UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 9, 2022
DUDDELL STREET ACQUISITION CORP.
(Exact Name of Registrant as specified in its Charter)
| Cayman Islands | 001-39672 | |||
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
|
8/F Printing House, 6 Duddell Street Hong Kong |
00000 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: + 852 3468 6200
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
| x | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) |
Name of each exchange on which registered | ||
| Class A ordinary shares, par value $0.0001 per share | DSAC | Nasdaq Capital Market | ||
| Capital Market | ||||
| Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 1.01 Entry Into A Material Definitive Agreement.
Amendment to the Business Combination Agreement
As previously disclosed in the Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on November 8, 2021 (the “Current Report”), on November 7, 2021, Duddell Street Acquisition Corp., a Cayman Islands exempted company (“DSAC”), entered into an Agreement and Plan of Merger (as it may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among DSAC, Grassroots Merger Sub, Inc., a Delaware corporation (“Merger Sub”), and FiscalNote Holdings, Inc., a Delaware corporation (“FiscalNote”). The Business Combination Agreement provides for, among other things, the following transactions on the closing date: (i) DSAC will domesticate as a Delaware corporation (“Newco”, and such transaction, the “Domestication”) and, in connection with the Domestication, (A) each then issued and outstanding Class A ordinary share of DSAC will convert automatically into one share of Class A common stock of Newco (the “Newco Class A Common Stock”), (B) each then issued and outstanding Class B ordinary share of DSAC will convert automatically into one share of Newco Class A Common Stock, and (C) each then issued and outstanding common warrant of DSAC will convert automatically into one warrant to purchase one share of Newco Class A Common Stock; and (ii) at least one day after the Domestication, Merger Sub will merge with and into FiscalNote, with FiscalNote as the surviving company in the merger and, after giving effect to such merger, continuing as a wholly-owned subsidiary of Newco (the “Merger”). The Domestication, the Merger and the other transactions contemplated by the Business Combination Agreement are hereinafter referred to as the “Business Combination” and the closing of the Business Combination is referred to as the “Closing.”
On May 9, 2022, DSAC, FiscalNote and Merger Sub entered into a First Amendment to the Business Combination Agreement (the “Amendment”). Pursuant to the Amendment, the parties thereto agreed to (i) an additional triggering event (the volume-weighted average price of the Newco Class A Common Stock for certain trading periods post-Closing reaching $10.50) for issuing an additional tranche of earnout consideration pursuant to the Business Combination Agreement, (ii) an extension of the Termination Date (as defined in the Business Combination Agreement) to August 7, 2022 and (iii) a bonus issuance of 0.57 shares of Newco Class A Common Stock to the holders of DSAC’s Class A ordinary shares that do not elect to redeem their shares for each share of Newco Class A Common Stock received by such holders in the Domestication and to the Backstop Purchasers (as defined below) for each Backstop Purchase Share (as defined below) pursuant to the Backstop Amendment (as defined below). In addition, certain provisions of the Business Combination Agreement were amended to reflect the transactions contemplated by the Debt Commitment Letter (as defined below), the termination of the Subscription Agreements (as defined below) and the removal of the PIPE Financing (as defined below).
The foregoing description of the Amendment is subject to and qualified in its entirety by reference to the full text of the Amendment, a copy of which is included as Exhibit 2.1 hereto, and the terms of which are incorporated herein by reference.
Termination of the PIPE Financing
As previously disclosed in the Current Report, in connection with the signing of the Business Combination Agreement, DSAC entered into subscription agreements (the “Subscription Agreements”) with certain investors, including affiliates of DSAC’s sponsor, pursuant to which such investors agreed to subscribe for and purchase, and DSAC agreed to issue and sell to such investors, on the closing date of, and immediately prior to (but subject to), the Merger, an aggregate of 10,000,000 shares of Newco Class A Common Stock for a purchase price of $10.00 per share, for aggregate gross proceeds of $100,000,000 (the “PIPE Financing”).
In connection with the execution of the Amendment and the Debt Commitment Letter, the parties to the Subscription Agreements agreed to terminate such agreements and the transactions contemplated thereby.
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Amendment to the Backstop Agreement
As previously disclosed in the Current Report, in connection with the signing of the Business Combination Agreement, DSAC and certain affiliates of its sponsor (the “Backstop Purchasers”) entered into a backstop agreement (the “Backstop Agreement”) whereby the Backstop Purchasers have agreed, subject to the other terms and conditions included therein, at the BPS Closing (as defined in the Backstop Agreement), to subscribe for shares of Newco Class A Common Stock in order to fund any redemptions by shareholders of DSAC in connection with the Business Combination, in an amount of up to $175,000,000.
On May 9, 2022, in connection with the execution of the Amendment, DSAC and the Backstop Purchasers entered into an Amendment to the Backstop Agreement (the “Backstop Amendment”). Pursuant to the Backstop Amendment, DSAC has agreed to a bonus issuance to each Backstop Purchaser of 0.57 shares of Newco Class A Common Stock for each Backstop Purchase Share (as defined in the Backstop Agreement) (“Backstop Purchase Share”) immediately prior to the effective time of the Merger.
The foregoing description of the Backstop Amendment is subject to and qualified in its entirety by reference to the full text of the Backstop Amendment, a copy of which is included as Exhibit 10.1 hereto, and the terms of which are incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On May 9, 2022, DSAC and FiscalNote issued a joint press release announcing their entry into the Amendment, FiscalNote Inc.’s entry into the Debt Commitment Letter and the other developments described herein. The press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
The foregoing (including Exhibit 99.1) is being furnished pursuant to Item 7.01 and will not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise be subject to the liabilities of that section, nor will it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.
