the date following the date of exercise or on the date of exercise of the warrant; in either case, the holding period would not include the period during which the U.S. holder held the warrant.
Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise, including when a U.S. holder’s holding period would commence with respect to the Class A common stock received, there can be no assurance regarding which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. holders should consult their tax advisors regarding the tax consequences of a cashless exercise.
If we redeem warrants for cash pursuant to the redemption provisions described in the section of this prospectus entitled “Description of Securities—Warrants—Public Stockholders’ Warrants” or if we purchase warrants in an open market transaction, such redemption or purchase generally will be treated as a taxable disposition to the U.S. holder, taxed as described above under “U.S. Holders—Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants.”
Information Reporting and Backup Withholding.
In general, information reporting requirements may apply to dividends (including constructive dividends) paid to a U.S. holder and to the proceeds of the sale or other disposition of our units, shares of Class A
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
common stock and warrants, unless the U.S. holder is an exempt recipient. Backup withholding may apply to such payments if the U.S. holder fails to provide a taxpayer identification number, a certification of exempt status or has been notified by the IRS that it is subject to backup withholding (and such notification has not been withdrawn).
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a credit against a U.S. holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided the required information is timely furnished to the IRS. All U.S. holders should consult their tax advisors regarding the application of information reporting and backup withholding to them.
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 common stock or warrants who or that is for U.S. federal income tax purposes:
➤
a non-resident alien individual (other than certain former citizens and residents of the United States subject to U.S. tax as expatriates);
➤
a foreign corporation; or
➤
an estate or trust that is not a U.S. holder;
but generally does not include an individual who is present in the United States for 183 days or more in the taxable year of the disposition of our units, Class A common stock or warrants. If you are such an individual, you should consult your tax advisor regarding the U.S. federal income tax consequences of the acquisition, ownership or sale or other disposition of our securities.
Taxation of Distributions.
In general, any distributions (including constructive distributions, but not including certain distributions of our stock or rights to acquire our stock) we make to a Non-U.S. holder of shares of our Class A common stock, to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles), will constitute dividends for U.S. federal income tax purposes and, provided such dividends are not effectively connected with the Non-U.S. holder’s conduct of a trade or business within the United States, we will be required to withhold tax from the gross amount of the dividend at a rate of 30%, unless such Non-U.S. holder is eligible for a reduced rate of withholding tax under an applicable income tax treaty and provides proper certification of its eligibility for such reduced rate (usually on an IRS Form W-8BEN or W-8BEN-E). In the case of any constructive dividend, it is possible that this tax would be withheld from any amount owed to a Non-U.S. holder by us or the applicable withholding agent, including cash distributions on other property or sale proceeds from warrants or other property subsequently paid or credited to such holder. Any distribution not constituting a dividend will be treated first as reducing (but not below zero) the Non-U.S. holder’s adjusted tax basis in its shares of our Class A common stock and, to the extent such distribution exceeds the Non-U.S. holder’s adjusted tax basis, as gain realized from the sale or other disposition of the Class A common stock, which will be treated as described under “Non-U.S. Holders—Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants” below. In addition, if we determine that we are likely to be classified as a “United States real property holding corporation” (see “Non-U.S. Holders—Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants” below), we generally will withhold 15% of any distribution that exceeds our current and accumulated earnings and profits.
The withholding tax generally does not apply to dividends paid to a Non-U.S. holder who provides a Form W-8ECI, certifying that the dividends are effectively connected with the Non-U.S. holder’s conduct of a trade or business within the United States. Instead, the effectively connected dividends will be subject to regular U.S. federal income tax as if the Non-U.S. holder were a U.S. resident, subject to an applicable income tax treaty providing otherwise. A corporate Non-U.S. holder receiving effectively connected dividends may also be subject to an additional “branch profits tax” imposed at a rate of 30% (or a lower applicable treaty rate).
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants.
A Non-U.S. holder generally will not be subject to U.S. federal income or withholding tax in respect of gain recognized on a sale, taxable exchange or other taxable disposition of our Class A common stock, which would include a dissolution and liquidation in the event we do not complete an initial business combination within the required time period, or warrants (including an expiration or redemption of our warrants), in each case without regard to whether those securities were held as part of a unit, unless:
➤
the gain is effectively connected with the conduct by the Non-U.S. holder of a trade or business within the United States (and, under certain income tax treaties, is attributable to a United States permanent establishment or fixed base maintained by the Non-U.S. holder); or
➤
we are or have been a “United States real property holding corporation” (as defined below) for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the Non-U.S. holder’s holding period for the applicable security, except, in the case where shares of our Class A common stock are “regularly traded on an established securities market” (within the meaning of the Treasury Regulations, referred to herein as “regularly traded”), the Non-U.S. holder (i) has owned, directly or constructively, at all times within the shorter of the five-year period preceding the disposition of the Class A common stock or such Non-U.S. holder’s holding period for such Class A common stock, 5% or less of our Class A common stock or (ii) has owned, directly or constructively, at all times within the shorter of the five-year period preceding the disposition of the warrants or such Non-U.S. holder’s holding period for such warrants, 5% or less of the total fair market value of our warrants, provided our warrants are considered to be regularly traded. It is unclear how the rules for determining the 5% threshold for this purpose would be applied with respect to our Class A common stock and warrants, including how a Non-U.S. holder’s ownership of warrants impacts the 5% threshold determination with respect to its Class A common stock and whether the 5% threshold determination with respect to our warrants must be made with or without reference to the private placement warrants. In addition, special rules may apply in the case of a disposition of warrants if our Class A common stock is considered to be regularly traded, but the warrants are not considered to be regularly traded. We can provide no assurance as to our future status as a United States real property holding corporation or as to whether our Class A common stock or warrants will be considered to be regularly traded. Non-U.S. holders should consult their own tax advisors regarding the application of the foregoing rules in light of their particular facts and circumstances.
Unless an applicable treaty provides otherwise, gain described in the first bullet point above will be subject to tax at generally applicable U.S. federal income tax rates as if the Non-U.S. holder were a U.S. resident. Any gains described in the first bullet point above of a Non-U.S. holder that is treated as a foreign corporation for U.S. federal income tax purposes may also be subject to an additional “branch profits tax” imposed at a 30% rate (or lower applicable treaty rate).
If the second bullet point above applies to a Non-U.S. holder, gain recognized by such holder on the sale, exchange or other disposition of our Class A common stock or warrants will be subject to tax at generally applicable U.S. federal income tax rates. In addition, a buyer of our Class A common stock or warrants from such holder may be required to withhold U.S. federal income tax at a rate of 15% of the amount realized upon such disposition. We cannot determine whether we will be a “United States real property holding corporation” in the future until we complete an initial business combination. We will be classified as a United States real property holding corporation if the fair market value of our “United States real property interests” equals or exceeds 50% of the sum of the fair market value of our worldwide real property interests plus our other assets used or held for use in a trade or business, as determined for U.S. federal income tax purposes.
Redemption of Class A Common Stock.
The characterization for U.S. federal income tax purposes of the redemption of a Non-U.S. holder’s Class A common stock pursuant to the redemption provisions described in the section of this prospectus entitled “Description of Securities—Common Stock” or pursuant to our purchase of a U.S. holder’s Class A common stock in an open market transaction generally will correspond to the U.S. federal income tax characterization of such a redemption of a U.S. holder’s Class A common stock, as described under “U.S.
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
Holders—Redemption of Class A Common Stock” above, and the consequences of the redemption to the Non-U.S. holder will be as described above under “Non-U.S. Holders—Taxation of Distributions” and “Non-U.S. Holders—Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants,” as applicable. Because it may not be certain at the time a Non-U.S. holder is redeemed whether such Non-U.S. holder’s redemption will be treated as a sale of shares or a distribution constituting a dividend, and because such determination will depend in part on a Non-U.S. holder’s particular circumstances, we or the applicable withholding agent may not be able to determine whether (or to what extent) a Non-U.S. holder is treated as receiving a dividend for U.S. federal income tax purposes. Therefore, we or the applicable withholding agent may withhold tax at a rate of 30% on the gross amount of any consideration paid to a Non-U.S. holder in redemption of such Non-U.S. holder’s Class A common stock unless special procedures are available to Non-U.S. holders to certify that they are entitled to exemptions from, or reductions in, such withholding tax. However, there can be no assurance that such special certification procedures will be available. A Non-U.S. holder generally may obtain a refund of any such excess amounts withheld by timely filing an appropriate claim for refund with the IRS. Non-U.S. holders should consult their own tax advisors regarding the application of the foregoing rules in light of their particular facts and circumstances.
Possible Constructive Distributions.
The terms of each warrant provide for an adjustment to the number of shares of Class A common stock 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 entitled “Description of Securities—Warrants—Public Stockholders’ Warrants.” An adjustment which has the effect of preventing dilution generally is not a taxable event. Nevertheless, a Non-U.S. holder of warrants would be treated as receiving a constructive distribution from us if, for example, the adjustment increases the holder’s proportionate interest in our assets or earnings and profits (for example, through an increase in the number of shares of Class A common stock that would be obtained upon exercise or through a decrease in the exercise price of the warrants), which adjustment may be made as a result of a distribution of cash or other property, such as other securities, to the holders of shares of our Class A common stock, or as a result of the issuance of a stock dividend to holders of shares of our Class A common stock, in each case, which is taxable to such holders as a distribution. Any constructive distribution received by a Non-U.S. holder would be subject to U.S. federal income tax (including any applicable withholding) in the same manner as if such Non-U.S. holder received a cash distribution from us equal to the fair market value of such increased interest without any corresponding receipt of cash. It is possible that any withholding tax on such a constructive distribution might be satisfied by us or the applicable withholding agent through a sale of a portion of the Non-U.S. holder’s shares of Class A common stock, warrants or other property held or controlled by us or the applicable withholding agent on behalf of the Non-U.S. holder or might be withheld from distributions or proceeds subsequently paid or credited to the Non-U.S. holder.
Exercise, Lapse or Redemption of a Warrant.
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, Lapse or Redemption of a Warrant” above, although to the extent a cashless exercise results in a taxable exchange, the consequences would be similar to those described below in “Non-U.S. Holders—Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants.”
The characterization for U.S. federal income tax purposes of the redemption of the Non-U.S. holder’s warrants generally will correspond to the U.S. federal income tax treatment of such a redemption of a U.S. holder’s warrants, as described under “U.S. Holders—Exercise, Lapse or Redemption of a Warrant” above, and the consequences of the redemption to the Non-U.S. holder will be as described below under the heading “Non-U.S. Holders—Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants” depending on such characterization.
Information Reporting and Backup Withholding.
Information returns will be filed with the IRS in connection with payments of dividends (including constructive dividends) and the proceeds from a sale or other disposition of our units, shares of Class A
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
common stock and warrants. A Non-U.S. holder may have to comply with certification procedures to establish that it is not a United States person in order to avoid information reporting and backup withholding requirements. The certification procedures required to claim a reduced rate of withholding under a treaty generally will satisfy the certification requirements necessary to avoid the backup withholding as well. Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a Non-U.S. holder will be allowed as a credit against such holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that the required information is timely furnished to the IRS.
FATCA Withholding Taxes.
Provisions commonly referred to as “FATCA” impose withholding of 30% on payments of dividends (including constructive dividends) on our Class A common stock to “foreign financial institutions” (which is broadly defined for this purpose and in general includes investment vehicles) and certain other non-U.S. entities unless various U.S. information reporting and due diligence requirements (generally relating to ownership by United States persons of interests in or accounts with those entities) have been satisfied by, or an exemption applies to, the payee (typically certified as to by the delivery of a properly completed IRS Form W-8BEN-E). Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules. Under certain circumstances, a Non-U.S. holder might be eligible for refunds or credits of such withholding taxes, and a Non-U.S. holder might be required to file a U.S. federal income tax return to claim such refunds or credits. Thirty percent withholding under FATCA was scheduled to apply to payments of gross proceeds from the sale or other disposition of property that produces U.S.-source interest or dividends beginning on January 1, 2019, but on December 13, 2018, the IRS released proposed regulations that, if finalized in their proposed form, would eliminate the obligation to withhold on gross proceeds. Such proposed regulations also delayed withholding on certain other payments received from other foreign financial institutions that are allocable, as provided for under final Treasury Regulations, to payments of U.S.-source dividends, and other fixed or determinable annual or periodic income. Although these proposed Treasury Regulations are not final, taxpayers generally may rely on them until final Treasury Regulations are issued. However, there can be no assurance that final Treasury Regulations will provide the same exceptions from FATCA withholding as the proposed Treasury Regulations. Prospective investors should consult their tax advisors regarding the effects of FATCA on their investment in our securities.
UNDERWRITING
Under the terms and subject to the conditions contained in an underwriting agreement dated as of the date of this prospectus, we have agreed to sell to the underwriter named below the following number of units:
Underwriter
|
|
|
Number of Units
|
|
UBS Securities LLC
|
|
|
|
|
20,000,000
|
|
|
Total
|
|
|
|
|
20,000,000
|
|
|
The underwriting agreement provides that the underwriter is obligated to purchase all the units in this offering if any are purchased, other than those units covered by the over-allotment option described below.
We have granted to the underwriter a 45-day option to purchase on a pro rata basis up to 3,000,000 additional units at the initial public offering price, less the underwriting commissions. The option may be exercised only to cover any over-allotments of units.
The underwriter proposes to offer the units initially at the public offering price on the cover page of this prospectus and to selling group members at that price less a selling concession of $ per unit.
The following table summarizes the compensation we will pay:
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|
|
Per Unit(1)
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|
|
Total(1)
|
|
|
|
|
Without
Over-
allotment
|
|
|
With
Over-
allotment
|
|
|
Without
Over-
allotment
|
|
|
With
Over-
allotment
|
|
Underwriting commissions paid by us
|
|
|
|
$
|
0.55
|
|
|
|
|
$
|
0.55
|
|
|
|
|
$
|
11,000,000
|
|
|
|
|
$
|
12,650,000
|
|
|
(1)
Includes $0.35 per unit, or $7,000,000 (or up to $8,050,000 if the underwriter’s over-allotment option is exercised in full) in the aggregate, payable to the underwriter for deferred underwriting commissions to be placed in a trust account located in the United States as described herein. The deferred commissions will be released only on completion of our initial business combination, in an amount equal to $0.35 multiplied by the number of shares of Class A common stock sold as part of the units in this offering, as described in this prospectus. Does not include certain fees and expenses payable to the underwriter in connection with this offering.
We estimate that our non-reimbursed out-of-pocket expenses for this offering will be approximately $1,500,000. We have agreed that for a period of 24 months after the closing of this offering, UBS Securities LLC shall have a right of first refusal to act as capital markets advisor, placement agent, or book-running lead manager, as the case may be, in connection with any private placement of equity, equity-linked or debt (including, without limitation, asset-backed) securities of us in connection with our initial business combination. In addition, we and our sponsor have agreed to reimburse UBS for any reasonable costs incurred by UBS Securities LLC in connection with this offering, in an amount not to exceed $200,000. Additionally, we have agreed to pay for the underwriters’ fees and expenses related to the review by FINRA, which will not exceed $25,000. In addition, the underwriter has agreed to reimburse us for certain expenses we incur in connection with the offering not to exceed $1,900,000 (or $2,185,000 if the underwriter’s over-allotment option is exercised in full). The underwriter has also agreed to separately reimburse certain of our expenses in an amount not to exceed $2,100,000 (or $2,415,000, if the underwriter’s over-allotment option is exercised in full) on the date, if any, on which the Trustee pays the deferred commissions to the underwriter in accordance with the underwriting agreement.
The underwriter has informed us that it does not intend to make sales to discretionary accounts.
We, our sponsor and our officers and directors have agreed that we will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, without the prior written consent of UBS Securities LLC for a period of 180 days after the date of this prospectus, any units, warrants, shares of Class A common stock or any other securities convertible into, or exercisable, or exchangeable for, shares of Class A common stock; provided, however, that we may (1) issue and sell the private placement warrants; (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 private placement warrants and the shares of Class A common stock issuable upon exercise of the warrants and the founder shares; and (4) issue securities in connection
with our initial business combination. However, the foregoing shall not apply to the forfeiture of any founder shares pursuant to their terms or any transfer of founder shares to any current or future independent director of the Company (as long as such current or future independent director is subject to the terms of the letter agreement, filed herewith, at the time of such transfer; and as long as, to the extent any Section 16 reporting obligation is triggered as a result of such transfer, any related Section 16 filing includes a practical explanation as to the nature of the transfer). UBS Securities LLC in its sole discretion may release any of the securities subject to these lock-up agreements at any time without notice.
The founder shares, private placement warrants and any shares of our Class A common stock issued upon conversion or exercise thereof are each subject to transfer restrictions pursuant to a letter agreement to be entered into by our sponsor, directors, officers and us. This letter agreement will provide that the founder shares, and any shares of our Class A common stock acquired upon exchange of founder shares, may not be transferred, assigned or sold until the earlier of (x) one year after the completion of our initial business combination or earlier if, subsequent to our business combination, the last sale price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, capital stock exchange, reorganization or other similar transaction after our initial business combination that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property except with respect to permitted transferees as described herein under “Principal Stockholders—Transfers of Founder Shares and Private Placement Warrants”). Any permitted transferees would be subject to the same restrictions and other agreements of our initial shareholders with respect to any founder shares.
The private placement warrants (including the shares of Class A common stock issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business combination (except with respect to permitted transferees as described herein under “Principal Stockholders—Transfers of Founder Shares and Private Placement Warrants”).
We have agreed to indemnify the underwriter against certain liabilities under the Securities Act, or contribute to payments that the underwriter may be required to make in that respect.
Our units have been approved for listing on the NYSE under the symbol “TGR.U.” We expect that our Class A common stock and warrants will be listed on the NYSE, under the symbols “TGR” and “TGR.WS,” respectively, once the Class A common stock and warrants begin separate trading.
Prior to this offering, there has been no public market for our securities. Consequently, the initial public offering price for the units was determined by negotiations between us and the underwriter. The determination of our per-unit offering price was more arbitrary than would typically be the case if we were an operating company. Among the factors considered in determining the initial public offering price were the history and prospects of companies whose principal business is the acquisition of other companies, prior offerings of those companies, our management, our capital structure, and currently prevailing general conditions in equity securities markets, including current market valuations of publicly traded companies considered comparable to our company. We cannot assure you, however, that the price at which the units, Class A common stock or warrants will sell in the public market after this offering will not be lower than the initial public offering price or that an active trading market in our units, Class A common stock or warrants will develop and continue after this offering.
If we do not complete our initial business combination within 15 months from the closing of this offering (or up to 21 months, if the sponsor exercises its extension options), the trustee and the underwriter have agreed that (1) the underwriter will forfeit any rights or claims to its deferred underwriting commissions, including any accrued interest thereon, then in the trust account; and (2) the deferred underwriting commissions will be distributed on a pro rata basis, including interest earned on the funds held in the trust account and not previously released to pay taxes of the company or Opco, to the public stockholders.
In connection with this offering, the underwriter may engage in stabilizing transactions, over-allotment transactions and syndicate covering transactions in accordance with Regulation M under the Exchange Act.
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Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.
➤
Over-allotment involves sales by the underwriter of units in excess of the number of units the underwriter is obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of units over-allotted by the underwriter is not greater than the number of units that it may purchase in the over-allotment option. In a naked short position, the number of units involved is greater than the number of units in the over-allotment option. The underwriter may close out any covered short position by either exercising their over-allotment option and/or purchasing units in the open market.
➤
Syndicate covering transactions involve purchases of the units in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of units to close out the short position, the 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 over-allotment option. If the underwriter sells more units than could be covered by the over-allotment option (a naked short position), the position can only be closed out by buying units in the open market. A naked short position is more likely to be created if the underwriter is concerned that there could be downward pressure on the price of the units in the open market after pricing that could adversely affect investors who purchase in this offering.
These stabilizing transactions and syndicate covering transactions may have the effect of raising or maintaining the market price of our units or preventing or retarding a decline in the market price of the units. As a result, the price of our units may be higher than the price that might otherwise exist in the open market. These transactions may be effected on NYSE or otherwise and, if commenced, may be discontinued at any time.
Other than the right of first refusal described above, 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 during the 180-day period preceding the required filing date through the 60-day period following the effective date of the offering, unless 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 or 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 or 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 time frame.
The underwriter and its affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us or our affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions.
In addition, in the ordinary course of their business activities, the underwriter and 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.
Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The underwriter and its affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
A prospectus in electronic format may be made available on the websites maintained by the underwriter, or selling group members, if any, participating in this offering and the underwriter may distribute
prospectuses electronically. The underwriter may agree to allocate a number of units to underwriter and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the underwriter and selling group members that will make internet distributions on the same basis as other allocations.
The units are offered for sale in the United States, Europe, Asia and other jurisdictions where it is lawful to make such offers.
The underwriter has represented and agreed that it has not offered, sold or delivered and will not offer, sell or deliver any of the units directly or indirectly, or distribute this prospectus or any other offering material relating to the units, in or from any jurisdiction except under circumstances that will result in compliance with the applicable laws and regulations thereof and that will not impose any obligations on us except as set forth in the underwriting agreement.
Capital markets advisor
Tudor, Pickering, Holt & Co. Securities, LLC (“TPH”) is acting as our capital markets advisor in connection with the initial public offering and initial business combination. As capital markets advisor, TPH’s services include advising us on various matters in connection with this offering and the initial business combination. TPH is not acting as an underwriter in connection with this offering and, accordingly, it is neither purchasing securities nor offering securities to the public in connection with this offering. We or an affiliate of our sponsor will pay TPH a fee of up to $200,000 in its capacity as capital markets advisor at the closing of this offering.
EUROPEAN ECONOMIC AREA
In relation to each Member State of the European Economic Area (each, a “Relevant Member State”), each underwriter represents and agrees that no units have been offered or will be offered pursuant to this offering to the public in that Relevant Member State prior to the publication of a prospectus in relation to the units which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Regulation, except that offers of units may be made to the public in that Relevant Member State at any time in accordance with the following exemptions under the Prospectus Regulation:
(a)
to any legal entity which is a qualified investor as defined under the Prospectus regulation;
(b)
to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Regulation) subject to obtaining the prior consent of the manager for any such offer; or
(c)
in any other circumstances falling within Article 1(4) of the Prospectus Regulation,
provided that no such offer of units shall require the issuer or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.
No units will be made available to retail investors in the EEA within the meaning of the PRIIPs Regulation. The issuer is not a PRIIP manufacturer under the PRIIPs Regulation and no underwriter is, or will hold itself out to be, a “person selling a PRIIP” as such expression is defined in the PRIIPs Regulation. No units have been offered or will be offered in circumstances in which a Key Information Document is required to be published in accordance with the PRIIPs Regulation.
For the purposes of this provision, the expression an “offer of units to the public” in relation to any units in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the units to be offered so as to enable an investor to decide to purchase or subscribe for any units, the expression “Prospectus Regulation” means Regulation (EU) 2017/1129 and the expression “PRIIPs Regulation” means Regulation (EU) 1286/2014.
NOTICE TO INVESTORS IN THE UNITED KINGDOM
In relation to the United Kingdom, no units have been offered or will be offered pursuant to this offering to the public in the United Kingdom prior to the publication of a prospectus in relation to the units
which has been approved by the competent authority in the United Kingdom in accordance with the UK Prospectus Regulation, except that offers of units may be made to the public in the United Kingdom at any time under the following exemptions under the UK Prospectus Regulation:
(a)
to any legal entity which is a qualified investor as defined under the UK Prospectus Regulation;
(b)
to fewer than 150 natural or legal persons (other than qualified investors as defined under the UK Prospectus Regulation), subject to obtaining the prior consent of the Representative for any such offer; or
(c)
in any other circumstances falling within Article 1(4) of the UK Prospectus Regulation,
provided that no such offer of units shall require the issuer or any underwriter to publish a prospectus pursuant to section 85 of the Financial Services and Markets Act 2000 (as amended, the “FSMA”) or supplement a prospectus pursuant to Article 23 of the UK Prospectus Regulation.
No units will be made available to retail investors in the UK within the meaning of the UK PRIIPs Regulation. The issuer is not a PRIIP manufacturer under the UK PRIIPs Regulation and no underwriter is, or will hold itself out to be, a “person selling a PRIIP” as such expression is defined in the UK PRIIPs Regulation. No units have been offered or will be offered in circumstances in which a Key Information Document is required to be published in accordance with the UK PRIIPs Regulation.
For the purposes of this provision, the expression an “offer to the public” in relation to any units in the United Kingdom means the communication in any form and by any means of sufficient information on the terms of the offer and any units to be offered so as to enable an investor to decide to purchase or subscribe for any units, the expression “UK Prospectus Regulation” means Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the Prospectus (Amendment etc) (EU Exit) Regulations 2019, and the expression “UK PRIIPs Regulation” means Regulation (EU) 1286/2014 as it forms part of domestic law by virtue of the Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019.
The underwriter represents, warrants and agrees as follows:
(a)
it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) to persons who have professional experience in matters relating to investments falling with Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or in circumstances in which section 21 of FSMA does not apply to the company; and
(b)
it has complied with, and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the units in, from or otherwise involving the United Kingdom.
NOTICE TO PROSPECTIVE INVESTORS IN ITALY
The offering of the common shares has not been registered pursuant to Italian securities legislation and, accordingly, no common shares may be offered, sold or delivered, nor may copies of this offering memorandum or of any other document relating to the common shares be distributed in the Republic of Italy, except:
1.
to qualified investors (investitori qualificati), as defined pursuant to Article 100 of Legislative Decree No. 58 of 24 February 1998, as amended (the “Financial Services Act”) and Article 34-ter, first paragraph, letter (b) of CONSOB Regulation No. 11971 of 14 May 1999, as amended from time to time (“Regulation No. 11971”); or
2.
in other circumstances which are exempted from the rules on public offerings pursuant to Article 100 of the Financial Services Act and Article 34-ter of the Regulation No. 11971.
Any offer, sale or delivery of the common shares or distribution of copies of this offering memorandum or any other document relating to the common shares in the Republic of Italy under (1) or (2) above must be:
➤
made by an investment firm, bank or financial intermediary permitted to conduct such activities in the Republic of Italy in accordance with the Financial Services Act, CONSOB Regulation No. 16190 of
October 29, 2007 (as amended from time to time) and Legislative Decree No. 385 of September 1, 1993, as amended (the “Banking Act”); and
➤
in compliance with Article 129 of the Banking Act, as amended, and implementing guidelines of the Bank of Italy, as amended from time to time, pursuant to which the Bank of Italy may request information on the issue or the offer of securities in the Republic of Italy; and
➤
in compliance with any other applicable laws and regulations or requirement imposed by CONSOB or other Italian authority.
NOTICE TO RESIDENTS OF JAPAN
The underwriter will not offer or sell any of our units directly or indirectly in Japan or to, or for the benefit of any Japanese person or to others, for re-offering or re-sale directly or indirectly in Japan or to any Japanese person, except in each case pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Securities and Exchange Law of Japan and any other applicable laws and regulations of Japan. For purposes of this paragraph, “Japanese person” means any person resident in Japan, including any corporation or other entity organized under the laws of Japan.
NOTICE TO PROSPECTIVE INVESTORS IN AUSTRALIA
No prospectus, product disclosure statement or other disclosure document has been lodged with the Australian Securities and Investments Commission (“ASIC”), in relation to the offering. This document does not constitute a prospectus, product disclosure statement or other disclosure document under the Corporations Act 2001 (Cth) (the “Corporations Act”), and does not purport to include the information required for a prospectus, product disclosure statement or other disclosure document under the Corporations Act.
Any offer in Australia of the units may only be made to persons who are “sophisticated investors” (within the meaning of section 708(8) of the Corporations Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act) or otherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the units without disclosure to investors under Chapter 6D of the Corporations Act.
In addition, the shares of Class A common stock and warrants (including any shares issued on the exercise of the warrants) must not be offered for sale in Australia in the period of 12 months after the respective date of issue, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring the shares of Class A common stock and warrants (including any shares issued on the exercise of the warrants) must observe such Australian on-sale restrictions.
This prospectus contains general information only and does not take account of the investment objectives, financial situation or particular needs of any particular person. It does not contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether the information in this prospectus is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice on those matters.
NOTICE TO INVESTORS IN THE UNITED ARAB EMIRATES (UAE)
Notice to persons in the onshore UAE
In accordance with the 2017 Promotion and Introduction Regulations (as emended) of the UAE Securities and Commodities Authority (SCA), our shares may only be promoted and offered in the UAE (excluding the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM)) without the prior approval of the SCA where the promotion is directed to: (i) the UAE federal government and local governments, governmental institutions and authorities; (ii) companies fully owned by any of the aforementioned; (iii) international bodies and organizations; (iv) entities licensed by the SCA or equivalent regulatory authority; (v) a corporate person who meets, at the date of its last financial statements, at
least two of the following requirements: (1) total assets of AED (75) million; (2) net annual revenues of AED (150) million; and (3) has net owner equity or paid-up capital of AED (7) million; or (vi) following a ‘reverse’ (i.e. unsolicited) enquiry by an investor. Further, this document does not constitute a public offer of our shares in the UAE (excluding the DIFC and the ADGM) and is not intended to be a public offer. The SCA has not verified this document or other documents in connection with out shares and the SCA may not be held liable for the accuracy or completeness of the information in this document. Our shares may be illiquid or subject to restrictions on their resale. Prospective investors should conduct their own due diligence on our shares. If you do not understand the contents of this document you should consult an authorized financial advisor.
Notice to persons in the Abu Dhabi Global Market (ADGM) in the UAE
This offer document is an ‘Exempt Offer’, in accordance with the ‘Market Rules’ of the ADGM Financial Services Regulatory Authority. This ‘Exempt Offer’ document is intended for distribution only to persons of a type specified in the Market Rules. It must not be delivered to, or relied on by, any other person. The ADGM Financial Services Regulatory Authority has no responsibility for reviewing or verifying any document in connection with ‘Exempt Offers’. The ADGM Financial Services Regulatory Authority has not approved this ‘Exempt Offer’ document nor taken steps to verify the information set out in it, and has no responsibility for it. The securities to which this Exempt Offer related may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the securities offered should conduct their own due diligence on the securities. If you do not understand the contents of this ‘Exempt Offer’ document you should consult an authorized financial advisor. For the purposes of this financial-promotion restriction in the Financial Services and Markets Regulation of the ADGM, this offer document constitutes an ‘Exempt Communication’ or is not otherwise subject to that restriction. Where applicable, it is intended for distribution only to person of a type specified in the relevant ‘Exempt Communication’. It must not be delivered to, or relied on by, any other person,
Notice to persons in the Dubai International Financial Centre (DIFC) in the UAE
This document relates to an ‘Exempt Offer’, in accordance with the Market Rules of the Dubai Financial Services Authority (DFSA). This document is intended for distribution only to persons of a type specified in the Market Rules. It must not be delivered to, or relied on, by any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with ‘Exempt Offers’. The DFSA has not approved this document not taken steps to verify the information set out in it, and has no responsibility for it. Our shares may be illiquid and/or subject to restrictions on their re-sale. Prospective purchasers of our shares should conduct their own due diligence on them. If you do not understand the contents of this document you should consult an authorized financial adviser. For the purposes of the financial-promotion restriction in the Regulatory Law 2004 (as amended) of the DIFC, this offer document constitutes an ‘Exempt Financial Promotion’ or is not otherwise subject to that restriction. Where applicable, it is intended for distribution only to persons of a type specified in the relevant ‘Exempt Communication’. It must not be delivered to, or relied on by, any other person.
NOTICE TO PROSPECTIVE INVESTORS IN QATAR
The units described in this prospectus have not been, and will not be, offered, sold or delivered, at any time, directly or indirectly in the State of Qatar (including the Qatar Financial Centre) in a manner that would constitute a public offering. This prospectus has not been, and will not be, registered with or approved by the Qatar Financial Markets Authority, the Qatar Central Bank, Qatar Financial Centre Regulatory Authority or any other relevant Qatar governmental body or securities exchange and may not be publicly distributed. This prospectus is intended for the original recipient only and must not be provided to any other person. It is not for general circulation in the State of Qatar and may not be reproduced or used for any other purpose.
NOTICE TO RESIDENTS OF HONG KONG
The underwriter and each of its affiliates have not (1) offered or sold, and will not offer or sell, in Hong Kong, by means of any document, our units other than (A) to “professional investors” as defined in the Securities and Futures Ordinance (Cap.571) of Hong Kong and any rules made under that Ordinance
or (B) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance (Cap. 32 of Hong Kong) or which do not constitute an offer to the public within the meaning of that Ordinance or (2) issued or had in its possession for the purposes of issue, and will not issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere any advertisement, invitation or document relating to our units which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to our securities which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the Securities and Futures Ordinance and any rules made under that Ordinance. The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice.
NOTICE TO RESIDENTS OF SINGAPORE
This prospectus or any other offering material relating to our units has not been and will not be registered as a prospectus with the Monetary Authority of Singapore, and the units will be offered in Singapore pursuant to exemptions under Section 274 and Section 275 of the Securities and Futures Act, Chapter 289 of Singapore (the “Securities and Futures Act”). Accordingly our units may not be offered or sold, or be the subject of an invitation for subscription or purchase, nor may this prospectus or any other offering material relating to our units be circulated or distributed, whether directly or indirectly, to the public or any member of the public in Singapore other than (a) to an institutional investor or other person specified in Section 274 of the Securities and Futures Act, (b) to a sophisticated investor, and in accordance with the conditions specified in Section 275 of the Securities and Futures Act or (c) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the Securities and Futures Act.
NOTICE TO RESIDENTS OF GERMANY
Each person who is in possession of this prospectus is aware that no German sales prospectus (Verkaufsprospekt) within the meaning of the Securities Sales Prospectus Act (Wertpapier- Verkaufsprospektgesetz, the “Act”) of the Federal Republic of Germany has been or will be published with respect to our units. In particular, each underwriter has represented that it has not engaged and has agreed that it will not engage in a public offering (offentliches Angebot) within the meaning of the Act with respect to any of our units otherwise then in accordance with the Act and all other applicable legal and regulatory requirements.
NOTICE TO RESIDENTS OF FRANCE
The units are being issued and sold outside the Republic of France and that, in connection with their initial distribution, it has not offered or sold and will not offer or sell, directly or indirectly, any units to the public in the Republic of France, and that it has not distributed and will not distribute or cause to be distributed to the public in the Republic of France this prospectus or any other offering material relating to the units, and that such offers, sales and distributions have been and will be made in the Republic of France only to qualified investors (investisseurs qualifiés) in accordance with Article L.411-2 of the Monetary and Financial Code and decrét no. 98-880 dated October 1, 1998.
NOTICE TO RESIDENTS OF THE NETHERLANDS
Our units may not be offered, sold, transferred or delivered in or from the Netherlands as part of their initial distribution or at any time thereafter, directly or indirectly, other than to, individuals or legal entities situated in The Netherlands who or which trade or invest in securities in the conduct of a business or profession (which includes banks, securities intermediaries (including dealers and brokers), insurance companies, pension funds, collective investment institution, central governments, large international and supranational organizations, other institutional investors and other parties, including treasury departments of commercial enterprises, which as an ancillary activity regularly invest in securities; hereinafter, “Professional Investors”); provided that in the offer, prospectus and in any other documents or advertisements in which a forthcoming offering of our units is publicly announced (whether electronically or otherwise) in The Netherlands it is stated that such offer is and will be exclusively made to such
Professional Investors. Individual or legal entities who are not Professional Investors may not participate in the offering of our units, and this prospectus or any other offering material relating to our units may not be considered an offer or the prospect of an offer to sell or exchange our units.
NOTICE TO PROSPECTIVE INVESTORS IN THE CAYMAN ISLANDS
No invitation, whether directly or indirectly, may be made to the public in the Cayman Islands to subscribe for our units.
NOTICE TO CANADIAN RESIDENTS
Resale restrictions
The distribution of units in Canada is being made only in the provinces of Ontario, Quebec, Alberta and British Columbia on a private placement basis exempt from the requirement that we prepare and file a prospectus with the securities regulatory authorities in each province where trades of these securities are made. Any resale of the units in Canada must be made under applicable securities laws which may vary depending on the relevant jurisdiction, and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers are advised to seek legal advice prior to any resale of the securities.
Representations of canadian purchasers
By purchasing units in Canada and accepting delivery of a purchase confirmation, a purchaser is representing to us and the dealer from whom the purchase confirmation is received that:
➤
the purchaser is entitled under applicable provincial securities laws to purchase the units without the benefit of a prospectus qualified under those securities laws as it is an “accredited investor” as defined under National Instrument 45-106—Prospectus Exemptions;
➤
the purchaser is a “permitted client” as defined in National Instrument 31-103—Registration Requirements, Exemptions and Ongoing Registrant Obligations;
➤
where required by law, the purchaser is purchasing as principal and not as agent; and
➤
the purchaser has reviewed the text above under “Resale Restrictions.”
Conflicts of interest
Canadian purchasers are hereby notified that 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 units should consult their own legal and tax advisors with respect to the tax consequences of an investment in the units in their particular circumstances and about the eligibility of the units for investment by the purchaser under relevant Canadian legislation.
LEGAL MATTERS
White & Case LLP, Houston, Texas, is acting as counsel in connection with the registration of our securities under the Securities Act, and as such, will pass upon the validity of the securities offered in this prospectus. In connection with this offering, Proskauer Rose LLP, New York, New York, is acting as counsel to the underwriter.
EXPERTS
The consolidated balance sheet of Kimbell Tiger Acquisition Corporation as of May 12, 2021, and the related consolidated statements of operations, changes in stockholder’s deficit and cash flows for the period from April 9, 2021 (inception) through May 12, 2021, have been included herein in reliance upon the report of KPMG LLP, independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.
The audit report covering the May 12, 2021 consolidated financial statements contains an explanatory paragraph that states that the Company’s working capital deficit raises substantial doubt about the entity’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of that uncertainty.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on Form S-1 (File No. 333-258260) 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
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F-2
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F-3
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F-4
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F-6
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F-7
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F-17
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F-18
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F-20
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Report of independent registered public accounting firm
To the Stockholder and Board of Directors
Kimbell Tiger Acquisition Corporation:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheet of Kimbell Tiger Acquisition Corporation and subsidiary (the Company) as of May 12, 2021, the related consolidated statements of operations, stockholder’s deficit, and cash flows for the period from April 9, 2021 (inception) through May 12, 2021, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of May 12, 2021, and the results of its operations and its cash flows for the period then ended, in conformity with U.S. generally accepted accounting principles.
Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has a working capital deficit that raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated 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 consolidated 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 consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ KPMG LLP
We have served as the Company’s auditor since 2021.
Dallas, Texas
June 11, 2021, except for Notes 6 and 7, as to which the date is July 29, 2021
KIMBELL TIGER ACQUISITION CORPORATION
CONSOLIDATED BALANCE SHEET
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May 12, 2021
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ASSETS
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Current assets
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Cash
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$
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26,000
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Deferred offering costs associated with proposed public offering
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261,078
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Total current assets
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$
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287,078
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LIABILITIES AND STOCKHOLDER’S DEFICIT
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Current liabilities
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Accounts payable to related party
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7,983
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Accrued expenses
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405,955
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Total current liabilities
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$
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413,938
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Commitments and contingencies (Note 5)
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Stockholder’s deficit:
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Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
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—
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Class A common stock, $0.0001 par value, 225,000,000 shares authorized, 2,500 shares
issued and outstanding
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—
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Class B common stock, $0.0001 par value, 25,000,000 shares authorized, 5,750,100 shares issued and outstanding(1)
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575
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Additional paid-in capital
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24,425
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Accumulated deficit
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(146,981)
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Total Kimbell Tiger Acquisition Corporation deficit
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(121,981)
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Non-controlling interest in subsidiary
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(4,879)
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Total stockholder’s deficit
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(126,860)
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Total liabilities and stockholder’s deficit
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$
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287,078
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(1)
This number includes up to 750,000 shares of our Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 4).
The accompanying notes are an integral part of these financial statements.
KIMBELL TIGER ACQUISITION CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
For the period from April 9, 2021 (inception) through May 12, 2021
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General and administrative expenses
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$
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152,860
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Loss before non-controlling interest and income taxes
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(152,860)
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Income tax expense
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—
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Net loss
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(152,860)
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Net loss attributable to non-controlling interest in subsidiary
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5,879
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Net loss attributable to Kimbell Tiger Acquisition Corporation
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(146,981)
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Weighted average shares outstanding of Class A common stock
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2,500
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Basic and diluted net income per share, Class A
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(59)
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|
|
Weighted average shares outstanding of Class B common stock(1)
|
|
|
|
|
5,750,100
|
|
|
|
Basic and diluted net loss per share, Class B
|
|
|
|
|
(0)
|
|
|
(1)
This number excludes up to 750,000 shares of our Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 4).
The accompanying notes are an integral part of these financial statements.
KIMBELL TIGER ACQUISITION CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDER’S DEFICIT
For the period from April 9, 2021 (inception) through May 12, 2021
|
|
|
Class A
Common Stock
|
|
|
Class B
Common Stock
|
|
|
Additional
Paid-in
Capital
|
|
|
Accumulated
Deficit
|
|
|
Non-
controlling
Interest in
subsidiary
|
|
|
Total
Stockholder’s
Deficit
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
Balance—April 9, 2021 (inception)
|
|
|
|
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
Issuance of Class A and Class B common
stock to Sponsor
|
|
|
|
|
2,500
|
|
|
|
|
|
—
|
|
|
|
|
|
5,750,100
|
|
|
|
|
|
575
|
|
|
|
|
|
24,425
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
25,000
|
|
|
Issuance of Units in Opco to Sponsor
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
1,000
|
|
|
|
|
|
1,000
|
|
|
Net loss
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
(146,981)
|
|
|
|
|
|
(5,879)
|
|
|
|
|
|
(152,860)
|
|
|
Balance—May 12, 2021
|
|
|
|
|
2,500
|
|
|
|
|
$
|
—
|
|
|
|
|
|
5,750,100
|
|
|
|
|
$
|
575
|
|
|
|
|
$
|
24,425
|
|
|
|
|
$
|
(146,981)
|
|
|
|
|
$
|
(4,879)
|
|
|
|
|
$
|
(126,860)
|
|
|
The accompanying notes are an integral part of these financial statements.
KIMBELL TIGER ACQUISITION CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period from April 9, 2021 (inception) through May 12, 2021
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
$
|
(152,860)
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Deferred offering costs associated with proposed public offering
|
|
|
|
|
(261,078)
|
|
|
|
Accrued expenses
|
|
|
|
|
413,938
|
|
|
|
Net cash used in operating activities
|
|
|
|
|
—
|
|
|
|
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
|
Contributions from Class A and Class B stockholder
|
|
|
|
|
25,000
|
|
|
|
Contributions from non-controlling interest owner
|
|
|
|
|
1,000
|
|
|
|
Net cash provided by financing activities
|
|
|
|
|
26,000
|
|
|
|
Net change in cash
|
|
|
|
|
26,000
|
|
|
|
Cash—beginning of the period
|
|
|
|
|
—
|
|
|
|
Cash—end of the period
|
|
|
|
$
|
26,000
|
|
|
|
Supplemental disclosure of noncash financing activities:
|
|
|
|
|
|
|
|
|
Deferred offering costs included in accrued expenses
|
|
|
|
$
|
261,078
|
|
|
The accompanying notes are an integral part of these financial statements.
KIMBELL TIGER ACQUISITION CORPORATION
Notes to the consolidated financial statements
Note 1—Description of Organization, Business Operations and Basis of Presentation
Kimbell Tiger Acquisition Corporation is a blank check company incorporated in Delaware on April 9, 2021. As used herein, “the Company” or “TGR” refer to Kimbell Tiger Acquisition Corporation and its majority-owned and controlled operating subsidiary, Kimbell Tiger Operating Company, LLC (the “Opco”), unless the context indicates otherwise. The Company is formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with emerging growth companies.
As of May 12, 2021, the Company had not commenced any operations. All activity for the period from April 9, 2021 (inception) through May 12, 2021 relates to the Company’s formation and the proposed initial public offering described below. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Proposed Public Offering (as defined below). The Company has selected December 31 as its fiscal year end.
The Company’s sponsor is Kimbell Tiger Acquisition Sponsor, LLC, a Delaware limited liability company (the “Sponsor”). The Company’s ability to commence operations is contingent upon obtaining adequate financial resources through a proposed public offering (the “Proposed Public Offering”) of units (each, a “Unit” and collectively, the “Units”) at $10.00 per Unit, and the sale of warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”), at a price of $1.00 per Private Placement Warrant in private placements to the Sponsor that will close simultaneously with the Proposed Public Offering. Each Private Placement Warrant is exercisable to purchase one share of TGR’s Class A common stock or, in certain circumstances, one Class A Unit of Opco together with a corresponding number of shares of TGR’s non-economic Class B common stock.
Following the Proposed Public Offering, the Public Stockholders (as defined below) will hold a direct economic equity ownership interest in TGR in the form of shares of Class A common stock, and an indirect ownership interest in Opco through TGR’s ownership of Class A Units of Opco. By contrast, the Initial Stockholders of the Company (as defined below) will own direct economic interests in Opco in the form of Class B Units and a corresponding non-economic voting equity interest in TGR in the form of shares of Class B common stock.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Proposed Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (as defined below) (excluding the amount of any deferred underwriting discount held in Trust) at the time of the agreement to enter into the initial Business Combination. However, the Company will only complete a Business Combination if the post-business combination company controls 50% or more of the voting securities of the target or is otherwise not 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 a portion of the proceeds from the sale of the Private Placement Warrants to the Sponsor, will be held in a trust account (“Trust Account”) located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and invested only in U.S. “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations, as determined
KIMBELL TIGER ACQUISITION CORPORATION
Notes to the consolidated financial statements
by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.
The Company will provide the holders (the “Public Stockholders”) of the Company’s outstanding shares of Class A common stock, par value $0.0001 per share, sold in the Proposed Public Offering (the “Public Shares”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. Unless otherwise stated herein, the term “Public Shares” includes the 2,500 shares of Class A common stock, par value $0.0001 per share, of the Company held by the Sponsor. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then held in the Trust Account (initially anticipated to be $10.00 per Public Share). The per-share amount to be distributed to Public Stockholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 5). These Public Shares will be recorded at a redemption value and classified as temporary equity upon the completion of the Proposed Public Offering in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” The Company will proceed with a Business Combination if a majority of the shares voted are voted in favor of the Business Combination. The Company will not redeem the Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks stockholder approval in connection with a Business Combination, the Initial Stockholders (as defined below) have agreed to vote their Founder Shares (as defined below in Note 4) and any Public Shares purchased during or after the Proposed Public Offering in favor of a Business Combination. In addition, the Initial Stockholders have agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of a Business Combination.
The Amended and Restated Certificate of Incorporation will provide that a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the 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 20% or more of the Public Shares, without the prior consent of the Company.
If the Company is unable to complete a Business Combination within 24 months from the closing of the Proposed Public Offering (or 27 months if an agreement in principle event has occurred) (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 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares and Class A Units of Opco (other than those held by Kimbell Tiger Acquisition Corporation), which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
The Sponsor and the Company’s officers and directors (the “Initial Stockholders”) have agreed (i) that any Founder Shares held by them will not be entitled to redemption rights, and they will waive any such
KIMBELL TIGER ACQUISITION CORPORATION
Notes to the consolidated financial statements
redemption rights for any Public Shares held by them, in connection with the completion of the initial Business Combination, (ii) that any Founder Shares held by them will not be entitled to redemption rights, and they will waive any such redemption rights for any Public Shares held by them, in connection with a stockholder vote to amend our amended and restated certificate of incorporation in a manner that would affect the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company have not consummated the initial Business Combination within the Combination Period, (iii) that any Founder Shares held by them are subject to forfeiture, and thus will not be entitled to liquidating distributions from the Trust Account, and they will waive any such rights to liquidating distributions for any Founder Shares, if the Company fails to complete the initial Business Combination within the Combination Period (although they will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares they hold if the Company fails to complete the initial Business Combination within the Combination Period), and (iv) in certain limited circumstances the Class B Units of Opco will have more limited rights to current or liquidating distributions from the Company.
The underwriters have agreed to waive their rights to the deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not complete a Business Combination within in the Combination Period and subsequently liquidates and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be only $10.00. 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 entered into a letter of intent, confidentiality or other similar agreement or business combination agreement (a “Target”), reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share or Class A Unit of Opco not held by TGR and (ii) the actual amount per Public Share or Class A Unit of Opco not held by TGR held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share or Class A Unit of Opco not held by TGR due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or Target that executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable), nor will it apply to any claims under the Company’s indemnity of the underwriters of the Proposed Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). 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, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Going Concern Consideration
At May 12, 2021, the Company had cash of $26,000 and a working capital deficit of $126,860. Further, the Company expects to continue to incur significant costs in pursuit of its financing and acquisition plans. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management plans to address this uncertainty through a planned public offering. There is no assurance that the Company’s plans to raise capital will be successful. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis of Presentation
The accompanying consolidated financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies
KIMBELL TIGER ACQUISITION CORPORATION
Notes to the consolidated financial statements
that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Note 2—Summary of Significant Accounting Policies
Principles of Consolidation and Financial Statement Presentation
The consolidated financial statements include the accounts of the Company and its majority-owned and controlled operating subsidiary after elimination of all intercompany transactions and balances as of May 12, 2021. The ownership interest of noncontrolling participants in the operating subsidiary is included as a separate component of stockholder’s deficit. The noncontrolling participants’ share of the net loss is included as “Net loss attributable to noncontrolling interest in subsidiary” on the accompanying consolidated statement of operations.
Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet primarily due to their short-term nature.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Cash
Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. The Company did not have any cash equivalents as of May 12, 2021.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed the Federal depository insurance coverage.
KIMBELL TIGER ACQUISITION CORPORATION
Notes to the consolidated financial statements
Deferred Offering Costs Associated with the Proposed Public Offering
Deferred offering costs consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Proposed Public Offering and that will be charged to stockholder’s equity upon the completion of the Proposed Public Offering. Should the Proposed Public Offering prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations.
Stock Compensation Expense
The Company accounts for stock-based compensation expense in accordance with ASC 718, “Compensation—Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date and recognized over the requisite service period. To the extent a stock-based award is subject to a performance condition, the amount of expense recorded in a given period, if any, reflects an assessment of the probability of achieving such performance condition, with compensation recognized once the event is deemed probable to occur. The fair value of equity awards has been estimated using a market approach. Forfeitures are recognized as incurred.
The Company’s Class B ordinary shares and Class B units of Opco were granted subject to a performance condition, namely the occurrence of a Business Combination. This market condition is considered in determining the grant date fair value of these instruments using a closed form barrier option model. Compensation expense related to the Class B common stock of the Company and units of Opco is recognized only when the performance condition is probable of occurrence, or more specifically when a Business Combination is consummated. Therefore, no stock-based compensation expense has been recognized during the period from April 9, 2021 (inception) to May 12, 2021.
Net Loss Per 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 shares of common stock outstanding during the period, excluding common stock subject to forfeiture. Weighted average shares at May 12, 2021 were reduced for the effect of an aggregate of 750,000 shares of common stock that are subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 6). At May 12, 2021, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into shares of common stock and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the period presented.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of May 12, 2021. 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 May 12, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or
KIMBELL TIGER ACQUISITION CORPORATION
Notes to the consolidated financial statements
material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
As of May 12, 2021 there was a deferred tax asset of $30,866 related to the net operating loss generated, offset by a valuation allowance of $30,866 as a result of the uncertainty of the realization of the tax benefit of the net operating loss carryforward prior to expiration. The effective tax rate used to calculate the deferred tax asset was 21%.
Recent Accounting Pronouncements
The Company’s management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying consolidated financial statements.
Note 3—Proposed Public Offering
Pursuant to the Proposed Public Offering, the Company intends to offer for sale a number of Units at a purchase price of $10.00 per Unit. Each Unit will consist of one share of Class A common stock and one-half of one redeemable warrant (each, a “Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of TGR’s Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 6).
The Company will grant the underwriters a 45-day option from the date of the final prospectus relating to the Proposed Public Offering to purchase up to a specified number of additional Units to cover over-allotments, if any, at the Proposed Public Offering price, less underwriting discounts and commissions.
The Company will use the proceeds it receives from the Proposed Public Offering to purchase Class A Units and warrants in Opco. Opco will deposit the proceeds into a U.S.-based trust account with Continental Stock Transfer & Trust Company acting as trustee and will use a specified amount of such proceeds to pay expenses in connection with the closing of the Proposed Public Offering and for working capital following the Proposed Public Offering. The proceeds to be placed in the trust account include a specified amount in deferred underwriting discounts and commissions.
Note 4—Related Party Transactions
Accounts Payable
An affiliate of the Sponsor paid $7,983 of expenses on the Company’s behalf, which have not been reimbursed. The Company expects to reimburse affiliates periodically.
Founder Shares
In May 2021, the Sponsor paid $25,000 to cover certain expenses of the Company in exchange for issuance of (i) 5,750,100 shares of TGR’s Class B common stock, par value $0.0001 per share, and (ii) 2,500 shares of TGR’s Class A common stock, par value $0.0001 per share. Upon a liquidation of Opco, distributions generally will be made to the holders of Opco Units on a pro rata basis, subject to certain limitations with respect to the Class B Units of Opco, including that, prior to the completion of the initial business combination, such Class B Units will not be entitled to participate in a liquidating distribution.
Also in May 2021, TGR paid $25,000 to Opco in exchange for issuance of 2,500 Class A Units of Opco. In May 2021, the Sponsor received 100 Class A Units of Opco in exchange for $1,000 and 5,750,000 Class B Units of Opco (which are profits interest units only) (up to 750,000 of which (together with a corresponding number of TGR's Class B Common Stock held by the Sponsor) are subject to forfeiture, depending on the extent to which the underwriters' over-allotment option is exercised) for no consideration.
The Company refers to the 5,750,000 shares of Class B common stock and corresponding number of Class B Units of Opco (or the Class A Units of Opco into which such Class B Units will convert) collectively as the “Founder Shares”. The Founder Shares consist of Class B Units of Opco (and any Class A Units of Opco into which such Class B Units are converted) and a corresponding number of shares of Class B
KIMBELL TIGER ACQUISITION CORPORATION
Notes to the consolidated financial statements
common stock, which together will be exchangeable for shares of TGR’s Class A common stock after the time of the initial Business Combination on a one-for-one basis, subject to adjustment as provided herein.
The Initial Stockholders have agreed 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 stock 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 stockholders prior to the Proposed Public Offering at 20.0% of the Company’s total outstanding equity upon the consummation of the Proposed Public Offering (excluding the shares of Class A common stock issuable upon exercise of the warrants).
The Class B Units of Opco will convert into Class A Units of Opco in connection with the initial Business Combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like and subject to further adjustment as provided herein. The Founder Shares consist of Class B Units of Opco (and any Class A Units of Opco into which such Class B Units are converted) and a corresponding number of shares of Class B common stock, which together will be exchangeable for shares of Class A common stock after the time of the initial Business Combination on a one-for-one basis (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like), and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in the Proposed Public Offering and related to the closing of the Business Combination, the number of Class A Units of Opco into which the Class B Units of Opco will convert may be adjusted (unless the holders of a majority of the outstanding Founder Shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon exchange of all Founder Shares will equal, in the aggregate, on an as-exchanged basis, 20% of the sum of the total outstanding shares of TGR’s common stock upon completion of the Proposed Public Offering, plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with the Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the Business Combination). In addition, the number of outstanding shares of Class B common stock will be adjusted through a stock split or stock dividend so that the total number of outstanding shares of Class B common stock corresponds to the total number of Class A Units of Opco outstanding (other than those held by TGR) plus the total number of Class A Units Opco into which the Class B Units of Opco are entitled to convert.
The Initial Stockholders will agree, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares held by them (and any shares of Class A common stock acquired upon exchange of Founder Shares) until one year after the date of the consummation of the initial Business Combination or earlier if, subsequent to the initial Business Combination, (i) the last sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination or (ii) the Company consummates a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of the stockholders having the right to exchange their shares of common stock for cash, securities or other property.
Private Placement Warrants
The Sponsor expects to purchase Private Placement Warrants at a price of $1.00 per Private Placement Warrant in a private placement that will occur simultaneously with the closing of the Proposed Public Offering. Each whole Private Placement Warrant is exercisable for a price of $11.50 to purchase one share of TGR’s Class A common stock or, in certain circumstances, one Class A Unit of Opco together with a corresponding number of shares of TGR’s non-economic Class B common stock. A portion of the proceeds from the sale of the Private Placement Warrants will be added to the proceeds from the Proposed Public Offering to be held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless.
KIMBELL TIGER ACQUISITION CORPORATION
Notes to the consolidated financial statements
With certain limited exceptions, the Private Placement Warrants and the securities underlying such warrants will not be transferable, assignable or saleable until 30 days after the completion of the initial Business Combination.
Related Party Loans
The Sponsor expects to agree to loan the Company an amount sufficient to cover expenses related to the Proposed Public Offering pursuant to a promissory note (the “Note”). This loan will be non-interest bearing and payable on the earlier of June 30, 2022 or the completion of the Proposed Public Offering.
In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination or, at the lender’s discretion, a portion of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. To date, the Company had no borrowings under the Working Capital Loans.
The Sponsor, officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on the Company’s behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. The Company’s audit committee will review on a quarterly basis all payments that were made to the Sponsor, officers or directors, or their affiliates.
Note 5—Commitments and Contingencies
Registration Rights
The holders of Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans, if any, (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to the consummation of the Proposed Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. The Company will bear the expenses incurred in connection with the registration of such securities.
Underwriting Agreement
The Company will grant the underwriters a 45-day option from the date of Proposed Public Offering to purchase up to a specified amount of 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, payable upon the closing of the Proposed Public Offering. In addition, the underwriters will be entitled to a deferred fee of $0.35 per Unit. 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
KIMBELL TIGER ACQUISITION CORPORATION
Notes to the consolidated financial statements
financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Note 6—Stockholder’s Deficit
Class A Common Stock—The Company is authorized to issue 225,000,000 shares of Class A common stock with a par value of $0.0001 per share. As of May 12, 2021, there were 2,500 shares of Class A common stock issued or outstanding.
Class B Common Stock—The Company is authorized to issue 25,000,000 shares of Class B common stock with a par value of $0.0001 per share. As of May 12, 2021, there were 5,750,100 shares of Class B common stock issued and outstanding, of which an aggregate of up to 750,000 shares of Class B common stock 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 Stockholders will collectively own 20% of the Company’s issued and outstanding common stock after the Proposed Public Offering.
Holders of the Class A common stock and holders of the Class B common stock will vote together as a single class on all matters submitted to a vote of the stockholders, except as required by law. Each share of common stock will have one vote on all such matters.
Preferred Stock—The Company is authorized to issue 1,000,000 shares of preferred stock, par value $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of May 12, 2021, there were no shares of preferred stock issued or outstanding.
Warrants—Public Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the Units and only whole Public Warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination 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 shares of Class A common stock 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 has agreed that as soon as practicable, but in no event later than 15 business days after the closing of the initial Business Combination, it will use its best efforts to file with the SEC and have an effective registration statement covering the shares of the Class A common stock issuable upon exercise of the warrants and to maintain a current prospectus relating to those shares of the Class A common stock until the warrants expire or are redeemed. If a registration statement covering the shares of the Class A common stock 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 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.
The warrants have an exercise price of $11.50 per share, subject to adjustments, and will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation. In addition, if the Company issues additional shares of Class A common stock 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 share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the board and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the Newly Issued Price.
Redemption of warrants when our Class A common stock equals or exceeds $18.00 per share:
Once the warrants become exercisable, the Company may redeem the outstanding warrants for cash:
➤
in whole and not in part;
KIMBELL TIGER ACQUISITION CORPORATION
Notes to the consolidated financial statements
➤
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 sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) 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 warrantholders.
The Company will not redeem the warrants for cash unless a registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of Class A common stock is available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. If the Company calls the warrants for redemption for cash as described above, the management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.”
In no event will the Company be required to net cash settle any warrant. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
Note 7—Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through July 29, 2021, the date that the consolidated financial statements were available to be issued. On July 20, 2021, the Company executed an unsecured promissory note with our Sponsor whereas the Sponsor has agreed to loan the Company up to $300,000 to be used for a portion of the expenses related to the Proposed Public Offering. This note is non-interest bearing and matures on the earlier of June 30, 2022 or the consummation date of the Proposed Public Offering. As of July 29, 2021, we had borrowed $100,000 under the note.
KIMBELL TIGER ACQUISITION CORPORATION
CONSOLIDATED BALANCE SHEET
|
|
|
September 30, 2021
|
|
|
May 12, 2021
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
|
$
|
26,000
|
|
|
|
|
$
|
26,000
|
|
|
Deferred offering costs associated with proposed public offering
|
|
|
|
|
577,873
|
|
|
|
|
|
261,078
|
|
|
Total current assets
|
|
|
|
$
|
603,873
|
|
|
|
|
$
|
287,078
|
|
|
LIABILITIES AND STOCKHOLDER’S EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Promissory note payable to related party
|
|
|
|
$
|
277,057
|
|
|
|
|
$
|
7,983
|
|
|
Accrued expenses
|
|
|
|
|
652,116
|
|
|
|
|
|
405,955
|
|
|
Total current liabilities
|
|
|
|
|
929,173
|
|
|
|
|
|
413,938
|
|
|
Commitments and contingencies (Note 5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholder’s equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
Class A common stock, $0.0001 par value, 200,000,000 shares authorized, 2,500 shares issued and outstanding(1)
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
Class B common stock, $0.0001 par value, 20,000,000 shares authorized, 5,750,100 shares issued and outstanding(1)
|
|
|
|
|
575
|
|
|
|
|
|
575
|
|
|
Additional paid-in capital
|
|
|
|
|
24,425
|
|
|
|
|
|
24,425
|
|
|
Accumulated deficit
|
|
|
|
|
(337,789)
|
|
|
|
|
|
(146,981)
|
|
|
Total Kimbell Tiger Acquisition Corporation equity
|
|
|
|
|
(312,789)
|
|
|
|
|
|
(121,981)
|
|
|
Non-controlling interest in subsidiary
|
|
|
|
|
(12,511)
|
|
|
|
|
|
(4,879)
|
|
|
Total stockholder’s equity
|
|
|
|
|
(325,300)
|
|
|
|
|
|
(126,860)
|
|
|
Total liabilities and stockholder’s equity
|
|
|
|
$
|
603,873
|
|
|
|
|
$
|
287,078
|
|
|
The accompanying notes are an integral part of these financial statements.
KIMBELL TIGER ACQUISITION CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
For the period from May 13, 2021 through September 30, 2021
|
General and administrative expenses
|
|
|
|
$
|
198,440
|
|
|
|
Net loss
|
|
|
|
|
(198,440)
|
|
|
|
Net loss attributable to non-controlling interest in subsidiary
|
|
|
|
|
7,632
|
|
|
|
Net loss attributable to Kimbell Tiger Acquisition Corporation
|
|
|
|
$
|
(190,808)
|
|
|
|
Weighted average shares outstanding of Class A common stock
|
|
|
|
|
2,500
|
|
|
|
Basic and diluted net income per share, Class A
|
|
|
|
|
(76)
|
|
|
|
Weighted average shares outstanding of Class B common stock(1)
|
|
|
|
|
5,750,100
|
|
|
|
Basic and diluted net loss per share, Class B
|
|
|
|
|
(0)
|
|
|
The accompanying notes are an integral part of these financial statements.
KIMBELL TIGER ACQUISITION CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDER’S DEFICIT
For the period from May 13, 2021 through September 30, 2021
|
|
|
Class A
Common Stock
|
|
|
Class B
Common Stock
|
|
|
Additional
Paid-in
Capital
|
|
|
Accumulated
Deficit
|
|
|
Noncontrolling
Interest
|
|
|
Total
Stockholder’s
Equity
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
Balance—May 12, 2021
|
|
|
|
|
2,500
|
|
|
|
|
$
|
—
|
|
|
|
|
|
5,750,100
|
|
|
|
|
$
|
575
|
|
|
|
|
$
|
24,425
|
|
|
|
|
$
|
(146,981)
|
|
|
|
|
$
|
(4,879)
|
|
|
|
|
$
|
(126,860)
|
|
|
Issuance of Class A and Class B common stock to Sponsor(1)
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
Issuance of Units in Opco to Sponsor
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
Net loss
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
(190,808)
|
|
|
|
|
|
(7,632)
|
|
|
|
|
|
(198,440)
|
|
|
Balance September 30, 2021
|
|
|
|
|
2,500
|
|
|
|
|
$
|
—
|
|
|
|
|
|
5,750,100
|
|
|
|
|
$
|
575
|
|
|
|
|
$
|
24,425
|
|
|
|
|
$
|
(337,789)
|
|
|
|
|
$
|
(12,511)
|
|
|
|
|
$
|
(325,300)
|
|
|
The accompanying notes are an integral part of these financial statements.
KIMBELL TIGER ACQUISITION CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period from Ma y 13, 2021 through September 30, 2021
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
$
|
(198,440)
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Deferred offering costs associated with proposed public offering
|
|
|
|
|
(316,795)
|
|
|
|
Promissory note payable to related party and accrued expenses
|
|
|
|
|
515,235
|
|
|
|
Net cash used in operating activities
|
|
|
|
|
—
|
|
|
|
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
|
Contributions from Class A and Class B stockholder
|
|
|
|
|
—
|
|
|
|
Contributions from non-controlling interest owner
|
|
|
|
|
—
|
|
|
|
Net cash provided by financing activities
|
|
|
|
|
—
|
|
|
|
Net change in cash
|
|
|
|
|
—
|
|
|
|
Cash—beginning of the period
|
|
|
|
|
26,000
|
|
|
|
Cash—end of the period
|
|
|
|
$
|
26,000
|
|
|
|
Supplemental disclosure of noncash financing activities:
|
|
|
|
|
|
|
|
|
Deferred offering costs included in accrued expenses
|
|
|
|
$
|
577,873
|
|
|
The accompanying notes are an integral part of these financial statements.
KIMBELL TIGER ACQUISITION CORPORATION
Notes to the consolidated financial statements
Note 1—Description of Organization, Business Operations and Basis of Presentation
Kimbell Tiger Acquisition Corporation is a blank check company incorporated in Delaware on April 9, 2021. As used herein, “the Company” or “TGR” refer to Kimbell Tiger Acquisition Corporation and its majority-owned and controlled operating subsidiary, Kimbell Tiger Operating Company, LLC (the “Opco”), unless the context indicates otherwise. The Company is formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with emerging growth companies.
As of September 30, 2021, the Company had not commenced any operations. All activity for the period from May 13, 2021 through September 30, 2021 relates to the Company’s formation and the proposed initial public offering described below. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Proposed Public Offering (as defined below). The Company has selected December 31 as its fiscal year end.
The Company’s sponsor is Kimbell Tiger Acquisition Sponsor, LLC, a Delaware limited liability company (the “Sponsor”). The Company’s ability to commence operations is contingent upon obtaining adequate financial resources through a proposed public offering (the “Proposed Public Offering”) of units (each, a “Unit” and collectively, the “Units”) at $10.00 per Unit, and the sale of warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”), at a price of $1.00 per Private Placement Warrant in private placements to the Sponsor that will close simultaneously with the Proposed Public Offering. Each Private Placement Warrant is exercisable to purchase one share of TGR’s Class A common stock or, in certain circumstances, one Class A Unit of Opco together with a corresponding number of shares of TGR’s non-economic Class B common stock.
Following the Proposed Public Offering, the Public Stockholders (as defined below) will hold a direct economic equity ownership interest in TGR in the form of shares of Class A common stock, and an indirect ownership interest in Opco through TGR’s ownership of Class A Units of Opco. By contrast, the Initial Stockholders of the Company (as defined below) will own direct economic interests in Opco in the form of Class B Units and a corresponding non-economic voting equity interest in TGR in the form of shares of Class B common stock.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Proposed Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (as defined below) (excluding the amount of any deferred underwriting discount held in Trust) at the time of the agreement to enter into the initial Business Combination. However, the Company will only complete a Business Combination if the post-business combination company controls 50% or more of the voting securities of the target or is otherwise not 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 initially equal to at least $10.20 per Unit sold in the Proposed Public Offering, including a portion of the proceeds from the sale of the Private Placement Warrants to the Sponsor, will be held in a trust account (“Trust Account”) located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and invested only in U.S. “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations, as determined
KIMBELL TIGER ACQUISITION CORPORATION
Notes to the consolidated financial statements
by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.
The Company will provide the holders (the “Public Stockholders”) of the Company’s outstanding shares of Class A common stock, par value $0.0001 per share, sold in the Proposed Public Offering (the “Public Shares”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. Unless otherwise stated herein, the term “Public Shares” includes the 2,500 shares of Class A common stock, par value $0.0001 per share, of the Company held by the Sponsor. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then held in the Trust Account (initially anticipated to be $10.20 per Public Share). The per-share amount to be distributed to Public Stockholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 5). These Public Shares will be recorded at a redemption value and classified as temporary equity upon the completion of the Proposed Public Offering in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” The Company will proceed with a Business Combination if a majority of the shares voted are voted in favor of the Business Combination. The Company will not redeem the Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks stockholder approval in connection with a Business Combination, the Initial Stockholders (as defined below) have agreed to vote their Founder Shares (as defined below in Note 4) and any Public Shares purchased during or after the Proposed Public Offering in favor of a Business Combination. In addition, the Initial Stockholders have agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of a Business Combination.
