As filed with the U.S. Securities and Exchange Commission on April 17, 2017.
Registration
No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TPG Pace
Energy Holdings Corp.
(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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81-5365682
(I.R.S. Employer
Identification Number)
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301 Commerce St., Suite 3300
Fort Worth, TX 76102
Telephone: (212)
405-8458
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant’s Principal Executive Offices)
Michael LaGatta
c/o
TPG Pace Energy Holdings Corp.
301 Commerce St., Suite 3300
Fort Worth, TX 76102
Telephone: (212)
405-8458
Facsimile: (512)
533-6601
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)
Copies to:
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Alexander D. Lynch, Esq.
Weil, Gotshal & Manges LLP
767 Fifth
Avenue
New York, NY 10153
Tel:
(212) 310-8000
Fax:
(212) 310-8007
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Paul D. Tropp, Esq.
Freshfields Bruckhaus Deringer US LLP
601 Lexington Avenue
New York, NY 10022
Tel: (212) 277-4000
Fax: (212) 277-4001
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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, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in
Rule 12b-2
of the Exchange Act. (Check one):
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated
filer ☒
(Do not check if a
smaller reporting company)
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Smaller reporting company ☐
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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, $.0001 par value, and
one-third
of one warrant(2)
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69,000,000 Units
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$10.00
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$690,000,000
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$79,971
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Shares of Class A common stock included as part of the units(3)
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69,000,000 Shares
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—
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—
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— (4)
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Warrants included as part of the units(3)
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23,000,000 Warrants
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—
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— (4)
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Total
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$690,000,000
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$79,971
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(1)
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Estimated solely for the purpose of calculating the registration fee.
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(2)
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Includes 9,000,000 units, consisting of 9,000,000 shares of Class A common stock and 3,000,000 warrants, which may be issued upon exercise of a
45-day
option granted to the underwriters to cover over-allotments, if any.
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(3)
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Pursuant to Rule 416(a), 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.
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(4)
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No fee pursuant to Rule 457(g).
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The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until
the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration
Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. We may not sell these
securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where
the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED APRIL 17, 2017
PRELIMINARY PROSPECTUS
$600,000,000
TPG Pace Energy Holdings Corp.
60,000,000 Units
TPG Pace
Energy Holdings Corp. is a newly organized blank check company 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 identified any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any
business combination target. We intend to focus our search for a target business in the energy industry.
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-third
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 provided herein. Only whole warrants are exercisable. The warrants will become exercisable on the later of 30 days after the
completion of our initial business combination and 12 months from the closing of this offering, and will expire five years after the completion of our initial business combination or earlier upon redemption or liquidation, as described in this
prospectus. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. We have also granted the underwriters a
45-day
option to purchase up to an additional
9,000,000 units to cover
over-allotments,
if any.
We will provide our public
stockholders with the opportunity to redeem all or a portion of their shares of our Class A common stock upon the completion of our initial business combination at a
per-share
price, payable in cash,
equal to the aggregate amount then on deposit in the trust account described below as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account and not
previously released to us to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes divided by the number of then outstanding shares of Class A common stock that were sold as part of the units in
this offering, which we refer to collectively as our public shares throughout this prospectus, subject to the limitations described herein. If we are unable to complete our initial business combination within 24 months from the closing of this
offering, we will redeem 100% of the public shares at a
per-share
price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the
trust account and not previously released to us to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then
outstanding public shares, subject to applicable law and as further described herein.
Our sponsor, TPG Pace Energy
Sponsor, LLC, a Delaware limited liability company (which we refer to as our sponsor throughout this prospectus), has committed to purchase an aggregate of 9,333,333 warrants (or 10,533,333 warrants if the underwriters’
over-allotment
option is exercised in full) at a price of $1.50 per warrant (approximately $14,000,000 in the aggregate, or approximately $15,800,000 in the aggregate if the underwriters’
over-allotment
option is exercised in full) in a private placement that will close simultaneously with the closing of this offering. We refer to these warrants throughout this prospectus as the private placement
warrants. Each private placement warrant is exercisable to purchase one share of our Class A common stock at $11.50 per share, subject to adjustment as provided herein.
Our initial stockholders own 17,250,000 shares of our Class F common stock (up to 2,250,000 shares of which are subject to forfeiture depending on the extent to which the underwriter’s
over-allotment
option is exercised). We refer to these shares of Class F common stock as the founder shares throughout this prospectus. The shares of Class F common stock will automatically convert into
shares of Class A common stock at the time of our initial business combination, or earlier at the option of the holder, on a
one-for-one
basis, subject to
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 this offering and
related to the closing of the business combination, the ratio at which shares of Class F common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of
Class F common stock agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class F common
stock will equal, in the aggregate, 20% of the sum of the total number of all shares of common stock outstanding upon completion of this 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. Holders of
the Class F common stock will have the right to elect all of our directors prior to our initial business combination. On any other matter submitted to a vote of our stockholders, holders of the Class F common stock and holders of the
Class A common stock will vote together as a single class, except as required by law.
Currently, there is no public
market for our units, Class A common stock or warrants. We will apply to list our units on the New York Stock Exchange, or the “NYSE,” under the symbol “TPGEU” on or promptly after the date of this prospectus. We cannot
guarantee that our securities will be approved for listing on the NYSE. 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 Deutsche Bank
Securities Inc. and Goldman, Sachs & Co. (the “Representatives”) inform us of their decision to allow earlier separate trading, subject to our filing a Current Report on
Form 8-K
with the
Securities and Exchange Commission, or the SEC, containing an audited balance sheet reflecting our receipt of the gross proceeds of this offering and issuing a press release announcing when such separate trading will begin. Once the securities
comprising the units begin separate trading, we expect that the Class A common stock and warrants will be listed on the NYSE under the symbols “TPGE” and “TPGEW,” respectively.
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 a high degree of risk. See “
Risk Factors
” beginning on page 31 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 SEC nor any state securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
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Per Unit
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Total
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Public offering price
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$
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10.00
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$
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600,000,000
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Underwriting discounts and commissions(1)
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$
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0.55
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$
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33,000,000
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Proceeds, before expenses, to us
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$
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9.45
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567,000,000
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(1)
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Includes $0.35 per unit, or $21,000,000 (or up to $24,150,000 if the underwriters’
over-allotment
option is exercised in
full) in the aggregate, payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States as described herein. Does not include certain fees and expenses payable to the underwriters in
connection with this offering. See also “Underwriting” for a description of compensation and other items of value payable to the underwriters.
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Of the proceeds we receive from this offering and the sale of the private placement warrants described in this prospectus, $600,000,000 or $690,000,000 if the underwriters’
over-allotment
option is exercised in full ($10.00 per unit) will be deposited into a
U.S.-based
trust account at J.P. Morgan Chase Bank, N.A., 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 fund our working capital requirements, subject to an annual limit of $750,000, and/or to
pay our taxes, the proceeds from this offering and the sale of the private placement warrants will not be released from the trust account until the earliest to occur of (i) the completion of our initial business combination, (ii) the
redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do
not complete our initial business combination within 24 months from the closing of this offering and (iii) the redemption of all of our public shares if we are unable to complete our initial business combination within 24 months from
the closing of this offering, subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.
The underwriters are offering the units for sale on a firm commitment basis. The underwriters expect to deliver the units to the
purchasers on or about , 2017.
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Deutsche Bank Securities
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Goldman, Sachs & Co.
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, 2017
TABLE OF CONTENTS
You should rely only on the information contained in this
prospectus. We have not, and the underwriters have not, authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are
not, making an offer to sell securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this
prospectus.
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SUMMARY
This summary only highlights the more detailed information
appearing elsewhere in this prospectus. You should read this entire prospectus carefully, including the information under “Risk Factors” and our financial statements and the related notes included elsewhere in this prospectus, before
investing.
Unless otherwise stated in this
prospectus, or the context otherwise requires, references to:
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“we,” “us,” “TPGE,” “company” or “our company” are to TPG Pace Energy Holdings Corp., a Delaware
corporation;
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“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);
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“public stockholders” are to the holders of our public shares;
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“management” or our “management team” are to our officers and directors;
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“sponsor” are to TPG Pace Energy Sponsor, LLC, a Delaware limited liability company and an affiliate of TPG;
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“initial stockholders” are to holders of our founder shares prior to this offering;
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“TPG” are to TPG Global, LLC, a Delaware limited liability company and its affiliates;
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“TPG Capital” are to TPG’s private equity business for equity investments over $100 million;
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“common stock” are to our Class A common stock and our Class F common stock, collectively;
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“founder shares” are to shares of our Class F common stock initially purchased by our sponsor in a private placement prior to this
offering, and, unless the context otherwise requires, our Class A common stock issued upon conversion thereof as provided herein;
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“equity-linked securities” are to any securities of our company which are convertible into, exchangeable for, or exercisable for common
stock of our company; and
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“private placement warrants” are to the warrants issued to our sponsor in a private placement simultaneously with the closing of this
offering.
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Unless we tell
you otherwise, the information in this prospectus assumes that the underwriters will not exercise their
over-allotment
option.
Our Company
We are a newly organized blank check company incorporated on
February 14, 2017 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, which we refer
to throughout this prospectus as our initial business combination. We intend to focus our search for a target business in energy or energy-related industries. Upon consummation of this offering, our units are expected to be listed on the NYSE. We
have not identified any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with respect to identifying any business combination target.
We intend to capitalize on the ability of TPG and our
management team to identify, acquire and operate a business in energy or energy related industries that is not operating at its full potential and could benefit from a
hands-on
lead shareholder who can
identify and implement improvements. Even good companies can often
1
under-perform their potential due to underinvestment, inefficient capital allocation, over-levered capital structures, excessive cost structures, incomplete management teams and/or business
strategies that lack focus. Our management team has extensive experience in identifying and executing such full potential acquisitions and has done so successfully across the upstream, midstream, services, refining and chemicals
sectors. In addition, our management and TPG have significant
hands-on
experience working with private companies across various sectors to prepare them to successfully execute an initial public offering and
serving as active owners/directors by working closely with these companies to continue their transformations and help create value in the public markets.
We believe that our management team is well positioned to identify attractive risk-adjusted returns in the marketplace and that our
contacts and transaction sources, ranging from industry executives, private owners, private equity funds, and investment bankers in addition to the extensive global industry and geographical reach of our affiliates will enable us to pursue a broad
range of opportunities. Our management believes that its ability to identify and implement value creation initiatives has been an essential driver of past performance and will remain central to its differentiated acquisition strategy.
Our management team is led
by Stephen Chazen, our President and Chief Executive Officer, who has more than 35 years of experience in energy and energy related industries. TPG has known Mr. Chazen for more than 10 years.
Mr. Chazen began his career at Occidental Petroleum Corporation (“Occidental”) in 1994 and was named Chief Financial Officer in 1999, a role in which he served until 2010. He was then named Chief
Operating Officer in 2010 before being appointed Chief Executive Officer in May 2011. Mr. Chazen retired from Occidental in April 2016. Since his retirement from Occidental, TPG has developed an active dialogue with Mr. Chazen regarding
partnering to acquire and operate large scale energy and energy related assets.
TPG believes Mr. Chazen demonstrated an ability to consistently create value for Occidental shareholders through successful deployment of growth capital as well as through acquisition and subsequent
optimization of energy and energy related assets. Under Mr. Chazen’s leadership, Occidental became the fourth-largest U.S. oil and gas company, based on 2015
year-end
market capitalization.
Occidental’s growth was driven in large part by its asset base in the Permian Basin, an area in which Occidental was the largest operator and producer of oil in 2015. During his time at Occidental, Mr. Chazen oversaw nearly $40 billion of
energy-related acquisitions and more than $20 billion of energy-related divestiture activity. From the time Mr. Chazen was appointed Chief Financial Officer until the time he retired as Chief Executive Officer, Occidental returned more than $17
billion to Occidental shareholders in the form of dividends between 2000 and his retirement in April 2016, demonstrating his focus on shareholder value creation. Importantly, Occidental’s corporate credit ratings improved during this same time
period. Mr. Chazen has been recognized repeatedly by the industry for his performance. In 2016, Mr. Chazen received the American Petroleum Institute Gold Medal for Distinguished Achievement. In addition, Mr. Chazen has been ranked on
numerous occasions as a top oil and gas executive by Institutional Investor Magazine.
Our management team’s objective is to generate attractive returns and create value for our stockholders by applying our disciplined strategy of underwriting intrinsic worth and affecting changes
after making an acquisition to unlock value. While our approach is value-oriented, and focusing on energy and energy related industries, an area in which we have differentiated insights, our management team has also driven change through a
comprehensive value creation plan framework. We favor opportunities with certain elements of downside protection, for example, opportunities where we believe we can acquire and hedge assets with existing oil and gas production to reduce commodity
risk, while improving the risk-reward by driving change and accelerating a target company’s growth initiatives. Our management team has successfully applied this approach globally and has deployed capital successfully in a wide range of
energy market and capital market cycles.
As
a result of TPG’s significant ownership interest in our sponsor, TPGE is an affiliate of TPG. TPG is a leading global alternative investment firm with over $74 billion of assets under management as of September 30,
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2016. TPG was founded in 1992 by David Bonderman and James Coulter. In 2015, Jon Winkelried joined TPG as
Co-Chief
Executive Officer alongside
Mr. Coulter
(Co-Chief
Executive Officer) and Mr. Bonderman (Chairman). TPG maintains offices in San Francisco, Fort Worth, Houston, London, New York, Hong Kong and other major cities throughout the
world. Mr. Bonderman will serve as a
non-executive
member of our board of directors following the completion of this offering.