Item 8.01 Other Events
On May 9, 2022, FiscalNote, Inc., a wholly owned indirect subsidiary of FiscalNote, entered into a debt commitment letter (the “Debt Commitment Letter”) with Runway Growth Finance Corp., ORIX Growth Capital, LLC, Clover Orochi LLC and ACM ASOF VIII SaaS FinCo LLC (the “Commitment Parties”), pursuant to which the Commitment Parties have committed to provide term loans to FiscalNote, Inc. concurrent with the Closing, which funds are expected to be used, in part, to retire certain existing indebtedness of FiscalNote and its subsidiaries, as well as for working capital and general corporate purposes (the “Debt Financing”). The Debt Financing is expected to consist of a senior secured term loan facility in an aggregate principal amount of up to $150.0 million. The annual interest is expected to consist of the greater of (a) Prime Rate (as referenced in the Debt Commitment Letter) plus 5.0% and (b) 9.0% and PIK interest (as referenced in the Debt Commitment Letter) of 1.00%. The term loan facility is expected to mature five years after the Closing.
The funding of the Debt Financing is expected to be contingent on the satisfaction or waiver of certain conditions set forth in the Debt Commitment Letter, including, without limitation, execution and delivery of definitive documentation consistent with the final terms of the Debt Commitment Letter and a requirement for unrestricted cash on the balance sheet of Newco on a consolidated basis (after giving effect to the Business Combination and the other transactions contemplated by the Business Combination Agreement) to be no less than $100 million. The funding of the Debt Financing is available until the earliest of (a) the termination of the Business Combination Agreement by FiscalNote, prior to closing of the Merger, (b) the consummation of the Merger without the use of the Debt Financing and (c) 11:59 p.m., New York City time, on August 7, 2022.
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Additional Information and Where to Find It
For additional information on the proposed Business Combination, see the relevant materials that DSAC has filed with the SEC, including a registration statement on Form S-4 (the “Form S-4”) with the SEC, which includes a proxy statement/prospectus of DSAC. DSAC’s shareholders and other interested persons are advised to read the preliminary proxy statement/prospectus and the amendments thereto and, when available, the definitive proxy statement and documents incorporated by reference therein filed or to be filed with the SEC in connection with the proposed Business Combination, as these materials contain important information about FiscalNote, DSAC and the proposed Business Combination. Promptly after the Form S-4 is declared effective by the SEC, DSAC will mail the definitive proxy statement/prospectus and a proxy card to each shareholder entitled to vote at the meeting relating to the approval of the Business Combination and other proposals set forth in the proxy statement/prospectus. Before making any voting or investment decision, investors and shareholders of DSAC are urged to carefully read the entire registration statement and proxy statement/prospectus, when they become available, and any other relevant documents filed with the SEC, as well as any amendments or supplements to these documents, because they will contain important information about the proposed Business Combination. The documents filed by DSAC with the SEC may be obtained free of charge at the SEC’s website at www.sec.gov.
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Participants in the Solicitation
DSAC and its directors and executive officers may be deemed participants in the solicitation of proxies from DSAC’s shareholders with respect to the Business Combination. A list of the names of those directors and executive officers and a description of their interests in DSAC are included in the proxy statement/prospectus for the Business Combination, which is available at www.sec.gov. Information about DSAC’s directors and executive officers and their ownership of DSAC shares are other information regarding the interests of the participants in the proxy solicitation are also included in the proxy statement/prospectus pertaining to the Business Combination when it becomes available. These documents can be obtained free of charge from the source indicated above.
FiscalNote and its directors and executive officers may also be deemed to be participants in the solicitation of proxies from the shareholders of DSAC in connection with the Business Combination. A list of the names of such directors and executive officers and information regarding their interests in the proposed Business Combination will be included in the proxy statement/prospectus for the Business Combination when available.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as “will,” “are expected to,” “is anticipated,” “estimated,” “believe,” “intend,” “plan,” “projection,” “pro forma,” “outlook” or words of similar meaning. These forward-looking statements include, but are not limited to, statements regarding FiscalNote’s industry and market sizes, future opportunities for FiscalNote and DSAC, FiscalNote’s estimated future results and the proposed Business Combination between DSAC and FiscalNote, including pro forma market capitalization, pro forma revenue, the expected transaction and ownership structure and the likelihood, timing and ability of the parties to successfully consummate the proposed Business Combination. Such forward-looking statements are based upon the current beliefs and expectations of DSAC’s and FiscalNote’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond DSAC’s or FiscalNote’s control. Actual results and the timing of events may differ materially from the results anticipated in these forward-looking statements.
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Nothing in this Current Report on Form 8-K should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Except as may be required by law, neither DSAC nor FiscalNote undertakes any duty to update these forward-looking statements.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: May 9, 2022 | DUDDELL STREET ACQUISITION CORP. | |
| By: |
/s/ Manoj Jain | |
| Name: | Manoj Jain | |
| Title: | Chief Executive Officer | |
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Exhibit 2.1
EXECUTION VERSION
FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
This First Amendment to Agreement and Plan of Merger (this “Amendment”), dated as of May 9, 2022, is entered into by and among the undersigned and amends that certain Agreement and Plan of Merger, dated as of November 7, 2021 (the “Merger Agreement”), by and among Duddell Street Acquisition Corp., a Cayman Islands exempted company (“DSAC”), Grassroots Merger Sub, Inc., a Delaware corporation and a wholly owned direct Subsidiary of DSAC (“Merger Sub” and, together with DSAC, the “DSAC Parties”), and FiscalNote Holdings, Inc., a Delaware corporation (the “Company” and together with the DSAC Parties, the “Parties”). Capitalized terms used but not defined in this Amendment have the meanings assigned to them in the Merger Agreement.