The Amended and Restated Certificate of Incorporation will provide that a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the 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 20% or more of the Public Shares, without the prior consent of the Company.
If the Company is unable to complete a Business Combination within 18 months from the closing of the Proposed Public Offering (or up to 24 months, if the sponsor exercises its extension options) (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 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares and Class A Units of Opco (other than those held by Kimbell Tiger Acquisition Corporation), which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
The Sponsor and the Company’s officers and directors (the “Initial Stockholders”) have agreed (i) that any Founder Shares and Sponsor Shares held by them will not be entitled to redemption rights, and they
KIMBELL TIGER ACQUISITION CORPORATION
Notes to the consolidated financial statements
will waive any such redemption rights for any Public Shares held by them, in connection with the completion of the initial Business Combination, (ii) that any Founder Shares and Sponsor Shares held by them will not be entitled to redemption rights, and they will waive any such redemption rights for any Public Shares held by them, in connection with a stockholder vote to amend our amended and restated certificate of incorporation in a manner that would affect the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company have not consummated the initial Business Combination within the Combination Period, (iii) that any Founder Shares held by them are subject to forfeiture, and thus will not be entitled to liquidating distributions from the Trust Account, and they will waive any such rights to liquidating distributions for any Founder Shares, if the Company fails to complete the initial Business Combination within the Combination Period (although they will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares they hold if the Company fails to complete the initial Business Combination within the Combination Period), and (iv) in certain limited circumstances the Class B Units of Opco will have more limited rights to current or liquidating distributions from the Company.
The underwriters have agreed to waive their rights to the deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not complete a Business Combination within in the Combination Period and subsequently liquidates and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be only $10.20. 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 entered into a letter of intent, confidentiality or other similar agreement or business combination agreement (a “Target”), reduce the amount of funds in the Trust Account to below the lesser of (i) $10.20 per Public Share or Class A Unit of Opco not held by TGR and (ii) the actual amount per Public Share or Class A Unit of Opco not held by TGR held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.20 per Public Share or Class A Unit of Opco not held by TGR due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or Target that executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable), nor will it apply to any claims under the Company’s indemnity of the underwriters of the Proposed Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). 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, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Going Concern Consideration
At September 30, 2021, the Company had cash of $26,000 and a working capital deficit of $325,300. Further, the Company expects to continue to incur significant costs in pursuit of its financing and acquisition plans. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management plans to address this uncertainty through a planned public offering. There is no assurance that the Company’s plans to raise capital will be successful. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis of Presentation
The accompanying consolidated financial statements are unaudited and do not include all the information and disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements. All adjustments that, in the opinion of management, are necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein. The results of operations for such interim periods are not necessarily indicative of results of operations for a full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying
KIMBELL TIGER ACQUISITION CORPORATION
Notes to the consolidated financial statements
notes for the period ended May 12, 2021. All significant intercompany balances and transactions have been eliminated in consolidation.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Note 2—Summary of Significant Accounting Policies
Principles of Consolidation and Financial Statement Presentation
The consolidated financial statements include the accounts of the Company and its majority-owned and controlled operating subsidiary after elimination of all intercompany transactions and balances as of September 30, 2021. The ownership interest of noncontrolling participants in the operating subsidiary is included as a separate component of stockholder’s deficit. The noncontrolling participants’ share of the net loss is included as “Net loss attributable to noncontrolling interest in subsidiary” on the accompanying consolidated statement of operations.
Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet primarily due to their short-term nature.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Cash
Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. The Company did not have any cash equivalents as of September 30, 2021.
KIMBELL TIGER ACQUISITION CORPORATION
Notes to the consolidated financial statements
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed the Federal depository insurance coverage.
Deferred Offering Costs Associated with the Proposed Public Offering
Deferred offering costs consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Proposed Public Offering and that will be charged to stockholder’s equity upon the completion of the Proposed Public Offering. Should the Proposed Public Offering prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations.
Stock Compensation Expense
The Company accounts for stock-based compensation expense in accordance with ASC 718, “Compensation—Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date and recognized over the requisite service period. To the extent a stock-based award is subject to a performance condition, the amount of expense recorded in a given period, if any, reflects an assessment of the probability of achieving such performance condition, with compensation recognized once the event is deemed probable to occur. The fair value of equity awards has been estimated using a market approach. Forfeitures are recognized as incurred.
The Company’s Class B ordinary shares and Class B units of Opco were granted subject to a performance condition, namely the occurrence of a Business Combination. This market condition is considered in determining the grant date fair value of these instruments using a closed form barrier option model. Compensation expense related to the Class B common stock of the Company and units of Opco is recognized only when the performance condition is probable of occurrence, or more specifically when a Business Combination is consummated. Therefore, no stock-based compensation expense has been recognized during the period from May 13, 2021 to September 30, 2021.
Net Loss Per 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 shares of common stock outstanding during the period, excluding common stock subject to forfeiture. Weighted average shares at September 30, 2021 were reduced for the effect of an aggregate of 750,000 shares of common stock that are subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 6). At September 30, 2021, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into shares of common stock and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the period presented.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those
KIMBELL TIGER ACQUISITION CORPORATION
Notes to the consolidated financial statements
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 September 30, 2021. 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 September 30, 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.
As of September 30, 2021, there was a deferred tax asset of $70,936 related to the net operating loss generated, offset by a valuation allowance of $70,936 as a result of the uncertainty of the realization of the tax benefit of the net operating loss carryforward prior to expiration. The effective tax rate used to calculate the deferred tax asset was 21%.
Recent Accounting Pronouncements
The Company’s management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying consolidated financial statements.
Note 3—Proposed Public Offering
Pursuant to the Proposed Public Offering, the Company intends to offer for sale a number of Units at a purchase price of $10.00 per Unit. Each Unit will consist of one share of Class A common stock and one-half of one redeemable warrant (each, a “Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of TGR’s Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 6).
The Company will grant the underwriters a 45-day option from the date of the final prospectus relating to the Proposed Public Offering to purchase up to a specified number of additional Units to cover over-allotments, if any, at the Proposed Public Offering price, less underwriting discounts and commissions.
The Company will use the proceeds it receives from the Proposed Public Offering to purchase Class A Units and warrants in Opco. Opco will deposit the proceeds into a U.S.-based trust account with Continental Stock Transfer & Trust Company acting as trustee and will use a specified amount of such proceeds to pay expenses in connection with the closing of the Proposed Public Offering and for working capital following the Proposed Public Offering. The proceeds to be placed in the trust account include a specified amount in deferred underwriting discounts and commissions.
Note 4—Related Party Transactions
Founder Shares
In May 2021, the Sponsor paid $25,000 to cover certain expenses of the Company in exchange for issuance of (i) 5,750,100 shares of TGR’s Class B common stock, par value $0.0001 per share, and (ii) 2,500 shares of TGR’s Class A common stock, par value $0.0001 per share. Upon a liquidation of Opco, distributions generally will be made to the holders of Opco Units on a pro rata basis, subject to certain limitations with respect to the Class B Units of Opco, including that, prior to the completion of the initial business combination, such Class B Units will not be entitled to participate in a liquidating distribution.
Also in May 2021, TGR paid $25,000 to Opco in exchange for issuance of 2,500 Class A Units of Opco. In May 2021, the Sponsor received 100 Class A Units of Opco in exchange for $1,000 and 5,750,000 Class B Units of Opco (which are profits interest units only) (up to 750,000 of which (together with a corresponding number of TGR's Class B Common Stock held by the Sponsor) are subject to forfeiture, depending on the extent to which the underwriters' over-allotment option is exercised) for no consideration.
The Company refers to the 5,750,000 shares of Class B common stock and corresponding number of Class B Units of Opco (or the Class A Units of Opco into which such Class B Units will convert) collectively as the “Founder Shares”. The Founder Shares consist of Class B Units of Opco (and any Class A Units of Opco into which such Class B Units are converted) and a corresponding number of shares of Class B
KIMBELL TIGER ACQUISITION CORPORATION
Notes to the consolidated financial statements
common stock, which together will be exchangeable for shares of TGR’s Class A common stock after the time of the initial Business Combination on a one-for-one basis, subject to adjustment as provided herein.
The Initial Stockholders have agreed 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 stock 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 stockholders prior to the Proposed Public Offering at 20.0% of the Company’s total outstanding equity upon the consummation of the Proposed Public Offering (excluding the shares of Class A common stock issuable upon exercise of the warrants).
The Class B Units of Opco will convert into Class A Units of Opco in connection with the initial Business Combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like and subject to further adjustment as provided herein. The Founder Shares consist of Class B Units of Opco (and any Class A Units of Opco into which such Class B Units are converted) and a corresponding number of shares of Class B common stock, which together will be exchangeable for shares of Class A common stock after the time of the initial Business Combination on a one-for-one basis (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like), and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in the Proposed Public Offering and related to the closing of the Business Combination, the number of Class A Units of Opco into which the Class B Units of Opco will convert may be adjusted (unless the holders of a majority of the outstanding Founder Shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon exchange of all Founder Shares will equal, in the aggregate, on an as-exchanged basis, 20% of the sum of the total outstanding shares of TGR’s common stock upon completion of the Proposed Public Offering, plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with the Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the Business Combination). In addition, the number of outstanding shares of Class B common stock will be adjusted through a stock split or stock dividend so that the total number of outstanding shares of Class B common stock corresponds to the total number of Class A Units of Opco outstanding (other than those held by TGR) plus the total number of Class A Units Opco into which the Class B Units of Opco are entitled to convert.
The Initial Stockholders will agree, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares held by them (and any shares of Class A common stock acquired upon exchange of Founder Shares) until one year after the date of the consummation of the initial Business Combination or earlier if, subsequent to the initial Business Combination, (i) the last sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination or (ii) the Company consummates a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of the stockholders having the right to exchange their shares of common stock for cash, securities or other property.
Private Placement Warrants
The Sponsor expects to purchase Private Placement Warrants at a price of $1.00 per Private Placement Warrant in a private placement that will occur simultaneously with the closing of the Proposed Public Offering. Each whole Private Placement Warrant is exercisable for a price of $11.50 to purchase one share of TGR’s Class A common stock or, in certain circumstances, one Class A Unit of Opco together with a corresponding number of shares of TGR’s non-economic Class B common stock. A portion of the proceeds from the sale of the Private Placement Warrants will be added to the proceeds from the Proposed Public Offering to be held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless.
KIMBELL TIGER ACQUISITION CORPORATION
Notes to the consolidated financial statements
With certain limited exceptions, the Private Placement Warrants and the securities underlying such warrants will not be transferable, assignable or saleable until 30 days after the completion of the initial Business Combination.
Related Party Loans
On July 20, 2021, the Company executed an unsecured promissory note with our Sponsor whereas the Sponsor has agreed to loan the Company up to $300,000 to be used for a portion of the expenses related to the Proposed Public Offering. This note is non-interest bearing and matures on the earlier of June 30, 2022 or the consummation date of the Proposed Public Offering. As of September 30, 2021, we had borrowed approximately $277,000 on this note.
In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination or, at the lender’s discretion, a portion of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. To date, the Company had no borrowings under the Working Capital Loans.
The Sponsor, officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on the Company’s behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. The Company’s audit committee will review on a quarterly basis all payments that were made to the Sponsor, officers or directors, or their affiliates.
Note 5—Commitments and Contingencies
Registration Rights
The holders of Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans, if any, (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to the consummation of the Proposed Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. The Company will bear the expenses incurred in connection with the registration of such securities.
Underwriting Agreement
The Company will grant the underwriters a 45-day option from the date of Proposed Public Offering to purchase up to a specified amount of 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, payable upon the closing of the Proposed Public Offering. In addition, the underwriters will be entitled to a deferred fee of $0.35 per Unit. 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.
KIMBELL TIGER ACQUISITION CORPORATION
Notes to the consolidated financial statements
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 and/or search for a target company, the specific impact is not readily determinable as of the date of these consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Note 6—Stockholder’s Deficit
Class A Common Stock—The Company is authorized to issue 225,000,000 shares of Class A common stock with a par value of $0.0001 per share. As of September 30, 2021, there were 2,500 shares of Class A common stock issued or outstanding.
Class B Common Stock—The Company is authorized to issue 25,000,000 shares of Class B common stock with a par value of $0.0001 per share. As of September 30, 2021, there were 5,750,100 shares of Class B common stock issued and outstanding, of which an aggregate of up to 750,000 shares of Class B common stock 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 Stockholders will collectively own 20% of the Company’s issued and outstanding common stock after the Proposed Public Offering.
Holders of the Class A common stock and holders of the Class B common stock will vote together as a single class on all matters submitted to a vote of the stockholders, except as required by law. Each share of common stock will have one vote on all such matters.
Preferred Stock—The Company is authorized to issue 1,000,000 shares of preferred stock, par value $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of September 30, 2021, there were no shares of preferred stock issued or outstanding.
Warrants—Public Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the Units and only whole Public Warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination 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 shares of Class A common stock 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 has agreed that as soon as practicable, but in no event later than 15 business days after the closing of the initial Business Combination, it will use its best efforts to file with the SEC and have an effective registration statement covering the shares of the Class A common stock issuable upon exercise of the warrants and to maintain a current prospectus relating to those shares of the Class A common stock until the warrants expire or are redeemed. If a registration statement covering the shares of the Class A common stock 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 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.
The warrants have an exercise price of $11.50 per share, subject to adjustments, and will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation. In addition, if the Company issues additional shares of Class A common stock 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 share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the board and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the Newly Issued Price.
KIMBELL TIGER ACQUISITION CORPORATION
Notes to the consolidated financial statements
Redemption of warrants when our Class A common stock equals or exceeds $18.00 per share:
Once the warrants become exercisable, the Company may redeem the outstanding warrants for cash:
➤
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 sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
The Company will not redeem the warrants for cash unless a registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of Class A common stock is available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. If the Company calls the warrants for redemption for cash as described above, the management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.”
In no event will the Company be required to net cash settle any warrant. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
Note 7—Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through January 28, 2022, the date that the consolidated financial statements were available to be issued.
On January 28, 2022, the Company amended the terms of the Proposed Public Offering to: (i) increase the amount of Private Placement Warrants to be sold in the Proposed Public Offering; (ii) increase the amount of proceeds from the Proposed Public Offering and the sale of the Private Placement Warrants that would be held in the Trust Account from $10.20 per Public Share to $10.30 per Public Share; and (iii) change the period during which the Company must complete an initial Business Combination such that the Company will have 15 months from the closing of the Proposed Public Offering to complete an initial Business Combination unless the Sponsor exercises its extension options (as described in the prospectus relating to the Proposed Public Offering).
20,000,000 Units
KIMBELL TIGER ACQUISITION CORPORATION
PRELIMINARY PROSPECTUS
, 2022
UBS Investment Bank
Until , 2022 (25 days after the date of this prospectus), all dealers that buy, sell, or trade shares of our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The estimated expenses payable by us in connection with the offering described in this registration statement (other than the underwriting discount and commissions) will be as follows:
|
SEC expenses
|
|
|
|
$
|
40,000
|
|
|
|
FINRA expenses
|
|
|
|
|
55,000
|
|
|
|
Accounting fees and expenses
|
|
|
|
|
50,000
|
|
|
|
Printing and engraving expenses
|
|
|
|
|
35,000
|
|
|
|
Travel and road show expenses
|
|
|
|
|
15,000
|
|
|
|
Directors and officers liability insurance premiums(1)
|
|
|
|
|
500,000
|
|
|
|
Legal fees and expenses
|
|
|
|
|
500,000
|
|
|
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NYSE listing and filing fees
|
|
|
|
|
85,000
|
|
|
|
Miscellaneous
|
|
|
|
|
720,000
|
|
|
|
Total
|
|
|
|
$
|
2,000,000
|
|
|
(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.
(2)
This amount represents additional expenses that may be incurred by us in connection with the offering over and above those specifically listed above, including distribution and mailing costs.
Item 14. Indemnification of Directors and Officers.
Our amended and restated certificate of incorporation provides that all of our directors, officers, employees and agents shall be entitled to be indemnified by us to the fullest extent permitted by Section 145 of the Delaware General Corporation Law (“DGCL”).
Section 145 of the DGCL concerning indemnification of officers, directors, employees and agents is set forth below.
Section 145. Indemnification of officers, directors, employees and agents; insurance.
(a)
A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful.
(b)
A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
(c)
To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.
(d)
Any indemnification under subsections (a) and (b) of this section (unless ordered. by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer of the corporation at the time of such determination (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum; or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum; or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion; or (4) by the stockholders.
(e)
Expenses (including attorneys’ fees) incurred by an officer or director of the corporation in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys’ fees) incurred by former directors and officers or other employees and agents of the corporation or by persons serving at the request of the corporation as directors, officers, employees or agents of another corporation, partnership, joint venture, trust or other enterprise may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.
(f)
The indemnification and advancement of expenses provided by or granted pursuant to the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office. A right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw shall not be eliminated or impaired by an amendment to the certificate of incorporation or the bylaws after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred.
(g)
A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under this section.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
(h)
For purposes of this section. references to “the corporation” shall include’, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued.
(i)
For purposes of this section, references to “other enterprises” shall include employee benefit plans, references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this section.
(j)
The indemnification and advancement of expenses provided by, or granted pursuant to this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
(k)
The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation’s obligation to advance expenses (including attorneys’ fees).
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to the court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
In accordance with Section 102(b)(7) of the DGCL, our amended and restated certificate of incorporation will provide that no director shall be personally liable to us or any of our stockholders for monetary damages resulting from breaches of his or her fiduciary duty as a director, except to the extent such limitation on or exemption from liability is not permitted under the DGCL or unless he or she violated his or her duty of loyalty to us or our stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived improper personal benefit from his or her action as a director. The effect of this provision of our amended and restated certificate of incorporation is to eliminate our rights and those of our stockholders (through stockholders’ derivative suits on our behalf) to recover monetary damages against a director for breach of the fiduciary duty of care as a director, including breaches resulting from negligent or grossly negligent behavior, except as restricted by Section 102(b) (7) of the DGCL. However, this provision does not limit or eliminate our rights or the rights of any stockholder to seek non-monetary relief, such as an injunction or rescission, in the event of a breach of a director’s duty of care.
If the DGCL is amended to authorize corporate action further eliminating or limiting the liability of directors, then, in accordance with our amended and restated certificate of incorporation, the liability of our directors to us or our stockholders will be eliminated or limited to the fullest extent authorized by the
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
DGCL, as so amended. Any repeal or amendment of provisions of our amended and restated certificate of incorporation limiting or eliminating the liability of directors, whether by our stockholders or by changes in law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to further limit or eliminate the liability of directors on a retroactive basis.
Our amended and restated certificate of incorporation will also provide that we will, to the fullest extent authorized or permitted by applicable law, indemnify our current and former officers and directors, as well as those persons who, while directors or officers of our corporation, are or were serving as directors, officers, employees or agents of another entity, trust or other enterprise, including service with respect to an employee benefit plan, in connection with any threatened, pending or completed proceeding, whether civil, criminal, administrative or investigative, against all expense, liability and loss (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred or suffered by any such person in connection with any such proceeding. Notwithstanding the foregoing, a person eligible for indemnification pursuant to our amended and restated certificate of incorporation will be indemnified by us in connection with a proceeding initiated by such person only if such proceeding was authorized by our Board, except for proceedings to enforce rights to indemnification and advancement of expenses.
The right to indemnification conferred by our amended and restated certificate of incorporation is a contract right that includes the right to be paid by us the expenses incurred in defending or otherwise participating in any proceeding referenced above in advance of its final disposition, provided, however, that if the DGCL requires, an advancement of expenses incurred by our officer or director (solely in the capacity as an officer or director of our corporation) will be made only upon delivery to us of an undertaking, by or on behalf of such officer or director, to repay all amounts so advanced if it is ultimately determined that such person is not entitled to be indemnified for such expenses under our amended and restated certificate of incorporation or otherwise.
The rights to indemnification and advancement of expenses will not be deemed exclusive of any other rights which any person covered by our amended and restated certificate of incorporation may have or hereafter acquire under law, our amended and restated certificate of incorporation, our bylaws, an agreement, vote of stockholders or disinterested directors, or otherwise.
Any repeal or amendment of provisions of our amended and restated certificate of incorporation affecting indemnification rights, whether by our stockholders or by changes in law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not in any way diminish or adversely affect any right or protection existing at the time of such repeal or amendment or adoption of such inconsistent provision with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision. Our amended and restated certificate of incorporation will also permit us, to the extent and in the manner authorized or permitted by law, to indemnify and to advance expenses to persons other that those specifically covered by our amended and restated certificate of incorporation.
Our bylaws include the provisions relating to advancement of expenses and indemnification rights consistent with those set forth in our amended and restated certificate of incorporation. In addition, our bylaws provide for a right of indemnitee to bring a suit in the event a claim for indemnification or advancement of expenses is not paid in full by us within a specified period of time. Our bylaws also permit us to purchase and maintain insurance, at our expense, to protect us and/or any director, officer, employee or agent of our corporation or another entity, trust or other enterprise against any expense, liability or loss, whether or not we would have the power to indemnify such person against such expense, liability or loss under the DGCL.
Any repeal or amendment of provisions of our bylaws affecting indemnification rights, whether by our Board, stockholders or by changes in applicable law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not in any way diminish or adversely affect any right or protection existing thereunder with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
We will enter into indemnification agreements with each of our officers and directors, a form of which is filed as an exhibit to this Registration Statement. These agreements will require us to indemnify these individuals to the fullest extent permitted under Delaware law and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.
Pursuant to the Underwriting Agreement to be filed as Exhibit 1.1 to this Registration Statement, we have agreed to indemnify the underwriter and the underwriter has agreed to indemnify us against certain civil liabilities that may be incurred in connection with this offering, including certain liabilities under the Securities Act.
Item 15. Recent Sales of Unregistered Securities.
On May 11, 2021, Kimbell Tiger Acquisition Sponsor, LLC, our sponsor, received 5,750,000 Class B Units of Opco for no consideration, purchased 5,750,000 corresponding shares of our Class B common stock and 2,500 shares of our Class A common stock for an aggregate of $25,000, and purchased 100 Class A Units of Opco for $1,000. The number of founder shares was determined based on the expectation that the founder shares would represent 20% of the total outstanding equity after this offering. Such securities were issued in connection with our organization pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
Our sponsor is an accredited investor for purposes of Rule 501 of Regulation D under the Securities Act. The sole business of our sponsor is to act as our sponsor in connection with this offering.
In addition, our sponsor has committed, pursuant to a written agreement, to purchase from us an aggregate of 12,750,000 private placement warrants (or 14,100,000 private placement warrants if the underwriter’s over-allotment option is exercised in full) at $1.00 per warrant (for an aggregate purchase price of $12,750,000 (or $14,100,000 if the underwriter’s over-allotment option is exercised in full)). This purchase will take place on a private placement basis simultaneously with the completion of our initial public offering. 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)
Exhibits. The following exhibits are being filed herewith:
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
*
Previously filed.
(b)
Financial Statements. See page F-1 for an index to the financial statements and schedules included in the registration statement.
Item 17. Undertakings.
(a)
The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.
(b)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(c)
The undersigned registrant hereby undertakes that:
(1)
For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2)
For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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 Fort Worth, Texas on the 28th day of January, 2022.
Kimbell Tiger Acquisition Corporation
By:
/s/ Zachary M. Lunn
Zachary M. Lunn
President & Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.
Name
|
|
|
Position
|
|
|
Date
|
|
/s/ Zachary M. Lunn
Zachary M. Lunn
|
|
|
President & Chief Executive Officer
(Principal Executive Officer)
|
|
|
January 28, 2022
|
|
/s/ R. Blayne Rhynsburger
R. Blayne Rhynsburger
|
|
|
Controller
(Principal Accounting Officer)
|
|
|
January 28, 2022
|
|
*
Robert D. Ravnaas
|
|
|
Chairman of the Board
|
|
|
January 28, 2022
|
|
*
Matthew S. Daly
|
|
|
Director
|
|
|
January 28, 2022
|
|
*
R. Davis Ravnaas
|
|
|
Director
|
|
|
January 28, 2022
|
|
*By:
/s/ Zachary M. Lunn
Attorney-in-Fact
|
|
|
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Exhibit 1.1
KIMBELL TIGER ACQUISITION CORPORATION
20,000,000 Units
Underwriting Agreement
[●], 2022
UBS Securities LLC
As Representative of the
several Underwriters listed
in Schedule 1 hereto
c/o UBS Securities LLC
1285 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
Kimbell Tiger Acquisition Corporation, a Delaware
corporation (the “Company”), proposes to issue and sell to the several underwriters listed in Schedule 1 hereto (collectively,
the “Underwriters”), for whom you are acting as representative (the “Representative”), an aggregate of 20,000,000
units of the Company (the “Underwritten Units”) and, at the option of the Underwriters, up to an additional 3,000,000 units
of the Company (the “Option Units”). The Underwritten Units and the Option Units are herein referred to as the “Units.”
To the extent that there are no additional Underwriters listed on Schedule 1 other than you, the term Representative as used herein shall
mean you, as Underwriter, and the term Underwriters shall mean either the singular or plural as the context requires.
Each Unit consists of one share of the Company’s
Class A common stock, $0.0001 par value per share (the “Common Stock”), and one-half of one redeemable warrant, where
each whole warrant entitles the holder to purchase one share of Common Stock (the “Warrant(s)”). The shares of Common Stock
and the Warrants included in the Units will not trade separately until the 52nd day following the date of the Prospectus (as defined below)
(or, if such date is not a business day (as defined below), the following business day) (unless the Representative informs the Company
of its decision to allow earlier separate trading), subject to (a) the Company’s preparation of an audited balance sheet reflecting
the receipt by the Company of the proceeds of the Offering (as defined below), (b) the filing with the Securities and Exchange Commission
(the “Commission”) of a Current Report on Form 8-K that includes such audited balance sheet and (c) the Company
having issued a press release announcing when such separate trading will begin. No fractional Warrants will be issued upon separation
of the Units, and only whole Warrants will trade. Each whole Warrant entitles its holder, upon exercise, to purchase one share of Common
Stock at a price of $11.50 per share, subject to adjustment as described in the Prospectus, during the period commencing on the later
of thirty days after the completion of the Company’s initial Business Combination (as defined below) and twelve months from the
Closing Date (as defined below) and (b) terminating on the five-year anniversary of the date of the completion of such initial Business
Combination or earlier upon redemption or Liquidation (as defined below); provided, however, that pursuant to
the Warrant Agreement (as defined below), a fractional Warrant may not be exercised, so that only a whole Warrant may be exercised at
any given time by a holder thereof. As used herein, the term “Business Combination” (as described more fully in the Prospectus)
shall mean a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one
or more businesses or entities involving the Company.
All references to “Company Parties”
shall be understood to refer to the Company together with its subsidiary, Kimbell Tiger Operating Company, LLC, a Delaware limited liability
company (“Opco”).
The Company Parties have entered into an Amended
and Restated Limited Liability Company Agreement of Opco, dated as of [●], 2022 (“Opco LLC Agreement”) in substantially
the form filed as Exhibit 10.10 to the Registration Statement.
The Company Parties have entered into an Investment
Management Trust Agreement, effective as of [●], 2022 (the “Trust Agreement”), with Continental Stock Transfer &
Trust Company (“CST”), as trustee (the “Trustee”), in substantially the form filed as Exhibit 10.3 to the
Registration Statement (as defined below), pursuant to which proceeds from the sale of the Private Placement Warrants (as defined below)
and proceeds of the Offering will be deposited and held in a trust account (the “Trust Account”) for the benefit of the Company,
the Underwriters and the Public Stockholders (as defined below).
The Company Parties have entered into a Warrant
Agreement, effective as [●], 2022 (the “Warrant Agreement”), with respect to the Warrants and the Private Placement
Warrants with CST, as warrant agent, in substantially the form filed as Exhibit 4.4 to the Registration Statement, pursuant to
which CST will act as warrant agent in connection with the issuance, registration, transfer, exchange, redemption, and exercise of the
Warrants and the Private Placement Warrants.
The Company has entered into a Securities Subscription Agreement, dated as of May 11,
2021, with Kimbell Tiger Acquisition Sponsor, LLC, a Delaware limited liability company (the “Sponsor”), in substantially
the form filed as Exhibit 10.6 to the Registration Statement (the “Company-Sponsor Securities Subscription Agreement”),
pursuant to which the Sponsor purchased (i) 5,750,100 shares of Class B common stock of the Company (“Class B Common
Stock”) (up to 750,000 of which (together with a corresponding number of Class B units of Opco held by the Sponsor, as described
below) are subject to forfeiture, depending on the extent to which the Over-Allotment Option is exercised) and (ii) 2,500 shares
of Common Stock.
Simultaneously therewith, the Sponsor entered
into a Securities Subscription Agreement, dated as of May 11, 2021, with Opco (together with the Company-Sponsor Securities
Subscription Agreement, the “Securities Subscription Agreements”), in substantially the form filed as Exhibit 10.5 to
the Registration Statement, pursuant to which the Sponsor purchased (i) 5,750,000 Class B units of Opco (together with the
Class B Common Stock purchased pursuant to the Company-Sponsor Securities Subscription Agreement, the “Founder
Shares”) (up to 750,000 of which (together with a corresponding number of shares of Class B Common Stock held by the
Sponsor) are subject to forfeiture, depending on the extent to which the Over-Allotment Option is exercised) and (ii) 100
Class A units of Opco (together with the 2,500 shares of Common Stock purchased pursuant to the Company-Sponsor Securities
Subscription Agreement, the “Sponsor Shares”). The Founder Shares are substantially similar to the Common Stock included
in the Units except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus (each, as defined
below).
The
Company Parties have entered into a Private Placement Warrants Purchase Agreement, effective as of [●], 2022 (the “Warrant
Purchase Agreement”), with the Sponsor in substantially the form filed as Exhibit 10.7 to the Registration Statement, pursuant
to which the Sponsor agreed to purchase an aggregate of 12,750,000 warrants (or up to 14,100,000 warrants if the over-allotment option is
exercised in full), each warrant entitling its holder, upon exercise, to purchase one share of Common Stock or, in certain circumstances,
one Class A Unit of Opco together with a corresponding number of shares of Class B Common Stock (the “Private Placement
Warrants”), for $1.00 per Private Placement Warrant.
The
Company has entered into a Registration Rights Agreement, effective as of [●], 2022 (the “Registration Rights Agreement”),
with the Sponsor and the other parties thereto in substantially the form filed as Exhibit 10.4 to the Registration Statement, pursuant
to which the Company has granted certain registration rights in respect of (i) the Private Placement Warrants, (ii) the shares
of Common Stock underlying the Private Placement Warrants, the Founder Shares, the Sponsor Shares and certain warrants (which will be
substantially similar to the Private Placement Warrants), if any, that may be issued upon conversion of working capital loans and (iii) the
shares of Common Stock issuable upon exercise of the exchange of any Class A Units of Opco.
The Company has caused to be duly executed and
delivered a letter agreement, dated as of the date hereof, by and among the Company, Opco, the Sponsor and each of the Company’s
officers and directors, in substantially the form filed as Exhibit 10.2 to the Registration Statement (the “Insider Letter”).
The
Company Parties have entered into an Administrative Services Agreement, dated as of the date hereof (the “Administrative Services
Agreement” and, collectively with this Agreement (as defined below), the Opco LLC Agreement, the Trust Agreement, the Warrant Agreement,
the Securities Subscription Agreement, the Warrant Purchase Agreement, the Registration Rights Agreement and the Insider Letter, the
“Transaction Documents”), with the Sponsor, in substantially the form filed as Exhibit 10.9 to the Registration Statement,
pursuant to which an affiliate of the Sponsor will, subject to the terms of the Administrative Services Agreement, provide office space
and administrative and support services to the Company Parties at a cost of $25,000 per month.
The Company hereby confirms its agreement with
the several Underwriters concerning the purchase and sale of the Units, as follows:
1. Registration
Statement. The Company has prepared and filed with the Commission under the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the “Securities Act”), a registration statement (File No. 333-258260),
including a prospectus, relating to the Units and the Warrants and shares of Common Stock included therein. Such registration statement,
as amended at the time it became effective, including the information, if any, deemed pursuant to Rule 430A under the Securities
Act to be part of the registration statement at the time of its effectiveness (“Rule 430A Information”), is referred
to herein as the “Registration Statement”; and as used herein, the term “Preliminary Prospectus” means each prospectus
included in such registration statement (and any amendments thereto) before effectiveness, any prospectus filed with the Commission pursuant
to Rule 424(a) under the Securities Act and the prospectus included in the Registration Statement at the time of its effectiveness
that omits Rule 430A Information, and the term “Prospectus” means the prospectus in the form first used (or made available
upon request of purchasers pursuant to Rule 173 under the Securities Act) in connection with confirmation of sales of the Units.
If the Company has filed an abbreviated registration statement pursuant to Rule 462(b) under the Securities Act (the “Rule 462
Registration Statement”), then any reference herein to the term “Registration Statement” shall be deemed to include
such Rule 462 Registration Statement.
At
or prior to the Applicable Time (as defined below), the Company had prepared the following information (collectively with the pricing
information set forth on Annex A, the “Pricing Disclosure Package”): a Preliminary Prospectus dated [●], 2022.
“Applicable
Time” means [●] P.M., New York City time, on [●], 2022.
2. Purchase
of the Units.
(a) The
Company agrees to issue and sell the Underwritten Units to the several Underwriters as provided in this underwriting agreement (this “Agreement”),
and each Underwriter, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set
forth herein, agrees, severally and not jointly, to purchase at a price per Unit of $9.80 (the “Purchase Price”) from the
Company the respective number of Underwritten Units set forth opposite such Underwriter’s name in Schedule 1 hereto.
(b) In
addition, the Company agrees to issue and sell the Option Units to the several Underwriters as provided in this Agreement, and the Underwriters,
on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, shall
have the option to purchase, severally and not jointly, from the Company the Option Units at a price per Unit of $9.80 less an amount
per unit equal to any dividends or distributions declared by the Company and payable on the Underwritten Units but not payable on the
Option Units.
If any Option Units are to be purchased,
the number of Option Units to be purchased by each Underwriter shall be the number of Option Units which bears the same ratio to the aggregate
number of Option Units being purchased as the number of Underwritten Units set forth opposite the name of such Underwriter in Schedule
1 hereto (or such number increased as set forth in Section 10 hereof) bears to the aggregate number of Underwritten Units being purchased
from the Company by the several Underwriters, subject, however, to such adjustments to eliminate any fractional Units as the Representative
in its sole discretion shall make.
The Underwriters may exercise the option
to purchase Option Units at any time in whole, or from time to time in part, on or before the 45th day following the date of the Prospectus,
by written notice from the Representative to the Company. Such notice shall set forth the aggregate number of Option Units as to which
the option is being exercised and the date and time when the Option Units are to be delivered and paid for, which may be the same date
and time as the Closing Date but shall not be earlier than the Closing Date nor later than the tenth full business day after the date
of such notice (unless such time and date are postponed in accordance with the provisions of Section 10 hereof). Any such notice
shall be given at least two business days prior to the date and time of delivery specified therein.
(c) In
addition to the discount from the public offering price represented by the Purchase Price, the Company hereby agrees to pay to the Underwriters
a deferred discount of $0.35 per Unit (including both Underwritten Units and Option Units) purchased hereunder (the “Deferred Discount”).
The Deferred Discount will be paid directly to the Representative by the Trustee from amounts on deposit in the Trust Account (without
accrued interest) by wire transfer payable in same-day funds if and when the Company consummates an initial Business Combination. The
Representative hereby agrees that if no Business Combination is consummated within the time period provided in the Company’s Amended
and Restated Certificate of Incorporation, as such time period may be extended, and the funds held under the Trust Agreement are distributed
to the holders of the shares of Common Stock included in the Units sold pursuant to this Agreement (the “Public Stockholders”),
(i) the Representative will forfeit any rights or claims to the Deferred Discount and (ii) the Trustee is authorized to distribute
the Deferred Discount to the Public Stockholders on a pro rata basis.
(d) Notwithstanding
anything to the contrary herein, the Underwriters hereby agree to reimburse the Company for certain expenses incurred by the Company in
connection with the Offering in an amount equal to $0.165 per Unit (including both Underwritten Units and Option Units) (the “Reimbursement
Amount”) in two parts:
(i) The
first part of the Reimbursement Amount, equal to $0.095 per Unit, shall be paid to the Company in cash or immediately available funds on
the Closing Date (or, with respect to any Option Units, the date on which the Company delivers such Option Units to the Underwriters).
(ii) The
second part of the Reimbursement Amount, equal to $0.105 per Unit, shall be paid to the Company in cash or immediately available funds
on the date (if any) on which the Trustee pays the Deferred Discount to the Underwriters. For the avoidance of doubt, if no Business Combination
is consummated within the time period provided in the Company’s Amended and Restated Certificate of Incorporation, as such time
period may be extended, and the funds held under the Trust Agreement are distributed to the Public Stockholders and no Deferred Discount
is paid to the Underwriters, this second part of the Reimbursement Amount shall not be due and payable.
(e) The
Company understands that the Underwriters intend to make a public offering of the Units (the “Offering”), and initially to
offer the Units on the terms set forth in the Pricing Disclosure Package. The Company acknowledges and agrees that the Underwriters may
offer and sell Units to or through any affiliate of an Underwriter.
(f) Payment
for the Units shall be made by wire transfer in immediately available funds to the account specified by the Company to the Representative
in the case of the Underwritten Units, at the offices of Proskauer Rose LLP, Eleven Times Square, New York, New York 10036 at 10:00 A.M. New
York City time on [●], 2022, or at such other time or place on the same or such other date, not later than the fifth business day
thereafter, as the Representative and the Company may agree upon in writing or, in the case of the Option Units, on the date and at the
time and place specified by the Representative in the written notice of the Underwriters’ election to purchase such Option Units.
The Company shall not be obligated to sell or deliver any of the Underwritten Units, except upon tender of payment by the Representative
for all Underwritten Units. The time and date of such payment for the Underwritten Units is referred to herein as the “Closing Date,”
and the time and date for such payment for the Option Units, if other than the Closing Date, is herein referred to as the “Additional
Closing Date.”
Payment for the Units to be purchased
on the Closing Date or the Additional Closing Date, as the case may be, shall be made against delivery to the Representative for the respective
accounts of the several Underwriters of the Units to be purchased on such date in definitive or book-entry form registered in such names
and in such denominations as the Representative shall request in writing not later than two full business days prior to the Closing Date
or the Additional Closing Date, as the case may be, with any transfer taxes payable in connection with the sale of such Units duly paid
by the Company. Delivery of the Units shall be made through the facilities of The Depository Trust Company unless the Representative shall
otherwise instruct.
(g) The
Company acknowledges and agrees that the Representative and the other Underwriters are acting solely in the capacity of an arm’s
length contractual counterparty to the Company with respect to the Offering contemplated hereby (including in connection with determining
the terms of the Offering) and not as a financial advisor or a fiduciary to, or an agent of, the Company or any other person. Additionally,
neither the Representative nor any other Underwriter is advising the Company or any other person as to any legal, tax, investment, accounting
or regulatory matters in any jurisdiction. The Company shall consult with its own advisors concerning such matters and shall be responsible
for making its own independent investigation and appraisal of the transactions contemplated hereby, and neither the Representative nor
the other Underwriters shall have any responsibility or liability to the Company with respect thereto. Any review by the Representative
and the other Underwriters of the Company, the transactions contemplated hereby or other matters relating to such transactions will be
performed solely for the benefit of the Underwriters and shall not be on behalf of the Company. The Company agrees that it will not claim
that the Underwriters, or any of them, has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to
it, in connection with the transactions contemplated hereby or the process leading thereto.
3. Representations
and Warranties of the Company Parties. Each Company Party, jointly and severally, represents and warrants to each Underwriter that:
(a) Preliminary
Prospectus. No order preventing or suspending the use of any Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus included in the Pricing Disclosure Package, at the time of filing thereof, complied in all material respects with
the Securities Act, and no Preliminary Prospectus, at the time of filing thereof, contained any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company makes no representation or warranty with respect
to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company
in writing by such Underwriter through the Representative expressly for use in any Preliminary Prospectus, it being understood and agreed
that the only such information furnished by any Underwriter consists of the information described as such in Section 7(b) hereof.
(b) Pricing
Disclosure Package. The Pricing Disclosure Package as of the Applicable Time did not, and as of the Closing Date and as of the Additional
Closing Date, as the case may be, will not, contain any untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however,
that the Company makes no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representative expressly
for use in such Pricing Disclosure Package, it being understood and agreed that the only such information furnished by any Underwriter
consists of the information described as such in Section 7(b) hereof. No statement of material fact included in the Prospectus
has been omitted from the Pricing Disclosure Package and no statement of material fact included in the Pricing Disclosure Package that
is required to be included in the Prospectus has been omitted therefrom.
(c) Issuer
Free Writing Prospectus. Other than the Registration Statement, the Preliminary Prospectus and the Prospectus, the Company (including
its agents and representatives, other than the Underwriters in their capacity as such) has not prepared, made, used, authorized, approved
or referred to and will not prepare, make, use, authorize, approve or refer to any “written communication” (as defined in
Rule 405 under the Securities Act) that constitutes an offer to sell or solicitation of an offer to buy the Units other than any
document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities Act or Rule 134 under the Securities
Act.
(d) Form 8-A.
The Company has filed with the Commission a Form 8-A (file number 001-[●]) providing for the registration under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), of the Units, the Common Stock and the Warrants, which registration
is currently effective on the date hereof. The Units and the shares of Common Stock and the Warrants included as part of the Units have
been authorized for listing, subject to official notice of issuance and evidence of satisfactory distribution, on the New York Stock Exchange
(the “NYSE”), and the Company knows of no reason or set of facts that is likely to adversely affect such authorization.
(e) Emerging
Growth Company. From the time of the initial confidential submission of the Registration Statement to the Commission (or, if earlier,
the first date on which the Company engaged directly or through any person authorized to act on its behalf in any Testing-the-Waters Communication)
through the date hereof, the Company has been and is an “emerging growth company,” as defined in Section 2(a) of
the Securities Act (an “Emerging Growth Company”). “Testing-the-Waters Communication” means any oral or written
communication with potential investors undertaken in reliance on Section 5(d) of the Securities Act or Rule 163B under
the Securities Act.
(f) Testing-the-Waters
Materials. The Company (i) has not alone engaged in any Testing-the-Waters Communications other than Testing-the-Waters
Communications with the consent of the Representative with entities that are qualified institutional buyers within the meaning of Rule 144A
under the Securities Act or institutions that are accredited investors within the meaning of Rule 501 under the Securities Act and
(ii) has not authorized anyone other than the Underwriters to engage in Testing-the-Waters Communications. The Company reconfirms
that the Underwriters have been authorized to act on its behalf in undertaking Testing-the-Waters Communications. The Company has not
distributed or approved for distribution any Written Testing-the-Waters Communications other than those listed on Annex B hereto. “Written
Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a written communication within the meaning
of Rule 405 under the Securities Act. Any individual Written Testing-the-Waters Communication does not conflict with the information
contained in the Registration Statement or the Pricing Disclosure Package, complied in all material respects with the Securities Act,
and when taken together with the Pricing Disclosure Package as of the Applicable Time, did not, and as of the Closing Date and as of the
Additional Closing Date, as the case may be, will not, contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(g) Registration
Statement and Prospectus. The Registration Statement has been declared effective by the Commission. No order suspending the effectiveness
of the Registration Statement has been issued by the Commission, and no proceeding for that purpose or pursuant to Section 8A of
the Securities Act against the Company or related to the Offering has been initiated or threatened by the Commission; as of the applicable
effective date of the Registration Statement and any post-effective amendment thereto, the Registration Statement and any such post-effective
amendment complied and will comply in all material respects with the Securities Act, and did not and will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein
not misleading; and as of the date of the Prospectus and any amendment or supplement thereto and as of the Closing Date and as of the
Additional Closing Date, as the case may be, the Prospectus will comply in all material respects with the Securities Act and will not
contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading; provided, however, that the Company
makes no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representative expressly for use in the
Registration Statement and the Prospectus and any amendment or supplement thereto, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in Section 7(b) hereof.
(h) Financial
Statements. The financial statements (including the related notes thereto) of the Company included in the Registration Statement,
the Pricing Disclosure Package and the Prospectus comply in all material respects with the applicable requirements of the Securities Act
and present fairly the financial position of the Company as of the dates indicated and the results of their operations and the changes
in their cash flows for the periods specified; such financial statements have been prepared in conformity with generally accepted accounting
principles (“GAAP”) in the United States applied on a consistent basis throughout the periods covered thereby, and any supporting
schedules included in the Registration Statement present fairly the information required to be stated therein; and the other financial
information included in the Registration Statement, the Pricing Disclosure Package and the Prospectus has been derived from the accounting
records of the Company and presents fairly the information shown thereby; all disclosures included in the Registration Statement, the
Pricing Disclosure Package and the Prospectus regarding “non-GAAP financial measures” (as such term is defined by the applicable
rules and regulations of Commission), if any, comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Securities
Act, to the extent applicable.
(i) No
Material Adverse Change. Since the date of the most recent financial statements of the Company included in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, (i) there has not been any change in the capital stock, short-term debt or long-term
debt of either Company Party, or any dividend or distribution of any kind declared, set aside for payment, paid or made by either Company
Party on any class of capital stock, or any material adverse change, or any development involving a prospective material adverse change,
in or affecting the business, properties, management, financial position, stockholders’ equity, results of operations or prospects
of the Company Parties, taken as a whole; (ii) neither Company Party has not entered into any transaction or agreement (whether or
not in the ordinary course of business) that is material to the Company Parties, taken as a whole, or incurred any liability or obligation,
direct or contingent, that is material to the Company Parties, taken as a whole; and (iii) neither Company Party has sustained any
loss or interference with its business that is material to the Company Parties, taken as a whole, and that is either from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree
of any court or arbitrator or governmental or regulatory authority, except in each case as otherwise disclosed in the Registration Statement,
the Pricing Disclosure Package and the Prospectus.
(j) Organization
and Good Standing. Each Company Party has been duly organized and is validly existing and in good standing under the laws of
its jurisdiction of organization, is duly qualified to do business and is in good standing in each jurisdiction in which its ownership
or lease of property or the conduct of its business requires such qualification, and has all power and authority necessary to own or hold
its properties and to conduct the business in which it is engaged, except where the failure to be so qualified or in good standing or
have such power or authority would not, individually or in the aggregate, be reasonably expected to have a material adverse effect on
its business, properties, management, financial position, stockholders’ equity, results of operations or prospects of, or on the
performance by, the Company Parties, taken as a whole, whether or not arising from transactions in the ordinary course of business, of
its obligations under the Transaction Documents (a “Material Adverse Effect”).
(k) Capitalization. The
Company has an authorized capitalization as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus
under the heading “Capitalization”; all the outstanding shares of capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable and are not subject to any pre-emptive or similar rights; except as described
in or expressly contemplated by the Registration Statement, the Pricing Disclosure Package and the Prospectus, there are no outstanding
rights (including, without limitation, pre-emptive rights), warrants or options to acquire, or instruments convertible into or exchangeable
for, any shares of capital stock or other equity interest in the Company or any contract, commitment, agreement, understanding or arrangement
of any kind relating to the issuance of any capital stock of the Company, any such convertible or exchangeable securities or any such
rights, warrants or options; the capital stock of the Company conforms in all material respects to the description thereof contained in
the Registration Statement, the Pricing Disclosure Package and the Prospectus. The offers and sales of the outstanding securities of the
Company were at all relevant times either registered under the Securities Act, the applicable state securities and blue sky laws or, based
in part on the representations and warranties of the purchasers of such securities, exempt from such registration requirements.
(l) Due
Authorization. Each Company Party has full right, power and authority to execute and deliver this Agreement and the other Transaction
Documents and to perform its obligations hereunder and thereunder; and all action required to be taken for the due and proper authorization,
execution and delivery by it of this Agreement and each of the other Transaction Documents and the consummation by such Company Party
of the transactions contemplated hereby and thereby has been duly and validly taken.
(m) Underwriting
Agreement. This Agreement has been duly authorized, executed and delivered by each of the Company Parties.
(n) The
Units. The Units to be issued and sold by the Company hereunder have been duly authorized by the Company and, when issued and
delivered and paid for as provided herein, will be duly and validly issued, will constitute valid and legally binding obligations of the
Company enforceable against the Company in accordance with their terms, except as enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability,
and will conform to the descriptions thereof in the Registration Statement, the Pricing Disclosure Package and the Prospectus; and the
issuance of the Units is not subject to any preemptive or similar rights.
(o) The
Unit Shares. The shares of Common Stock included in the Units have been duly authorized by the Company and, when issued and delivered
against payment for the Units by the Underwriters pursuant to this Agreement, will be duly and validly issued and delivered, will be fully
paid and nonassessable, and will conform to the descriptions thereof in the Registration Statement, the Pricing Disclosure Package and
the Prospectus.
(p) The
Unit Warrants. The Warrants included in the Units to be issued and sold by the Company hereunder have been duly authorized by
the Company and, when issued and delivered in the manner set forth in the Warrant Agreement against payment for the Units by the Underwriters
pursuant to this Agreement, will be duly and validly issued and delivered, will constitute valid and legally binding obligations of the
Company enforceable against the Company in accordance with their terms, except as enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability,
and will conform to the descriptions thereof in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
(q) The
Private Placement Warrants. The Private Placement Warrants to be issued and sold by the Company under the Warrant Purchase Agreement
have been duly authorized by the Company and, when issued and delivered in the manner set forth in the Warrant Agreement against payment
therefor pursuant to the Warrant Purchase Agreement will be duly and validly issued and delivered, will constitute valid and legally binding
obligations of the Company enforceable against the Company in accordance with their terms, except as enforceability may be limited by
applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles
relating to enforceability, and will conform to the descriptions thereof in the Registration Statement, the Pricing Disclosure Package
and the Prospectus.
(r) The
Warrant Shares. The shares of Common Stock issuable upon exercise of the Warrants included in the Units and the Private Placement
Warrants (the “Warrant Shares”) have been duly authorized by the Company and, when issued and delivered against payment therefor
pursuant to the Warrants and the Private Placement Warrants, as applicable, and the Warrant Agreement, will be duly and validly issued
and delivered, will be fully paid and nonassessable; and such Warrant Shares have been duly authorized by the Company and validly reserved
for issuance. The holders of such Warrant Shares will not be subject to personal liability by reason of being such holders; such Warrant
Shares, at the time such shares are issued, will not be subject to any preemptive or other similar contractual rights granted by the Company;
and all corporate action required to be taken for the authorization, issuance and sale of such Warrant Shares (other than such delivery
at the time of issuance) has been duly and validly taken.
(s) The
Founder Shares. The shares of Class B Common Stock comprising the Founder Shares have been duly authorized and are validly
issued, fully paid and non-assessable.
(t) Opco
Units.
(i) The
Class A Opco Units have been duly authorized and are validly issued, fully paid (to the extent of the Opco LLC Agreement) and non-assessable
(except as such non-assessability may be affected by the Delaware Limited Liability Company Act (the “Delaware LLC Act”)).
(ii) The
Class B Opco Units have been duly authorized and are validly issued, fully paid (to the extent of the Opco LLC Agreement) and non-assessable
(except as such non-assessability may be affected by the Delaware LLC Act).
(u) Opco
LLC Agreement. The Opco LLC Agreement has been duly authorized, executed and delivered by each of the Company Parties and constitutes
a valid and legally binding obligation of each of the Company Parties enforceable against each of the Company Parties in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’
rights generally or by equitable principles relating to enforceability.
(v) The
Trust Agreement. The Trust Agreement has been duly authorized, executed and delivered by each of the Company Parties and constitutes
a valid and legally binding obligation of each of the Company Parties enforceable against each of the Company Parties in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’
rights generally or by equitable principles relating to enforceability.
(w) The
Warrant Agreement. The Warrant Agreement has been duly authorized, executed and delivered by each of the Company Parties and
constitutes a valid and legally binding obligation of each of the Company Parties enforceable against each of the Company Parties in accordance
with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement
of creditors’ rights generally or by equitable principles relating to enforceability.
(x) The
Securities Subscription Agreements. The Securities Subscription Agreements have been duly authorized, executed and delivered by
each of the Company Parties and constitute valid and legally binding obligations of each of the Company Parties enforceable against
each of the Company Parties in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, insolvency
or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.
(y) The
Warrant Purchase Agreement. The Warrant Purchase Agreement has been duly authorized, executed and delivered by each of the Company
Parties and constitutes a valid and legally binding obligation of each of the Company Parties enforceable against each of the Company
Parties in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting
the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.
(z) The
Registration Rights Agreement. The Registration Rights Agreement has been duly authorized, executed and delivered by the Company
and constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights
generally or by equitable principles relating to enforceability.
(aa) The
Insider Letter. The Insider Letter has been duly authorized, executed and delivered by each of the Company Parties and, to the
knowledge of the Company Parties, the Sponsor and each officer and director of the Company and constitutes a valid and legally binding
obligation of each of the Company Parties and, to the knowledge of the Company Parties, the Sponsor and each officer and director of the
Company enforceable against each of the Company Parties and, to the knowledge of the Company Parties, the Sponsor and each officer and
director of the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or
similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.
(bb) The
Administrative Services Agreement. The Administrative Services Agreement has been duly authorized, executed and delivered by each
of the Company Parties and constitutes a valid and legally binding obligation of each of the Company Parties enforceable against each
of the Company Parties in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.
(cc) Descriptions
of the Transaction Documents. Each Transaction Document conforms in all material respects to the description thereof contained
in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
(dd) No
Violation or Default. Neither of the Company Parties is (i) in violation of any provision in its certificate of incorporation,
by-laws, limited liability company agreement or similar organizational documents; (ii) in default, and no event has occurred that,
with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which
it is bound or to which any of its property or assets are subject; or (iii) in violation of any law or statute or any judgment, order,
rule or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of clauses (ii) and
(iii) above, for any such default or violation that would not, individually or in the aggregate, have a Material Adverse Effect.
(ee) No
Conflicts. The execution, delivery and performance by each of the Company Parties of each of the Transaction Documents to which
it is a party, the issuance and sale of the Units and the consummation of the transactions contemplated by the Transaction Documents or
the Pricing Disclosure Package and the Prospectus will not (i) conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, result in the termination, modification or acceleration of, or result in the creation
or imposition of any lien, charge or encumbrance upon any property, right or asset of either of the Company Parties pursuant to, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to which a Company Party is a party or by which a Company Party
is bound or to which any property, right or asset of a Company Party is subject, (ii) result in any violation of the provisions of
the certificate of incorporation, by-laws, limited liability company agreement or similar organizational documents of the Company Parties
or (iii) result in the violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator
or governmental or regulatory authority, except, in the case of clauses (i) and (iii) above, for any such conflict, breach,
violation, default, lien, charge or encumbrance that would not, individually or in the aggregate, have a Material Adverse Effect.
(ff) No
Consents Required. No consent, approval, authorization, order, registration or qualification of or with any court or arbitrator
or governmental or regulatory authority is required for the execution, delivery and performance by each of the Company Parties of each
of the Transaction Documents to which it is a party, the issuance and sale of the Units and the consummation of the transactions contemplated
by the Transaction Documents, except for the registration of the Units and the shares of Common Stock and the Warrants included in the
Units under the Securities Act and such consents, approvals, authorizations, orders and registrations or qualifications as may be required
by the Financial Industry Regulatory Authority, Inc. (“FINRA”) and under applicable state securities laws in connection
with the purchase and distribution of the Units by the Underwriters.
(gg) Legal
Proceedings. There are no legal, governmental or regulatory investigations, actions, demands, claims, suits, arbitrations, inquiries
or proceedings (“Actions”) pending to which a Company Party is or may be a party or to which any property of a Company Party
is or may be the subject that, individually or in the aggregate, if determined adversely to a Company Party, could reasonably be expected
to have a Material Adverse Effect; no such Actions are, to the knowledge of the Company Parties, threatened or contemplated by any governmental
or regulatory authority or threatened by others; and there are no current or pending Actions that are required under the Securities Act
to be described in the Registration Statement, the Pricing Disclosure Package or the Prospectus that are not so described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus.
(hh) Independent
Accountants. KPMG LLP, which has certified certain financial statements of the Company, is an independent registered public accounting
firm with respect to the Company within the applicable rules and regulations adopted by the Commission and the Public Company Accounting
Oversight Board (United States) and as required by the Securities Act.
(ii) Disclosure;
Exhibits. There is no franchise, contract or other document of a character required to be described in the Registration Statement
or Prospectus, or to be filed as an exhibit thereto, which is not described or filed as required (and the Pricing Disclosure Package contains
in all material respects the same description of the foregoing matters contained in the Prospectus); and the statements in the Pricing
Disclosure Package and the Prospectus under the headings “Principal Stockholders,” “Certain Relationships and Related
Party Transactions,” “Description of Securities,” “Underwriting” and “United States Federal Income
Tax Considerations” insofar as such statements summarize legal matters, agreements, documents or proceedings discussed therein,
are in all material respects accurate and fair summaries of such legal matters, agreements, documents or proceedings. There are no business
relationships or related party transactions involving the Company Parties or any other person required by the Securities Act to be described
in the Registration Statement or Prospectus that have not been described as required.
(jj) Investment
Company Act. Neither of the Company Parties is, and after giving effect to the offering and sale of the Units and the application
of the proceeds thereof as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus will be, required
to register as an “investment company” or an entity “controlled” by an “investment company” within
the meaning of the Investment Company Act of 1940, as amended, and the applicable rules and regulations of the Commission thereunder
(collectively, the “Investment Company Act”).
(kk) Taxes.
Each of the Company Parties has paid all federal, state, local and foreign taxes and filed all tax returns required to be paid or filed
through the date hereof; and except as otherwise disclosed in each of the Registration Statement, the Pricing Disclosure Package and the
Prospectus, there is no tax deficiency that has been, or could reasonably be expected to be, asserted against a Company Party or any of
its properties or assets.
(ll) Licenses
and Permits. Each of the Company Parties possesses all licenses, sub-licenses, certificates, permits and other authorizations
issued by, and has made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory
authorities that are necessary for the ownership or lease of its properties or the conduct of its business as described in each of the
Registration Statement, the Pricing Disclosure Package and the Prospectus, except where the failure to possess or make the same would
not, individually or in the aggregate, have a Material Adverse Effect; and except as described in each of the Registration Statement,
the Pricing Disclosure Package and the Prospectus, neither of the Company Parties has received notice of any revocation or modification
of any such license, sub-license, certificate, permit or authorization or has any reason to believe that any such license, sub-license,
certificate, permit or authorization will not be renewed in the ordinary course.
(mm) Disclosure
Controls. The Company maintains an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of
the Exchange Act) that complies with the requirements of the Exchange Act to the extent required by Rule 13a-15(e) of the Exchange
Act.
(nn) [Reserved].
(oo) No
Unlawful Payments. Neither of the Company Parties, nor the Sponsor, nor any director, director nominee, officer or employee of
the Company nor, to the knowledge of the Company Parties, any agent, affiliate or other person associated with or acting on behalf of
a Company Party or the Sponsor has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization of any direct
or indirect unlawful payment or benefit to any foreign or domestic government official or employee, including of any government-owned
or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of
the foregoing, or any political party or party official or candidate for political office; (iii) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or any applicable law or regulation implementing the OECD Convention
on Combating Bribery of Foreign Public Officials in International Business Transactions, or committed an offence under the Bribery Act
2010 of the United Kingdom or any other applicable anti-bribery or anti-corruption law; or (iv) made, offered, agreed, requested
or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence
payment, kickback or other unlawful or improper payment or benefit. The Company Parties have instituted, maintain and enforce, and will
continue to maintain and enforce policies and procedures designed to promote and ensure compliance with all applicable anti-bribery and
anti-corruption laws.
(pp) Compliance
with Anti-Money Laundering Laws. The operations of the Company Parties and the Sponsor are and have been conducted at all times in
compliance with applicable financial recordkeeping and reporting requirements, including those of the U.S. Bank Secrecy Act, as amended
by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001 (USA PATRIOT Act) and the Currency and Foreign Transactions Reporting Act of 1970, as amended, the applicable money laundering
statutes of all jurisdictions where a Company Party conducts business, the applicable rules and regulations thereunder and any related
or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency (collectively, the “Anti-Money
Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator
involving a Company Party or the Sponsor with respect to the Anti-Money Laundering Laws is pending or, to the knowledge of the Company
Parties, threatened.
(qq) No
Conflicts with Sanctions Laws. Neither the Company Parties, nor the Sponsor, nor any of its directors, director nominees, officers,
or employees, nor, to the knowledge of the Company Parties, any agent, affiliate or other person associated with or acting on behalf of
a Company Party or the Sponsor is currently the subject or the target of any sanctions administered or enforced by the U.S. government,
(including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of
State and including, without limitation, the designation as a “specially designated national” or “blocked person”),
the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority (collectively,
“Sanctions”), nor is the Company located, organized or resident in a country or territory that is the subject or target of
Sanctions, including, without limitation, Crimea, Cuba, Iran, North Korea and Syria (each, a “Sanctioned Country”); and
the Company will not directly or indirectly use the proceeds of the Offering hereunder, or lend, contribute or otherwise make available
such proceeds to any subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business
with any person that, at the time of such funding or facilitation, is the subject or target of Sanctions, (ii) to fund or facilitate
any activities of or business in any Sanctioned Country or (iii) in any other manner that will result in a violation by any person
(including any person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions. For the
past five years, neither Company Party nor the Sponsor has knowingly engaged in and are not now knowingly engaged in any dealings or transactions
with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions or with any Sanctioned
Country.
(rr) No
Registration Rights. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, no person
has the right to require the Company to register any securities for sale under the Securities Act by reason of the filing of the Registration
Statement with the Commission or the issuance and sale of the Units.
(ss) Compliance
with NYSE Listing Standards. There is and has been no failure on the part of the Company or, to the knowledge of the Company, any of
the Company’s officers, directors or director nominees, in their capacities as such, to comply with (as and when applicable), and
immediately following the initial effective date of the Registration Statement the Company will be in compliance with, the applicable
rules and regulations of the NYSE set forth in the NYSE Listed Company Manual. Further, there is and has been no failure on the part
of the Company or, to the knowledge of the Company, any of the Company’s officers, directors or director nominees, in their capacities
as such, to comply with (as and when applicable), and immediately following the initial effective date of the Registration Statement the
Company will be in compliance with, the phase-in requirements and all other applicable provisions of NYSE corporate governance requirements
set forth in the NYSE Listed Company Manual.
(tt) Taxes. There
are no transfer, stamp, issue, registration, documentary or other similar taxes, duties, fees or charges under U.S. federal law or the
laws of any state, or any political subdivision thereof, or under the laws of any non-U.S. jurisdiction, required to be paid in connection
with the execution and delivery of this Agreement or the issuance or sale by the Company of the Units.
(uu) Questionnaires.
All information contained in the questionnaires (the “Questionnaires”) completed by the Company and the Sponsor and, to the
knowledge of the Company, the Company’s officers, directors and director nominees and provided to the Underwriters, is true and
correct in all material respects and the Company has not become aware of any information that would cause the information disclosed in
the Questionnaires completed by the Company, the Sponsor or the Company’s officers, directors and director nominees to become inaccurate
and incorrect in any material respects.
(vv) Acquisition
Target Not Selected. Prior to the date hereof, the Company has not selected any specific Business Combination target and has not,
nor, to its knowledge, has anyone on its behalf, initiated any substantive discussions, directly or indirectly, with respect to any Business
Combination with the Company.
(ww) No
Broker’s Fees. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, there are
no claims, payments, arrangements, contracts, agreements or understandings relating to the payment of a brokerage commission or finder’s,
consulting, origination or similar fee by the Company, the Sponsor or any officer, director or director nominee of the Company with respect
to the sale of the Units hereunder or any other arrangements, agreements or understandings of the Company, to the knowledge of the Company,
the Sponsor or any such officer, director or director nominee of the Company, or their respective affiliates, that may affect the Underwriters’
compensation, as determined by the FINRA.
(xx) No
Direct or Indirect Payments. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus,
the Company has not made any direct or indirect payments (in cash, securities or any other “item of value” pursuant to Rule 5110
of FINRA’s Conduct Rules): (i) to any person, as a finder’s fee, consulting fee or otherwise, in consideration of such
person raising capital for the Company or introducing to the Company persons who raised or provided capital to the Company; (ii) to
any person that, to the Company’s knowledge, has been accepted by FINRA as a member of FINRA (a “Member”); or (iii) to
any person or entity that, to the Company’s knowledge, has any direct or indirect affiliation or association with any Member, within
the twelve months prior to the initial effective date of the Registration Statement, other than payments to the Underwriters pursuant
to this Agreement.
(yy) No
Investment Banking, Financial Advisory and/or Consulting Services. Except as described in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, during the period beginning 180 days prior to the initial confidential submission of the Registration
Statement and ending on the initial effective date of the Registration Statement, no Member and/or any person associated or affiliated
with a Member has provided any investment banking, financial advisory and/or consulting services to the Company.
(zz) Affiliation
with FINRA. Except as disclosed in the Questionnaires provided to the Representative, to the Company’s knowledge, no officer,
director, director nominee or beneficial owner of 5% or more of any class of the Company’s securities (whether debt or equity, registered
or unregistered, regardless of the time acquired or the source from which derived) (any such individual or entity, a “Company Affiliate”)
is a Member or a person associated or affiliated with a Member.
(aaa) Ownership
of FINRA Member Securities. Except as disclosed in the Questionnaires provided to the Representative, to the Company’s knowledge,
no Company Affiliate is an owner of stock or other securities of any Member (other than securities purchased on the open market).
(bbb) Subordinated
Loans to FINRA Members. To the Company’s knowledge, no Company Affiliate has made a subordinated loan to any Member.
(ccc) Non-Compete/Non-Solicitation.
Except as described in the Pricing Disclosure Package and the Prospectus, to the Company’s knowledge, none of the Sponsor, officers,
directors or director nominees of the Company is subject to a non-competition agreement or non-solicitation agreement with any employer,
prior employer or other entity that could materially affect its, his or her ability to be and act in the capacity of stockholder, officer,
director or director nominees of the Company, as applicable.
(ddd) Related
Party Transactions. No relationship, direct or indirect, exists between or among any of the Company or any affiliate of the Company,
on the one hand, and any director, director nominee, officer, stockholder or special advisor of the Company or any affiliate of the Company,
on the other hand, which is required by the Securities Act or the Exchange Act to be described in the Registration Statement, Pricing
Disclosure Package or the Prospectus that is not described as required. There are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of any of
the officers, directors or director nominees of the Company or any of their respective family members. The Company has not extended or
maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the form of a personal loan to or for any
officer, director or director nominee of the Company.
(eee) No
Unlawful Influence. The Company has not offered, or caused the Underwriters to offer, the Units to any person or entity with the intention
of unlawfully influencing: (a) a customer or supplier of the Company or any affiliate of the Company to alter the customer’s
or supplier’s level or type of business with the Company or such affiliate or (b) a journalist or publication to write or publish
favorable information about the Company or any such affiliate.
(fff) Applicability
of Rule 419. Upon delivery and payment for the Units on the Closing Date and each Additional Closing Date, the Company will not
be subject to Rule 419 under the Securities Act and none of the Company’s outstanding securities will be deemed to be a “penny
stock” as defined in Rule 3a51-1 under the Exchange Act.
(ggg) Absence
of Manipulation. The Company has not taken, directly or indirectly, any action designed to or that would constitute or that might
reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Units.
(hhh) Margin
Rules. Neither the issuance, sale and delivery of the Units nor the application of the proceeds thereof by the Company as described
in each of the Registration Statement, the Pricing Disclosure Package and the Prospectus will violate Regulation T, U or X of the Board
of Governors of the Federal Reserve System or any other regulation of such Board of Governors.
(iii) Statistical
and Market Data. Nothing has come to the attention of the Company that has caused the Company to believe that the statistical
and market-related data included in each of the Registration Statement, the Pricing Disclosure Package and the Prospectus is not based
on or derived from sources that are reliable and accurate in all material respects.
(jjj) Sarbanes-Oxley
Act. Solely to the extent that the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated by the Commission
thereunder (the “Sarbanes-Oxley Act”) have been applicable to the Company, there is and has been no failure on the part of
the Company or any of the Company’s directors, director nominees or officers, in their capacities as such, to comply with any provision
of the Sarbanes-Oxley Act, including Section 402 related to loans and Sections 302 and 906 related to certifications.
(kkk) Status
under the Securities Act. At the time of filing the Registration Statement and any post-effective amendment thereto, the Company was
an “ineligible issuer,” as defined in Rule 405 under the Securities Act solely because of subclause (B) of clause
(ii) of the definition thereof. The Company has paid the registration fee for the Offering pursuant to Rule 456 under the Securities
Act.