TPG’s investment activities include discrete investment
platforms focused on a range of alternative investment products and a series of funds across the private equity spectrum, including (i) TPG Capital, TPG’s private equity business for equity investments over $100 million, which focuses
on global investments across all major industry sectors predominantly in North America and Europe; (ii) TPG Asia, TPG’s Asian-focused private equity business; (iii) TPG Growth, which invests in small- and middle-market growth equity
and corporate opportunities in all major industry sectors in North America and in other developed and emerging markets; (iv) TPG Biotechnology Partners, which invests in early- and late-stage venture capital opportunities in the biotechnology
and related life sciences industries; and (v) TPG ART, which invests in alternative and renewable technologies. Beyond its private equity platform, TPG has opportunistically established (vi) TPG Special Situations Partners, which is the
special situations and credit platform of TPG; (vii) TPG Real Estate, which is the real estate platform of TPG; (viii) TPG Public Equity Partners, which invests in the public equity market; and (ix) TPG Strategic Infrastructure, which
invests in large scale infrastructure opportunities in growth markets. TPG has over 1,000 employees and advisors, including 527 investment and operations professionals.
We believe that TPGE will benefit from TPG’s prior
experience in the public capital markets and with energy and energy related investing. In addition to successfully taking more than 50 of its portfolio companies public, TPG has experience with the sponsorship of other blank check companies and has
a dedicated effort, TPG Permanent Capital Solutions, to help companies access the public equity markets with access to TPG’s
hands-on
private equity skill set. TPG founded Pace Holdings Corp.
(“Pace-I”)
in 2015, a blank check company formed for substantially similar purposes as our company, with the vision of helping a promising company access and grow in the public markets.
Pace-I
completed its initial public offering in September 2015, in which it sold 45,000,000 units, each consisting of one Class A ordinary share of
Pace-I
and one warrant
to purchase
one-third
of one Class A ordinary share of
Pace-I,
for an offering price of $10.00 per unit, generating aggregate proceeds of $450,000,000. In December
2016,
Pace-I
entered into a definitive agreement to acquire Playa Hotels and Resorts B.V. (“Playa”).
Pace-I
contributed approximately $500 million to
Playa (consisting of $450 million in proceeds from the initial public offering, plus approximately $50 million in proceeds from an additional private placement). Playa is an owner, operator and developer of
all-inclusive
resorts in beachfront locations in Mexico and the Caribbean. Playa owns a portfolio consisting of 13 resorts located in Mexico, the Dominican Republic, and Jamaica. On March 11, 2017, Pace-I
consummated the business combination with Playa. Playa’s ordinary shares are traded on the NASDAQ capital market under the symbol “PLYA,” and its warrants are traded under the symbol “PLYAW”.
TPG has historically considered energy to be one of
the five core sectors for its private equity investing. Michael MacDougall, who has helped lead the firm’s global energy investing effort since 2002, will be a member of our board of directors. TPG has successfully taken several of
its energy and energy related portfolio companies public, including Kraton Performance Polymers and Northern Tier Energy. Additionally, TPG has successfully provided growth capital for publicly traded energy and energy related companies, including
Copano Energy and EnLink Midstream Partners. TPG also has substantial experience acquiring large scale energy and energy related divisions and assets from large publicly traded energy companies, including CenterPoint Energy, Marathon Oil and Encana.
With respect to the foregoing examples, past
performance by TPG and our management team, including Mr. Chazen’s past performance, particularly at Occidental, is not a guarantee either (i) of success with respect to any business combination we may consummate or (ii) that we
will be able to locate a suitable candidate for our initial
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business combination. You should not rely on the historical record of TPG’s or our management team’s, including Mr. Chazen’s, performance as indicative of our future performance.
An investment in us is not an investment in TPG.
Certain of our officers and directors have fiduciary and contractual duties to TPG and to certain companies in which TPG
has invested. As a result, certain of our officers and directors will have a duty to offer acquisition opportunities to certain TPG funds before TPGE can pursue such opportunities. However, we do not expect these duties to present a
significant conflict of interest with our search for an initial business combination. We believe this conflict of interest will be naturally mitigated, to some extent, by the differing nature of the acquisition targets TPG typically considers most
attractive for TPG funds and the types of acquisitions we expect TPGE to find most attractive. TPG’s traditional private equity activities typically involve investing in private companies, and while TPG will often take companies public, it
typically invests in those entities several years prior to an initial public offering, not at the time of such offering. As a result, we may become aware of a potential transaction that is not a fit for the traditional private equity activities
of TPG but that is an attractive opportunity for TPGE. In addition, our officers and directors are not required to commit any specified amount of time to our affairs, and, accordingly, will have conflicts of interest in allocating management time
among various business activities, including identifying potential business combinations and monitoring the related due diligence. Moreover, certain of our officers and directors have time and attention requirements for private investment funds of
which affiliates of TPG are the investment managers.
In addition, TPG or its affiliates 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
(other than Mr. Chazen) 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 expect that any such other blank check company would be focused on the energy industry and, as a result, we do not believe that any potential conflicts would materially affect our ability to complete our initial business
combination. Mr. Chazen has agreed, pursuant to a letter agreement with us, not to participate in the formation of, or become an officer or director of, another blank check company until we have entered into a definitive agreement regarding our
initial business combination or we have failed to complete our initial business combination within 24 months after the closing of this offering. Mr. Chazen has not been involved with any blank check companies in the past.
Business Strategy
Our acquisition and value creation strategy is to identify,
acquire and, after our initial business combination, to build a company in energy or energy related industries in the United States, although we may seek to complete a business combination in any industry or location. We intend to seek a company
that complements the experience and expertise of Mr. Chazen and is a business that our skills can help improve. Consistent with Mr. Chazen’s prior experience at Occidental, 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 such a business over time through a combination of organic capital projects and acquisitions and with a focus on consistently achieving
attractive returns on capital. Importantly, we would look to achieve conservative balance sheet metrics over time given the likely commodity exposure of the business.
The energy markets globally, and in the United
States specifically, have faced an oversupplied market with respect to oil and gas for more than two and a half years, since the middle of 2014. This oversupply dynamic, until recently, led to the longest dislocation seen in
the price of oil in more than 20 years. Declines in oil and gas commodity prices disrupted access to capital in the public equity markets and negatively impacted valuations of many companies across the energy value chain. Our management team
and TPG have substantial experience investing and acquiring assets over multiple cycles in the energy markets.
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Our selection process will leverage our team’s network of industry, private equity
sponsor and lending community relationships as well as relationships with management teams of public and private companies, investment bankers, restructuring advisers, attorneys and accountants, which we believe should provide us with a number of
business combination opportunities. We intend to deploy a
pro-active,
thematic sourcing strategy and to focus on companies where we believe the combination of our operating experience, relationships, capital
and capital markets expertise can be catalysts to transform companies and can help accelerate the target business’ growth and performance.
In addition, we intend to utilize the networks and industry experience of our management team and our board of directors in seeking an
initial business combination. Over the course of their careers, the members of our management team and board of directors have developed a broad network of contacts and corporate relationships that we believe will serve as a useful source of
acquisition opportunities. This group has experience in:
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operating companies, setting and changing strategies, and identifying, mentoring and recruiting world-class talent;
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developing and growing companies, both organically and through acquisitions and strategic transactions;
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sourcing, structuring, acquiring, and selling businesses;
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accessing the capital markets, including financing businesses and helping companies transition to public ownership;
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fostering relationships with sellers, capital providers and target management teams; and
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executing transactions in multiple geographies and under varying economic and financial market conditions.
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We plan to utilize the industry network and experience of
Mr. Chazen and TPG in seeking an initial business combination and employing our acquisition strategy. Over the course of his career, Mr. Chazen has developed deep, long-standing relationships in the energy sector. His
extensive experience in the acquisition and divestiture market has led to frequent interactions with both buyers and sellers of energy and energy related assets. In addition, we intend to leverage TPG’s considerable experience investing in
energy and energy related industries. We believe the relationships of Mr. Chazen and TPG in the energy and energy related industries have the potential to lead to the creation of, and proprietary access to, potential business combinations. We
anticipate that target business candidates may 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. Upon completion of this offering, members of our management team will communicate with their network of relationships to articulate our acquisition themes, including the parameters of our search for a target company, and
will begin the disciplined process of pursuing and reviewing promising leads.
Acquisition Criteria
Consistent with our strategy, we have identified the following general criteria and guidelines that 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 business that does not meet these criteria and guidelines. We intend to seek to acquire companies that we believe:
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can utilize the extensive networks we have built in the energy industry.
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have fundamentally sound assets that are underperforming their potential.
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are at an inflection point, such as those requiring additional management expertise or where we believe we can drive improved financial
performance and where an acquisition may help facilitate growth. We
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believe that we are well-positioned to evaluate and improve a company’s growth prospects and help them realize the opportunities to create stockholder value following the consummation of a
business combination.
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have significant embedded and/or underexploited expansion opportunities. One of the key elements of TPG’s typical value creation approach is
to acquire target companies to accelerate their growth. This can be accomplished through a combination of accelerating organic growth and finding attractive
add-on
acquisition targets. Our management team has
significant experience in identifying such targets and helping target management assess the strategic and financial fit.
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exhibit unrecognized value or other characteristics that we believe have been misevaluated by the marketplace based on our company specific
analysis and due diligence review. For a potential target company, this process will include, among other things, a review and analysis of the company’s capital structure, quality of earnings, potential for operational improvements, corporate
governance, customers, material contracts, and industry background and trends. We intend to leverage the operational experience and disciplined investment approach of our team and those of TPG to identify opportunities to unlock value that our
experience in complex situations allows us to pursue.
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will offer attractive risk-adjusted equity returns for our stockholders. We will seek to acquire a target on terms and in a manner that leverages
our experience in transformational investing. Financial returns will be evaluated based on (i) the potential for organic growth in cash flows, (ii) the ability to achieve cost savings, (iii) the ability to accelerate growth, including
through the opportunity for
follow-on
acquisitions and (iv) the prospects for creating value through other value creation initiatives. Potential upside from growth in the target business’
earnings and an improved capital structure will be weighed against any identified downside risks.
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will have leverage levels that we believe are appropriate for the public equity markets given the underlying commodity price exposure of the assets
resulting from the business combination.
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have been underinvested in by current owners due to, among other causes, liquidity limitations due to the past commodity price environment, the capital
intensity of other operations and balance sheet considerations.
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These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as
well as other considerations, factors and criteria that our management may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will
disclose that the target business does not meet the above criteria in our stockholder 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 will 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 which will be made available to us. We will also utilize our operational and capital planning experience.
We are not prohibited from pursuing an initial business
combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor, officers or directors, we, or a committee of
independent directors, will obtain an opinion from an independent investment banking firm that is a member of the Financial Industry Regulatory Authority, or FINRA, or from an independent accounting firm, that our initial business combination is
fair to our company from a financial point of view.
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Members of our management team may directly or indirectly own our common stock and/or
private placement warrants following this offering, and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further,
each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to
any agreement with respect to our initial business combination.
We currently do not have any specific business combination under consideration. Our officers and directors have neither individually identified nor considered a target business for our initial
business combination nor have they had any discussions regarding possible target businesses amongst themselves or with our underwriters or other advisors. Certain members of our management team are employed by TPG. TPG is continuously made
aware of potential business opportunities, one or more of which we may desire to pursue, for a business combination, but we have not (nor has anyone on our behalf) contacted any prospective target business or had any discussions, formal or
otherwise, with respect to a business combination transaction. We have not (nor have any of our agents or affiliates) been approached by any candidates (or representative of any candidates) with respect to a possible acquisition transaction with us
and we will not consider a business combination with any company that has already been identified by TPG as a suitable acquisition candidate for it. Additionally, we have not, nor has anyone on our behalf, taken any measure, directly or
indirectly, to identify or locate any suitable acquisition candidate for us, nor have we engaged or retained any agent or other representative to identify or locate any such acquisition candidate.
Each of our officers and directors presently has, and any of
them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity. Accordingly, if any of our officers or
directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present
such business combination opportunity to such entity. We expect that if an opportunity is presented to one of our officers or directors in his or her capacity as an officer or director of one of those other entities, such opportunity would be
presented to such other entity and not to us. For more information on the entities to which our officers and directors currently have fiduciary or contractual obligations, please refer to “Management—Conflicts of Interest.” We do not
believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination. 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.
Initial Business Combination
The NYSE rules require that our initial business combination must occur with one or more target businesses that together have fair market
value equal to 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 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. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent
investment banking firm that is a member of the Financial Industry Regulatory Authority, or FINRA, or from an independent accounting firm with respect to the satisfaction of such criteria. We do not intend to purchase multiple businesses in
unrelated industries in conjunction with our initial business combination.
We anticipate structuring our initial business combination so that the
post-transaction
company in which our public stockholders own shares will own or acquire 100%
of the equity interests or assets of the target business
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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. 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 acquires an interest in the target sufficient for it not to be required to register as an
investment company under the Investment Company Act of 1940, as amended, or the “Investment Company Act.” Even if the
post-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 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 less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the
post-transaction
company, the portion of such business or businesses
that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If our initial business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the
target businesses and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking stockholder approval, as applicable.
Prior to the date of this prospectus, we will file a Registration Statement on Form
8-A
with the SEC to voluntarily register our securities under Section 12 of the 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 consummation 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, or the “Securities Act,” as modified by the Jumpstart Our Business Startups Act of 2012, or 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, or 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 $1.0 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock
that is held by
non-affiliates
exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in
non-convertible
debt securities during the
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prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.
Our executive offices are located at 301 Commerce St.,
Suite 3300 Fort Worth, Texas 76102 and our telephone number is
(212) 405-8458.
Upon completion of this offering, our corporate website address will be
www.tpg.com/pace-energy.