WHEREAS, Section 12.11 of the Merger Agreement provides that the Merger Agreement may be amended in whole or in part by a duly authorized agreement in writing executed by each of the Parties;
WHEREAS, the Parties wish to enter into this Amendment to amend the Merger Agreement pursuant to Section 12.11 thereof, upon the terms and conditions set forth herein; and
WHEREAS, concurrently with the execution of this Amendment, (i) the applicable persons are entering into amendments to certain of the Ancillary Agreements as described in more detail below, (ii) the applicable persons are entering into the Debt Commitment Letter (as defined below); and (iii) the PIPE Subscription Agreements are being terminated.
NOW, THEREFORE, in consideration of the premises and mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows.
| 1. | Amendment to the Merger Agreement. |
| (a) | Amendments Related to the Termination of the PIPE Subscription Agreements: |
(i) Annex B to the Merger Agreement (Form of Newco Bylaws) is hereby amended by deleting the proviso in the definition of Locked Up Shares therein related to shares purchased pursuant to the PIPE Subscription Agreements;
(ii) Annex D (Sponsor Letter Agreement) to the Merger Agreement is hereby amended by deleting the references to the PIPE Financing in Section 2, Section 5(b) and Section 6(a)(i) thereof, and the parties to the Sponsor Letter Agreement are concurrently delivering an amendment to such effect concurrently with this Amendment;
(iii) Annex E (Backstop Agreement) to the Merger Agreement is hereby amended by deleting the references to the PIPE Financing in Section 2(b) thereof and providing for the issuance of Newco Bonus Shares to the Purchasers (as defined in the Backstop Agreement) in new Section 2(d) thereof, and the parties to the Backstop Agreement are concurrently delivering an amendment to such effect concurrently with this Amendment;
(iv) Annex F (Form of Amended and Restated Registration Rights Agreement) to the Merger Agreement is hereby amended by deleting the references to the PIPE Financing in the Recitals and Section 2.02(b)(ii) and Section 5.06 thereof;
(v) The Merger Agreement is hereby amended by deleting the eleventh recital of the Merger Agreement in its entirety;
(vi) The Merger Agreement is hereby amended by adding a recital as follows:
“WHEREAS, in connection with and concurrently with the execution and delivery of the Debt Commitment Letter, the PIPE Subscription Agreements are being terminated;”;
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(vii) The Merger Agreement is hereby amended by entitling Section 6.19 “Backstop Agreement”, deleting Section 6.19(a) in its entirety and deleting references to the PIPE Financing in Section 6.19(c);
(viii) The Merger Agreement is hereby amended by deleting Section 8.03 (PIPE Subscription Agreements) in its entirety;
(ix) The Merger Agreement is hereby amended by deleting Section 10.01(g) (Net Tangible Assets) in its entirety and inserting the following in lieu thereof:
“DSAC shall have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) remaining after the closing of the DSAC Share Redemption and the transactions contemplated by the Backstop Agreement.”; and
(x) The Merger Agreement is hereby amended by deleting all references to the “PIPE Financing”, “PIPE Financing Amount”, “PIPE Investors” and “PIPE Subscription Agreements” in the following Sections:
| (A) | Section 1.01 (Definitions); |
| (B) | Section 6.15 (Employees and Employee Benefit Plans); |
| (C) | Section 8.01(b) (Conduct of the Business); and |
| (D) | Section 9.05(a) (DSAC Shareholder Approval). |
| (b) | Amendments Related to the Debt Commitment Letter: |
| (i) | The Merger Agreement is hereby amended by adding a recital as follows: |
“WHEREAS, that certain First Amendment to Agreement and Plan of Merger is being entered into by and among the Parties concurrently with the execution and delivery of the Debt Commitment Letter;”;
| (ii) | Section 1.01 (Definitions) of the Merger Agreement is hereby amended as follows: |
(1) The definition of “Available Cash” is hereby amended by deleting such definition in its entirety and inserting the following in lieu thereof:
““Available Cash” means, as of immediately prior to the Closing, an amount equal to the sum of (i) the amount of cash available to be released from the Trust Account (after giving effect to all payments to be made as a result of the completion of all DSAC Share Redemptions), plus (ii) the amount (if any) by which the aggregate proceeds actually received by the Company or any of its Subsidiaries pursuant to the Debt Financing exceeds $75,000,000 (i.e., the amount in excess of the $75,000,000 funded by Runway Growth Finance Corp. prior to the date of the Debt Commitment Letter), plus (iii) if applicable, the net amount of proceeds actually received by DSAC pursuant to the Backstop Agreement, minus (iv) the lesser of (A) the Company Transaction Expenses and (B) $5,000,000, minus (v) the lesser of (A) the DSAC Transaction Expenses and (B) $30,000,000.”;
| (iii) | The Merger Agreement is hereby amended by adding a new Section 5.27 as follows: |
“Debt Commitment Letter.
(a) As of May 9, 2022, the Company has delivered to DSAC a true, accurate and complete copy of (i) the fully executed debt commitment letter dated as of May 9, 2022, including all amendments, exhibits, attachments, appendices and schedules thereto as of May 9, 2022 (the “Debt Commitment Letter”) from Runway Growth Finance Corp., ORIX Growth Capital, LLC, Clover Orochi LLC, and ACM ASOF VIII SaaS FinCo LLC (the “Debt Financing Sources”) relating to their commitment, subject to the conditions set forth therein, to lend to FiscalNote, Inc., a Delaware corporation, and the other Persons named therein as “Borrowers” the amounts set forth therein (the “Debt Financing”) for the purpose of funding the transactions contemplated hereby, and (ii) the fully executed fee letter in connection with the Debt Commitment Letter (the “Fee Letter”).