(lll) No
Ratings. There are (and prior to the Closing Date, will be) no debt securities, convertible securities or preferred stock issued or
guaranteed by the Company that are rated by a “nationally recognized statistical rating organization,” as such term is defined
in Section 3(a)(62) under the Exchange Act.
(mmm) Company
Ownership of Other Entities. Other than Opco, the Company has no subsidiaries and does not own, and since its incorporation has not
owned, an interest in any corporation, partnership, limited liability company, joint venture, trust or other entity.
4. Further
Agreements of the Company. The Company covenants and agrees with each Underwriter that:
(a) Required
Filings. The Company will file the final Prospectus with the Commission within the time periods specified by Rule 424(b) and
Rule 430A under the Securities Act; and the Company will furnish copies of the Prospectus (to the extent not previously delivered)
to the Underwriters in New York City prior to 10:00 A.M., New York City time, on the business day next succeeding the date of this Agreement
in such quantities as the Representative may reasonably request, unless the Underwriters otherwise consent to a later date.
(b) Delivery
of Copies. The Company will deliver, upon request, without charge, (i) to the Representative, signed copies of the Registration
Statement as originally filed and each amendment thereto, in each case including all exhibits and consents filed therewith; and (ii) to
each Underwriter (A) a conformed copy of the Registration Statement as originally filed and each amendment thereto (without exhibits)
and (B) during the Prospectus Delivery Period (as defined below), as many copies of the Prospectus (including all amendments and
supplements thereto) as the Representative may reasonably request. As used herein, the term “Prospectus Delivery Period” means
such period of time after the first date of the public offering of the Units as in the opinion of counsel for the Underwriters a prospectus
relating to the Units is required by law to be delivered (or required to be delivered but for Rule 172 under the Securities Act)
in connection with sales of the Units by any Underwriter or dealer.
(c) Amendments
or Supplements. Before making, preparing, using, authorizing, approving, referring to or filing any amendment or supplement to
the Registration Statement, the Pricing Disclosure Package or the Prospectus, the Company will furnish to the Representative and counsel
for the Underwriters a copy of the proposed amendment or supplement for review and will not make, prepare, use, authorize, approve, refer
to or file any such proposed amendment or supplement to which the Representative reasonably object.
(d) Notice
to the Representative. The Company will advise the Representative promptly, and confirm such advice in writing, (i) when
the Registration Statement has become effective; (ii) when any amendment to the Registration Statement has been filed or becomes
effective; (iii) when any supplement to the Pricing Disclosure Package, the Prospectus or any Written Testing-the-Waters Communication
or any amendment to the Prospectus has been filed or distributed; (iv) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or the receipt of any comments from the Commission relating to
the Registration Statement or any other request by the Commission for any additional information, including, but not limited to, any request
for information concerning any Testing-the-Waters Communication; (v) of the issuance by the Commission or any other governmental
or regulatory authority of any order suspending the effectiveness of the Registration Statement or preventing or suspending the use of
any Preliminary Prospectus, any of the Pricing Disclosure Package, the Prospectus or any Written Testing-the-Waters Communication or the
initiation or threatening of any proceeding for that purpose or pursuant to Section 8A of the Securities Act; (vi) of the occurrence
of any event or development within the Prospectus Delivery Period as a result of which the Prospectus, any of the Pricing Disclosure Package
or any Written Testing-the-Waters Communication as then amended or supplemented would include any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing when the
Prospectus, the Pricing Disclosure Package or any Written Testing-the-Waters Communication is delivered to a purchaser, not misleading;
and (vii) of the receipt by the Company of any notice with respect to any suspension of the qualification of the Units for offer
and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and the Company will use its reasonable
best efforts to prevent the issuance of any such order suspending the effectiveness of the Registration Statement, preventing or suspending
the use of any Preliminary Prospectus, any of the Pricing Disclosure Package or the Prospectus or any Written Testing-the-Waters Communication
or suspending any such qualification of the Units and, if any such order is issued, will obtain as soon as possible the withdrawal thereof.
(e) Ongoing
Compliance. (1) If during the Prospectus Delivery Period (i) any event or development shall occur or condition shall
exist as a result of which the Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Prospectus
is delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the Prospectus to comply with law, the
Company will promptly notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c) above, file with the Commission
and furnish to the Underwriters and to such dealers as the Representative may designate such amendments or supplements to the Prospectus
as may be necessary so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances
existing when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply with law and (2) if
at any time prior to the Closing Date (i) any event or development shall occur or condition shall exist as a result of which the
Pricing Disclosure Package as then amended or supplemented would include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Pricing Disclosure
Package is delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the Pricing Disclosure Package
to comply with law, the Company will promptly notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c) above,
file with the Commission (to the extent required) and furnish to the Underwriters and to such dealers as the Representative may designate
such amendments or supplements to the Pricing Disclosure Package as may be necessary so that the statements in the Pricing Disclosure
Package as so amended or supplemented will not, in the light of the circumstances existing when the Pricing Disclosure Package is delivered
to a purchaser, be misleading or so that the Pricing Disclosure Package will comply with law.
(f) Blue
Sky Compliance. The Company will qualify the Units for offer and sale under the securities or Blue Sky laws of such jurisdictions
as the Representative shall reasonably request and will continue such qualifications in effect so long as required for distribution of
the Units; provided that the Company shall not be required to (i) qualify as a foreign corporation or other entity
or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general
consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not
otherwise so subject.
(g) Earning
Statement. The Company will make generally available to its security holders and the Representative as soon as practicable an
earning statement that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated
thereunder covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the “effective
date” (as defined in Rule 158) of the Registration Statement.
(h) Clear
Market. For a period of 180 days after the date of the Prospectus, the Company will not (i) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly, or submit to, or file with, the Commission a registration statement
under the Securities Act relating to, any Units, shares of Common Stock, shares of Class B Common Stock, Warrants or any securities
convertible into or exercisable or exchangeable for any Units, Common Stock, Class B Common Stock or Warrants, or publicly disclose
the intention to undertake any of the foregoing, or (ii) enter into any swap or other arrangement that transfers, in whole or in
part, any of the economic consequences of ownership of any Units, shares of Common Stock, Founder Shares or Warrants or any such other
securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Units or such
other securities, in cash or otherwise, without the prior written consent of the Representative, except, in each case, that the Company
may (A) issue and sell the Private Placement Warrants, (B) issue and sell the Option Units on exercise of the option provided
for in Section 2(b) hereof, (C) register with the Commission pursuant to the Registration Rights Agreement, in accordance
with the terms of the Registration Rights Agreement, the resale of the Founder Shares, the Private Placement Warrants and warrants that
may be issued upon conversion of working capital loans (and any shares of Common Stock issued or issuable upon the exercise of any such
Private Placement Warrants or warrants issued upon conversion of the working capital loans and upon conversion of the Founder Shares),
(D) issue securities in connection with a Business Combination and (E) effectuate the forfeiture of any Founder Shares pursuant
to the terms of the Insider Letter.
The Company agrees not to amend the Insider Letter without the written consent of the Representative.
(i) Use
of Proceeds. The Company will apply the net proceeds from the Offering and the sale of the Private Placement Warrants received
by it in a manner materially consistent with the applications described under the caption “Use of Proceeds” in the Pricing
Disclosure Package and the Prospectus.
(j) No
Stabilization. Neither the Company nor its affiliates will take, directly or indirectly, any action designed to or that could
reasonably be expected to cause or result in any stabilization or manipulation of the price of the Units.
(k) Exchange
Listing. The Company will use its reasonable best efforts to list, subject to notice of issuance, the Units, the Common Stock
and the Warrants on NYSE.
(l) Reports. For
a period commencing on the initial effective date of the Registration Statement and ending five years from the date of the consummation
of the Business Combination or until such earlier time at which the Liquidation occurs, the Company shall, to the extent such information
or documents are not otherwise publicly available, upon written request from the Representative, furnish to the Representative copies
of such financial statements and other periodic and special reports as the Company from time to time furnishes generally to holders of
any class of securities, and, to the extent such information or documents are not otherwise publicly available, upon written request from
the Representative, promptly furnish to the Representative: (i) a copy of such registration statements, financial statements and
periodic and special reports as the Company shall be required to file with the Commission and from time to time furnishes generally to
holders of any such class of its securities in their capacities as such; and (ii) such additional documents and information with
respect to the Company and the affairs of any future subsidiaries of the Company as the Representative may from time to time reasonably
request, all subject to the execution of a satisfactory confidentiality agreement. Any registration statements, financial statements,
periodic and special reports or other additional documents referred to in the preceding sentence filed or furnished on the Commission’s
EDGAR website and publicly available will be considered furnished for the purposes of this Section 4(l).
(m) Filings. The
Company will file with the Commission such reports as may be required by Rule 463 under the Securities Act.
(n) Emerging
Growth Company. The Company will promptly notify the Representative if the Company ceases to be an Emerging Growth Company at any
time prior to the later of (i) completion of the distribution of Units within the meaning of the Securities Act and (ii) completion
of the 180-day restricted period referred to in Section 4(h) hereof.
(o) Exchange
Act Registration. For a period commencing on the initial effective date of the Registration Statement and ending five years from the
date of the consummation of the Business Combination or until such earlier time at which the Liquidation occurs, the Company will use
commercially reasonable efforts to maintain the registration of the Common Stock (or such other security into which such Common Stock
may be exchanged in connection with a Business Combination) under the provisions of the Exchange Act, except after giving effect to a
going private transaction after the completion of an initial Business Combination. For a period commencing on the initial effective date
of the Registration Statement and ending upon the consummation of the Business Combination or until such earlier time at which the Liquidation
occurs, the Company will use commercially reasonable efforts to maintain the registration of the Units and Warrants under the provisions
of the Exchange Act. During such applicable period, the Company will not deregister the Units, Common Stock or Warrants under the
Exchange Act (except in connection with an exchange pursuant to a Business Combination or a going private transaction after the completion
of an initial Business Combination) without the prior written consent of the Representative.
(p) Current
Report on Form 8-K. The Company has, as of the date hereof, retained its independent registered public accounting firm to audit
the balance sheet of the Company as of the Closing Date (the “Audited Balance Sheet”) reflecting the receipt by the
Company of the proceeds of the Offering on the Closing Date. As soon as the Audited Balance Sheet becomes available, the Company shall
promptly, but not later than four business days after the Closing Date, file a Current Report on Form 8-K with the Commission, which
Current Report shall contain the Company’s Audited Balance Sheet. Additionally, upon the Company’s receipt of the proceeds
from the exercise of all or any portion of the option provided for in Section 2(b) hereof, the Company shall promptly, but not
later than four business days after the receipt of such proceeds, file a Current Report on Form 8-K with the Commission, which report
shall disclose the Company’s sale of the Option Units and its receipt of the proceeds therefrom, unless the receipt of such proceeds
are reflected in the Current Report on Form 8-K referenced in the immediately prior sentence.
(q) Quarterly
Review. For a period commencing on the initial effective date of the Registration Statement and ending five years from the date of
the consummation of the Business Combination or until such earlier time at which the Liquidation occurs or the Common Stock and Warrants
cease to be publicly traded, the Company, at its expense, shall cause its regularly engaged independent registered public accounting firm
to review (but not audit) the Company’s financial statements for each of the first three fiscal quarters prior to the announcement
of quarterly financial information, the filing of the Company’s Form 10-Q quarterly report and the mailing, if any, of quarterly
financial information to stockholders.
(r) Rule 462(b) Registration
Statement. If the Company elects to rely upon Rule 462(b) under the Securities Act, the Company shall file a Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement,
and the Company shall at the time of filing either pay to the Commission the filing fee for the Rule 462(b) Registration Statement
or give irrevocable instructions for the payment of such fee pursuant to Rule 111 under the Securities Act.
(s) Transfer
and Warrant Agent. For a period commencing on the initial effective date of the Registration Statement and ending five years
from the date of the consummation of the Business Combination or until such earlier time at which the Liquidation occurs or the Common
Stock and Warrants cease to be publicly traded, the Company shall retain a transfer and warrant agent.
(t) Initial
Business Combination. In the event that the Company seeks to consummate an initial Business Combination with any entity that
is affiliated with the Company’s initial stockholders, officers, directors or director nominees, or any of their respective affiliates,
it, or a committee of independent and disinterested members of its board of 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
the Company from a financial point of view. The Company shall not pay any of the Company’s initial stockholders, officers, directors,
director nominees or any of their respective affiliates any fees or compensation of any kind for services rendered to the Company prior
to, or in connection with, the consummation of an initial Business Combination except as disclosed in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, none of which payments will be made from the proceeds held in the Trust Account prior to
completion of the initial Business Combination.
(u) FINRA
Submissions. For a period of 60 days following the effective date of the Registration Statement, in the event any person or entity
(regardless of any FINRA affiliation or association) is engaged to assist the Company in its search for a merger candidate or to provide
any other merger and acquisition services, or has provided or will provide any investment banking, financial, advisory and/or consulting
services to the Company, the Company agrees that it shall promptly provide to FINRA (via a FINRA submission), the Representative and its
counsel a notification prior to entering into the agreement or transaction relating to a potential Business Combination: (i) the
identity of the person or entity providing any such services; (ii) complete details of all such services and copies of all agreements
governing such services prior to entering into the agreement or transaction; and (iii) justification as to why the value received
by any person or entity for such services is not underwriting compensation for the Offering. The Company also agrees that proper disclosure
of such arrangement or potential arrangement will be made in the tender offer materials or proxy statement, as applicable, which the Company
may file in connection with the Business Combination for purposes of offering redemption of shares held by its stockholders or for soliciting
stockholder approval, as applicable; to the extent that the Company discloses arrangements with respect to the Underwriters, the Company
will provide the Underwriters with an opportunity to review and comment on any such tender offer materials or proxy statement.
(v) Affiliates
or Associated Persons of Members. The Company shall advise FINRA, the Representative and its counsel if it is aware that any
5% or greater stockholder of the Company becomes an affiliate or associated person of a Member participating in the distribution of the
Units.
(w) Trust
Account Investments. The Company shall cause the proceeds of the Offering and the sale of the Private Placement Warrants required
to be held in the Trust Account to be held as cash items or invested only in United States government treasury bills with a maturity of
185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act as set forth
in the Trust Agreement and disclosed in the Pricing Disclosure Package and the Prospectus. The Company will otherwise conduct its business
in a manner so that it will not become subject to the Investment Company Act. Furthermore, once the Company consummates an initial Business
Combination, it will not be required to register as an investment company under the Investment Company Act.
(x) Use
of Funds in Trust Account. During the period prior to the Company’s initial Business Combination or Liquidation, the Company
will only utilize the funds in the Trust Account in accordance with the Trust Agreement.
(y) Availability
of Authorized but Unissued Securities. The Company will reserve and keep available that maximum number of its authorized but
unissued securities that are issuable upon the exercise of any of the Warrants and the Private Placement Warrants outstanding from time
to time and upon the conversion of the Founder Shares.
(z) No
Additional Issuances prior to the Business Combination. Prior to the earlier of the consummation of an initial Business Combination
and the Liquidation, the Company shall not issue (other than in replacement for lost, stolen or mutilated certificates) any shares of
Common Stock, Warrants or any options or other securities convertible into shares of Common Stock, or any preferred stock, in each case, that
(1) receive funds from the Trust Account or (2) vote as a class with the Public Shares (a) on any initial Business Combination
or (b) to approve an amendment to the Company’s Amended and Restated Certificate of Incorporation.
(aa) Audit
Committee Review. Prior to the earlier of the consummation of an initial Business Combination and the Liquidation, the Company’s
audit committee will review on a quarterly basis all payments made by the Company to the Sponsor, to the Company’s officers or directors,
or to the Company’s or any of such other persons’ respective affiliates.
(bb) Penny
Stock. The Company agrees that it will use commercially reasonable efforts to prevent the Company from becoming subject to Rule 419
under the Securities Act prior to the consummation of any Business Combination, including, but not limited to, using its best efforts
to prevent any of the Company’s outstanding securities from being deemed to be a “penny stock” as defined in Rule 3a51-1
under the Exchange Act during such period.
(cc) Internal
Controls. To the extent required by Rule 13a-15(e) under the Exchange Act, the Company will maintain “disclosure controls
and procedures” (as defined under Rule 13a-15(e) under the Exchange Act) and a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific
authorization, (ii) transactions are recorded as necessary in order to permit preparation of financial statements in accordance with
GAAP and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management’s general
or specific authorization, and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(dd) Maintenance
of Listing. The Company will use commercially reasonable efforts to effect and maintain the listing of (x) the Units and
Warrants on the NYSE (or another national securities exchange) until the consummation of the Business Combination or until such earlier
time at which the Liquidation occurs, and (y) the Common Stock on the NYSE (or another national securities exchange) until five years
from the date of the consummation of the Business Combination or until such earlier time at which Liquidation occurs.
(ee) Sarbanes
Oxley. As soon as legally required to do so, the Company and its directors and officers, in their capacities as such, shall take
all actions necessary to comply with any applicable provisions of the Sarbanes-Oxley Act, including Section 402 related to loans
and Sections 302 and 906 related to certifications, and to comply with the rules and regulations of the NYSE.
(ff) Certificate
of Incorporation. The Company shall not take any action or omit to take any action that would cause the Company to be in material
breach or violation of its Amended and Restated Certificate of Incorporation.
(gg) Consummate
the Initial Business Combination. The Company, subject to any applicable provision of the Company’s Amended and
Restated Certificate of Incorporation, may consummate the initial Business Combination and conduct redemptions of Public Shares (as
defined below) for cash upon consummation of such Business Combination without a stockholder vote pursuant to Rule 13e-4 and
Regulation 14E under the Exchange Act, including the filing of tender offer documents with the Commission. Such tender offer
documents will contain substantially the same financial and other information about the initial Business Combination and the
redemption rights as is required under the Commission’s proxy rules and will provide each stockholder of the Company with
the opportunity prior to the consummation of the initial Business Combination to redeem the shares of Common Stock held by such
stockholder for an amount of cash equal to (A) the aggregate amount then on deposit in the Trust Account, calculated as of two
business days prior to the consummation of the initial Business Combination, representing (x) the proceeds held in the Trust
Account from the Offering and the sale of the Private Placement Warrants and (y) any interest income earned on the funds held
in the Trust Account and not previously released to the Company Parties to pay taxes (which interest shall be net of taxes payable),
divided by (B) the sum of (1) the total number of shares of Common Stock sold as part of the Units in the Offering (the
“Public Shares”) then outstanding and (2) the Class A Opco Units (other than those held by the
Company). If, however, a stockholder vote is required by applicable law or stock exchange listing requirement in connection with the
initial Business Combination, or the Company decides to hold a stockholder vote for business or other reasons, the Company will
submit such Business Combination to the Company’s stockholders for their approval (“Business Combination
Vote”). With respect to the initial Business Combination Vote, if any, each of the Sponsor and the Company’s
directors, director nominees and officers has agreed to vote all of the Founder Shares, Sponsor Shares and Public Shares it then
holds, if any, in favor of the Company’s initial Business Combination. If the Company seeks stockholder approval of the
initial Business Combination, the Company will offer to each Public Stockholder the right to have its shares redeemed in conjunction
with a proxy solicitation pursuant to the proxy rules of the Commission at a per share redemption price (the
“Redemption Price”) equal to (I) the aggregate amount then on deposit in the Trust Account, calculated as of
two business days prior to the consummation of the initial Business Combination, representing (1) the proceeds held in the
Trust Account from the Offering and the sale of the Private Placement Warrants and (2) interest income earned on the funds held
in the Trust Account and not previously released to the Company to pay taxes (which interest shall be net of any taxes payable),
divided by (II) the sum of (A) the total number of Public Shares then outstanding and (B) the Class A Opco Units
(other than those held by the Company). If the Company seeks stockholder approval of the initial Business Combination, the Company
may proceed with such Business Combination only if a majority of the outstanding shares voted are voted to approve such Business
Combination. If, after seeking and receiving such stockholder approval, the Company elects to so proceed, it will redeem shares, at
the Redemption Price, from those Public Stockholders who validly and affirmatively requested such redemption. Only Public
Stockholders who properly exercise their redemption rights, in accordance with the applicable tender offer or proxy materials
related to such Business Combination and the Amended and Restated Certificate of Incorporation, shall be entitled to receive
distributions from the Trust Account in connection with an initial Business Combination, and the Company shall pay no distributions
with respect to any other holders of shares of capital stock of the Company in connection therewith. In the event that the Company
does not effect a Business Combination by 15 months from the closing of the Offering (or up to 21 months, if the sponsor exercises its “extension options” (as defined in the Prospectus)), the Company will (i) cease all operations except for the
purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of
the outstanding Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust
Account, including interest (less an amount required to satisfy taxes of the Company and Opco and less up to $100,000 of such net
interest to pay dissolution expenses), divided by the number of then outstanding Public Shares and Class A Opco Units (other
than those held by the Company), which redemption will completely extinguish Public Stockholders’ rights as stockholders
(including the right to receive further liquidation distributions, if any), and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of
directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims
of creditors and the requirements of other applicable law. Only Public Stockholders holding shares of Common Stock included in the
Units shall be entitled to receive such redemption amounts and the Company shall pay no such redemption amounts or any distributions
in liquidation with respect to any other shares of capital stock of the Company. The Sponsor and the Company’s officers,
directors and director nominees have agreed that they will not propose any amendment to the Company’s Amended and Restated
Certificate of Incorporation (A) to modify the substance or timing of the Company’s obligation to redeem 100% of the
outstanding Public Shares if the Company has not consummated an initial Business Combination within 15 months from the closing of
the Offering (or up to 21 months, if the sponsor exercises its “extension options”) or (B) with respect to any other
provision relating to the rights of holders of the Common Stock or pre-initial Business Combination activity, unless the Company
offers to the Public Stockholders the right to redeem their Public Shares upon approval of such amendment, as described in the
Pricing Disclosure Package and Prospectus.
(hh) Business
Combination Announcement. In the event that the Company desires or is required by an applicable law or regulation to cause an announcement
(a “Business Combination Announcement”) to be placed in The Wall Street Journal, The New York Times or any other news or media
publication or outlet or to be made via a public filing or submission with the Commission announcing the consummation of an initial Business
Combination that indicates that the Underwriters were the underwriters in the Offering, the Company shall supply the Representative with
a draft of the Business Combination Announcement and provide the Representative with a reasonable advance opportunity to comment thereon,
subject to the agreement of the Underwriters to keep confidential such draft announcement in accordance with the Representative’s
standard policies regarding confidential information.
(ii) Deferred
Discount Payment. Upon the consummation of the initial Business Combination, the Company will direct the Trustee to pay the Representative
the Deferred Discount out of the proceeds of the Offering held in the Trust Account. The Representative shall have no claim to payment
of any interest earned on the portion of the proceeds held in the Trust Account representing the Deferred Discount. If the Company fails
to consummate its initial Business Combination within the time period required by its Amended and Restated Certificate of Incorporation,
the Deferred Discount will not be paid to the Representative and will, instead, be included in the Liquidation distribution of the proceeds
held in the Trust Account made to the Public Stockholders. In connection with any such Liquidation, the Representative forfeits any rights
or claims to the Deferred Discount.
(jj) Forfeiture. Upon
the earlier to occur of the expiration and termination of the Underwriters’ over-allotment option, the Company shall cancel or otherwise
effect the forfeiture of Founder Shares from the holders thereof, in an aggregate amount equal to the number of Founder Shares determined
by multiplying (a) 750,000 by (b) a fraction, (i) the numerator of which is 3,000,000 minus the number of Option Units
purchased by the Underwriters upon the exercise of their over-allotment option, and (ii) the denominator of which is 3,000,000. For
the avoidance of doubt, if the Underwriters exercise their over-allotment option in full, the Company shall not cancel or otherwise effect
the forfeiture of any Founder Shares pursuant to this Section 4(jj).
(kk) Written
Testing-the-Waters Communication. If at any time following the distribution of any Written Testing-the-Waters Communication, there
occurred or occurs an event or development as a result of which such Written Testing-the-Waters Communication included or would include
any untrue statement of a material fact or omitted or would omit to state any material fact necessary to make the statements therein in
the light of the circumstances under which they were made at such time, not misleading, the Company will promptly (i) notify the
Representative so that use of the Written Testing-the-Waters Communication may cease until it is amended or supplemented; (ii) amend
or supplement, at its own expense, such Written Testing-the-Waters Communication to eliminate or correct such untrue statement or omission;
and (iii) supply any amendment or supplement to the Representative in such quantities as may be reasonably requested.
(ll) Emerging
Growth Company. The Company will promptly notify the Representative if the Company ceases to be an Emerging Growth Company at
any time prior to the later of (i) completion of the distribution of the Units within the meaning of the Securities Act and (ii) completion
of the 180-day restricted period referred to in Section 4(h) hereof.
(mm) Delivery
of Agreements. The Company will deliver to the Representative executed copies of the Trust Agreement, the Warrant Agreement, the Securities
Subscription Agreement, the Warrant Purchase Agreement, the Registration Rights Agreement, the Insider Letter and the Administrative Services
Agreement.
(nn) Trust
Account Waiver. The Company will seek to have all vendors, service providers (other than its independent registered public accounting
firm), prospective target businesses and other entities with which it does business enter into an agreement waiving any right, title,
interest or claim of any kind in or to any monies held in the Trust Account for the benefit of the Public Stockholders. If a third party
refuses to execute an agreement waiving such claims to the monies held in the Trust Account, the Company’s management will consider
whether competitive alternatives are reasonably available to the Company and will only enter into an agreement with such third party if
the Company’s management believes that such third party’s engagement would be in the best interests of the Company under the
circumstances.
(oo) Certification
of Beneficial Ownership. The Company will deliver to each Underwriter (or its agent), on the date of execution of this Agreement,
a properly completed and executed Certification Regarding Beneficial Owners and Key Controllers of Legal Entity Customers, together with
copies of identifying documentation, and the Company undertakes to provide such additional supporting documentation as each Underwriter
may reasonably request in connection with the verification of the foregoing Certification.
5. Certain
Agreements of the Underwriters. Each Underwriter hereby represents and agrees that it is not subject to any pending proceeding under
Section 8A of the Securities Act with respect to the Offering (and will promptly notify the Company if any such proceeding against
it is initiated during the Prospectus Delivery Period).
6. Conditions
of Underwriters’ Obligations. The obligation of each Underwriter to purchase the Underwritten Units on the Closing Date or the
Option Units on the Additional Closing Date, as the case may be, as provided herein is subject to the performance by the Company of its
covenants and other obligations hereunder and to the following additional conditions:
(a) Registration
Compliance; No Stop Order. No order suspending the effectiveness of the Registration Statement shall be in effect, and no proceeding
for such purpose or pursuant to Section 8A under the Securities Act shall be pending before or threatened by the Commission; the
Prospectus shall have been timely filed with the Commission under the Securities Act and in accordance with Section 4(a) hereof;
and all requests by the Commission for additional information shall have been complied with to the reasonable satisfaction of the Representative.
(b) Representations
and Warranties. The representations and warranties of the Company Parties contained herein shall be true and correct on the date
hereof and on and as of the Closing Date or the Additional Closing Date, as the case may be; and the statements of the Company Parties
and their officers made in any certificates delivered pursuant to this Agreement shall be true and correct on and as of the Closing Date
or the Additional Closing Date, as the case may be.
(c) No
Material Adverse Change. No event or condition of a type described in Section 3(i) hereof shall have occurred or shall
exist, which event or condition is not described in the Pricing Disclosure Package (excluding any amendment or supplement thereto) and
the Prospectus (excluding any amendment or supplement thereto) and the effect of which in the judgment of the Representative makes it
impracticable or inadvisable to proceed with the offering, sale or delivery of the Units on the Closing Date or the Additional Closing
Date, as the case may be, on the terms and in the manner contemplated by this Agreement, the Pricing Disclosure Package and the Prospectus.
(d) Officers’
Certificate.
(i) The
Representative shall have received on and as of the Closing Date or the Additional Closing Date, as the case may be, a certificate of
the chief financial officer or chief accounting officer of the Company and one additional senior executive officer of the Company who
is satisfactory to the Representative (i) confirming that such officers have carefully reviewed the Registration Statement, the Pricing
Disclosure Package and the Prospectus and, to the knowledge of such officers, the representations set forth in Sections 3(b) and
3(c) hereof are true and correct, (ii) confirming that the other representations and warranties of the Company in this Agreement
are true and correct and that the Company has complied with all agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date or the Additional Closing Date, as the case may be, and (iii) to the effect set
forth in paragraphs (a) and (c) above.
(ii) The
Representative shall have received on and as of the Closing Date or the Additional Closing Date, as the case may be, a certificate of
at least two senior executive officers of Opco who are satisfactory to the Representative (i) confirming that the representations
and warranties of Opco in this Agreement are true and correct and that Opco has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied hereunder at or prior to the Closing Date or the Additional Closing Date, as the case may be,
and (ii) to the effect set forth in paragraph (c) above.
(e) Comfort
Letters. On the date of this Agreement and on the Closing Date or the Additional Closing Date, as the case may be, KPMG LLP shall
have furnished to the Representative, at the request of the Company, letters, dated the respective dates of delivery thereof and addressed
to the Underwriters, in form and substance reasonably satisfactory to the Representative, containing statements and information of the
type customarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements
and certain financial information contained in each of the Registration Statement, the Pricing Disclosure Package and the Prospectus; provided,
that the letter delivered on the Closing Date or the Additional Closing Date, as the case may be, shall use a “cut-off” date
no more than two business days prior to such Closing Date or such Additional Closing Date, as the case may be.
(f) Opinion
and 10b-5 Statement of Counsel for the Company Parties. White & Case LLP, counsel for the Company Parties, shall have
furnished to the Representative, at the request of the Company, their written opinion and 10b-5 statement, dated the Closing Date or the
Additional Closing Date, as the case may be, and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representative.
(g) Opinion
and 10b-5 Statement of Counsel for the Underwriters. The Representative shall have received on and as of the Closing Date or
the Additional Closing Date, as the case may be, an opinion and 10b-5 statement, addressed to the Underwriters, of Proskauer Rose LLP,
counsel for the Underwriters, with respect to such matters as the Representative may reasonably request, and such counsel shall have received
such documents and information as they may reasonably request to enable them to pass upon such matters.
(h) No
Legal Impediment to Issuance and Sale. No action shall have been taken and no statute, rule, regulation or order shall have been
enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority that would, as of the Closing Date or
the Additional Closing Date, as the case may be, prevent the issuance or sale of the Units; and no injunction or order of any federal,
state or foreign court shall have been issued that would, as of the Closing Date or the Additional Closing Date, as the case may be, prevent
the issuance or sale of the Units.
(i) Good
Standing. The Representative shall have received on and as of the Closing Date or the Additional Closing Date, as the case may be,
satisfactory evidence of the good standing of each of the Company Parties in its jurisdiction of organization and its good standing in
such other jurisdictions as the Representative may reasonably request, in each case in writing or any standard form of telecommunication
from the appropriate governmental authorities of such jurisdictions.
(j) Exchange
Listing. The Units to be delivered on the Closing Date or the Additional Closing Date, as the case may be, shall have been approved
for listing on NYSE, subject to official notice of issuance.
(k) Delivery
of Transaction Documents. On or prior to the Closing Date, the Company shall have delivered to the Representative executed copies
of the Opco LLC Agreement, the Trust Agreement, the Warrant Agreement, the Securities Subscription Agreement, the Warrant Purchase Agreement,
the Registration Rights Agreement, the Insider Letter and the Administrative Services Agreement, and each of the Transaction Documents
shall be in full force and effect on the Closing Date or the Additional Closing Date, as the case may be.
(l) Funding
of Private Placement Warrants. At least one business day prior to the Closing Date or the Additional Closing Date, as applicable,
the proceeds from the sale of the Private Placement Warrants shall have been deposited into the Trust Account such that the cumulative
amount deposited into the Trust Account as of such Closing Date or Additional Closing Date shall equal the product of the number of Units
sold in the public offering as of such Closing Date or Additional Closing Date and the public offering price per Unit as set forth on
the cover of the Prospectus.
(m) FINRA.
FINRA shall not have raised any objection with respect to the fairness or reasonableness of the underwriting or other arrangements of
the transactions contemplated hereby.
(n) Additional
Documents. On or prior to the Closing Date or the Additional Closing Date, as the case may be, the Company Parties shall have
furnished to the Representative such further certificates and documents as the Representative may reasonably request.
All opinions, letters, certificates and
evidence mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are
in form and substance reasonably satisfactory to counsel for the Underwriters.
7. Indemnification
and Contribution.
(a) Indemnification
of the Underwriters. The Company and Opco, jointly and severally, agree to indemnify and hold harmless each Underwriter, its
affiliates, directors and officers and each person, if any, who controls such Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including,
without limitation, legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as
such fees and expenses are incurred), joint or several, that arise out of, or are based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or caused by any omission or alleged omission to state therein
a material fact required to be stated therein or necessary in order to make the statements therein, not misleading, or (ii) any untrue
statement or alleged untrue statement of a material fact contained in the Prospectus (or any amendment or supplement thereto), any Preliminary
Prospectus, any Written Testing-the-Waters Communication, any road show as defined in Rule 433(h) under the Securities Act (a
“road show”) or any Pricing Disclosure Package (including any Pricing Disclosure Package that has subsequently been amended),
or caused by any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, in each case except insofar as such losses, claims, damages or liabilities
arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in
conformity with any information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representative
expressly for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the
information described as such in paragraph (b) below.
(b) Indemnification
of the Company. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company Parties, each
of their directors, each of officer of the Company who signed the Registration Statement and each person, if any, who controls a Company
Party within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity
set forth in paragraph (a) above, but only with respect to any losses, claims, damages or liabilities that arise out of, or are based
upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information
relating to such Underwriter furnished to the Company in writing by such Underwriter through the Representative expressly for use in the
Registration Statement, the Prospectus (or any amendment or supplement thereto), any Preliminary Prospectus, any Written Testing-the-Waters
Communication, any road show or any Pricing Disclosure Package (including any Pricing Disclosure Package that has subsequently been amended),
it being understood and agreed upon that the only such information furnished by any Underwriter consists of the following information
in the Prospectus furnished on behalf of each Underwriter: (y) the concession figure appearing in the fourth paragraph under the
caption “Underwriting” and (z) the [●] paragraphs under the caption “Underwriting.”
(c) Notice
and Procedures. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall
be brought or asserted against any person in respect of which indemnification may be sought pursuant to the preceding paragraphs of this
Section 7, such person (the “Indemnified Person”) shall promptly notify the person against whom such indemnification
may be sought (the “Indemnifying Person”) in writing; provided that the failure to notify the Indemnifying
Person shall not relieve it from any liability that it may have under the preceding paragraphs of this Section 7 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further,
that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise
than under the preceding paragraphs of this Section 7. If any such proceeding shall be brought or asserted against an Indemnified
Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory
to the Indemnified Person (who shall not, without the consent of the Indemnified Person, be counsel to the Indemnifying Person) to represent
the Indemnified Person and any others entitled to indemnification pursuant to this Section that the Indemnifying Person may designate
in such proceeding and shall pay the fees and expenses in such proceeding and shall pay the fees and expenses of such counsel related
to such proceeding, as incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have reasonably concluded that there may be
legal defenses available to it that are different from or in addition to those available to the Indemnifying Person; or (iv) the
named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person
and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them.
It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified
Persons, and that all such fees and expenses shall be paid or reimbursed as they are incurred. Any such separate firm for any Underwriter,
its affiliates, directors and officers and any control persons of such Underwriter shall be designated in writing by the Representative
and any such separate firm for the Company, Opco, their directors, the Company’s officers who signed the Registration Statement
and any control persons of a Company Party shall be designated in writing by the Company. The Indemnifying Person shall not be liable
for any settlement of any proceeding effected without its written consent, but if settled with such consent, the Indemnifying Person agrees
to indemnify each Indemnified Person from and against any loss or liability by reason of such settlement. Notwithstanding the foregoing
sentence, if at any time an Indemnified Person shall have requested that an Indemnifying Person reimburse the Indemnified Person for fees
and expenses of counsel as contemplated by this paragraph, the Indemnifying Person shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by the Indemnifying Person
of such request and (ii) the Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request
prior to the date of such settlement. No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnification
could have been sought hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional release of such
Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the
subject matter of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure
to act by or on behalf of any Indemnified Person.
(d) Contribution. If
the indemnification provided for in paragraphs (a) or (b) above is unavailable to an Indemnified Person or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying
such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company
Parties, on the one hand, and the Underwriters on the other, from the Offering or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause
(i) but also the relative fault of the Company Parties, on the one hand, and the Underwriters on the other, in connection with the
statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations.
The relative benefits received by the Company Parties (treated jointly for this purpose as one person), on the one hand, and the Underwriters
on the other, shall be deemed to be in the same respective proportions as the net proceeds (before deducting expenses) received by the
Company from the sale of the Units and the total underwriting discounts and commissions received by the Underwriters in connection therewith,
in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate offering price of the Units. The relative
fault of the Company Parties, on the one hand, and the Underwriters on the other, shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates
to information supplied by a Company Party or by the Underwriters and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
(e) Limitation
on Liability. The Company Parties and the Underwriters agree that it would not be just and equitable if contribution pursuant
to paragraph (d) above were determined by pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph
(d) above. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred
to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred
by such Indemnified Person in connection with any such action or claim. Notwithstanding the provisions of paragraphs (d) and (e),
in no event shall an Underwriter be required to contribute any amount in excess of the amount by which the total underwriting discounts
and commissions received by such Underwriter with respect to the Offering exceeds the amount of any damages that such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to
paragraphs (d) and (e) are several in proportion to their respective purchase obligations hereunder and not joint.
(f) Non-Exclusive
Remedies. The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any Indemnified Person at law or in equity.
8. Effectiveness
of Agreement. This Agreement shall become effective as of the date first written above.
9. Termination.
This Agreement may be terminated in the absolute discretion of the Representative, by notice to the Company Parties, if after the execution
and delivery of this Agreement and on or prior to the Closing Date or, in the case of the Option Units, prior to the Additional Closing
Date (i) trading generally shall have been suspended or materially limited on or by any of the NYSE or Nasdaq Stock Market LLC; (ii) trading
of any securities issued or guaranteed by the Company shall have been suspended on any exchange or in any over-the-counter market; (iii) a
general moratorium on commercial banking activities shall have been declared by federal or New York State authorities; or (iv) there
shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis, either within
or outside the United States, that, in the judgment of the Representative, is material and adverse and makes it impracticable or inadvisable
to proceed with the offering, sale or delivery of the Units on the Closing Date or the Additional Closing Date, as the case may be, on
the terms and in the manner contemplated by this Agreement, the Pricing Disclosure Package and the Prospectus.
10. Defaulting
Underwriter.
(a) If,
on the Closing Date or the Additional Closing Date, as the case may be, any Underwriter defaults on its obligation to purchase the Units
that it has agreed to purchase hereunder on such date, the non-defaulting Underwriters may in their discretion arrange for the purchase
of such Units by other persons satisfactory to the Company on the terms contained in this Agreement. If, within 36 hours after any such
default by any Underwriter, the non-defaulting Underwriters do not arrange for the purchase of such Units, then the Company shall be entitled
to a further period of 36 hours within which to procure other persons satisfactory to the non-defaulting Underwriters to purchase such
Units on such terms. If other persons become obligated or agree to purchase the Units of a defaulting Underwriter, either the non-defaulting
Underwriters or the Company may postpone the Closing Date or the Additional Closing Date, as the case may be, for up to five full business
days in order to effect any changes that in the opinion of counsel for the Company or counsel for the Underwriters may be necessary in
the Registration Statement and the Prospectus or in any other document or arrangement, and the Company agrees to promptly prepare any
amendment or supplement to the Registration Statement and the Prospectus that effects any such changes. As used in this Agreement, the
term “Underwriter” includes, for all purposes of this Agreement unless the context otherwise requires, any person not listed
in Schedule 1 hereto that, pursuant to this Section 10, purchases Units that a defaulting Underwriter agreed but failed to purchase.
(b) If,
after giving effect to any arrangements for the purchase of the Units of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters and the Company as provided in paragraph (a) above, the aggregate number of Units that remain unpurchased on the Closing
Date or the Additional Closing Date, as the case may be, does not exceed one-eleventh of the aggregate number of Units to be purchased
on such date, then the Company shall have the right to require each non-defaulting Underwriter to purchase the number of Units that such
Underwriter agreed to purchase hereunder on such date plus such Underwriter’s pro rata share (based on the number of Units that
such Underwriter agreed to purchase on such date) of the Units of such defaulting Underwriter or Underwriters for which such arrangements
have not been made.
(c) If,
after giving effect to any arrangements for the purchase of the Units of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters and the Company as provided in paragraph (a) above, the aggregate number of Units that remain unpurchased on the Closing
Date or the Additional Closing Date, as the case may be, exceeds one-eleventh of the aggregate amount of Units to be purchased on such
date, or if the Company shall not exercise the right described in paragraph (b) above, then this Agreement or, with respect to any
Additional Closing Date, the obligation of the Underwriters to purchase Units on the Additional Closing Date, as the case may be, shall
terminate without liability on the part of the non-defaulting Underwriters. Any termination of this Agreement pursuant to this Section 10
shall be without liability on the part of the Company, except that the Company will continue to be liable for the payment of expenses
as set forth in Section 11 hereof and except that the provisions of Section 7 hereof shall not terminate and shall remain in
effect.
(d) Nothing
contained herein shall relieve a defaulting Underwriter of any liability it may have to the Company or any non-defaulting Underwriter
for damages caused by its default.
11. Payment
of Expenses.
(a) Whether
or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, the Company will pay or cause
to be paid all costs and expenses incident to the performance of its obligations hereunder, including without limitation, (i) the
costs incident to the authorization, issuance, sale, preparation and delivery of the Units and any taxes payable in that connection; (ii) the
costs incident to the preparation, printing and filing under the Securities Act of the Registration Statement, the Preliminary Prospectus,
any Pricing Disclosure Package and the Prospectus (including all exhibits, amendments and supplements thereto) and the distribution thereof;
(iii) the costs of reproducing and distributing each of the Transaction Documents; (iv) the fees and expenses of the Company’s
counsel and independent accountants; (v) the fees and expenses incurred in connection with the registration or qualification and
determination of eligibility for investment of the Units under the laws of such jurisdictions as the Representative may designate and
the preparation, printing and distribution of a Blue Sky Memorandum (including the related fees and expenses of counsel for the Underwriters); (vi) the
cost of preparing stock certificates; (vii) the costs and charges of any transfer agent, trustee, warrant agent and registrar; (viii) all
expenses and application fees incurred in connection with any filing with, and clearance of the offering by, FINRA (including the reasonable
and documented fees and expenses of counsel for the Underwriters relating to such filings up to $25,000); (ix) all expenses incurred
by the Company in connection with any “road show” presentation to potential investors; and (x) all expenses and application
fees related to the listing of the Units on the NYSE.
(b) If
(i) this Agreement is terminated pursuant to Section 9 (other than clauses (iii) and (iv)), (ii) the Company for any
reason fails to tender the Units for delivery to the Underwriters or (iii) the Underwriters decline to purchase the Units for any
reason permitted under this Agreement, the Company agrees to reimburse the Underwriters for all out-of-pocket costs and expenses (including
the fees and expenses of their counsel) reasonably incurred by the Underwriters in connection with this Agreement and the Offering.
12. Persons
Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective
successors and the officers and directors and any controlling persons referred to herein, and the affiliates of each Underwriter referred
to in Section 7 hereof. Nothing in this Agreement is intended or shall be construed to give any other person any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision contained herein. No purchaser of Units from any Underwriter
shall be deemed to be a successor merely by reason of such purchase.
13. Survival.
The respective indemnities, rights of contribution, representations, warranties and agreements of the Company Parties and the Underwriters
contained in this Agreement or made by or on behalf of a Company Party or the Underwriters pursuant to this Agreement or any certificate
delivered pursuant hereto shall survive the delivery of and payment for the Units and shall remain in full force and effect, regardless
of any termination of this Agreement or any investigation made by or on behalf of a Company Party or the Underwriters or the directors,
officers, controlling persons or affiliates referred to in Section 7 hereof.
14. Certain
Defined Terms. For purposes of this Agreement, (a) except where otherwise expressly provided, the term “affiliate”
has the meaning set forth in Rule 405 under the Securities Act; and (b) the term “business day” means any day other
than a day on which banks are permitted or required to be closed in New York City; and (c) the term “Liquidation” means
the distributions of the Trust Account to the Public Stockholders in connection with the redemption of the Common Stock held by the Public
Stockholders pursuant to the terms of the Company’s Amended and Restated Certificate of Incorporation, as amended, if the Company
fails to consummate a Business Combination with the time period provided therein.
15. Compliance
with USA Patriot Act. The Company Parties acknowledge that, in accordance with the requirements of the USA Patriot Act (Title III
of Pub. L. 107-56 (signed into law October 26, 2001)), the Underwriters are required to obtain, verify and record information that
identifies their respective clients, including the Company Parties, which information may include the name and address of their respective
clients, as well as other information that will allow the Underwriters to properly identify their respective clients.
16. Miscellaneous.
(a) Notices. All
notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted and
confirmed by any standard form of telecommunication.
Notices to the Underwriters shall be given to the
Representative:
UBS Securities LLC
1285 Avenue of the Americas
New York, New York 10019
Attention: Syndicate
with a copy to:
Proskauer Rose LLP
Eleven Times Square
New York, New York 10036
Attention: Steven
R. Burwell
Notices to the Company Parties shall be given to
the Company:
Kimbell Tiger Acquisition Corporation.
777 Taylor St.
Fort Worth, Texas 76102
Attention: Zachary
M. Lunn
with copies to:
White & Case LLP
609 Main Street, Suite 2900
Houston,
Texas 77002
Attention: Jason A. Rocha and Andrew J. Ericksen
(b) Governing
Law. This Agreement and any claim, controversy or dispute arising under or related to this Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
(c) Submission
to Jurisdiction. Each of the Company Parties hereby submits to the exclusive jurisdiction of the U.S. federal and New York state
courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. Each of the Company Parties waives any objection which it may now or hereafter have to the laying of
venue of any such suit or proceeding in such courts. Each of the Company Parties agrees that final judgment in any such suit, action or
proceeding brought in such court shall be conclusive and binding upon such Company Party and may be enforced in any court to the jurisdiction
of which such Company Party is subject by a suit upon such judgment.
(d) Waiver
of Jury Trial. EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY SUIT OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT.
(e) Recognition
of the U.S. Special Resolution Regimes.
(i) In
the event that any Underwriter that is a Covered Entity (as defined below) becomes subject to a proceeding under a U.S. Special Resolution
Regime (as defined below), the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement,
will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and
any such interest and obligation, were governed by the laws of the United States or a state of the United States.
(ii) In
the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate (as defined below) of such Underwriter becomes subject
to a proceeding under a U.S. Special Resolution Regime, Default Rights (as defined below) under this Agreement that may be exercised against
such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special
Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.
As used in this Section 16(e):
“BHC Act Affiliate” has the
meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Covered Entity” means any
of the following:
(i) a
“covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(ii) a
“covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(iii) a
“covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the meaning
assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“U.S. Special Resolution Regime”
means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank
Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
(f) Counterparts. This
Agreement may be signed in counterparts (which may include counterparts delivered by any standard form of telecommunication), each of
which shall be an original and all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile,
electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act,
the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart
so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
(g) Amendments
or Waivers. No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom,
shall in any event be effective unless the same shall be in writing and signed by the parties hereto.
(h) Headings. The
headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation
of, this Agreement.
(i) Integration. This
Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Underwriters, or any
of them, with respect to the subject matter hereof.
[Remainder of page intentionally left blank]
If the foregoing is in accordance with your understanding,
please indicate your acceptance of this Agreement by signing in the space provided below.
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Very truly yours,
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KIMBELL TIGER ACQUISITION CORPORATION
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By:
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Name:
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Title:
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KIMBELL TIGER OPERATING COMPANY, LLC
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By:
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Name:
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Title:
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Accepted: As of the date first written above
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UBS SECURITIES LLC
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For itself and on behalf of the several Underwriters listed in Schedule 1 hereto.
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UBS SECURITIES LLC
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By:
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Name:
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Title:
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By:
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Name:
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Title:
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Schedule 1
Underwriter
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Number of
Units
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UBS Securities LLC
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[●]
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Total
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20,000,000
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Annex A
Pricing Information Provided Orally by Underwriters
The initial public offering price per Unit for
the Units is $10.00.
The number of Units purchased by the Underwriters
is 20,000,000. The Underwriters have an option to purchase an additional 3,000,000 Units to cover over-allotments, if any.
Annex B
Written Testing-the-Waters Communications
Reference is made to the materials used in the
testing the waters presentation made to potential investors by the Company, to the extent such materials are deemed to be a “written
communication” within the meaning of Rule 405 under the Securities Act.
Exhibit 3.3
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
KIMBELL TIGER ACQUISITION CORPORATION
[●], 2022
Kimbell Tiger Acquisition
Corporation, a corporation organized and existing under the laws of the State of Delaware (the “Corporation”),
DOES HEREBY CERTIFY AS FOLLOWS:
1. The
name of the Corporation is “Kimbell Tiger Acquisition Corporation”. The original certificate of incorporation of the Corporation
was filed with the Secretary of State of the State of Delaware on April 9, 2021 (as subsequently amended on April 26, 2021,
the “Original Certificate”).
2. This
Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate”), which both restates
and amends the provisions of the Original Certificate, was duly adopted in accordance with Sections 242 and 245 of the General Corporation
Law of the State of Delaware (the “DGCL”) and by written consent of the Corporation’s stockholders in
accordance with Section 228 of the DGCL.
3. The
text of the Original Certificate is hereby restated and amended in its entirety to read as follows:
ARTICLE I
NAME
The name of the corporation
is Kimbell Tiger Acquisition Corporation (the “Corporation”).
ARTICLE II
PURPOSE
The purpose of the Corporation
is to engage in any lawful act or activity for which corporations may be organized under the DGCL. In addition to the powers and privileges
conferred upon the Corporation by law and those incidental thereto, the Corporation shall possess and may exercise all the powers and
privileges that are necessary or convenient to the conduct, promotion or attainment of the business or purposes of the Corporation, including,
but not limited to, effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business
combination involving the Corporation and one or more businesses (a “Business Combination”).
ARTICLE III
REGISTERED AGENT
The address of the Corporation’s
registered office in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle, State of Delaware,
19801, and the name of the Corporation’s registered agent at such address is The Corporation Trust Company.
ARTICLE IV
CAPITALIZATION
Section 4.1 Authorized
Capital Stock. The total number of shares of all classes of capital stock, each with a par value of $0.0001 per share, which
the Corporation is authorized to issue is 251,000,000 shares, consisting of (a) 250,000,000 shares of common stock (the “Common
Stock”), including (i) 225,000,000 shares of Class A common stock (the “Class A Common Stock”),
and (ii) 25,000,000 shares of Class B common stock (the “Class B Common Stock”), and (b)
1,000,000 shares of preferred stock (the “Preferred Stock”). The number of authorized shares of the Class A Common Stock or Preferred Stock may be increased or decreased (but not below the number
of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the stock of the Corporation
entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the DGCL (or any successor provision thereto), and no
vote of the holders of any of the Class A Common Stock or the Preferred Stock voting separately as a class shall be required therefor,
unless a vote of any such holder is required pursuant to this Amended and Restated Certificate (including any certificate of designation
relating to any series of Preferred Stock). The holders of Class B Common Stock are entitled to vote as a separate class to increase the
authorized number of shares of Class B Common Stock.
Section 4.2 Preferred
Stock. Subject to Article IX of this Amended and Restated Certificate, the board of directors of the Corporation (the
“Board”) is hereby expressly authorized to provide, out of the unissued shares of the Preferred Stock, one or
more series of Preferred Stock, and to establish from time to time the number of shares to be included in each such series and to fix
the voting rights, if any, designations, powers, preferences and relative, participating, optional, special and other rights, if any,
of each such series and any qualifications, limitations and restrictions thereof, as shall be stated in the resolution or resolutions
adopted by the Board providing for the issuance of such series and included in a certificate of designation (a “Preferred
Stock Designation”) filed pursuant to the DGCL, and the Board is hereby expressly vested with the authority to the full
extent provided by law, now or hereafter, to adopt any such resolution or resolutions.
Section 4.3 Common
Stock.
(a) Except
as otherwise required by law or this Amended and Restated Certificate (including any Preferred Stock Designation), the holders of the
Common Stock shall exclusively possess all voting power with respect to the Corporation and the holders of shares of Common Stock shall
be entitled to one vote for each such share on each matter properly submitted to the stockholders on which stockholders generally are
entitled to vote.
(b)
(i) Shares of
Class A Common Stock shall be issuable, on the terms and subject to the conditions set forth in the Second Amended and Restated Limited
Liability Agreement of Kimbell Tiger Operating Company, LLC (“Opco”) dated as of [●], 2022, as it may
be amended from time to time in accordance with its terms (the “LLC Agreement”), upon the redemption or exchange
of Class A Units of Opco, together with a corresponding number of shares of Class B Common Stock, pursuant to the Redemption
Right or Call Right (as each such term is defined in the LLC Agreement). The Corporation will at all times reserve and keep available
out of its authorized but unissued shares of Class A Common Stock, solely for the purpose of issuance upon the redemption or exchange
of the outstanding Class A Units of Opco for Class A Common Stock pursuant to the LLC Agreement, such number of shares of Class A
Common Stock that shall be issuable upon any such redemption or exchange pursuant to the LLC Agreement; provided that nothing contained
herein shall be construed to preclude the Corporation from satisfying its obligations in respect of any such redemption or exchange of
Class A Units of Opco pursuant to the LLC Agreement by delivering to Opco or the holder of Class A Units of Opco, as applicable,
in lieu of newly issued shares of Class A Common Stock, cash in the amount permitted by and provided in the LLC Agreement or shares
of Class A Common Stock which are held in the treasury of the Corporation. All shares of Class A Common Stock that may be issued
upon any such exchange shall, upon issuance in accordance with the LLC Agreement, be validly issued, fully paid and non-assessable. In
connection with any such exchange or redemption of Class A Units of Opco pursuant to the LLC Agreement, an equal number of shares
of Class B Common Stock shall be forfeited by the holder of such Class A Units of Opco and cancelled by the Corporation.
(ii) To the extent
the number of Class A Units of Opco into which the Class B Units of Opco will convert pursuant to the LLC Agreement is adjusted
(whether through an adjustment to the conversion ratio of such Class B Units or to the number of Class B Units of Opco outstanding),
the number of outstanding shares of Class B Common Stock will be adjusted through a stock split or stock dividend so that the total
number of outstanding shares of Class B Common Stock corresponds to the total number of Class A Units of Opco outstanding (other
than those held by the Corporation and any of its wholly owned subsidiaries) plus the total number of Class A Units of Opco into
which the Class B Units of Opco are entitled to convert pursuant to the LLC Agreement.
(c) Except
as otherwise required by law or this Amended and Restated Certificate (including any Preferred Stock Designation), at any annual or special
meeting of the stockholders of the Corporation, holders of the Class A Common Stock and holders of the Class B Common Stock,
voting together as a single class, shall have the exclusive right to vote for the election of directors and on all other matters properly
submitted to a vote of the stockholders, and no holder of any series of Preferred Stock, as such, shall be entitled to any voting powers
in respect thereof. Notwithstanding the foregoing, except as otherwise required by law or this Amended and Restated Certificate (including
any Preferred Stock Designation), holders of shares of any series of Common Stock shall not be entitled to vote on any amendment to this
Amended and Restated Certificate (including any amendment to any Preferred Stock Designation) that relates solely to the terms of one
or more outstanding series of Preferred Stock or other series of Common Stock if the holders of such affected series of Preferred Stock
or Common Stock, as applicable, are entitled exclusively, either separately or together with the holders of one or more other such series,
to vote thereon pursuant to this Amended and Restated Certificate (including any Preferred Stock Designation) or the DGCL.
(d) Subject
to applicable law, the rights, if any, of the holders of any outstanding series of the Preferred Stock and the provisions of Article IX
hereof, the holders of the Class A Common Stock shall be entitled to receive such dividends and other distributions (payable in cash,
property or capital stock of the Corporation) when, as and if declared thereon by the Board from time to time out of any assets or funds
of the Corporation legally available therefor and shall share equally on a per share basis in such dividends and distributions. Dividends
and other distributions shall not be declared or paid on the Class B Common Stock unless the dividend consists solely of shares of
Class B Common Stock.
(e) Subject
to applicable law, the rights, if any, of the holders of any outstanding series of the Preferred Stock and the provisions of Article IX
hereof, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, after payment or provision
for payment of the debts and other liabilities of the Corporation, the holders of shares of Class A Common Stock shall be entitled
to receive all the remaining assets of the Corporation available for distribution to its stockholders, ratably in proportion to the number
of shares of Class A Common Stock held by them. The holders of shares of Class B Common Stock, as such, shall not be entitled
to receive any assets of the Corporation in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation.
Section 4.4 Rights
and Options. The Corporation has the authority to create and issue rights, warrants and options entitling the holders thereof to acquire
from the Corporation any shares of its capital stock of any class or classes, with such rights, warrants and options to be evidenced by
or in instrument(s) approved by the Board. The Board is empowered to set the exercise price, duration, times for exercise and other
terms and conditions of such rights, warrants or options; provided, however, that the consideration to be received for any shares of capital
stock issuable upon exercise thereof may not be less than the par value thereof.
ARTICLE V
BOARD OF DIRECTORS
Section 5.1 Board
Powers. The business and affairs of the Corporation shall be managed by, or under the direction of, the Board. In addition
to the powers and authority expressly conferred upon the Board by statute, this Amended and Restated Certificate or the Bylaws (the “Bylaws”)
of the Corporation, the Board is hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done
by the Corporation, subject, nevertheless, to the provisions of the DGCL, this Amended and Restated Certificate and any Bylaws; provided,
however, that no Bylaws hereafter adopted by the stockholders shall invalidate any prior act of the Board that would have been valid if
such Bylaws had not been adopted.
Section 5.2 Number,
Election and Term.
(a) The
number of directors of the Corporation shall be fixed from time to time exclusively by the Board pursuant to a resolution adopted by a
majority of the Board.
(b) Subject
to Section 5.5 hereof, the Board shall be divided into three classes, as nearly equal in number as possible and designated
Class I, Class II and Class III. The Board is authorized to assign members of the Board already in office to Class I,
Class II or Class III. The term of the initial Class I Directors shall expire at the first annual meeting of the stockholders
of the Corporation following the effectiveness of this Amended and Restated Certificate; the term of the initial Class II Directors
shall expire at the second annual meeting of the stockholders of the Corporation following the effectiveness of this Amended and Restated
Certificate; and the term of the initial Class III Directors shall expire at the third annual meeting of the stockholders of the
Corporation following the effectiveness of this Amended and Restated Certificate. At each succeeding annual meeting of the stockholders
of the Corporation, beginning with the first annual meeting of the stockholders of the Corporation following the effectiveness of this
Amended and Restated Certificate, successors to the class of directors whose term expires at that annual meeting shall be elected for
a three-year term or until the election and qualification of their respective successors in office, subject to their earlier death, resignation
or removal. Subject to Section 5.5 hereof, if the number of directors is changed, any increase or decrease shall be apportioned
by the Board among the classes so as to maintain the number of directors in each class as nearly equal as possible, but in no case shall
a decrease in the number of directors shorten the term of any incumbent director. Directors shall be elected by a plurality of the votes
cast at an annual meeting of stockholders by holders of Common Stock. The Board is hereby expressly authorized, by resolution or resolutions
thereof, to assign members of the Board already in office to the aforesaid classes at the time this Amended and Restated Certificate (and
therefore such classification) becomes effective in accordance with the DGCL.
(c) Subject
to Section 5.5 hereof, a director shall hold office until the annual meeting for the year in which his or
her term expires and until his or her successor has been elected and qualified, subject, however, to such director’s earlier death,
resignation, retirement, disqualification or removal.
(d) Unless
and except to the extent that the Bylaws shall so require, the election of directors need not be by written ballot.
Section 5.3 Newly
Created Directorships and Vacancies. Subject to Section 5.5 hereof, newly created directorships resulting
from an increase in the number of directors and any vacancies on the Board resulting from death, resignation, retirement, disqualification,
removal or other cause may be filled solely and exclusively by a majority vote of the remaining directors then in office, even if less
than a quorum or by a sole remaining director (and not by stockholders), and any director so chosen shall hold office for the remainder
of the full term of the class of directors to which the new directorship was added or in which the vacancy occurred and until his or her
successor has been elected and qualified, subject, however, to such director’s earlier death, resignation, retirement, disqualification
or removal.
Section 5.4 Removal.
Subject to Section 5.5 hereof, any or all of the directors may be removed from office at any time, but only
for cause and only by the affirmative vote of holders of a majority of the voting power of all then outstanding shares of capital stock
of the Corporation entitled to vote generally in the election of directors, voting together as a single class.
Section 5.5 Preferred
Stock – Directors. Notwithstanding any other provision of this Article V, and except as otherwise required by law, whenever
the holders of one or more series of the Preferred Stock shall have the right, voting separately by class or series, to elect one or more
directors, the term of office, the filling of vacancies, the removal from office and other features of such directorships shall be governed
by the terms of such series of the Preferred Stock as set forth in this Amended and Restated Certificate (including any Preferred Stock
Designation) and such directors shall not be included in any of the classes created pursuant to this Article V unless expressly provided
by such terms.
Section 5.6 Quorum.
A quorum for the transaction of business by the directors shall be set forth in the Bylaws.
ARTICLE VI
BYLAWS
In furtherance and not in
limitation of the powers conferred upon it by law, the Board shall have the power and is expressly authorized to adopt, amend, alter or
repeal the Bylaws. The affirmative vote of a majority of the Board shall be required to adopt, amend, alter or repeal the Bylaws. The
Bylaws also may be adopted, amended, altered or repealed by the stockholders; provided, however, that in addition to any vote of the holders
of any class or series of capital stock of the Corporation required by law or by this Amended and Restated Certificate (including any
Preferred Stock Designation), the affirmative vote of the holders of at least a majority of the voting power of all then outstanding shares
of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall
be required for the stockholders to adopt, amend, alter or repeal the Bylaws; and provided further, however, that no Bylaws hereafter
adopted by the stockholders shall invalidate any prior act of the Board that would have been valid if such Bylaws had not been adopted.
ARTICLE VII
MEETINGS OF STOCKHOLDERS; ACTION BY WRITTEN
CONSENT
Section 7.1 Meetings. Subject
to the rights, if any, of the holders of any outstanding series of the Preferred Stock, and to the requirements of applicable law, special
meetings of stockholders of the Corporation may be called only by the Chairman of the Board, Chief Executive Officer of the Corporation,
or the Board pursuant to a resolution adopted by a majority of the Board then in office, and the ability of the stockholders to call a
special meeting is hereby specifically denied. Except as provided in the foregoing sentence, special meetings of stockholders may not
be called by another person or persons.
Section 7.2 Advance
Notice. Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders
before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws.
Section 7.3 Action
by Written Consent. Except as may be otherwise provided for or fixed pursuant to this Amended and Restated Certificate (including
any Preferred Stock Designation) relating to the rights of the holders of any outstanding series of Preferred Stock, subsequent to the
consummation of the Corporation’s initial public offering of securities (the “Offering”), any action required
or permitted to be taken by the stockholders of the Corporation must be effected by a duly called annual or special meeting of such stockholders
and may not be effected by written consent of the stockholders, other than with respect to Class B Common Stock with respect to which
action may be taken by written consent.
ARTICLE VIII
LIMITED LIABILITY; INDEMNIFICATION
Section 8.1 Limitation
of Director Liability. A director of the Corporation shall not be personally liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof
is not permitted under the DGCL as the same exists or may hereafter be amended unless a director violated his or her duty of loyalty to
the Corporation or its stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of
dividends, unlawful stock purchases or unlawful redemptions, or derived improper personal benefit from his or her actions as a director.
Any amendment, modification or repeal of the foregoing sentence shall not adversely affect any right or protection of a director of the
Corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, modification or repeal.
Section 8.2 Indemnification
and Advancement of Expenses.
(a) To
the fullest extent permitted by applicable law, as the same exists or may hereafter be amended, the Corporation shall indemnify and hold
harmless each person who is or was made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”)
by reason of the fact that he or she is or was a director or officer of the Corporation or, while a director or officer of the Corporation,
is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan (an “indemnitee”),
whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent, or in any other
capacity while serving as a director, officer, employee or agent, against all liability and loss suffered and expenses (including, without
limitation, attorneys’ fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred
by such indemnitee in connection with such proceeding. The Corporation shall to the fullest extent not prohibited by applicable law pay
the expenses (including attorneys’ fees) incurred by an indemnitee in defending or otherwise participating in any proceeding in
advance of its final disposition; provided, however, that, to the extent required by applicable law, such payment of expenses in advance
of the final disposition of the proceeding shall be made only upon receipt of an undertaking, by or on behalf of the indemnitee, to repay
all amounts so advanced if it shall ultimately be determined that the indemnitee is not entitled to be indemnified under this Section 8.2
or otherwise. The rights to indemnification and advancement of expenses conferred by this Section 8.2 shall be contract rights
and such rights shall continue as to an indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the
benefit of his or her heirs, executors and administrators. Notwithstanding the foregoing provisions of this Section 8.2(a),
except for proceedings to enforce rights to indemnification and advancement of expenses, the Corporation shall indemnify and advance expenses
to an indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof)
was authorized by the Board.
(b) The
rights to indemnification and advancement of expenses conferred on any indemnitee by this Section 8.2 shall not be exclusive
of any other rights that any indemnitee may have or hereafter acquire under law, this Amended and Restated Certificate, the Bylaws, an
agreement, vote of stockholders or disinterested directors, or otherwise.
(c) Any
repeal or amendment of this Section 8.2 by the stockholders of the Corporation or by changes in law, or the adoption of any
other provision of this Amended and Restated Certificate inconsistent with this Section 8.2, shall, unless otherwise required
by law, be prospective only (except to the extent such amendment or change in law permits the Corporation to provide broader indemnification
rights on a retroactive basis than permitted prior thereto), and shall not in any way diminish or adversely affect any right or protection
existing at the time of such repeal or amendment or adoption of such inconsistent provision in respect of any proceeding (regardless of
when such proceeding is first threatened, commenced or completed) arising out of, or related to, any act or omission occurring prior to
such repeal or amendment or adoption of such inconsistent provision.
(d) This
Section 8.2 shall not limit the right of the Corporation, to the extent and in the manner authorized or permitted by law,
to indemnify and to advance expenses to persons other than indemnitees.
ARTICLE IX
BUSINESS COMBINATION REQUIREMENTS; EXISTENCE
Section 9.1 General.
(a) The
provisions of this Article IX shall apply during the period commencing upon the effectiveness of this Amended and Restated
Certificate and terminating upon the consummation of the Corporation’s initial Business Combination and no amendment to this Article IX
shall be effective prior to the consummation of the initial Business Combination unless approved by the affirmative vote of the holders
of at least 65% of all then outstanding shares of the Common Stock.
(b) Immediately
after the Offering, a certain amount of the net offering proceeds received by the Corporation in the Offering (including the proceeds
of any exercise of the underwriters’ over-allotment option) and certain other amounts specified in the Corporation’s registration
statement on Form S-1, as initially filed with the Securities and Exchange Commission (the “SEC”) on July
29, 2021, as amended (the “Registration Statement”), shall be contributed to Opco in exchange for Class A
Units and deposited in a trust account (the “Trust Account”), established for the benefit of the Public Stockholders
(as defined below), the Sponsor (as defined below) and holders of Class A Units of Opco pursuant to a trust agreement described
in the Registration Statement. Except for the withdrawal of interest to pay taxes, none of the funds held in the Trust Account (including
the interest earned on the funds held in the Trust Account) will be released from the Trust Account until the earliest of (i) the
completion of the initial Business Combination, (ii) the redemption of shares (and corresponding redemption of units of Opco held
by the Corporation) in connection with a vote seeking to amend any provisions of this Amended and Restated Certificate (A) to modify
the substance or timing of the Corporation’s obligation to redeem 100% of the Offering Shares (as defined below) if the Corporation
has not consummated an initial Business Combination within 15 months from the closing of the Offering (or up to 21 months, if Kimbell
Tiger Acquisition Sponsor, LLC (the “Sponsor”) exercises its option, upon deposit of an amount equal to $0.10
per Offering Share (as defined below) into the Trust Account, to cause the Corporation to extend the available time to consummate the
initial Business Combination by three months, which option the Sponsor may exercise up to two times (the “Deadline Date”)),
or (B) with respect to any other provision relating to the rights of holders of Class A Common Stock or pre-initial Business
Combination activity (as described in Section 9.7) or (iii) the redemption of 100% of the Offering Shares and Class A
Units of Opco if the Corporation is unable to complete its initial Business Combination by the Deadline Date. Holders of shares of Class A
Common Stock included as part of the units sold in the Offering (the “Offering Shares”) (whether such Offering
Shares were purchased in the Offering or in the secondary market following the Offering and whether or not such holders are affiliates
of the Sponsor, the Sponsor or officers or directors of the Corporation) are referred to herein as “Public Stockholders.”