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. You should not rely on any such information in making your decision whether to invest in our securities.
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The Offering
In making your decision whether to invest in our securities, you should take into account not only the
backgrounds of the members of our management team, but also the special risks we face as a blank check company and the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. You will not
be entitled to protections normally afforded to investors in Rule 419 blank check offerings. You should carefully consider these and the other risks set forth in the section below entitled “Risk Factors” in this prospectus.
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Securities offered
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60,000,000 units, at $10.00 per unit, each unit consisting of:
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one share of Class A common stock; and
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one-third
of one warrant.
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NYSE symbols
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Units: “TPGEU”
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Class A Common Stock: “TPGE”
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Trading commencement and separation of Class A common stock and warrants
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The units will begin trading 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 the Representatives inform us of their decision to allow earlier separate trading, subject to our having filed the Current Report on
Form 8-K
described below
and having issued a press release announcing when such separate trading will begin. Once the shares of 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 three units, you will not be able to receive or trade a whole warrant.
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Separate trading of the Class A common stock and warrants is prohibited until we have filed a
Current Report on
Form 8-K
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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
which
includes an audited balance sheet reflecting our receipt of the gross proceeds at the closing of this offering. We will file the Current Report on
Form 8-K
promptly after the closing of this offering,
which is anticipated to take place three business days from the date of this prospectus. If the underwriters’
over-allotment
option is exercised following the initial filing of such Current Report on
Form 8-K,
a second or amended Current Report on
Form 8-K
will be filed to provide updated financial information to reflect the exercise of the underwriters’
over-allotment
option.
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Units:
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Number outstanding before this offering
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0
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Number outstanding after this offering
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60,000,000(1)
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Common stock:
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Number outstanding before this offering
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17,250,000(2)(4)
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Number outstanding after this offering
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75,000,000(1)(3)(4)
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Warrants:
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Number of private placement warrants to be sold in a private placement simultaneously with this offering
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9,333,333(1)
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Number of warrants to be outstanding after this offering and the private placement
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29,333,333(1)
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Exercisability
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Each whole warrant is exercisable to purchase one share of our Class A common stock. Only whole warrants are exercisable.
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1
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Assumes no exercise of the underwriters’
over-allotment
option and the forfeiture by our sponsor of 2,250,000 founder
shares.
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2
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Consists solely of founder shares and includes up to 2,250,000 shares that are subject to forfeiture by our sponsor depending on the extent to which the
underwriters’
over-allotment
option is exercised. Except as otherwise specified, the rest of this prospectus has been drafted to give effect to the full forfeiture of these 2,250,000 shares of common
stock.
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3
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Includes 60,000,000 public shares and 15,000,000 founder shares.
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4
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Founder shares are classified as shares of Class F common stock, which shares will automatically convert into shares of our Class A common stock at the time
of our initial business combination, or earlier at the option of the holder, on a
one-for-one
basis, subject to adjustment as described below adjacent to the caption
“Founder shares conversion and
anti-dilution.”
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Exercise price
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$11.50 per share, subject to adjustment as provided herein.
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Exercise period
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The warrants will become exercisable on the later of:
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30 days after the completion of our initial business combination, and
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12 months from the closing of this offering;
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provided in each case that we have an effective registration statement under the Securities Act covering the shares of Class A common
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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).
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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 fifteen (15) business days after the closing of our initial business combination, we will use our best efforts to file with the SEC and have an effective registration statement covering the shares of Class A common stock issuable upon
exercise of the warrants, and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed; provided, that 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 public warrants who exercise
their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement.
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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.
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Redemption of warrants for cash
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Once the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private placement warrants):
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in whole and not in part;
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at a price of $0.01 per warrant;
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upon a minimum of 30 days’ prior written notice of redemption, which we refer to as the
30-day
redemption period; and
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if, and only if, the last 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 on the third trading day prior to the date on which we send the notice of redemption to
the warrant holders.
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We will not redeem the warrants 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
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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.
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Redemption of warrants for Class A common stock
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Once the warrants become exercisable, we may redeem the outstanding warrants (including the private placement warrants):
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in whole and not in part;
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at a price equal to a number of shares of Class A common stock to be determined by reference to the table set forth under “Description of
Securities—Warrants—Public Shareholders’ Warrants” based on the redemption date and the “fair market value” of our Class A common stock (as defined below);
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upon a minimum of 30 days’ prior written notice of redemption; and
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if, and only if, the last sale price of our Class A common stock equals or exceeds $10.00 per share (as adjusted per stock splits, stock
dividends, reorganizations, recapitalizations and the like) on the trading day prior to the date on which we send the notice of redemption to the warrant holders.
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The “fair market value” of our Class A common stock shall mean the average reported last sale price of our Class A common stock for 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.
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No fractional shares of Class A common stock will be issued upon redemption. If, upon redemption, a holder would be entitled to receive a fractional interest in a share, we will round down
to the nearest whole number of the number of shares of Class A common stock to be issued to the holder. Please see the section entitled “Description of Securities—Warrants—Public Shareholders’ Warrants” for additional
information.
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Cashless exercise
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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
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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” (as defined below) over the exercise price of the warrants by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the Class A common stock for 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. Please see the section entitled “Description of Securities—Warrants—Public Stockholders’
Warrants” for additional information.
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Election of directors; voting rights
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Prior to our initial business combination, only holders of our founder shares will have the right to vote on the election of directors. Holders of our public shares will not be entitled to vote
on the election of directors during such time. These provisions of our amended and restated certificate of incorporation may only be amended if approved by holders of at least 90% of our outstanding common stock entitled to vote thereon. With
respect to any other matter submitted to a vote of our stockholders, including any vote in connection with our initial business combination, except as required by law, holders of our founder shares and holders of our public shares will vote together
as a single class, with each share entitling the holder to one vote.
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Founder shares
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In February 2017, our sponsor purchased an aggregate of 11,500,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.002 per share. In April 2017, we effected a
stock dividend with respect to our Class F common stock of 5,750,000 shares thereof, resulting in our initial stockholders holding an aggregate of 17,250,000 founder shares. Prior to the initial investment in the company of $25,000 by our sponsor,
the company had no assets, tangible or intangible. The purchase price of the founder shares was determined by dividing the amount of cash contributed to us by the number of founder shares issued. In
2017, our sponsor transferred 40,000 founder shares to each of our independent director nominees at their original purchase price. As such, our initial stockholders will
collectively own 20% of our issued and outstanding shares after this offering (assuming they do not purchase any units in this offering). If we increase or decrease the size of the offering, we will effect a stock dividend or share contribution back
to capital, as applicable, with respect to our Class F common stock immediately prior to the consummation of the offering in such amount as to maintain the ownership of founder shares by our initial stockholders at 20% of our issued and
outstanding shares of common stock upon the consummation of this offering. Up to 2,250,000 founder shares are subject to forfeiture by our sponsor depending on the extent to which the underwriters’
over-allotment
option is exercised.
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The founder shares are identical to the shares of Class A common stock included in the units being sold in this offering, except that:
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only holders of the founder shares have the right to vote on the election of directors prior to our initial business combination;
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the founder shares are subject to certain transfer restrictions, as described in more detail below;
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our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed (i) to waive their redemption
rights with respect to their founder shares and public shares in connection with the completion of our initial business combination and (ii) to waive their rights to liquidating distributions from the trust account with respect to their founder
shares if we fail to complete our initial business combination within 24 months from the closing of this offering (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we
fail to complete our initial business combination within the prescribed time frame). If we submit our initial business combination to our public stockholders for a vote, our initial stockholders have agreed, pursuant to such letter agreement, 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, we would need 22,500,001, or
approximately 37.5%, of 60,000,000 public shares sold in this offering to be voted in favor of a transaction (assuming all outstanding shares are voted and no exercise of the underwriter’s over-allotment option) in order to have an initial
business combination approved;
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the founder shares are automatically convertible into our Class A common stock at the time of our initial business combination, or earlier at the
option of the holder, on a
one-for-one
basis, subject to adjustment pursuant to certain anti-dilution rights, as described in more detail below; and
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the founders shares are subject to registration rights.
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Transfer restrictions on founder shares
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Our initial stockholders have agreed not to transfer, assign or sell any of its founder shares until the earlier to occur of: (A) one year after the completion of our initial business
combination, or (B) subsequent to our initial business combination, if 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 our initial business combination, or (C) the date following the completion of our initial business combination 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
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common stock for cash, securities or other property (except as described herein under “Principal Stockholders—Transfers of Founder Shares and Private Placement Warrants”). We refer
to such transfer restrictions throughout this prospectus as the
lock-up.
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Notwithstanding the foregoing, if the last sale price of our 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, the founder shares will be
released from the
lock-up.
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Founder shares conversion and
anti-dilution
rights
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The Class F common stock will automatically convert into shares of our Class A common stock at the time of our initial business combination, or earlier at the option of the holder, 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 this offering and related to the
closing of our initial business combination, the ratio at which shares of Class F common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class F
common stock agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class F common stock will equal,
in the aggregate, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of this offering plus all shares of Class A common stock and
equity-linked
securities
issued or deemed issued in connection with our initial business combination, excluding any shares or
equity-linked
securities issued, or to be issued, to any seller in our initial business combination.
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Private placement warrants
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Our sponsor has committed to purchase an aggregate of 9,333,333 private placement warrants (or 10,533,333 if the underwriters’
over-allotment
option
is exercised in full) at a price of $1.50 per warrant (approximately $14,000,000 in the aggregate or approximately $15,800,000 in the aggregate if the underwriters’
over-allotment
option is exercised in
full) in a private placement that will occur simultaneously with the closing of this offering. Each private placement warrant is exercisable to purchase one share of our Class A common stock at $11.50 per share, subject to adjustment as
provided herein.
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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
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account such that at the time of closing $600,000,000 (or $690,000,000 if the underwriters exercise their
over-allotment
option in full) will be held in
the trust account. If we do not complete our initial business combination within 24 months from the closing of this offering, the proceeds from the sale of the private placement warrants held in the trust account will be used to fund the
redemption of our public shares (subject to the requirements of applicable law) and the private placement warrants will expire worthless.
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The private placement warrants will not be redeemable by us so long as they are held by our sponsor or its permitted transferees except for redemption by the Company for Class A common
stock. The private placement warrants will be exercisable on a cashless basis so long as they are held by the sponsor or its permitted transferees. If the private placement warrants are held by holders other than the sponsor or its permitted
transferees, the private placement warrants will be exercisable by the holders on the same basis as the warrants included in the units being sold in this offering.
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Transfer restrictions on private placement warrants
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The private placement warrants (including the 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.
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Proceeds to be held in trust account
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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. Of the
$614.0 million in proceeds we will receive from this offering and the sale of the private placement warrants described in this prospectus, or $705.8 million if the underwriters’ over-allotment option is exercised in full, $600,000,000
($10.00 per unit), or $690,000,000 ($10.00 per unit) if the underwriters’ over-allotment option is exercised in full, (including $21,000,000 (or up to $24,150,000 if the underwriters’ over-allotment option is exercised in full) in deferred
underwriting commissions), will be deposited into a
non-interest
bearing
U.S.-based
trust account at J.P. Morgan Chase Bank, N.A., with Continental Stock
Transfer & Trust Company acting as trustee, and $2.0 million will be used to pay expenses in connection with the closing of this offering and for working capital following this offering. The funds in the trust account will be invested
only in specified U.S. government treasury bills or in specified money market 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 fund our working capital requirements, subject to an annual limit of $750,000,
and/or to pay our taxes, the proceeds from this offering and the sale of the private placement warrants will not be released from the trust account until the earliest of (i) the completion of our initial business combination, (ii) the
redemption of any public shares properly submitted in
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connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do
not complete our initial business combination within 24 months from the closing of this offering and (iii) the redemption of all of our public shares if we are unable to complete our initial business combination within 24 months from
the closing of this offering, 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.
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Anticipated expenses and funding sources
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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 fund our working capital
requirements, subject to an annual limit of $750,000, and/or to pay our taxes. Based upon current interest rates, we expect the trust account to generate approximately $1,200,000 of interest annually (assuming an interest rate of 0.2% per year)
following the investment of such funds in specified U.S. government treasury bills or in specified money market funds. Unless and until we complete our initial business combination, we may pay our expenses only from:
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•
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the net proceeds of this offering and the sale of the private placement warrants not held in the trust account, which will be approximately $1,000,000
in working capital after the payment of approximately $1,000,000 in expenses relating to this offering; and
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•
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any loans or additional investments from our sponsor, members of our management team or their affiliates or other third parties, although they are
under no obligation to advance funds or invest in us, and provided any such loans will not have any claim on the proceeds held in the trust account unless such proceeds are released to us upon completion of a business combination.
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Conditions to completing our initial business combination
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There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination. The NYSE rules require that our initial business combination
must be with one or more target businesses that together have fair market value equal to at least 80% of the balance in the trust account (net of amounts disbursed to management for working capital purposes and 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. We do not intend to purchase multiple businesses in unrelated industries in conjunction with our initial
business combination.
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If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking
firm that is a
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member of FINRA, or from an independent accounting firm. We will complete our initial business combination only if the
post-transaction
company in which
our public stockholders own shares will own or acquire 50% or more of the outstanding voting securities of the target or otherwise acquires an interest in the target sufficient for it not to be required to register as an investment company under the
Investment Company Act. Even if the
post-transaction
company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to our initial business combination may collectively own
a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in our initial business combination transaction. If less than 100% of the equity interests or assets of a target business or businesses are
owned or acquired by the
post-transaction
company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test, provided that in the
event that our initial business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses.