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(b) As of May 9, 2022, the Debt Commitment Letter, in the form so delivered to DSAC, is in full force and effect and is a legal, valid and binding obligation of, as applicable, FiscalNote, Inc. and, to the knowledge of the Company, the other parties thereto, except as such enforcement may be limited by general principles of equity or by bankruptcy, insolvency and other similar laws affecting creditors’ rights generally. As of the date of thereof, in each case, the Debt Commitment Letter has not been amended or modified, no such amendment or modification is contemplated, the obligations and commitments contained in the Debt Commitment Letter have not been withdrawn, terminated or rescinded in any respect and, to the knowledge of the Company, no such withdrawal, termination or restriction is contemplated. The Company or a Subsidiary thereof has fully paid any and all fees, if any, that are payable on or prior to the date thereof under the Debt Commitment Letter.
(c) As of May 9, 2022, no event has occurred which, with or without notice, lapse of time or both, would or would be reasonably expected to constitute a default or breach on the part of FiscalNote, Inc. or, to the knowledge of the Company, any other parties thereto, under the Debt Commitment Letter. As of May 9, 2022, assuming the conditions set forth in this Agreement are satisfied, the Company does not have any reason to believe that the Debt Financing will not be available to the Borrowers on the Closing Date. The Debt Commitment Letter contains all of the conditions precedent to the obligations of the parties thereunder to make the Debt Financing available to the Borrowers, as applicable, on the terms therein (other than to the extent resulting from any amendments, modifications and/or waivers implemented in compliance with Section 7.08).
(d) There are no side letters or other oral or written Contracts related to the funding of the Debt Financing pursuant to the Debt Commitment Letter to which the Company or any of its Affiliates is a party, other than (i) as expressly set forth in the Debt Commitment Letter and the Fee Letter, (ii) customary engagement letter(s) and non- disclosure agreement(s) and (iii) those entered in compliance with Section 7.08.”; and
| (iv) | The Merger Agreement is hereby amended by adding a new Section 7.08 as follows: |
“Debt Financing.
(a) During the period from May 9, 2022 through the earlier of the Effective Time or the termination of this Agreement pursuant to Section 11.01, the Company shall use commercially reasonable efforts to take, or cause to be taken, all actions and do, or cause to be done, all things necessary, proper or advisable to arrange and consummate the Debt Financing at the Closing on the terms and conditions set forth in the Debt Commitment Letter, including using commercially reasonable efforts to: (i) comply with and maintain in effect the Debt Commitment Letter, (ii) negotiate and enter into definitive agreements with respect thereto (“Financing Agreements”), (iii) comply with and perform the obligations applicable to the Company or any Subsidiary thereof pursuant to the Debt Commitment Letter, (iv) satisfy (or cause to be satisfied) on a timely basis all conditions applicable to the Company or any Subsidiary thereof in the Debt Commitment Letter that are within their respective control, and (v) draw down on and consummate the Debt Financing if the conditions to the availability of the Debt Financing have been satisfied or waived.
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(b) During the period from May 9, 2022 through the earlier of the Effective Time or the termination of this Agreement pursuant to Section 11.01, if the Company becomes aware that any portion of the Debt Financing has become, or is reasonably likely to be, unavailable at Closing, (i) the Company shall promptly so notify DSAC, and (ii) the Company shall use commercially reasonable efforts to arrange to obtain alternative debt financing from the same or alternate sources, as promptly as practicable following the occurrence of such event, on terms and conditions (including “flex” provisions) not materially less favorable (as reasonably determined by the Company) to the Company and its Subsidiaries than those contained in the Debt Commitment Letter, in an amount at least equal to the Debt Financing or such unavailable portion thereof, as the case may be (the “Alternative Debt Financing”), and to enter into new definitive agreements with respect to such Alternative Debt Financing (the “Alternative Debt Financing Agreements” and together with the Debt Commitment Letter and the Financing Agreements, each a “Debt Financing Document”); provided that, for the avoidance of doubt, none of the Company nor any of its Subsidiaries shall be required to execute any Alternative Debt Financing Agreement or arrange for such Alternate Debt Financing on terms and conditions (including “flex” provisions) which are materially less favorable (as reasonably determined by the Company) to the Company and its Subsidiaries than those included in the Debt Commitment Letter. The Company shall deliver to DSAC promptly (and no later than two (2) Business Days) after such execution, a true and complete copy of each such Alternative Debt Financing Agreement. Any reference in this Section 7.08 to (A) the “Debt Financing” shall be deemed to include the debt financing contemplated by the Debt Financing Documents to the extent so amended, restated, supplemented, replaced, substituted or modified pursuant to this Section 7.08, including any Alternative Debt Financing, (B) the “Debt Commitment Letter” shall be deemed to include the Debt Commitment Letter to the extent so amended, restated, supplemented, replaced, substituted or modified (including any Debt Financing Documents to the extent then in effect) and (C) any reference in this Agreement to “Fee Letter” shall be deemed to include any Fee Letter relating to the Debt Commitment Letter to the extent so amended, restated, supplemented, replaced, substituted or modified (including in connection with any Debt Financing Documents to the extent then in effect).