Section 9.2 Redemption
Rights.
(a) Prior
to the consummation of the initial Business Combination, the Corporation shall provide all holders of Offering Shares with the opportunity
to have their Offering Shares redeemed upon the consummation of the initial Business Combination pursuant to, and subject to the limitations
of, Sections 9.2(b) and 9.2(c) (such rights of such holders to have their Offering Shares redeemed pursuant to
such Sections, the “Redemption Rights”) hereof for cash equal to the applicable redemption price per share determined
in accordance with Section 9.2(b) hereof (the “Redemption Price”); provided, however,
that the Corporation shall not redeem or repurchase Offering Shares in an amount that would cause the Corporation to have net tangible
assets of less than $5,000,001 (such limitation hereinafter called the “Redemption Limitation”). Notwithstanding
anything to the contrary contained in this Amended and Restated Certificate, there shall be no Redemption Rights or liquidating distributions
with respect to any warrant issued pursuant to the Offering.
(b) If
the Corporation offers to redeem the Offering Shares other than in conjunction with a stockholder vote on an initial Business Combination
with a proxy solicitation pursuant to Regulation 14A under the Exchange Act and filing proxy materials with the SEC, the Corporation shall
offer to redeem the Offering Shares upon the consummation of the initial Business Combination, subject to lawfully available funds therefor,
in accordance with the provisions of Section 9.2(a) hereof pursuant to a tender offer in accordance with Rule 13e-4 and
Regulation 14E under the Exchange Act (such rules and regulations hereinafter called the “Tender Offer Rules”)
which it shall commence prior to the consummation of the initial Business Combination and shall file tender offer documents with the SEC
prior to the consummation of the initial Business Combination that contain substantially the same financial and other information about
the initial Business Combination and the Redemption Rights as is required under Regulation 14A under the Exchange Act (such rules and
regulations hereinafter called the “Proxy Solicitation Rules”), even if such information is not required under
the Tender Offer Rules; provided, however, that if a stockholder vote is required by law to approve the proposed initial Business
Combination, or the Corporation decides to submit the proposed initial Business Combination to the stockholders for their approval for
business or other legal reasons, the Corporation shall offer to redeem the Offering Shares, subject to lawfully available funds therefor,
in accordance with the provisions of Section 9.2(a) hereof in conjunction with a proxy solicitation pursuant to the Proxy
Solicitation Rules (and not the Tender Offer Rules) at a price per share equal to the Redemption Price calculated in accordance with
the following provisions of this Section 9.2(b). In the event that the Corporation offers to redeem the Offering Shares pursuant
to a tender offer in accordance with the Tender Offer Rules, the Redemption Price per share of Class A Common Stock payable to holders
of the Offering Shares tendering their Offering Shares pursuant to such tender offer shall be equal to the quotient obtained by dividing:
(i) the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the initial Business
Combination, including interest (net of taxes payable), by (ii) the total number of then outstanding Offering Shares, the 2,500 shares
of Class A Common Stock issued to the Sponsor prior to the Offering (“Sponsor Shares”) and Class A
Units of Opco (other than those held by the Corporation and any of its wholly owned subsidiaries). If the Corporation offers to redeem
the Offering Shares in conjunction with a stockholder vote on the proposed initial Business Combination pursuant to a proxy solicitation,
the Redemption Price per share of Class A Common Stock payable to holders of the Offering Shares exercising their Redemption Rights
(irrespective of whether they voted in favor or against the Business Combination) shall be equal to the quotient obtained by dividing
(x) the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the initial Business
Combination, including interest (net of taxes payable), by (y) the total number of then outstanding Offering Shares, the Sponsor
Shares and Class A Units of Opco (other than those held by the Corporation and any of its wholly owned subsidiaries).
(c) If
the Corporation offers to redeem the Offering Shares in conjunction with a stockholder vote on an initial Business Combination pursuant
to a proxy solicitation, a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder
is acting in concert or as a “group” (as defined under Section 13(d)(3) of the Exchange Act), shall be restricted
from seeking Redemption Rights with respect to more than an aggregate of 20% of the Offering Shares.
(d) In
the event that the Corporation has not consummated an initial Business Combination by the Deadline Date, the Corporation shall (i) cease
all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days
thereafter subject to lawfully available funds therefor, redeem 100% of the Offering Shares and the Sponsor Shares in consideration of
a per-share price, payable in cash, equal to the quotient obtained by dividing (A) the aggregate amount then on deposit in the Trust
Account, including interest not previously released to pay taxes of the Corporation and Opco (less an amount required to satisfy taxes
of the Corporation and Opco and up to $100,000 of interest to pay dissolution expenses), by (B) the total number of then outstanding
Offering Shares, the Sponsor Shares, and the Class A Units of Opco (other than those held by the Corporation and any of its wholly
owned subsidiaries), which redemption will completely extinguish rights of the Public Stockholders and the Sponsor (including the right
to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following
such redemption, subject to the approval of the remaining stockholders and the Board in accordance with applicable law, dissolve and liquidate,
subject in each case to the Corporation’s obligations under the DGCL to provide for claims of creditors and other requirements of
applicable law.
(e) If
the Corporation offers to redeem the Offering Shares in conjunction with a stockholder vote on an initial Business Combination, the Corporation
shall consummate the proposed initial Business Combination only if (i) such initial Business Combination is approved by the affirmative
vote of the holders of a majority of the shares of the Common Stock that are voted at a stockholder meeting held to consider such initial
Business Combination and (ii) the Redemption Limitation is not exceeded.
(f) If
the Corporation conducts a tender offer pursuant to Section 9.2(b), the Corporation shall consummate the proposed initial
Business Combination only if the Redemption Limitation is not exceeded.
(g) In
the event that any shares of Class A Common stock are redeemed in exchange for any amounts in the Trust Account pursuant to this
Section 9.2 or Section 9.7, a corresponding number of Class A Units of Opco held by the Corporation shall
first be redeemed in exchange for such amounts.
Section 9.3 Distributions from the Trust Account.
(a) A
Public Stockholder shall be entitled to receive funds from the Trust Account only as provided in Sections 9.2(a), 9.2(b),
9.2(d) or 9.7 hereof and the Sponsor shall be entitled to receive funds from the Trust Account only as provided in
Section 9.2(d). In no other circumstances shall a Public Stockholder or the Sponsor have any right or interest of any kind
in or to distributions from the Trust Account, and no stockholder other than a Public Stockholder or the Sponsor shall have any interest
in or to the Trust Account.
(b) Each
Public Stockholder that does not exercise its Redemption Rights shall retain its interest in the Corporation and shall be deemed to have
given its consent to the release of the remaining funds in the Trust Account to Opco, and following payment to any Public Stockholders
exercising their Redemption Rights, the remaining funds in the Trust Account shall be released to Opco.
(c) The
exercise by a Public Stockholder of the Redemption Rights shall be conditioned on such Public Stockholder following the specific procedures
for redemptions set forth by the Corporation in any applicable tender offer or proxy materials sent to the Public Stockholders relating
to the proposed initial Business Combination. Payment of the amounts necessary to satisfy the Redemption Rights properly exercised shall
be made as promptly as practical after the consummation of the initial Business Combination.
Section 9.4 Share
Issuances. Prior to the consummation of the Corporation’s initial Business Combination, the Corporation shall not issue any
additional shares of capital stock of the Corporation that would entitle the holders thereof to receive funds from the Trust Account or
vote on any initial Business Combination.
Section 9.5 Transactions
with Affiliates. In the event the Corporation enters into an initial Business Combination with a target business that is affiliated
with the Sponsor, or the directors or officers of the Corporation, the Corporation, or a committee of the independent directors of the
Corporation, shall obtain an opinion from an independent investment banking firm that is a member of the Financial Industry Regulatory
Authority or another entity that commonly renders valuation opinions stating that the consideration to be paid by the Corporation in such
Business Combination is fair to the Corporation from a financial point of view. For purposes of this Section 9.5, “affiliate”
means, in respect of a person, any other person that, directly or indirectly, through one or more intermediaries, controls, is controlled
by, or is under common control with, such person, 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.
Section 9.6 No
Transactions with Other Blank Check Companies. The Corporation shall not enter into a Business Combination solely with another
blank check company or a similar company with nominal operations.
Section 9.7 Additional
Redemption Rights. If, in accordance with Section 9.1(a), any amendment is made to Section 9.2(d) that
would affect the substance or timing of the Corporation’s obligation to redeem 100% of the Offering Shares if the Corporation has
not consummated an initial Business Combination by the Deadline Date or with respect to any other provision relating to the rights of
holders of Class A Common Stock or pre-initial Business Combination activity, the Public Stockholders shall be provided with the
opportunity to redeem their Offering Shares upon the approval of any such amendment, at a per-share price, payable in cash, equal to the
aggregate amount then on deposit in the Trust Account, including interest (net of taxes payable), divided by the number of then outstanding
Offering Shares, Sponsor Shares and Class A Units of Opco (other than those held by the Corporation and any of its wholly owned subsidiaries);
provided, however, that any such amendment will be voided, and this Article IX will remain unchanged, if any stockholders
who wish to redeem are unable to redeem due to the Redemption Limitation.
Section 9.8 Approval
of Business Combination. Notwithstanding any other provision in this Amended and Restated Certificate, approval of the initial Business
Combination shall require the affirmative vote of a majority of the Board, which must include a majority of the Corporation’s independent
directors and each of the non-independent directors nominated by the Sponsor.
Section 9.9 Minimum
Value of Target. The Corporation’s initial Business Combination must occur with one or more operating businesses or assets that
together have a fair market value of at least 80% of the net assets held in the Trust Account (net of amounts disbursed to management
for working capital purposes and excluding the deferred underwriting discounts held in trust) at the time of the agreement to enter into
the initial Business Combination.
ARTICLE X
CORPORATE OPPORTUNITY
To the extent allowed by law,
the doctrine of corporate opportunity, or any other analogous doctrine, shall not apply with respect to the Corporation or any of its
officers or directors, or any of their respective affiliates, in circumstances where the application of any such doctrine would conflict
with any fiduciary duties or contractual obligations they may have as of the date of this Amended and Restated Certificate or in the future, and
the Corporation renounces any expectancy that any of the directors or officers of the Corporation will offer any such corporate opportunity
of which he or she may become aware to the Corporation, except, the doctrine of corporate opportunity shall apply with respect to any
of the directors or officers of the Corporation with respect to a corporate opportunity that was offered to such person solely in his
or her capacity as a director or officer of the Corporation and (i) such opportunity is one the Corporation is legally and contractually
permitted to undertake and would otherwise be reasonable for the Corporation to pursue and (ii) the director or officer is permitted
to refer that opportunity to the Corporation without violating any legal, fiduciary or contractual obligation.
ARTICLE XI
EXCLUSIVE FORUM FOR CERTAIN LAWSUITS
Section 11.1 Forum.
Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (the
“Court of Chancery”) shall be the sole and exclusive forum for any stockholder (including a beneficial owner)
to bring (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of
breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s
stockholders, (iii) any action asserting a claim against the Corporation, its directors, officers or employees arising pursuant to
any provision of the DGCL or this Amended and Restated Certificate or the Bylaws, or (iv) any action asserting a claim against the
Corporation, its directors, officers or employees governed by the internal affairs doctrine and, if brought outside of Delaware, the stockholder
bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel, except for, as to each of
(i) through (iv) above, any claim (A) as to which the Court of Chancery determines that there is an indispensable party
not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of
the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court
or forum other than the Court of Chancery or (C) for which the Court of Chancery does not have subject matter jurisdiction. Notwithstanding
the foregoing, the provisions of this Section 11.1 will not apply to suits brought to enforce a duty or liability created
by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Additionally, unless the Corporation
consents in writing to the selection of an alternative forum, the federal courts shall be the exclusive forum for the resolution of any
complaint asserting a cause of action arising under the Securities Act of 1933, as amended, against the Corporation or any of its directors,
officers, other employees or agents. Any person or entity purchasing or otherwise acquiring any
interest in any security of the Corporation shall be deemed to have notice of and consented to the provisions of this Section 11.1.
Section 11.2 Consent
to Jurisdiction. If any action the subject matter of which is within the scope of Section 11.1 immediately above is filed
in a court other than a court located within the State of Delaware (a “Foreign Action”) in the name of any stockholder,
such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within
the State of Delaware in connection with any action brought in any such court to enforce Section 11.1 immediately above (an
“FSC Enforcement Action”) and (ii) having service of process made upon such stockholder in any such FSC
Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.
Section 11.3 Severability.
If any provision or provisions of this Article XI shall be held to be invalid, illegal or unenforceable as applied to any
person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability
of such provisions in any other circumstance and of the remaining provisions of this Article XI (including, without limitation,
each portion of any sentence of this Article XI containing any such provision held to be invalid, illegal or unenforceable
that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and
circumstances shall not in any way be affected or impaired thereby. Any person or entity purchasing or otherwise acquiring any interest
in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article XI.
ARTICLE XII
AMENDMENT OF CERTIFICATE OF INCORPORATION
The Corporation reserves the
right at any time and from time to time to amend, alter, change, add or repeal any provision contained in this Amended and Restated Certificate
(including any Preferred Stock Designation), and other provisions authorized by the laws of the State of Delaware at the time in force
that may be added or inserted, in the manner now or hereafter prescribed by this Amended and Restated Certificate and the DGCL; and except
as set forth in Article VIII, all rights, preferences and privileges of whatever nature herein conferred upon stockholders,
directors or any other persons by and pursuant to this Amended and Restated Certificate in its present form or as hereafter amended are
granted subject to the right reserved in this Article XII; provided, however, that Article IX of this Amended
and Restated Certificate may be amended only as provided therein.
ARTICLE XIII
APPLICATION OF DGCL SECTION 203
Section 13.1 Section 203
of the DGCL. The Corporation hereby expressly elects not to be governed by Section 203 of the DGCL.
Section 13.2 Limitation
on 203 Business Combinations. Notwithstanding the foregoing, the Corporation shall not engage in any 203 Business Combination (as
defined below), at any point in time at which the Corporation’s Common Stock is registered under Section 12(b) or 12(g) of
the Exchange Act with any interested stockholder (as defined below) for a period of three years following the time that such stockholder
became an interested stockholder, unless:
(a) prior
to such time, the Board approved either the 203 Business Combination or the transaction which resulted in the stockholder becoming an
interested stockholder, or
(b) upon
consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned
at least 85% of the Corporation’s voting stock outstanding at the time the transaction commenced, excluding for purposes of determining
the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned by (i) persons
who are directors and also officers of the Corporation and (ii) employee stock plans in which employee participants do not have the
right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer, or
(c) at
or subsequent to that time, the 203 Business Combination is approved by the Board and authorized at an annual or special meeting of stockholders,
and not by written consent, by the affirmative vote of at least 66-2/3% of the outstanding voting stock that is not owned by the interested
stockholder.
Section 13.3 Certain
Definitions. Solely for purposes of this Article XIII, references to:
(a) “affiliate”
means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control
with, another person.
(b) “associate,”
when used to indicate a relationship with any person, means: (i) any corporation, partnership, unincorporated association or other
entity of which such person is a director, officer or partner or is, directly or indirectly, the owner of 20% or more of any class of
voting stock; (ii) any trust or other estate in which such person has at least a 20% beneficial interest or as to which such person
serves as trustee or in a similar fiduciary capacity; and (iii) any relative or spouse of such person, or any relative of such spouse,
who has the same residence as such person.
(c) “203
Business Combination,” when used in reference to the Corporation and any interested stockholder of the Corporation, means:
(i) any
merger or consolidation of the Corporation or any direct or indirect majority-owned subsidiary of the Corporation (a) with the interested
stockholder, or (b) with any other corporation, partnership, unincorporated association or other entity if the merger or consolidation
is caused by the interested stockholder and as a result of such merger or consolidation Section 13.2 is not applicable to
the surviving entity;
(ii) any
sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except proportionately
as a stockholder of the Corporation, to or with the interested stockholder, whether as part of a dissolution or otherwise, of assets of
the Corporation or of any direct or indirect majority-owned subsidiary of the Corporation which assets have an aggregate market value
equal to 10% or more of either the aggregate market value of all the assets of the Corporation determined on a consolidated basis or the
aggregate market value of all the outstanding stock of the Corporation;
(iii) any
transaction which results in the issuance or transfer by the Corporation or by any direct or indirect majority-owned subsidiary of the
Corporation of any stock of the Corporation or of such subsidiary to the interested stockholder, except: (a) pursuant to the exercise,
exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of the Corporation or any such subsidiary
which securities were outstanding prior to the time that the interested stockholder became such; (b) pursuant to a merger under Section 251(g) of
the DGCL; (c) pursuant to a dividend or distribution paid or made, or the exercise, exchange or conversion of securities exercisable
for, exchangeable for or convertible into stock of the Corporation or any such subsidiary which security is distributed, pro rata to all
stockholders of a class or series of stock of the Corporation subsequent to the time the interested stockholder became such; (d) pursuant
to an exchange offer by the Corporation to purchase stock made on the same terms to all stockholders of said stock; or (e) any issuance
or transfer of stock by the Corporation; provided, however, that in no case under items (c)-(e) of this subsection (iii) shall
there be an increase in the interested stockholder’s proportionate share of the stock of any class or series of the Corporation
or of the voting stock of the Corporation (except as a result of immaterial changes due to fractional share adjustments); or
(iv) any
transaction involving the Corporation or any direct or indirect majority-owned subsidiary of the Corporation which has the effect, directly
or indirectly, of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of
any class or series, of the Corporation or of any such subsidiary which is owned by the interested stockholder, except as a result of
immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares of stock not caused,
directly or indirectly, by the interested stockholder.
(d) “control,”
including the terms “controlling,” “controlled by” and “under common control with,”
means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person,
whether through the ownership of voting stock, by contract, or otherwise. A person who is the owner of 20% or more of the voting power
of the outstanding voting stock of the Corporation, partnership, unincorporated association or other entity shall be presumed to have
control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption
of control shall not apply where such person holds voting stock, in good faith and not for the purpose of circumventing this Article XIII,
as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of
such entity.
(e) “Exempted
Person” means the Sponsor and its affiliates, any of their direct or indirect transferees of at least 20% of the Corporation’s
outstanding Common Stock and any “group” of which any such person is a part under Rule 13d-5 of the Exchange Act.
(f) “interested
stockholder” means any person (other than the Corporation or any direct or indirect majority-owned subsidiary of the Corporation)
that (i) is the owner of 20% or more of the voting stock of the Corporation, or (ii) is an affiliate or associate of the Corporation
and was the owner of 20% or more of the voting stock of the Corporation at any time within the three year period immediately prior to
the date on which it is sought to be determined whether such person is an interested stockholder; and the affiliates and associates of
such person; but “interested stockholder” shall not include (a) any Exempted Person, or (b) any person whose ownership
of shares in excess of the 20% limitation set forth herein is the result of any action taken solely by the Corporation; provided that
with respect to clause (b) such person shall be an interested stockholder if thereafter such person acquires additional shares of
voting stock of the Corporation, except as a result of further corporate action not caused, directly or indirectly, by such person. For
the purpose of determining whether a person is an interested stockholder, the voting stock of the Corporation deemed to be outstanding
shall include stock deemed to be owned by the person through application of the definition of “owner” below but shall not
include any other unissued stock of the Corporation which may be issuable pursuant to any agreement, arrangement or understanding, or
upon exercise of conversion rights, warrants or options, or otherwise.
(g) “owner,”
including the terms “own” and “owned,” when used with respect to any stock, means a person that
individually or with or through any of its affiliates or associates:
(i) beneficially
owns such stock, directly or indirectly; or
(ii) has
(a) the right to acquire such stock (whether such right is exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise;
provided, however, that a person shall not be deemed the owner of stock tendered pursuant to a tender or exchange offer made by such person
or any of such person’s affiliates or associates until such tendered stock is accepted for purchase or exchange; or (b) the
right to vote such stock pursuant to any agreement, arrangement or understanding; provided, however, that a person shall not be deemed
the owner of any stock because of such person’s right to vote such stock if the agreement, arrangement or understanding to vote
such stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to 10 or more persons;
or
(iii) has
any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy
or consent as described in item (b) of subsection (ii) above), or disposing of such stock with any other person that beneficially
owns, or whose affiliates or associates beneficially own, directly or indirectly, such stock.
(h) “person”
means any individual, corporation, partnership, unincorporated association or other entity.
(i) “stock”
means, with respect to any corporation, capital stock and, with respect to any other entity, any equity interest.
(j) “voting
stock” means stock of any class or series entitled to vote generally in the election of directors.
[Signature Page Follows]
IN WITNESS WHEREOF, Kimbell
Tiger Acquisition Corporation has caused this Amended and Restated Certificate to be duly executed and acknowledged in its name and
on its behalf by an authorized officer as of the date first set forth above.
By:
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Name:
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Zachary M. Lunn
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Title:
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Chief Executive Officer
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[Signature
Page to Certificate of Incorporation]
Exhibit 4.1
NUMBER UNITS
U-
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP [●]
KIMBELL TIGER ACQUISITION CORPORATION
UNITS CONSISTING OF ONE SHARE OF CLASS A
COMMON STOCK AND
ONE-HALF OF ONE REDEEMABLE WARRANT TO PURCHASE ONE SHARE OF CLASS A COMMON STOCK
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) share of Class A common stock, par value $0.0001 per share (“Common Stock”), of Kimbell
Tiger Acquisition Corporation, a Delaware corporation (the “Company”), and one-half of one redeemable warrant
to purchase one share of Class A common stock (each whole warrant, a “Warrant”). Each Warrant entitles
the holder thereof to purchase one (1) share (subject to adjustment) of Common Stock for $11.50 per share (subject to adjustment).
Each Warrant will become exercisable thirty (30) days after the Company’s completion of a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or other similar business combination with one or more businesses (each a “Business
Combination”) 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 Class A common stock and warrants constituting the Units will begin separate trading on the 52nd day following
the date of the prospectus relating to the Company’s initial public offering (or, if such date is not a business day, the following
business day), unless UBS Securities LLC informs us of its decision 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 offering and issuing a press release announcing when separate trading will begin.
The terms of the Warrants are governed by a Warrant Agreement, dated as of [●], 2022 between the Company, Kimbell Tiger Operating
Company, LLC 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.
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 signature of its duly authorized
officers.
By:
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Zachary M. Lunn
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Title:
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Chief Executive Officer
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Kimbell Tiger Acquisition Corporation
The Company will furnish without charge to each
unitholder who so requests, a statement of the powers, designations, preferences and relative, participating, optional or other special
rights of each class of stock or series thereof of the Company and the qualifications, limitations, or restrictions of such preferences
and/or rights.
The following abbreviations, when used in the
inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or
regulations:
TEN COM
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as tenants in common
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UNIF GIFT MIN ACT
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_________ Custodian__________
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TEN ENT
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as tenants by the entireties
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(Cust) (Minor)
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JT TEN
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as joint tenants with right of survivorship and not as tenants in common
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under Uniform Gifts to Minors Act
(State)
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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 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.
Dated: _______________________
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Notice:
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The signature to this assignment must correspond with the name as written upon the face of the certificate
in every particular, without alteration or enlargement or any change whatever.
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Signature(s) Guaranteed:
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM,
PURSUANT TO RULE 17Ad-15 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (OR ANY SUCCESSOR RULE))
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In each case, as more fully described in the Company’s
final prospectus dated [●], 2022, 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
outstanding shares of Common Stock of the Company are redeemed and the Company liquidates because it does not consummate an initial business
combination within the period of time set forth in the restated certificate, (ii) the shares of Common Stock sold in its initial
public offering are redeemed in connection with a stockholder vote to approve an amendment to the Company’s amended and restated
certificate of incorporation (A) in a manner that would affect the substance or timing of the Company’s obligation to redeem
100% of the Common Stock if it does not consummate an initial business combination within the period of time set forth in the restated
certificate or (B) with respect to any other provision relating to the rights of holders of the Common Stock or pre-initial business
combination activity, or (iii) if the holder(s) seek(s) to redeem for cash his, her or its respective shares of Common
Stock in connection with a tender offer (or proxy solicitation, solely in the event the Company seeks stockholder approval of the proposed
initial business combination) setting forth the details of a proposed initial business combination. In no other circumstances shall the
holder(s) have any right or interest of any kind in or to the trust account.
Exhibit 4.2
NUMBER
C-
SHARES
SEE REVERSE FOR
CERTAIN DEFINITIONS
CUSIP [●]
KIMBELL TIGER ACQUISITION CORPORATION
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
CLASS A COMMON STOCK
This Certifies that
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF THE PAR
VALUE OF $0.0001 EACH OF THE CLASS A COMMON STOCK OF
KIMBELL TIGER ACQUISITION CORPORATION
(THE “CORPORATION”)
transferable on the books of the Corporation in
person or by duly authorized attorney upon surrender of this certificate properly endorsed. All of the shares of Class A common stock
will be redeemed if the Corporation is unable to complete a business combination within the period of time set forth in the restated certificate,
as more fully described in the Corporation’s final prospectus dated [●], 2022.
This certificate is not valid unless countersigned
by the Transfer Agent and registered by the Registrar.
Witness the seal of the Corporation and the facsimile
signatures of its duly authorized officers.
Secretary
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[Corporate Seal]
Delaware
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Chief Executive Officer
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KIMBELL TIGER ACQUISITION CORPORATION
The Corporation will furnish without charge to
each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of
each class of stock or series thereof of the Corporation 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 Certificate
of Incorporation and all amendments thereto and resolutions of the Board of Directors providing for the issue of securities (copies of
which may be obtained from the secretary of the Corporation), to all of which the holder of this certificate by acceptance hereof assents.
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written
out in full according to applicable laws or regulations:
TEN COM
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as tenants in common
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UNIF GIFT MIN ACT
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_________ Custodian__________
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TEN ENT
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as tenants by the entireties
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(Cust) (Minor)
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JT TEN
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as joint tenants with right of survivorship and not as tenants in common
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under Uniform Gifts to Minors Act
(State)
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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 of the
capital stock represented by the within Certificate, and hereby irrevocably constitutes and appoints
Attorney to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises.
Dated: ________________________
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Notice:
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The signature to this assignment must correspond with the name as written upon the face of the certificate
in every particular, without alteration or enlargement or any change whatever.
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Signature(s) Guaranteed:
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM,
PURSUANT TO RULE 17Ad-15 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (OR ANY SUCCESSOR RULE)).
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In each case, as more fully described in the Corporation’s
final prospectus dated [●], 2022, 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 Corporation’s initial public offering only in the event that
(i) the outstanding shares of Class A common stock of the Corporation are redeemed and the Corporation liquidates because it
does not consummate an initial business combination within the period of time set forth in the restated certificate, (ii) the shares
of Class A common stock sold in its initial public offering are redeemed in connection with a stockholder vote to approve an amendment
to the Corporation’s amended and restated certificate of incorporation (A) in a manner that would affect the substance or timing
of the Corporation’s obligation to redeem 100% of the Class A common stock if it does not consummate an initial business combination
within the period of time set forth in the restated certificate or (B)with respect to any other provision relating to the rights of holders
of the Class A common stock or pre-initial business combination activity, or (iii) if the holder(s) seek(s) to redeem
for cash his, her or its respective shares of Class A common stock in connection with a tender offer (or proxy solicitation, solely
in the event the Corporation seeks stockholder approval of the proposed initial business combination) setting forth the details of a proposed
initial business combination. In no other circumstances shall the holder(s) have any right or interest of any kind in or to the trust
account.
Exhibit 4.3
[Form of Warrant Certificate]
[FACE]
Number
Warrants
THIS
WARRANT SHALL BE NULL AND VOID IF NOT EXERCISED PRIOR TO
THE
EXPIRATION OF THE EXERCISE PERIOD PROVIDED FOR
IN THE
WARRANT AGREEMENT DESCRIBED BELOW
KIMBELL
TIGER ACQUISITION CORPORATION
Incorporated Under the Laws of the State of
Delaware
CUSIP [____]
Warrant Certificate
This
Warrant Certificate certifies that ________________, or registered assigns, is the registered holder of warrant(s) evidenced
hereby (the “Warrants” and each, a “Warrant”) to purchase shares of Class A common
stock, $0.0001 par value per share (“Class A Common Stock”), of Kimbell Tiger Acquisition Corporation,
a Delaware corporation (the “Company”). Each whole Warrant entitles the holder, upon exercise during the period
set forth in the Warrant Agreement referred to below, to receive from the Company that number of fully paid and non-assessable shares
of Class A Common Stock as set forth below, at the exercise price (the “Warrant Price”) as determined pursuant
to the Warrant Agreement, payable in lawful money of the United States of America upon surrender of this Warrant Certificate and payment
of the Warrant Price (or through “cashless exercise” as provided for in the Warrant Agreement) at the office
or agency of the Warrant Agent referred to below, subject to the conditions set forth herein and in the Warrant Agreement. The Warrants
evidenced by this Warrant Certificate are [Public][Private Placement][Post-IPO] Warrants. Capitalized terms used in this Warrant Certificate
but not defined herein shall have the meanings given to them in the Warrant Agreement.
Each whole Warrant is initially
exercisable for one fully paid and non-assessable share of Class A Common Stock. No fractional shares will be issued upon exercise
of any Warrant. If, upon the exercise of Warrants, a holder would be entitled to receive a fractional interest in a share of Class A
Common Stock, the Company will, upon exercise, round down to the nearest whole number the number of shares of Class A Common Stock
to be issued to the Warrant holder. The number of shares of Class A Common Stock issuable upon exercise of the Warrants is subject
to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.
The initial Warrant Price
per share of Class A Common Stock for any Warrant is equal to $11.50 per share. The Warrant Price is subject to adjustment upon the
occurrence of certain events set forth in the Warrant Agreement.
Subject to the conditions
set forth in the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the
end of such Exercise Period, such Warrants shall become null and void. 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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KIMBELL TIGER ACQUISITION CORPORATION
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By:
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Name:
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Title:
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CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
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as Warrant Agent
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By:
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[Form of Warrant Certificate]
[Reverse]
The Warrants evidenced by
this Warrant Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise to receive shares of Class A
Common Stock and are issued or to be issued pursuant to a Warrant Agreement dated as of_______________, 2022 (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 Warrant 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 shares of Class A Common Stock to be issued upon exercise is effective under the Securities Act and (ii) a
prospectus thereunder relating to the shares of Class A Common Stock is current, except through “cashless exercise” as
provided for in the Warrant Agreement. In addition, and notwithstanding anything else in this Warrant Certificate or the Warrant Agreement,
to the extent that the holder of a Warrant has delivered a notice contemplated by subsection 3.5.5 of the Warrant Agreement, neither
the Company nor the Warrant Agent shall issue to Holder, and Holder may not acquire, any right it might have to acquire, a number of shares
of Common Stock upon exercise of any Warrant to the extent that, upon such exercise, the number of shares of Common Stock then beneficially
owned by Holder would exceed the Maximum Percentage of shares of Common Stock outstanding immediately after giving effect to such exercise
as determined in accordance with subsection 3.3.5 of the Warrant Agreement.
The Warrant Agreement provides
that upon the occurrence of certain events the number of shares of Class A Common Stock issuable upon exercise of the Warrants set
forth on the face hereof may, subject to certain conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof would be
entitled to receive a fractional interest in a share of Class A Common Stock, the Company shall, upon exercise, round down to the
nearest whole number of shares of Class A Common Stock 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 stockholder of the Company.
Election to Purchase
(To Be Executed Upon Exercise of Warrant)
The undersigned hereby irrevocably
elects to exercise the right, represented by this Warrant Certificate, to receive _____ shares of Class A Common Stock and herewith
tenders payment for such shares of Class A Common Stock to the order of Kimbell Tiger Acquisition Corporation (the “Company”)
in the amount of $_____________ in accordance with the terms hereof. The undersigned requests that a certificate for such shares of Class A
Common Stock be registered in the name of _____________, whose address is and that such shares of Class A Common Stock be delivered
to ______________ whose address is _______________. If said number of shares of Class A Common Stock is less than all of the shares
of Class A Common Stock purchasable hereunder, the undersigned requests that a new Warrant Certificate representing the remaining
balance of such shares of Class A Common Stock be registered in the name of ___________________, whose address is _______________
and that such Warrant Certificate be delivered to _______________, whose address is _______________.
In the event that the Warrant
has been called for redemption by the Company pursuant to Section 6.1 of the Warrant Agreement and the Company has required
cashless exercise pursuant to Section 6.3 of the Warrant Agreement, the number of shares of Class A Common Stock that
this Warrant is exercisable for shall be determined in accordance with subsection 3.3.1(b) and Section 6.3 of
the Warrant Agreement.
In the event that the Warrant
is to be exercised on a “cashless” basis pursuant to Section 7.4 of the Warrant Agreement, the number of shares
of Class A Common Stock that this Warrant is exercisable for shall be determined in accordance with Section 7.4 of the
Warrant Agreement.
In the event that the Warrant
may be exercised, to the extent allowed by the Warrant Agreement, through cashless exercise (i) the number of shares of Class A
Common Stock that this Warrant is exercisable for would be determined in accordance with the relevant section of the Warrant Agreement
which allows for such cashless exercise and (ii) the holder hereof shall complete the following: The undersigned hereby irrevocably
elects to exercise the right, represented by this Warrant Certificate, through the cashless exercise provisions of the Warrant Agreement,
to receive shares of Class A Common Stock. If said number of shares of Class A Common Stock is less than all of the shares of
Class A Common Stock purchasable hereunder (after giving effect to the cashless exercise), the undersigned requests that a new Warrant
Certificate representing the remaining balance of such shares of Class A Common Stock be registered in the name of ________________,
whose address is________________ and that such Warrant Certificate be delivered to ________________, whose address is ________________.
[To be included in any Election to Purchase of
a holder who has provided the notice set forth in subsection 3.3.5 of the Warrant Agreement.
By signing this Election to Purchase, the undersigned
hereby certifies that upon after giving effect to such exercise, the undersigned (together with such person’s affiliates) or any
“group” of which holder or its affiliates is a member, would not beneficially own in excess of the Maximum Percentage of the
shares of Common Stock outstanding immediately after giving effect to such exercise as determined in accordance with subsection 3.3.5.
of the Warrant Agreement.]
[Signature Page Follows]
Date: ____________, 20___
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(Address)
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Signature Guaranteed:
THE SIGNATURE(S) SHOULD BE GUARANTEED BY
AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (OR ANY SUCCESSOR
RULE)).
Exhibit 4.4
FORM OF
WARRANT AGREEMENT
between
KIMBELL TIGER ACQUISITION CORPORATION
and
CONTINENTAL STOCK TRANSFER & TRUST
COMPANY
Dated as of [●], 2022
THIS WARRANT AGREEMENT (this
“Agreement”), dated as of [●], 2022, is by and between Kimbell Tiger Acquisition Corporation, a Delaware
corporation (the “Company”), and Continental Stock Transfer & Trust Company, a New York corporation,
as warrant agent (in such capacity, the “Warrant Agent” and also referred to herein as the “Transfer
Agent”).
WHEREAS, the Company is engaged
in an initial public offering (the “Offering”) of units of the Company’s equity securities, each such
unit comprised of one share of Class A common stock of the Company, par value $0.0001 per share (“Common Stock”),
and one-half of one redeemable Public Warrant (as defined below) (the “Units”) and, in connection therewith,
has determined to issue and deliver up to 10,000,000 warrants (or up to 11,500,000 warrants if the Over-allotment Option (as defined below)
is exercised in full) to public investors in the Offering (the “Public Warrants”);
WHEREAS, the Company has
entered into that certain Private Placement Warrants Purchase Agreement with Kimbell Tiger Acquisition Sponsor, LLC, a Delaware
limited liability company (the “Sponsor”), pursuant to which the Sponsor agreed to purchase an aggregate
of 12,750,000 private placement warrants (or up to 14,100,000 private placement warrants if the Over-allotment Option is exercised
in full) simultaneously with the closing of the Offering (and the closing of the Over-allotment Option, if applicable) (the
“Private Placement Warrants”), each bearing the legend set forth in Exhibit A hereto, at a
purchase price of $1.00 per Private Placement Warrant;
WHEREAS, the Company was incorporated
for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination
with one or more businesses (a “Business Combination”);
WHEREAS, in order to finance
the transaction costs of the Company and its subsidiary Kimbell Tiger Operating Company, LLC, a Delaware limited liability company (“Opco”
and, together with the Company, the “SPAC Parties”), in connection with an intended initial Business Combination,
the Sponsor or an affiliate of the Sponsor or the Company’s officers and directors may, but are not obligated to, loan to the Company
funds as the Company may require, which such loans may be convertible into additional Private Placement Warrants at a price of $1.00 per
Private Placement Warrant;
WHEREAS, following consummation
of the Offering, the Company may issue additional warrants (the “Post-IPO Warrants,” and, together with the
Private Placement Warrants and the Public Warrants, the “Warrants”) in connection with, or following the consummation
by the Company of, a Business Combination;
WHEREAS, the Company has filed
with the U.S. Securities and Exchange Commission (the “Commission”) a registration statement on Form S-1,
File No. 333-258260 (the “Registration Statement”), and prospectus (the “Prospectus”),
for the registration, under the Securities Act of 1933, as amended (the “Securities Act”), of the Units, the
Public Warrants, the Common Stock included in the Units and the Common Stock underlying the Public Warrants;
WHEREAS, the Company desires
the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration,
transfer, exchange, redemption and exercise of the Warrants;
WHEREAS, the Company desires
to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights,
limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and
WHEREAS, all acts and things
have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or
on behalf of the Warrant Agent (if a physical certificate is issued), as provided herein, the valid, binding and legal obligations of
the Company, and to authorize the execution and delivery of this Agreement.
NOW, THEREFORE, in consideration
of the mutual agreements herein contained, the parties hereto agree as follows:
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, and, if a physical certificate is issued, shall be in substantially
the form of Exhibit B hereto (and shall indicate whether the Warrant is a Public Warrant, Private Placement Warrant or Post-IPO
Warrant), the provisions of which are incorporated herein and shall be signed by, or bear the facsimile signature of, the Chairman of
the Company’s board of directors (the “Board”), President, Chief Executive Officer, Chief Financial Officer,
Secretary or other principal officer of the Company. In the event the person whose facsimile signature has been placed upon any Warrant
shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with
the same effect as if he or she had not ceased to be such at the date of issuance. All of the Public Warrants shall initially be represented
by one or more book-entry certificates (each, a “Book-Entry Warrant Certificate”).
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 the initial
issuance of the Warrants 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. All of the Public Warrants shall initially be represented
by one or more Book-Entry Warrant Certificates deposited with The Depository Trust Company (the “Depositary”)
and registered in the name of Cede & Co., a nominee of the Depositary. 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 (i) the Depositary or its
nominee for each Book-Entry Warrant Certificate, or (ii) institutions that have accounts with the Depositary (each 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 Warrant Certificate, and the Company shall instruct the Warrant Agent to deliver to
the Depositary definitive certificates in physical form evidencing such Warrants (“Definitive Warrant Certificate”).
Such Definitive Warrant Certificate shall be in the form annexed hereto as Exhibit B, with appropriate insertions, modifications
and omissions, as provided above.
2.3.2 Registered
Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat
the person in whose name such Warrant is registered in the Warrant Register (the “Registered Holder”) as the
absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on
a Definitive Warrant Certificate made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof,
and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
2.4 Detachability
of Warrants. The Common Stock and Public Warrants comprising the Units shall begin separate trading on the 52nd day following the
date of the Prospectus or, if such 52nd day is not on a day, other than a Saturday, Sunday or federal holiday, on which banks in New York
City are generally open for normal business (a “Business Day”), then on the immediately succeeding Business
Day following such date, or earlier (the “Detachment Date”) with the consent of UBS Securities LLC, as representative
of the several underwriters, but in no event shall the Common Stock and the Public Warrants comprising the Units be separately traded
until (A) the Company has filed a Current Report on Form 8-K with the Commission containing an audited balance sheet reflecting
the receipt by the Company of the gross proceeds of the Offering, including the proceeds received by the Company from the exercise by
the underwriters of their right to purchase additional Units in the Offering (the “Over-allotment Option”),
if the Over-allotment Option is exercised prior to the filing of the Current Report on Form 8-K, and (B) the Company issues
a press release and files with the Commission a Current Report on Form 8-K announcing when such separate trading shall begin.
2.5 No
Fractional Warrants Other Than as Part of Units. The Company shall not issue fractional Warrants other than as part of the Units.
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 the Private Placement Warrants
may not be transferred, assigned or sold until the date that is thirty (30) days after the completion by the Company of an initial Business
Combination other than:
(a) to
the Company’s officers or directors, any affiliate or family member of any of the Company’s officers or directors, any members
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 such individual’s immediate family or to a trust, the beneficiary of which is
a member of such individual’s immediate family, an affiliate of such individual or to a charitable organization;
(c) in
the case of an individual, by virtue of the laws of descent and distribution upon death of such person;
(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 an initial Business Combination at prices no greater than the price
at which the Warrants were originally purchased;
(f) by
virtue of the laws of the State of Delaware or the limited liability company agreement of the Sponsor upon dissolution of the Sponsor;
(g) in
the event of the Company’s liquidation prior to the consummation of a Business Combination; and
(h) in
the event that, subsequent to the consummation of an initial Business Combination, the Company completes a liquidation, merger, share
exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their shares
of Common Stock for cash, securities or other property; provided, however, that, in the case of clauses (a) through (f), these
transferees (the “Permitted Transferees”) enter into a written agreement with the Company agreeing to be bound
by the transfer restrictions in this Agreement and the other restrictions contained in the letter agreement, dated as of the date hereof,
by and among the Company, the Sponsor and the Company’s officers and directors.
2.7 Post-IPO
Warrants. The Post-IPO Warrants, when and if issued, shall have the same terms and be in the same form as the Public Warrants except
as may be agreed upon by the Company.
3. Terms
and Exercise of Warrants.
3.1 Warrant
Price. Each Warrant shall entitle the Registered Holder thereof, subject to the provisions of such Warrant and of this Agreement,
including without limitation, subsection 3.3.5, to purchase from the Company the number of shares of Common Stock 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 shares of Common Stock 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 (15) 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 three (3) Business Days’ prior written notice of such reduction to Registered Holders
of the Warrants and, provided further that any such reduction shall be identical among all of the Warrants.
3.2 Duration
of Warrants. A Warrant may be exercised only during the period (the “Exercise Period”) commencing on the
date that is thirty (30) days after the first date on which the SPAC Parties complete an initial Business Combination, and terminating
on the earliest to occur of: (i) 5:00 p.m., New York City time on the date that is five (5) years after the date on which the
SPAC Parties complete an initial Business Combination, (ii) the liquidation of the Company and (iii) 5:00 p.m., New York City
time on the Redemption Date (as defined below) as provided in Section 6.2 hereof (the “Expiration Date”);
provided, however, that the exercise of any Warrant shall be subject to the satisfaction of any applicable conditions, as
set forth in subsection 3.3.2 below, with respect to an effective registration statement. Except with respect to the right to receive
the Redemption Price (as defined below) in the event of a redemption (as set forth in Section 6 hereof), each outstanding
Warrant not exercised on or before the Expiration Date shall become null and void, and all rights thereunder and all rights in respect
thereof under this Agreement shall cease at 5:00 p.m. New York City time on the Expiration Date. The Company in its sole discretion
may extend the duration of the Warrants by delaying the Expiration Date; provided that the Company shall provide at least twenty
(20) days prior written notice of any such extension to Registered Holders of the Warrants and, provided further that any such extension
shall be identical in duration among all the Warrants.
3.3 Exercise
of Warrants.
3.3.1 Payment.
Subject to the provisions of the Warrant and this Agreement, including without limitation, subsection 3.3.5, 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 Book-Entry Warrant Certificate, 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”) shares of Common Stock pursuant to the exercise of a Warrant, properly completed and executed by the Registered
Holder on the reverse of the Definitive Warrant Certificate or, in the case of a Book-Entry Warrant Certificate, properly delivered by
the Participant in accordance with the Depositary’s procedures, and (iii) payment in full of the Warrant Price for each share
of Common Stock as to which the Warrant is exercised and any and all applicable taxes due in connection with the exercise of the Warrant,
the exchange of the Warrant for the shares of Common Stock and the issuance of such shares of Common Stock, as follows:
(a) in
lawful money of the United States, in good certified check or good bank draft payable to the Warrant Agent or by wire transfer of immediately
available funds;
(b) in
the event of a redemption pursuant to Section 6 hereof in which the Company’s board of directors (the “Board”)
has elected to require all holders of the Warrants to exercise such Warrants on a “cashless basis,” by surrendering the Warrants
for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common
Stock underlying the Warrants, multiplied by the excess of the “Fair Market Value,” as defined in this subsection 3.3.1(b),
over the Warrant Price by (y) the Fair Market Value. Solely for purposes of this subsection 3.3.1(b) and Section 6.3,
the “Fair Market Value” shall mean the average last reported sale price of the Common Stock for the ten (10) trading
days ending on the third (3rd) trading day prior to the date on which the notice of redemption is sent to the holders of the
Warrants, pursuant to Section 6 hereof; or
(c) as
provided in Section 7.4 hereof.
3.3.2 Issuance
of Shares of Common Stock on Exercise. As soon as practicable after the exercise of any Warrant and, if payment is pursuant to subsection
3.3.1 (a), the clearance of the funds in payment of the Warrant Price, the Company shall issue to the Registered Holder of such Warrant
a book-entry position or certificate, as applicable, for the number of shares of Common Stock to which he, she or it is entitled, registered
in such name or names as may be directed by him, her or it, and if such Warrant shall not have been exercised in full, a new book-entry
position or countersigned Warrant, as applicable, for the number of shares of Common Stock as to which such Warrant shall not have been
exercised. If fewer than all the Warrants evidenced by a Book-Entry Warrant Certificate are exercised, a notation shall be made to the
records maintained by the Depositary, its nominee for each Book-Entry Warrant Certificate, or a Participant, as appropriate, evidencing
the balance of the Warrants remaining after such exercise. Notwithstanding the foregoing, the Company shall not be obligated to deliver
any shares of Common Stock pursuant to the exercise of a Warrant and shall have no obligation to settle such Warrant exercise unless a
registration statement under the Securities Act with respect to the shares of Common Stock underlying the Public Warrants is then effective
and a prospectus relating thereto is current, subject to the Company’s satisfying its obligations under Section 7.4.
No Warrant shall be exercisable and the Company shall not be obligated to issue shares of Common Stock upon exercise of a Warrant unless
the shares of Common Stock issuable upon such Warrant exercise have been registered, qualified or deemed to be exempt from registration
or qualification under the securities laws of the state of residence of the Registered Holder of the Warrants. In the event that the conditions
in the two immediately preceding sentences are not satisfied with respect to a Warrant, the holder of such Warrant shall not be entitled
to exercise such Warrant. In no event will the Company be required to net cash settle the Warrant exercise. The Company may require holders
of Warrants to settle the Warrant on a “cashless basis” pursuant to subsection 7.4.1(b). 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 a share of Common Stock, the Company shall round down to the nearest whole number, the number of shares
of Common Stock to be issued to such holder.
3.3.3 Valid
Issuance. All shares of Common Stock issued upon the proper exercise of a Warrant in conformity with this Agreement shall be validly
issued, fully paid and non-assessable.
3.3.4 Date
of Issuance. Each person in whose name any book-entry position or certificate, as applicable, for shares of Common Stock is issued
shall for all purposes be deemed to have become the holder of record of such shares of Common Stock on the date on which the Warrant,
or book-entry position representing such Warrant, was surrendered and payment of the Warrant Price was made, irrespective of the date
of delivery of such certificate in the case of a certificated Warrant, except that, if the date of such surrender and payment is a date
when the share transfer books of the Company or book-entry system of the Warrant Agent are closed, such person shall be deemed to have
become the holder of such shares of Common Stock at the close of business on the next succeeding date on which the share transfer books
or book-entry system of the Warrant Agent 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, 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) or any “group”
of which the holder or its affiliates is a member, would beneficially own in excess of 4.9% or 9.8% (or such other amount as a holder
may specify) (the “Maximum Percentage”) of the shares of Common Stock outstanding immediately after giving effect
to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by such person
and its affiliates, or any group of which such person and its affiliates is a member, shall include the number of shares of Common Stock
issuable upon exercise of the Warrant with respect to which the determination of such sentence is being made, but shall exclude shares
of Common Stock that would be issuable upon (x) exercise of the remaining, unexercised portion of the Warrant beneficially owned
by such person and its affiliates, or any group of which such person and its affiliates is a member 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,
or any group of which such person and its affiliates is a member (including, without limitation, any convertible notes or convertible
preferred stock or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as
set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the applicable regulations of the
Commission. For purposes hereof, “group” has the meaning set forth in Section 13(d) of the Exchange Act and applicable
regulations of the Commission, and the percentage held by the holder shall be determined in a manner consistent with the provisions of
Section 13(d) of the Exchange Act. To the extent that a holder makes the election described in this subsection 3.3.5,
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, unless such holder provides to the Warrant Agent in its Election to Purchase, a certification that, upon after giving effect
to such exercise, such person (together with such person’s affiliates) or any “group” of which the holder or its affiliates
is a member, would not beneficially own in excess of the Maximum Percentage of the shares of Common Stock outstanding immediately after
giving effect to such exercise as determined in accordance with this subsection 3.3.5. For purposes of the Warrant, in determining
the number of issued and outstanding shares of Common Stock, the holder may rely on the number of issued and outstanding shares of Common
Stock as reflected in (1) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current
Report on Form 8-K or other public filing with the Commission as the case may be, (2) a more recent public announcement by the
Company or (3) any other notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock 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 shares of Common Stock then outstanding. In any case, the number of issued
and outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of equity securities of the
Company by the holder and its affiliates since the date as of which such number of issued and outstanding shares of Common Stock was reported.
By written notice to the Company, the holder of a Warrant may from time to time increase or decrease the Maximum Percentage applicable
to such holder to any other percentage specified in such notice; provided, however, that any such increase shall not be effective
until the sixty-first (61st) day after such notice is delivered to the Company.
4. Adjustments.
4.1 Stock
Dividends.
4.1.1 Split-Ups.
If after the date hereof, and subject to the provisions of Section 4.6 below, the number of issued and outstanding shares
of Common Stock is increased by a stock dividend payable in shares of Common Stock, or by a split-up of shares of Common Stock or other
similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of Common Stock issuable
on exercise of each Warrant shall be increased in proportion to such increase in the issued and outstanding shares of Common Stock. A
rights offering made to all or substantially all holders of the Common Stock entitling holders to purchase shares of Common Stock at a
price less than the “Historical Fair Market Value” (as defined below) shall be deemed a stock dividend of a number of shares
of Common Stock equal to the product of (i) the number of shares of Common Stock 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 shares of Common Stock)
multiplied by (ii) one (1) minus the quotient of (x) the price per share of Common Stock 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 Common Stock, in determining the price payable for Common Stock, there shall be taken into account
any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) “Historical
Fair Market Value” means the volume weighted average price of the Common Stock as reported during the ten (10) trading day
period ending on the trading day prior to the first date on which the shares of Common Stock trade on the applicable exchange or in the
applicable market, regular way, without the right to receive such rights. No shares of Common Stock 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, shall pay a dividend or make a distribution
in cash, securities or other assets to all or substantially all of the holders of the Common Stock on account of such shares of Common
Stock (or other shares of the Company’s capital stock 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 Common Stock in connection with a proposed initial Business Combination, (d) to satisfy the redemption rights of the
holders of Common Stock in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation
(as amended from time to time, the “Charter”) that would affect the substance or timing of the Company’s
obligation to redeem 100% of the shares of Common Stock included in the Units sold in the Offering (the “Public Shares”)
if the Company does not complete the Business Combination within the period set forth in the Charter or with respect to any other provision
relating to the rights of holders of Common Stock or pre-initial Business Combination activity, or (e) in connection with the redemption
of Public Shares upon the failure of the Company to complete its initial Business Combination and any subsequent distribution of its assets
upon its liquidation (any such non-excluded event being referred to herein as an “Extraordinary Dividend”),
then the Warrant Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, by the amount
of cash and/or the fair market value (as determined by the Board, in good faith) of any securities or other assets paid on each share
of Common Stock in respect of such Extraordinary Dividend. For purposes of this 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 Common Stock during the 365-day period ending on the date of declaration of such dividend or distribution
(as adjusted to appropriately reflect any of the events referred to in other subsections of this Section 4 and excluding cash
dividends or cash distributions that resulted in an adjustment to the Warrant Price or to the number of shares of Common Stock issuable
on exercise of each Warrant) does not exceed $0.50 (being 5% of the offering price of the Units in the Offering and 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 shares of Common Stock 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
shares of Common Stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of Common Stock
or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar
event, the number of shares of Common Stock issuable on exercise of each Warrant shall be decreased in proportion to such decrease in
the number of issued and outstanding shares of Common Stock.
4.3 Adjustments
in Warrant Price.
4.3.1 Whenever
the number of shares of Common Stock 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 shares of Common Stock purchasable upon
the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of shares
of Common Stock so purchasable immediately thereafter.
4.3.2 If
(x) the Company issues additional shares of Common Stock or equity-linked securities for capital raising purposes in connection with
the consummation of the initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Common
Stock (with such issue price or effective issue price to be determined in good faith by the Board and, in the case of any such issuance
to the Sponsor or its affiliates, without taking into account any shares of Class B Common Stock (as defined below) held by the Sponsor
or its affiliates, as applicable (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 funding the initial Business Combination
on the date of the completion of the initial Business Combination (net of redemptions), and (z) the volume weighted average trading
price of the Common Stock during the 20 trading day period starting on the trading day after the day on which the SPAC Parties consummate
the 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, and the last sales
price of the Common Stock that triggers the Company’s right to redeem the Warrants pursuant to Section 6.1 below shall
be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
4.4 Replacement
of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the issued and outstanding
shares of Common Stock (other than a change covered by Section 4.1 or 4.2 hereof or that solely affects the par
value of such shares of Common Stock), in which any “person” or “group” (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act) acquires more than 50% of the voting power of the Company's then outstanding securities
eligible to vote for the election of directors to the Board or in the case of any merger or consolidation of the Company with or
into another entity (other than a consolidation or merger in which the Company is the
continuing corporation (and is not a subsidiary of another entity whose stockholders did not own all or substantially all of the
Common Stock of the Company in substantially the same proportions immediately before such transaction) and that does not result in
any reclassification or reorganization of the outstanding shares of Common Stock), or in the case of any sale or conveyance to
another corporation or entity of the assets or other property of the Company as an entirety or substantially as an entirety in
connection with which the Company is dissolved, the holders of the Warrants shall thereafter have the right to purchase and receive,
upon the basis and upon the terms and conditions specified in the Warrants and in lieu of the shares of Common Stock of the Company
immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of
shares of stock or other securities or property (including cash) 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 if the holders of the Common Stock were entitled to exercise a right
of election as to the kind or amount of securities, cash or other assets receivable upon such 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 Common Stock in such
consolidation or merger that affirmatively make such election; provided, further, that if less than seventy percent
(70%) of the consideration receivable by the holders of the Common Stock in the applicable event is payable in the form of common
stock in the successor entity that is listed for trading on a national securities exchange or is quoted in an established
over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the Registered Holder
properly exercises the Warrant within thirty (30) days following the public disclosure of the consummation of such applicable event
by the Company pursuant to a Current Report on Form 8-K filed with the Commission, the Warrant Price shall be reduced by an
amount (in dollars) equal to the difference of (i) the Warrant Price in effect prior to such reduction minus
(ii) (A) the Per Share Consideration (as defined below) minus (B) the Black-Scholes Warrant Value (as defined below)
(but in no event less than zero). 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.
For purposes of calculating such amount, (1) Section 6.1
shall be taken into account, (2) the price of each share of Common Stock shall be the volume weighted average price of the Common
Stock as reported during the ten (10) trading day period ending on the trading day prior to the effective date of the applicable
event, (3) the assumed volatility shall be the ninety (90) day volatility obtained from the HVT function on Bloomberg determined
as of the trading day immediately prior to the day of the announcement of the applicable event, and (4) the assumed risk-free interest
rate shall correspond to the U.S. Treasury rate for a period equal to the remaining term of the Warrant. “Per Share Consideration”
means (i) if the consideration paid to holders of the Common Stock consists exclusively of cash, the amount of such cash per share
of Common Stock, and (ii) in all other cases, the volume weighted average price of the Common Stock as reported during the ten (10) trading
day period ending on the trading day prior to the effective date of the applicable event. If any reclassification or reorganization also
results in a change in shares of Common Stock covered by subsection 4.1.1 hereof , then such adjustment shall be made pursuant
to subsection 4.1.1 or Sections 4.2 or 4.3 and this Section 4.4. The provisions of this Section 4.4
shall similarly apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other transfers. In no event
will the Warrant Price be reduced to less than the par value per share issuable upon exercise of the Warrant.
4.5 Notices
of Changes in Warrant. Upon every adjustment of the Warrant Price or the number of shares of Common Stock issuable upon exercise of
a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from
such adjustment and the increase or decrease, if any, in the number of shares of Common Stock purchasable at such price upon the exercise
of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based; provided,
however, that no adjustment to the number of shares of Common Stock issuable upon exercise of a Warrant shall be required until
cumulative adjustments amount to one percent (1%) or more of the number of shares of Common Stock issuable upon exercise of a Warrant
as last adjusted; provided, further, that any such adjustments that are not made are carried forward and taken into account
in any subsequent adjustment. Notwithstanding the foregoing, all such carried forward adjustments shall be made (i) in connection
with any subsequent adjustment that (taken together with such carried forward adjustments) would result in a change of at least one percent
(1%) in the number of Class A Shares issuable upon exercise of a Warrant and (ii) on the exercise date of any Warrant. Upon
the occurrence of any event specified in Sections 4.1, 4.2, 4.3 or 4.4, the Company shall give written notice
of the occurrence of such event to each holder of a Warrant, at the last address set forth for such holder in the Warrant Register, of
the record date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality
or validity of such event.
4.6 No
Fractional Shares. Notwithstanding any provision contained in this Agreement to the contrary, the Company shall not issue fractional
shares of Common Stock 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 shares of Common Stock to be issued to such holder.
4.7 Form of
Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued
after such adjustment may state the same Warrant Price and the same number of shares of Common Stock as is stated in the Warrants initially
issued pursuant to this Agreement; provided, however, that the Company may at any time in its sole discretion make any change in
the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued
or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed.
4.8 Other
Events. In case any event shall occur affecting the Company as to which none of the provisions of the preceding subsections of this
Section 4 are strictly applicable, but which would require an adjustment to the terms of the Warrants in order to (i) avoid
an adverse impact on the Warrants and (ii) effectuate the intent and purpose of this Section 4, then, in each such case,
the Company shall appoint a firm of independent public accountants, investment banking or other appraisal firm of recognized national
standing, which shall give its opinion as to whether or not any adjustment to the rights represented by the Warrants is necessary to effectuate
the intent and purpose of this Section 4 and, if they determine that an adjustment is necessary, the terms of such adjustment.
The Company shall adjust the terms of the Warrants in a manner that is consistent with any adjustment recommended in such opinion.
5. Transfer
and Exchange of Warrants.
5.1 Registration
of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register,
upon surrender of such Warrant for transfer, in the case of a certificated Warrant, 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 in any Book-Entry Warrant Certificate or Definitive Warrant Certificate, each Book-Entry Warrant Certificate and Definitive
Warrant Certificate 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 Transfers
of Fractions of Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange of Warrants which
would require 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
of Warrants.
6.1 Redemption
of Warrants for Cash. All but not less than all of the outstanding Warrants may be redeemed for cash, 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 6.2 hereof, at the price of $0.01 per Warrant (the “Redemption Price”); provided
that the last reported sale price of the Common Stock has been at least $18.00 per share (subject to adjustment in compliance with Section 4
hereof), on each of twenty (20) trading days within the thirty (30) trading-day period ending on the third (3rd) trading day
prior to the date on which notice of the redemption is given; provided further that there is an effective registration statement
covering the shares of Common Stock issuable upon exercise of the Warrants, and a current prospectus relating thereto, available throughout
the 30-day Redemption Period (as defined in Section 6.2 hereof) or the Company has elected to require the exercise of the
Warrants on a “cashless basis” pursuant to subsection 3.3.1(b) hereof and such cashless exercise is exempt from
registration under the Securities Act.
6.2 Date
Fixed for, and Notice of, Redemption. In the event that the Company elects to redeem all of the Warrants pursuant to Section 6.1hereof,
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.
6.3 Exercise
After Notice of Redemption. The Warrants may be exercised, for cash (or on a “cashless basis” pursuant to subsection
3.3.1(b) hereof, if applicable) at any time after notice of redemption shall have been given by the Company pursuant to Section 6.2
hereof and prior to the Redemption Date. In the event that the Company determines to require all holders of Warrants to exercise their
Warrants on a “cashless basis” pursuant to subsection 3.3.1(b) hereof, the notice of redemption shall contain
instructions on how to calculate the number of shares of Common Stock to be received upon exercise of the Warrants, including the “Fair
Market Value” (as such term is defined in subsection 3.3.1(b) hereof) in such case. On and after the Redemption Date,
the record holder of the Warrants shall have no further rights except to receive, upon surrender of the Warrants, the Redemption Price.
7. Other
Provisions Relating to Rights of Holders of Warrants.
7.1 No
Rights as Stockholder. A Warrant does not entitle the Registered Holder thereof to any of the rights of a stockholder of the Company,
including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent
or to receive notice as stockholders in respect of the meetings of stockholders or the election of directors of the Company or any other
matter.
7.2 Lost,
Stolen, Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent
may on such terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case of a mutilated Warrant,
include the surrender thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated, or
destroyed. Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.
7.3 Reservation
of Common Stock. The Company shall at all times reserve and keep available a number of its authorized but unissued shares of Common
Stock that shall be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement.
7.4 Registration
of Common Stock; Cashless Exercise at Company’s Option.
7.4.1 Registration
of the Common Stock.
(a) 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 post-effective amendment to the Registration
Statement, or a new registration statement, registering, under the Securities Act, the issuance of the shares of Common Stock issuable
upon exercise of the Warrants. The Company shall use its commercially reasonable efforts to cause the same to become effective and to
maintain the effectiveness of such post-effective amendment or registration statement, and a current prospectus relating thereto, until
the expiration or redemption of the Warrants in accordance with the provisions of this Agreement.
(b) If
any such post-effective amendment or 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 post-effective amendment or 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 shares of Common Stock issuable upon exercise of the Warrants, to exercise such Warrants on a “cashless basis,”
by exchanging the Warrants (in accordance with Section 3(a)(9) of the Securities Act (or any successor rule) or another exemption)
for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common
Stock underlying the Warrants, multiplied by the excess of the “Fair Market Value” (as defined below) over the Warrant Price
by (y) the Fair Market Value. Solely for purposes of this subsection 7.4.1(b), “Fair Market Value” shall mean
the average last reported sale price of the Common Stock for the ten (10) trading days 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(b) is not required to
be registered under the Securities Act and (ii) the shares of Common Stock issued upon such exercise shall be freely tradable under
United States federal securities laws by anyone who is not an affiliate (as such term is defined in Rule 144 under the Securities
Act (or any successor rule) of the Company and, accordingly, shall not be required to bear a restrictive legend.
(c) Except
as provided in subsection 7.4.2 hereof, for the avoidance of any doubt, unless and until all of the Warrants have been exercised
or have expired, the Company shall continue to be obligated to comply with its registration obligations under subsection 7.4.1(a).
7.4.2 Cashless
Exercise at Company’s Option. If the Common Stock is at the time of any exercise of a Warrant not listed on a national
securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the
Securities Act (or any successor rule), the Company may, at its option, require holders who exercise Warrants to exercise such Warrants
on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act (or any successor rule) as described
in subsection 7.4.1 and (i) in the event the Company so elects, the Company shall not be required to file or maintain in effect
a registration statement for the registration, under the Securities Act, of the Common Stock issuable upon exercise of the Warrants, notwithstanding
anything in this Agreement to the contrary or (ii) if the Company does not so elect, the Company agrees to use its commercially reasonable
efforts to register or qualify for sale the Common Stock issuable upon exercise of the Public Warrants under the blue sky laws of the
state of residence of the exercising Public Warrant holder to the extent an exemption is not available.
8. Concerning
the Warrant Agent and Other Matters.
8.1 Payment
of Taxes. The Company shall from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant
Agent in respect of the issuance or delivery of shares of Common Stock upon the exercise of the Warrants, but the Company shall not be
obligated to pay any transfer taxes in respect of the Warrants or such shares of Common Stock.
8.2 Resignation,
Consolidation, or Merger of Warrant Agent.
8.2.1 Appointment
of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged
from all further duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the Company. If the office
of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor
Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within a period of thirty (30) days after
it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of a Warrant (who shall, with
such notice, submit his, her or its Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court
of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Company’s cost. Any
successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation 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 Borough of Manhattan, City and State
of New York, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or
state authority. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties,
and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further
act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the
expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and rights of such predecessor
Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any
and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority,
powers, rights, immunities, duties, and obligations.
8.2.2 Notice
of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the
predecessor Warrant Agent and the Transfer Agent for the Common Stock not later than the effective date of any such appointment.
8.2.3 Merger
or Consolidation of Warrant Agent. Any entity into which the Warrant Agent may be merged or with which it may be consolidated or any
entity resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under
this Agreement without any further act.
8.3 Fees
and Expenses of Warrant Agent.
8.3.1 Remuneration.
The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder and shall, pursuant
to its obligations under this Agreement, reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably
incur in the execution of its duties hereunder.
8.3.2 Further
Assurances. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged, and
delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying
out or performing of the provisions of this Agreement.
8.4 Liability
of Warrant Agent.
8.4.1 Reliance
on Company Statement. Whenever in the performance of its duties under this Agreement, the Warrant Agent shall deem it necessary or
desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact
or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established
by a statement signed by the Chief Executive Officer, Chief Financial Officer, President, Executive Vice President, Vice President, Secretary
or Chairman of the Board or other principal officer of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon
such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement.
8.4.2 Indemnity.
The Warrant Agent shall be liable hereunder only for its own, or its representatives’, gross negligence, willful misconduct, fraud,
bad faith or material breach of this Agreement. 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 or its representatives’ gross negligence,
willful misconduct, fraud, bad faith or material breach of this Agreement.
8.4.3 Exclusions.
The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or execution
of any Warrant (except its countersignature thereof). The Warrant Agent shall not be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Warrant. The Warrant Agent shall not be responsible to make any adjustments
required under the provisions of Section 4 hereof or responsible for the manner, method, or amount of any such adjustment
or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Agreement
or any Warrant or as to whether any shares of Common Stock shall, when issued, be valid and fully paid and non-assessable.
8.5 Acceptance
of Agency. The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the terms
and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently
account for, and pay to the Company, all monies received by the Warrant Agent for the purchase of shares of Common Stock through the exercise
of the Warrants.
8.6 Waiver.
The Warrant Agent has no right of set-off or any other right, title, interest or claim of any kind (“Claim”)
in, or to any distribution of, the Trust Account (as defined in that certain Investment Management Trust Agreement, dated as of the date
hereof, by and between the Company and the Warrant Agent as trustee thereunder) and hereby agrees not to seek recourse, reimbursement,
payment or satisfaction for any Claim against the Trust Account for any reason whatsoever. 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:
Kimbell Tiger Acquisition Corporation
777 Taylor Street
Fort Worth, TX 76102
Attention: Zachary M. Lunn
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
1 State Street, 30th Floor
New York, NY 10004
Attention: Compliance Department
in each case, with copies to:
White & Case LLP
609 Main Street, Suite 2900
Houston, TX 77002
Attn: Jason A. Rocha, Esq.
and Andrew J. Ericksen, Esq.
Email: [***] and [***]
and
Proskauer Rose LLP
Eleven Times Square
New York, NY 10036
Attn: Steven R. Burwell, Esq.
Email: [***]
9.3 Applicable
Law; Exclusive Forum. The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all
respects by the laws of the State of New York. 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 the 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 of 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 Borough of Manhattan, City and State of New York, for inspection by the Registered Holder of any Warrant. The Warrant Agent may require
any such holder to submit such holder’s Warrant for inspection by the Warrant Agent.
9.6 Counterparts;
Electronic Signatures. This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
A signature to this Agreement transmitted electronically shall have the same authority, effect and enforceability as an original signature.
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 (i) for the purpose of (x) curing
any ambiguity or to correct any defective provision or mistake contained herein, including to conform the provisions hereof to the description
of the terms of the Warrants and this Agreement set forth in the Prospectus, (y) adjusting the definition of “Ordinary Cash
Dividend” as contemplated by and in accordance with the second sentence of subsection 4.1.2 or (z) adding or changing any other
provisions with respect to matters or questions arising under this Agreement as the parties may deem necessary or desirable and that the
parties deem shall not adversely affect the rights of the Registered Holders hereunder, and (ii) to provide for the delivery of an
Alternative Issuance pursuant to Section 4.4. All other modifications or amendments, including any modification or amendment to increase
the Warrant Price or shorten the Exercise Period shall require the vote or written consent of the Registered Holders of fifty percent
(50%) of the number of the then outstanding 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 hereof, 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.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed as of the date first above written.