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Permitted purchases of public shares by our affiliates
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If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules,
our initial stockholders, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. There is no
limit on the number of shares such persons may purchase. 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. In the event our initial stockholders, directors, officers, advisors or their affiliates determine to make any such purchases at the time of a stockholder vote relating to our initial business combination, such purchases could
have the effect of influencing the vote necessary to approve such transaction. None of the funds in the trust account will be used to purchase shares in 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: (i) refrain from purchasing shares during certain blackout periods and when they are in possession of any material
non-public
information and (ii) to clear all trades with a designated officer 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
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make such purchases pursuant to a
Rule 10b5-1
plan or determine that such a plan is not necessary.
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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. Our initial stockholders, directors,
officers, advisors or their affiliates will not make any purchases if the purchases would violate Section 9(a)(2) or
Rule 10b-5
of the Exchange Act.
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Redemption rights for public stockholders upon completion of our initial business combination
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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 as of two business days prior to the consummation of our initial business combination, including interest earned
on the funds held in the trust account and not previously released to us to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes, divided by the number of then outstanding public shares, subject to
the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The
per-share
amount we will distribute to investors who properly redeem their shares
will not be reduced by the deferred underwriting commissions we will pay to the underwriters. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Our initial stockholders, officers
and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and any public shares they may acquire during or after this offering in connection
with the completion of our initial business combination.
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Manner of conducting redemptions
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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 (i) in
connection with a stockholder meeting called to approve the business combination or (ii) by means of a tender offer. 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 and whether the terms of the transaction would require us to seek stockholder approval under the law or stock exchange listing
requirements. 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
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issue more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation would require stockholder approval. We intend to conduct redemptions
without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by law or stock exchange listing requirements or we choose to seek stockholder approval for business or other legal reasons.
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If a stockholder vote is not required 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:
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•
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conduct the redemptions pursuant to
Rule 13e-4
and Regulation 14E of the Exchange Act, which regulate
issuer tender offers, and
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•
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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.
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Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we or 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.
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In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with
Rule 14e-1(a)
under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be
conditioned on public stockholders not tendering more than a specified number of public shares, which number will be based on the requirement that we may not redeem public shares in an amount that would cause our net tangible assets to be less than
$5,000,001, after payment of the deferred underwriting commission (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to
our initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination.
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If, however, stockholder approval of the transaction is required by law or stock exchange listing requirements, or we decide to obtain stockholder approval for business or other legal reasons,
we will:
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•
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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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•
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file proxy materials with the SEC.
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We expect that a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy
statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Although we are not required to do so, we currently
intend to comply with the substantive and procedural requirements of Regulation 14A in connection with any stockholder vote even if we are not able to maintain our NYSE listing or Exchange Act registration.
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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 our
company entitled to vote at such a meeting. Our initial stockholders will count toward this quorum. Pursuant to the terms of a letter agreement entered into with us, our initial stockholders, officers and directors have agreed (and their permitted
transferees will agree) to vote any founder shares held by them and any public shares purchased during or after this offering in favor of our initial business combination. We expect that at the time of any stockholder vote relating to our initial
business combination, our initial stockholders and their permitted transferees will own at least 20% of our outstanding common stock entitled to vote thereon. These quorum and voting thresholds and the letter agreement may make it more likely that
we will consummate our initial business combination. Each public stockholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction, subject to the Excess Shares (as defined below)
limitation.
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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 (so that we are not subject to the SEC’s “penny stock” rules). Redemptions of our public shares may also be subject to a higher net tangible asset test or cash requirement pursuant to an agreement relating to our initial
business combination. For example, the proposed business
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combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes
or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all 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, and all shares of Class A common stock submitted for redemption will be returned to the holders thereof.
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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 vote on the proposal to approve our initial business combination in the
event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option, rather than simply voting
against the initial business combination. The tender offer or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public
stockholders to satisfy such delivery requirements.
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Limitation on redemption rights of stockholders holding more than 15% of the shares sold in this
offering if we hold stockholder vote
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Notwithstanding the foregoing redemption rights, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business
combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in
concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in this offering, which we refer to as the
“Excess Shares”. We believe the restriction described above will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to redeem their shares as a means to force us
or our sponsor or its affiliates to purchase their shares at a significant premium to the
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then-current
market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares
sold in this offering could threaten to exercise its redemption rights against a business combination if such holder’s shares are not purchased by us or our sponsor or its affiliates at a premium to the
then-
current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem to no more than 15% of the shares sold in this offering, we believe we will limit the ability of a
small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum
net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including all shares held by those stockholders that hold more than 15% of the shares sold in this offering) for
or against our initial business combination. Our initial stockholders, officers and directors have, pursuant to a letter agreement entered into with us, waived their right to have any founder shares or public shares redeemed in connection with our
initial business combination. Unless any of our other affiliates acquires founder shares through a permitted transfer from an initial stockholder, and thereby becomes subject to the letter agreement, no such affiliate is subject to this waiver.
However, to the extent any such affiliate acquires public shares in this offering or thereafter through open market purchases, it would be a public stockholder and subject to the 15% limitation in connection with any such redemption right.
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Redemption rights in connection with proposed amendments to our amended and restated certificate of
incorporation
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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, including those 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, but excluding the provision of the articles relating to the appointment of directors) 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 (other than the election of directors), 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 Delaware General Corporation Law, or DGCL, or applicable stock
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exchange rules. Our initial stockholders, who will collectively beneficially own 20% of our common stock upon the closing of this offering (assuming they do not purchase any units in this
offering), 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 do not complete
our initial business combination within 24 months from the closing of this offering, unless we provide our public stockholders with the opportunity to redeem their shares of 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 us to fund our
working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes, divided by the number of then outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible
assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules).
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Release of funds in trust account on closing of our initial business combination
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On the completion of our initial business combination, all amounts held in the trust account will be released to us. We will use these funds to pay amounts due to any public stockholders who
exercise their redemption rights as described above under “Redemption rights for public stockholders upon completion of our initial business combination,” to pay the underwriters their deferred underwriting commissions, to pay all or a
portion of the consideration payable to the target or owners of the target of our initial business combination and to pay other expenses associated with our initial business combination. If our initial business combination is paid for using equity
or debt securities, 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, we may apply the balance of the cash released to us from the trust account for
general corporate purposes, including for maintenance or expansion of operations of
post-transaction
businesses, the payment of principal or interest due on indebtedness incurred in completing our initial
business combination, to fund the purchase of other companies or for working capital.
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Redemption of public shares and distribution and liquidation if no initial business combination
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Our sponsor, officers, and directors have agreed that we will have only 24 months from the closing of this offering to complete our initial business combination. If we are unable to
complete our initial
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business combination within such
24-month
period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as
reasonably possible but not more than ten business days thereafter, redeem the public shares, at a
per-share
price, payable in cash, equal to the aggregate amount then on deposit in the trust account including
interest earned on the funds held in the trust account, and not previously released to us to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes (less up to $100,000 of interest to pay dissolution
expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), 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. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our
initial business combination within the
24-month
time period.
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Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect
to their founder shares if we fail to complete our initial business combination within 24 months from the closing of this offering. However, if our initial stockholders acquire public shares after this offering, they will be entitled to
liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted
24-month
time frame.
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The underwriters have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not complete our initial business combination and
subsequently liquidate 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.
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Limited payments to insiders
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There will be no finder’s fees, reimbursements or cash payments made to our sponsor, officers or directors, or our or their affiliates, for services rendered to us prior to or in connection
with the completion of our initial business combination, other than the following payments, none of which will be made from the proceeds of this offering and the sale of the private placement warrants held in the trust account prior to the
completion of our initial business combination:
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Repayment of an aggregate of $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses;
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Payment to an affiliate of our sponsor of a total of $20,000 per month for office space, administrative and support services;
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•
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Reimbursement for any
out-of-pocket
expenses related to identifying,
investigating and completing an initial business combination; and
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•
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Repayment of loans which may be made by our sponsor or an affiliate of our sponsor or certain of our officers and directors to finance transaction
costs in connection with an intended initial business combination, 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 may be convertible into warrants of the
post business combination entity, at a price of $1.50 per warrant at the option of the lender.
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These payments may be funded using the net proceeds of this offering and the sale of the private placement warrants not held in the trust account or, upon completion of the initial business
combination, from any amounts remaining from the proceeds of the trust account released to us in connection therewith
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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.
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Audit Committee
|
Prior to the effectiveness of this registration statement, we will have established and will maintain an audit committee, (which will be composed entirely of independent directors) to among
other things, monitor compliance with the terms described above and the other terms relating to this offering. If any noncompliance is identified, then the audit committee will be charged with the responsibility to immediately take all action
necessary to rectify such noncompliance or otherwise to cause compliance with the terms of this offering. For more information, see the section entitled “Management—Committees of the Board of Directors—Audit Committee.”
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Conflicts of Interest
|
TPG manages several investment vehicles. Funds managed by TPG or its affiliates may compete with us for acquisition opportunities. If these funds decide to pursue any such opportunity, we
may be precluded from pursuing such opportunities. In addition, investment ideas generated within TPG, including by persons who may make decisions for the company, may be suitable for both us and for a current or future TPG fund and may be directed
to such investment vehicle rather than to us, subject to applicable fiduciary duties. Neither TPG nor members of our management team who are also employed by TPG have any obligation to present us with any opportunity for a potential business
combination of which they become aware solely in their capacities as officers or managing directors of TPG. TPG and/or our management, in their capacities as officers or managing directors of TPG or in their other endeavors, may choose to present
potential business combinations to the related entities described above, current or future TPG investment vehicles,
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or third parties, before they present such opportunities to us, subject to applicable fiduciary duties. 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.
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In addition, TPG or its affiliates 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 (other than Mr. Chazen) 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 expect that any such other blank check company would be focused on the energy industry and, as a result, we do not believe that any potential conflicts would materially affect our ability to complete our initial
business combination.
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Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or
director is or will be required to present a business combination opportunity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current
fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity. We expect that if an opportunity is presented to one of our officers or
directors in his or her capacity as an officer or director of one of those other entities, such opportunity would be presented to such other entity and not to us. For more information on the entities to which our officers and directors currently
have fiduciary or contractual obligations, please refer to “Management—Conflicts of Interest.” We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our
ability to complete our initial business combination.
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Indemnity
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Our sponsor has agreed that it will be liable to us if and to the extent any claims by a vendor (other than our independent auditors) for services rendered or products sold to us, or a
prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share 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 the value of the trust assets, in each case net of the interest which may be withdrawn to fund our working capital requirements, subject to an annual limit of
$750,000, and/or to
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28
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pay our taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the
underwriters of this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the
extent of any liability for such third party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company and,
therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such eventuality. 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.
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Risks
We are a newly formed company that has conducted no
operations and has generated no revenues. Until we complete our initial business combination, we will have no operations and will generate no operating revenues. In making your decision whether to invest in our securities, you should take into
account not only the background of our management team, but also the special risks we face as a blank check company. This offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. Accordingly, you will
not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. For additional information concerning how Rule 419 blank check offerings differ from this offering, please see “Proposed
Business—Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.” You should carefully consider these and the other risks set forth in the section entitled “Risk Factors” in this prospectus.
29
Summary Financial Data
The following table summarizes the relevant financial data for our business and should be read with our
financial statements, which are included in this prospectus. We have not had any significant operations to date, so only balance sheet data is presented.
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February 23, 2017
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Actual
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As Adjusted
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Balance Sheet Data:
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Working capital(1)
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$
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(10,723
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)
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$
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579,989,277
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Total assets(2)
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$
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412,522
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$
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600,989,277
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Total liabilities(3)
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$
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423,245
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$
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21,000,000
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Value of common stock that may be redeemed in connection with our initial business combination ($10.00 per
share)(4)
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$
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—
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$
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574,989,267
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Stockholder’s equity (deficit)(5)
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$
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(10,723
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)
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$
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5,000,010
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(1)
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The “as adjusted” calculation includes $600,000,000 cash held in trust from the proceeds of this offering and the sale of the private placement warrants, plus
$1,000,000 in cash held outside the trust account, less $
(10,723) of actual stockholder’s equity at
February 23, 2017, less $21,000,000 of deferred underwriting commissions.
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(2)
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The “as adjusted” calculation equals $600,000,000 cash held in trust from the proceeds of this offering and the sale of the private placement warrants, plus
$1,000,000 in cash held outside the trust account, less $(10,723) of actual stockholder’s equity as of February 23, 2017.
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(3)
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The “as adjusted” calculation includes $21,000,000 of deferred underwriting commissions.
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(4)
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The “as adjusted” calculation equals the “as adjusted” total assets, less the “as adjusted” total liabilities, less the “as
adjusted” stockholders’ equity, which is set to approximate the minimum net tangible assets threshold of at least $5,000,001.
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(5)
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Excludes 57,498,927 shares of Class A common stock purchased in the public market which are subject to redemption in connection with our initial business
combination. The “as adjusted” calculation equals the “as adjusted” total assets, less the “as adjusted” total liabilities, less the value of Class A common stock that may be redeemed in connection with our initial
business combination (approximately $10.00 per share).
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The “as adjusted” information gives effect to the sale of the units in this offering, the sale of the private placement warrants, repayment of an aggregate of $300,000 in loans made to us by our
sponsor and the payment of the estimated expenses of this offering. The “as adjusted” total assets amount includes the $600,000,000 held in the trust account ($690,000,000 if the underwriters’ over-allotment option is exercised in
full) for the benefit of our public stockholders, which amount, less deferred underwriting commissions, will be available to us only upon the completion of our initial business combination within 24 months from the closing of this offering. The
“as adjusted” working capital and “as adjusted” total assets include $21,000,000 being held in the trust account (up to $24,150,000 if the underwriters’ over-allotment option is exercised in full) representing deferred
underwriting commissions. The underwriters will not be entitled to any interest accrued on the deferred underwriting discounts and commissions.