(c) During the period from May 9, 2022 through the earlier of the Effective Time or the termination of this Agreement pursuant to Section 11.01, the Company shall give DSAC prompt written notice: (i) of any amendment to or modification of any Debt Financing Document;provided that none of the Company nor any of its Subsidiaries shall agree to or permit any amendments or modifications to, or grant any waivers of, any condition or other provision under any Debt Financing Document without the prior written consent of DSAC if such amendments, modifications or waivers would (A) reduce the aggregate amount of the Debt Financing or (B) impose new or additional conditions to the Debt Financing or otherwise expand, amend or modify the Debt Financing in a manner which would reasonably be expected to (1) prevent or materially delay the consummation of the Merger and the other transactions contemplated hereby or (2) adversely impact in any material respect the ability of the Company or any of its Subsidiaries to enforce its rights against the other parties to Debt Commitment Letter; (ii) of any material breach or material default (or any event or circumstance that, with or without notice, lapse of time or both, would reasonably be expected to give rise to any breach or default) by any party to the Debt Commitment Letter known to the Company; (iii) of the receipt of any written notice or other written communication from any party to the Debt Commitment Letter with respect to any actual, potential or claimed expiration, lapse, withdrawal, breach, default, termination or repudiation by any party to the Debt Commitment Letter of any provisions of the Debt Commitment Letter; and (iv) of any underfunding of any amount under the Debt Commitment Letter. Prior to the Closing, at the request of DSAC, the Company shall keep DSAC informed on a reasonably current basis in reasonable detail of the status of the Company’s and its Subsidiaries’ efforts to obtain the Debt Financing or Alternative Debt Financing. In no event shall the receipt or availability of any funds or financing (including the Debt Financing) by the Company, any of its Subsidiaries or any of their Affiliates be a condition to any of DSAC’s obligations under this Agreement, subject to the applicable conditions set forth in Article 10.
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(d) During the period from May 9, 2022 through the earlier of the Effective Time or the termination of this Agreement pursuant to Section 11.01, DSAC and its Subsidiaries shall, and shall use their commercially reasonable efforts to cause their directors, officers, employees and representatives, including legal and accounting representatives, to use commercially reasonable efforts to, at DSAC’s sole expense, provide to the Company and its Subsidiaries such cooperation reasonably requested by the Company that is reasonably necessary and customary in connection with the Debt Financing (provided that such requested cooperation is consistent with applicable Law and does not unreasonably interfere with the operations of DSAC or its Subsidiaries), including on, to the extent customary and reasonable for the Debt Financing, (i) cooperating in the preparation, negotiation, execution and delivery of any definitive financing documents (including any loan agreement, guarantees, pledge agreements, security documents, amendments to loan agreements, and currency or interest hedging agreement, (in each case, including any schedules and exhibits thereto and any related deliverables in connection therewith)) as may be reasonably requested by the Company and (ii) facilitating the pledging of collateral; provided that the effectiveness of any definitive financing documents to be executed and delivered pursuant to clause (i) above or collateral or security granted pursuant to clause (ii) above, and any obligations of DSAC or any of its Subsidiaries thereunder, shall be contingent upon the occurrence of the Effective Time; and (iii) furnishing the Company, no later than eight (8) Business Days prior to the Closing Date, with all documentation and other information as has been reasonably requested by the Company prior to the Closing Date that is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act and, to the extent it or any Subsidiary qualifies as a “legal entity customer” under 31 C.F.R. § 1010.230, a customary certification for DSAC and its Subsidiaries regarding beneficial ownership in relation to such company prior to the Closing.
(e) For the avoidance of doubt, in no event may any provision of this Agreement be enforced against any Debt Financing Source.”
(c) Amendments Related to Potential NYSE Listing: The following provisions of the Merger Agreement are hereby amended by replacing each instance of “NYSE” with the phrase “NYSE or NASDAQ”:
| (i) | The definition of “Trading Day”; |
| (ii) | The definition of “VWAP”; |
| (iii) | Section 8.02; |
| (iv) | Sections 9.01(a) and 9.01(b); and |
| (v) | Section 10.01(b). |
(d) Amendment Related to the Termination Date: Section 11.01(b) (Termination) of the Merger Agreement is hereby amended by deleting such section in its entirety and inserting the following in lieu thereof:
“by either the Company or DSAC if the Closing shall not have occurred on or before August 7, 2022 (the “Termination Date”); provided that the right to terminate this Agreement pursuant to this Section 11.01(b) shall not be available to any Party whose breach of or failure to perform any provision of this Agreement results in the failure of the Closing to be consummated by such date;”.
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(e) Amendment Related to the Newco Bonus Shares: The Merger Agreement is hereby amended by adding a new Section 5.27 as follows:
“Issuance of Newco Common Stock to Non-Redeeming Shareholders and Backstop Purchasers.
(a) Immediately prior to the Effective Time, subject to Section 4.07(c), Newco shall issue (i) to each holder of each share of Newco Class A Common Stock converted from a DSAC Class A Ordinary Share pursuant to Section 2.03(a) for which the DSAC Shareholder Redemption Right has not been exercised as of immediately prior to the Effective Time (“Non-Redeeming Shares”) the Newco Bonus Shares in respect of such Non-Redeeming Shares and (ii) to each Purchaser (as such term is defined in the Backstop Agreement) the Newco Bonus Shares in respect of such Purchaser’s Backstop Purchase Shares (as such term is defined in the Backstop Agreement) (“Backstop Purchase Shares”) pursuant to the Backstop Agreement.
(b) For purposes of this Agreement,
“Newco Bonus Share Ratio” means the quotient of (i) 10,000,000 divided by (ii) the aggregate number of issued and outstanding DSAC Class A Ordinary Shares immediately prior to giving effect to the DSAC Shareholder Redemption Right.
“Newco Bonus Shares” means (i) with respect to each Non-Redeeming Share, a number of shares of Newco Class A Common Stock equal to the Newco Bonus Share Ratio, and (ii) with respect to each Backstop Purchase Share, a number of shares of Newco Class A Common Stock equal to the Newco Bonus Share Ratio.”