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KIMBELL TIGER ACQUISITION CORPORATION
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By:
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Name:
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Title:
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CONTINENTAL STOCK TRANSFER &
TRUST COMPANY, as Warrant Agent
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By:
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Name:
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Title:
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[Signature Page to Warrant
Agreement]
EXHIBIT A
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 KIMBELL TIGER ACQUISITION CORPORATION (THE “COMPANY”), KIMBELL TIGER 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 SHARES OF CLASS A COMMON STOCK OF THE COMPANY ISSUED UPON EXERCISE OF SUCH SECURITIES SHALL BE ENTITLED TO REGISTRATION
RIGHTS UNDER A REGISTRATION RIGHTS AGREEMENT TO BE EXECUTED BY THE COMPANY.”
EXHIBIT B
[Form of Warrant Certificate]
[FACE]
Number
Warrants
THIS
WARRANT SHALL BE NULL AND VOID IF NOT EXERCISED PRIOR TO
THE
EXPIRATION OF THE EXERCISE PERIOD PROVIDED FOR
IN THE
WARRANT AGREEMENT DESCRIBED BELOW
KIMBELL
TIGER ACQUISITION CORPORATION
Incorporated Under the Laws of the State of
Delaware
CUSIP 49436K 114
Warrant Certificate
This Warrant Certificate
certifies that ________________, or registered assigns, is the registered holder of warrant(s) evidenced hereby (the “Warrants”
and each, a “Warrant”) to purchase shares of Class A common stock, $0.0001 par value per share (“Class A
Common Stock”), of Kimbell Tiger Acquisition Corporation, a Delaware corporation (the “Company”).
Each whole Warrant entitles the holder, upon exercise during the period set forth in the Warrant Agreement referred to below, to receive
from the Company that number of fully paid and non-assessable shares of Class A Common Stock as set forth below, at the exercise
price (the “Warrant Price”) as determined pursuant to the Warrant Agreement, payable in lawful money of the
United States of America upon surrender of this Warrant Certificate and payment of the Warrant Price (or through “cashless
exercise” as provided for in the Warrant Agreement) at the office or agency of the Warrant Agent referred to below, subject
to the conditions set forth herein and in the Warrant Agreement. The Warrants evidenced by this Warrant Certificate are [Public][Private
Placement][Post-IPO] Warrants. Capitalized terms used in this Warrant Certificate but not defined herein shall have the meanings given
to them in the Warrant Agreement.
Each whole Warrant is initially
exercisable for one fully paid and non-assessable share of Class A Common Stock. No fractional shares will be issued upon exercise
of any Warrant. If, upon the exercise of Warrants, a holder would be entitled to receive a fractional interest in a share of Class A
Common Stock, the Company will, upon exercise, round down to the nearest whole number the number of shares of Class A Common Stock
to be issued to the Warrant holder. The number of shares of Class A Common Stock issuable upon exercise of the Warrants is subject
to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.
The initial Warrant Price
per share of Class A Common Stock for any Warrant is equal to $11.50 per share. The Warrant Price is subject to adjustment upon the
occurrence of certain events set forth in the Warrant Agreement.
Subject to the conditions
set forth in the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the
end of such Exercise Period, such Warrants shall become null and void. 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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KIMBELL TIGER ACQUISITION CORPORATION
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By:
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Name:
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Title:
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CONTINENTAL STOCK TRANSFER &
TRUST COMPANY, as Warrant Agent
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By:
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Name:
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Title:
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[Form of Warrant Certificate]
[Reverse]
The Warrants evidenced by
this Warrant Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise to receive shares of Class A
Common Stock and are issued or to be issued pursuant to a Warrant Agreement dated as of_______________, 2022 (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 Warrant 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 shares of Class A Common Stock to be issued upon exercise is effective under the Securities Act and (ii) a
prospectus thereunder relating to the shares of Class A Common Stock is current, except through “cashless exercise” as
provided for in the Warrant Agreement. In addition, and notwithstanding anything else in this Warrant Certificate or the Warrant Agreement,
to the extent that the holder of a Warrant has delivered a notice contemplated by subsection 3.5.5 of the Warrant Agreement, neither
the Company nor the Warrant Agent shall issue to Holder, and Holder may not acquire, any right it might have to acquire, a number of shares
of Common Stock upon exercise of any Warrant to the extent that, upon such exercise, the number of shares of Common Stock then beneficially
owned by Holder would exceed the Maximum Percentage of shares of Common Stock outstanding immediately after giving effect to such exercise
as determined in accordance with subsection 3.3.5 of the Warrant Agreement.
The Warrant Agreement provides
that upon the occurrence of certain events the number of shares of Class A Common Stock issuable upon exercise of the Warrants set
forth on the face hereof may, subject to certain conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof would be
entitled to receive a fractional interest in a share of Class A Common Stock, the Company shall, upon exercise, round down to the
nearest whole number of shares of Class A Common Stock 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 stockholder of the Company.
Election to Purchase
(To Be Executed Upon Exercise of Warrant)
The undersigned hereby irrevocably
elects to exercise the right, represented by this Warrant Certificate, to receive _____ shares of Class A Common Stock and herewith
tenders payment for such shares of Class A Common Stock to the order of Kimbell Tiger Acquisition Corporation (the “Company”)
in the amount of $_____________ in accordance with the terms hereof. The undersigned requests that a certificate for such shares of Class A
Common Stock be registered in the name of _____________, whose address is and that such shares of Class A Common Stock be delivered
to ______________ whose address is _______________. If said number of shares of Class A Common Stock is less than all of the shares
of Class A Common Stock purchasable hereunder, the undersigned requests that a new Warrant Certificate representing the remaining
balance of such shares of Class A Common Stock be registered in the name of ___________________, whose address is _______________
and that such Warrant Certificate be delivered to _______________, whose address is _______________.
In the event that the Warrant
has been called for redemption by the Company pursuant to Section 6.1 of the Warrant Agreement and the Company has required
cashless exercise pursuant to Section 6.3 of the Warrant Agreement, the number of shares of Class A Common Stock that
this Warrant is exercisable for shall be determined in accordance with subsection 3.3.1(b) and Section 6.3 of
the Warrant Agreement.
In the event that the Warrant
is to be exercised on a “cashless” basis pursuant to Section 7.4 of the Warrant Agreement, the number of shares
of Class A Common Stock that this Warrant is exercisable for shall be determined in accordance with Section 7.4 of the
Warrant Agreement.
In the event that the Warrant
may be exercised, to the extent allowed by the Warrant Agreement, through cashless exercise (i) the number of shares of Class A
Common Stock that this Warrant is exercisable for would be determined in accordance with the relevant section of the Warrant Agreement
which allows for such cashless exercise and (ii) the holder hereof shall complete the following: The undersigned hereby irrevocably
elects to exercise the right, represented by this Warrant Certificate, through the cashless exercise provisions of the Warrant Agreement,
to receive shares of Class A Common Stock. If said number of shares of Class A Common Stock is less than all of the shares of
Class A Common Stock purchasable hereunder (after giving effect to the cashless exercise), the undersigned requests that a new Warrant
Certificate representing the remaining balance of such shares of Class A Common Stock be registered in the name of ________________,
whose address is________________ and that such Warrant Certificate be delivered to ________________, whose address is ________________.
[To be included in any Election to Purchase of
a holder who has provided the notice set forth in subsection 3.3.5 of the Warrant Agreement.
By signing this Election to Purchase, the undersigned
hereby certifies that upon after giving effect to such exercise, the undersigned (together with such person’s affiliates) or any
“group” of which holder or its affiliates is a member, would not beneficially own in excess of the Maximum Percentage of the
shares of Common Stock outstanding immediately after giving effect to such exercise as determined in accordance with subsection 3.3.5.
of the Warrant Agreement.]
[Signature Page Follows]
Date: ____________, 20___
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Signature
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(Address)
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(Tax Identification Number)
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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 (OR ANY SUCCESSOR
RULE)).
Exhibit 10.2
[•], 2022
Kimbell Tiger Acquisition Corporation
777 Taylor St.
Fort Worth, Texas 76102
Re: Initial Public Offering
Ladies and Gentlemen:
This letter (this “Letter Agreement”)
is being delivered to you in accordance with the Underwriting Agreement (the “Underwriting Agreement”) entered
into by and among Kimbell Tiger Acquisition Corporation, a Delaware corporation (the “Company”), and UBS Investment
Bank, (the “Underwriter”), relating to an underwritten initial public offering (the “Public Offering”),
of up to 23,000,000 of the Company’s units (including up to 3,000,000 units that may be purchased to cover over-allotments, if any)
(the “Units”), each comprised of one share of the Company’s Class A common stock, par value $0.0001
per share (the “Class A Common Stock”), and one-half of one warrant (each whole warrant, a “Warrant”).
Each Warrant entitles the holder thereof to purchase one share of Class A Common Stock at a price of $11.50 per share, subject to
adjustment. The Units shall be sold in the Public Offering pursuant to the registration statement on Form S-1 File No. 333-258260,
and the prospectus (the “Prospectus”) filed by the Company with the Securities and Exchange Commission (the
“Commission”), and the Company has applied to have the Units listed on the New York Stock Exchange. Certain
capitalized terms used herein are defined in paragraph 11 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, Kimbell Tiger Acquisition Sponsor, LLC, a Delaware limited liability company (the “Sponsor”),
and each of the undersigned individuals, each of whom is a member of the Company’s board of directors and/or management team (each
an “Insider” and collectively, the “Insiders”), hereby agrees with the Company as
follows:
1. The
Sponsor and each Insider agrees that if the Company seeks stockholder approval of a proposed Business Combination, then in connection
with such proposed Business Combination, it, he or she shall (i) vote all Founder Shares, Sponsor Shares and any Offering Shares
(as defined below) acquired by it, him or her in the Public Offering or the secondary public market in favor of such proposed Business
Combination and (ii) not redeem any such Offering Shares owned by it, him or her in connection with such stockholder approval.
2. The
Sponsor and each Insider hereby agrees that in the event that the Company fails to consummate a Business Combination within 15 months
from the closing of the Public Offering (or up to 21 months, if the Sponsor exercises its option, upon deposit of an amount equal to
$0.10 per Offering Share (as defined below) into the Trust Account, to cause the Corporation to extend the available time to consummate
the initial Business Combination by three months, which option the Sponsor may exercise up to two times (each, an "extension option")),
or such later period approved by the Company’s stockholders in accordance with the Company’s amended and restated certificate
of incorporation, the Sponsor and each Insider shall take all reasonable steps to cause the Company to (i) cease all operations
except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than 10 business days thereafter, subject
to lawfully available funds therefor, redeem 100% of the Class A Common Stock sold as part of the Units in the Public Offering (the
“Offering Shares”), at a per-share price, payable in cash, equal to the aggregate amount then on deposit in
the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to pay taxes of the Company
and its subsidiary, Kimbell Tiger Operating Company, LLC (“Opco”) (less an amount required to satisfy taxes
of the Company and Opco and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Offering
Shares plus the number of outstanding Class A units of Opco (the “Opco Class A Units”) (other than
Opco Class A Units held by the Company), which redemption will completely extinguish the Public Stockholders’ rights as stockholders
(including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as
reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s
board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for
claims of creditors and other requirements of applicable law. The Sponsor and the Insiders agree to not propose any amendment to the
Company’s amended and restated certificate of incorporation (i) in a manner that would affect the substance or timing of the
Company’s obligation to redeem 100% of the Offering Shares if the Company does not complete a Business Combination within 15 months
from the closing of the Public Offering (or up to 21 months, if the sponsor exercises its extension options) or (ii) with respect to any
other provision relating to the rights of holders of Class A Common Stock or pre-initial business combination activity, unless the
Company provides its Public Stockholders with the opportunity to redeem their Offering Shares upon approval of any such amendment at
a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on
the funds held in the Trust Account and not previously released to pay taxes of the Company and Opco (less an amount required to satisfy
taxes of the Company and Opco and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding
Offering Shares plus the number of outstanding Opco Class A Units (other than Opco Class A Units held by the Company), subject
to certain limitations on redemption set forth in the Company’s amended and restated certificate of incorporation.
3. During
the period commencing on the effective date of the Underwriting Agreement and ending 180 days after such date, the undersigned shall not,
without the prior written consent of the Underwriter, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant
any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated thereunder, any Units, shares of Class A Common Stock,
shares of the Company’s Class B common stock, par value $0.0001 per share (the “Class B Common Stock”
and, together with the Class A Common Stock, the “Common Stock”), Warrants or any securities convertible
into, or exercisable, or exchangeable for, shares of Common Stock owned by him, her or it, (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences of ownership of any Units, shares of Common Stock, Founder
Shares, Warrants or any securities convertible into, or exercisable, or exchangeable for, shares of Class A Common Stock, owned by
him, her or it, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (iii) publicly
announce any intention to effect any transaction specified in clause (i) or (ii).
4. In
the event of the liquidation of the Trust Account, the Sponsor (which for purposes of clarification shall not extend to any officer, member
or manager of the Sponsor) agrees to indemnify and hold harmless the Company against any and all loss, liability, claim, damage and expense
whatsoever (including, but not limited to, any and all legal or other expenses reasonably incurred in investigating, preparing or defending
against any litigation, whether pending or threatened, or any claim whatsoever) to which the Company may become subject as a result of
any claim by (i) any third party (other than the Company’s independent public accountants) for services rendered or products
sold to the Company or (ii) a prospective target business with which the Company has entered into a letter of intent, confidentiality
or other similar agreement or business combination agreement (a “Target”); provided, however,
that such indemnification of the Company by the Sponsor shall apply only to the extent necessary to ensure that such claims by a third
party for services rendered (other than the Company’s independent public accountants) or products sold to the Company or a Target
do not reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per share of the Offering Shares and (ii) such
lesser amount per share of the Offering Shares held in the Trust Account due to reductions in the value of the trust assets as of the
date of the liquidation of the Trust Account, in each case net of the amount of interest earned on the property in the Trust Account which
may be withdrawn to pay taxes, except as to any claims by a third party or Target that executed an agreement waiving claims against and
all rights to seek access to the Trust Account whether or not such agreement is enforceable. In the event that any such executed waiver
is deemed to be unenforceable against such third party, the Sponsor shall not be responsible for any liability as a result of any such
third party claims. Notwithstanding any of the foregoing, such indemnification of the Company by the Sponsor shall not apply as to any
claims under the Company’s obligation to indemnify the Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. The Sponsor shall have the right to defend against any such claim with counsel of its choice reasonably
satisfactory to the Company if, within 15 days following written receipt of notice of the claim to the Sponsor, the Sponsor notifies the
Company in writing that it shall undertake such defense.
5. To
the extent that the Underwriter does not exercise its over-allotment option to purchase up to an additional 3,000,000 Units (as described
in the Prospectus), the Sponsor agrees, upon the expiration or waiver of such option, to forfeit, for cancellation at no cost, a number
of Founder Shares equal to 750,000 multiplied by a fraction, (i) the numerator of which is 3,000,000 minus the number of Units purchased
by the Underwriter upon the exercise of its over-allotment option, and (ii) the denominator of which is 3,000,000. The forfeiture
will be adjusted to the extent that the over-allotment option is not exercised in full by the Underwriter so that, assuming the exchange
of all Founder Shares into Class A Common Stock, the Class A Common Stock received by the Sponsor in exchange for the Founder
Shares will represent 20.0% of the Company’s issued and outstanding shares of Common Stock after the Public Offering (excluding
the Sponsor Shares and any shares issuable upon the exercise of any warrants).
6. Each
of the Sponsor and the Insiders hereby agrees and acknowledges that: (i) the Underwriter and the Company would be irreparably injured
in the event of a breach by such Sponsor or Insider of his, her or its obligations under paragraphs 1, 2, 3, 4, 5, 7(a), 7(b) and
9 of this Letter Agreement, (ii) monetary damages may not be an adequate remedy for such breach and (iii) the non-breaching
party shall be entitled to injunctive relief, in addition to any other remedy that such party may have in law or in equity, in the event
of such breach.
7. (a) The
Sponsor and each Insider agree not to transfer, assign or sell any Founder Shares held by it, him or her until one year after the date
of the consummation of the Business Combination or earlier if, subsequent to a Business Combination, (i) the last reported sale price
of the Class A Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the consummation of a Business
Combination or (ii) the Company consummates a subsequent liquidation, merger, stock exchange or other similar transaction that results
in all of the Company’s stockholders having the right to exchange their shares of Common Stock for cash, securities or other property
(the “Lock-up”).
(b) Subject
to certain limited exceptions, the Sponsor and each Insider agrees not to transfer, assign or sell any Private Placement Warrants or Class A
Common Stock underlying such warrants held by it, him or her, until 30 days after the completion of a Business Combination.
(c) Notwithstanding
the provisions set forth in paragraphs 7(a) and (b), transfers of the Founder Shares, Private Placement Warrants and shares of Class A
Common Stock underlying the Private Placement Warrants or the Founder Shares and that are held by the Sponsor, any Insider or any of their
permitted transferees (that have complied with this paragraph 7(c)) are permitted (a) to the Company’s officers or directors,
any affiliates or family members of any of the Company’s officers or directors, any member(s) of the Sponsor or their affiliates,
or any affiliates of the Sponsor; (b) in the case of an individual, to an affiliate of such person or by gift to members of the individual’s
immediate family or to a trust, the beneficiary of which is a member of the individual’s immediate family, or to a charitable organization;
(c) in the case of an individual, by virtue of laws of descent and distribution upon death of such person; (d) in the case of
an individual, pursuant to a qualified domestic relations order; (e) by virtue of the laws of the state of Delaware or the Sponsor’s
operating agreement upon dissolution of the Sponsor; (f) 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 applicable securities were originally purchased; (g) in the
event of the Company’s liquidation prior to the completion of a Business Combination; or (h) in the event of the Company’s
completion of a liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s stockholders
having the right to exchange their shares of Class A Common Stock for cash, securities or other property subsequent to the completion
of a Business Combination; provided, however, that in the case of clauses (a) through (e) and (h), these permitted
transferees must enter into a written agreement with the Company and Opco agreeing to be bound by these transfer restrictions.
8. Each
Insider’s biographical information furnished to the Company that is included in the Prospectus is true and accurate in all respects
and does not omit any material information with respect to such Insider’s background. Each Insider’s questionnaire furnished
to the Company including any such information that is included in the Prospectus is true and accurate in all 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 neither such Insider nor the Sponsor has ever 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.
9. (a) Except
as disclosed in the Prospectus, neither the Sponsor nor any affiliate of the Sponsor, nor any director or officer of the Company, shall
receive any finder’s fee, reimbursement, consulting fee, monies in respect of any repayment of a loan or other compensation prior
to, or in connection with any services rendered in order to effectuate the consummation of the Company’s initial Business Combination
(regardless of the type of transaction that it is). However, such persons may receive the following payments, none of which will be made
from the proceeds held in the Trust Account prior to the completion of the initial Business Combination: repayment of a loan of up to
$300,000 made to Opco by the Sponsor pursuant to a Promissory Note dated July 20, 2021; payment of $25,000 per month
to an affiliate of the Sponsor, for administrative and support services, pursuant to an Administrative Services Agreement, dated [●],
2022; reimbursement for any out-of-pocket
expenses related to identifying, investigating, negotiating and consummating an initial Business Combination; and repayment of loans,
if any, and on such terms as to be determined by the Company from time to time, made by the Sponsor or an affiliate of the Sponsor or
certain of the Company’s officers and directors to finance transaction costs in connection with an intended initial Business Combination,
provided, that, if the Company does not consummate an initial Business Combination, a portion of the working capital held outside the
Trust Account may be used by the Company to repay such loaned amounts so long as no proceeds from the Trust Account are used for such
repayment. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender.
Such warrants would be identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise period.
10. The
Sponsor and each Insider has full right and power, without violating any agreement to which it is bound (including, without limitation,
any non-competition or non-solicitation agreement with any employer, former employer or other person), to enter into this Letter Agreement
and, as applicable, to serve as an officer of the Company or as a director of the Company and each Insider hereby consents to being named
in the Prospectus as an officer and/or director of the Company, as applicable.
11. As
used herein, (i) “Business Combination” shall mean a merger, capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination, involving the Company and one or more businesses; (ii) “Founder Shares”
shall mean the Class B Units of Opco (the “Opco Class B Units”) (or the Opco Class A Units into which such
Opco Class B Units will convert) and the corresponding shares of Class B Common Stock of the Company held by the Sponsor; (iii) “Private
Placement Warrants” shall mean the 12,750,000 (or 14,100,000 if the Underwriter’s over-allotment option in connection with the
Public Offering is exercised in full) warrants, each exercisable to purchase for $11.50 one share of Class A Common Stock, for an
aggregate purchase price of approximately $12,750,000 (or $14,100,000 if the Underwriter’s over-allotment option in connection with
the Public Offering is exercised in full), or $1.00 per warrant, in a private placement that shall occur simultaneously with the consummation
of the Public Offering; (iv) “Public Stockholders” shall mean the holders of securities issued in the Public Offering;
(v) “Trust Account” shall mean the trust fund into which a portion of the net proceeds of the Public Offering shall be
deposited; and (vi) “Sponsor Shares” shall mean the 100 Opco Class A Units and corresponding number of shares of
Class B Common Stock (which together will be exchangeable into shares of Class A Common Stock after the Business Combination
on a one-for-one basis, subject to adjustment) and the 2,500 shares of Class A Common Stock purchased by the Sponsor in a private
placement prior to the Public Offering.
12. This
Letter Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and
supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they
relate in any way to the subject matter hereof or the transactions contemplated hereby. This Letter Agreement may not be changed, amended,
modified or waived (other than to correct a typographical error) as to any particular provision, except by a written instrument executed
by all parties hereto.
13. No
party hereto may assign either this Letter Agreement or any of its rights, interests, or obligations hereunder without the prior written
consent of the 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 Insider
and each of their respective successors, heirs and assigns and permitted transferees.
14. This
Letter Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving
effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The parties
hereto (i) all agree that any action, proceeding, claim or dispute arising out of, or relating in any way to, this Letter Agreement
shall be brought and enforced in the courts of New York City, in the State of New York, and irrevocably submit to such jurisdiction and
venue, which jurisdiction and venue shall be exclusive and (ii) waive any objection to such exclusive jurisdiction and venue or that
such courts represent an inconvenient forum.
15. 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.
16. This
Letter Agreement shall terminate on the earlier of (i) the expiration of the Lock-up or (ii) the liquidation of the Company;
provided, however, that this Letter Agreement shall earlier terminate in the event that the Public Offering is not consummated
and closed by [●], 2022, provided further that paragraph 4 of this Letter Agreement shall survive such liquidation.
[Signature page follows]
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Sincerely,
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KIMBELL TIGER ACQUISITION SPONSOR, LLC
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By:
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Name: Zachary M. Lunn
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Title: President and Chief Executive Officer
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Zachary M. Lunn
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R. Blayne Rhynsburger
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Robert D. Ravnaas
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R. Davis Ravnass
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Matthew S. Daly
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Kimberly DeWoody
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Fred N. Reynolds
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Acknowledged and Agreed:
KIMBELL TIGER ACQUISITION CORPORATION
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By:
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Name: Zachary M. Lunn
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Title: President and Chief Executive Officer
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[Signature Page to Letter Agreement]
Exhibit 10.3
INVESTMENT MANAGEMENT TRUST AGREEMENT
This Investment Management Trust Agreement (this
“Agreement”) is made effective as of [●], 2022, by and among Kimbell Tiger Acquisition Corporation, a
Delaware corporation (the “Company”), Kimbell Tiger Operating Company, LLC, a Delaware limited liability company
(“Opco” and together with the Company, the “SPAC Parties”), and Continental Stock
Transfer & Trust Company, a New York corporation (the “Trustee”).
WHEREAS, the Company’s registration statement
on Form S-1 (File No. 333-258260) (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 share
of the Company’s Class A common stock, par value $0.0001 per share (the “Common Stock” and, the
holders of Common Stock sold as part of the Units, the “Public Stockholders”), and one-half of one redeemable
warrant, each whole warrant entitling the holder thereof to purchase one share of Common Stock (such initial public offering hereinafter
referred to as the “Offering”), has been declared effective as of the date hereof by the U.S. Securities and
Exchange Commission;
WHEREAS, prior to the Offering, the Company issued
2,500 shares of Common Stock to Kimbell Tiger Acquisition Sponsor, LLC, a Delaware limited company (the “Sponsor”),
and Opco issued 100 Class A units (“Class A Units”) to the Sponsor;
WHEREAS, the Company has entered into an Underwriting
Agreement (the “Underwriting Agreement”) with UBS Securities LLC (the “Underwriter”);
WHEREAS, if a Business Combination (as defined
below) is not consummated within the initial 15 month period following the closing of the Offering, upon the request of the Sponsor,
the Company may extend such period by an additional three months up to two times, each by an additional three months (for a total of
up to 21 months to complete a business combination), subject to the Sponsor or its affiliates or permitted designees depositing $2,00,000
(or up to $2,300,000 if the Underwriters’ over-allotment option is exercised in full) for each of the available three-month extensions,
for a total payment of up to $4,000,000, or $4,600,000 if the underwriters’ over-allotment option is exercised in full, into the
Trust Account no later than the 15-month or 18-month anniversary of the Offering, as applicable (each, a “Deadline”)
for such extensions (each, an “Extension”), in exchange for which the Sponsor will receive a non-interest bearing,
unsecured promissory note for such Extension payable upon consummation of a Business Combination;
WHEREAS, as described in the Registration Statement,
$206,000,000 of the gross proceeds of the Offering and sale of the Private Placement Warrants (as defined in the Underwriting Agreement)
(or $236,900,000 if the Underwriter’s over-allotment option is exercised in full) and the proceeds from any loans in connection
with an Extension 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 SPAC Parties and the holders of Common Stock and
Class A Units, 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 holders for whose benefit the Trustee shall hold the Property
will be referred to as the “Holders,” and the Holders, the Company and Opco will be referred to together as
the “Beneficiaries”);
WHEREAS, pursuant to the Underwriting Agreement,
a portion of the Property equal to $7,000,000 million or $8,100,000 million if the Underwriter’s over-allotment option is exercised
in full, is attributable to deferred underwriting discounts and commissions that may be payable by the Company to the Underwriter upon
the consummation of the Business Combination (the “Deferred Discount”); and
WHEREAS, the SPAC Parties 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:
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1.
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Agreements
and Covenants of Trustee. The Trustee hereby agrees and covenants to:
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(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
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 the Trustee and at a brokerage institution selected by the Trustee that is reasonably satisfactory to the
SPAC Parties;
(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 SPAC Parties, invest and reinvest the Property in United States government securities
within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, having a maturity of 185 days or less,
or in money market funds meeting the conditions of paragraphs (d)(1), (d)(2), (d)(3) and (d)(4) of Rule 2a-7 promulgated
under the Investment Company Act of 1940, as amended, which invest only in direct U.S. government treasury obligations, as determined
by the SPAC Parties; 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 SPAC Parties’ instructions hereunder; and while account funds are invested
or uninvested the Trustee may earn bank credits or other considerations;
(d) Collect
and receive, when due, all interest or other income arising from the Property, which shall become part of the “Property,”
as such term is used herein;
(e) Promptly
notify the SPAC Parties of all communications received by the Trustee with respect to any Property requiring action by the SPAC Parties;
(f) Supply
any necessary information or documents as may be requested by the SPAC Parties (or their authorized agents) in connection with the SPAC
Parties’ 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
SPAC Parties to do so;
(h) Render
to the SPAC Parties 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 SPAC Parties (“Termination Letter”) in a form substantially similar to that attached hereto as either
Exhibit A or Exhibit B, as applicable, signed on behalf of each of the SPAC Parties by the Chief Executive Officer,
President, Chief Financial Officer, Secretary or Chairman of the board of directors (the “Board”) or other
authorized officer, as applicable, and complete the liquidation of the Trust Account and distribute the Property in the Trust Account,
including interest earned on the Property and not previously released to pay taxes of the SPAC Parties (less an amount required to satisfy
taxes of the SPAC Parties and up to $100,000 of interest that may be released to the SPAC Parties to pay dissolution expenses), only
as directed in the Termination Letter and the other documents referred to therein, or (y) the date which is the later of (1) 15
months after the closing of the Offering or such later date upon an Extension effectuated pursuant to the terms hereof and (2) such
later date as may be approved by the Company’s stockholders in accordance with the Company’s amended and restated certificate
of incorporation, if a Termination Letter has not been received by the Trustee prior to such later 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 Property and not previously released to pay taxes of the SPAC Parties (less an
amount required to satisfy taxes of the SPAC Parties and up to $100,000 of interest that may be released to the SPAC Parties to pay dissolution
expenses) shall be distributed to the Holders of record as of such date;
(j) Upon
joint written request from the SPAC Parties, 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 SPAC Parties the amount of interest earned on the Property requested by the SPAC Parties to cover any tax obligation owed by the
SPAC Parties as a result of assets of the SPAC Parties or interest or other income earned on the Property, which amount shall be delivered
directly to Opco by electronic funds transfer or other method of prompt payment, and Opco shall forward such payment to the relevant
taxing authority; provided, however, that to the extent there is not sufficient cash in the Trust Account to pay such tax
obligation, the Trustee shall liquidate such assets held in the Trust Account as shall be designated by the SPAC Parties in writing to
make such distribution; provided, further, that if the tax to be paid is a franchise tax, the written request by the SPAC
Parties to make such distribution shall be accompanied by a copy of the franchise tax bill from the State of Delaware and a written statement
from the principal financial officer of each of the SPAC Parties setting forth the actual amount payable. The written request of the
SPAC Parties referenced above shall constitute presumptive evidence that Opco is entitled to said funds, and the Trustee shall have no
responsibility to look beyond said request;
(k) Upon
joint written request from the SPAC Parties, which may be given from time to time in a form substantially similar to that attached hereto
as Exhibit D (a “Stockholder Redemption Withdrawal Instruction”), the Trustee shall distribute
on behalf of the SPAC Parties the amount requested by the SPAC Parties to be used to redeem shares of Common Stock from Public Stockholders
properly submitted in connection with a stockholder vote to approve an amendment to the Company’s amended and restated certificate
of incorporation (A) in a manner that would affect the substance or timing of the Company’s obligation to redeem 100% of the
Common Stock if it does not consummate an initial business combination within 15 months from the closing of the Offering or such later
date upon an Extension effectuated pursuant to the terms hereof or (B) with respect to any other provision relating to the rights
of holders of the Common Stock or pre-initial Business Combination activity. The written request of the SPAC Parties referenced above
shall constitute presumptive evidence that the SPAC Parties are entitled to distribute said funds, and the Trustee shall have no responsibility
to look beyond said request;
(l) Not
make any withdrawals or distributions from the Trust Account other than pursuant to Section 1(i), 1(j) or 1(k) above;
and
(m) Upon
receipt of an extension letter (“Extension Letter”) substantially similar to Exhibit E hereto at
least five business days prior to the applicable Deadline, signed on behalf of the Company and Opco by an executive officer, and receipt
of the dollar amount specified in the Extension Letter on or prior to such Deadline, follow the instructions set forth in the Extension
Letter.
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2.
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Agreements
and Covenants of the Company and Opco. Each of the Company and Opco, jointly and
severally, hereby agrees and covenants to:
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(a) Give
all instructions to the Trustee hereunder in writing, signed by the Company’s Chairman of the Board, President, Chief Executive
Officer, Chief Financial Officer or Secretary, in such person’s capacity as such, on behalf of the Company and in the Company’s
capacity as managing member of Opco. In addition, except with respect to its duties under Sections 1(i), 1(j) and
1(k) hereof, the Trustee shall be entitled to rely on, and shall be protected in relying on, any verbal or telephonic advice
or instruction which it, in good faith and with reasonable care, believes to be given by any one of the persons authorized above to give
written instructions, provided that such SPAC Party 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 SPAC Parties 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 SPAC
Parties 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 SPAC Parties, which such consent shall not be unreasonably withheld. The
SPAC Parties may participate in such action with their 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 Opco pursuant to Sections 1(i) through
1(k) hereof. Opco shall pay the Trustee the initial acceptance fee and the first annual administration fee at the consummation
of the Offering. Neither SPAC Party shall be responsible for any other fees or charges of the Trustee except as set forth in this Section 2(c),
Schedule A and as may be provided in Section 2(b) hereof;
(d) In
connection with any vote of the Company’s stockholders regarding a merger, capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination involving the Company and one or more businesses (the “Business Combination”),
provide to the Trustee an affidavit or certificate of the inspector of elections for the stockholders’ meeting verifying the vote
of such stockholders 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) 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;
(g) Within
five (5) business days after the Underwriter exercises the over-allotment option (or any unexercised portion thereof) or such over-allotment
option expires, provide the Trustee with a notice in writing (with a copy to the Underwriter) of the total amount of the Deferred Discount;
(h) If
applicable, issue a press release at least three days prior to a Deadline announcing that, at least five days prior to the Deadline,
the Company received notice from the Sponsor that the Sponsor intends to deposit funds into the Trust Account for extending a Deadline
and the Board has approved such Extension; and
(i) Promptly
following a Deadline, disclose whether or not the deadline for the Company to consummate a Business Combination has been extended.
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3.
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Limitations
of Liability. The Trustee shall have no responsibility or liability to:
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(a) Imply
obligations, perform duties, inquire or otherwise be subject to the provisions of any agreement or document other than this Agreement
and that which is expressly set forth herein;
(b) Take
any action with respect to the Property, other than as directed in Section 1 hereof, and the Trustee shall have no liability
to any party except for liability arising out of the Trustee’s gross negligence, fraud or willful misconduct;
(c) Institute
any proceeding for the collection of any principal and income arising from, or institute, appear in or defend any proceeding of any kind
with respect to, any of the Property unless and until it shall have received instructions from the SPAC Parties given as provided herein
to do so and Opco shall have advanced or guaranteed to it funds sufficient to pay any expenses incident thereto;
(d) Refund
any depreciation in principal of any Property;
(e) Assume
that the authority of any person designated by the Company or Opco to give instructions hereunder shall not be continuing unless provided
otherwise in such designation, or unless the Company or Opco shall have delivered a written revocation of such authority to the Trustee;
(f) The
other parties hereto or to anyone else for any action taken or omitted by it, or any action suffered by it to be taken or omitted, in
good faith and in the Trustee’s best judgment, except for the Trustee’s gross negligence, fraud or willful misconduct. The
Trustee may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel
(including counsel chosen by the Trustee, which counsel may be the Company’s counsel), statement, instrument, report or other paper
or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability
of any information therein contained) which the Trustee believes, in good faith and with reasonable care, to be genuine and to be signed
or presented by the proper person or persons. The Trustee shall not be bound by any notice or demand, or any waiver, modification, termination
or rescission of this Agreement or any of the terms hereof, unless evidenced by a written instrument delivered to the Trustee, signed
by the proper party or parties and, if the duties or rights of the Trustee are affected, unless it shall give its prior written consent
thereto;
(g) Verify
the accuracy of the information contained in the Registration Statement;
(h) Provide
any assurance that any Business Combination entered into by the Company or any other action taken by the Company is as contemplated by
the Registration Statement;
(i) File
information returns with respect to the Trust Account with any local, state or federal taxing authority or provide periodic written statements
to the SPAC Parties documenting the taxes payable by the SPAC Parties, if any, relating to any interest income earned on the Property;
(j) Prepare,
execute and file tax reports, income or other tax returns and pay any taxes with respect to any income generated by, and activities relating
to, the Trust Account, regardless of whether such tax is payable by the Trust Account or the SPAC Parties, including, but not limited
to, income tax obligations, except pursuant to Section 1(j) hereof; or
(k) Verify
calculations, qualify or otherwise approve the Company’s written requests for distributions pursuant to Sections 1(i),
1(j) and 1(k) hereof.
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4.
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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
SPAC Parties under this Agreement, including, without limitation, under Section 2(b) or
Section 2(c) hereof, the Trustee shall pursue such Claim solely against
the SPAC Parties and their assets outside the Trust Account and not against the Property
or any monies in the Trust Account.
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5.
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Termination.
This Agreement shall terminate as follows:
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(a) If
the Trustee gives written notice to the SPAC Parties that it desires to resign under this Agreement, the SPAC Parties shall use their
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 SPAC Parties notify the Trustee that a successor trustee has been appointed and has agreed to become subject to
the terms of this Agreement, the Trustee shall transfer the management of the Trust Account to the successor trustee, including but not
limited to the transfer of copies of the reports and statements relating to the Trust Account, whereupon this Agreement shall terminate;
provided, however, that in the event that the SPAC Parties do 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 (which section may not be amended under any circumstances) and distributed the Property in accordance
with the provisions of the Termination Letter, this Agreement shall terminate except with respect to Section 2(b).
(a) The
Company, Opco 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, Opco 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 SPAC Parties, 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
Sections 1(i), 1(j) and 1(k) hereof (which sections may not be modified, amended or deleted without
the affirmative vote of sixty-five percent (65%) of the then outstanding shares of Common Stock and shares of Class B common stock,
par value $0.0001 per share, of the Company, voting together as a single class; provided that no such amendment will affect any
Public Stockholder who has properly elected to redeem his, her or its shares of Common Stock in connection with a stockholder vote to
approve an amendment to this Agreement (i) that would affect the substance or timing of the Company’s obligation to redeem
100% of its shares of Common Stock and Class A Units if the Company does not complete its initial Business Combination within the
time frame specified in the Company’s amended and restated certificate of incorporation or (ii) with respect to any other
provision relating to the rights of holders of the Common Stock or pre-initial Business Combination activity), 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 facsimile
or email transmission:
if to the Trustee, to:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Fran Wolf and Celeste Gonzalez
Email: [***]
Email: [***]
if to the Company or Opco, to:
Kimbell Tiger Acquisition Corporation
777 Taylor St.
Fort Worth, TX 76102
Attn: Zachary M. Lunn
Email: [***]
in each case, with copies to:
White & Case LLP
609 Main Street, Suite 2900
Houston, TX 77002
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Attn:
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Jason A. Rocha
Andrew J. Ericksen
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and
UBS Securities LLC
1285 Avenue of the Americas
New York, New York 10019
Attention: Syndicate
and
Proskauer Rose, LLP
Eleven Times Square
New York, NY 10036
Attn.: Steven R. Burwell
Email: [***]
(f) Each
of the Company, Opco 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) Each
of the Company, Opco and the Trustee hereby acknowledges and agrees that the Underwriter is a third party beneficiary of this Agreement.
(h) 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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COMPANY:
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Kimbell
Tiger Acquisition Corporation
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By:
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Name:
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Zachary M. Lunn
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Title:
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President and Chief Executive Officer
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OPCO:
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Kimbell
Tiger Operating Company, LLC
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By:
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Name:
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Zachary M. Lunn
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Title:
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President and Chief Executive Officer
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[Signature Page to Investment
Management Trust Agreement]
Schedule
A
Fee Item
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Time and method of payment
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Amount
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Initial set-up fee.
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Initial closing of Offering by wire transfer.
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$
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3,500.00
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Trustee administration fee
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Payable annually. First year fee payable at initial closing of Offering by wire transfer; thereafter, payable 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), 1(j) and 1(k)
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Deduction by Trustee from accumulated income following disbursement made to Opco under Section 1
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$
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250.00
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Paying Agent services as required pursuant to Sections 1(i) and 1(k)
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Billed to Opco upon delivery of service pursuant to Sections 1(i) and 1(k)
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Prevailing rates
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Exhibit A
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Fran Wolf and Celeste Gonzalez
Re: Trust
Account—Termination Letter
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section 1(i) of
the Investment Management Trust Agreement by and among Kimbell Tiger Acquisition Corporation (the “Company”),
Kimbell Tiger Operating Company, LLC (“Opco”) and Continental Stock Transfer & Trust Company (the
“Trustee”), dated as of [●], 2022 (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 _______________, 20___.
The Company shall notify you at least seventy-two (72) hours in advance of the actual date of the consummation of the Business Combination
(the “Consummation Date”). Capitalized terms used but not defined herein shall have the meanings set forth
in the Trust Agreement.
In accordance with the terms of the Trust Agreement,
we hereby authorize you to commence to liquidate all of the assets of the Trust Account and to transfer the proceeds into 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 SPAC Parties shall direct on the Consummation Date. It is acknowledged
and agreed that while the funds are on deposit in the trust operating account at J.P. Morgan Chase Bank, N.A. awaiting distribution,
Opco will not 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 concurrently
with your transfer of funds to the accounts as directed by the SPAC Parties (the “Notification”) and (ii) the
SPAC Parties shall deliver to you (a) a certificate of the Chief Executive Officer of the Company, which verifies that the Business
Combination has been approved by a vote of the Company’s stockholders, if a vote is held, and (b) written instruction signed
by the SPAC Parties 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 SPAC Parties in writing of the same and the SPAC Parties shall direct you as to whether such funds
should remain in the Trust Account and be distributed after the Consummation Date to Opco. 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 the Company has 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 SPAC Parties, the funds
held in the Trust Account shall be reinvested as provided in Section 1(c) of the Trust Agreement on the business day
immediately following the Consummation Date as set forth in such written instructions as soon thereafter as possible.
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Very
truly yours,
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Kimbell
Tiger Acquisition Corporation
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By:
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Name:
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Zachary M. Lunn
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Title:
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President and Chief Executive Officer
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Kimbell
Tiger Operating Company, LLC
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By:
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Name:
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Zachary M. Lunn
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Title:
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President and Chief Executive Officer
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Exhibit B
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004]
Attn: Fran Wolf and Celeste Gonzalez
Re: Trust
Account — Termination Letter
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section 1(i) of
the Investment Management Trust Agreement by and among Kimbell Tiger Acquisition Corporation (the “Company”),
Kimbell Tiger Operating Company, LLC and Continental Stock Transfer & Trust Company (the “Trustee”),
dated as of [●], 2022 (the “Trust Agreement”), this is to advise you that the Company has been unable
to effect a business combination with a Target Business within the time frame specified in the Company’s Amended and Restated Certificate
of Incorporation, as described in the Company’s Prospectus relating to the Offering or such later date as may be approved by the
Company’s stockholders in accordance with the Company’s amended and restated certificate of incorporation. 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 Holders. The SPAC Parties have selected ____________, 20__ as the
effective date for the purpose of determining when the Holders will be entitled to receive their share of the liquidation proceeds. You
agree to be the Paying Agent of record and, in your separate capacity as Paying Agent, agree to distribute said funds directly to the
Holders in accordance with the terms of the Trust Agreement, the Amended and Restated Certificate of Incorporation of the Company and
the Amended and Restated Limited Liability Company Agreement of Opco. 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].
[Signature page follows]
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Very
truly yours,
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Kimbell
Tiger Acquisition Corporation
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By:
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Name:
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Zachary M. Lunn
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Title:
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President and Chief Executive Officer
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Kimbell
Tiger Operating Company, LLC
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By:
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Name:
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Zachary M. Lunn
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Title:
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President and Chief Executive Officer
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Exhibit C
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Fran Wolf and Celeste Gonzalez
Re: Trust
Account — Tax Payment Withdrawal Instruction
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section 1(j) of
the Investment Management Trust Agreement by and among Kimbell Tiger Acquisition Corporation (the “Company”),
Kimbell Tiger Operating Company, LLC (“Opco”) and Continental Stock Transfer & Trust Company (the
“Trustee”), dated as of [●], 2022 (the “Trust Agreement”), the SPAC Parties
hereby request that you deliver to Opco $_______________ 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 SPAC Parties need 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 Opco’s operating
account at:
[WIRE INSTRUCTION INFORMATION]
[Signature page follows]
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Very
truly yours,
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Kimbell
Tiger Acquisition Corporation
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By:
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Name:
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Zachary M. Lunn
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Title:
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President and Chief Executive Officer
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Kimbell
Tiger Operating Company, LLC
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By:
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Name:
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Zachary M. Lunn
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Title:
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President and Chief Executive Officer
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EXHIBIT D
[Letterhead of Company]
[·],
2022
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Fran Wolf and Celeste Gonzalez
Re: Trust
Account — Stockholder Redemption Withdrawal Instruction
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section 1(k) of
the Investment Management Trust Agreement by and among Kimbell Tiger Acquisition Corporation (the “Company”),
Kimbell Tiger Operating Company, LLC (“Opco”) and Continental Stock Transfer & Trust Company (the
“Trustee”), dated as of [●], 2022 (the “Trust Agreement”), the SPAC Parties
hereby request that you deliver to the redeeming Public Stockholders of the Company $_______________ of the principal and interest income
earned on the Property as of the date hereof. Capitalized terms used but not defined herein shall have the meanings set forth in the
Trust Agreement.
The SPAC Parties need such funds to pay the Public
Stockholders who have properly elected to have their shares of Common Stock redeemed by the Company in connection with a stockholder
vote to approve an amendment to the Company’s amended and restated certificate of incorporation (i) that affects the substance
or timing of the SPAC Parties’ obligation to redeem 100% of the Common Stock and Class A Units if the Company has not consummated
an initial Business Combination within such time as is described in the Company’s amended and restated certificate of incorporation
or (ii) with respect to any other provision relating to the rights of holders of the Common Stock or pre-initial Business Combination
activity. As such, you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this
letter to the redeeming Public Stockholders in accordance with your customary procedures.
[Signature page follows]
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Very
truly yours,
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Kimbell
Tiger Acquisition Corporation
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By:
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Name:
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Zachary M. Lunn
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Title:
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President and Chief Executive Officer
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Kimbell
Tiger Operating Company, LLC
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By:
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Name:
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Zachary M. Lunn
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Title:
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President and Chief Executive Officer
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EXHIBIT E
[Letterhead of Company]
[·],
2022
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Fran Wolf and Celeste Gonzalez
Re: Trust Account Extension Letter
Ladies and Gentlemen:
Pursuant to Section 1(m) of
the Investment Management Trust Agreement between ONS Acquisition Corp. (“Company”) and Continental Stock Transfer &
Trust Company, dated as of [__], 2022 (“Trust Agreement”), this is to advise you that the Company is extending the time available
to consummate a Business Combination for an additional three (3) months, from _______ to _________ (the “Extension”).
This Extension Letter shall
serve as the notice required with respect to the Extension prior to the Deadline. Capitalized words used herein and not otherwise defined
shall have the meanings ascribed to them in the Trust Agreement.
In accordance with the terms
of the Trust Agreement, we hereby authorize you to deposit $_________, which will be wired to you, into the Trust Account investments
upon receipt.
This is the [first/second] of up to two Extension Letters.
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Very
truly yours,
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Kimbell
Tiger Acquisition Corporation
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By:
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Name:
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Zachary M. Lunn
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Title:
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President and Chief Executive Officer
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Kimbell
Tiger Operating Company, LLC
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By:
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Name:
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Zachary M. Lunn
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Title:
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President and Chief Executive Officer
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Exhibit 10.4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”),
dated as of [●], 2022, is made and entered into by and among Kimbell Tiger Acquisition Corporation, a Delaware corporation (the
“Company”), Kimbell Tiger Acquisition Sponsor, LLC, a Delaware limited liability company (the “Sponsor”),
and the undersigned parties listed under Holder on the signature page hereto (each such party, together with the Sponsor and any
person or entity who hereafter becomes a party to this Agreement pursuant to Section 5.2, a “Holder”
and collectively the “Holders”).
RECITALS
WHEREAS, the Sponsor owns an aggregate
of 5,750,000 Class B units (“Class B Units”) of Kimbell Tiger Operating Company, LLC (“Opco”)
and 5,750,100 shares of the Company’s Class B common stock, par value $0.0001 per share (“Class B Common
Stock”) (collectively, the “Founder Shares”);
WHEREAS, the Sponsor also owns an aggregate
of 2,500 shares of the Company’s Class A common stock, par value $0.0001 per share (the “Common Stock”)
and 100 Class A units of Opco (“Class A Units”) (collectively, the “Sponsor Shares”);
WHEREAS, the Class B Units will automatically
convert into Class A Units at the time of the Company’s initial Business Combination (as defined below) on a one-for-one basis,
subject to adjustment pursuant to the terms of the Amended and Restated Limited Liability Company Agreement of Opco, dated [●],
2022;
WHEREAS, following the initial Business
Combination, the Holders will have the right to exchange their Class A Units (and a corresponding number of shares of Class B
Common Stock) for shares of Company’s Common Stock on a one-for-one basis;
WHEREAS, on [●], 2022, the Company
and the Sponsor entered into that certain Private Placement Warrants Purchase Agreement, pursuant to which the Sponsor agreed to purchase
12,750,000 warrants (or 14,100,000 warrants if the over-allotment option in connection with the Company’s initial public offering
is exercised in full) (the “Sponsor Private Placement Warrants”) in a private placement transaction occurring
in connection with the closing of the Company’s initial public offering; and
WHEREAS, the Company and the Holders desire
to enter into this Agreement, pursuant to which the Company shall grant the Holders certain registration rights with respect to certain
securities of the Company, as set forth in this Agreement.
NOW, THEREFORE, in consideration of the
representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
Article I
Definitions
1.1. Definitions.
The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth below:
“Agreement” shall have
the meaning given in the Preamble.
“Board” shall mean
the Board of Directors of the Company.
“Business Combination”
shall mean any merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination
with one or more businesses, involving the Company.
“Class A Units”
shall have the meaning given in the Recitals hereto.
“Class B Common Stock”
shall have the meaning given in the Recitals hereto.
“Class B Units”
shall have the meaning given in the Recitals hereto.
“Commission” shall
mean the Securities and Exchange Commission.
“Common Stock” shall
have the meaning given in the Recitals hereto.
“Company” shall have
the meaning given in the Preamble.
“Demanding Holder”
shall mean any Holder or group of Holders that together elects to dispose of Registrable Securities having an aggregate value of at least
$25 million, at the time of the Underwritten Demand, under a Registration Statement pursuant to an Underwritten Offering.
“Effectiveness Period”
shall have the meaning given in subsection 3.1.1.
“Exchange Act” shall
mean the Securities Exchange Act of 1934, as it may be amended from time to time.
“Form S-3” shall
mean Form S-3 or any similar short-form registration statement that may be available at such time.
“Founder Shares” shall
have the meaning given in the Recitals hereto.
“Holder Indemnified Persons”
shall have the meaning given in subsection 4.1.1.
“Holders” shall have
the meaning given in the Preamble.
“Maximum Number of Securities”
shall have the meaning given in subsection 2.1.4.
“Misstatement” shall
mean, in the case of a Registration Statement, an untrue statement of a material fact or an omission to state a material fact required
to be stated therein, or necessary to make the statements therein not misleading, and in the case of a Prospectus, an untrue statement
of a material fact or an omission to state a material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
“Opco” shall have the
meaning given in the Recitals hereto.
“Piggyback Registration”
shall have the meaning given in subsection 2.2.1.
“Private Placement Lock-up Period”
shall mean, with respect to the Private Placement Warrants and Common Stock underlying the Private Placement Warrants, until thirty (30)
days after the completion of a Business Combination.
“Private Placement Warrants”
shall have the meaning given in the Recitals hereto.
“Pro Rata” shall have
the meaning given in subsection 2.1.4.
“Prospectus” shall
mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any
and all post-effective amendments and including all material incorporated by reference in such prospectus.
“Registrable Security”
shall mean (a) the shares of Common Stock issued or issuable upon the exchange of Class A Units (and the corresponding shares
of Class B Common Stock), (b) the Private Placement Warrants (including any shares of Common Stock issued or issuable upon
the exercise of any such Private Placement Warrants or, if applicable, upon exchange of Class A Units issued upon the exercise of
any such Private Placement Warrants), (c) any equity securities (including the shares of Common Stock issued or issuable upon the
exercise of any such equity security) of the Company issuable upon conversion of any working capital loans in an amount up to $1,500,000
made to the Company by a Holder, (d) any outstanding share of Common Stock, including Common Stock comprising the Founder Shares
and Sponsor Shares, or any other equity security (including the shares of Common Stock issued or issuable upon the exercise of any other
equity security) of the Company held by a Holder as of the date of this Agreement or acquired prior to or in connection with the Business
Combination, and (e) any other equity security of the Company issued or issuable with respect to any such share of Common Stock
by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or reorganization;
provided, however, that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities when: (A) a
Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities
shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (B) such securities
shall have been otherwise transferred, new certificates for such securities not bearing a legend restricting further transfer shall have
been delivered by the Company and subsequent public distribution of such securities shall not require registration under the Securities
Act; (C) such securities shall have ceased to be outstanding; or (D) such securities may be sold without registration pursuant
to Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission) (but with
no volume or other restrictions or limitations).
“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 any such registration statement having
been declared effective by, or become effective pursuant to rules promulgated by, the Commission.
“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
and any securities exchange on which the Common Stock is then listed);
(B) fees
and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters
in connection with blue sky qualifications of Registrable Securities);
(C) printing,
messenger, telephone and delivery expenses;
(D) reasonable
fees and disbursements of counsel for the Company;
(E) reasonable
fees and disbursements of all independent registered public accountants of the Company incurred specifically in connection with such
Registration; and
(F) reasonable
fees and expenses of one (1) legal counsel selected by the Demanding Holders initiating an Underwritten Demand, the Requesting Holders
participating in an Underwritten Offering and the Holders participating in a Piggyback Registration, as applicable.
“Registration Statement”
shall mean any registration statement under the Securities Act 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 2.1.3.
“Securities Act” shall
mean the Securities Act of 1933, as amended from time to time.
“Sponsor” shall have
the meaning given in the Preamble.
“Sponsor Private Placement Warrants”
shall have the meaning given in the Recitals hereto.
“Sponsor Shares” shall
have the meaning given in the Recitals hereto.
“Suspension Event”
shall have the meaning given in Section 3.4.
“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 Demand”
shall have the meaning given in subsection 2.1.3.
“Underwritten Offering”
shall mean a Registration in which securities of the Company are sold to an Underwriter in a firm commitment underwriting for distribution
to the public.
Article II
Registrations
2.1. Registration.
2.1.1 Shelf
Registration. The Company agrees that, within twenty (20) business days after the consummation of the Business Combination, the
Company will file with the Commission (at the Company’s sole cost and expense) a Registration Statement registering the resale
or other disposition of the Registrable Securities (a “Shelf Registration”).
2.1.2 Effective
Registration. The Company shall use its reasonable best efforts to cause such Registration Statement to become effective by the
Commission as soon as reasonably practicable after the initial filing of the Registration Statement. Subject to the limitations contained
in this Agreement, the Company shall effect any Shelf Registration on such appropriate registration form of the Commission (a) as
shall be selected by the Company and (b) as shall permit the resale or other disposition of the Registrable Securities by the Holders.
If at any time a Registration Statement filed with the Commission pursuant to Section 2.1.1 is effective and a Holder provides
written notice to the Company that it intends to effect an offering of all or part of the Registrable Securities included on such Registration
Statement, the Company will amend or supplement such Registration Statement as may be necessary in order to enable such offering to take
place in accordance with the terms of this Agreement.
2.1.3 Underwritten
Offering. Subject to the provisions of subsection 2.1.4 and Section 2.3, any Demanding Holder may make a written
demand for an Underwritten Offering pursuant to a Registration Statement filed with the Commission in accordance with Section 2.1.1
(an “Underwritten Demand”). The Company shall, within five (5) days of the Company’s receipt
of the Underwritten Demand, notify, in writing, all other Holders of such demand, and each Holder who thereafter requests to include
all or a portion of such Holder’s Registrable Securities in such Underwritten Offering pursuant to such Underwritten Demand (each
such Holder that requests to include all or a portion of such Holder’s Registrable Securities in such Underwritten Offering, a
“Requesting Holder”) shall so notify the Company, in writing, within two (2) days (one (1) day if
such offering is an overnight or bought Underwritten Offering) 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), such Requesting Holder(s) shall be entitled to have
their Registrable Securities included in such Underwritten Offering pursuant to such Underwritten Demand. 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 Demanding Holders initiating
such Underwritten Offering. Notwithstanding the foregoing, the Company is not obligated to effect more than an aggregate of three (3) Underwritten
Offerings pursuant to this subsection 2.1.3 and is not obligated to effect an Underwritten Offering pursuant to this subsection
2.1.3 within ninety (90) days after the closing of an Underwritten Offering.
2.1.4 Reduction
of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Offering pursuant to an Underwritten
Demand, in good faith, advises the Company, the Demanding Holders, the Requesting Holders and other persons or entities holding Common
Stock or other equity securities of the Company that the Company is obligated to include pursuant to separate written contractual arrangements
with such persons or entities (if any) in writing that the dollar amount or number of Registrable Securities or other equity securities
of the Company requested to be included in such Underwritten Offering exceeds the maximum dollar amount or maximum number of equity securities
of the Company 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 Offering and the aggregate number of Registrable Securities that the Demanding Holders and Requesting Holders have
requested be included in such Underwritten Offering (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), Common Stock or other equity securities of the Company that the Company desires to sell
and that can be sold without exceeding the Maximum Number of Securities; and (iii) third, to the extent that the Maximum Number
of Securities has not been reached under the foregoing clauses (i) and (ii), Common Stock or other equity securities
of the Company held by other persons or entities that the Company is obligated to include pursuant to separate written contractual arrangements
with such persons or entities and that can be sold without exceeding the Maximum Number of Securities.
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 (i) file
a Registration Statement under the Securities Act with respect to an offering of equity securities of the Company, or securities or other
obligations exercisable or exchangeable for, or convertible into equity securities of the Company, for its own account or for the account
of stockholders of the Company, other than a Registration Statement (A) filed in connection with any employee stock option or other
benefit plan, (B) for an exchange offer or offering of securities solely to the Company’s existing stockholders, (C) for
an offering of debt that is convertible into equity securities of the Company or (D) for a dividend reinvestment plan, or (ii) consummate
an Underwritten Offering for its own account or for the account of stockholders of the Company, then the Company shall give written notice
of such proposed action to all of the Holders as soon as practicable (but in the case of filing a Registration Statement, not less than
ten (10) days before the anticipated filing date of such Registration Statement), which notice shall (x) describe the amount
and type of securities to be included, the intended method(s) of distribution and the name of the proposed managing Underwriter
or Underwriters, if any, and (y) offer to all of the Holders the opportunity to register the sale of such number of Registrable
Securities as such Holders may request in writing within (a) five (5) days in the case of filing a Registration Statement and
(b) two (2) days in the case of an Underwritten Offering (unless such offering is an overnight or bought Underwritten Offering,
then one (1) day), in each case 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 Piggyback 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 include Registrable
Securities in an Underwritten Offering under this subsection 2.2.1 shall enter into an underwriting agreement in customary form
with the Underwriter(s) selected for such Underwritten Offering by the Company.
2.2.2 Reduction
of Piggyback Registration. If the managing Underwriter or Underwriters in an Underwritten Offering that is to be a Piggyback
Registration, in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration
in writing that the dollar amount or number of shares of the equity securities of the Company that the Company desires to sell, taken
together with (i) the shares of equity securities of the Company, if any, as to which Registration or Underwritten Offering 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 or Underwritten Offering has been requested pursuant to Section 2.2
and (iii) the shares of equity securities of the Company, if any, as to which Registration or Underwritten Offering has been
requested pursuant to separate written contractual piggyback registration rights of other stockholders of the Company, exceeds the Maximum
Number of Securities, then:
(a) If
the Registration or Underwritten Offering is undertaken for the Company’s account, the Company shall include in any such Registration
or Underwritten Offering (A) first, the Common Stock or other equity securities of the Company that the Company desires to sell,
which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities
has not been reached under the foregoing clause (A), the Registrable Securities of Holders exercising their rights to register
their Registrable Securities pursuant to subsection 2.2.1, Pro Rata, which can be sold without exceeding the Maximum Number of
Securities; and (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses
(A) and (B), Common Stock or other equity securities of the Company, if any, as to which Registration or Underwritten
Offering has been requested pursuant to written contractual piggyback registration rights of other stockholders of the Company, which
can be sold without exceeding the Maximum Number of Securities; or
(b) If
the Registration or Underwritten Offering 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 or Underwritten Offering (A) first, Common Stock or other equity securities
of the Company, 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),
Common Stock or other equity securities of the Company 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), Common Stock or other equity securities of the Company 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 or Underwritten Offering effected pursuant to Section 2.2
shall not be counted as an Underwritten Offering pursuant to an Underwritten Demand effected under Section 2.1.
2.3. Restrictions
on Registration Rights. If (A) the Holders have requested an Underwritten Offering pursuant to an Underwritten Demand and
the Company and the Holders are unable to obtain the commitment of underwriters to firmly underwrite the offer; or (B) the Holders
have requested an Underwritten Offering pursuant to an Underwritten Demand and in the good faith judgment of the Board such Underwritten
Offering would be seriously detrimental to the Company and the Board concludes as a result that it is essential to defer the undertaking
of such Underwritten Offering 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 Underwritten
Offering in the near future and that it is therefore essential to defer the undertaking of such Underwritten Offering. In such event,
the Company shall have the right to defer such filing or offering 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 twelve (12)-month period.
Article III
Company
Procedures
3.1. General
Procedures. The Company shall use its best efforts to effect such Registration or Underwritten Offering to permit the sale or
other disposition of such Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto the
Company shall, as expeditiously as possible and to the extent applicable:
3.1.1 prepare
and file with the Commission as soon as practicable after the consummation of the Business Combination 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 or are no longer outstanding
(such period, the “Effectiveness Period”);
3.1.2 prepare
and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements to the
Prospectus, as may be reasonably requested by the Holders or any Underwriter 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 or are no longer outstanding;
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 or Underwritten Offering, 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 (including each preliminary
Prospectus) and such other documents as the Underwriters and the Holders of Registrable Securities included in such Registration or Underwritten
Offering or the legal counsel for any such Holders may reasonably request in order to facilitate the disposition of the Registrable Securities
owned by such Holders; provided, that the Company will not have any obligation to provide any document pursuant to this clause that is
available on the Commission’s EDGAR system;
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 during
the Effectiveness Period, furnish a conformed copy of each filing of any Registration Statement or Prospectus or any amendment or supplement
to such Registration Statement or Prospectus or any document that is to be incorporated by reference into such Registration Statement
or Prospectus, promptly after such filing of such documents with the Commission to each seller of such Registrable Securities or its
counsel; provided, that the Company will not have any obligation to provide any document pursuant to this clause that is available on
the Commission’s EDGAR system;
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;
3.1.10 subject
to the provisions of this Agreement, notify the Holders of the happening of any event as a result of which a Misstatement exists, and
then to correct such Misstatement as set forth in Section 3.4;
3.1.11 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 or the Prospectus, 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;
3.1.12 obtain
a comfort letter from the Company’s independent registered public accountants in the event of an Underwritten Offering, in customary
form and covering such matters of the type customarily covered by comfort letters as the managing Underwriter may reasonably request,
and reasonably satisfactory to a majority-in-interest of the participating Holders;
3.1.13 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 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 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 such placement agent, sales agent or Underwriter;
3.1.14 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;
3.1.15 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);
3.1.16 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;
3.1.17 until
the date the Registrable Securities may be sold under Rule 144, in order to permit the Holders to conduct sales (including continuous
offerings based on market prices and block trades) of the Registrable Securities offered pursuant to the Registration Statement (“Brokerage
Trades”) through two or more reputable investment banks or other reputable broker-dealers designated by the Company (“Financial
Counterparties”): (a) enter into an equity distribution agreement or sales agreement with the Financial Counterparties,
in customary form, which shall include, among other provisions, indemnities similar to those in Article IV, and representations,
covenants and other indemnities and rights and obligations as are customary in equity distribution agreements for issuer ATM programs
(including an obligation of the Company to reimburse the Financial Counterparties for the expense of one counsel to the Financial Counterparties),
(b) notify the Holders of the identities of the Financial Counterparties, (c) to the extent requested by a Financial Counterparty
in order to engage in Brokerage Trades, the Company shall allow the Financial Counterparties to conduct customary “underwriter’s
due diligence” with respect to the Company, which may be on a periodic “bring down” basis when the Company files periodic
or current reports or there is material news about the Company, including (1) by using commercially reasonable efforts to cause
its independent certified public accountants to provide to the Financial Counterparties a “cold comfort” letter in form and
substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed
to the Financial Counterparties, (2) by using commercially reasonable efforts to cause its outside counsel to the Company to deliver
an opinion in form, scope and substance as is customarily given in an underwritten public offering, including a standard “10b-5”
letter for such offering, addressed to the Financial Counterparties, and (3) by providing a standard officer’s certificate
from the chief executive officer or chief financial officer, or other officers serving such functions, of the Company addressed to the
Financial Counterparties and (d) shall take such other reasonable action as requested by the Financial Counterparties in order to
expedite or facilitate the Brokerage Trades; and
3.1.18 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 in respect 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. Notwithstanding anything to the contrary in this Agreement, the Company shall be entitled to (A) delay or postpone
the (i) initial effectiveness of any Registration Statement or (ii) launch of any Underwritten Offering, in each case, filed
or requested pursuant to this Agreement, and (B) from time to time to require the Holders not to sell under any Registration Statement
or Prospectus or to suspend the effectiveness thereof, if the negotiation or consummation of a transaction by the Company or its subsidiaries
is pending or an event has occurred, which negotiation, consummation or event, the Board reasonably believes, upon the advice of legal
counsel, would require additional disclosure by the Company in the applicable Registration Statement or Prospectus of material information
that the Company has a bona fide business purpose for keeping confidential and the non-disclosure of which in the Registration Statement
or Prospectus would be expected, in the reasonable determination of the Board, upon the advice of legal counsel, to cause the Registration
Statement or Prospectus to fail to comply with applicable disclosure requirements (each such circumstance, a “Suspension
Event”); provided, however, that the Company may not delay or suspend a Registration Statement, Prospectus or Underwritten
Offering on more than two occasions, for more than sixty (60) consecutive calendar days, or more than ninety (90) total calendar days,
in each case during any twelve (12)-month period. Upon receipt of any written notice from the Company of a Suspension Event while a Registration
Statement filed pursuant to this Agreement is effective or if as a result of a Suspension Event a Misstatement exists, each Holder agrees
that (i) it will immediately discontinue offers and sales of Registered Securities under each Registration Statement filed pursuant
to this Agreement until the Holder receives copies of a supplemental or amended Prospectus (which the Company agrees to promptly prepare)
that corrects the relevant misstatements or omissions and receives notice that any post-effective amendment has become effective or unless
otherwise notified by the Company that it may resume such offers and sales and (ii) it will maintain the confidentiality of information
included in such written notice delivered by the Company unless otherwise required by law or subpoena. If so directed by the Company,
the Holders will deliver to the Company or, in Holders’ sole discretion destroy, all copies of each Prospectus covering Registrable
Securities in Holders’ possession; provided, however, that this obligation to deliver or destroy shall not apply (A) to the
extent the Holders are required to retain a copy of such Prospectus (x) to comply with applicable legal, regulatory, self-regulatory
or professional requirements or (y) in accordance with a bona fide pre-existing document retention policy or (B) to copies
stored electronically on archival servers as a result of automatic data back-up.
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 Section 13(a) or 15(d) of the
Exchange Act. The Company further covenants that it shall take such further action as any Holder may reasonably request, all to the extent
required from time to time to enable such Holder to sell or otherwise dispose of Registrable Securities held by such Holder without registration
under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (or any
successor rule promulgated thereafter by the Commission), including providing any legal opinions. Upon the request of any Holder,
the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such
requirements.
Article IV
Indemnification
and Contribution
4.1. Indemnification.
4.1.1 The
Company agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its officers, directors, employees,
advisors, agents, representatives, members and each person who controls such Holder (within the meaning of the Securities Act) (collectively,
the “Holder Indemnified Persons”) against all losses, claims, damages, liabilities and expenses (including
reasonable attorneys’ fees and inclusive of all reasonable attorneys’ fees arising out of the enforcement of each such persons’
rights under this Section 4.1) resulting from 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, in the light of the circumstances under which
they were made, not misleading, except insofar as the same are caused by or contained or included in any information furnished in writing
to the Company by or on behalf of such Holder Indemnified Person specifically for use therein.
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, severally and not jointly, indemnify the Company, its directors,
officers, employees, advisors, agents, representatives, members and agents and each person who controls the Company (within the meaning
of the Securities Act) against any losses, claims, damages, liabilities and expenses (including reasonable attorneys’ fees and
inclusive of all reasonable attorneys’ fees arising out of the enforcement of each such persons’ rights under this Section 4.1)
resulting from 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, in the light of the circumstances under which they were made, not misleading, but
only to the extent that the same are made in reliance on and in conformity with information relating to the Holder so furnished in writing
to the Company by or on behalf of such Holder specifically for use therein. In no event shall the liability of any selling Holder hereunder
be greater in amount than the net proceeds received by such Holder from the sale of Registrable Securities pursuant to such Registration
Statement giving rise to such indemnification obligation.
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 or
there may be reasonable defenses available to the indemnified party that are different from or additional to those available to the indemnifying
party, 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, employee, advisor, agent, representative, member or controlling person of such
indemnified party and shall survive the transfer of securities.