If no business combination is completed within 24 months from the closing of this offering, the proceeds then on deposit in the trust
account including interest earned on the funds held in the trust account, and not previously released to us to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes (less up to $100,000 of interest to
pay dissolution expenses), will be used to fund the redemption of our public shares. Our initial stockholders, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their rights to
liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within such
24-month
time period.
30
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.
We are a newly formed company with no operating history and no revenues, and you have no basis on which to evaluate our
ability to achieve our business objective.
We are a newly formed 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.
Our public stockholders may not be afforded an
opportunity to vote on our proposed business combination, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination.
We may not hold a stockholder vote to approve our initial
business combination unless the business combination would require stockholder approval under applicable law or the rules of the NYSE or if we decide to hold a stockholder vote for business or other reasons. For instance, the NYSE rules currently
allow us to engage in a tender offer in lieu of a stockholder meeting but would still require us to obtain stockholder approval if we were seeking to issue more than 20% of our outstanding shares to a target business as consideration in any business
combination. Therefore, if we were structuring a business combination that required us to issue more than 20% of our outstanding shares, we would seek stockholder approval of such business combination. However, except as required by law, 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 consummate our initial business combination even if holders of a majority of our
public shares do not approve of the business combination we consummate. Please see the section entitled “Proposed Business—Stockholders May Not Have the Ability to Approve Our Initial Business Combination” for additional information.
If we seek stockholder approval of our initial business
combination, our initial stockholders, officers and directors have agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote.
Unlike many other blank check companies in which the initial stockholders agree to vote their founder shares in
accordance with the majority of the votes cast by the public stockholders in connection with an initial business combination, our initial stockholders, officers and directors have agreed (and their permitted transferees will agree), pursuant to the
terms of a letter agreement entered into with us, to vote any founder shares held by them, as well as 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, we would need 22,500,001, or approximately 37.5%, of the 60,000,000 public shares sold in this offering to be voted in favor of a transaction (assuming all outstanding shares are voted and no exercise of the
underwriters’ over-allotment option) in order to have an initial business combination approved. We expect that our initial stockholders and their permitted transferees will own at least 20% of our outstanding shares at the time of any such
stockholder vote.
31
Accordingly, if we seek stockholder approval of our initial business combination, it is more likely that the necessary stockholder approval will be received than would be the case if such persons
agreed to vote their founder shares in accordance with the majority of the votes cast by our public stockholders.
Your only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek
stockholder approval of the business combination.
At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of one or more target businesses. Since our board of directors may complete a
business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote on the business combination, unless we seek such stockholder vote. 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, after payment of the deferred underwriting commissions, to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or
cash requirement which may be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 or such
greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination. Prospective targets will be
aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.
The ability of our public 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 are 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.
32
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 is increased. If our initial business combination is unsuccessful, you would not receive
your pro rata portion of the trust account until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time our stock may trade at a discount to the pro
rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your stock in the
open market.
The requirement that we complete our initial
business combination within the prescribed time frame may give potential target businesses leverage over us in negotiating a business combination and may decrease our ability to conduct due diligence on potential business combination targets as we
approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders.
Any potential target business with which we enter into
negotiations concerning a business combination will be aware that we must complete our initial business combination within 24 months from the closing of this offering. 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 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 only receive $10.00 per share, or less than such
amount in certain circumstances, and our warrants will expire worthless.
Our sponsor, officers and directors have agreed that we must complete our initial business combination within 24 months from the closing of this offering. We may not be able to find a suitable target
business and complete our initial business combination within such time period. If we have not completed our initial business combination within such time period, we will: (i) cease all operations except for the purpose of winding up,
(ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a
per-share
price, payable in cash, equal to the aggregate amount then on deposit
in the trust account including interest earned on the funds held in the trust account, and not previously released to us to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes (less up to $100,000
of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating
distributions, if any), 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, in which case our public stockholders may only receive $10.00 per share, or less than in certain circumstances, and our
warrants will expire worthless.
33
If we seek stockholder approval of our initial business combination, our sponsor, directors, officers,
advisors and their affiliates may elect to purchase shares from public stockholders, 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 in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares in privately negotiated
transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation to do so. Such a purchase may include a contractual acknowledgement that such stockholder,
although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our sponsor, directors, officers, advisors or 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 such
purchases could be to vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder approval of the initial business combination, or to satisfy a closing condition in an agreement with a
target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. This may result in the completion of our initial
business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public “float” of our Class A common stock and the number of beneficial holders of our securities may be reduced, possibly making it difficult
to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
If a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares,
such shares may not be redeemed.
We will
comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these rules, if a stockholder fails to receive our tender offer or proxy
materials, as applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable, that we will furnish to holders of our public shares in connection
with our initial business combination will describe the various procedures that must be complied with in order to validly tender or redeem public shares. In the event that a stockholder fails to comply with these procedures, its shares may not be
redeemed. See “Proposed Business—Business Strategy—Tendering stock certificates in connection with a tender offer or redemption rights.”
You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment,
therefore, you may be forced to sell your public shares 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 completion of our initial business combination, (ii) the redemption
of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not
complete our initial business combination within 24 months from the closing of this offering and (iii) the redemption of all of our public shares if we are unable to complete an initial business combination within 24 months from the
closing of this offering, subject to applicable law and as further described herein. In addition, if we are unable to complete our initial business combination within 24 months from the closing of this offering 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
34
may be forced to wait beyond 24 months from the closing of this offering 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. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
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.
We intend to apply to have our units listed on the NYSE on or promptly after the date of this prospectus and our Class A common stock
and warrants listed on or promptly after their date of separation. Although after giving effect to this offering we expect to meet, 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 be, or 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 amount in stockholders’ equity (generally $4,000,000) and a minimum number of holders of our securities (generally 400 public 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 $2.00 per share and our stockholders’ equity would generally be required to be at least
$4.0 million. 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:
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a limited availability of market quotations for our securities;
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•
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reduced liquidity for our securities;
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•
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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;
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•
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a limited amount of news and analyst coverage; and
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•
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a decreased ability to issue additional securities or obtain additional financing in the future.
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The National Securities Markets Improvement Act of 1996,
which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because we expect that our units and eventually our Class A 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.
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 target business that has not been
identified, we may be
35
deemed to be a “blank check” company under the United States securities laws. However, because we will have net tangible assets in excess of $5,000,000 upon the 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 demonstrating this fact, we are exempt from rules
promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means our units will be immediately
tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, if this offering were subject to Rule 419, that rule would prohibit the release of any interest
earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial business combination. For a more detailed comparison of our offering to offerings
that comply with Rule 419, please see “Proposed Business—Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.”
If we seek stockholder approval of our initial business combination and we
do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold in excess of 15% of our Class A common stock, you will lose the ability to redeem all such shares in excess of
15% of our Class A common stock.
If we
seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will
provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be
restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in this offering, which we refer to as the “Excess Shares.” However, we would not be restricting our stockholders’ ability to
vote all of their shares (including Excess Shares) for or against our initial business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination and you could
suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And
as a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your stock in open market transactions, potentially at a loss.
Because of our limited resources and the significant competition for
business combination opportunities, it may be more difficult for us to complete our initial business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share,
or less in certain circumstances, on our redemption, and our warrants will expire worthless.
We expect to encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank
check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are
well-established
and have extensive
experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local
industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds of
this offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive
limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, if we are obligated to pay cash for the shares of Class A common stock which our public stockholders redeemed and, in the event we seek
stockholder approval of our initial business combination, we make purchases of our Class A common stock, potentially reducing the resources available to us for our initial business combination. Any of these obligations may place us at a
competitive disadvantage in successfully
36
negotiating a business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of
our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their shares. See “—If third parties bring claims against us, the
proceeds held in the trust account could be reduced and the
per-share
redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.
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 24 months, we may be unable to complete our initial business combination.
The funds available to us outside of the trust account may not be sufficient to allow us to operate for at
least the next 24 months, assuming that our initial business combination is not completed during that time. We expect to incur significant costs in pursuit of our acquisition plans. Management’s plans to address this need for capital
through this offering and potential loans from certain of our affiliates are discussed in the section of this prospectus titled ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations.’’
However, our affiliates are not obligated to make loans to us in the future, and we may not be able to raise additional financing from unaffiliated 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.
We believe that, upon the closing of this offering, the funds available to us outside of the trust account will be sufficient to allow us to operate for at least the next 24 months; however, we
cannot assure you that our estimate is accurate. 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 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 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. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless. In certain
circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their shares. See “—If third parties bring claims against us, the proceeds held in the trust account could be reduced and the
per-share
redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.
If the net proceeds of this offering and the sale of the private placement warrants not being held in the trust account are insufficient, it could
limit the amount available to fund our search for a target business or businesses and complete our initial business combination and we will depend on loans from our sponsor or management team to fund our search, to pay our taxes and to complete our
initial business combination.
Of the net
proceeds of this offering and the sale of the private placement warrants, only approximately $1,000,000 will be available to us initially outside the trust account to fund our working capital requirements. In the event that our offering expenses
exceed our estimate of $1,000,000, 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 $1,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. If we are required to seek additional capital, we would need to
borrow funds from our sponsor, management team or other third parties to operate or may be forced to liquidate. None of our sponsor, members of our management team nor any of their affiliates is under any obligation to advance funds to us in
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such circumstances. Any such advances would be repaid only from funds held outside the trust account or from funds released to us upon 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 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. Consequently, our public stockholders may only
receive approximately $10.00 per share on our redemption of our public shares, and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their shares. See
“—If third parties bring claims against us, the proceeds held in the trust account could be reduced and the
per-share
redemption amount received by stockholders may be less than $10.00 per
share” and other risk factors herein.
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 our stock price, 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 surface all material issues that may be present inside 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 who
choose to remain stockholders following the business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.
If third parties bring claims against us, the proceeds held in the trust
account could be reduced and the
per-share
redemption amount received by stockholders may be less than $10.00 per share.
Our placing of funds in the trust account may not protect
those funds from
third-party
claims against us. Although we will seek to have all vendors, service providers (other than our independent auditors), prospective target businesses or other entities with which we
do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public 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 advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies
held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s
engagement would be significantly more beneficial to us than any alternative.
Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by
management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where
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management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a
result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we are unable to complete our initial business combination
within the prescribed timeframe, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us
within the 10 years following redemption. Accordingly, the
per-share
redemption amount received by public stockholders could be less than the $10.00 per share initially held in the trust account, due to
claims of such creditors.
Our sponsor has agreed
that it will be liable to us if and to the extent any claims by a vendor (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction
agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share 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 the value of the trust assets, in each case net of the interest which may be withdrawn to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes except as to any claims by a third party who executed
a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the
event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third party claims. We have not independently verified whether our sponsor has sufficient
funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Our sponsor may not have sufficient funds available to satisfy those obligations. We have not asked our sponsor to reserve for
such obligations and therefore, no funds are currently set aside to cover any such obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and
redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption of your public
shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Our directors may decide not to enforce the indemnification obligations of
our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public stockholders.
In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per public share or (ii) such
lesser amount per share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to fund our working capital
requirements, subject to an annual limit of $750,000, and/or to pay our taxes, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent
directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations.
While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its
indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification
obligations, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.00 per share.
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If, after we distribute the proceeds in the trust account to our public stockholders, we file a
bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary
duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.
If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent
conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad
faith, thereby exposing itself and us to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors.
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.
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 stockholders in connection with our
liquidation may be reduced.
If we are deemed to be an
investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company
under the Investment Company Act, our activities may be restricted, including:
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restrictions on the nature of our investments; and
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restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial business combination.
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In addition, we may have
imposed upon us burdensome requirements, including:
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registration as an investment company;
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adoption of a specific form of corporate structure; and
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reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations.
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We do not believe that our anticipated principal activities
will subject us to the Investment Company Act. The proceeds held in the trust account may be invested by the trustee only in United States government treasury bills with a maturity of 180 days or less or in money market funds investing solely
in United States Treasuries and meeting certain conditions under
Rule 2a-7
under the Investment Company Act. Prior to such time, such proceeds will not be invested and will be held in a
non-interest
bearing trust account. Because the investment of the proceeds will be restricted to these instruments, we believe we will meet the requirements for the exemption provided in Rule
3a-1
promulgated under the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional
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expenses for which we have not allotted funds and may hinder our ability to consummate a business combination. If we were deemed to be subject to the Investment Company Act, compliance with these
additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete a business combination. If we are unable to complete our initial business combination, our public
stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
Changes in laws or regulations, or a failure to comply with any laws and
regulations, may adversely affect our business, investments 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 and results of operations.
If we are unable to consummate our initial business combination within 24
months of the closing of this offering, our public stockholders may be forced to wait beyond such 24 months before redemption from our trust account.
If we are unable to consummate our initial business combination within 24 months from the closing of this offering, we will distribute the
aggregate amount then on deposit in the trust account (less up to $100,000 of the net interest earned thereon 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 24 months before the redemption proceeds of our trust account become available to them and they receive the return of their pro rata portion of the proceeds
from our trust account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless we consummate our initial business combination prior thereto and only then in cases where investors have sought to
redeem their common stock. Only upon our redemption or any liquidation will public stockholders be entitled to distributions if we are unable to complete our initial business combination
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 24 months from the closing of this offering 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
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our intention to redeem our public shares as soon as reasonably possible following the 24th month from the closing of this offering in the event we do not complete our business combination
and, therefore, we do not intend to comply with the foregoing procedures.
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 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, 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 24 months from the closing of this offering is not considered a liquidating distribution under Delaware law and such
redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the
case of a liquidating distribution.