(f) Amendment Related to the Earn-Out: Section 1.01 (Definitions) of the Merger Agreement is hereby amended as follows:
(i) adding the in applicable alphabetical order the following new definition:
““Triggering Event 0” means the date on which the VWAP is greater than or equal to $10.50 (which shall be equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combination, exchange of shares or other like change or transaction with respect to shares of Newco Class A Common Stock occurring after the Closing and upon or prior to the applicable Triggering Event) for any ten (10) Trading Days (which may or may not be consecutive) within any twenty (20) consecutive Trading Day period within the Earnout Period.” and
(ii) amending the definition of “Triggering Events” to read in its entirety as follows: ““Triggering Events” means Triggering Event 0, Triggering Event I, Triggering Event II, Triggering Event III and Triggering Event IV, collectively.
2. Effect of Amendment. Except as set forth herein, all other terms and provisions of the Merger Agreement remain unchanged and in full force and effect. On and after the date hereof, each reference in the Merger Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import shall mean and be a reference to the Merger Agreement as amended or otherwise modified by this Amendment. For the avoidance of doubt, references to the phrases “the date of this Agreement” or “the date hereof”, wherever used in the Merger Agreement, as amended by this Amendment, shall mean November 7, 2021.
3. Construction. This Amendment shall be governed by all provisions of the Merger Agreement unless context requires otherwise, including all provisions concerning construction, enforcement and governing law.
4. Entire Agreement. This Amendment and the Merger Agreement constitute the entire agreement between the Parties on the subject matter contained herein and therein. In the event of a conflict between the terms of the Merger Agreement and this Amendment, the terms of this Amendment shall prevail solely as to the subject matter contained herein.
5. Counterparts. This Amendment may be executed and delivered, including by portable document format (.PDF), in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.
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| 6 |
IN WITNESS WHEREOF the Parties have hereunto caused this Amendment to Merger Agreement to be duly executed as of the date hereof.
| DUDDELL STREET ACQUISITION CORP. | |||
| By: | /s/ Manoj Jain | ||
| Name: | Manoj Jain | ||
| Title: | Director | ||
| GRASSROOTS MERGER SUB, INC. | |||
| By: | /s/ Manoj Jain | ||
| Name: | Manoj Jain | ||
| Title: | Director | ||
[Signature Page to First Amendment to Agreement and Plan of Merger]
| FISCALNOTE HOLDINGS, INC. | |||
| By: | /s/ Tim Hwang | ||
| Name: | Timothy Hwang | ||
| Title: | Chief Executive Officer | ||
[Signature Page to First Amendment to Agreement and Plan of Merger]
Exhibit 10.1
EXECUTION VERSION
FIRST AMENDMENT
TO BACKSTOP AGREEMENT
This First Amendment to Backstop Agreement (this “Amendment”), dated as of May 9, 2022, is entered into by and among the undersigned and amends that certain Backstop Agreement, dated as of November 7, 2021 (the “Backstop Agreement”), by and among Duddell Street Acquisition Corp., a Cayman Islands exempted company (together with its successors, “DSAC”), Maso Capital Investments Limited, a Cayman Islands exempted company (“MCIL”), Blackwell Partners LLC – Series A, a Delaware limited liability company (“Blackwell”), and Star V Partners LLC, a Tennessee limited liability company (“Star” and together with MCIL and Blackwell, collectively, the “Purchasers” and each, a “Purchaser”). The Purchasers, together with DSAC and FiscalNote Holdings, Inc., are referred to herein as the “Parties” and each a “Party.” Capitalized terms used but not defined in this Amendment have the meanings assigned to them in the Backstop Agreement.
WHEREAS, Section 9(j) of the Backstop Agreement provides that the Backstop Agreement may be amended by an instrument in writing signed by the Parties; and
WHEREAS, the Parties wish to enter into this First Amendment to amend the Backstop Agreement pursuant to Section 9(j) thereof, upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows.
1. Amendments to the Backstop Agreement.
(a) The Backstop Agreement is hereby amended by adding a recital as follows:
“WHEREAS, immediately prior to the Effective Time, DSAC shall issue the Newco Bonus Shares (as defined below) to the Purchasers;”
(b) The Backstop Agreement is hereby amended by deleting Section 2(b) and inserting the following in lieu thereof:
“The closing of the sale of the Backstop Purchase Shares (the “BPS Closing”) shall be held immediately prior to the issuance described in Section 2(d) of this Agreement. At the BPS Closing, DSAC shall issue to the Purchasers (or the funds, accounts and/or assignees designated by the Purchasers in accordance with this Agreement if so designated by the Purchasers, or its nominee in accordance with its delivery instructions) or to a custodian designated by any Purchaser, as applicable, in each case prior to the BPS Closing, the Backstop Purchase Shares, free and clear of any liens or other restrictions whatsoever (other than those arising under state or federal securities laws), which Backstop Purchase Shares, unless otherwise determined by DSAC, shall be uncertificated, with record ownership reflected only in the register of shareholders of DSAC (a copy of which showing the Purchasers and/or their designees as the owners of the relevant Backstop Purchase Shares on and as of the Closing Date shall be provided to the Purchasers on the Closing Date or promptly thereafter).” and
(c) The Backstop Agreement is hereby amended by adding a new Section 2(d) as follows:
“(d) (i) Immediately prior to the Effective Time, subject to Section 4.07(c) of the Merger Agreement, DSAC shall issue to each Purchaser the Newco Bonus Shares in respect of such Purchaser’s Backstop Purchase Shares. For purposes of this Agreement,
“Newco Bonus Share Ratio” means the quotient of (i) 10,000,000 divided by (ii) the aggregate number of issued and outstanding DSAC Class A Ordinary Shares immediately prior to giving effect to the DSAC Shareholder Redemption Right.