4.1.5 If
the indemnification provided under Section 4.1 is held by a court of competent jurisdiction to be unavailable to 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 to the extent permitted by law 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 a court of law by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information
supplied by such indemnifying party or such 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, any legal
or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties
hereto agree that it would not be just and equitable if contribution pursuant to this subsection 4.1.5 were determined by pro
rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this
subsection 4.1.5. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution pursuant to this subsection 4.1.5 from any person who was not guilty of such fraudulent
misrepresentation.
Article V
Miscellaneous
5.1. Notices.
Any notice or communication under this Agreement must be in writing and given by (i) deposit in the United States mail, addressed
to the party to be notified, postage prepaid and registered or certified with return receipt requested, (ii) delivery in person
or by courier service providing evidence of delivery or (iii) transmission by hand delivery, telecopy, telegram, facsimile or email.
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 (3rd) business day following the date on which it is mailed,
in the case of notices delivered by courier service, hand delivery, telecopy or telegram, 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,
and in the case of notices delivered by facsimile or email, at such time as it is successfully transmitted to the addressee. Any notice
or communication under this Agreement must be addressed, if to the Company or the Sponsor, to: 777 Taylor St., Fort Worth, Texas, 76102,
or by email to: , and, if to any Holder, to the address of such Holder as
it appears in the applicable register for the Registrable Securities or such other address as may be designated in writing by such Holder
(including on the signature pages hereto). Any party may change its address for notice at any time and from time to time by written
notice to the other parties hereto, and such change of address shall become effective thirty (30) days after delivery of such notice
as provided in this Section 5.1.
5.2. Assignment;
No Third-Party Beneficiaries.
5.2.1 This
Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or
in part.
5.2.2 This
Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors.
5.2.3 This
Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth in this
Agreement and Section 5.2.
5.2.4 No
assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate the Company
unless and until the Company shall have received (i) written notice of such assignment as provided in Section 5.1 and
(ii) the written agreement of the assignee, in a form reasonably satisfactory to the Company, to be bound by the terms and provisions
of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement). Any transfer or assignment
made other than as provided in this Section 5.2 shall be null and void.
5.3. Counterparts.
This Agreement may be executed in multiple counterparts (including facsimile or PDF counterparts), each of which shall be deemed an original,
and all of which together shall constitute the same instrument, but only one of which need be produced.
5.4. Governing
Law; Venue. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY
AGREE THAT 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.
5.5. Amendments
and Modifications. Upon the written consent of the Company and the Holders of at least a majority in interest of the Registrable
Securities at the time in question, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be
waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however, that notwithstanding the foregoing,
any amendment hereto or waiver hereof that adversely affects one Holder, solely in his, her or its capacity as a holder of the shares
of capital stock of the Company, in a manner that is materially different from the other Holders (in such capacity) shall require the
consent of the Holder so affected. No course of dealing between any Holder or the Company and any other party hereto or any failure or
delay on the part of a Holder or the Company in exercising any rights or remedies under this Agreement shall operate as a waiver of any
rights or remedies of any Holder or the Company. No single or partial exercise of any rights or remedies under this Agreement by a party
shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party.
5.6. Other
Registration Rights. The Company represents and warrants that no person, other than a Holder has any right to require the Company
to register any securities of the Company for sale or to include such securities of the Company in any Registration filed by the Company
for the sale of securities for its own account or for the account of any other person. Further, the Company represents and warrants that
this Agreement supersedes any other registration rights agreement or agreement with similar terms and conditions and in the event of
a conflict between any such agreement or agreements and this Agreement, the terms of this Agreement shall prevail.
5.7. Term.
This Agreement shall terminate upon the earlier of (i) the tenth (10th) anniversary of the date of this Agreement and (ii) with
respect to any Holder, the date as of which such Holder ceases to hold any Registrable Securities. The provisions of 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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KIMBELL TIGER ACQUISITION CORPORATION
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By:
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Name:
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Zachary M. Lunn
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Title:
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President and Chief Executive Officer
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HOLDERS:
KIMBELL TIGER ACQUISITION SPONSOR, LLC
By: Kimbell Royalty Operating, LLC, its Managing Member
By:
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Name:
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Matthew S. Daly
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Title:
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Chief Operating Officer
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Name: [·]
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[Signature Page to Registration
Rights Agreement]
Exhibit 10.5
Kimbell Tiger Operating Company, LLC
777 Taylor St., Suite 810
Fort Worth, Texas 76102
May 10, 2021
Kimbell Tiger Acquisition Corporation
777 Taylor St., Suite 810
Fort Worth, Texas 76102
RE: Securities Subscription Agreement
Ladies and Gentlemen:
This agreement (the
“Agreement”) is entered into on May 10, 2021 by and between Kimbell Tiger Acquisition Corporation, a Delaware
corporation (the “Subscriber” or “you”), and Kimbell Tiger Operating Company, LLC, a Delaware
limited liability company (the “Company”, “we” or “us”). Pursuant to the
terms hereof, the Company hereby accepts the offer the Subscriber has made to purchase 2,500 Class A units of the Company (the
“Units”). The Company and the Subscriber’s agreements regarding such Units are as follows:
1. Purchase
of Securities.
1.1. Purchase
of Units. For the sum of $25,000 (the “Purchase Price”), which the Company acknowledges receiving in cash, the
Company hereby issues the Units to the Subscriber, and the Subscriber hereby purchases the Units from the Company, subject to forfeiture,
on the terms and subject to the conditions set forth in this Agreement. Concurrently with
the Subscriber’s execution of this Agreement, the Company shall, at its option, deliver to the Subscriber a certificate registered
in the Subscriber’s name representing the Units (the “Original Certificate”), or effect such delivery in book-entry
form.
2. Representations,
Warranties and Agreements.
2.1. Subscriber’s
Representations, Warranties and Agreements. To induce the Company to issue the Units 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 Units.
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. Organization
and Authority. The Subscriber is a Delaware corporation, validly existing and in good standing under the laws of Delaware 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 is 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 Units and (ii) able to bear the economic risk of its investment in the Units for an indefinite
period of time because the Units have not been registered under the Securities Act (as defined below) and therefore cannot be sold unless
subsequently registered under the Securities Act or an exemption from such registration is available. Subscriber is capable of evaluating
the merits and risks of its investment in the Company and has the capacity to protect its own interests. Subscriber must bear the economic
risk of this investment until the Units are sold pursuant to: (i) an effective registration statement under the Securities Act or
(ii) an exemption from registration available with respect to such sale. Subscriber is able to bear the economic risks of an investment
in the Units and to afford a complete loss of Subscriber’s investment in the Units.
2.1.5. Access
to Information; Independent Investigation. Prior to the execution of this Agreement, the Subscriber has had the opportunity to ask
questions of and receive answers from representatives of the Company concerning an investment in the Company, as well as the finances,
operations, business and prospects of the Company, and the opportunity to obtain additional information to verify the accuracy of all
information so obtained. In determining whether to make this investment, Subscriber has relied solely on Subscriber’s own knowledge
and understanding of the Company and its business based upon Subscriber’s own due diligence investigation and the information furnished
pursuant to this paragraph. Subscriber understands that no person has been authorized to give any information or to make any representations
which were not furnished pursuant to this Section 2 and Subscriber has not relied on any other representations or information in
making its investment decision, whether written or oral, relating to the Company, its operations and/or its prospects.
2.1.6. Regulation
D Offering. Subscriber represents that it is an “accredited investor” as such term is defined in Rule 501(a) of
Regulation D under the Securities Act of 1933, as amended (the “Securities Act”) and acknowledges the sale contemplated
hereby is being made in reliance on a private placement exemption to “accredited investors” within the meaning of Section 501(a) of
Regulation D under the Securities Act or similar exemptions under state law.
2.1.7. Investment
Purposes. The Subscriber is purchasing the Units solely for investment purposes, for the Subscriber’s own account and not for
the account or benefit of any other person, and not with a view towards the distribution or dissemination thereof. The Subscriber did
not decide to enter into this Agreement as a result of any general solicitation or general advertising within the meaning of Rule 502
under the Securities Act.
2.1.8. Restrictions
on Transfer. Subscriber understands the Units are being offered in a transaction not involving a public offering within the meaning
of the Securities Act. Subscriber understands the Units will be “restricted securities” within the meaning of Rule 144(a)(3) under
the Securities Act, and Subscriber understands that the certificates or book-entries representing the Units will contain a legend in respect
of such restrictions. If in the future the Subscriber decides to offer, resell, pledge or otherwise transfer the Units, such Units 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 Units 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 Units.
2.1.9. No
Governmental Consents. No governmental, administrative or other third party consents or approvals are required, necessary or appropriate
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 Units, the Company hereby represents and warrants
to the Subscriber and agrees with the Subscriber as follows:
2.2.1. Organization
and Corporate Power. The Company is a Delaware limited liability 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 limited liability power and authority necessary to carry out the transactions
contemplated by this Agreement.
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 Amended and Restated Limited Liability Company Agreement
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, the Units will be duly and validly issued,
fully paid and nonassessable. Upon issuance in accordance with, and payment pursuant to, the terms hereof, the Subscriber will have or
receive good title to the Units, free and clear of all liens, claims and encumbrances of any kind, other than (a) transfer restrictions
hereunder and other agreements to which the Units 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. [Reserved.]
4. [Reserved.]
5. Restrictions
on Transfer.
5.1. Securities
Law Restrictions. Subscriber agrees not to sell, transfer, pledge, hypothecate or otherwise dispose of all or any part of the Units
unless, prior thereto (a) a registration statement on the appropriate form under the Securities Act and applicable state securities
laws with respect to the Units 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. [Reserved.]
5.3. Restrictive
Legends. Any certificates representing the Units shall have endorsed thereon legends substantially as follows:
“THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE 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.”
5.4. Additional
Units or Substituted Securities. In the event of the declaration of a unit dividend, the declaration of an extraordinary dividend
payable in a form other than Units, a spin-off, a unit split, an adjustment in conversion ratio, a recapitalization or a similar transaction
affecting the Company’s outstanding Units 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 Units subject to this Section 5 or into which such
Units 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 Units subject to this Section 5 and Section 3.
5.5. No
Registration Rights. Subscriber acknowledges that the Units 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 and will not be registered pursuant to any
registration rights agreement to be entered into by the Subscriber in connection with its initial public offering or otherwise.
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 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.
[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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Very truly yours,
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KIMBELL TIGER OPERATING COMPANY, LLC
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By:
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Kimbell Tiger Acquisition Corporation, its Managing Member
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By:
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/s/Zachary Lunn
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Name:
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Zachary Lunn
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Title:
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President & Chief Executive Officer
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Accepted and agreed as of the date first written above.
KIMBELL TIGER ACQUISITIOn Corporation
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By:
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/s/ Zachary Lunn
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Name:
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Zachary Lunn
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Title:
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President & Chief Executive Officer
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[Signature
Page to Securities Subscription Agreement]
Exhibit 10.7
PRIVATE PLACEMENT WARRANTS PURCHASE AGREEMENT
THIS PRIVATE PLACEMENT WARRANTS PURCHASE AGREEMENT,
effective as of [●], 2022 (as it may from time to time be amended, this “Agreement”), is entered into by and
between Kimbell Tiger Acquisition Corporation, a Delaware corporation (the “Company”), and Kimbell Tiger Acquisition
Sponsor, LLC, a Delaware limited liability company (the “Purchaser”).
WHEREAS, the Company intends to consummate an
initial public offering of the Company’s units (the “Public Offering”), each unit consisting of one share of
the Company’s Class A common stock, par value $0.0001 per share (each, a “Share”), and one-half of one
redeemable warrant (the “Public Warrants”), as set forth in the Company’s registration statement on Form S-1,
filed with the Securities and Exchange Commission (the “SEC”), File Number 333-258260 (the “Registration
Statement”) under the Securities Act of 1933, as amended (the “Securities Act”), and each whole Public Warrant
entitles the holder to purchase one Share at an exercise price of $11.50 per Share; and
WHEREAS, the Purchaser has agreed to purchase
an aggregate of 12,750,000 warrants (or up to 14,100,000 warrants if the over-allotment option in connection with the Public Offering is
exercised in full) (the “Private Placement Warrants”), each Private Placement Warrant entitling the holder to purchase
one Share at an exercise price of $11.50 per Share.
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
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Section 1.
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Authorization, Purchase and Sale; Terms of the Private Placement
Warrants.
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A. Authorization
of the Private Placement Warrants. The Company has duly authorized the issuance and sale of the Private Placement Warrants to the
Purchaser.
B. Purchase
and Sale of the Private Placement Warrants. On the date that is one business day prior to the date of the consummation of the Public
Offering or on such earlier time and date as may be mutually agreed by the Purchaser and the Company (the “Initial Closing Date”),
the Company shall issue and sell to the Purchaser, and the Purchaser shall purchase from the Company 12,750,000 Private Placement Warrants
at a price of $1.00 per warrant for an aggregate purchase price of $12,750,000 (the “Purchase Price”), which shall be
paid by the Purchaser by wire transfer of immediately available funds to an account designated by the Company in accordance with the Company’s
wiring instructions. On the Initial Closing Date, upon the payment by the Purchaser of the Purchase Price, the Company shall, at its option,
deliver a certificate evidencing the Private Placement Warrants purchased on such date duly registered in the Purchaser’s name to
the Purchaser, or effect such delivery in book-entry form. On the date that is one business day prior to the date of the consummation
of the closing of the over-allotment option in connection with the Public Offering or on such earlier time and date as may be mutually
agreed by the Purchaser and the Company (each such date, an “Over-allotment Closing Date,” and each Over-allotment
Closing Date (if any) and the Initial Closing Date being sometimes referred to herein as a “Closing Date”), the Company
shall issue and sell to the Purchaser, and the Purchaser shall purchase from the Company, up to an aggregate of 1,350,000 Private Placement
Warrants at a price of $1.00 per warrant for an aggregate purchase price of up to $1,350,000 (if the over-allotment option in connection
with the Public Offering is exercised in full) (the “Over-allotment Purchase Price”), which shall be paid by the Purchaser
by wire transfer of immediately available funds to the account designated by the Company in accordance with the Company’s wiring
instructions. On each Over-allotment Closing Date, upon the payment by the Purchaser of the applicable Over-allotment Purchase Price,
the Company shall, at its option, deliver a certificate evidencing the Private Placement Warrants purchased on such date duly registered
in the Purchaser’s name to the Purchaser, or effect such delivery in book-entry form.
C. Terms
of the Private Placement Warrants.
(i) Each
Private Placement Warrant shall have the terms set forth in a Warrant Agreement to be entered into by the Company and a warrant agent,
in connection with the Public Offering (the “Warrant Agreement”).
(ii) At
the time of the closing of the Public Offering, the Company and the Purchaser shall enter into a registration rights agreement (the “Registration
Rights Agreement”) pursuant to which the Company will grant certain registration rights to the Purchaser relating to the Private
Placement Warrants and the Shares underlying the Private Placement Warrants.
Section 2. Representations
and Warranties of the Company. As a material inducement to the Purchaser to enter into this Agreement and purchase the Private Placement
Warrants, the Company hereby represents and warrants to the Purchaser (which representations and warranties shall survive each Closing
Date) that:
A. Organization
and Corporate Power. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State
of Delaware and is qualified to do business in every jurisdiction in which the failure to so qualify would reasonably be expected to have
a material adverse effect on the financial condition, operating results or assets of the Company. The Company possesses all requisite
corporate power and authority necessary to carry out the transactions contemplated by this Agreement and the Warrant Agreement.
B. Authorization;
No Breach.
(i) The
execution, delivery and performance of this Agreement and the Private Placement Warrants have been duly authorized by the Company as of
the Initial Closing Date. This Agreement constitutes the valid and binding obligation of the Company, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other laws of general applicability relating
to or affecting creditors’ rights and to general equitable principles (whether considered in a proceeding in equity or law). Upon
issuance in accordance with, and payment pursuant to, the terms of the Warrant Agreement and this Agreement, the Private Placement Warrants
will constitute valid and binding obligations of the Company, enforceable in accordance with their terms as of each Closing Date, 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 Company of this Agreement and the Private Placement Warrants, the issuance and sale of the Private Placement
Warrants, the issuance of the Shares upon exercise of the Private Placement Warrants in accordance with the Warrant Agreement and this
Agreement and the fulfillment of and compliance with the respective terms hereof and thereof by the Company, do not and will not as of
each Closing Date (a) conflict with or result in a breach of the terms, conditions or provisions of, (b) constitute a default
under, (c) result in the creation of any lien, security interest, charge or encumbrance upon the Company’s capital stock or
assets under, (d) result in a violation of, or (e) require any authorization, consent, approval, exemption or other action by
or notice or declaration to, or filing with, any court or administrative or governmental body or agency pursuant to the Amended and Restated
Certificate of Incorporation of the Company or the Amended and Restated Bylaws of the Company (in effect on the date hereof or as may
be amended prior to completion of the contemplated Public Offering), or any material law, statute, rule or regulation to which the
Company is subject, or any agreement, order, judgment or decree to which the Company is subject, except for any filings required after
the date hereof under federal or state securities laws.
C. Title
to Securities. Upon exercise of the Private Placement Warrants in accordance with the terms of the Warrant Agreement and the issuance
in accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, the Shares issuable upon exercise of the Private
Placement Warrants will be duly and validly issued, fully paid and non-assessable. Upon exercise of the Private Placement Warrants in
accordance with the terms of the Warrant Agreement and the issuance in accordance with, and payment pursuant to, the terms hereof and
the Warrant Agreement, the Purchaser will have good title to 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, under the other agreements
contemplated hereby or under any other agreement between the Purchaser and the Company entered into in connection with the Public Offering,
(ii) transfer restrictions under federal and state securities laws, and (iii) liens, claims or encumbrances imposed due to the
actions of the Purchaser.
D. Governmental
Consents. No permit, consent, approval or authorization of, or declaration to or filing with, any governmental authority is required
in connection with the execution, delivery and performance by the Company of this Agreement or the consummation by the Company of any
other transactions contemplated hereby.
Section 3. Representations
and Warranties of the Purchaser. As a material inducement to the Company to enter into this Agreement and issue and sell the Private
Placement Warrants to the Purchaser, the Purchaser hereby represents and warrants to the Company (which representations and warranties
shall survive each Closing Date) that:
A. Organization
and Requisite Authority. The Purchaser possesses all requisite limited liability company power and authority necessary to carry out
the transactions contemplated by this Agreement.
B. Authorization;
No Breach.
(i) This
Agreement constitutes a valid and binding obligation of the Purchaser, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’
rights and to general equitable principles (whether considered in a proceeding in equity or law).
(ii) The
execution and delivery by the Purchaser of this Agreement and the fulfillment of and compliance with the terms hereof by the Purchaser
does not and shall not as of each Closing Date conflict with or result in a breach by the Purchaser of the terms, conditions or provisions
of any agreement, instrument, order, judgment or decree to which the Purchaser is subject.
C. Investment
Representations.
(i) The
Purchaser is acquiring the Private Placement Warrants and, upon exercise of the Private Placement Warrants, the Shares issuable upon such
exercise (collectively, the “Securities”) for the Purchaser’s own account, for investment purposes only and not
with a view towards, or for resale in connection with, any public sale or distribution thereof.
(ii) The
Purchaser is an “accredited investor” as such term is defined in Rule 501(a)(3) of Regulation D under the Securities
Act.
(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 the 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) of Regulation D under the Securities Act.
(v) The
Purchaser has been furnished with all materials relating to the business, finances and operations of the Company and materials relating
to the offer and sale of the Securities that 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; (b) except as specifically set forth in the Registration Rights Agreement, neither the Company
nor any other person is under any obligation to register the Securities under the Securities Act or any state securities laws or to comply
with the terms and conditions of any exemption thereunder; and (c) Rule 144 adopted pursuant to the Securities Act will not
be available for resale transactions of Securities prior to a business combination involving the Company and may not be available for
resale transactions of Securities after such a business combination.
(viii) The
Purchaser has such knowledge and experience in financial and business matters, knows of the high degree of risk associated with investments
in the securities of companies in the development stage such as the Company, is capable of evaluating the merits and risks of an investment
in the Securities and is able to bear the economic risk of an investment in the Securities in the amount contemplated hereunder for an
indefinite period of time. The Purchaser has adequate means of providing for the Purchaser’s current financial needs and contingencies
and will have no current or anticipated future needs for liquidity that would be jeopardized by the investment in the Securities. The
Purchaser can afford a complete loss of the Purchaser’s investment in the Securities.
Section 4. Conditions
of the Purchaser’s Obligations. The obligations of the Purchaser to purchase and pay for the Private Placement Warrants are
subject to the fulfillment, on or before each Closing Date, of each of the following conditions:
A. Representations
and Warranties. The representations and warranties of the Company contained in Section 2 shall be true and correct at and as
of such Closing Date as though then made.
B. Performance.
The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required
to be performed or complied with by it on or before such Closing Date.
C. No
Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby that prohibits the consummation of any of the transactions contemplated by this Agreement
or the Warrant Agreement.
D. Warrant
Agreement. The Company shall have entered into the Warrant Agreement with a warrant agent on terms satisfactory to the Purchaser.
Section 5. Conditions
of the Company’s Obligations. The obligations of the Company to the Purchaser under this Agreement are subject to the fulfillment,
on or before each Closing Date, of each of the following conditions:
A. Representations
and Warranties. The representations and warranties of the Purchaser contained in Section 3 shall be true and correct at and as
of such Closing Date as though then made.
B. Performance.
The Purchaser shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required
to be performed or complied with by the Purchaser on or before such Closing Date.
C. Corporate
Consents. The Company shall have obtained the consent of its Board of Directors authorizing the execution, delivery and performance
of this Agreement and the Warrant Agreement and the issuance and sale of the Private Placement Warrants hereunder.
D. No
Injunction. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby, which prohibits the consummation of any of the transactions contemplated by this Agreement
or the Warrant Agreement.
E. Warrant
Agreement. The Company shall have entered into the Warrant Agreement with a warrant agent on terms satisfactory to the Company.
Section 6. Termination.
This Agreement may be terminated at any time after [insert 60 days after the date of the agreement], 2022 upon the election by
either the Company or the Purchaser upon written notice to the other party if the closing of the Public Offering does not occur prior
to such date.
Section 7. Survival
of Representations and Warranties. All of the representations and warranties contained herein shall survive each Closing Date.
Section 8. Definitions.
Terms used but not otherwise defined in this Agreement shall have the meaning assigned to such terms in the Registration Statement.
Section 9. Miscellaneous.
A. Successors
and Assigns. Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto shall bind and inure to the benefit of the respective successors of the parties hereto whether so expressed
or not. Notwithstanding the foregoing or anything to the contrary herein, the parties may not assign this Agreement, other than assignments
by the Purchaser to affiliates thereof (including, without limitation, one or more of its members), without the prior written consent
of the other parties.
B. Severability.
Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective
only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.
C. Counterparts.
This Agreement may be executed simultaneously in two or more counterparts, none of which need contain the signatures of more than one
party, but all such counterparts taken together shall constitute one and the same agreement.
D. Descriptive
Headings; Interpretation. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive
part of this Agreement. The use of the word “including” in this Agreement shall be by way of example rather than by limitation.
E. Governing
Law. This Agreement shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be construed
in accordance with the internal laws of the State of New York.
F. Amendments.
This Agreement may not be amended, modified or waived as to any particular provision, except by a written instrument executed by all parties
hereto.
[Signature page follows]
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement to be effective as of the date first set forth above.
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COMPANY:
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KIMBELL TIGER ACQUISITION
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CORPORATION
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By:
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Name:
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Zachary M. Lunn
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Title:
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President and Chief Executive Officer
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PURCHASER:
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KIMBELL TIGER ACQUISITION
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SPONSOR, LLC
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By: Kimbell Royalty Operating, LLC,
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its Managing Member
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By:
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Name:
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Matthew S. Daly
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Title:
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Chief Operating Officer
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[Signature Page to Private Placement Warrants
Purchase Agreement]
Exhibit 10.8
FORM OF INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this “Agreement”)
is made as of [●], 2022, by and between Kimbell Tiger Acquisition Corporation, a Delaware corporation (the “Company”),
and [●] (“Indemnitee”).
RECITALS
WHEREAS, highly competent persons have
become more reluctant to serve publicly-held corporations as directors or officers 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 corporations.
WHEREAS, the Board of Directors of the
Company (the “Board”) has determined that, in order to attract and retain qualified individuals as directors
and officers, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect such persons
serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and
widespread practice among corporations and other business enterprises, the Company believes that, given current market conditions and
trends, such insurance may be available to it in the future only at higher premiums and with more exclusions. At the same time, directors
and officers are being increasingly subjected to expensive and time-consuming litigation. The Amended and Restated Certificate of Incorporation
(the “Charter”) and the Bylaws (the “Bylaws”) of the Company require indemnification
of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to applicable provisions of
the Delaware General Corporation Law (“DGCL”). The Charter, Bylaws and the DGCL expressly 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 stockholders
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 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 Charter and Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor,
nor to diminish or abrogate any rights of Indemnitee thereunder.
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 or continue to serve for or on behalf of the Company on the condition that Indemnitee be so indemnified.
NOW, THEREFORE, in consideration of the
premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
TERMS AND CONDITIONS
1. SERVICES
TO THE COMPANY. In consideration of the Company’s covenants and obligations hereunder, Indemnitee will serve or continue
to serve as an officer, director or key employee of the Company for so long as Indemnitee is duly elected or appointed or until Indemnitee
tenders Indemnitee’s 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 or officer of the Company, as provided in Section 17. This
Agreement, however, shall not impose any obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company
beyond any period otherwise required by law or by other agreements or commitments of the parties, if any.
2. DEFINITIONS.
As used in this Agreement:
(a) “Affiliate”
shall mean with respect to any Person, any Person directly or indirectly through one or more intermediaries Controlling, Controlled by
or under common Control with such Person.
(b) References
to “agent” shall mean any person who is or was a director, officer or employee of the Company or a subsidiary of the Company
or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer,
employee, fiduciary or other official of another 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.
(c) The
terms “Beneficial Owner” and “Beneficial Ownership” shall have the meanings set forth in Rule 13d-3 promulgated
under the Exchange Act (as defined below) as in effect on the date hereof.
R
(d) A
“Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following
events:
(i) Acquisition
of Stock by Third Party. Other than an Affiliate of Kimbell Tiger Acquisition Sponsor, LLC (the “Sponsor”), any Person (as
defined below) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing fifteen percent
(15%) or more of the combined voting power of the Company’s then outstanding securities entitled to vote generally in the election
of directors, unless (1) the change in the relative Beneficial Ownership of the Company’s securities by any Person results
solely from a reduction in the aggregate number of outstanding securities entitled to vote generally in the election of directors, or
(2) such acquisition was approved in advance by the Continuing Directors (as defined below) and such acquisition would not constitute
a Change in Control under part (iii) of this definition;
(ii) Change
in Board of Directors. Individuals who, as of the date hereof, constitute the Board, and any new director whose election by the Board
or nomination for election by the Company’s stockholders was approved by a vote of at least two thirds of the directors then still
in office who were directors on the date hereof or whose election for nomination for election was previously so approved (collectively,
the “Continuing Directors”), cease for any reason to constitute at least a majority of the members of the Board;
(iii) Corporate
Transactions. The effective date of a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business
combination, involving the Company (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 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 (as defined below)) 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 the Sponsor or an Affiliate thereof, no Person (excluding any 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 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 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 of Directors, providing for such Business Combination;
(iv) Liquidation.
The approval by the stockholders 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 stockholder approval is not required, the decision by the Board to proceed with such
a liquidation, sale, or disposition in one transaction or a series of related transactions); or
(v) Other
Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A (or any successor rule) (or a response to any similar item on any similar schedule or form) promulgated under the Exchange
Act (as defined below), whether or not the Company is then subject to such reporting requirement.
(e) “Control”
(including the correlative terms “Controlled by” and “Controlling”) shall mean the possession, directly or indirectly,
of the power to direct, or to cause the direction of, the management and policies of a Person, whether through ownership of voting securities,
by contract or otherwise.
(f) “Corporate
Status” describes the status of a person who is or was a director, officer, trustee, general partner, manager, managing member,
fiduciary, employee or agent of the Company or of any other Enterprise (as defined below) which such person is or was serving at the
request of the Company.
(g) “Delaware
Court” shall mean the Court of Chancery of the State of Delaware.
(h) “Disinterested
Director” shall mean a director of the Company who is not and was not a party to the Proceeding (as defined below) in respect of
which indemnification is sought by Indemnitee.
(i) “Enterprise”
shall mean the Company and any other corporation, constituent 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, manager, general partner, managing member, fiduciary, employee or agent.
(j) “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.
(k) “Expenses”
shall include all direct and indirect costs, fees and expenses of any type or nature whatsoever, including, without limitation, all reasonable
attorneys’ fees and costs, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, fees of private
investigators and professional advisors, duplicating costs, printing and binding costs, telephone charges, postage, delivery service
fees, fax transmission charges, secretarial services and all other disbursements, obligations or expenses in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, settlement or appeal of, or otherwise
participating in, a Proceeding (as defined below), including reasonable compensation for time spent by Indemnitee for which he or she
is not otherwise compensated by the Company or any third party. “Expenses” also shall include expenses incurred in connection
with any appeal resulting from any Proceeding (as defined below), including without limitation the principal, premium, security for,
and other costs relating to any cost bond, supersede as 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.
(l) References
to “fines” shall include any excise tax assessed on Indemnitee with respect to any employee benefit plan and any fines imposed
on Indemnitee by any governmental authority; 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.
(m) “Independent
Counsel” shall mean a law firm or a member of a law firm with significant experience in matters of corporation law and that neither
presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to
either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar
indemnification agreements); or (ii) any other party to the Proceeding (as defined below) giving rise to a claim for indemnification
hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee
in an action to determine Indemnitee’s rights under this Agreement.
(n) The
term “Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act as in effect
on the date hereof; provided, however, that “Person” shall exclude: (i) the Company; (ii) any Subsidiaries (as
defined below) of the Company; (iii) any employment benefit plan of the Company or of a Subsidiary (as defined below) of the Company
or of any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company; and (iv) any trustee or other fiduciary holding securities under an employee benefit plan of
the Company or of a Subsidiary (as defined below) of the Company or of a corporation owned directly or indirectly by the stockholders
of the Company in substantially the same proportions as their ownership of stock of the Company.
(o) The
term “Proceeding” shall include any threatened, pending or completed action, suit, arbitration, mediation, alternate dispute
resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether
brought in the right of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal,
administrative or investigative or related nature, in which Indemnitee was, is, will or might be involved as a party, 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 Indemnitee or of any action (or failure to act) on Indemnitee’s part while acting as a director
or officer of the Company, or by reason of the fact that Indemnitee is or was serving at the request of the Company as a director, officer,
trustee, general partner, managing member, fiduciary, employee or agent of any other Enterprise, in each case whether or not serving
in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement, or advancement of expenses
can be provided under this Agreement.
(p) The
term “Subsidiary,” with respect to any Person, shall mean any corporation, limited liability company, partnership, joint
venture, trust or other entity of which a majority of the voting power of the voting equity securities or equity interest is owned, directly
or indirectly, by that Person.
3. INDEMNITY
IN THIRD-PARTY PROCEEDINGS. To the fullest extent permitted by applicable law, 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, liabilities,
fines, penalties and amounts paid in settlement) actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection
with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee 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 Indemnitee’s conduct was unlawful.
4. INDEMNITY
IN PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. To the fullest extent permitted by applicable law, 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 Indemnitee or on Indemnitee’s
behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company. No indemnification, hold harmless or exoneration for
Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally
adjudged by a court to be liable to the Company, unless and only to the extent that any court in which the Proceeding was brought or
the 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.
5. INDEMNIFICATION
FOR EXPENSES OF A PARTY WHO IS WHOLLY OR PARTLY SUCCESSFUL. Notwithstanding any other provisions of this Agreement except for Section 27,
to the extent that Indemnitee was or is, by reason of Indemnitee’s Corporate Status, a party to (or a participant in) and is successful,
on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall,
to the fullest extent permitted by applicable law, indemnify, hold harmless and exonerate Indemnitee against all Expenses actually and
reasonably incurred by Indemnitee 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, indemnify, hold harmless and exonerate Indemnitee against all Expenses actually and reasonably
incurred by Indemnitee or on Indemnitee’s 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, 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.
6. INDEMNIFICATION
FOR EXPENSES OF A WITNESS. Notwithstanding any other provision of this Agreement except for Section 27, to the extent that Indemnitee
is, by reason of Indemnitee’s Corporate Status, a witness or deponent in any Proceeding to which Indemnitee was or is not a party
or threatened to be made a party, Indemnitee shall, to the fullest extent permitted by applicable law, be indemnified, held harmless
and exonerated against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.
7. ADDITIONAL
INDEMNIFICATION, HOLD HARMLESS AND EXONERATION RIGHTS. Notwithstanding any limitation in Sections 3, 4, or 5, except for Section 27,
the Company shall, to the fullest extent permitted by applicable law, 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, 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, liabilities, fines,
penalties and amounts paid in settlement) actually and reasonably incurred by Indemnitee in connection with the Proceeding. No indemnification,
hold harmless or exoneration rights shall be available under this Section 7 on account of Indemnitee’s conduct which constitutes
a breach of Indemnitee’s duty of loyalty to the Company or its stockholders or is an act or omission not in good faith or which
involves intentional misconduct or a knowing violation of the law.
8. CONTRIBUTION
IN THE EVENT OF JOINT LIABILITY.
(a) To
the fullest extent permissible under applicable law, if the indemnification, hold harmless and/or exoneration rights provided for in
this Agreement are unavailable to Indemnitee in whole or in part for any reason whatsoever, the Company, in lieu of indemnifying, holding
harmless or exonerating Indemnitee, shall pay, in the first instance, the entire amount incurred by Indemnitee, whether for judgments,
liabilities, fines, penalties, amounts paid or to be paid in settlement and/or for Expenses, in connection with any Proceeding without
requiring Indemnitee to contribute to such payment, and the Company hereby waives and relinquishes any right of contribution it may have
at any time against Indemnitee.
(b) The
Company shall not enter into any settlement of any Proceeding in which the Company is jointly liable with Indemnitee (or would be if
joined in such Proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.
(c) The
Company hereby agrees to fully indemnify, hold harmless and exonerate Indemnitee from any claims for contribution that may be brought
by officers, directors or employees of the Company other than Indemnitee who may be jointly liable with Indemnitee.
9. EXCLUSIONS.
Notwithstanding any provision in this Agreement, except for Section 27, the Company shall not be obligated under this Agreement
to make any indemnification, advance of expenses, hold harmless or exoneration payment in connection with any claim made against Indemnitee:
(a) for
which payment has actually been received by or on behalf of Indemnitee under any insurance policy, contract, agreement, or other indemnity
or advancement provision or otherwise, except with respect to any excess beyond the amount actually received under any insurance policy,
contract, agreement, other indemnity or advancement provision or otherwise;
(b) for
an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the
meaning of Section 16(b) of the Exchange Act (or any successor rule) or similar provisions of state statutory law or common
law; or
(c) except
as otherwise provided in Sections 14(f)-(g) hereof, prior to a Change in Control, in connection with any Proceeding (or any part
of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against
the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part
of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, advance of expenses, hold harmless
or exoneration payment, in its sole discretion, pursuant to the powers vested in the Company under applicable law. 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.
10. ADVANCES
OF EXPENSES; DEFENSE OF CLAIM.
(a) Notwithstanding
any provision of this Agreement to the contrary, except for Section 27, and to the fullest extent not prohibited by applicable law,
the Company shall pay the Expenses incurred by Indemnitee (or reasonably expected by Indemnitee to be incurred by Indemnitee within three
months) in connection with any Proceeding within ten (10) days after the receipt by the Company of a statement or statements requesting
such advances from time to time, prior to the final disposition of any Proceeding. Advances shall, to the fullest extent permitted by
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, 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, held harmless or exonerated by the Company
under the provisions of this Agreement, the Charter, the Bylaws, applicable law or otherwise. This Section 10(a) shall not
apply to any claim made by Indemnitee for which an indemnification, advance of expenses, hold harmless or exoneration payment is excluded
pursuant to Section 9.
(b) The
Company will be entitled to participate in the Proceeding at its own expense.
(c) The
Company shall not settle any action, claim or Proceeding (in whole or in part) which would impose any Expense, judgment, liability, fine,
penalty or limitation on Indemnitee without Indemnitee’s prior written consent.
11. PROCEDURE
FOR NOTIFICATION AND APPLICATION FOR INDEMNIFICATION.
(a) Indemnitee
agrees to promptly notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information
or other document relating to any Proceeding, claim, issue or matter therein which may be subject to indemnification, hold harmless or
exoneration rights, or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve
the Company of any obligation which it may have to Indemnitee under this Agreement, or otherwise.
(b) Indemnitee
may deliver to the Company a written application to indemnify, hold harmless or exonerate Indemnitee in accordance with this Agreement.
Such application(s) may be delivered from time to time and at such time(s) as Indemnitee deems appropriate in Indemnitee’s
sole discretion. Following such a written application for indemnification by Indemnitee, Indemnitee’s entitlement to indemnification
shall be determined according to Section 12(a) of this Agreement.
12. PROCEDURE
UPON APPLICATION FOR INDEMNIFICATION.
(a) A
determination, if required by applicable law, with respect to Indemnitee’s entitlement to indemnification shall be made in the
specific case by one of the following methods, which shall be at the election of Indemnitee: (i) by a majority vote of the Disinterested
Directors, even though less than a quorum of the Board or (ii) by Independent Counsel in a written opinion to the Board, a copy
of which shall be delivered to Indemnitee. 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 that is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee
and reasonably necessary to such determination. Any costs or Expenses (including reasonable attorneys’ fees and disbursements)
incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective
of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby agrees to indemnify and to hold
Indemnitee harmless therefrom.
(b) In
the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof,
the Independent Counsel shall be selected as provided in this Section 12(b). The Independent Counsel shall be selected by Indemnitee
(unless Indemnitee shall request that such selection be made by the Board), and Indemnitee shall give written notice to the Company advising
it of the identity of the Independent Counsel so selected and certifying that the Independent Counsel so selected meets the requirements
of “Independent Counsel” as defined in Section 2 of this Agreement. If the Independent Counsel is selected by the Board,
the Company shall give written notice to Indemnitee advising Indemnitee 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 or law firm 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 or law firm selected by the Delaware Court,
and the person or law firm with respect to whom all objections are so resolved or the person or law firm 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).
(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 such Independent
Counsel’s engagement pursuant hereto.
13. PRESUMPTIONS
AND EFFECT OF CERTAIN PROCEEDINGS.
(a) In
making a determination with respect to entitlement to indemnification hereunder, the person, persons or entity making such determination
shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification
in accordance with Section 11(b) of this Agreement, and the Company shall have the burden of proof to overcome that presumption
in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure
of the Company (including by the Disinterested Directors or Independent Counsel) to have made a determination prior to the commencement
of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable
standard of conduct, nor an actual determination by the Company (including by the Disinterested Directors or Independent Counsel) that
Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee
has not met the applicable standard of conduct.
(b) If
the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled
to indemnification shall not have made a determination within thirty (30) days after receipt by the Company of the request therefor,
the requisite determination of entitlement to indemnification shall, to the fullest extent permitted by 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; provided,
however, that such 30-day period may be extended for a reasonable time, not to exceed an additional fifteen (15) days, if the person,
persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time
for the obtaining or evaluating of documentation and/or information relating thereto.
(c) The
termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea
of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect
the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee
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 Indemnitee’s conduct was unlawful.
(d) For
purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action
is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee
by the directors, managers, or officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise,
the Board, any committee of the Board or any director, trustee, general partner, manager or managing member of the Enterprise, or on
information or records given or reports made to the Enterprise, the Board, any committee of the Board or any director, trustee, general
partner, manager or managing member of the Enterprise, by an independent certified public accountant or by an appraiser or other expert
selected by the Enterprise, the Board, any committee of the Board or any director, trustee, general partner, manager or managing member
of the Enterprise. The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other
circumstances in which Indemnitee may be deemed or found to have met the applicable standard of conduct set forth in this Agreement.
(e) The
knowledge and/or actions, or failure to act, of any other director, officer, trustee, partner, manager, managing member, fiduciary, agent
or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this
Agreement.
14. REMEDIES
OF INDEMNITEE.
(a) In
the event that (i) a determination is made pursuant to Section 12 of this Agreement that Indemnitee is not entitled to indemnification
under this Agreement, (ii) advancement of Expenses, to the fullest extent permitted by applicable law, is not timely made pursuant
to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to
Section 12(a) of this Agreement within thirty (30) days after receipt by the Company of the request for indemnification, (iv) payment
of indemnification is not made pursuant to Section 5, 6 or the last sentence of Section 12(a) of this Agreement within
ten (10) days after receipt by the Company of a written request therefor, (v) a contribution payment is not made in a timely
manner pursuant to Section 8 of this Agreement, (vi) payment of indemnification pursuant to Section 3 or 4 of this Agreement
is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vii) payment
to Indemnitee pursuant to any hold harmless or exoneration rights under this Agreement or otherwise is not made in accordance with this
Agreement, Indemnitee shall be entitled to an adjudication by the Delaware Court to such indemnification, hold harmless, exoneration,
contribution or advancement rights. Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to
be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Except
as set forth herein, the provisions of Delaware law (without regard to its conflict of laws rules) shall apply to any such arbitration.
The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.
(b) In
the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled
to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects
as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination.
(c) In
any judicial proceeding or arbitration commenced pursuant to this Section 14, Indemnitee shall be presumed to be entitled to
be indemnified, held harmless, exonerated and to receive advancement of Expenses under this Agreement and the Company shall have the
burden of proving Indemnitee is not entitled to be indemnified, held harmless, exonerated and to receive advancement of Expenses, as
the case may be, and the Company may not refer to or introduce into evidence any determination pursuant to Section 12(a) of
this Agreement adverse to Indemnitee for any purpose. If Indemnitee commences a judicial proceeding or arbitration pursuant to this Section 14, Indemnitee
shall not be required to reimburse the Company for any advances pursuant to Section 10 until a final determination is made with
respect to Indemnitee’s entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed).
(d) If
a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification,
the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14,
absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification
under applicable law.
(e) The
Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the
procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before
any such arbitrator that the Company is bound by all the provisions of this Agreement.
(f) The
Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by 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, such Expenses which are incurred by Indemnitee in connection with any judicial proceeding or arbitration
brought by Indemnitee: (i) to enforce Indemnitee’s 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 Charter or the Bylaws now
or hereafter in effect; or (ii) for recovery or advances under any insurance policy maintained by any person for the benefit of
Indemnitee, regardless of the outcome and whether Indemnitee ultimately is determined to be entitled to such indemnification, hold harmless
or exoneration right, advancement, contribution or insurance recovery, as the case may be (unless such judicial proceeding or arbitration
was not brought by Indemnitee in good faith).
(g) Interest
shall be paid by the Company to Indemnitee at the legal rate under 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.
15. SECURITY.
Notwithstanding anything herein to the contrary, except for Section 27, to the extent requested by Indemnitee and approved by the
Board, the Company may at any time and from time to time provide security to Indemnitee for the Company’s obligations hereunder
through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to Indemnitee, may not
be revoked or released without the prior written consent of Indemnitee.
16. NON-EXCLUSIVITY;
SURVIVAL OF RIGHTS; INSURANCE; SUBROGATION.
(a) The
rights of Indemnitee as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time
be entitled under applicable law, the Charter, the Bylaws, any agreement, a vote of stockholders 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 Indemnitee’s Corporate
Status prior to such amendment, alteration or repeal. To the extent that a change in applicable law, whether by statute or judicial decision,
permits greater indemnification, hold harmless or exoneration rights or advancement of Expenses than would be afforded currently under
the Charter, the Bylaws or this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and
every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other right or remedy.
(b) The
DGCL and the Bylaws 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 Indemnitee or incurred by or on behalf of Indemnitee or in such capacity as a director,
officer, employee or agent of the Company, or arising out of Indemnitee’s status as such, whether or not the Company would have
the power to indemnify Indemnitee against such liability under the provisions of this Agreement or under the DGCL, as it may then be
in effect. The purchase, establishment, and maintenance of any such Indemnification Arrangement shall not in any way limit or affect
the rights and obligations of the Company or of Indemnitee under this Agreement except as expressly provided herein, and the execution
and delivery of this Agreement by the Company and Indemnitee shall not in any way limit or affect the rights and obligations of the Company
or the other party or parties thereto under any such Indemnification Arrangement.
(c) To
the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, trustees,
partners, managers, managing members, fiduciaries, employees, or agents of the Company or of any other Enterprise which such person serves
at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the
maximum extent of the coverage available for any such director, officer, trustee, partner, manager, managing member, fiduciary, employee
or agent under such policy or policies. If, at the time the Company receives notice from any source of a Proceeding as to which Indemnitee
is a party or a participant (as a witness, deponent or otherwise), the Company has director and officer liability insurance in effect,
the Company shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth in the respective
policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee,
all amounts payable as a result of such Proceeding in accordance with the terms of such policies.
(d) In
the event of any payment under this Agreement, the Company, to the fullest extent permitted by 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.
(e) The
Company’s obligation to indemnify, hold harmless, exonerate or advance Expenses hereunder to Indemnitee who is or was serving at
the request of the Company as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of any other
Enterprise shall be reduced by any amount Indemnitee has actually received as indemnification, hold harmless or exoneration payments
or advancement of expenses from such Enterprise. Notwithstanding any other provision of this Agreement to the contrary except for Section 27,
(i) Indemnitee shall have no obligation to reduce, offset, allocate, pursue or apportion any indemnification, hold harmless, exoneration,
advancement, contribution or insurance coverage among multiple parties possessing such duties to Indemnitee prior to the Company’s
satisfaction and performance of all its obligations under this Agreement, and (ii) the Company shall perform fully its obligations
under this Agreement without regard to whether Indemnitee holds, may pursue or has pursued any indemnification, advancement, hold harmless,
exoneration, contribution or insurance coverage rights against any person or entity other than the Company.
17. DURATION
OF AGREEMENT. All agreements and obligations of the Company contained herein shall continue during the period Indemnitee serves as
a director or officer of the Company or as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent
of any other corporation, partnership, joint venture, trust, employee benefit plan or other Enterprise which Indemnitee serves at the
request of the Company and shall continue thereafter so long as Indemnitee shall be subject to any possible Proceeding (including any
rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant to Section 14 of this Agreement) by reason of Indemnitee’s
Corporate Status, whether or not Indemnitee is acting in any such capacity at the time any liability or expense is incurred for which
indemnification or advancement can be provided under this Agreement.
18. SEVERABILITY.
If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the
validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any
Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is
not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the
fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions
of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any
such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed
so as to give effect to the intent manifested thereby.
19. ENFORCEMENT
AND BINDING EFFECT.
(a) The
Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order
to induce Indemnitee to serve as a director, officer or key employee of the Company, and the Company acknowledges that Indemnitee is
relying upon this Agreement in serving as a director, officer or key employee of the Company.
(b) Without
limiting any of the rights of Indemnitee under the Charter or Bylaws as they may be amended from time to time, this Agreement constitutes
the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings,
oral, written and implied, between the parties hereto with respect to the subject matter hereof.
(c) The
indemnification, hold harmless, exoneration and advancement of expenses rights provided by or granted pursuant to this Agreement shall
be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect
successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company),
shall continue as to an Indemnitee who has ceased to be a director, officer employee or agent of the Company or a director, officer,
trustee, general partner, manager, managing member, fiduciary, employee or agent of any other Enterprise at the Company’s request,
and shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and
other legal representatives.
(d) The
Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially
all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee,
expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required
to perform if no such succession had taken place.
(e) The
Company and Indemnitee agree herein that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable
and difficult to prove, 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 Indemnitee
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. The Company hereby waives any such
requirement of such a bond or undertaking to the fullest extent permitted by law.
20. MODIFICATION
AND WAIVER. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the Company
and Indemnitee. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions
of this Agreement, nor shall any waiver constitute a continuing waiver.
21. NOTICES.
All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly
given (i) if delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed,
or (ii) mailed by certified or registered mail with postage prepaid, on the third (3rd) business day after the date on which it
is so mailed:
(a) If
to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide
in writing to the Company.
(b) If
to the Company, to:
Kimbell Tiger Acquisition Corporation
777 Taylor St.
Fort Worth, Texas 76102
With a copy, which shall not constitute notice,
to
White & Case LLP
609 Main Street, Suite 2900
Houston, Texas 77002
Attention:
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Jason A. Rocha
|
|
Andrew J. Erickson
|
or to any other address as may have been furnished
to Indemnitee in writing by the Company.
22. APPLICABLE
LAW AND CONSENT TO JURISDICTION. This Agreement and the legal relations among the parties shall be governed by, and construed and
enforced in accordance with, the laws of the State of 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.
23. IDENTICAL
COUNTERPARTS. This Agreement may be executed in one or more counterparts (including by electronic delivery of a counterpart in PDF
format), each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same
Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence
of this Agreement.
24. MISCELLANEOUS.
Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate and vice versa. The headings
of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or
to affect the construction thereof.
25. PERIOD
OF LIMITATIONS. No legal action shall be brought and no cause of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee’s spouse, assigns, heirs, devisees, executors or administrators or other legal representatives after
the expiration of two years from the date of accrual of such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal action within such two-year period; provided, however,
that if any shorter period of limitations is otherwise applicable to any such cause of action such shorter period shall govern.
26. ADDITIONAL
ACTS. If for the validation of any of the provisions in this Agreement any act, resolution, approval or other procedure is required
to the fullest extent permitted by 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.
27. WAIVER
OF CLAIMS TO TRUST ACCOUNT. Indemnitee hereby agrees that Indemnitee 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 Indemnitee
may have in the future as a result of, or arising out of, any services provided to the Company and will not seek recourse against such
trust account for any reason whatsoever.
28. MAINTENANCE
OF INSURANCE. The Company shall use commercially reasonable efforts to obtain and maintain in effect during the entire period for
which the Company is obligated to indemnify the Indemnitee under this Agreement, one or more policies of insurance with reputable insurance
companies to provide the officers and 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 PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto
have caused this Indemnification Agreement to be signed as of the day and year first above written.
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KIMBELL TIGER ACQUISITION CORPORATION
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By:
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Name:
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Zachary M. Lunn
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Title:
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President and Chief Executive Officer
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INDEMNITEE
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By:
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Name:
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[●]
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Address:
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[Signature Page to Indemnification Agreement]
Exhibit 10.9
KIMBELL TIGER OPERATING COMPANY, LLC
777 Taylor St.
Fort Worth, Texas 76102
[●], 2022
[Sponsor Affiliate]
777 Taylor St.
Fort Worth, Texas 76102
Re: Administrative Support Agreement
Ladies and Gentlemen:
This letter agreement by and between Kimbell Tiger
Acquisition Corporation (the “SPAC”), Kimbell Tiger Operating Company, LLC (the “Company,”
and together with the SPAC, the “SPAC Parties”), Kimbell Tiger Acquisition Sponsor, LLC (“Sponsor”),
and [Sponsor Affiliate] (“Affiliate”), an affiliate of Sponsor will confirm our agreement that, commencing on
the date certain securities of the SPAC are first listed on the New York Stock Exchange (the “Listing Date”),
pursuant to a Registration Statement on Form S-1 and prospectus filed with the U.S. Securities and Exchange Commission (the “Registration
Statement,” and the offering of securities described therein, the “Offering”) and continuing until
the earlier of the consummation by the SPAC of an initial business combination (the “Business Combination”)
or the SPAC’s liquidation (in each case as described in the Registration Statement) (such earlier date hereinafter referred to as
the “Termination Date”):
(i) Affiliate shall provide to the Company office space, administrative and support services as may be reasonably required by the Company.
As reimbursement therefor, beginning on the Listing Date and continuing monthly thereafter until the Termination Date, the Company shall
pay Affiliate (and Affiliate will receive on behalf of itself or, to the extent it causes another person to make support available to
Company, as nominee on behalf of such other person) the sum of $25,000 per month. Such payment may be made to Affiliate or
to such recipients providing such support to the Company, as designated by the SPAC or the Company. Although the sums payable hereunder
are fixed, the parties intend that such sums constitute solely a reimbursement for the costs described herein without any mark-up or other
profits and agree that that such fixed sums constitute a reasonable estimate of such costs.
(ii) Affiliate and Sponsor hereby irrevocably waive any and all right, title, interest, causes of action and claims of any kind as a
result of, or arising out of, this letter agreement (each, a “Claim”) in or to, and any and all right to seek
payment of any amounts due to it out of, the trust account established for the benefit of the public shareholders of the SPAC and into
which substantially all of the proceeds of the SPAC’s initial public offering will be deposited (the “Trust Account”),
and hereby irrevocably waives any Claim it may have in the future, which Claim would reduce, encumber or otherwise adversely affect the
Trust Account or any monies or other assets in the Trust Account, and further agrees not to seek recourse, reimbursement, payment or satisfaction
of any Claim against the Trust Account or any monies or other assets in the Trust Account for any reason whatsoever. Accordingly, the
Sponsor acknowledges and agrees that any indemnification or advance of expenses required to be provided hereunder will only be paid by
the SPAC Parties (i) if prior to a Business Combination, to the extent that the SPAC Parties have sufficient funds outside of the Trust
Account to satisfy their obligations to provide such indemnification and advancement of expenses or (ii) on or after the date that the
SPAC Parties consummate a Business Combination, and in both cases such indemnification and other payments shall accrue and become due
and payable immediately upon the occurrence of either event in clauses (i) and (ii).
(iii) To the fullest extent permitted by applicable law, each of the SPAC Parties hereby agrees to defend, indemnify, hold harmless and exonerate
(including the advancement of expenses to the fullest extent permitted by applicable law) Sponsor, Affiliate and each of their respective
directors, officers, employees, principals, managers, partners, members, shareholders, equityholders, control persons, affiliates, agents,
advisors, consultants and representatives (each, a “Sponsor Indemnitee”) from any and all costs, fees, expenses,
judgments, liabilities, fines, penalties, reasonable attorneys’ fees and amounts paid in settlement (including all interest, assessments
and other charges paid or payable in connection with or in respect of such costs, fees, expenses, judgments, liabilities, fines, penalties
and amounts paid in settlement) actually, and reasonably, incurred by a Sponsor Indemnitee or on a Sponsor Indemnitee’s behalf
in connection with any threatened, pending or completed action, suit, arbitration, mediation, alternate dispute resolution mechanism,
investigation, inquiry, hearing or any other actual, threatened or completed proceeding (including in each case as a witness) instituted
by the Company or any third party, whether civil, criminal, administrative or investigative in nature, in respect of (i) the Offering
or the SPAC Parties’ operations or conduct of their business (including any investment opportunities sourced by a Sponsor Indemnitee
for the SPAC Parties), or (ii) any claim against a Sponsor Indemnitee alleging any expressed or implied management or endorsement by
such Sponsor Indemnitee of any activities of the SPAC Parties or any express or implied association between such Sponsor Indemnitee,
on the one hand, and the SPAC Parties or any of their affiliates, on the other hand (in each case to the extent that such indemnification,
hold harmless and exoneration obligations with respect to such matters are not expressly covered by a separate written agreement between
the SPAC Parties, on the one hand, and the applicable Sponsor Indemnitee, on the other hand); provided, for the avoidance of doubt, that
under no circumstance shall a Sponsor Indemnitee have a Claim to any monies or assets held in the Trust Account, and the Company shall
not be permitted to procure monies or assets held in the Trust Account for the satisfaction of its obligations to any Sponsor Indemnitee
in respect of the indemnification provided hereunder. The Sponsor Indemnitee will promptly notify the SPAC Parties in writing
of any indemnified claim provided that failure or delay to give such notice shall not relieve the SPAC Parties of their indemnification
obligations hereunder. The SPAC Parties will, at their expense, undertake the defense of such claim with attorneys of their own choosing
reasonably satisfactory in all respects to such Sponsor Indemnitee, subject to the right of such Sponsor Indemnitee to undertake such
defense as hereinafter provided. An Sponsor Indemnitee may participate in such defense with counsel of such Sponsor Indemnitee’s
choosing at the expense of the SPAC Parties. In the event that the SPAC Parties do not undertake the defense of any claim within a reasonable
time after such Sponsor Indemnitee has given the notice thereof, or in the event that such Sponsor Indemnitee shall in good faith determine
that the defense of any claim by the SPAC Parties is inadequate or may conflict with the interest of any Sponsor Indemnitee, such Sponsor
Indemnitee may, at the expense of the SPAC Parties and after giving notice to the SPAC Parties of such action, undertake the defense
of the claim and compromise or settle the claim, all for the account of and at the risk of the SPAC Parties. The SPAC Parties shall pay
all costs and expenses (including, without limitation, attorneys’ fees and costs of experts) incurred by the Sponsor Indemnitee
in connection with Sponsor Indemnitee’s defense of any such claim promptly (and in any event within 10 days) after receipt of any
statement therefor. In the defense of any claim against a Sponsor Indemnitee, the SPAC Parties shall not, except with the prior written
consent of such Sponsor Indemnitee, consent to entry of any judgment or enter into any settlement that includes any injunctive or other
non-monetary relief or any payment of money by such Sponsor Indemnitee, or that does not include as an unconditional term thereof the
giving by the person or persons asserting such claim to such Sponsor Indemnitee of an unconditional release from all liability on any
of the matters that are the subject of such Claim and an acknowledgement that such Sponsor Indemnitee denies all wrongdoing in connection
with such matters. The SPAC Parties shall not be obligated to indemnify a Sponsor Indemnitee against amounts paid in settlement of a
claim if such settlement is effected by such Sponsor Indemnitee without the prior written consent of the SPAC Parties, which shall not
be unreasonably withheld or delayed. If the indemnification provided for in this paragraph is for any reason not available to a Sponsor
Indemnitee as a matter of law in respect of any losses, claims, damages or liabilities referred to herein, then, in lieu of indemnifying
such Sponsor Indemnitee therefor, the SPAC Parties shall contribute to the amount paid or payable by such Sponsor Indemnitee as a result
of such losses, claims, damages or liabilities (and expenses relating thereto) (a) in such proportion as is appropriate to reflect the
relative benefits to the Sponsor Indemnitee, on the one hand, and the SPAC Parties, on the other hand, of the subject matter of this
Agreement or (b) if the allocation provided by clause (a) above is not available, in such proportion as is appropriate to reflect not
only the relative benefits referred to in such clause (a) but also the relative fault of each of such Sponsor Indemnitee and the SPAC
Parties, as well as any other relevant equitable considerations. The Sponsor Indemnitees shall be third party beneficiaries of this paragraph.
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 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 amended, modified
or waived as to any particular provision, except by a written instrument executed by the parties hereto.
No party hereto may assign either this letter
agreement or any of its rights, interests or obligations hereunder without the prior written approval of the other parties; provided,
however, that Affiliate may assign this letter agreement, in whole or in part, to Sponsor or any other person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, Sponsor without the prior
written approval 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 constitutes the entire relationship
of the parties hereto with respect to the matters contemplated herein, and any litigation between the parties (whether grounded in contract,
tort, statute, law or equity) with respect to 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.
[Signature Page Follows]
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Very truly yours,
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KIMBELL TIGER OPERATING COMPANY,
LLC
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By:
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Name:
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Zachary M. Lunn
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Title:
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President and Chief Executive Officer
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KIMBELL TIGER ACQUISITION CORPORATION
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By:
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Name:
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Zachary M. Lunn
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Title:
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President and Chief
Executive Officer
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AGREED TO ACCEPTED BY:
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[Affiliate]
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By:
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Name:
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Title:
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Chief Executive Officer
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KIMBELL TIGER ACQUISITION SPONSOR,
LLC
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By: Kimbell Royalty Operating, LLC,
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its Managing Member
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By:
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Name:
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Matthew S. Daly
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Title:
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Chief Operating Officer
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Signature Page to Administrative
Support Agreement
Exhibit 10.10
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
KIMBELL TIGER OPERATING COMPANY, LLC
DATED AS OF [●], 2022
THE LIMITED LIABILITY COMPANY INTERESTS IN KIMBELL
TIGER OPERATING COMPANY, LLC HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, THE SECURITIES LAWS OF ANY STATE,
OR ANY OTHER APPLICABLE SECURITIES LAWS, AND HAVE BEEN OR ARE BEING ISSUED IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND SUCH LAWS. SUCH INTERESTS MUST BE ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, ANY APPLICABLE SECURITIES
LAWS OF ANY STATE AND ANY OTHER APPLICABLE SECURITIES LAWS; (II) THE TERMS AND CONDITIONS OF THIS AMENDED AND RESTATED LIMITED LIABILITY
COMPANY AGREEMENT; AND (III) ANY OTHER TERMS AND CONDITIONS AGREED TO IN WRITING BETWEEN THE MANAGING MEMBER AND THE APPLICABLE MEMBER.
THE LIMITED LIABILITY COMPANY INTERESTS MAY NOT BE TRANSFERRED OF RECORD EXCEPT IN COMPLIANCE WITH SUCH LAWS, THIS AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT AND ANY OTHER TERMS AND CONDITIONS AGREED TO IN WRITING BY THE MANAGING MEMBER AND THE APPLICABLE
MEMBER. THEREFORE, PURCHASERS AND OTHER TRANSFEREES OF SUCH LIMITED LIABILITY COMPANY INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR
INVESTMENT OR ACQUISITION FOR AN INDEFINITE PERIOD OF TIME.
Table of Contents
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Page
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Article I DEFINITIONS
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2
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Section 1.1
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Definitions
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2
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Section 1.2
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Interpretive Provisions
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12
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Article II ORGANIZATION OF THE LIMITED LIABILITY COMPANY
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12
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Section 2.1
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Formation
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12
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Section 2.2
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Filing
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12
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Section 2.3
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Name
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13
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Section 2.4
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Registered Office; Registered Agent
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13
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Section 2.5
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Principal Place of Business
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13
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Section 2.6
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Purpose; Powers
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13
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Section 2.7
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Term
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13
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Section 2.8
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Intent
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13
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Article III [RESERVED]
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13
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Article IV OWNERSHIP AND CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS
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13
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Section 4.1
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Authorized Units; General Provisions With Respect to Units
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13
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Section 4.2
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Class B Units
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16
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Section 4.3
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Voting Rights
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17
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Section 4.4
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Capital Contributions; Unit Ownership
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17
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Section 4.5
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Capital Accounts
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18
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Section 4.6
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Other Matters
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18
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Section 4.7
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Redemption of Class A Units
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19
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Article V ALLOCATIONS OF PROFITS AND LOSSES
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23
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Section 5.1
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Profits and Losses
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23
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Section 5.2
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Special Allocations
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24
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Section 5.3
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Allocations for Tax Purposes in General
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27
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Section 5.4
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Other Allocation Rules
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28
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Article VI DISTRIBUTIONS
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29
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Section 6.1
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Distributions
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29
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Section 6.2
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Tax-Related Distributions
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29
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Section 6.3
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Distribution Upon Withdrawal
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29
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Section 6.4
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Issuance of Additional Equity Securities
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29
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Article VII MANAGEMENT
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30
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Section 7.1
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The Managing Member; Fiduciary Duties
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30
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Section 7.2
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Officers
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30
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Section 7.3
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Warranted Reliance by Officers on Others
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31
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Section 7.4
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Indemnification
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31
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Section 7.5
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Maintenance of Insurance or Other Financial Arrangements
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32
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Section 7.6
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Resignation or Termination of Managing Member
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32
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Section 7.7
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No Inconsistent Obligations
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32
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Section 7.8
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Reclassification Events of PubCo
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32
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Section 7.9
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Certain Costs and Expenses
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33
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Article VIII ROLE OF MEMBERS
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33
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Section 8.1
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Rights or Powers
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33
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Section 8.2
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Voting
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34
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Section 8.3
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Various Capacities
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34
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Section 8.4
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Investment Opportunities
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34
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Article IX TRANSFERS OF INTERESTS
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35
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Section 9.1
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Restrictions on Transfer
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35
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Section 9.2
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Notice of Transfer
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35
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Section 9.3
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Transferee Members
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36
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Section 9.4
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Legend
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36
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Article X ACCOUNTING; CERTAIN TAX MATTERS
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37
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Section 10.1
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Books of Account
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37
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Section 10.2
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Tax Elections
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37
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Section 10.3
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Tax Returns; Information
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37
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Section 10.4
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Company Representative
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37
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Section 10.5
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Withholding Tax Payments and Obligations
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38
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Article XI DISSOLUTION AND TERMINATION
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39
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Section 11.1
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Liquidating Events
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39
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Section 11.2
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Bankruptcy
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39
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Section 11.3
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Procedure
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40
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Section 11.4
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Rights of Members
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41
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Section 11.5
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Notices of Dissolution
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41
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Section 11.6
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Reasonable Time for Winding Up
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41
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Section 11.7
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No Deficit Restoration
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41
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Article XII GENERAL
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41
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Section 12.1
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Amendments; Waivers
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41
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Section 12.2
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Further Assurances
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42
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Section 12.3
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Successors and Assigns
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42
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Section 12.4
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Certain Representations by Members
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42
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Section 12.5
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Entire Agreement
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43
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Section 12.6
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Rights of Members Independent
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43
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Section 12.7
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Governing Law
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43
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Section 12.8
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Jurisdiction and Venue
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43
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Section 12.9
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Headings
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43
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Section 12.10
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Counterparts
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43
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Section 12.11
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Notices
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43
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Section 12.12
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Representation By Counsel; Interpretation
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44
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Section 12.13
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Severability
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44
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Section 12.14
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Expenses
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44
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Section 12.15
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Waiver of Jury Trial
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44
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Section 12.16
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No Third Party Beneficiaries
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44
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AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
KIMBELL TIGER OPERATING COMPANY, LLC
This Amended and Restated Limited Liability Company
Agreement (as amended, supplemented or restated from time to time, this “Agreement”) is entered into as of [●],
2022, by and among Kimbell Tiger Operating Company, LLC, a Delaware limited liability company (the “Company”),
Kimbell Tiger Acquisition Corporation, a Delaware corporation (“PubCo”), Kimbell Tiger Acquisition Sponsor,
LLC, a Delaware limited liability company (“Tiger Sponsor”), and each other Person who is or at any time becomes
a Member in accordance with the terms of this Agreement and the Act. Capitalized terms used herein and not otherwise defined have the
respective meanings set forth in Section 1.1.
RECITALS
WHEREAS,
immediately prior to the adoption of this Agreement, the Company was governed by the Limited Liability Company Agreement, dated effective
as of April 9, 2021 (the “Existing LLC Agreement”);
WHEREAS,
on May 10, 2021 Tiger Sponsor purchased 100 Class A Units (and a corresponding number of Class B Shares) and 2,500 Class A
Shares (collectively, the “Sponsor Shares”);
WHEREAS,
on May 10, 2021 Tiger Sponsor acquired 5,750,000 Class B Units and a corresponding number of Class B Shares, of which up
to 750,000 Class B Units and a corresponding number of Class B Shares are subject to forfeiture by Tiger Sponsor to the extent
that the underwriters of the initial underwritten public offering of PubCo Units (the “IPO”) do not fully exercise
their over-allotment option (the “Over-Allotment Option”);
WHEREAS,
it is contemplated that PubCo will, subject to the approval of its board of directors, issue up to 20,000,000 PubCo Units, comprised of
an aggregate of 20,000,000 Class A Shares and 10,000,000 PubCo Warrants, to the public for cash in the initial underwritten public
offering of PubCo Units (the “IPO”), or in the event the Over-Allotment Option is exercised in full, 23,000,000
Class A Shares and 11,500,000 PubCo Warrants;
WHEREAS,
if the IPO is consummated, PubCo will contribute all of the net proceeds received by it from the IPO to the Company in exchange for a
number of Class A Units and Company Warrants equal to the number of Class A Shares and PubCo Warrants, respectively, comprising
the PubCo Units issued in the IPO;
WHEREAS,
in connection with the IPO, it is contemplated that Tiger Sponsor will purchase from PubCo an aggregate of 11,500,000 PubCo Warrants, or
in the event the Over-Allotment Option is exercised in full, 12,700,000 PubCo Warrants, and if such purchase is consummated, PubCo will
contribute all of the net proceeds received by it in such purchase to the Company in exchange for a number of Company Warrants equal to
the number of PubCo Warrants sold to Tiger Sponsor;
WHEREAS,
each Class A Unit (other than any Class A Unit held by the PubCo Holdings Group) may be redeemed, at the election of the holder
of such Class A Unit (together with the surrender and delivery by such holder of one Class B Share), for one Class A Share
or, at the Company’s election under certain circumstances, cash in accordance with the terms and conditions of this Agreement;
WHEREAS,
the Members of the Company desire that PubCo continue as the sole managing member of the Company (in its capacity as managing member,
the “Managing Member”);
WHEREAS,
the Members and the Company desire to amend and restate the Existing LLC Agreement and adopt this Agreement; and
WHEREAS,
this Agreement shall supersede the Existing LLC Agreement in its entirety as of the date hereof.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, and intending
to be legally bound, the Existing LLC Agreement is hereby amended and restated in its entirety and the parties hereby agree as follows:
Article I
DEFINITIONS
Section 1.1 Definitions.