We may not hold an annual
meeting of stockholders until after the consummation of our initial business combination. Our public stockholders will not have the right to elect directors prior to the consummation of our initial business combination.
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. In addition, as holders of our shares of Class A common stock, our public stockholders
will not have the right to vote on the election of directors. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination. 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 are not registering the shares of Class A common stock issuable
upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its
warrants except on a cashless basis and potentially causing such warrants to expire worthless.
We are not registering the shares of Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of the
warrant agreement, we have agreed, as soon as practicable, but in no event later than fifteen (15) business days after the closing of our initial business combination, to use our best efforts to file a registration statement under the
Securities Act covering such shares and 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
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stop order. If the shares issuable upon exercise of the warrants are not registered under the Securities Act, we will be required to permit holders to exercise their warrants on a cashless basis.
However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified
under the securities laws of the state of the exercising holder, or an exemption is available. 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 public warrants who exercise their warrants to do so on a “cashless basis” in
accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our best efforts to register or qualify the shares under
applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net cash settle any warrant, nor will we be required to issue securities or other compensation in exchange for the warrants in the event that we
are unable to register or qualify the stock including the warrants under applicable state securities laws. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification,
the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit
purchase price solely for the shares of Class A common stock included in the units. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying shares of
Class A common stock for sale under all applicable state securities laws.
The grant of registration rights to our initial stockholders and holders of our private placement warrants 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 their founder shares, after those shares convert to Class A common stock at the time of our initial business combination. In addition, holders of our private placement
warrants and their permitted transferees can demand that we register the private placement warrants and the shares of Class A common stock issuable 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. 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 conclude. 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 or holders of our working capital loans or their respective permitted transferees are registered.
Because we are not limited to a particular industry, or any specific
target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’ operations.
Although we expect to focus our search for a target business in the energy industry, we may seek to 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 initial business combination with another blank check company
or similar company with nominal operations. Because we have not yet identified or approached any specific target business with respect to a business combination, there is no basis to evaluate the possible merits or risks of any particular target
business’s operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete our initial business
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combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking
an established record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks
inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be
outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you that an investment in our units will ultimately prove to be more favorable to
investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any stockholders who choose to remain stockholders following the business combination could suffer a reduction in the value of
their shares. Such stockholders are unlikely to have a remedy for such reduction in value of their shares.
Because we intend to seek a business combination with a target business in the energy industry, we expect our future operations to be subject to risks associated with this industry.
We intend to focus our search for a target business in the
energy industry in the United States, although we may seek to complete a business combination in any industry or location. Our management team has extensive experience across the upstream, midstream, services, refining and chemicals sectors.
Accordingly, we may pursue a target business in these sectors or any other sector within the energy industry. Because we have not yet identified or approached any specific target business or sector, we cannot provide specific risks of any business
combination. However, risks inherent in investments in the energy industry include, but are not limited to, the following:
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Competitive pressures in the energy industry, primarily in wholesale markets, as a result of consumer demand, technological advances, greater
availability of natural gas and other factors;
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Volatility in prices for oil, natural gas and other energy related commodities;
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Price and availability of alternative fuels;
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Significant federal, state and local regulation, taxation and regulatory approval processes as well as changes in applicable laws and regulations;
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The speculative nature of and high degree of risk involved in investments in the upstream sector more broadly, and of exploration and development in
particular, including relying on estimates of oil and gas reserves and the impacts of regulatory and tax changes;
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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;
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Proximity and capacity of transportation and support infrastructure to production facilities;
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Availability of key inputs, such as strategic consumables, raw materials and drilling and processing equipment;
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Impact of energy conservation efforts;
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Technological advances affecting energy production and consumption;
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Overall domestic and global economic conditions;
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Availability of, and potential disputes with, independent contractors;
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Natural disasters, terrorist acts and similar dislocations; and
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Past performance by TPG, including our management team, may not be indicative of future performance of an
investment in the Company.
Information
regarding performance by, or businesses associated with, TPG and its affiliates is presented for informational purposes only. Past performance by TPG and our management team, including Mr. Chazen’s past performance, particularly at Occidental,
is not a guarantee either (i) that we will be able to identify a suitable candidate for our initial business combination or (ii) of success with respect to any business combination we may consummate. You should not rely on the
historical record of TPG or our management team’s performance as indicative of our future performance or of an investment in the company or the returns the company will, or is likely to, generate going forward. You should not rely on the
historical record of TPG’s or our management team’s, including Mr. Chazen’s, performance as indicative of our future performance. Furthermore, an investment in us is not an investment in TPG.
We may seek acquisition opportunities in industries or sectors that may be
outside of our management’s areas of expertise.
While our initial focus will be to pursue companies in energy or energy-related industries, we will consider a business combination outside of our management’s areas of expertise if a 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’s expertise, our
management’s expertise may not be directly applicable to its evaluation or operation, and the information contained in this prospectus regarding the areas of our management’s expertise would not be relevant to an understanding of the
business that we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all of the significant risk factors. Accordingly, any stockholders who choose to remain stockholders following our initial business
combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.
Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter
into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our
general criteria and guidelines.
Although we
have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not have all of these positive attributes. If we
complete our initial business combination with a target that does not meet some or all of these 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 target 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 law, or we decide to obtain stockholder approval for business
or other legal reasons, it may be more difficult for us to attain stockholder approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business
combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless.
We may seek acquisition opportunities with a financially unstable business
or an entity lacking an established record of revenue or earnings, which could subject us to volatile revenues or earnings or difficulty in retaining key personnel.
To the extent we complete our initial business combination
with 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 volatile revenues or
earnings and difficulties in obtaining and
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retaining key personnel. By their nature, distressed companies are subject to heightened risks and our acquisition may be at greater risk. For example, distressed companies may have reduced
access to credit and substantial interest expense, which may result in lower working capital and reduced profitability. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may not be
able to properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce
the chances that those risks will adversely impact a target business.
We are not required to obtain an opinion from an independent investment banking 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 initial business combination with an affiliated entity or our board cannot independently determine the fair market value of the target business or businesses, 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 of directors, who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our tender offer documents or
proxy solicitation materials, as applicable, related to our initial business combination.
We may issue additional 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 shares of Class A common stock upon the conversion of the Class F common stock at a ratio greater than
one-to-one
at the time of our initial
business combination as a result of the
anti-dilution
provisions contained in our amended and restated 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 200,000,000 shares of Class A common stock, par value $0.0001 per share, 20,000,000 shares of Class F common stock, par value $0.0001 per share, and 1,000,000
shares of preferred stock, par value $0.0001 per share. Immediately after this offering, there will be 140,000,000 and 5,000,000 (assuming, in each case, that the underwriters have not exercised their
over-allotment
option) authorized but unissued shares of Class A common stock and Class F common stock available, respectively, available for issuance, which amount takes into account the shares of
Class A common stock reserved for issuance upon exercise of outstanding warrants but not the conversion of the Class F common stock. Shares of Class F common stock are automatically convertible into shares of our Class A common
stock at the time of our initial business combination, or earlier at the option of the holder, initially at a
one-for-one
ratio but subject to adjustment as set forth
herein. Immediately after this offering, there will be no preferred shares issued and outstanding.
We may issue a substantial number of additional shares of common 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 shares of Class A common stock upon conversion of the Class F common stock at a ratio greater than
one-to-one
at the
time of our initial business combination as a result of the
anti-dilution
provisions contained in our amended and restated 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. The issuance of additional shares of common 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; and
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may adversely affect prevailing market prices for our units, Class A common stock and/or warrants.
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Resources could be wasted in researching acquisitions that are not
completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00
per share, or less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
We anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements,
disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete a specific initial business combination, the costs incurred
up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination for any number of reasons including
those beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our
initial business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless.
We are dependent upon our officers and directors and their departure could adversely affect our ability to operate.
Our operations are dependent upon a
relatively small group of individuals and, in particular, Mr. Chazen. We believe that our success depends on the continued service of our officers and directors, at least until we have completed our initial business combination. In addition,
our officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential
business combinations and monitoring the related due diligence. We do not intend to have any full-time employees prior to the completion of our initial business combination. Moreover, certain of our officers and directors have time and attention
requirements for private investment funds of which affiliates of TPG are the investment managers. We do not have an employment agreement with, or
key-man
insurance on the life of, any of our directors or
officers. The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us.
In addition, certain of our officers and directors are employed by affiliates of our sponsor, which is an investment manager to various
private investment funds, which make investments in securities or other interests of or relating to companies 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 in excess of their current commitment levels, it could limit their ability to devote time to our
affairs, which may have a negative impact on our ability to complete our initial business combination. For a complete discussion of our officers’ and directors’ other business affairs, please see the section entitled
“Management—Directors and Executive Officers.”
Our ability to successfully effect our initial business combination and to be successful thereafter will be totally dependent upon the efforts of our
key personnel, some of whom may join us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability of our
post-combination
business.
Our ability to successfully effect our
initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot presently be ascertained.
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Although some of our key personnel may remain with the target business in senior management or advisory positions following our initial business combination, it is likely that some or all of the
management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct.
These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
Our key personnel may negotiate employment or consulting agreements with a
target business in connection with a particular business combination. These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in
determining whether a particular business combination is the most advantageous.
Our key personnel may be able to remain with the company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection with
the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for
services they would render to us after the completion of the business combination. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business, subject to their fiduciary
duties under Delaware law. However, we believe the ability of such individuals to remain with us after the completion of our initial business combination will not be the determining factor in our decision as to whether or not we will proceed with
any potential business combination. There is no certainty, however, that any of our key personnel will remain with us after the completion of our initial business combination. We cannot assure you that any of our key personnel will remain in senior
management or advisory positions with us. The determination as to whether any of our key personnel will remain with us will be made at the time of our initial business combination.
We may have 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.
When evaluating the desirability of effecting our initial
business combination with a prospective target business, our ability to assess the target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target’s management,
therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary to manage a public company, the
operations and profitability of the
post-combination
business may be negatively impacted. Accordingly, any stockholders who choose to remain stockholders following the business combination could suffer a
reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.
The officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The departure of a
business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business. The role of an acquisition candidates’ key personnel upon the completion of our initial business
combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial business combination, it is
possible that members of the management of an acquisition candidate will not wish to remain in place
Our officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of
interest could have a negative impact on our ability to complete our initial business combination.
Our officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of
interest in allocating their time between our operations and our search for a business
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combination and their other businesses. We do not intend to have any
full-time
employees prior to the completion of our initial business combination. Each
of our officers is engaged in several other business endeavors for which he may be entitled to substantial compensation and our officers are not obligated to contribute any specific number of hours per week to our affairs. In particular, certain of
our officers and directors are employed by TPG, which are the investment managers to various private investment funds, which make investments in securities or other interests of or relating to companies 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 in
excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination. For a complete discussion of our officers’ and
directors’ other business affairs, please see “Management—Directors and Executive Officers.”
Certain of our officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us,
including another blank check company, and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
Following the completion of this offering and until we
consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses. Our sponsor and officers and directors are, or may in the future become, affiliated with entities that are
engaged in a similar business, including another blank check company that may have acquisition objectives that are similar to ours or that is focused on a particular industry. Moreover, certain of our officers and directors have time and attention
requirements for private investment funds of which affiliates of TPG are the investment managers.
Our officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the other entities to which they owe certain fiduciary or contractual duties.
Accordingly, they may have conflicts of interest
in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to other entities prior to its presentation to us. 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.
For a complete discussion of our officers’ and
directors’ business affiliations and the potential conflicts of interest that you should be aware of, please see “Management—Directors and Executive Officers,” “Management—Conflicts of Interest” and “Certain
Relationships and Related Party Transactions.”
Our
officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct or
indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business combination with a target business that is
affiliated with our sponsor, our directors or officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us,
including the formation of, or participation in, one or more other blank check companies. Accordingly, such persons or entities may have a conflict between their interests and ours.
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We may engage in a business combination with one or more target businesses that have relationships with
entities that may be affiliated with our sponsor, officers, directors or existing holders which may raise potential conflicts of interest.
In light of the involvement of our sponsor, officers and directors with other entities, we may decide to acquire one or more businesses
affiliated with our sponsor, officers and directors. Our officers and directors also serve as officers and board members for other entities, including, without limitation, those described under “Management—Conflicts of Interest.” Such
entities may compete with us for business combination opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with which they are
affiliated, and there have been no preliminary discussions concerning a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would
pursue such a transaction if we determined that such affiliated entity met our criteria for a business combination as set forth in “Proposed Business—Effecting our Initial Business Combination—Selection of a target business and
structuring of our initial business combination” and such transaction was approved by a majority of our disinterested directors. Despite our agreement 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 officers, directors or existing holders,
potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public stockholders as they would be absent any conflicts of interest.
Since our sponsor, officers and directors will lose their entire
investment in us if our initial 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.
In February 2017, our sponsor purchased an aggregate of
11,500,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.002 per share. In April 2017, we effected a stock dividend with respect to our Class F common stock of 5,750,000 shares thereof, resulting in our initial
stockholders holding an aggregate of 17,250,000 founder shares. In 2017, our sponsor transferred 40,000 founder shares to each of our independent director nominees at their
original per share purchase price. As such, our initial stockholders will collectively own 20% of our issued and outstanding shares after this offering (assuming they do not purchase any units in this offering). If we increase or decrease the size
of the offering, we will effect a stock dividend or share contribution back to capital, as applicable, immediately prior to the consummation of the offering in such amount as to maintain the ownership of our initial stockholders prior to this
offering at 20% of our issued and outstanding shares of common stock upon the consummation of this offering. The founder shares will be worthless if we do not complete an initial business combination. In addition, our sponsor has committed to
purchase an aggregate of 9,333,333 (or 10,533,333 if the underwriters’
over-allotment
option is exercised in full) private placement warrants, each exercisable to purchase one share of our Class A
common stock, for a purchase price of approximately $14,000,000 in the aggregate or approximately $15,800,000 in the aggregate if the underwriters’
over-allotment
option is exercised in full), or $1.50
per warrant, that will also be worthless if we do not complete a business combination. Each private placement warrant may be exercised for one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as provided
herein.