“Newco Bonus Shares” means with respect to each Backstop Purchase Share, a number of shares of Newco Class A Common Stock equal to the Newco Bonus Share Ratio.
(ii) Sections 2(b), 2(c), 3, 4, 5 and 9(m) shall apply mutatis mutandis to the Newco Bonus Shares issued hereunder as if all references therein to the “Backstop Purchase Shares” were to the “Backstop Purchase Shares and the Newco Bonus Shares.”
2. Effect of Amendment. Except as set forth herein, all other terms and provisions of the Backstop Agreement remain unchanged and in full force and effect. On and after the date hereof, each reference in the Backstop Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import shall mean and be a reference to the Backstop Agreement as amended or otherwise modified by this Amendment. For the avoidance of doubt, references to the phrases “the date of this Agreement” or “the date hereof”, wherever used in the Backstop Agreement, as amended by this Amendment, shall mean November 7, 2021.
3. Construction. This Amendment shall be governed by all provisions of the Backstop Agreement unless context requires otherwise, including all provisions concerning construction, enforcement and governing law.
4. Entire Agreement. This Amendment and the Backstop Agreement constitute the entire agreement between the Parties on the subject matter contained herein and therein. In the event of a conflict between the terms of the Backstop Agreement and this Amendment, the terms of this Amendment shall prevail solely as to the subject matter contained herein.
5. Counterparts. This Amendment may be executed and delivered, including by portable document format (.PDF), in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.
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2
IN WITNESS WHEREOF the Parties have hereunto caused this First Amendment to Backstop Agreement to be duly executed as of the date hereof.
| Duddell Street ACQUISITION CORP. |
| By: | /s/ Manoj Jain | ||
| Name: | Manoj Jain | ||
| Title: | Director | ||
| MASO CAPITAL INVESTMENTS LIMITED |
| By: | /s/ Sohit Khurana | ||
| Name: | Sohit Khurana | ||
| Title: | Authorized Signatory | ||
| BLACKWELL PARTNERS LLC – SERIES A |
| By: | /s/ Sohit Khurana | ||
| Name: | Sohit Khurana | ||
| Title: | Authorized Signatory | ||
| STAR V PARTNERS LLC |
| By: | /s/ Sohit Khurana | ||
| Name: | Sohit Khurana | ||
| Title: | Authorized Signatory | ||
| FISCALNOTE HOLDINGS, INC. |
| By: | /s/ Tim Hwang | ||
| Name: | Timothy Hwang | ||
| Title: | Chief Executive Officer | ||
[Signature Page to First Amendment to Backstop Agreement]
Exhibit 99.1
FiscalNote
and Duddell Street Acquisition Corp. Announce
Expanded Access to Capital and Further Enhancements to
Transaction in Advance of Closing of Business Combination
FiscalNote
Secures up to $250 million in Capital, Representing Strong Institutional
Support and Validation of FiscalNote’s Long-Term Growth Plan
Enhancements
to Business Combination Agreement Provide Additional Benefits to
Duddell Street and FiscalNote Shareholders
Company Reiterates FY2022 Revenue Growth Targets
Washington, D.C. - Monday, May 9, 2022 -- FiscalNote Holdings, Inc., ("FiscalNote"), a leading AI-driven enterprise SaaS company that delivers legal and regulatory data and insights, and Duddell Street Acquisition Corp. ("Duddell Street" or “DSAC”) (Nasdaq: DSAC), a publicly-traded special purpose acquisition company, today announced FiscalNote’s signing of a commitment letter for a significantly upsized credit facility, with Runway Growth Capital, ORIX Growth Capital, and Atalaya Capital Management, providing for up to $250 million in senior debt funding, as well as enhancements to the Business Combination Agreement such as the establishment of a bonus pool for non-redeeming DSAC shareholders.
The expanded credit facility will provide a 5-year senior secured term loan of up to $250 million, including an aggregate principal amount of $150 million financing committed at closing with an additional accordion facility for $100 million, subject to certain conditions.1 Proceeds at closing are expected to be used to drive the company’s growth through an acceleration of investment in go-to-market and other capabilities, fund the company’s successful M&A strategy, and refinance certain existing indebtedness of FiscalNote. The new credit facility replaces the previously announced PIPE with a flexible source of funding with an attractive cost of capital that can expand as the company grows.
In addition, FiscalNote and DSAC are allocating, on a pro rata basis, the 10 million shares previously reserved for the PIPE into a bonus pool available exclusively to non-redeeming DSAC public shareholders and backstop providers, with existing FiscalNote equity holders retaining approximately 75% pro forma equity ownership in the post-business combination company.
The parties also have expanded the scope of the existing earnout structure, providing existing FiscalNote equity holders the opportunity to receive additional shares of common stock of the combined company if certain stock price growth targets are achieved.
The company currently remains on pace to achieve its growth targets and is reiterating its revenue guidance for FY2022.
1 The facility will have a 5-year term, accrue interest at the greater of the Prime Rate plus 5.0% and 9.0% (plus 1.0% PIK interest), and provide for customary affirmative and negative covenants.
“This incremental capital represents a tremendous opportunity for shareholders and is an accomplishment for FiscalNote, while marking yet another impactful milestone in securing our long-term success as a publicly-traded company,” said Tim Hwang, CEO & Co-founder of FiscalNote. “It’s a strong validation from leading financial partners who share a deep confidence in our global mission, growth plan, and business proposition. We look forward to leveraging this facility to execute on our growth strategy, lower our cost of capital, and drive long-term value.”