As used in this Agreement and the Schedules and Exhibits attached to this Agreement, the following definitions shall apply:
“Act”
means the Delaware Limited Liability Company Act, 6 Del. C. § 18-101, et seq., as amended from time to time (or any corresponding
provisions of succeeding law).
“Action”
means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Entity.
“Adjusted Basis”
has the meaning given such term in Section 1011 of the Code.
“Adjusted Capital
Account” means, with respect to any Member, (a) the Capital Account balance of such Member, plus (b) such Member’s
share of Member Minimum Gain or Company Minimum Gain.
“Adjusted Capital
Account Deficit” means, with respect to any Member, the deficit balance, if any, in such Member’s Adjusted Capital
Account at the end of any Fiscal Year or other taxable period, after (a) crediting such Member’s Adjusted Capital Account for
any amount such Member is obligated to restore under Treasury Regulations Section 1.704-1(b)(2)(ii)(c) and (b) reduction
to reflect the items described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6). This definition of Adjusted
Capital Account Deficit is intended to comply with the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall
be interpreted consistently therewith.
“Adjusted Conversion
Ratio” means that ratio having:
(a) a
numerator equal to the sum of (i) a number of units equal to 25% of the number of all Class A Shares issued or deemed issued
in connection with the closing of the Initial Business Combination (or issuable upon the conversion or exercise of any Equity-Linked Securities
issued or deemed issued in connection with the closing of the Initial Business Combination), but excluding (x) any such Class A
Shares or Equity-Linked Securities to the extent that the holders of Class B Units have waived their rights pursuant to Section 4.2(b)(ii) with
respect to such Class A Shares or Equity-Linked Securities, (y) any Class A Shares or Equity-Linked Securities issued or
issuable to any seller in the Initial Business Combination and (z) any Sponsor Shares, plus (ii) the number of Founder Units
issued and outstanding immediately prior to the closing of the Initial Business Combination; and
(b) a
denominator equal to the number of Founder Units issued and outstanding immediately prior to the closing of the Initial Business Combination.
“Affiliate”
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by or is under common control
with such Person. For these purposes, “control” means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract
or otherwise; provided that, for purposes of this Agreement, (a) no Member shall be deemed an Affiliate of the Company or any of
its Subsidiaries and (b) none of the Company or any of its Subsidiaries shall be deemed an Affiliate of any Member.
“Agreement”
is defined in the preamble to this Agreement.
“beneficially
own” and “beneficial owner” shall be as defined in Rule 13d-3 of the rules promulgated
under the Exchange Act.
“Block Redemption
Date” is defined in Section 4.7(b)(ii).
“Business Day”
means any day except a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law
to be closed.
“Business Opportunities
Exempt Party” is defined in Section 8.4.
“Call Right”
is defined in Section 4.7(f).
“Capital Account”
means, with respect to any Member, the Capital Account maintained for such Member in accordance with Section 4.5.
“Capital Contribution”
means, with respect to any Member, the amount of cash and the initial Gross Asset Value of any property (other than cash) contributed
to the Company by such Member. Any reference to the Capital Contribution of a Member will include any Capital Contributions made by a
predecessor holder of such Member’s Units to the extent that such Capital Contribution was made in respect of Units Transferred
to such Member.
“Cash Election”
means an election by the Company to redeem Class A Units for cash pursuant to Section 4.7(e)(ii) or an election by PubCo
(or such designated member(s) of the PubCo Holdings Group) to purchase Class A Units for cash pursuant to an exercise of its
Call Right set forth in Section 4.7(f).
“Cash Election
Amount” means with respect to a particular Redemption of Class A Shares, for which a Cash Election has been made, (a) if
the Cash Election is made in respect of a Redemption Notice issued by a Redeeming Holder in connection with a Registered Offering of Class A
shares, an amount of cash equal to the product of (i) the number of Class A Shares that would have been received in such Redemption
if a Cash Election had not been made and (ii) the price per Class A Share sold to the public in such Registered Offering (reduced
by the amount of any Discount associated with such Class A Share); (b) other than in the case of clause (a), if the Class A
Shares trade on a securities exchange or automated or electronic quotation system, an amount of cash equal to the product of (i) the
number of Class A Shares that would have been received in such Redemption if a Cash Election had not been made and (ii) the
average of the volume-weighted closing price for a Class A Share on the principal U.S. securities exchange or automated or electronic
quotation system on which the Class A Shares trade, as reported by Bloomberg, L.P., or its successor, for each of the 10 consecutive
full Trading Days ending on and including the last full Trading Day immediately prior to the Redemption Notice Date, subject to appropriate
and equitable adjustment for any stock splits, reverse splits, stock dividends or similar events affecting the Class A Shares; and
(c) if the Class A Shares no longer trade on a securities exchange or automated or electronic quotation system, an amount of
cash equal to the product of (i) the number of Class A Shares that would have been received in such Redemption if a Cash Election
had not been made and (ii) the Fair Market Value of one Class A Share.
“Chief Executive
Officer” means the person appointed as the Chief Executive Officer of the Company by the Managing Member pursuant to Section 7.2(a).
“Class A
Capital Account” means, with respect to any Member holding Class A Units, (a) the total number of Class A
Units held by such Member, multiplied by (b) the Class A Per Unit Balance.
“Class A
Per Unit Balance” means, as of any relevant date, the quotient of (a) PubCo’s Adjusted Capital Account balance,
to the extent attributable to PubCo’s ownership of Class A Units and computed on a hypothetical basis after all allocations
have been tentatively made pursuant to Section 5.1 and Section 5.2, based on an interim closing of the books pursuant to Section 706
of the Code as of such date, divided by (b) the total number of Class A Units held by PubCo on such date.
“Class A
Shares” means, as applicable, (a) the Class A Common Stock of PubCo, par value $0.0001 per share, or (b) following
any consolidation, merger, reclassification or other similar event involving PubCo, any shares or other securities of PubCo or any other
Person or cash or other property that become payable in consideration for the Class A Shares or into which the Class A Shares
are exchanged or converted as a result of such consolidation, merger, reclassification, recapitalization, reorganization or other similar
event.
“Class A
Units” means the Class A Units of the Company issued hereunder and shall also include any Equity Security of the Company
issued in respect of or in exchange for Class A Units, whether by way of dividend or other distribution, split, consolidation, merger,
reclassification, recapitalization, reorganization, conversion or similar event.
“Class B
Capital Account” means, as of any relevant date, with respect to any Member holding Class B Units, (a) such Member’s
Adjusted Capital Account minus (b) such Member’s Class A Capital Account (if any), in each case, computed on a hypothetical
basis after all allocations have been tentatively made pursuant to Section 5.1 and Section 5.2, based on an interim closing
of the books pursuant to Section 706 of the Code as of such date.
“Class B
Conversion Date” means the closing date of the Initial Business Combination.
“Class B
Fungibility Target Balance” means, as of any relevant date, with respect to any Member holding Class B Units, the product
of (a) the Class A Per Unit Balance, multiplied by (b) the number of Class B Units held by such Member; provided
that, in the event Class B Units will be converted pursuant to Section 4.2(c) using the Adjusted Conversion Ratio, the
Class B Fungibility Target Balance shall be determined by further multiplying the foregoing amount by the Adjusted Conversion Ratio.
“Class B
Units” means the Class B Units of the Company issued hereunder and shall also include any Equity Security of the Company
issued in respect of or in exchange for Class B Units, whether by way of dividend or other distribution, split, consolidation, merger,
reclassification, recapitalization, reorganization, conversion or similar event.
“Class B
Shares” means, as applicable, (a) the Class B common stock of PubCo, par value $0.0001 per share, or (b) following
any consolidation, merger, reclassification or other similar event involving PubCo, any shares or other securities of PubCo or any other
Person or cash or other property that become payable in consideration for the Class B Shares or into which the Class B Shares
are exchanged or converted as a result of such consolidation, merger, reclassification, recapitalization, reorganization or other similar
event.
“Code”
means the United States Internal Revenue Code of 1986, as amended from time to time (or any corresponding provisions of succeeding law).
“Commission”
means the U.S. Securities and Exchange Commission, including any governmental body or agency succeeding to the functions thereof.
“Company”
is defined in the preamble to this Agreement.
“Company Level
Taxes” means any federal, state or local taxes, additions to tax, penalties and interest payable by the Company or any of
its Subsidiaries as a result of any examination of the Company’s or any of its Subsidiaries’ affairs by any federal, state
or local tax authorities, including resulting administrative and judicial proceedings under the Partnership Tax Audit Rules.
“Company Minimum
Gain” has the meaning of “partnership minimum gain” set forth in Treasury Regulations Sections 1.704-2(b)(2) and
1.704-2(d). It is further understood that Company Minimum Gain shall be determined in a manner consistent with the rules of Treasury
Regulations Section 1.704-2(b)(2), including the requirement that if the adjusted Gross Asset Value of property subject to one or
more Nonrecourse Liabilities differs from its adjusted tax basis, Company Minimum Gain shall be determined with reference to such Gross
Asset Value.
“Company Representative”
has the meaning assigned to the term “partnership representative” in Section 6223 of the Code and any Treasury Regulations
or other administrative or judicial pronouncements promulgated thereunder (including, in each case, any similar capacity or role under
relevant state or local law), and shall include, except where context otherwise requires, any Designated Individual.
“Company Warrants”
means the warrants issued by the Company to PubCo and exercisable for Class A Units.
“Contract”
means any written agreement, contract, lease, sublease, license, sublicense, obligation, promise or undertaking.
“control”
(including the terms “controlled by” and “under common control with”), with respect to the relationship between
or among two or more Persons, means the possession, directly or indirectly or as trustee, personal representative or executor, of the
power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as
trustee, personal representative or executor, by contract or otherwise.
“Covered Audit
Adjustment” means an adjustment to any partnership-related item (within the meaning of Section 6241(2)(B) of the
Code) to the extent such adjustment results in an “imputed underpayment” as described in Section 6225(b) of the
Code or any analogous provision of state or local Law.
“Covered Person”
is defined in Section 7.4.
“Debt Securities”
means, with respect to PubCo, any and all debt instruments or debt securities that are not Equity Securities of PubCo.
“Depreciation”
means, for each Fiscal Year or other taxable period, an amount equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such Fiscal Year or other taxable period, except that (a) with respect to any such property
the Gross Asset Value of which differs from its Adjusted Basis for U.S. federal income tax purposes and which difference is being eliminated
by use of the “remedial method” pursuant to Treasury Regulations Section 1.704-3(d), Depreciation for such Fiscal Year
or other taxable period shall be the amount of book basis recovered for such Fiscal Year or other taxable period under the rules prescribed
by Treasury Regulations Section 1.704-3(d)(2), and (b) with respect to any other such property the Gross Asset Value
of which differs from its Adjusted Basis for U.S. federal income tax purposes at the beginning of such Fiscal Year or other taxable period,
Depreciation shall be an amount that bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation,
amortization or other cost recovery deduction for such Fiscal Year or other taxable period bears to such beginning Adjusted Basis; provided,
however, that if the Adjusted Basis for U.S. federal income tax purposes of an asset at the beginning of such Fiscal Year or other taxable
period is zero, Depreciation with respect to such asset shall be determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the Managing Member.
“Designated Holder”
means any holder of Units (a) that has elected to be treated as a Designated Holder by providing written notice to the Company not
less than 10 Business Days prior to the relevant date on which an automatic redemption occurs pursuant to Section 4.7(i) or
(b) that the Company has reason to know is not (or is a disregarded subsidiary of a Person that is not) a “United States person”
or a partnership for U.S. federal income tax purposes.
“Designated Holder
Redemption” is defined in Section 4.7(i).
“Designated Holder
Redemption Date” is defined in Section 4.7(i).
“Designated Holder
Redemption Notice” is defined in Section 4.7(i).
“Designated Individual”
means an individual meeting the requirements of proposed Treasury Regulations Sections 301.6223-1(b)(2) and (4) that is
appointed as the sole individual through whom the Company Representative will act for purposes of subchapter C of chapter 63 of the Code,
as provided in proposed Treasury Regulations Section 301.6223-1(b)(3). References in the preceding sentence to proposed Treasury
Regulations shall include any similar final Treasury Regulations.
“DGCL”
means the General Corporation Law of the State of Delaware, as amended from time to time (or any corresponding provisions of succeeding
law).
“Discount”
is defined in Section 4.7(e)(ii).
“Effective Time”
means the time of the initial closing of the IPO.
“Equalization
Date” means the date on which all outstanding Class B Units have been converted into Class A Units pursuant to
Section 4.2(c) or Section 4.7(i).
“Equity Securities”
means (a) with respect to a partnership, limited liability company or similar Person, any and all units, interests, rights to purchase,
warrants, options or other equivalents of, or other ownership interests in, any such Person as well as Indebtedness or equity instruments
convertible, exchangeable or exercisable into any such units, interests, rights or other ownership interests and (b) with respect
to a corporation, any and all shares, interests, participation or other equivalents (however designated) of corporate stock, including
all common stock and preferred stock, or warrants, options or other rights to acquire any of the foregoing, including any debt instrument
convertible or exchangeable into any of the foregoing.
“Equity-Linked
Securities” means any Equity Securities of PubCo, the Company or any of their Subsidiaries, but excluding:(a) any Equity
Securities of the Company held by PubCo and (b) any Founder Units or Class A Shares issued upon the Redemption of any Founder
Units.
“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.
“Excess Tax Amount”
is defined in Section 10.5(c).
“Exchange Act”
means the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder, as the same may be amended from
time to time (or any corresponding provisions of succeeding law).
“Existing LLC
Agreement” is defined in the recitals to this Agreement.
“Fair Market Value”
means the fair market value of any property as determined in Good Faith by the Managing Member after taking into account such factors
as the Managing Member shall deem appropriate.
“Federal Bankruptcy
Code” means Title 11 of the United States Code, as amended from time to time, and all rules and regulations promulgated
thereunder.
“Fiscal Year”
means the fiscal year of the Company, which shall end on December 31 of each calendar year unless, for U.S. federal income tax purposes,
another fiscal year is required. The Company shall have the same fiscal year for U.S. federal income tax purposes and for accounting purposes.
“Founder Units”
means (a) any Class B Units and any Class A Units issued upon conversion of a Class B Unit pursuant to Section 4.2(c) or
Section 4.7(i) and (b) any Class A Units held by the PubCo Holdings Group as a result of a Designated Holder Redemption
of any such Units described in clause (a).
“Fungible Class B
Units” of any Member holding Class B Units, as of any relevant date, means a number of such Class B Units equal
to the quotient, rounded down to the nearest whole unit, of (a) such Member’s Class B Capital Account, divided by (b) the
Class A Per Unit Balance; provided that, solely in the case of a conversion pursuant to Section 4.2(c) using the
Adjusted Conversion Ratio, the number of Fungible Class B Units for purposes of such conversion shall be determined by further dividing
the foregoing amount by the Adjusted Conversion Ratio; provided further that, for the avoidance of doubt, the number of Fungible Class B
Units shall never exceed the total number of Class B Units held by such Member.
“GAAP”
means U.S. generally accepted accounting principles, in effect from time to time.
“Good Faith”
means a Person having acted in good faith and in a manner such Person reasonably believed to be in or not opposed to the best interests
of the Company and the PubCo Holdings Group and, with respect to a criminal proceeding, having had no reasonable cause to believe such
Person’s conduct was unlawful.
“Governmental
Entity” means any federal, national, supranational, state, provincial, local, foreign or other government, governmental,
stock exchange, regulatory or administrative authority, agency or commission or any court, tribunal or judicial or arbitral body.
“Gross Asset Value”
means, with respect to any asset, the asset’s Adjusted Basis for U.S. federal income tax purposes, except as follows:
(a) the
initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross Fair Market Value of such asset as of
the date of such contribution;
(b) the
Gross Asset Values of all Company assets shall be adjusted to equal their respective gross Fair Market Values as of the following times:
(i) the acquisition of an interest (or additional interest) in the Company by any new or existing Member in exchange for more than
a de minimis Capital Contribution to the Company or in exchange for the performance of more than a de minimis amount of services to or
for the benefit of the Company; (ii) the distribution by the Company to a Member of more than a de minimis amount of Company assets
as consideration for an interest in the Company; (iii) the liquidation of the Company within the meaning of Treasury Regulations
Section 1.704-1(b)(2)(ii)(g)(1), (iv) the acquisition of an interest in the Company by any new or existing Member upon the exercise
of a Company Warrant or other noncompensatory option in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(s) or
in connection with a Redemption; (v) the conversion of Class B Units into Class A Units pursuant to Section 4.2(c) on
the Class B Conversion Date; or (vi) any other event to the extent determined by the Managing Member to be permitted and necessary
or appropriate to properly reflect Gross Asset Values in accordance with the standards set forth in Treasury Regulations Section 1.704-1(b)(2)(iv)(q);
provided, however, that adjustments pursuant to clauses (i), (ii), (iv) and (v) above shall not be made if the Managing Member
reasonably determines that such adjustments are not necessary or appropriate to reflect the relative economic interests of the Members
in the Company. If any Company Warrants or other noncompensatory options are outstanding upon the occurrence of an event described in
this paragraph (b)(i) through (b)(vi), the Company shall adjust the Gross Asset Values of its properties to properly reflect
any change in the Fair Market Value of such Company Warrants or other noncompensatory options in accordance with Treasury Regulations
Sections 1.704-1(b)(2)(iv)(f)(1) and 1.704-1(b)(2)(iv)(h)(2);
(c) the
Gross Asset Value of any Company asset distributed to any Member shall be adjusted to equal the gross Fair Market Value of such asset
on the date of such distribution;
(d) the
Gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the Adjusted Basis of such assets
pursuant to Code Section 734(b) (including any such adjustments pursuant to Treasury Regulation Section 1.734-2(b)(1)),
but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and
clause (f) in the definition of “Profits” or “Losses” below or Section 5.2(h); provided, however,
that the Gross Asset Value of a Company asset shall not be adjusted pursuant to this subsection to the extent the Managing Member
determines in Good Faith that an adjustment pursuant to clause (b) of this definition is necessary or appropriate in connection
with a transaction that would otherwise result in an adjustment pursuant to this clause (d); and
(e) if
the Gross Asset Value of a Company asset has been determined or adjusted pursuant to clauses (a), (b) or (d) of this definition
of Gross Asset Value, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such
asset for purposes of computing Profits, Losses and other items allocated pursuant to Article V.
“Indebtedness”
means (a) all indebtedness for borrowed money (including capitalized lease obligations, sale-leaseback transactions or other similar
transactions, however evidenced), (b) any other indebtedness that is evidenced by a note, bond, debenture, draft or similar instrument,
(c) notes payable and (d) lines of credit and any other agreements relating to the borrowing of money or extension of credit.
“Initial Business
Combination” means the first transaction or series of transactions constituting a “Business Combination” within
the meaning of the PubCo Charter.
“Interest”
means the entire interest of a Member in the Company, including the Units and all of such Member’s rights, powers and privileges
under this Agreement and the Act.
“Investment Company
Act” is defined in Section 8.1(b).
“IPO”
is defined in the recitals to this Agreement.
“Law”
means any federal, national, supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, code, order,
requirement or rule of law (including common law).
“Legal Action”
is defined in Section 12.8.
“Liability”
means any liability or obligation, whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated
or unliquidated and whether due or to become due, regardless of when asserted.
“Liquidating Event”
is defined in Section 11.1.
“Managing Member”
is defined in the recitals to this Agreement.
“Member”
means any Person that executes this Agreement as a Member and any other Person admitted to the Company as an additional or substituted
Member, in each case, that has not made a disposition of such Person’s entire Interest.
“Member
Minimum Gain” has the meaning ascribed to “partner nonrecourse debt minimum gain” set forth in Treasury Regulations
Section 1.704-2(i). It is further understood that the determination of Member Minimum Gain and the net increase or decrease in Member
Minimum Gain shall be made in the same manner as required for such determination of Company Minimum Gain under Treasury Regulations
Sections 1.704-2(d) and 1.704-2(g)(3).
“Member Nonrecourse
Debt” has the meaning of “partner nonrecourse debt” set forth in Treasury Regulations Section 1.704-2(b)(4).
“Member Nonrecourse
Deductions” has the meaning of “partner nonrecourse deductions” set forth in Treasury Regulations Sections 1.704-2(i)(1) and
1.704-2(i)(2).
“National Securities
Exchange” means an exchange registered with the Commission under the Exchange Act.
“NCO Target Balance”
means (a) with respect to a Class A Unit received upon the exercise of a Company Warrant, the Class A Per Unit Balance
and (b) with respect to any interest in the Company received upon the exercise of any other noncompensatory option, such other amount
determined in the Managing Member’s reasonable discretion that reflects the economic intent of such interest in the Company.
“Non-Fungible
Class B Units” of any holder of Class B Units as of any relevant date means the number of any such Class B
Units outstanding in excess of the number of such Class B Units that are Fungible Class B Units.
“Nonrecourse Deductions”
has the meaning assigned that term in Treasury Regulations Section 1.704-2(b)(1).
“Nonrecourse Liability”
is defined in Treasury Regulations Section 1.704-2(b)(3).
“Officer”
means each Person appointed as an officer of the Company pursuant to and in accordance with the provisions of Section 7.2.
“Over-Allotment
Option” is defined in the recitals to this Agreement.
“Partnership Tax
Audit Rules” means Sections 6221 through 6241 of the Code, together with any final or temporary Treasury Regulations,
Revenue Rulings and case law interpreting Sections 6221 through 6241 of the Code (and any analogous provision of state or local tax
Law).
“Person”
means any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization or other
entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Exchange Act.
“Plan Asset Regulations”
means the regulations issued by the U.S. Department of Labor at Section 2510.3-101 of Part 2510 of Chapter XXV, Title 29 of
the Code of Federal Regulations, or any successor regulations as the same may be amended from time to time.
“Proceeding”
is defined in Section 7.4.
“Profits”
or “Losses” means, for each Fiscal Year or other taxable period, an amount equal to the Company’s taxable
income or loss for such year or period, determined in accordance with Code Section 703(a) (for this purpose, all items
of income, gain, loss or deduction required to be separately stated pursuant to Code Section 703(a)(1) shall be included in
taxable income or loss), with the following adjustments (without duplication):
(a) any
income or gain of the Company that is exempt from U.S. federal income tax or otherwise described in Section 705(a)(1)(B) of
the Code and not otherwise taken into account in computing Profits or Losses shall be added to such taxable income or loss;
(b) any
expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures
pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses,
shall be subtracted from such taxable income or loss;
(c) in
the event the Gross Asset Value of any Company asset is adjusted pursuant to clause (b) or (c) of the definition of Gross
Asset Value above, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the Gross Asset Value
of the Company asset) or an item of loss (if the adjustment decreases the Gross Asset Value of the Company asset) from the disposition
of such asset and shall, except to the extent allocated pursuant to Section 5.2, be taken into account for purposes of computing
Profits or Losses;
(d) gain
or loss resulting from any disposition of Company assets with respect to which gain or loss is recognized for U.S. federal income tax
purposes shall be computed with reference to the Gross Asset Value of the asset disposed of, notwithstanding that the adjusted tax basis
of such asset differs from its Gross Asset Value;
(e) in
lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation;
(f) to
the extent an adjustment to the adjusted tax basis of any asset pursuant to Code Section 734(b) is required, pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Account balances as a result of a distribution
other than in liquidation of a Member’s interest in the Company, the amount of such adjustment shall be treated as an item of gain
(if the adjustment increases the basis of the asset) or an item of loss (if the adjustment decreases such basis) from the disposition
of such asset and shall be taken into account for purposes of computing Profits or Losses; and
(g) any
items of income, gain, loss or deduction that are specifically allocated pursuant to the provisions of Section 5.1(a)(ii) and
Section 5.2 shall not be taken into account in computing Profits or Losses for any taxable year, but such items available to be specially
allocated pursuant to Section 5.2 will be determined by applying rules analogous to those set forth in clauses (a) through
(f) above.
“Property”
means all real and personal property owned by the Company from time to time, including both tangible and intangible property.
“PubCo”
is defined in the recitals to this Agreement.
“PubCo Charter”
means the Amended and Restated Certificate of Incorporation of PubCo, dated as of [●], 2022, as may be amended from time to time
in accordance with its terms.
“PubCo Holdings
Group” means PubCo and each other Subsidiary of PubCo (other than the Company and its Subsidiaries).
“PubCo Shares”
means all classes and series of common stock of PubCo, including the Class A Shares and the Class B Shares.
“PubCo Tax-Related
Liabilities” means any U.S. federal, state and local and non-U.S. income tax obligations (including any Company Level Taxes
for which the PubCo Holdings Group is liable hereunder) owed by the PubCo Holdings Group (other than any obligations to remit any taxes
withheld from payments to third parties).
“PubCo Units”
means the units, each consisting of one Class A Share and one-half of one PubCo Warrant, issued in PubCo’s IPO.
“PubCo Warrants”
means the warrants issued by PubCo and exercisable for Class A Shares in accordance with the terms of the Warrant Agreement.
“Quarterly Redemption
Date” means a date within each fiscal quarter specified by PubCo from time to time, which will generally be set so that
the corresponding Redemption Notice Date falls within a window after PubCo’s earnings announcement for the prior fiscal quarter
or in connection with a Registered Offering.
“Reclassification
Event” means any of the following: (a) any reclassification or recapitalization of PubCo Shares (other than a change
in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination or
any transaction subject to Section 4.1(e)), (b) any merger, consolidation or other combination involving PubCo, or (c) any
sale, conveyance, lease or other disposal of all or substantially all the properties and assets of PubCo to any other Person, in each
of clauses (a), (b) or (c), as a result of which holders of PubCo Shares shall be entitled to receive cash, securities or other
property for their PubCo Shares.
“Redeeming Holder”
is defined in Section 4.7(a).
“Redemption”
means any redemption of Class A Units pursuant to Section 4.7.
“Redemption Contingency”
is defined in Section 4.7(c)(iii).
“Redemption Date”
means a Quarterly Redemption Date, a Special Redemption Date, or a Block Redemption Date.
“Redemption Notice”
is defined in Section 4.7(b).
“Redemption Notice
Date” means, with respect to any Redemption Date, the date that is 10 Business Days before such Redemption Date (or such
other date specified by PubCo that is not later than 10 Business Days before such Redemption Date); provided that if such date
falls on a weekend or holiday, the Redemption Notice Date shall be on the preceding Business Day; provided further that in the
case of a Block Redemption, PubCo may reduce or waive such 10 Business Day period.
“Redemption Right”
is defined in Section 4.7(a).
“Registered Offering”
means any secondary securities offering (which may include a “bought deal” or “overnight” offering), and any primary
securities offering for which piggyback rights are offered, pursuant to the Registration Rights Agreement.
“Registration
Rights Agreement” means the Registration Rights Agreement, by and among PubCo and the Members, to be entered into concurrently
with the closing of the IPO.
“Regulatory Allocations”
is defined in Section 5.2(i).
“Securities Act”
means the Securities Act of 1933, and the rules and regulations promulgated thereunder, as the same may be amended from time to time
(or any corresponding provisions of succeeding law).
“Special Redemption
Date” means a date specified by PubCo in addition to or in lieu of the Quarterly Redemption Date during the same fiscal
quarter. PubCo must specify a Special Redemption Date effective with any Registered Offering.
“Sponsor Shares”
is defined in the recitals to this Agreement.
“Subsidiary”
means, with respect to any specified Person, any other Person with respect to which such specified Person (a) has, directly or indirectly,
the power, through the ownership of securities or otherwise, to elect a majority of directors or similar managing body or (b) beneficially
owns, directly or indirectly, a majority of such Person’s Equity Securities.
“Tax Contribution
Obligation” is defined in Section 10.5(c).
“Tax Offset”
is defined in Section 10.5(c).
“Trading Day”
means a day on which the New York Stock Exchange or such other principal United States securities exchange on which the Class A Shares
are listed or admitted to trading is open for the transaction of business (unless such trading shall have been suspended for the entire
day).
“Transfer”
means, when used as a noun, any voluntary or involuntary, direct or indirect (whether through a change of control of the Transferor or
any Person that controls the Transferor, the issuance or transfer of Equity Securities of the Transferor, by operation of law or otherwise),
transfer, sale, pledge or hypothecation or other disposition and, when used as a verb, voluntarily or involuntarily, directly or indirectly
(whether through a change of control of the Transferor or any Person that controls the Transferor, the issuance or transfer of Equity
Securities of the Transferor or any Person that controls the Transferor, by operation of law or otherwise), to transfer, sell,
pledge or hypothecate or otherwise dispose of. The terms “Transferee,” “Transferor,” “Transferred”
and other forms of the word “Transfer” shall have the correlative meanings.
“Treasury Regulations”
means pronouncements, as amended from time to time, or their successor pronouncements, that clarify, interpret and apply the provisions
of the Code, and that are designated as “Treasury Regulations” by the United States Department of the Treasury.
“Trust Account”
has the meaning set forth in the PubCo Charter.
“Trust Agreement”
means the Investment Management Trust Agreement, dated as of [●], 2022, by and among Continental Stock Transfer & Trust
Company, PubCo and the Company.
“Uniform Commercial
Code” means the Uniform Commercial Code or any successor provision thereof as the same may from time to time be in effect
in the State of Delaware.
“Units”
means the Class A Units and the Class B Units issued hereunder.
“Warrant Agreement”
means the Warrant Agreement, dated as of [●], 2022, by and between PubCo and a warrant agent, as may be amended from time to time
in accordance with its terms.
“Winding-Up Member”
is defined in Section 11.3(a).
Section 1.2 Interpretive
Provisions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
(a) the
terms defined in Section 1.1 are applicable to the singular as well as the plural forms of such terms;
(b) all
accounting terms not otherwise defined herein have the meanings assigned under GAAP;
(c) all
references to currency, monetary values and dollars set forth herein shall mean United States (U.S.) dollars and all payments hereunder
shall be made in United States dollars;
(d) when
a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of,
or an Exhibit or Schedule to, this Agreement unless otherwise indicated;
(e) whenever
the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to
be followed by the words “without limitation”;
(f) “or”
is not exclusive;
(g) pronouns
of either gender or neuter shall include, as appropriate, the other pronoun forms; and
(h) the
words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement,
refer to this Agreement as a whole and not to any particular provision of this Agreement.
Article II
ORGANIZATION
OF THE LIMITED LIABILITY COMPANY
Section 2.1 Formation.
The Company has been formed as a limited liability company subject to the provisions of the Act upon the terms, provisions and conditions
set forth in this Agreement.
Section 2.2 Filing.
The Company’s Certificate of Formation has been filed with the Secretary of State of the State of Delaware in accordance with the
Act. The Members shall execute such further documents (including amendments to such Certificate of Formation) and take such further action
as is appropriate to comply with the requirements of Law for the formation or operation of a limited liability company in Delaware and
in all states and counties where the Company may conduct its business.
Section 2.3 Name.
The name of the Company is “ Kimbell Tiger Operating Company, LLC” and all business of the Company shall be conducted in
such name or, in the discretion of the Managing Member, under any other name.
Section 2.4 Registered
Office; Registered Agent. The location of the registered office of the Company in the State of Delaware is 1209 Orange Street,
Wilmington, New Castle County, Delaware 19801, or at such other place as the Managing Member from time to time may select. The name and
address for service of process on the Company in the State of Delaware are The Corporation Trust Company, 1209 Orange Street, Wilmington,
New Castle County, Delaware 19801, or such other qualified Person as the Managing Member may designate from time to time and its business
address.
Section 2.5 Principal
Place of Business. The principal place of business of the Company shall be located in such place as is determined by the Managing
Member from time to time.
Section 2.6 Purpose;
Powers. The nature of the business or purposes to be conducted or promoted by the Company is to engage in any lawful act or activity
for which limited liability companies may be formed under the Act. The Company shall have the power and authority to take any and all
actions and engage in any and all activities necessary, appropriate, desirable, advisable, ancillary or incidental to the accomplishment
of the foregoing purpose.
Section 2.7 Term.
The term of the Company commenced on the date of filing of the Certificate of Formation of the Company with the office of the Secretary
of State of the State of Delaware in accordance with the Act and shall continue indefinitely. The Company may be dissolved and its affairs
wound up only in accordance with Article XI.
Section 2.8 Intent.
It is the intent of the Members that the Company be operated in a manner consistent with its treatment as a “partnership”
for U.S. federal and state income tax purposes. It is also the intent of the Members that the Company not be operated or treated as a
“partnership” for purposes of Section 303 of the Federal Bankruptcy Code. Neither the Company nor any Member shall take
any action inconsistent with the express intent of the parties hereto as set forth in this Section 2.8.
Article III
[RESERVED]
Article IV
OWNERSHIP
AND CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS
Section 4.1 Authorized
Units; General Provisions With Respect to Units.
(a) Subject
to the provisions of this Agreement, the Company shall be authorized to issue from time to time such number of Units and such other Equity
Securities as the Managing Member shall determine in accordance with Section 4.4. Each authorized Unit may be issued pursuant to
such agreements as the Managing Member shall approve, including pursuant to options and warrants. The Company may reissue any Units or
other Equity Securities that have been repurchased or acquired by the Company.
(b) The
Units shall be initially divided into two (2) classes of Units referred to as “Class A Units” and “Class B
Units.” The number and class of Units issued to each Member shall be set forth opposite such Member’s name on Exhibit A.
Each outstanding Unit shall be identical except as otherwise provided hereunder.
(c) Initially,
none of the Units will be represented by certificates. If the Managing Member determines that it is in the interest of the Company to
issue certificates representing the Units, certificates will be issued and the Units will be represented by those certificates, and this
Agreement shall be amended as necessary or desirable to reflect the issuance of certificated Units for purposes of the Uniform Commercial
Code.
(d) The
Members as of the date hereof are set forth on Exhibit B. The total number of Units issued and outstanding and held by each Member
as of the date hereof is set forth in the books and records of the Company. The Company shall update such books and records from time
to time to reflect any Transfers of Interests, the issuance of additional Units or Equity Securities and subdivisions or combinations
of Units or other Equity Securities made in compliance with Section 4.1(j), in each case, in accordance with the terms of this Agreement.
(e) If,
at any time after the Effective Time, PubCo issues a Class A Share or any other Equity Security of PubCo (other than Class B
Shares), (i) one or more member(s) of the PubCo Holdings Group shall concurrently contribute to the Company the net proceeds
(in cash or other property, as the case may be), if any, received by PubCo for such Class A Share or other Equity Security and (ii) the
Company shall concurrently issue to such member(s) of the PubCo Holdings Group, in accordance with the contributions made by each
such member pursuant to clause (i), one Class A Unit (if PubCo issues a Class A Share), or such other Equity Security of the
Company (if PubCo issues Equity Securities other than Class A Shares) corresponding to the Equity Securities issued by PubCo, and
with substantially the same rights to dividends and distributions (including distributions upon liquidation, but taking into account differences
as a result of any tax or other liabilities borne by the PubCo Holdings Group) and other economic rights as those of such Equity Securities
of PubCo to be issued. Notwithstanding the foregoing:
(i) If
PubCo issues any Class A Shares in order to acquire or fund the acquisition from a Member (other than any member of the PubCo Holdings
Group) of a number of Class A Units (and Class B Shares) equal to the number of Class A Shares so issued, then the Company
shall not issue any new Class A Units in connection therewith and, where such Class A Shares have been issued for cash to fund
such an acquisition by any member of the PubCo Holdings Group pursuant to a Cash Election, the PubCo Holdings Group shall not be required
to transfer such net proceeds to the Company, and such net proceeds shall instead be transferred by such member of the PubCo Holdings
Group to such Member as consideration for such acquisition. For the avoidance of doubt, if PubCo issues any Class A Shares or other
Equity Security for cash to be used to fund the acquisition by any member of the PubCo Holdings Group of any Person or the assets of any
Person, then PubCo shall not be required to transfer such cash proceeds to the Company but instead such member of the PubCo Holdings Group
shall be required to contribute such Person or the assets and liabilities of such Person to the Company or any of its Subsidiaries.
(ii) This
Section 4.1(e) shall not apply to the issuance and distribution to holders of PubCo Shares of rights to purchase Equity Securities
of PubCo under a “poison pill” or similar shareholders rights plan (and upon any Redemption of Class A Units for Class A
Shares, including pursuant to the Call Right, such Class A Shares will be issued together with a corresponding right under such plan),
or to the issuance under PubCo’s employee benefit plans of any warrants, options, other rights to acquire Equity Securities of PubCo
or rights or property that may be converted into or settled in Equity Securities of PubCo, but shall in each of the foregoing cases apply
to the issuance of Equity Securities of PubCo in connection with the exercise or settlement of such rights, warrants, options or other
rights or property.
(f) Except
pursuant to Section 4.7, (x) the Company may not issue any additional Class A Units to any member of the PubCo Holdings
Group unless substantially simultaneously therewith a member of the PubCo Holdings Group issues or transfers an equal number of newly-issued
Class A Shares of PubCo to another Person (other than another member of the PubCo Holdings Group), and (y) the Company may not
issue any other Equity Securities of the Company to any member of the PubCo Holdings Group unless substantially simultaneously a member
of the PubCo Holdings Group issues or transfers, to another Person (other than another member of the PubCo Holdings Group), an equal number
of newly-issued shares of a new class or series of Equity Securities of PubCo with substantially the same rights to dividends and distributions
(including distributions upon liquidation, but taking into account differences as a result of any tax or other liabilities borne by the
PubCo Holdings Group) and other economic rights as those of such Equity Securities of the Company.
(g) If
at any time any member of the PubCo Holdings Group issues Debt Securities (other than to another member of the PubCo Holdings Group),
such member of the PubCo Holdings Group shall transfer to the Company (in a manner to be determined by the Managing Member in its reasonable
discretion) the proceeds received by such member of the PubCo Holdings Group in exchange for such Debt Securities in a manner that directly
or indirectly burdens the Company with the repayment of the Debt Securities.
(h) In
the event any PubCo Warrant or other exercisable, exchangeable or convertible Equity Security outstanding at PubCo is exercised, exchanged
or otherwise converted and, as a result, any Class A Shares or other exercisable, exchangeable or convertible Equity Securities of
PubCo are issued, (a) the corresponding Company Warrant or other Equity Security outstanding at the Company shall be similarly exercised,
exchanged or otherwise converted, as applicable, and an equivalent number of Class A Units or other Equity Securities of the Company
shall be issued to the PubCo Holdings Group as contemplated by the first sentence of Section 4.1(e), and (b) the PubCo Holdings
Group shall concurrently contribute to the Company the net proceeds received by the PubCo Holdings Group from any such exercise.
(i) No
member of the PubCo Holdings Group may redeem, repurchase or otherwise acquire (other than from another member of the PubCo Holdings Group)
(a) any Class A Shares (including upon forfeiture of any unvested Class A Shares) unless substantially simultaneously the
Company redeems, repurchases or otherwise acquires from the PubCo Holdings Group an equal number of Class A Units for the same price
per security or (b) any other Equity Securities of PubCo (other than Class B Shares), unless substantially simultaneously the
Company redeems, repurchases or otherwise acquires from the PubCo Holdings Group an equal number of Equity Securities of the Company of
a corresponding class or series with substantially the same rights to dividends and distributions (including distributions upon liquidation,
but taking into account differences as a result of any tax or other liabilities borne by the PubCo Holdings Group) and other economic
rights as those of such Equity Securities of PubCo for the same price per security. The Company may not redeem, repurchase or otherwise
acquire (x) any Class A Units from the PubCo Holdings Group unless substantially simultaneously the PubCo Holdings Group redeems,
repurchases or otherwise acquires an equal number of Class A Shares for the same price per security from holders thereof, or (y) any
other Equity Securities of the Company from the PubCo Holdings Group unless substantially simultaneously the PubCo Holdings Group redeems,
repurchases or otherwise acquires for the same price per security an equal number of Equity Securities of PubCo of a corresponding class
or series with substantially the same rights to dividends and distributions (including distribution upon liquidation, but taking into
account differences as a result of any tax or other liabilities borne by the PubCo Holdings Group) and other economic rights as those
of such Equity Securities of PubCo. Notwithstanding the foregoing, to the extent that any consideration payable by the PubCo Holdings
Group in connection with the redemption or repurchase of any Class A Shares or other Equity Securities of PubCo consists (in whole
or in part) of Class A Shares or such other Equity Securities (including, for the avoidance of doubt, in connection with the cashless
exercise of an option or warrant), then the redemption or repurchase of the corresponding Class A Units or other Equity Securities
of the Company shall be effectuated in an equivalent manner.
(j) The
Company shall not in any manner effect any subdivision (by any equity split, equity distribution, reclassification, recapitalization or
otherwise) or combination (by reverse equity split, reclassification, recapitalization or otherwise) of the outstanding Units (or other
Equity Securities of the Company) unless accompanied by an identical subdivision or combination, as applicable, of the outstanding PubCo
Shares (or other corresponding Equity Securities of PubCo), with corresponding changes made with respect to any other exchangeable or
convertible securities. Unless in connection with any action taken pursuant to Section 4.1(l), PubCo shall not in any manner effect
any subdivision (by any equity split, equity distribution, reclassification, recapitalization or otherwise) or combination (by reverse
equity split, reclassification, recapitalization or otherwise) of the outstanding PubCo Shares (or other Equity Securities of PubCo) unless
accompanied by an identical subdivision or combination, as applicable, of the outstanding Units (or other corresponding Equity Securities
of the Company), with corresponding changes made with respect to any other exchangeable or convertible securities.
(k) Notwithstanding
any other provision of this Agreement (including Section 4.1(e)), the Company may redeem Class A Units from the PubCo Holdings
Group for cash to fund any acquisition by the PubCo Holdings Group of another Person or assets and liabilities of another Person, provided
that promptly after such redemption and acquisition the PubCo Holdings Group contributes or causes to be contributed, directly or indirectly,
such Person or the assets and liabilities of such Person to the Company or any of its Subsidiaries in exchange for a number of Class A
Units equal to the number of Class A Units so redeemed.
(l) Notwithstanding
any other provision of this Agreement (including Section 4.1(e)), if the PubCo Holdings Group acquires or holds any material amount
of cash in excess of any monetary obligations it reasonably anticipates (including as a result of the receipt of distributions pursuant
to Section 6.2 for any period in excess of the PubCo Tax-Related Liabilities for such period), PubCo may, in its sole discretion,
use such excess cash amount in such manner, and make such adjustments to or take such other actions with respect to the capitalization
of PubCo and the Company, as PubCo (including in its capacity as the Managing Member) in Good Faith determines to be fair and reasonable
to the holders of PubCo Shares or other Equity Securities of PubCo and to the Members and to preserve the intended economic effect of
this Section 4.1, Section 4.7 and the other provisions hereof.
Section 4.2 Class B
Units.
(a) Profits
Interest Treatment. It is intended that (and all provisions of this Agreement shall be interpreted consistent with the intent that)
for U.S. federal (and conforming state and local) income tax purposes the Class B Units (and any Class A Units into which such
Class B Units convert pursuant to Section 4.2(c)) constitute “profits interests” within the meaning of IRS Revenue
Procedure 93-27 and IRS Revenue Procedure 2001-43. The Company and holders of any Class B Units will treat such holders as the owners
of a partnership interest in the Company from the date of the grant of the Class B Units (including that such holders will take into
account their distributive share of Company income, gain, loss, deduction, and credit associated with such Class B Units and that
neither the Company nor any Member will deduct any amount as wages, compensation or otherwise for the fair market value of any Class B
Unit at the time of grant of such Class B Unit or upon such Class B Unit becoming substantially vested). The Class B Units
shall have an initial Capital Account of zero dollars ($0.00). Each Member shall make a timely election under Section 83(b) of
the Code with respect to such Member’s Class B Units.
(b) Anti-Dilution.
(i) In
the event that Class A Shares or Equity-Linked Securities are issued or deemed issued in connection with the closing of the Initial
Business Combination (other than any such Class A Shares or Equity Linked Securities that are excluded from clause (a)(i) of
the definition of “Adjusted Conversion Ratio”):
(A) the
number of Class A Units received by each holder of Class B Units upon their conversion into Class A Units in connection
with the Initial Business Combination pursuant to Section 4.2(c) shall equal the product of (x) the number of such Class B
Units to be so converted multiplied by (y) the Adjusted Conversion Ratio; and
(B) to
the extent any Class B Units remain outstanding following such conversion, the Company shall divide such remaining outstanding Class B
Units such that each holder of Class B Units holds, after such division, a number of Class B Units equal to the product of (x) the
number of Class B Units held by such holder immediately prior to such division multiplied by (y) the Adjusted Conversion Ratio.
(ii) Notwithstanding
anything to the contrary contained herein, the provisions of this Section 4.2(b) may be waived in whole or in part 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 Units then outstanding.
(iii) The
Adjusted Conversion Ratio shall also be adjusted to account for any subdivision (by stock split, subdivision, exchange, stock dividend,
reclassification, recapitalization or otherwise) or combination (by reverse stock split, exchange, reclassification, recapitalization
or otherwise) or similar reclassification or recapitalization, except to the extent pursuant to Section 4.1(l), of the outstanding
Class A Units or Class A Shares into a greater or lesser number of shares occurring after the date hereof without a proportionate
and corresponding subdivision, combination or similar reclassification or recapitalization of the outstanding Class B Units.
(iv) The
Members and the Company agree to treat any division of Class B Units as disregarded for U.S. federal (and applicable state and local)
income tax purposes.
(c) Conversion
into Class A Units.
(i) On
the Class B Conversion Date, any Class B Units shall be converted into an equal number of Class A Units, subject to adjustment
as provided in Section 4.2(b)(i)(A).
(ii) Any
conversion of Class B Units pursuant to this Section 4.2(c) shall occur automatically after the close of business on the
Class B Conversion Date, as of which time the Member holding any converted Class B Units shall be credited on the books and
records of the Company with the issuance as of the opening of business on the next day of the number of Class A Units issuable upon
such conversion.
(iii) The
Members and the Company agree to treat the conversion of Class B Units into Class A Units (for the avoidance of doubt, not including
any allocations that may be made pursuant to Article V) as disregarded for U.S. federal (and applicable state and local) income
tax purposes.
Section 4.3 Voting
Rights. No Member has any voting rights except with respect to those matters specifically reserved for a Member vote under the
Act and for matters expressly requiring the approval of Members under this Agreement. Except as otherwise required by the Act, each Unit
will entitle the holder thereof to one vote on all matters to be voted on by the Members. Except as otherwise expressly provided in this
Agreement, the holders of Units having voting rights will vote together as a single class on all matters to be approved by the Members.
Section 4.4 Capital
Contributions; Unit Ownership.
(a) Capital
Contributions. Except as otherwise set forth in Section 4.1(e) with respect to the obligations of the PubCo Holdings Group,
no Member shall be required to make additional Capital Contributions.
(b) Issuance
of Additional Units or Interests. Except as otherwise expressly provided in this Agreement, the Managing Member shall have the right
to authorize and cause the Company to issue on such terms (including price) as may be determined by the Managing Member, subject to the
limitations of Section 4.1, additional Units or other Equity Securities in the Company (including creating preferred interests or
other classes or series of interests having such rights, preferences and privileges as determined by the Managing Member, which rights,
preferences and privileges may be senior to the Units); provided that, at any time following the date hereof, in each case the Company
shall not issue Equity Securities in the Company to any Person unless such Person shall have executed a counterpart to this Agreement
and all other documents, agreements or instruments deemed necessary or desirable in the discretion of the Managing Member. Upon such issuance
and execution, such Person shall be admitted as a Member of the Company. In that event, the Managing Member shall update the Company’s
books and records to reflect such additional issuances. Subject to Section 12.1, the Managing Member is hereby authorized to amend
this Agreement to set forth the designations, preferences, rights, powers and duties of such additional Units or other Equity Securities
in the Company, or such other amendments that the Managing Member determines to be otherwise necessary or appropriate in connection with
the creation, authorization or issuance of any class or series of Units or other Equity Securities in the Company pursuant to this Section 4.4(b);
provided that, notwithstanding the foregoing, the Managing Member shall have the right to amend this Agreement as set forth in this sentence
without the approval of any other Person (including any Member) and notwithstanding any other provision of this Agreement (other than
Section 12.1(a)(ii), (iii) or (iv)) if such amendment is necessary, and then only to the extent necessary, in order to consummate
any offering of PubCo Shares or other Equity Securities of PubCo provided that the designations, preferences, rights, powers and duties
of any such additional Units or other Equity Securities of the Company as set forth in such amendment are substantially similar to those
applicable to such PubCo Shares or other Equity Securities of PubCo.
Section 4.5 Capital
Accounts.
(a) A
Capital Account shall be maintained for each Member in accordance with the provisions of Treasury Regulations Section 1.704-1(b)(2)(iv) and,
to the extent consistent with such regulations, the other provisions of this Agreement. Each Member’s Capital Account shall be (a) increased
by (i) allocations to such Member of Profits pursuant to Section 5.1 and any other items of income or gain allocated to such
Member pursuant to Section 5.2, (ii) the amount of cash or the initial Gross Asset Value of any asset (net of any Liabilities
assumed by the Company and any Liabilities to which the asset is subject) contributed to the Company by such Member, and (iii) any
other increases allowed or required by Treasury Regulations Section 1.704-1(b)(2)(iv), and (b) decreased by (i) allocations
to such Member of Losses pursuant to Section 5.1 and any other items of deduction or loss allocated to such Member pursuant to the
provisions of Section 5.2, (ii) the amount of any cash or the Gross Asset Value of any asset (net of any Liabilities assumed
by the Member and any Liabilities to which the asset is subject) distributed to such Member, and (iii) any other decreases allowed
or required by Treasury Regulations Section 1.704-1(b)(2)(iv).
(b) A
Member that has more than one class or series of Units shall have a single Capital Account that reflects all such Units; provided, however,
that the Capital Accounts shall be maintained in such manner as will facilitate a determination of the portion of each Capital Account
attributable to each class or series of Units, including for purposes of determining any Member’s Class B Capital Account and
the Class A Per Unit Balance.
(c) In
the event of a Transfer of Units made in accordance with this Agreement (including a deemed Transfer for U.S. federal income tax purposes
as described in Section 4.7(e)(iv)) the Capital Account of the Transferor that is attributable to the Transferred Units shall carry
over to the Transferee Member in accordance with the provisions of Treasury Regulations Section 1.704-1(b)(2)(iv)(l).
Section 4.6 Other
Matters.
(a) No
Member shall demand or receive a return on or of its Capital Contributions or withdraw from the Company without the consent of the Managing
Member. Under circumstances requiring a return of any Capital Contributions, no Member has the right to receive property other than cash.
The Company shall not be obligated to repay any Capital Contributions of any Member.
(b) No
Member shall receive any interest, salary, compensation, draw or reimbursement with respect to its Capital Contributions or its Capital
Account, or for services rendered or expenses incurred on behalf of the Company or otherwise in its capacity as a Member, except as otherwise
provided in Section 7.9 or as otherwise contemplated by this Agreement.
(c) The
Liability of each Member shall be limited as set forth in the Act and other applicable Law and, except as expressly set forth in this
Agreement or required by Law, no Member (or any of its Affiliates) shall be personally liable, whether to the Company, any of the other
Members, the creditors of the Company or any other third party, for any debt or Liability of the Company, whether arising in contract,
tort or otherwise, solely by reason of being a Member of the Company.
(d) Except
as otherwise required by the Act, a Member shall not be required to restore a deficit balance in such Member’s Capital Account,
to lend any funds to the Company or, except as otherwise set forth herein, to make any additional contributions or payments to the Company.
Section 4.7 Redemption
of Class A Units.
(a) Redemptions
Generally. Each Member other than the PubCo Holdings Group (a “Redeeming Holder”) shall be entitled to cause
the Company to redeem all or a portion of such Member’s Class A Units in exchange for an equal number of Class A Shares
or, at the Company’s election under certain circumstances, cash in accordance with Section 4.7(e)(ii) (referred to herein
as the “Redemption Right”), upon the terms and subject to the conditions set forth in this Section 4.7
and subject to PubCo’s (or such designated member(s) of the PubCo Holdings Group’s) Call Right as set forth in Section 4.7(f).
Upon the Redemption of any Class A Units, an equal number of Class B Shares held by the Redeeming Holder shall be cancelled.
(b) Permitted
Redemptions; Limitations.
(i) Quarterly
and Special Redemptions. Each Redeeming Holder may effect Redemptions on each Quarterly Redemption Date and/or any Special Redemption
Date designated by the Managing Member; provided that, with respect to a Redemption of Class A Units, absent the prior written consent
of the Managing Member to the contrary, on each Quarterly Redemption Date or Special Redemption Date, a Redeeming Holder shall only be
permitted to redeem less than all of its Class A Units if (A) after such Redemption it would continue to hold at least 25,000
Units and (B) it redeems not less than 25,000 Class A Units in such Redemption.
(ii) Block
Redemptions. Each Redeeming Holder may effect Redemptions on any date designated by such Redeeming Holder in a timely Redemption Notice
(a “Block Redemption Date”); provided that, with respect to a Redemption of Class A Units, absent the prior
written consent of the Managing Member to the contrary, on each Block Redemption Date a Redeeming Holder shall not be permitted to redeem
less than 500,000 Class A Units.
(iii) Additional
Limitations. Each Member’s Redemption Right shall be subject to the following additional limitations and qualifications:
(A) Any
Redemption of Class A Units issued after the date hereof (other than in connection with any recapitalization), including such Class A
Units issued to Members as of the date hereof, may be limited in accordance with the terms of any agreements or instruments entered into
in connection with such issuance, as deemed necessary or desirable in the discretion of the Managing Member.
(B) The
Managing Member may impose additional limitations and restrictions on Redemptions (including limiting Redemptions or creating priority
procedures for Redemptions), to the extent it determines, in Good Faith, such limitations and restrictions to be necessary or appropriate
to avoid undue risk that the Company may be classified as a “publicly traded partnership” within the meaning of Section 7704
of the Code. Furthermore, the Managing Member may require any Member to redeem all of their Class A Units to the extent it determines,
in Good Faith, that such Redemption is necessary or appropriate to avoid undue risk that the Company may be classified as a “publicly
traded partnership” within the meaning of Section 7704 of the Code. Upon delivery of any notice by the Managing Member to such
Member requiring such Redemption, such Member shall exchange, subject to exercise by PubCo (or such designated member(s) of the PubCo
Holdings Group) of the Call Right pursuant to Section 4.7(f), all of their Class A Units effective as of the date specified
in such notice (and such date shall be deemed to be a Redemption Date for purposes of this Agreement) in accordance with this Section 4.7
and otherwise in accordance with the requirements set forth in such notice.
(c) Notice
Requirements for Redeeming Holders. In order to exercise its Redemption Right, each Redeeming Holder shall provide written notice
in a reasonable form as the Company may provide from time to time (the “Redemption Notice”) to the Company and
PubCo, on or before the applicable Redemption Notice Date, stating:
(i) the
number of Class A Units that the Redeeming Holder elects to have the Company redeem in accordance with Section 4.7(b)(i) or
(b)(ii);
(ii) if
the Class A Shares to be received are to be issued other than in the name of the Redeeming Holder, the name(s) of the Person(s) in
whose name or on whose order the Class A Shares are to be issued;
(iii) whether
the Redemption is to be contingent (including as to timing) upon the closing of a Registered Offering of the Class A Shares for which
the Class A Units will be redeemed or the closing of an announced merger, consolidation or other transaction or event to which PubCo
is a party in which the Class A Shares would be exchanged or converted or become exchangeable for or convertible into cash or other
securities or property (such contingency, a “Redemption Contingency”);
(iv) pursuant
to which section of this Agreement the Redemption Right is being exercised;
(v) in
the case of a Block Redemption, the intended Block Redemption Date; and
(vi) whether
and to the extent that the Redemption Notice is to continue to apply to subsequent Quarterly Redemption Dates.
Notwithstanding the foregoing, any notice by any
Member pursuant to the Registration Rights Agreement to demand or participate in any Registered Offering shall be deemed to constitute
a Redemption Notice for the related Special Redemption Date.
(d) Revocation;
Redemption Contingencies. A Redeeming Holder may not revoke or rescind a Redemption Notice after the applicable Redemption Notice
Date. Any Redemption Notice delivered for a Redemption on a Quarterly Redemption Date may not be contingent. Any Redemption Notice delivered
for a Redemption on a Special Redemption Date or Block Redemption Date may be subject to a Redemption Contingency.
(e) Procedure;
Cash Election.
(i) On
any Redemption Date for which any Redeeming Holder has delivered a Redemption Notice with respect to Class A Units, unless the Company
elects to pay cash in accordance with Section 4.7(e)(ii) or a member of the PubCo Holdings Group exercises its Call Right pursuant
to Section 4.7(f), on such Redemption Date, such number of Class A Units shall be redeemed for an equal number of Class A
Shares and an equal number of Class B Shares shall be surrendered by such Redeeming Holder and cancelled.
(ii) The
Company shall be entitled to elect to settle any Redemption by delivering to the Redeeming Holder, in lieu of the applicable number of
Class A Shares that would be received in such Redemption, an amount of cash equal to the Cash Election Amount for such Redemption.
(iii) Unless
a member of the PubCo Holdings Group has elected its Call Right pursuant to Section 4.7(f) with respect to any Redemption, on
the relevant Redemption Date and immediately prior to such Redemption, (i) PubCo (or such other member(s) of the PubCo Holdings
Group) shall contribute to the Company the consideration the Redeeming Holder is entitled to receive under Section 4.7(e)(i) (including
in the event the Company exercises its right to deliver the Cash Election Amount pursuant to Section 4.7(e)(ii)) and the Company
shall issue to PubCo (or such other member(s) of the PubCo Holdings Group) a number of Class A Units or, pursuant to Section 4.1(e),
other Equity Securities of the Company as consideration for such contribution, (ii) the Company shall (A) cancel the redeemed
Class A Units and (B) transfer to the Redeeming Holder the consideration the Redeeming Holder is entitled to receive under Section 4.7(e)(i) (including
in the event the Company exercises its right to deliver the Cash Election Amount pursuant to Section 4.7(e)(ii)), and (iii) PubCo
shall cancel the surrendered Class B Shares, as applicable. Notwithstanding any other provisions of this Agreement to the contrary,
in the event that the Company makes a Cash Election that is funded with proceeds from a primary offering of PubCo Equity Securities, the
PubCo Holdings Group shall only be obligated to contribute to the Company an amount in cash equal to the net proceeds (after deduction
of any underwriters’ discounts or commissions and brokers’ fees or commissions (including, for the avoidance of doubt, any
deferred discounts or commissions and brokers’ fees or commissions payable in connection with or as a result of such Registered
Offering)) (such difference, the “Discount”) from the sale by PubCo of a number of Class A Shares equal
to the number of Class A Units to be redeemed with such cash or from the sale of other PubCo Equity Securities used to fund the Cash
Election Amount; provided that PubCo’s Capital Account (or the Capital Account(s) of the other member(s) of the PubCo
Holdings Group, as applicable) shall be increased by the amount of such Discount in accordance with Section 7.9; provided further,
that the contribution of such net proceeds shall in no event affect the Redeeming Holder’s right to receive the Cash Election Amount.
(iv) Each
Redemption shall be deemed to have been effected on the applicable Redemption Date. Any Redeeming Holder redeeming Class A Units
in accordance with this Agreement may request that the Class A Shares to be issued upon such Redemption be issued in a name other
than such Redeeming Holder. Any Person or Persons in whose name or names any Class A Shares are issuable on any Redemption Date shall
be deemed to have become, on such Redemption Date, the holder or holders of record of such shares.
(v) PubCo
shall at all times keep available, solely for the purpose of issuance upon a Redemption, out of its authorized but unissued Class A
Shares, such number of Class A Shares that shall be issuable upon the Redemption of all outstanding Class A Units (other than
those Class A Units held by any member of the PubCo Holdings Group); provided, that nothing contained herein shall be construed to
preclude PubCo from satisfying its obligations with respect to a Redemption by delivery of cash pursuant to a Cash Election or Class A
Shares that are held in the treasury of PubCo. PubCo covenants that all Class A Shares to be issued upon a Redemption shall, upon
issuance thereof, be validly issued, fully paid and non-assessable. In addition, for so long as the Class A Shares are listed on
a National Securities Exchange, PubCo shall use its reasonable best efforts to cause all Class A Shares issued upon a Redemption
to be listed on such National Securities Exchange at the time of such issuance.
(f) Call
Right. Notwithstanding anything to the contrary in this Section 4.7, a Redeeming Holder shall be deemed to have offered to sell
its Class A Units as described in any Redemption Notice to each member of the PubCo Holdings Group, and PubCo (or such other member(s) of
the PubCo Holdings Group designated by PubCo) may, in its sole discretion, in accordance with this Section 4.7(f), elect to purchase
directly and acquire such Class A Units on the Redemption Date by paying to the Redeeming Holder that number of Class A Shares
the Redeeming Holder would otherwise receive pursuant to Section 4.7(e) or, if PubCo (or such designated member(s) of the
PubCo Holdings Group) makes a Cash Election, the Cash Election Amount for such Class A Shares (the “Call Right”),
whereupon PubCo (or such designated member(s) of the PubCo Holdings Group) shall acquire the Class A Units offered for redemption
by the Redeeming Holder and shall become the owner thereof.
(g) Tax
Matters.
(i) For
U.S. federal income (and applicable state and local) tax purposes, each of the Redeeming Holder, the Company and PubCo (and any other
member of the PubCo Holding Group), as the case may be, agree to treat each Redemption and, in the event PubCo (or another member of the
PubCo Holdings Group) exercises its Call Right, each transaction between the Redeeming Holder and PubCo (or such other member of the PubCo
Holdings Group), as a sale of such Redeeming Holder’s Class A Units (together with the same number Class B Shares) to
PubCo (or such other member of the PubCo Holdings Group) in exchange for Class A Shares or cash, as applicable.
(ii) The
issuance of Class A Shares upon a Redemption shall be made without charge to the Redeeming Holder for any stamp or other similar
tax in respect of such issuance, except that if any such Class A Shares are to be issued in a name other than that of the Redeeming
Holder, then the Person or Persons in whose names such shares are to be issued shall pay to PubCo the amount of any tax payable in respect
of any Transfer involved in such issuance or establish to the satisfaction of PubCo that such tax has been paid or is not payable.
(iii) Each
of the Company and PubCo shall be entitled to deduct and withhold from any consideration payable or otherwise deliverable upon a Redemption
(and the Redeeming Holder agrees to indemnify the Company and PubCo with respect to) such amounts as may be required to be deducted or
withheld therefrom under the Code or any provision of applicable Law, and to the extent deduction and withholding is required, such deduction
and withholding may be taken in Class A Shares. Prior to making such deduction or withholding, the Company shall use commercially
reasonable efforts to give written notice to the Redeeming Holder and reasonably cooperate with such Redeeming Holder to reduce or avoid
any such withholding. To the extent such amounts are so deducted or withheld and paid over to the relevant governmental authority, such
amounts shall be treated for all purposes under this Agreement as having been paid to the Redeeming Holder, and, if withholding is taken
in Class A Shares, the relevant withholding party shall be treated as having sold such Class A Shares on behalf of such Redeeming
Holder for an amount of cash equal to the Fair Market Value thereof at the time of such deemed sale and paid such cash proceeds to the
appropriate governmental authority.
(h) If
(i) there is any reclassification, reorganization, recapitalization or other similar transaction pursuant to which the Class A
Shares are converted or changed into another security, securities or other property (other than as a result of a subdivision or combination
or any transaction subject to Section 4.1(j) or Section 4.1(l)), or (ii) except in connection with actions taken with
respect to the capitalization of PubCo or the Company pursuant to Section 4.1(l), PubCo, by dividend or otherwise, distributes to
all holders of the Class A Shares evidences of its Indebtedness or assets, including securities (including Class A Shares and
any rights, options or warrants to all holders of the Class A Shares to subscribe for or to purchase or to otherwise acquire Class A
Shares, or other securities or rights convertible into, redeemable for or exercisable for Class A Shares) but excluding (A) any
cash dividend or distribution, (B) any such distribution of Indebtedness or assets, in either case (A) or (B) received
by PubCo, directly or indirectly, from the Company in respect of the Class A Units, and (C) any exercise or redemption of PubCo
Warrants pursuant to the terms of the Warrant Agreement, then upon any subsequent Redemption, in addition to the Class A Shares or
the Cash Election Amount, as applicable, each Redeeming Holder shall be entitled to receive the amount of such security, securities or
other property that such Redeeming Holder would have received if such Redemption had occurred immediately prior to the effective date
of such reclassification, reorganization, recapitalization, other similar transaction, dividend or other distribution, taking into account
any adjustment as a result of any subdivision (by any split, distribution or dividend, reclassification, reorganization, recapitalization
or otherwise) or combination (by reverse split, reclassification, recapitalization or otherwise) of such security, securities or other
property that occurs after the effective time of such reclassification, reorganization, recapitalization or other similar transaction.
If there is any reclassification, reorganization, recapitalization or other similar transaction in which the Class A Shares are converted
or changed into another security, securities or other property, or any dividend or distribution (other than an excluded dividend or distribution,
as described above in clauses (A), (B) or (C)), this Section 4.7 shall continue to be applicable, mutatis mutandis, with
respect to such security or other property.
(i) Automatic
Redemption of Designated Holders. Immediately prior to an Initial Business Combination (or, in the case of a proposed business combination
involving U.S. real property interests, immediately prior to signing any definitive agreement in respect of such a business combination),
all Units held by any Designated Holders shall automatically (i) in the case of any Class B Units, be converted into Class A
Units in accordance with the provisions of Section 4.2(c) and (ii) following such conversion, if any, be redeemed for Class A
Shares (together with the cancellation of a corresponding number of Class B Shares) in accordance with this Section 4.7 (such
conversion and Redemption, a “Designated Holder Redemption”). The Company shall deliver written notice to any
such Designated Holder of an intended Designated Holder Redemption pursuant to this Section 4.7(i) (a “Designated
Holder Redemption Notice”) as soon as reasonably practicable following the date upon which such Designated Holder Redemption
is effected (such date, the “Designated Holder Redemption Date”), indicating in such notice the number of Class A
Shares issued to such Designated Holder in the Designated Holder Redemption; provided, however, that such Designated Holder Redemption
Notice shall only be provided to a Designated Holder after the Managing Member determines that providing such notice would not impart
material non-public information with respect to PubCo to the Designated Holder. From and after the Designated Holder Redemption Date,
(x) the Units, Class B Shares subject to such Designated Holder Redemption shall be deemed to be transferred to PubCo on the
Designated Holder Redemption Date and (y) such Designated Holder shall cease to have any rights with respect to the Units, Class B
Shares subject to such Designated Holder Redemption (other than the right to receive Class A Shares pursuant to such Designated Holder
Redemption). The Designated Holders shall take all actions reasonably requested by the Managing Member to effect such Designated Holder
Redemption, including taking any action and delivering any document required to effect a Designated Holder Redemption.
(j) No
Redemption shall impair the right of the Redeeming Holder to receive any distributions payable on the Class A Units redeemed pursuant
to such Redemption in respect of a record date that occurs prior to the Redemption Date for such Redemption. For the avoidance of doubt,
no Redeeming Holder, or a Person designated by a Redeeming Holder to receive Class A Shares, shall be entitled to receive, with respect
to such record date, distributions or dividends both on Class A Units redeemed by the Company from such Redeeming Holder and on Class A
Shares received by such Redeeming Holder, or other Person so designated, if applicable, in such Redemption.
Article V
ALLOCATIONS
OF PROFITS AND LOSSES
Section 5.1 Profits
and Losses.
(a) Pre-Equalization.
For any Fiscal Year or other allocation period ending on or prior to the Equalization Date, except as set forth in Section 5.2 or
Section 5.4, Profit and Loss of the Company for such Fiscal Year or other allocation period shall be allocated to the Members as
follows:
(i) prior
to an Initial Business Combination, to the Class A Members pro rata in accordance with the number of Class A Units held by each
such Member; and
(ii) after
an Initial Business Combination, to all of the Members, pro rata in accordance with the number of Units held by each such Member.
(b) Post-Equalization.
For any Fiscal Year or other allocation period beginning after the Equalization Date, subject to Section 5.4, Profits and Losses
(and, to the extent determined by the Managing Member to be necessary and appropriate to achieve the resulting Capital Account balances
described below, any allocable items of income, gain, loss, deduction or credit includable in the computation of Profits and Losses) for
each Fiscal Year or other allocation period shall be allocated among the Members during such Fiscal Year or other allocation period in
a manner such that, after giving effect to the special allocations set forth in Section 5.2 and all distributions through the end
of such Fiscal Year or other allocation period, the Capital Account balance of each Member, immediately after making such allocation,
is, as nearly as possible, equal to (i) the amount such Member would receive pursuant to Section 11.3(c) if all assets
of the Company on hand at the end of such Fiscal Year or other taxable period were sold for cash equal to their Gross Asset Values, all
liabilities of the Company were satisfied in cash in accordance with their terms (limited with respect to each nonrecourse liability to
the Gross Asset Value of the assets securing such liability), and all remaining or resulting cash was distributed, in accordance with
Section 11.3(c), to the Members immediately after making such allocation, minus (ii) such Member’s share of Company Minimum
Gain and Member Minimum Gain, computed immediately prior to the hypothetical sale of assets, and the amount any such Member is treated
as obligated to contribute to the Company, computed immediately after the hypothetical sale of assets.