The founder shares are identical to the
common stock included in the units being sold in this offering except that (i) holders of the founder shares have the right to vote on the election of directors prior to our initial business combination, (ii) the founder shares are subject
to certain transfer restrictions, (iii) our initial stockholders, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed (A) to waive their redemption rights with respect to their founder
shares and public shares in connection with the completion of our initial business combination and (B) to waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our
initial business combination within 24 months from the closing of this offering, although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial
business combination within
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the prescribed time frame, (iv) the founder shares are subject to registration rights and (v) the founder shares are automatically convertible into shares of our Class A common stock at
the time of our initial business combination, or earlier at the option of the holder, on a
one-for-one
basis, subject to adjustment pursuant to certain anti-dilution
rights, as described herein.
The personal and
financial interests of our officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following the
initial business combination.
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 security is payable on demand;
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our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while
the debt security is outstanding;
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our inability to pay dividends on our common stock;
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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our
common stock if declared, expenses, capital expenditures, acquisitions, and other general corporate purposes;
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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our
strategy and other purposes and other disadvantages compared to our competitors who have less debt.
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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.
The net proceeds from this offering and the sale of the
private placement of warrants will provide us with $579,000,000 (or $665,850,000 if the underwriters’
over-allotment
option is exercised in full) that we may use to complete our initial business
combination (after payment of $21,000,000, or up to $24,150,000 if the underwriters’
over-allotment
option is exercised in full, of deferred underwriting commissions being held in the trust account).
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We may effectuate our initial business combination with a single target business or multiple
target businesses simultaneously or within a short period of time. However, we may not be able to effectuate our initial business combination with more than one target business because of various factors, including the existence of complex
accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By
completing our initial business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory risks. Further, we would not be able to diversify our operations or benefit from the
possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry. 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:
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solely dependent upon the performance of a single business, property or asset, or
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dependent upon the development or market acceptance of a single or limited number of products, processes or services.
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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.
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 a business combination so that the
post-transaction
company in which our public stockholders own shares will own less than 100% of the equity interests or assets of a target business, but we will only complete such business combination if the
post-transaction
company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires an interest in the target 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
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criteria. Even if the
post-
transaction company owns 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. For example, we could pursue a transaction in which we issue a
substantial number of new shares of Class A common stock in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial
number of new shares of common stock, our stockholders immediately prior to such transaction could own less than a majority of our outstanding shares of common stock subsequent to such transaction. 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. 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 do not have a specified maximum redemption threshold. The absence of
such a redemption threshold may make it possible for us to complete a business combination with which a substantial majority of our 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, after payment of the deferred underwriting commissions, to be less than $5,000,001
(such that we are not subject to the SEC’s “penny stock” rules). As a result, we may be able to complete our initial business combination even though a substantial majority of our public stockholders do not agree with the transaction
and have redeemed their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered into privately
negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or 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, 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.
The exercise price for the public warrants is higher than in many similar
blank check company offerings in the past, and, accordingly, the warrants are more likely to expire worthless.
The exercise price of the public warrants is higher than is typical in many similar blank check companies in the past. Historically, the
exercise price of a warrant was generally a fraction of the purchase price of the units in the initial public offering. The exercise price for our public warrants is $11.50 per share, subject to adjustment as provided herein. As a result, the
warrants are less likely to ever be in the money and more likely to expire worthless.
In order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments. We cannot assure
you that we will not seek to amend our amended and restated certificate of incorporation or governing instruments in a manner that will make it easier for us to complete our initial business combination but that our stockholders may not support.
In order to effectuate a business
combination, blank check companies have, in the past, amended various provisions of their charters and modified governing instruments. For example, blank check companies have amended the definition of business combination, increased redemption
thresholds and changed industry focus. We cannot assure you that we will not seek to amend our charter or governing instruments or change our industry focus in order to effectuate our initial business combination.
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Certain provisions of our amended and restated certificate of incorporation that relate to our
pre-business
combination activity (and corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval of holders of at least 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 which prohibits the amendment of certain of its provisions, including those which relate to a company’s
pre-business
combination activity, without approval by a certain percentage of the company’s 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 of 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), but
excluding the provisions of the charter relating to the election of directors, 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 (other than the election of directors), 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 collectively beneficially own 20% of our
common stock upon the closing of this offering (assuming they do not purchase any units in this offering), 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.
We may be unable to obtain
additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination.
Although we believe that the net proceeds of this offering
and the sale of the private placement warrants will be sufficient to allow us to complete our initial business combination, because we have not yet identified any prospective target business we cannot ascertain the capital requirements for any
particular transaction. If the net proceeds of this offering and the sale of the private placement 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 only receive approximately $10.00 per share on the liquidation of our trust account, and our warrants will expire worthless.
54
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. As a result, they will elect all of our directors 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 20% of our issued and outstanding shares of common stock (assuming they do not purchase any units in this offering). In addition, the founder shares, all of which are held by our initial stockholders, will entitle
the holders to elect all of our directors prior to our initial business combination. Holders of our public shares will have no right to vote on the election of directors during such time. These provisions of our amended and restated certificate of
incorporation may only be amended if approved by holders of at least 90% of our outstanding common stock entitled to vote thereon. As a result, you will not have any influence over the election of directors prior to our initial business combination.
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, as a result of their substantial ownership in our company, our initial stockholders may exert a substantial influence on other actions requiring a stockholder vote,
potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation or bylaws and approval of major corporate transactions. If our initial stockholders purchase any additional shares of
common stock in the aftermarket or in privately negotiated transactions, this would increase their influence over these actions. Accordingly, our initial stockholders will exert significant influence over actions requiring a stockholder vote at
least until the completion of our initial business combination.
Our sponsor paid an aggregate of $25,000, or approximately $0.002 per founder share, and, accordingly, you will experience immediate and substantial
dilution upon the purchase of our Class A common stock.
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 the founder shares at a nominal price, significantly contributing to
this dilution. Upon the closing of this offering, and assuming no value is ascribed to the warrants included in the units, you and the other public stockholders will incur an immediate and substantial dilution of approximately 97.1% (or $9.71 per
share, assuming no exercise of the underwriters’
over-allotment
option), the difference between the pro forma net tangible book value per share of $(0.29) and the initial offering price of $10.00 per
unit. This dilution would increase to the extent that the anti-dilution provisions of the shares of Class F common stock result in the issuance of the shares of Class A common stock on a greater than
one-to-one
basis upon conversion of the shares of Class F common stock at the time of our initial business combination and would become exacerbated to the extent that public stockholders seek redemptions
from the trust. 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.
We may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then outstanding public warrants.
Our warrants will be issued in registered
form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any
ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants.
Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public warrants
with the consent of at least 50% of
55
the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period
or decrease the number of shares of our Class A common stock purchasable upon exercise of a warrant.
We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem outstanding warrants at any
time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of our Class A 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 we send the notice of such redemption to the
warrant holders. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the
outstanding warrants could force you (i) to exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your warrants at the
then-current
market price when you might otherwise wish to hold your warrants or (iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is
likely to be substantially less than the market value of your warrants.
In addition, we may redeem your warrants after they become exercisable for a number of shares of Class A common stock determined based on the redemption date and the fair market value of our
Class A common stock. Any such redemption may have similar consequences to a cash redemption described above. In addition, such redemption may occur at a time when the warrants are “out-of-the-money,” in which case you would lose any
potential embedded value from a subsequent increase in the value of the Class A common stock had your warrants remained outstanding.
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 initial business combination.
We will be issuing warrants to purchase 20,000,000 shares of our Class A common stock (or up to 23,000,000 shares of Class A
common stock if the underwriters’
over-allotment
option is exercised in full), at a price of $11.50 per share (subject to adjustment as provided herein), as part of the units offered by this prospectus
and, simultaneously with the closing of this offering, we will be issuing in a private placement warrants to purchase an aggregate of 9,333,333 (or 10,533,333 if the underwriters’
over-allotment
option is
exercised in full) shares of Class A common stock at $11.50 per share. Our initial stockholders currently own 17,250,000 founder shares. The founder shares are convertible into shares of Class A common stock on a
one-for-one
basis, subject to adjustment as provided herein. In addition, if our sponsor makes any working capital loans, up to $1,500,000 of such loans may be converted into
warrants, at the price of $1.50 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants.
To the extent we issue shares of Class A common stock to effectuate a business combination, the potential for the issuance of a
substantial number of additional shares of Class A common stock upon exercise of these warrants or conversion 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 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.
The private placement warrants are identical to the warrants sold as part of the units in this offering except that, so long as they are held by our sponsor or its permitted transferees, (i) they
(including the Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred,
56
assigned or sold by our sponsor until 30 days after the completion of our initial business combination, (ii) they may not be redeemed by us except for redemption by us for Class A
common stock, (iii) they may be exercised by the holders on a cashless basis, and (iv) are subject to registration rights.
Because each unit contains
one-third
of one warrant and only a whole warrant may be exercised, the units may be
worth less than units of other blank check companies.
Each unit contains
one-third
of one warrant. Because, pursuant to the warrant agreement, the warrants may only be exercised for a whole number of shares of
Class A common stock, only a whole warrant may be exercised at any given time. This is different from other offerings similar to ours whose units include one share of common stock and one warrant to purchase one whole share. We have established
the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants will be exercisable in the aggregate for one third of the number of shares compared to units
that each contain a warrant to purchase one whole share, thus making us, we believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if they included a warrant to
purchase one whole share.
The determination of the offering
price of our units and the size of this offering is more arbitrary than the pricing of securities and size of an offering of an operating company in a particular industry. You may have less assurance, therefore, that the offering price of our units
properly reflects the value of such units than you would have in a typical offering of an operating company.
Prior to this offering there has been no public market for any of our securities. The public offering price of the units and the terms of
the warrants were negotiated between us and the underwriters. In determining the size of this offering, management held customary organizational meetings with representatives of the underwriters, both prior to our inception and thereafter, with
respect to the state of capital markets, generally, and the amount the underwriters believed they reasonably could raise on our behalf. Factors considered in determining the size of this offering, prices and terms of the units, including the
Class A common stock and warrants underlying the units, include:
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the history and prospects of companies whose principal business is the acquisition of other companies;
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prior offerings of those companies;
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•
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our prospects for acquiring an operating business at attractive values;
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•
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a review of debt to equity ratios in leveraged transactions;
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•
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an assessment of our management and their experience in identifying operating companies;
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general conditions of the securities markets at the time of this offering; and
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•
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other factors as were deemed relevant.
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Although these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities of an
operating company in a particular industry since we have no historical operations or financial results.
There is currently no market for our securities and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities.
There is currently no market for our securities.
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
57
significantly due to one or more potential business combinations and general market or economic conditions. Furthermore, an active trading market for our securities may never develop or, if
developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained.
Because we must furnish our 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 target 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 financing reporting standards as issued by the International Accounting Standards
Board, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial
statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal proxy
rules and complete our initial business combination within the prescribed time frame.
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 Class A common stock held by
non-affiliates
exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether
investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower
than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised
financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with
the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to
non-emerging
growth
companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private
companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an
emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.
58
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, 2018. 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 on us as compared to other public companies because a target company with which we seek to complete our initial business combination may not be in compliance with the
provisions of the
Sarbanes-Oxley
Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the
Sarbanes-Oxley
Act may increase the time and costs necessary to complete any such acquisition.
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
two-year
director terms and the ability of the board of directors to designate the terms of and issue new series of preferred
shares, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
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.
If we effect our initial business combination with a company with operations or opportunities outside of the United States, we would be subject to a variety of additional risks that may negatively
impact our operations.
We may pursue a
business combination with a target business in any geographic location. If we effect our initial business combination with a company with operations or opportunities outside of the United States, 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 difficult
commercial and legal requirements of the overseas market;
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rules and regulations regarding currency redemption;
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•
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complex corporate withholding taxes on individuals;
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•
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laws governing the manner in which future business combinations may be effected;
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•
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tariffs and trade barriers;
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•
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regulations related to customs and import/export matters;
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•
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tax issues, such as tax law changes and variations in tax laws as compared to the United States;
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•
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currency fluctuations and exchange controls;
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59
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•
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challenges in collecting accounts receivable;
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•
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cultural and language differences;
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•
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employment regulations;
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•
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crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars;
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•
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deterioration of political relations with the United States; and
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•
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government appropriation of assets.
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We may not be able to adequately address these additional risks. If we were unable to do so, our operations might suffer, which may
adversely impact our results of operations and financial condition.
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 could resign from their positions as officers of the Company, and the management of the target business at the time of the business
combination will remain in place. Management of the target business may not be familiar with United States securities laws. If new management is unfamiliar with United States securities laws, they may have to expend time and resources becoming
familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.
60
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING
STATEMENTS
Some statements contained in this prospectus are
forward-looking
in nature. Our
forward-looking
statements include, but are
not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future
events or circumstances, including any underlying assumptions, are
forward-looking
statements. The words “anticipate,” “believe,” “continue,” “could,”
“estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and
similar expressions may identify
forward-looking
statements, but the absence of these words does not mean that a statement is not
forward-looking.