“The new facility, combined with the revised transaction structure, reaffirms FiscalNote and Duddell Street’s joint commitment to drive long-term value creation for all shareholders,” said Manoj Jain, CEO of Duddell Street, and Co-Chief Investment Officer of Maso Capital. “FiscalNote continues to execute on its growth strategy, and with significant funding from global partners, we believe the company has the foundation it needs to achieve its organic and M&A targets. Overall, these enhancements represent responsible and effective financial stewardship of the company through a sustainable and beneficial capital structure.”
Business Combination
Agreement Details
FiscalNote previously announced plans to become a publicly-traded company through a business combination agreement with Duddell
Street Acquisition Corp. (Nasdaq: DSAC). Completion of the proposed business combination is subject to Duddell Street's registration
statement on Form S-4 (the "Registration Statement") being declared effective by the Securities & Exchange Commission
("SEC"), the approval of the proposed business combination by Duddell Street's shareholders, and other customary closing conditions.
The SEC is continuing its regulatory review process in connection with the Registration Statement. Once this review is completed, the
parties will seek the required shareholder approvals and proceed to close the proposed business combination, with a target closing date
in Q2 of this year.
About FiscalNote
FiscalNote is a leading global technology provider of legal and policy data and insights. By combining AI capabilities, expert
analysis, and legislative, regulatory, and geopolitical data, FiscalNote is reinventing the way that organizations minimize risk and
capitalize on opportunity. Home to CQ, Roll Call, Oxford Analytica, and VoterVoice, FiscalNote empowers clients worldwide to monitor,
manage, and act on the issues that matter most to them. To learn more about FiscalNote and its family of brands, visit FiscalNote.com
and follow @FiscalNote.
About Duddell Street
Acquisition Corp.
Duddell Street Acquisition Corp. was formed for the purpose of effecting a merger, share exchange, asset acquisition, share
purchase, reorganization or similar business combination with one or more businesses. Duddell Street is sponsored by Hong Kong-based
hedge fund Maso Capital. Since inception, Maso Capital has invested in more than one thousand companies and situations across multiple
sectors and geographies. Leveraging its stature and reputation in Hong Kong and its experienced investment team, Maso Capital has had
investments in a number of TMT, healthcare, fintech and consumer companies in the region. For more information, please visit DSAC.co.
Contacts:
Media
FiscalNote
Nicholas Graham
press@fiscalnote.com
Investors
ICR, Inc. for FiscalNote
Sean Hannan
IR@fiscalnote.com
Duddell Street Acquisition
Corp.
Sam Joshi
IR@masocapital.com
Additional Information and Where to Find It
In connection with its proposed business combination with FiscalNote, Duddell Street Acquisition Corp. (Nasdaq: DSAC) ("Duddell Street") has filed relevant materials with the SEC, including the Registration Statement, which includes a proxy statement/prospectus of Duddell Street, and will file other documents regarding the proposed business combination with the SEC. Duddell Street's shareholders and other interested persons are advised to read the preliminary proxy statement/prospectus and the amendments thereto and, when available, the definitive proxy statement and documents incorporated by reference therein filed in connection with the proposed business combination, as these materials will contain important information about FiscalNote, Duddell Street and the proposed business combination. Promptly after the Registration Statement is declared effective by the SEC, Duddell Street will mail the definitive proxy statement/prospectus and a proxy card to each shareholder entitled to vote at the meeting relating to the approval of the business combination and other proposals set forth in the proxy statement/prospectus. Before making any voting or investment decision, investors and shareholders of Duddell Street are urged to carefully read the entire registration statement and proxy statement/prospectus, when they become available, and any other relevant documents filed with the SEC, as well as any amendments or supplements to these documents, because they will contain important information about the proposed business combination. The documents filed by Duddell Street with the SEC may be obtained free of charge at the SEC's website at www.sec.gov.
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Participants in the Solicitation
Duddell Street and its directors and executive officers may be deemed participants in the solicitation of proxies from its shareholders with respect to the business combination. A list of the names of those directors and executive officers and a description of their interests in Duddell Street will be included in the proxy statement/prospectus for the proposed business combination when available at www.sec.gov. Information about Duddell Street's directors and executive officers and their ownership of Duddell Street shares is set forth in Duddell Street's prospectus, dated October 28, 2020. Other information regarding the interests of the participants in the proxy solicitation will be included in the proxy statement/prospectus pertaining to the proposed business combination when it becomes available. These documents can be obtained free of charge from the source indicated above.
FiscalNote and its directors and executive officers may also be deemed to be participants in the solicitation of proxies from the shareholders of Duddell Street in connection with the proposed business combination. A list of the names of such directors and executive officers and information regarding their interests in the proposed business combination will be included in the proxy statement/prospectus for the proposed business combination.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, statements about future financial and operating results, plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as "will," "are expected to," "is anticipated," "estimated," "believe," "intend," "plan," "projection," "pro forma," "outlook" or words of similar meaning. These forward-looking statements include, but are not limited to, statements regarding FiscalNote's industry and market sizes, future opportunities for FiscalNote and Duddell Street, FiscalNote's estimated future results and the proposed business combination between Duddell Street and FiscalNote, including pro forma market capitalization, pro forma revenue, the expected transaction and ownership structure and the likelihood, timing and ability of the parties to successfully consummate the proposed transaction. Such forward-looking statements are based upon the current beliefs and expectations of Duddell Street's and FiscalNote's managements and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond Duddell Street's or FiscalNote's control. Actual results and the timing of events may differ materially from the results anticipated in these forward-looking statements. Except as required by law, Duddell Street and FiscalNote do not undertake any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.