Section 5.2 Special
Allocations.
(a) Nonrecourse
Deductions for any Fiscal Year or other taxable period shall be specially allocated to the Members on a pro rata basis, in accordance
with the number of Units owned by each Member as of the last day of such Fiscal Year or other taxable period. The amount of Nonrecourse
Deductions for a Fiscal Year or other taxable period shall equal the excess, if any, of the net increase, if any, in the amount of Company
Minimum Gain during that Fiscal Year or other taxable period over the aggregate amount of any distributions during that Fiscal Year or
other taxable period of proceeds of a Nonrecourse Liability that are allocable to an increase in Company Minimum Gain, determined in accordance
with the provisions of Treasury Regulations Section 1.704-2(d).
(b) Any
Member Nonrecourse Deductions for any Fiscal Year or other taxable period shall be specially allocated to the Member who bears economic
risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with
Treasury Regulations Section 1.704-2(i). If more than one Member bears the economic risk of loss for such Member Nonrecourse Debt,
the Member Nonrecourse Deductions attributable to such Member Nonrecourse Debt shall be allocated among the Members according to the ratio
in which they bear the economic risk of loss. This Section 5.2(b) is intended to comply with the provisions of Treasury Regulations
Section 1.704-2(i) and shall be interpreted consistently therewith.
(c) Notwithstanding
any other provision of this Agreement to the contrary, if there is a net decrease in Company Minimum Gain during any Fiscal Year or other
taxable period (or if there was a net decrease in Company Minimum Gain for a prior Fiscal Year or other taxable period and the Company
did not have sufficient amounts of income and gain during prior periods to allocate among the Members under this Section 5.2(c)),
each Member shall be specially allocated items of Company income and gain for such Fiscal Year or other taxable period in an amount equal
to such Member’s share of the net decrease in Company Minimum Gain during such year (as determined pursuant to Treasury Regulations
Section 1.704-2(g)(2)). This section is intended to constitute a minimum gain chargeback under Treasury Regulations Section 1.704-2(f) and
shall be interpreted consistently therewith.
(d) Notwithstanding
any other provision of this Agreement except Section 5.2(c), if there is a net decrease in Member Minimum Gain during any Fiscal
Year or other taxable period (or if there was a net decrease in Member Minimum Gain for a prior Fiscal Year or other taxable period and
the Company did not have sufficient amounts of income and gain during prior periods to allocate among the Members under this Section 5.2(d)),
each Member shall be specially allocated items of Company income and gain for such year in an amount equal to such Member’s share
of the net decrease in Member Minimum Gain (as determined pursuant to Treasury Regulations Section 1.704-2(i)(4)). This section is
intended to constitute a partner nonrecourse debt minimum gain chargeback under Treasury Regulations Section 1.704-2(i)(4) and
shall be interpreted consistently therewith.
(e) Notwithstanding
any provision hereof to the contrary except Section 5.2(a) and Section 5.2(b), no Losses or other items of loss or expense
shall be allocated to any Member to the extent that such allocation would cause such Member to have an Adjusted Capital Account Deficit
(or increase any existing Adjusted Capital Account Deficit) at the end of such Fiscal Year or other taxable period. All Losses and other
items of loss and expense in excess of the limitation set forth in this Section 5.2(e) shall be allocated to the Members who
do not have an Adjusted Capital Account Deficit in proportion to their relative positive Capital Accounts (as adjusted pursuant to clauses (a) and
(b) of the definition of “Adjusted Capital Account Deficit”) but only to the extent that such Losses and other items
of loss and expense do not cause any such Member to have an Adjusted Capital Account Deficit.
(f) Notwithstanding
any provision hereof to the contrary except Section 5.2(c) and Section 5.2(d), in the event any Member unexpectedly receives
any adjustment, allocation or distribution described in paragraph (4), (5) or (6) of Treasury Regulations Section 1.704-1(b)(2)(ii)(d),
items of income and gain (consisting of a pro rata portion of each item of income, including gross income, and gain for the Fiscal Year
or other taxable period) shall be specially allocated to such Member in an amount and manner sufficient to eliminate any Adjusted Capital
Account Deficit of that Member as quickly as possible; provided that an allocation pursuant to this Section 5.2(f) shall be
made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for
in this Article V have been tentatively made as if this Section 5.2(f) were not in this Agreement. This Section 5.2(f) is
intended to constitute a qualified income offset under Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.
(g) If
any Member has an Adjusted Capital Account Deficit at the end of any Fiscal Year or other taxable period, that Member shall be specially
allocated items of Company income and gain in the amount of such deficit as quickly as possible, provided that an allocation pursuant
to this Section 5.2(g) shall be made only if and to the extent that such Member would have a deficit after all other allocations
provided for in this Article V have been tentatively made as if Section 5.2(f) and this Section 5.2(g) were not
in this Agreement.
(h) To
the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Sections 734(b) (including any such
adjustments pursuant to Treasury Regulation Section 1.734-2(b)(1)) is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) or
1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as a result of a distribution to any Member in complete
liquidation of such Member’s Interest, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain
(if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such item of gain or loss shall
be allocated to the Members in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) if such section applies
or to the Member to whom such distribution was made if Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.
(i) The
allocations set forth in Sections 5.2(a) through 5.2(h) (the “Regulatory Allocations”) are intended
to comply with certain requirements of Treasury Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding any other provision
of this Article V (other than the Regulatory Allocations), the Regulatory Allocations (and anticipated future Regulatory Allocations)
shall be taken into account in allocating other items of income, gain, loss and deduction among the Members so that, to the extent possible,
the net amount of such allocation of other items and the Regulatory Allocations to each Member should be equal to the net amount that
would have been allocated to each such Member if the Regulatory Allocations had not occurred.
This Section 5.2(i) is
intended to minimize to the extent possible and to the extent necessary any economic distortions that may result from application of the
Regulatory Allocations and shall be interpreted in a manner consistent therewith.
(j) Items
of income, gain, loss, deduction or credit resulting from a Covered Audit Adjustment shall be allocated to the Members in accordance with
the applicable provisions of the Partnership Tax Audit Rules.
(k) Special
Fungibility Allocations.
(i) Notwithstanding
the provisions of Section 5.1, but subject to and after taking into account any allocations or other adjustments pursuant to Section 5.2(l),
if any Non-Fungible Class B Units are outstanding at the time of any adjustment to the Gross Asset Values of Company assets pursuant
to Treasury Regulations Section 1.704-1(b)(2)(iv)(f) and clause (b) of the definition of “Gross Asset Value”:
(A) such
adjustment to the Gross Asset Values shall be determined based on, (x) if the Class A Shares trade on a securities exchange
or automated or electronic quotation system, the closing price for a Class A Share on the principal U.S. securities exchange or automated
or electronic quotation system on which the Class A Shares trade, as reported by Bloomberg, L.P., or its successor, for the last
full Trading Day immediately prior the date of such adjustment, or (y) if the Class A Shares no longer trade on a securities
exchange or automated or electronic quotation system, the Fair Market Value of one Class A Share, and in each case, by assuming such
closing price or Fair Market Value, as applicable, already takes into account the effect of the conversion rights of any then-outstanding
Class B Units pursuant to Section 4.2(c) or Section 4.7(i);
(B) any
items of gain included in clause (c) of the definition of “Profits” or “Losses” realized in connection
with such adjustment shall (x) first, be allocated to the Members holding Class B Units, pro rata in accordance with the number
of Non-Fungible Class B Units held by each such Member or as otherwise reasonably determined by the Managing Member, until each Member’s
Class B Capital Account equals its Class B Fungibility Target Balance, and (y) then allocated to the Members, pro rata;
and
(C) any
items of loss included in clause (c) of the definition of “Profits” or “Losses” realized in connection
with such adjustment shall (x) first, be allocated to the Members, pro rata in accordance with the number of Class A Units and
Fungible Class B Units held by each such Member until each Member’s Class B Capital Account equals its Class B Fungibility
Target Balance, and (y) then allocated to the Members, pro rata;
provided,
however, in the event of a liquidation of the Company prior to an Initial Business Combination, prior to any distribution pursuant to
Section 11.3(c)(iii)(A), any items of gain or loss included in clause (c) of the definition of “Profits” or
“Losses” realized in connection with such an adjustment shall be allocated to the Members to the extent necessary such that
a Member holding Founder Units is not entitled to any distributions with respect to funds in the Trust Account with respect to any such
Founder Units.
(ii) For
any Fiscal Year in which any Member converts, pursuant to Section 4.2(c), a number of Class B Units that, but for this Section 5.2(k)(ii),
would be in excess of such Member’s Fungible Class B Units, after all other allocations have been tentatively made pursuant
to Section 5.1 and this Section 5.2 (including, for the avoidance of doubt, allocations pursuant to Section 5.2(k)(i) in
connection with such conversion), based on an interim closing of the books pursuant to Section 706 of the Code as of the Class B
Conversion Date, the Managing Member shall, to the maximum extent possible and to the minimum extent required to cause such Member to
have a number of Fungible Class B Units equal to the number of Class B Units to be so converted, allocate to such Member appropriate
items of gross income. In the event that the Company has insufficient items of gross income to make allocations to all Members making
such election, the available items of gross income shall be allocated to such Members as reasonably determined by the Managing Member;
provided that in the case of a Designated Holder Redemption, any excess amount required to cause the Class B Units held by
any Designated Holder to be Fungible Class B Units shall be allocated to such Designated Holder and treated as a “guaranteed
payment” within the meaning of Section 707(c) of the Code (and solely for the purposes of maintaining such Member’s
Capital Account shall be made as if such guaranteed payment were recontributed to the Company).
(iii) The
Members agree that the intent of this Section 5.2(k) is to cause, to the greatest extent possible, the Capital Account balance
associated with each Class B Unit to be equivalent to the Capital Account balance associated with each Class A Unit (and, to
the greatest extent possible, for such equivalency to be achieved through adjustments to the Gross Asset Values of the Company properties
described in clause (c) of the definition of “Profits” or “Losses”). The Managing Member shall be permitted
to interpret or amend this Section 5.2(k) as necessary and consistent with such intention and to make allocations in any manner
as reasonably necessary to implement such intent.
(l) Special
Allocations Regarding Company Warrants and Other Noncompensatory Options. Upon an exercise of a Company Warrant or other noncompensatory
option to acquire a Class A Unit or other Equity Security of the Company:
(i) An
adjustment shall be made to the Gross Asset Value of Company assets in accordance with Treasury Regulations Sections 1.704-1(b)(2)(iv)(f) and
1.704-1(b)(2)(iv)(s)(1) and clause (b) of the definition of “Gross Asset Value” as of immediately after the
exercise of such option.
(ii) The
Capital Account of the holder of the Class A Unit (or other Equity Security of the Company) acquired upon the exercise of such option
will be credited with the amount paid for the option and the exercise price of the option in accordance with Treasury Regulations Sections 1.704-1(b)(2)(iv)(b) and
1.704-1(b)(2)(iv)(d)(4) and Section 4.5(a)(ii).
(iii) To
the extent that, after crediting such holder’s Capital Account in accordance with Section 5.2(l)(ii), such holder’s Capital
Account balance, to the extent attributable to such Class A Unit (or other Equity Security of the Company) received upon the exercise
of such option, is not equal to the NCO Target Balance, (A) such holder shall be allocated any unrealized income, gain or loss in
Company assets (that has not been reflected in the Members’ Capital Accounts previously) to the extent necessary to cause such holder’s
Capital Account balance, to the extent attributable to such Class A Unit (or other Equity Security of the Company) received upon
the exercise of such option, to equal the NCO Target Balance, and (B) thereafter, any remaining amounts of such unrealized income,
gain or loss shall be allocated in accordance with the other provisions of Section 5.1 and this Section 5.2, in each case, accordance
with Treasury Regulations Section 1.704-1(b)(2)(iv)(s)(2).
(iv) If
after making the foregoing allocations, such holder’s Capital Account balance, to the extent attributable to such Class A Unit
(or other Equity Security of the Company) received upon the exercise of such option, is still not equal to the NCO Target Balance, the
Members’ Capital Accounts shall be reallocated to the extent to the extent necessary to cause such holder’s Capital Account
balance, to the extent attributable to such Class A Unit (or other Equity Security of the Company) received upon the exercise of
such option, to equal the NCO Target Balance, in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(s)(3); provided that,
for the avoidance of doubt, any such reallocation shall be made, to the greatest extent possible, consistent with the intentions of Section 5.2(k) of
causing the Capital Account balance associated with each Class B Unit to be (and remain) equivalent to the Capital Account balance
associated with each Class A Unit, as determined by the Managing Member.
Section 5.3 Allocations
for Tax Purposes in General.
(a) Except
as otherwise provided in this Section 5.3, each item of income, gain, loss, deduction, and credit of the Company for U.S. federal
income tax purposes shall be allocated among the Members in the same manner as such item is allocated under Sections 5.1 and 5.2.
(b) In
accordance with Code Section 704(c) and the Treasury Regulations thereunder (including the Treasury Regulations applying the
principles of Code Section 704(c) to changes in Gross Asset Values), items of income, gain, loss and deduction with respect
to any Company property having a Gross Asset Value that differs from such property’s adjusted U.S. federal income tax basis shall,
solely for U.S. federal income tax purposes, be allocated among the Members to account for any such difference using such method or methods
as determined by the Managing Member to be appropriate and in accordance with the applicable Treasury Regulations.
(c) Any
(i) recapture of depreciation or any other item of deduction shall be allocated, in accordance with Treasury Regulations Sections 1.1245-1(e) and
1.1254-5, to the Members who received the benefit of such deductions, and (ii) recapture of grants or credits shall be allocated
to the Members in accordance with applicable law.
(d) Tax
credits of the Company shall be allocated among the Members as provided in Treasury Regulation Sections 1.704-1(b)(4)(ii) and
1.704-1(b)(4)(viii).
(e) Allocations
pursuant to this Section 5.3 are solely for purposes of U.S. federal, state and local taxes and shall not affect or in any way be
taken into account in computing any Member’s Capital Account or share of Profits, Losses, other items or distributions pursuant
to any provision of this Agreement.
(f) If,
as a result of an exercise of a noncompensatory option to acquire an interest in the Company (including any Company Warrant), a Capital
Account reallocation is required under Section 5.2(l)(iv) or Treasury Regulations Section 1.704-1(b)(2)(iv)(s)(3), the
Company shall make corrective allocations pursuant to Treasury Regulations Section 1.704-1(b)(4)(x).
Section 5.4 Other
Allocation Rules.
(a) The
Members are aware of the income tax consequences of the allocations made by this Article V and the economic impact of the allocations
on the amounts receivable by them under this Agreement. The Members hereby agree to be bound by the provisions of this Article V
in reporting their share of Company income and loss for income tax purposes.
(b) The
provisions regarding the establishment and maintenance for each Member of a Capital Account as provided by Section 4.5 and the allocations
set forth in Sections 5.1, 5.2 and 5.3 are intended to comply with the Treasury Regulations and to reflect the intended economic entitlement
of the Members. If the Managing Member determines, in its sole discretion, that the application of the provisions in Section 4.5,
5.1, 5.2 or 5.3 would result in non-compliance with the Treasury Regulations or would be inconsistent with the intended economic entitlement
of the Members, the Managing Member is authorized to make any appropriate adjustments to such provisions.
(c) All
items of income, gain, loss, deduction and credit allocable to an interest in the Company that may have been Transferred shall be allocated
between the Transferor and the Transferee in accordance with a method determined by the Managing Member and permissible under Code Section 706
and the Treasury Regulations thereunder.
(d) The
Members’ proportionate shares of the “excess nonrecourse liabilities” of the Company, within the meaning of Treasury
Regulations Section 1.752-3(a)(3), shall be allocated to the Members on a pro rata basis, in accordance with the number of Units
owned by each Member.
(e) The
Managing Member shall amend this Article V from time to time to reflect the allocation of Profit and Loss in connection with priority
distributions on any preferred units or other Equity Securities that may be issued by the Company (other than Units).
(f) The
Managing Member may amend or interpret the provisions of this Article V as, in the Managing Member’s reasonable discretion,
may be necessary or appropriate to comply with the applicable Treasury Regulations or other legal requirements and to properly reflect
the economic intent of this Agreement.
Article VI
DISTRIBUTIONS
Section 6.1 Distributions.
(a) Distributions.
To the extent permitted by applicable Law and hereunder, and except as otherwise provided in Section 6.2 and Section 11.3, distributions
to Members may be declared by the Managing Member out of funds legally available therefor in such amounts and on such terms (including
the payment dates of such distributions) as the Managing Member shall determine using such record date as the Managing Member may designate.
Any such distribution shall be made to the Members as of the close of business on such record date on a pro rata basis in accordance with
the number of Units held by each such Member. For the avoidance of doubt, repurchases or Redemptions made in accordance with Section 4.1(i),
Section 4.7 or payments made in accordance with Sections 7.4 or 7.9 need not be on a pro rata basis. Notwithstanding any other
provision herein to the contrary, no distributions shall be made to any Member to the extent such distribution would render the Company
insolvent or violate the Act. For purposes of the foregoing sentence, insolvency means the inability of the Company to meet its payment
obligations when due. Promptly following the designation of a record date and the declaration of a distribution pursuant to this Section 6.1,
the Managing Member shall give notice to each Member of the record date, the amount and the terms of the distribution and the payment
date thereof.
(b) Successors.
For purposes of determining the amount of distributions, each Member shall be treated as having made the Capital Contributions and as
having received the distributions made to or received by its predecessors in respect of any of such Member’s Units.
(c) Distributions
In-Kind. Except as otherwise provided in this Agreement, any distributions may be made in cash or in kind, or partly in cash and partly
in kind, as determined by the Managing Member. In the event of any distribution of (i) property in kind or (ii) both cash and
property in kind, each Member shall be distributed its proportionate share of any such cash so distributed and its proportionate share
of any such property so distributed in kind (based on the Fair Market Value of such property).
Section 6.2 Tax-Related
Distributions. The Company shall, subject to any restrictions contained in any agreement to which the Company is bound, make
distributions out of legally available funds, at such times and in such amounts as the Managing Member reasonably determines to be necessary
to cause a distribution to the PubCo Holdings Group, in the aggregate, sufficient to enable the PubCo Holdings Group to timely satisfy
any PubCo Tax-Related Liabilities, as follows:
(a) prior
to an Initial Business Combination, to the Class A Members pro rata in accordance with the number of Class A Units held by each
such Member; and
(b) after
an Initial Business Combination, to all of the Members, pro rata in accordance with the number of Units held by each such Member.
Section 6.3 Distribution
Upon Withdrawal. No withdrawing Member shall be entitled to receive any distribution or the value of such Member’s Interest
as a result of withdrawal from the Company prior to the liquidation of the Company, except as specifically provided in this Agreement.
Section 6.4 Issuance
of Additional Equity Securities. This Article VI shall be subject to and, to the extent necessary, amended to reflect the
issuance by the Company of any additional Equity Securities.
Article VII
MANAGEMENT
Section 7.1 The
Managing Member; Fiduciary Duties.
(a) PubCo
shall be the sole Managing Member of the Company. Except as otherwise required by Law, (i) the Managing Member shall have full and
complete charge of all affairs of the Company, (ii) the management and control of the Company’s business activities and operations
shall rest exclusively with the Managing Member, and the Managing Member shall make all decisions regarding the business, activities and
operations of the Company (including the incurrence of costs and expenses) in its sole discretion without the consent of any other Member
and (iii) the Members other than the Managing Member (in their capacity as such) shall not participate in the control, management,
direction or operation of the activities or affairs of the Company and shall have no power to act for or bind the Company.
(b) In
connection with the performance of its duties as the Managing Member of the Company, except as otherwise set forth herein, the Managing
Member acknowledges that it will owe to the Members the same fiduciary duties as it would owe to the stockholders of a Delaware corporation
if it were a member of the board of directors of such a corporation and the Members were stockholders of such corporation. The Members
acknowledge that the Managing Member will take action through its board of directors, and that the members of the Managing Member’s
board of directors will owe comparable fiduciary duties to the stockholders of the Managing Member.
Section 7.2 Officers.
(a) The
Managing Member may appoint, employ or otherwise contract with any Person for the transaction of the business of the Company or the performance
of services for or on behalf of the Company, and the Managing Member may delegate to any such Persons such authority to act on behalf
of the Company as the Managing Member may from time to time deem appropriate.
(b) Except
as otherwise set forth herein, the Chief Executive Officer will be responsible for the general and active management of the business of
the Company and its Subsidiaries and will see that all orders of the Managing Member are carried into effect. The Chief Executive Officer
will report to the Managing Member and have the general powers and duties of management usually vested in the office of president and
chief executive officer of a corporation organized under the DGCL, subject to the terms of this Agreement, and will have such other powers
and duties as may be prescribed by the Managing Member or this Agreement. The Chief Executive Officer will have the power to execute bonds,
mortgages and other contracts requiring a seal, under the seal of the Company, except where required or permitted by Law to be otherwise
signed and executed, and except where the signing and execution thereof will be expressly delegated by the Managing Member to some other
Officer or agent of the Company.
(c) Except
as set forth herein, the Managing Member may appoint Officers at any time, and the Officers may include a president, one or more vice
presidents, a secretary, one or more assistant secretaries, a chief financial officer, a general counsel, a treasurer, one or more assistant
treasurers, a chief operating officer, an executive chairman, and any other officers that the Managing Member deems appropriate. Except
as set forth herein, the Officers will serve at the pleasure of the Managing Member, subject to all rights, if any, of such Officer under
any contract of employment. Any individual may hold any number of offices, and an Officer may, but need not, be a Member of the Company.
The Officers will exercise such powers and perform such duties as specified in this Agreement or as determined from time to time by the
Managing Member.
(d) Subject
to this Agreement and to the rights, if any, of an Officer under a contract of employment, any Officer may be removed, either with or
without cause, by the Managing Member. Any Officer may resign at any time by giving written notice to the Managing Member. Any resignation
will take effect at the date of the receipt of that notice or at any later time specified in that notice; and, unless otherwise specified
in that notice, the acceptance of the resignation will not be necessary to make it effective. Any resignation is without prejudice to
the rights, if any, of the Company under any contract to which the Officer is a party. A vacancy in any office because of death, resignation,
removal, disqualification or any other cause will be filled in the manner prescribed in this Agreement for regular appointments to that
office.
(e) The
Officers, in the performance of their duties as such, shall owe to the Company and the Members duties of loyalty and due care of the type
owed by the officers of a corporation to such corporation and its shareholders under the DGCL.
Section 7.3 Warranted
Reliance by Officers on Others. In exercising their authority and performing their duties under this Agreement, the Officers
shall be entitled to rely on information, opinions, reports or statements of the following Persons or groups unless they have actual
knowledge concerning the matter in question that would cause such reliance to be unwarranted:
(a) one
or more employees or other agents of the Company or subordinates whom the Officer reasonably believes to be reliable and competent in
the matters presented; and
(b) any
attorney, public accountant or other Person as to matters which the Officer reasonably believes to be within such Person’s professional
or expert competence.
Section 7.4 Indemnification.
The Company shall indemnify and hold harmless, to the fullest extent permitted by applicable Law as it presently exists or may hereafter
be amended (provided, that no such amendment shall limit a Covered Person’s rights to indemnification hereunder with respect to
any actions or events occurring prior to such amendment except to the extent required by a non-waivable and non-modifiable provision
of applicable Law), any person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened,
pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”)
by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was entitled to indemnification
under the Existing LLC Agreement, a Member, an Officer, the Managing Member, the Company Representative or the Designated Individual
or is or was serving at the request of the Company as a member, director, officer, trustee, employee or agent of another limited liability
company or of a corporation, partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect
to an employee benefit plan (a “Covered Person”), whether the basis of such Proceeding is alleged action in
an official capacity as a member, director, officer, trustee, employee or agent, or in any other capacity while serving as a member,
director, officer, trustee, employee or agent, against all expenses, liability and loss (including, without limitation, attorneys’
fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred or suffered by such Covered
Person in connection with such Proceeding, unless there has been a final and non-appealable judgment entered by a court of competent
jurisdiction determining that, in respect of such act or omission, and taking into account the acknowledgements and agreements set forth
in this Agreement, (x) such Covered Person engaged in a bad faith violation of the implied contractual covenant of good faith and
fair dealing or a bad faith violation of this Agreement or (y) such Covered Person would not be so entitled to be indemnified and
held harmless if the Company were a corporation organized under the laws of the State of Delaware that indemnified and held harmless
its directors, officers, employees and agents to the fullest extent permitted by Section 145 of the DGCL as in effect on the date
of this Agreement (but including any expansion of rights to indemnification thereunder from and after the date of this Agreement). The
Company shall, to the fullest extent not prohibited by applicable Law as it presently exists or may hereafter be amended (provided, that
no such amendment shall limit a Covered Person’s rights to indemnification hereunder with respect to any actions or events occurring
prior to such amendment except to the extent required by a non-waivable and non-modifiable provision of applicable Law), pay the expenses
(including attorneys’ fees) incurred by a Covered Person in defending any Proceeding in advance of its final disposition; provided,
however, that such payment of expenses in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking
by the Covered Person to repay all amounts advanced if it should be ultimately determined by final judicial decision from which there
is no further right to appeal that the Covered Person is not entitled to be indemnified under this Section 7.4 or otherwise. The
rights to indemnification and advancement of expenses under this Section 7.4 shall be contract rights and such rights shall continue
as to a Covered Person who has ceased to be a member, director, officer, trustee, employee or agent and shall inure to the benefit of
his heirs, executors and administrators. Notwithstanding the foregoing provisions of this Section 7.4, except for Proceedings to
enforce rights to indemnification and advancement of expenses, the Company shall indemnify and advance expenses to a Covered Person in
connection with a Proceeding (or part thereof) initiated by such Covered Person only if such Proceeding (or part thereof) was authorized
by the Managing Member.
Section 7.5 Maintenance
of Insurance or Other Financial Arrangements. To the extent permitted by applicable Law, the Company (with the approval of the
Managing Member) may purchase and maintain insurance or make other financial arrangements on behalf of any Person who is or was a Member,
employee or agent of the Company, or at the request of the Company is or was serving as a manager, director, officer, employee or agent
of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, for any Liability asserted
against such Person and Liability and expenses incurred by such Person in such Person’s capacity as such, or arising out of such
Person’s status as such, whether or not the Company has the authority to indemnify such Person against such Liability and expenses.
Section 7.6 Resignation
or Termination of Managing Member. PubCo shall not, by any means, resign as, cease to be or be replaced as Managing Member except
in compliance with this Section 7.6. No termination or replacement of PubCo as Managing Member shall be effective unless proper
provision is made, in compliance with this Agreement, so that the obligations of PubCo, its successor (if applicable) and any new Managing
Member and the rights of all Members under this Agreement and applicable Law remain in full force and effect. No appointment of a Person
other than PubCo (or its successor, as applicable) as Managing Member shall be effective unless PubCo (or its successor, as applicable)
and the new Managing Member (as applicable) provide all other Members with contractual rights, directly enforceable by such other Members
against PubCo (or its successor, as applicable) and the new Managing Member (as applicable), to cause (a) PubCo to comply with all
PubCo’s obligations under this Agreement (including its obligations under Section 4.7) other than those that must necessarily
be taken in its capacity as Managing Member and (b) the new Managing Member to comply with all the Managing Member’s obligations
under this Agreement.
Section 7.7 No
Inconsistent Obligations. The Managing Member represents that it does not have any contracts, other agreements, duties or obligations
that are inconsistent with its duties and obligations (whether or not in its capacity as Managing Member) under this Agreement and covenants
that, except as permitted by Section 7.1, it will not enter into any contracts or other agreements or undertake or acquire any other
duties or obligations that are inconsistent with such duties and obligations.
Section 7.8 Reclassification
Events of PubCo. If a Reclassification Event occurs, the Managing Member or its successor, as the case may be, shall, as and
to the extent necessary, amend this Agreement in compliance with Section 12.1, and enter into any necessary supplementary or additional
agreements, to ensure that following the effective date of the Reclassification Event: (i) the Redemption Rights of holders of Class A
Units set forth in Section 4.7 provide that each Class A Unit (together with the surrender and delivery of one Class B
Share) is redeemable for the same amount and same type of property, securities or cash (or combination thereof) that one Class A
Share becomes exchangeable for or converted into as a result of the Reclassification Event and (ii) PubCo or the successor to PubCo,
as applicable, is obligated to deliver such property, securities or cash upon such Redemption. PubCo shall not consummate or agree to
consummate any Reclassification Event unless the successor Person, if any, becomes obligated to comply with the obligations of PubCo
(in whatever capacity) under this Agreement.
Section 7.9 Certain
Costs and Expenses. The Company shall (a) pay, or cause to be paid, all costs, fees, operating expenses and other expenses
of the Company and its Subsidiaries (including the costs, fees and expenses of attorneys, accountants or other professionals and the
compensation of all personnel providing services to the Company and its Subsidiaries) incurred in pursuing and conducting, or otherwise
related to, the activities of the Company and (b) in the Good Faith discretion of the Managing Member, reimburse the Managing Member
for any costs, fees or expenses incurred by it in connection with serving as the Managing Member. To the extent that the Managing Member
determines in its Good Faith discretion that such expenses are related to the business and affairs of the Managing Member that are conducted
through the Company and/or its Subsidiaries (including expenses that relate to the business and affairs of the Company and/or its Subsidiaries
and that also relate to other activities of the Managing Member or any other member of the PubCo Holdings Group), the Managing Member
may cause the Company to pay or bear all expenses of the PubCo Holdings Group, including, without limitation, franchise taxes, costs
of securities offerings not borne directly by Members, board of directors compensation and meeting costs, costs of periodic reports to
stockholders of PubCo, litigation costs and damages arising from litigation, accounting and legal costs; provided that the Company shall
not pay or bear any PubCo Tax-Related Liabilities of any member of the PubCo Holdings Group (but the Company shall be entitled to make
distributions in respect of these obligations pursuant to Article VI). In the event that (i) Class A Shares or other Equity
Securities of PubCo were sold to underwriters in the IPO or any public offering after the Effective Time, in each case, at a price per
share that is lower than the price per share for which such Class A Shares or other Equity Securities of PubCo are sold to the public
in such public offering after taking into account any Discounts and (ii) the proceeds from such public offering are used to fund
the Cash Election Amount for any redeemed Units or otherwise contributed to the Company, the Company shall reimburse the applicable member
of the PubCo Holdings Group for such Discount by treating such Discount as an additional Capital Contribution made by such member of
the PubCo Holdings Group to the Company, issuing Units in respect of such deemed Capital Contribution in accordance with Section 4.7(e)(ii),
and increasing the Capital Account of such member of the PubCo Holdings Group by the amount of such Discount. For the avoidance of doubt,
any payments made to or on behalf of any member of the PubCo Holdings Group pursuant to this Section 7.9 shall not be treated as
a distribution pursuant to Section 6.1(a) but shall instead be treated as an expense of the Company.
Article VIII
ROLE
OF MEMBERS
Section 8.1 Rights
or Powers.
(a) Other
than the Managing Member, the Members, acting in their capacity as Members, shall not have any right or power to take part in the management
or control of the Company or its business and affairs or to act for or bind the Company in any way. Notwithstanding the foregoing, the
Members have all the rights and powers specifically set forth in this Agreement and, to the extent not inconsistent with this Agreement,
in the Act. A Member, any Affiliate thereof or an employee, stockholder, agent, director or officer of a Member or any Affiliate thereof,
may also be an employee or be retained as an agent of the Company. The existence of these relationships and acting in such capacities
will not result in the Member (other than the Managing Member) being deemed to be participating in the control of the business of the
Company or otherwise affect the limited liability of the Member. Except as specifically provided herein, a Member (other than the Managing
Member) shall not, in its capacity as a Member, take part in the operation, management or control of the Company’s business, transact
any business in the Company’s name or have the power to sign documents for or otherwise bind the Company.
(b) The
Company shall promptly (but in any event within three business days) notify the Members in writing if, to the Company’s knowledge,
for any reason, it would be an “investment company” within the meaning of the Investment Company Act of 1940 (the “Investment
Company Act”), as amended, but for the exceptions provided in Section 3(c)(1) or 3(c)(7) thereunder.
Section 8.2 Voting.
(a) Meetings
of the Members may be called upon the written request of Members holding at least 50% of the outstanding Units. Such request shall state
the location of the meeting and the nature of the business to be transacted at the meeting. Written notice of any such meeting shall be
given to all Members not less than two Business Days and not more than 30 days prior to the date of such meeting. Members may vote in
person, by proxy or by telephone at any meeting of the Members and may waive advance notice of such meeting. Whenever the vote or consent
of Members is permitted or required under this Agreement, such vote or consent may be given at a meeting of the Members or may be given
in accordance with the procedure prescribed in this Section 8.2. Except as otherwise expressly provided in this Agreement, the affirmative
vote of the Members holding a majority of the outstanding Units shall constitute the act of the Members.
(b) Each
Member may authorize any Person or Persons to act for it by proxy on all matters in which such Member is entitled to participate, including
waiving notice of any meeting, or voting or participating at a meeting. Every proxy must be signed by such Member or its attorney-in-fact.
No proxy shall be valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy. Every proxy shall
be revocable at the pleasure of the Member executing it.
(c) Each
meeting of Members shall be conducted by an Officer designated by the Managing Member or such other individual Person as the Managing
Member deems appropriate.
(d) Any
action required or permitted to be taken by the Members may be taken without a meeting if the requisite Members whose approval is necessary
consent thereto in writing.
Section 8.3 Various
Capacities. The Members acknowledge and agree that the Members or their Affiliates will from time to time act in various capacities,
including as a Member and as the Company Representative.
Section 8.4 Investment
Opportunities. To the fullest extent permitted by applicable law, the doctrine of corporate opportunity, or any analogous doctrine,
shall not apply to any Member, any of their respective Affiliates, or any of their respective officers, directors, agents, shareholders,
members, managers and partners (each, a “Business Opportunities Exempt Party”). The Company renounces any interest
or expectancy of the Company in, or in being offered an opportunity to participate in, business opportunities that are from time to time
presented to any Business Opportunities Exempt Party. No Business Opportunities Exempt Party who acquires knowledge of a potential transaction,
agreement, arrangement or other matter that may be an opportunity for the Company or any of its subsidiaries shall have any duty to communicate
or offer such opportunity to the Company. No amendment or repeal of this Section 8.4 shall apply to or have any effect on the liability
or alleged liability of any Business Opportunities Exempt Party for or with respect to any opportunities of which any such Business Opportunities
Exempt Party becomes aware prior to such amendment or repeal. Any Person purchasing or otherwise acquiring any interest in any Units
shall be deemed to have notice of and consented to the provisions of this Section 8.4. Neither the alteration, amendment or repeal
of this Section 8.4, nor the adoption of any provision of this Agreement inconsistent with this Section 8.4, shall eliminate
or reduce the effect of this Section 8.4 in respect of any business opportunity first identified or any other matter occurring,
or any cause of action, suit or claim that, but for this Section 8.4, would accrue or arise, prior to such alteration, amendment,
repeal or adoption.
Article IX
TRANSFERS
OF INTERESTS
Section 9.1 Restrictions
on Transfer.
(a) Except
as provided in Section 4.7 and Section 9.1(c), no Member shall Transfer all or any portion of its Interest without the Managing
Member’s prior written consent, which consent shall be granted or withheld in the Managing Member’s sole discretion. If, notwithstanding
the provisions of this Section 9.1(a), all or any portion of a Member’s Interests are Transferred in violation of this Section 9.1(a),
involuntarily, by operation of law or otherwise, then without limiting any other rights and remedies available to the other parties under
this Agreement or otherwise, the Transferee of such Interest (or portion thereof) shall not be admitted to the Company as a Member or
be entitled to any rights as a Member hereunder, and the Transferor will continue to be bound by all obligations hereunder, unless and
until the Managing Member consents in writing to such admission, which consent shall be granted or withheld in the Managing Member’s
sole discretion. Any attempted or purported Transfer of all or a portion of a Member’s Interests in violation of this Section 9.1(a) shall
be null and void and of no force or effect whatsoever. For the avoidance of doubt, the restrictions on Transfer contained in this Article IX
shall not apply to the Transfer of any capital stock of PubCo; provided that no Class B Shares may be Transferred unless a corresponding
number of Units are Transferred therewith in accordance with this Agreement.
(b) In
addition to any other restrictions on Transfer herein contained, including the provisions of this Article IX, in no event may any
Transfer or assignment of Interests by any Member be made (i) to any Person who lacks the legal right, power or capacity to own Interests;
(ii) if such Transfer (A) would be considered to be effected on or through an “established securities market” or
a “secondary market or the substantial equivalent thereof,” as such terms are used in Treasury Regulations Section 1.7704-1,
(B) would result in the Company having more than 100 partners, within the meaning of Treasury Regulations Section 1.7704-1(h)(1) (determined
taking into account the rules of Treasury Regulations Section 1.7704-1(h)(3)), or (C) would cause the Company to be treated
as a “publicly traded partnership” within the meaning of Section 7704 of the Code or a successor provision or to be classified
as a corporation pursuant to the Code or successor of the Code; (iii) if such Transfer would cause the Company to become, with respect
to any employee benefit plan subject to Title I of ERISA, a “party-in-interest” (as defined in Section 3(14) of ERISA)
or a “disqualified person” (as defined in Section 4975(e)(2) of the Code); (iv) if such Transfer would, in
the opinion of counsel to the Company, cause any portion of the assets of the Company to constitute assets of any employee benefit plan
pursuant to the Plan Asset Regulations or otherwise cause the Company to be subject to regulation under ERISA; (v) if such Transfer
requires the registration of such Interests or any Equity Securities issued upon any exchange of such Interests, pursuant to any applicable
U.S. federal or state securities Laws; or (vi) if such Transfer subjects the Company to regulation under the Investment Company Act
or the Investment Advisors Act of 1940, each as amended (or any succeeding law). Any attempted or purported Transfer of all or a portion
of a Member’s Interests in violation of this Section 9.1(b) shall be null and void and of no force or effect whatsoever.
(c) Notwithstanding
any of the provisions in Section 9.1(a), but subject to all other provisions in this Article IX, Tiger Sponsor may Transfer
all or a portion of its Units to any of its members as of the date hereof without the consent of any other Member or Person.
(d) Notwithstanding
the foregoing but subject to Section 9.1(b), the parties hereto agree that the Managing Member shall not unreasonably withhold consent
to any Transfer of Units (i) by will or intestacy; (ii) as a bona fide gift or gifts; (iii) to any trust, partnership,
limited liability company or other entity for the direct or indirect benefit of the holder or the immediate family of such holder; (iv) to
any immediate family member or other dependent of the holder; (v) as a distribution to limited partners, members or stockholders
of the holder; (vi) to the holder’s affiliates or to any investment fund or other entity controlled or managed by the holder;
(vii) to a nominee or custodian of a person or entity to whom a disposition or transfer would be permissible under the foregoing
clauses (i) through (vi); or (viii) pursuant to an order of a court or regulatory agency.
Section 9.2 Notice
of Transfer.
(a) Other
than in connection with Transfers made pursuant to Section 4.7, each Member shall, after complying with the provisions of this Agreement,
but in any event no later than three Business Days following any Transfer of Interests, give written notice to the Company of such Transfer.
Each such notice shall describe the manner and circumstances of the Transfer.
(b) A
Member making a Transfer (including a deemed Transfer for U.S. federal income tax purposes as described in Section 4.7(e)(iv)) permitted
by this Agreement shall, unless otherwise determined by the Managing Member, (i) have delivered to the Company an affidavit of non-foreign
status with respect to such Transferor that satisfies the requirements of Section 1445 and Section 1446(f)(2) of the Code
or other documentation establishing a valid exemption from withholding pursuant to Section 1445 and Section 1446(f) of
the Code or (ii) contemporaneously with the Transfer, properly withhold and remit to the Internal Revenue Service the amount of tax
required to be withheld upon the Transfer by Section 1445 and Section 1446(f) of the Code (and provide evidence to the
Company of such withholding and remittance promptly thereafter).
Section 9.3 Transferee
Members. A Transferee of Interests pursuant to this Article IX shall have the right to become a Member only if (a) the
requirements of this Article IX are met, (b) such Transferee executes an instrument reasonably satisfactory to the Managing
Member agreeing to be bound by the terms and provisions of this Agreement and assuming all of the Transferor’s then existing and
future Liabilities arising under or relating to this Agreement, (c) such Transferee represents that the Transfer was made in accordance
with all applicable securities Laws, (d) the Transferor or Transferee shall have reimbursed the Company for all reasonable expenses
(including attorneys’ fees and expenses) of any Transfer or proposed Transfer of a Member’s Interest, whether or not consummated
and (e) if such Transferee or his or her spouse is a resident of a community property jurisdiction, then such Transferee’s
spouse shall also execute an instrument reasonably satisfactory to the Managing Member agreeing to be bound by the terms and provisions
of this Agreement to the extent of his or her community property or quasi-community property interest, if any, in such Member’s
Interest. Unless agreed to in writing by the Managing Member, the admission of a Member shall not result in the release of the Transferor
from any Liability that the Transferor may have to each remaining Member or to the Company under this Agreement or any other Contract
between the Managing Member, the Company or any of its Subsidiaries, on the one hand, and such Transferor or any of its Affiliates, on
the other hand. Written notice of the admission of a Member shall be sent promptly by the Company to each remaining Member.
Section 9.4 Legend.
Each certificate representing a Unit, if any, will be stamped or otherwise imprinted with a legend in substantially the following form:
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933.
THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT.
THE TRANSFER AND VOTING OF THESE SECURITIES
IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF KIMBELL TIGER OPERATING COMPANY,
LLC (THE ISSUER OF THESE SECURITIES) AS IT MAY BE AMENDED, SUPPLEMENTED AND/OR RESTATED FROM TIME TO TIME, AND NO TRANSFER OF THESE
SECURITIES WILL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST
BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE ISSUER OF SUCH SECURITIES.”
Article X
ACCOUNTING;
CERTAIN TAX MATTERS
Section 10.1 Books
of Account. The Company shall, and shall cause each Subsidiary to, maintain true books and records of account in which full and
correct entries shall be made of all its business transactions pursuant to a system of accounting established and administered in accordance
with GAAP, and shall set aside on its books all such proper accruals and reserves as shall be required under GAAP.
Section 10.2 Tax
Elections.
(a) The
Company and any eligible Subsidiary (x) shall make an election (or continue a previously made election) pursuant to Section 754
of the Code (and any similar provisions of applicable U.S. state or local law) for each taxable year for which the Company (or such eligible
Subsidiary) is permitted to make such election and shall not thereafter revoke such election and (y) shall use commercially reasonable
efforts to ensure that any entity in which the Company holds a direct or indirect interest that is treated as a partnership for U.S. federal
income tax purposes that does not meet the definition of “Subsidiary” herein will have in effect an election pursuant to Section 754
of the Code (and any similar provisions of U.S. state or local law). In addition, the Company shall make the following elections on the
appropriate forms or tax returns, if permitted under the Code or applicable law:
(i) to
adopt the calendar year as the Company’s Fiscal Year;
(ii) to
adopt the accrual method of accounting for U.S. federal income tax purposes;
(iii) to
elect to amortize the organizational expenses of the Company as permitted by Section 709(b) of the Code; and
(iv) except
as otherwise provided herein, any other election the Managing Member may in Good Faith deem appropriate and in the best interests of the
Company.
(b) Upon
request of the Managing Member, each Member shall cooperate in Good Faith with the Company in connection with the Company’s efforts
to make any election pursuant to this Section 10.2.
Section 10.3 Tax
Returns; Information. The Managing Member shall arrange for the preparation and timely filing of all income and other tax and
informational returns of the Company. The Managing Member shall furnish to each Member a copy of each approved return and statement,
together with any schedules (including Schedule K-1), or other information that a Member may require and reasonably request in connection
with such Member’s own tax affairs as soon as practicable after the end of each Fiscal Year. The Members agree to (a) take
all actions reasonably requested by the Company or the Company Representative to comply with the Partnership Tax Audit Rules and
(b) furnish to the Company (i) all reasonably requested certificates or statements relating to the tax matters of the Company
(including without limitation an affidavit of non-foreign status pursuant to Section 1445 and Section 1446(f)(2) of the
Code), and (ii) all pertinent information in its possession relating to the Company’s operations that is reasonably necessary
to enable the Company’s tax returns to be prepared and timely filed.
Section 10.4 Company
Representative. The Managing Member is specially authorized and appointed to act as the Company Representative and in any similar
capacity under state or local Law and to take any and all actions determined by the Managing Member and permissible under the Partnership
Tax Audit Rules. The Company Representative shall designate and authorize a Designated Individual in accordance with Treasury Regulations
Section 301.6223-1(b)(3). The Company and the Members shall cooperate fully with each other and shall use reasonable best efforts
to cause the Managing Member (or any other Person subsequently designated) to become the Company Representative with respect to any taxable
period of the Company with respect to which the statute of limitations has not yet expired, including (as applicable) by filing a certification
pursuant to Treasury Regulations Section 301.6231(a)(7)-1(d). The Company Representative is hereby authorized to take such actions
and to execute and file all statements and forms on behalf of the Company that are permitted or required by the Partnership Tax Audit
Rules (including a “push-out” election under Section 6226 of the Code or any analogous election under state or
local tax law) or in connection with any other tax proceeding. The Company Representative may retain, at the Company’s expense,
such outside counsel, accountants and other professional consultants as it may reasonably deem necessary in the course of fulfilling
its obligations as Company Representative.
Section 10.5 Withholding
Tax Payments and Obligations.
(a) Withholding
Tax Payments. Each of the Company and its Subsidiaries may withhold from distributions, allocations or portions thereof if it is required
to do so by any applicable Law, and each Member hereby authorizes the Company and its Subsidiaries to withhold or pay on behalf of or
with respect to such Member, any amount of U.S. federal, state or local or non-U.S. taxes that the Managing Member determines, in Good
Faith, that the Company or any of its Subsidiaries is required to withhold or pay with respect to any amount distributable or allocable
to such Member pursuant to this Agreement.
(b) Other
Tax Payments. To the extent that any tax is paid by (or withheld from amounts payable to) the Company or any of its Subsidiaries and the
Managing Member determines, in Good Faith, that such tax (including any Company Level Tax) relates to one or more specific Members, such
tax shall be treated as an amount of tax withheld or paid with respect to such Member pursuant to this Section 10.5. Any determinations
made by the Managing Member pursuant to this Section 10.5 shall be binding on the Members.
(c) Tax
Contribution and Indemnity Obligation. Any amounts withheld or paid with respect to a Member pursuant to Section 10.5(a) or
(b) shall be offset against any distributions to which such Member is entitled concurrently with such withholding or payment (a “Tax
Offset”); provided that the amount of any distribution subject to a Tax Offset shall be treated as having been distributed
to such Member pursuant to Section 6.1 or Section 11.3(c)(iii) at the time such Tax Offset is made. To the extent that
(i) there is a payment of Company Level Taxes relating to a Member or (ii) the amount of such Tax Offset exceeds the distributions
to which such Member is entitled during the same Fiscal Year as such withholding or payment (“Excess Tax Amount”),
the amount of such (i) Company Level Taxes or (ii) Excess Tax Amount, as applicable, shall, upon notification to such Member
by the Managing Member, give rise to an obligation of such Member to make a capital contribution to the Company (a “Tax Contribution
Obligation”), which Tax Contribution Obligation shall be immediately due and payable. In the event a Member defaults with
respect to its obligation under the prior sentence, the Company shall be entitled to offset the amount of a Member’s Tax Contribution
Obligation against distributions to which such Member would otherwise be subsequently entitled until the full amount of such Tax Contribution
Obligation has been contributed to the Company or has been recovered through offset against distributions, and any such offset shall not
reduce such Member’s Capital Account. Any contribution by a Member with respect to a Tax Contribution Obligation shall increase
such Member’s Capital Account but shall not reduce the amount (if any) that a Member is otherwise obligated to contribute to the
Company. Each Member hereby unconditionally and irrevocably grants to the Company a security interest in such Member’s Units to
secure such Member’s obligation to pay the Company any amounts required to be paid pursuant to this Section 10.5. Each Member
shall take such actions as the Company may reasonably request in order to perfect or enforce the security interest created hereunder.
Each Member hereby agrees to indemnify and hold harmless the Company, the other Members, the Company Representative, the Designated Individual
and the Managing Member from and against any liability (including any liability for Company Level Taxes) with respect to income attributable
to or distributions or other payments to such Member.
(d) Continued
Obligations of Former Members. Any Person who ceases to be a Member shall be deemed to be a Member solely for purposes of this Section 10.5,
and the obligations of a Member pursuant to this Section 10.5 shall survive until 60 days after the closing of the applicable statute
of limitations on assessment with respect to the taxes withheld or paid by the Company or a Subsidiary that relate to the period during
which such Person was actually a Member; provided, however, that if the Managing Member determines in its sole discretion that seeking
indemnification for Company Level Taxes from a former Member is not practicable, or that seeking such indemnification has failed, then,
in either case, the Managing Member may, in its sole discretion, (A) recover any liability for Company Level Taxes from the Transferee
that acquired directly or indirectly the applicable interest in the Company from such former Member (unless such Transferee is a member
of the PubCo Holdings Group) or (B) treat such liability for Company Level Taxes as a Company expense.
(e) Managing
Member Discretion Regarding Recovery of Taxes. Notwithstanding the foregoing, the Managing Member may choose not to recover an amount
of Company Level Taxes or other taxes withheld or paid with respect to a Member under this Section 10.5 to the extent that there
are no distributions to which such Member is entitled that may be offset by such amounts, if the Managing Member determines, in its reasonable
discretion, that such a decision would be in the best interests of the Members (e.g., where the cost of recovering the amount of taxes
withheld or paid with respect to such Member is not justified in light of the amount that may be recovered from such Member).
Article XI
DISSOLUTION
AND TERMINATION
Section 11.1 Liquidating
Events. The Company shall dissolve and commence winding up and liquidating upon the first to occur of the following (each, a
“Liquidating Event”):
(a) The
sale of all or substantially all of the assets of the Company;
(b) The
failure of PubCo to complete an Initial Business Combination within the period contemplated by Section 9.2(d) of the PubCo Charter;
and
(c) The
determination of (i) the Managing Member, and (ii) if at such time the Members (other than any member of the PubCo Holdings
Group) beneficially own, in the aggregate, more than 2.5% of the then-outstanding Units, the holders of at least 66 2/3% of the outstanding
Units held by Members other than the PubCo Holdings Group to dissolve, wind up and liquidate the Company; provided that no such Liquidating
Event shall be consummated until at least 5 Business Days after written notice is provided to the Members that such determination has
been made in accordance with the foregoing, and, for the avoidance of doubt, any Member, including any Member not consenting to such determination,
shall have the right to file a Redemption Notice prior to the consummation of such Liquidating Event.
The Members hereby agree that the Company shall
not dissolve prior to the occurrence of a Liquidating Event and that no Member shall seek a dissolution of the Company, under Section 18-802
of the Act or otherwise, other than based on the matters set forth in clauses (a) and (c) above. If it is determined by
a court of competent jurisdiction that the Company has dissolved prior to the occurrence of a Liquidating Event, the Members hereby agree
to continue the business of the Company without a winding up or liquidation. In the event of a dissolution pursuant to Section 11.1(c),
the relative economic rights of each class of Units immediately prior to such dissolution shall be preserved to the greatest extent practicable
with respect to distributions made to Members pursuant to Section 11.3 in connection with such dissolution, taking into consideration
tax and other legal constraints that may adversely affect one or more parties to such dissolution and subject to compliance with applicable
laws and regulations, unless, with respect to any class of Units, holders of a majority of the Units of such class consent in writing
to a treatment other than as described above.
Section 11.2 Bankruptcy.
For purposes of this Agreement, the “bankruptcy” of a Member shall mean the occurrence of any of the following: (a) any
Governmental Entity shall take possession of any substantial part of the property of that Member or shall assume control over the affairs
or operations thereof, or a receiver or trustee shall be appointed, or a writ, order, attachment or garnishment shall be issued with
respect to any substantial part thereof, and such possession, assumption of control, appointment, writ or order shall continue for a
period of 90 consecutive days; or (b) a Member shall admit in writing of its inability to pay its debts when due, or make an assignment
for the benefit of creditors; or apply for or consent to the appointment of any receiver, trustee or similar officer or for all or any
substantial part of its property; or shall institute (by petition, application, answer, consent or otherwise) any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debts, dissolution, liquidation or similar proceeding under the Laws of any jurisdiction;
or (c) a receiver, trustee or similar officer shall be appointed for such Member or with respect to all or any substantial part
of its property without the application or consent of that Member, and such appointment shall continue undischarged or unstayed for a
period of 90 consecutive days or any bankruptcy, insolvency, reorganization, arrangements, readjustment of debt, dissolution, liquidation
or similar proceedings shall be instituted (by petition, application or otherwise) against that Member and shall remain undismissed for
a period of 90 consecutive days.
Section 11.3 Procedure.
(a) In
the event of the dissolution of the Company for any reason, the Members shall commence to wind up the affairs of the Company and to liquidate
the Company’s investments; provided that if a Member is in bankruptcy or dissolved, another Member, who shall be the Managing Member
(“Winding-Up Member”), shall commence to wind up the affairs of the Company and, subject to Section 11.4(a),
such Winding-Up Member shall have full right and unlimited discretion to determine in Good Faith the time, manner and terms of any sale
or sales of the Property or other assets pursuant to such liquidation, having due regard to the activity and condition of the relevant
market and general financial and economic conditions. The Members shall continue to share profits, losses and distributions during the
period of liquidation in the same manner and proportion as though the Company had not dissolved. The Company shall engage in no further
business except as may be necessary, in the reasonable discretion of the Managing Member or the Winding-Up Member, as applicable, to preserve
the value of the Company’s assets during the period of dissolution and liquidation.
(b) In
the event that holders of Class A Shares are entitled to have their Class A Shares redeemed by PubCo in exchange for any amounts
in the Trust Account in accordance with Section 9.2 or Section 9.7 of the PubCo Charter, the Company shall use funds available
pursuant to the Trust Agreement in order to distribute to in liquidation or redeem an equivalent number of Class A Units from PubCo
prior to such redemption of any Class A Shares; provided, further, funds from the Trust Account may only be used to redeem
Class A Units constituting Sponsor Shares in connection with a liquidation of PubCo in accordance with the PubCo Charter.
(c) Following
the payment of all expenses of liquidation and the allocation of all Profits and Losses as provided in Article V, the proceeds of
the liquidation and any other funds of the Company shall be distributed in the following order of priority:
(i) First,
to the payment and discharge of all of the Company’s debts and Liabilities to creditors (whether third parties or Members), in the
order of priority as provided by Law, except any obligations to the Members in respect of their Capital Accounts;
(ii) Second,
to set up such cash reserves that the Managing Member reasonably deems necessary for contingent or unforeseen Liabilities or future payments
described in Section 11.3(c)(i) (which reserves when they become unnecessary shall be distributed in accordance with the provisions
of clause (iii) below); and
(iii) Third,
the balance to the Members, as follows:
(A) prior
to the Equalization Date, in accordance with their respective positive Capital Account balances, as determined after making all adjustments
thereto in accordance with Section 5.1 and Section 5.2 resulting from the Company’s operations and from all sales or dispositions
of all or any part of the Company’s assets; or
(B) after
the Equalization Date, pro rata in accordance with the number of Units owned by each Member.
(d) No
Member shall have any right to demand or receive property other than cash upon dissolution and termination of the Company.
(e) Upon
the completion of the liquidation of the Company and the distribution of all Company funds, the Company shall terminate and the Managing
Member or the Winding-Up Member, as the case may be, shall have the authority to execute and record a certificate of cancellation of the
Company, as well as any and all other documents required to effectuate the dissolution and termination of the Company.
Section 11.4 Rights
of Members.
(a) Each
Member irrevocably waives any right that it may have to maintain an action for partition with respect to the property of the Company.
(b) Except
as otherwise provided in this Agreement, (i) each Member shall look solely to the assets of the Company for the return of its Capital
Contributions and (ii) no Member shall have priority over any other Member as to the return of its Capital Contributions, distributions
or allocations.
Section 11.5 Notices
of Dissolution. In the event a Liquidating Event occurs or an event occurs that would, but for the provisions of Section 11.1,
result in a dissolution of the Company, the Company shall, within 30 days thereafter, (a) provide written notice thereof to each
of the Members and to all other parties with whom the Company regularly conducts business (as determined in the discretion of the Managing
Member), and (b) comply, in a timely manner, with all filing and notice requirements under the Act or any other applicable Law.
Section 11.6 Reasonable
Time for Winding Up. A reasonable time shall be allowed for the orderly winding up of the business and affairs of the Company
and the liquidation of its assets in order to minimize any losses that might otherwise result from such winding up.
Section 11.7 No
Deficit Restoration. No Member shall be personally liable for a deficit Capital Account balance of that Member, it being expressly
understood that the distribution of liquidation proceeds shall be made solely from existing Company assets.
Article XII
GENERAL
Section 12.1 Amendments;
Waivers.
(a) The
terms and provisions of this Agreement may be waived, modified or amended (including by means of merger, consolidation or other business
combination to which the Company is a party) with the approval of (y) the Managing Member and (z) if at such time the Members
(other than the PubCo Holdings Group) beneficially own, in the aggregate, more than 2.5% of the then-outstanding Units, the holders of
at least 66 2/3% of the outstanding Units held by Members other than the PubCo Holdings Group; provided that no waiver, modification or
amendment shall be effective until at least 5 Business Days after written notice is provided to the Members that the requisite consent
has been obtained for such waiver, modification or amendment, and, for the avoidance of doubt, any Member, including any Member not providing
written consent, shall have the right to file a Redemption Notice prior to the effectiveness of such waiver, modification or amendment;
provided, further, that no amendment to this Agreement may:
(i) modify
the limited liability of any Member, or increase the liabilities or obligations of any Member, in each case, without the consent of each
such affected Member;
(ii) materially
alter or change any rights, preferences or privileges of any Interests in a manner that is different or prejudicial (or would have a different
or prejudicial effect) relative to any other Interests, without the approval of a majority in interest of the Members holding the Interests
affected in such a different or prejudicial manner;
(iii) materially
alter or change any rights, preferences or privileges of either the Class A Units or the Class B Units in a manner that is different
or prejudicial (or that would have a different or prejudicial effect) relative to the other class of Units, without the approval of the
Members holding such class of Units that are affected in a different or prejudicial manner;
(iv) alter
or change any rights, preferences or privileges of any Member that are expressly for the benefit of such Member, without the approval
of such member; or
(v) modify
the requirement that a majority of the directors of PubCo who are independent within the meaning of the rules of the New York Stock
Exchange (or such other principal United States securities exchange on which the Class A Shares are listed) and Rule 10A-3 of
the Securities Act and do not hold any Class A Units that are subject to the applicable Redemption must approve a Cash Election pursuant
to Section 4.7(e)(ii) without the approval of a majority of the directors of PubCo who are independent within the meaning of
the rules of the New York Stock Exchange (or such other principal United States securities exchange on which the Class A Shares
are listed) and Rule 10A-3 of the Securities Act.
(b) Notwithstanding
the foregoing clause (a), the Managing Member, acting alone, may amend this Agreement, including Exhibit B, (i) to reflect
the admission of new Members, as provided by the terms of this Agreement, (ii) to the minimum extent necessary to comply with or
administer in an equitable manner the Partnership Tax Audit Rules in any manner determined by the Managing Member, and (iii) as
necessary to avoid the Company being classified as a “publicly traded partnership” within the meaning of Section 7704(b) of
the Code.
(c) No
waiver of any provision or default under, nor consent to any exception to, the terms of this Agreement or any agreement contemplated hereby
shall be effective unless in writing and signed by the party to be bound and then only to the specific purpose, extent and instance so
provided.
Section 12.2 Further
Assurances. Each party agrees that it will from time to time, upon the reasonable request of another party, execute such documents
and instruments and take such further action as may be required to accomplish the purposes of this Agreement.
Section 12.3 Successors
and Assigns. All of the terms and provisions of this Agreement shall be binding upon the parties and their respective successors
and assigns, but shall inure to the benefit of and be enforceable by the successors and assigns of any Member only to the extent that
they are permitted successors and assigns pursuant to the terms hereof. No party may assign its rights hereunder except as herein expressly
permitted.
Section 12.4 Certain
Representations by Members. Each Member, by executing this Agreement and becoming a Member, whether by making a Capital Contribution,
by admission in connection with a permitted Transfer or otherwise, represents and warrants to the Company and the Managing Member, as
of the date of its admission as a Member, that such Member (or, if such Member is disregarded for U.S. federal income tax purposes, such
Member’s regarded owner for such purposes) is either: (i) not a partnership, grantor trust or Subchapter S corporation for
U.S. federal income tax purposes (e.g., an individual or Subchapter C corporation), or (ii) is a partnership, grantor trust or Subchapter
S corporation for U.S. federal income tax purposes, but (A) permitting the Company to satisfy the 100-partner limitation set forth
in Treasury Regulations Section 1.7704-1(h)(1)(ii) is not a principal purpose of any beneficial owner of such Member in investing
in the Company through such Member, (B) such Member was formed for business purposes prior to or in connection with the investment
by such Member in the Company or for estate planning purposes, and (C) no beneficial owner of such Member has a redemption or similar
right with respect to such Member that is intended to correlate to such Member’s right to Redemption pursuant to Section 4.7.
Section 12.5 Entire
Agreement. This Agreement, together with all Exhibits and Schedules hereto and all other agreements referenced therein and herein,
constitute the entire agreement between the parties hereto pertaining to the subject matter hereof and supersede all prior and contemporaneous
agreements, understandings, negotiations and discussions, whether oral or written, of the parties and there are no warranties, representations
or other agreements between the parties in connection with the subject matter hereof except as specifically set forth herein and therein.
Section 12.6 Rights
of Members Independent. The rights available to the Members under this Agreement and at Law shall be deemed to be several and
not dependent on each other and each such right accordingly shall be construed as complete in itself and not by reference to any other
such right. Any one or more and/or any combination of such rights may be exercised by a Member and/or the Company from time to time and
no such exercise shall exhaust the rights or preclude another Member from exercising any one or more of such rights or combination thereof
from time to time thereafter or simultaneously.
Section 12.7 Governing
Law. This Agreement, the legal relations between the parties and any Action, whether contractual or non-contractual, instituted
by any party with respect to matters arising under or growing out of or in connection with or in respect of this Agreement shall be governed
by and construed in accordance with the Laws of the State of Delaware applicable to contracts made and performed in such state and without
regard to conflicts of law doctrines.
Section 12.8 Jurisdiction
and Venue. The parties hereto hereby agree and consent to be subject to the jurisdiction of any federal court of the District
of Delaware or the Delaware Court of Chancery over any action, suit or proceeding (a “Legal Action”) arising
out of or in connection with this Agreement. The parties hereto irrevocably waive the defense of an inconvenient forum to the maintenance
of any such Legal Action. Each of the parties hereto further irrevocably consents to the service of process out of any of the aforementioned
courts in any such Legal Action by the mailing of copies thereof by registered mail, postage prepaid, to such party at its address set
forth in this Agreement, such service of process to be effective upon acknowledgment of receipt of such registered mail. Nothing in this
Section 12.8 shall affect the right of any party hereto to serve legal process in any other manner permitted by law.
Section 12.9 Headings.
The descriptive headings of the Articles, Sections and subsections of this Agreement are for convenience only and do not constitute a
part of this Agreement.
Section 12.10 Counterparts.
This Agreement and any amendment hereto or any other agreement (or document) delivered pursuant hereto may be executed in one or more
counterparts and by different parties in separate counterparts any may delivered by email or other electronic means. All of such counterparts
shall constitute one and the same agreement (or other document) and shall become effective (unless otherwise provided therein) when one
or more counterparts have been signed by each party and delivered to the other party.
Section 12.11 Notices.
Any notice or other communication hereunder must be given in writing and (a) delivered in person, (b) transmitted by facsimile,
by telecommunications mechanism or electronically or (c) mailed by certified or registered mail, postage prepaid, receipt requested
as follows:
If to the Company or the Managing Member, addressed to it at:
Kimbell Tiger Operating Company, LLC
777 Taylor St.
Fort Worth, Texas 76102
Attention: Zachary M. Lunn
Email:[***]
With copies (which shall not constitute notice) to:
White & Case LLP
609 Main Street, Suite 2900
Houston, TX 77002
Attention: Jason A. Rocha and Andrew J. Ericksen
Email: [***] and [***]
or to such other address or to such other Person
as either party shall have last designated by such notice to the other parties. Each such notice or other communication shall be effective
(i) if given by telecommunication or electronically, when transmitted to the applicable number or email address so specified in (or
pursuant to) this Section 12.11 and an appropriate answerback is received or, if transmitted after 4:00 p.m. local time on a
Business Day in the jurisdiction to which such notice is sent or at any time on a day that is not a Business Day in the jurisdiction to
which such notice is sent, then on the immediately following Business Day, (ii) if given by mail, on the first Business Day in the
jurisdiction to which such notice is sent following the date three days after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid or (iii) if given by any other means, on the Business Day when actually received at
such address or, if not received on a Business Day, on the Business Day immediately following such actual receipt.
Section 12.12 Representation
By Counsel; Interpretation. The parties acknowledge that each party to this Agreement has been represented by counsel in connection
with this Agreement and the transactions contemplated by this Agreement. Accordingly, any rule of Law, or any legal decision that
would require interpretation of any claimed ambiguities in this Agreement against the party that drafted it has no application and is
expressly waived.
Section 12.13 Severability.
If any provision of this Agreement is determined to be invalid, illegal or unenforceable by any Governmental Entity, the remaining provisions
of this Agreement, to the extent permitted by Law shall remain in full force and effect, provided that the essential terms and conditions
of this Agreement for all parties remain valid, binding and enforceable.
Section 12.14 Expenses.
Except as otherwise provided in this Agreement, each party shall bear its own expenses in connection with the transactions contemplated
by this Agreement.
Section 12.15 Waiver
of Jury Trial. EACH OF THE COMPANY, THE MEMBERS, THE MANAGING MEMBER AND ANY INDEMNITEES SEEKING REMEDIES HEREUNDER HEREBY WAIVES
TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE.
Section 12.16 No
Third Party Beneficiaries. Except as expressly provided in Section 7.4, nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the parties hereto and their respective successors and permitted assigns, any rights or
remedies under this Agreement or otherwise create any third party beneficiary hereto.
[Signature Pages Follow]
IN WITNESS WHEREOF, each of the parties hereto
has caused this Amended and Restated Limited Liability Company Agreement to be executed as of the day and year first above written.
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COMPANY:
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Kimbell Tiger Operating Company, LLC
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By:
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Name:
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Zachary M. Lunn
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Title:
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Chief Executive Officer
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Signature
Page to
Amended and Restated Limited Liability Company Agreement of
Kimbell Tiger Operating Company, LLC
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MANAGING MEMBER:
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Kimbell Tiger Acquisition Corporation
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By:
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Name:
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Zachary M. Lunn
|
|
Title:
|
Chief Executive Officer
|
Signature
Page to
Amended and Restated Limited Liability Company Agreement of
Kimbell Tiger Operating Company, LLC
|
PUBCO:
|
|
|
|
|
Kimbell Tiger Acquisition Corporation
|
|
|
|
|
By:
|
|
|
Name:
|
Zachary M. Lunn
|
|
Title:
|
Chief Executive Officer
|
Signature
Page to
Amended and Restated Limited Liability Company Agreement of
Kimbell Tiger Operating Company, LLC
|
MEMBERS:
|
|
|
|
|
Kimbell Tiger Acquisition Sponsor, LLC
|
|
|
|
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By:
|
|
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Name:
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Matthew S. Daly
|
|
Title:
|
Chief Operating Officer
|
Signature
Page to
Amended and Restated Limited Liability Company Agreement of
Kimbell Tiger Operating Company, LLC
Exhibit A
Name
|
|
Class A Units Held
|
|
|
Class B Units Held
|
|
|
Company Warrants Held
|
|
Kimbell Tiger Acquisition Sponsor, LLC
|
|
|
100
|
|
|
|
5,750,000
|
|
|
|
—
|
|
Kimbell Tiger Acquisition Corporation
|
|
|
20,002,500
|
|
|
|
—
|
|
|
|
21,500,000
|
|
Exhibit A
to
Amended and Restated Limited Liability Company Agreement of
Kimbell Tiger Operating Company, LLC
Exhibit B
Members:
Kimbell Tiger Acquisition Sponsor, LLC
Kimbell Tiger Acquisition Corporation
Exhibit B
to
Amended and Restated Limited Liability Company Agreement of
Kimbell Tiger Operating Company, LLC
Exhibit 23.1
Consent of Independent Registered Public
Accounting Firm
We consent to the use of our report dated June 11, 2021, except as
to Notes 6 and 7, which is as of July 29, 2021, with respect to the consolidated financial statements of Kimbell Tiger Acquisition Corporation,
included herein and to the reference to our firm under the heading “Experts” in the prospectus.
/s/ KPMG LLP
Dallas, Texas
January 28, 2022