Forward-looking
statements in this prospectus may include, for example, statements about:
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our ability to select an appropriate target business or businesses;
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our ability to complete our initial business combination;
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our expectations around the performance of the prospective target business or businesses;
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our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;
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our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our
initial business combination, as a result of which they would then receive expense reimbursements;
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our potential ability to obtain additional financing to complete our initial business combination;
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our pool of prospective target businesses;
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the ability of our officers and directors to generate a number of potential acquisition opportunities;
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changes in global supply and demand and prices for commodities;
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our public securities’ potential liquidity and trading;
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the lack of a market for our securities;
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the use of proceeds not held in the trust account or available to us from interest income on the trust account balance; or
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our financial performance following this offering.
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The
forward-looking
statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have
anticipated. These
forward-looking
statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially
different from those expressed or implied by these
forward-looking
statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.”
Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these
forward-looking
statements. We undertake no obligation to update or revise any
forward-looking
statements, whether as a result of new information, future events or otherwise, except as may be required under applicable
securities laws.
61
USE OF PROCEEDS
We are offering 60,000,000 units at an offering price of
$10.00 per unit. We estimate that the net proceeds of this offering together with the funds we will receive from the sale of the private placement warrants will be used as set forth in the following table.
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Without
Over-Allotment
Option
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Over-Allotment
Option Fully
Exercised
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Gross proceeds
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Gross proceeds from units offered to public(1)
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$
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600,000,000
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$
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690,000,000
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Gross proceeds from private placement warrants offered in the private placement
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14,000,000
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15,800,000
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Total gross proceeds
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$
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614,000,000
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$
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705,800,000
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Offering expenses(2)
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Underwriting commissions (2.0% of gross proceeds from units offered to public, excluding deferred portion)(3)
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$
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12,000,000
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$
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13,800,000
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Legal fees and expenses
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$
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400,000
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$
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400,000
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Accounting fees and expenses
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100,000
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100,000
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SEC Expenses
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79,914
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79,914
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FINRA Expenses
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104,000
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104,000
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Travel and road show
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40,000
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40,000
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Directors and officers insurance
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150,000
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150,000
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NYSE listing and filing fees
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85,000
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85,000
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Miscellaneous expenses
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41,086
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41,086
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Total offering expenses (other than underwriting commissions)
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$
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1,000,000
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$
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1,000,000
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Proceeds after offering expenses
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$
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601,000,000
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$
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691,000,000
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Held in trust account(3)
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$
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600,000,000
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$
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690,000,000
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% of public offering size
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100
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%
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100
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%
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Not held in trust account(2)
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$
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1,000,000
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$
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1,000,000
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The following table shows the
use of the approximately $1,000,000 of net proceeds not held in the trust account.(4)
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Amount
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% of Total
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Legal, accounting, due diligence, travel, and other expenses in connection with any business combination(5)
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$
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170,000
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17.0
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%
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Legal and accounting fees related to regulatory reporting obligations
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150,000
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|
|
15.0
|
%
|
|
Payment for office space, administrative and support services
|
|
|
480,000
|
|
|
|
48.0
|
%
|
|
Reserve for liquidation expenses
|
|
|
100,000
|
|
|
|
10.0
|
%
|
|
NYSE continued listing fees
|
|
|
96,600
|
|
|
|
9.6
|
%
|
|
Other miscellaneous expenses (including franchise taxes net of anticipated interest income)
|
|
|
3,400
|
|
|
|
3.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,000,000
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Includes amounts payable to public stockholders who properly redeem their shares in connection with our successful completion of our initial business combination.
|
|
(2)
|
|
A portion of the offering expenses have been paid from the proceeds of loans from our sponsor of $300,000 as described in this prospectus. These loans
will be repaid upon completion of this offering out of the $2,000,000 of offering proceeds that has been allocated for the payment of offering expenses (other than
|
62
|
|
underwriting commissions) and amounts not to be held in the trust account. In the event that offering expenses are less than as set forth in this table, any such amounts will be used for
post-closing
working capital expenses. In the event that the offering expenses are more than as set forth in this table, we may fund such excess with funds not held in the trust account.
|
|
(3)
|
|
The underwriters have agreed to defer underwriting commissions equal to 3.5% of the gross proceeds of this offering. Upon completion of our initial business
combination, $21,000,000, which constitutes the underwriters’ deferred commissions (or up to $24,150,000 if the underwriters’
over-allotment
option is exercised in full) will be paid to the
underwriters from the funds held in the trust account, and the remaining funds will be released to us and can be used to pay all or a portion of the purchase price of the business or businesses with which our initial business combination occurs or
for general corporate purposes, including payment of principal or interest on indebtedness incurred in connection with our initial business combination, to fund the purchases of other companies or for working capital. The underwriters will not be
entitled to any interest accrued on the deferred underwriting discounts and commissions.
|
|
(4)
|
|
These expenses are estimates only. Our actual expenditures for some or all of these items may differ from the estimates set forth herein. For example, we may incur
greater legal and accounting expenses than our current estimates in connection with negotiating and structuring a business combination based upon the level of complexity of such business combination. In the event we identify an acquisition target in
a specific industry subject to specific regulations, we may incur additional expenses associated with legal due diligence and the engagement of special legal counsel. In addition, our staffing needs may vary and as a result, we may engage a number
of consultants to assist with legal and financial due diligence. We do not anticipate any change in our intended use of proceeds, other than fluctuations among the current categories of allocated expenses, which fluctuations, to the extent they
exceed current estimates for any specific category of expenses, would not be available for our expenses. The amount in the table above does not include interest available to us from the trust account. Based on current interest rates, we would expect
the trust account to generate approximately $1,200,000 of interest annually following the investment of such funds in specified U.S. Government Treasury bills or in specified money market funds; however, we can provide no assurances regarding this
amount. This estimate assumes an interest rate of 0.2% per annum based upon current yields of securities in which the trust account may be invested. 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 $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans by our sponsor, affiliate of our sponsor, or certain of 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.
|
|
(5)
|
|
Includes estimated amounts that may also be used in connection with our initial business combination to fund a “no shop” provision and commitment fees for
financing.
|
The rules of the NYSE
provide that at least 90% of the gross proceeds from this offering and the private placement be deposited in a trust account. Of the net proceeds of this offering and the sale of the private placement warrants, $600,000,000 (or $690,000,000 if the
underwriters’
over-allotment
option is exercised in full), including $21,000,000 (or up to $24,150,000 if the underwriters’
over-allotment
option is exercised
in full) of deferred underwriting commissions, will, upon the consummation of this offering, be placed in a
non-interest
63
bearing
U.S.-based
trust account at J.P. Morgan Chase Bank, N.A., with Continental Stock Transfer & Trust Company acting as trustee. The funds in
the trust account will be invested only in U.S. government treasury bills with a maturity of 180 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. Based on current interest rates, we estimate that the interest earned on the trust account will be approximately $1,200,000 per year, assuming an interest rate of 0.2% per
year, following the investment of such funds in specified U.S. government treasury bills or in specified money market funds. We will not be permitted to withdraw any of the principal or interest held in the trust account except for the withdrawal of
interest to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes, the proceeds from this offering and the sale of the private placement warrants will not be released from the trust account until the
earliest of (i) the completion of our initial business combination, (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify
the substance and timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering and (iii) the redemption of all of our public shares if we
are unable to complete our initial business combination within 24 months from the closing of this offering, subject to applicable law.
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 securities, 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, we may apply the balance of the cash released from the trust account for general corporate purposes, including for maintenance or expansion of operations of the
post-transaction
company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
We believe that amounts not held in trust will be sufficient to pay the costs and expenses to which such
proceeds are allocated. This belief is based on the fact that while we may begin preliminary due diligence of a target business in connection with an indication of interest, we intend to undertake
in-depth
due
diligence, depending on the circumstances of the relevant prospective acquisition, only after we have negotiated and signed a letter of intent or other preliminary agreement that addresses the terms of a business combination. However, if our
estimate of the costs of undertaking
in-depth
due diligence and negotiating a business combination is less than the actual amount necessary to do so, we may be required to raise additional capital, the amount,
availability and cost of which is currently unascertainable. If we are required to seek additional capital, we could seek such additional capital through loans or additional investments from our sponsor, members of our management team or their
affiliates, but such persons are not under any obligation to advance funds to, or invest in, us.
We will enter into an Administrative Services Agreement pursuant to which we will pay an affiliate of our sponsor a total of $20,000 per month for office space, administrative and support services. Upon
completion of our initial business combination or our liquidation, we will cease paying these monthly fees.
Prior to the closing of this offering, our sponsor has loaned us $300,000 to be used for a portion of the expenses related to the
organization of our company and this offering. This loan is
non-interest
bearing, unsecured and due at the earlier of August 31, 2017 or the closing of this offering. This loan will be repaid upon the
closing of this offering out of the $2,000,000 of offering proceeds not held in the trust account.
In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but
are not obligated to, loan us funds as may be required. If we complete 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 converted into warrants of the post business combination entity at a price of $1.50 per warrant at the option of the
64
lender. The warrants would be identical to the private placement warrants issued to our sponsor. 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.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor,
directors, officers, advisors or their affiliates may also purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. However, such persons have no
current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. If they engage in such transactions, they will 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. 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, after payment of the deferred underwriting commissions, to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules) and the agreement for our initial business combination may
require as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights so that we cannot satisfy the net tangible asset requirement or any net worth or cash
requirements, we would not proceed with the redemption of our public shares or the business combination, and instead may search for an alternate business combination.
A public stockholder will be entitled to receive funds from
the trust account only upon the earlier to occur of: (i) the completion of our initial business combination, (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and
restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering and
(iii) the redemption of all of our public shares if we are unable to complete our initial business combination within 24 months from the closing of this offering, subject to applicable law. In no other circumstances will a public stockholder
have any right or interest of any kind to or in the trust account.
Our initial stockholders have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and public shares in
connection with the completion of our initial business combination. In addition, our initial stockholders, officers and directors have agreed to waive their rights to liquidating distributions from the trust account with respect to their founder
shares if we fail to complete our initial business combination within the prescribed time frame. However, if our sponsor or any of our officers, directors or affiliates acquires public shares in or after this offering, they will be entitled to
liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the prescribed time frame.
65
DIVIDEND POLICY
We have not paid any cash dividends on our common stock to
date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general
financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time. In April 2017,
we effected a stock dividend with respect to our Class F common stock of 5,750,000 shares thereof, resulting in our initial stockholders owning an aggregate of 17,250,000 founder shares. If we increase the size of the offering, we will effect a
stock dividend with respect to our Class F common stock immediately prior to the consummation of the offering in such amount as to maintain the ownership of our initial stockholders at 20% of our issued and outstanding shares of our common
stock upon the consummation of this offering. Further, if we incur any indebtedness in connection with our initial business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection
therewith.
66
DILUTION
The difference between the public offering price per share of
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 February 23, 2017, our net tangible book value was
$(10,723), or approximately $(0.001) per share of common stock. After giving effect to the sale of 60,000,000 shares of Class A common stock included in the units we are offering by this prospectus, the sale of the private placement
warrants and the deduction of underwriting commissions and estimated expenses of this offering, our pro forma net tangible book value at February 23, 2017 would have been $5,000,010 or approximately $0.29 per share, representing an
immediate increase in net tangible book value (as decreased by the value of the approximately 57,498,927 shares of Class A common stock that may be redeemed for cash and assuming no exercise of the underwriters’
over-allotment
option) of $9.71 per share to our initial stockholders as of the date of this prospectus and an immediate dilution of $10.00 per share or 100% to our public stockholders not exercising their
redemption rights. Total dilution to public stockholders from this offering will be $9.71 per share. The dilution to new investors if the underwriters exercise the
over-allotment
option in full would be an
immediate dilution of $9.75 per share or 97.5%.
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:
|
|
|
|
|
|
|
|
|
|
|
Public offering price
|
|
|
|
|
|
$
|
10.00
|
|
|
Net tangible book value before this offering
|
|
$
|
(0.001)
|
|
|
|
|
|
|
Increase attributable to public stockholders
|
|
|
9.71
|
|
|
|
|
|
|
Decrease attributable to public shares subject to redemption
|
|
|
(10.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma net tangible book value after this offering and the sale of the private placement warrants
|
|
|
|
|
|
$
|
(0.29)
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilution to public stockholders
|
|
|
|
|
|
$
|
9.71
|
|
|
|
|
|
|
|
|
|
|
|
For purposes of presentation,
we have reduced our pro forma net tangible book value after this offering (assuming no exercise of the underwriters’
over-allotment
option) by $574,989,267 because holders of up to approximately 95.8% of
our public shares may redeem their shares for a pro rata share of the aggregate amount then on deposit in the trust account at a per share redemption price equal to the amount in the trust account as set forth in our tender offer or proxy materials
(initially anticipated to be the aggregate amount held in trust two days prior to the commencement of our tender offer or stockholders meeting, including interest earned on the funds held in the trust account and not previously released to us to
fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes, divided by the number of shares of Class A common stock sold in this offering).
67
The following table sets forth information with respect to our initial stockholders and the
public stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Purchased
|
|
|
Total Consideration
|
|
|
Average
Price
Per
Share
|
|
|
|
|
Number
|
|
|
Percentage
|
|
|
Amount
|
|
|
Percentage
|
|
|
|
Initial Stockholders(1)(2)
|
|
|
15,000,000
|
|
|
|
20.00
|
%
|
|
$
|
25,000
|
|
|
|
0.001
|
%
|
|
$
|
0.0017
|
|
|
Public Stockholders
|
|
|
60,000,000
|
|
|
|
80.00
|
%
|
|
|
600,000,000
|
|
|
|
99.99
|
%
|
|
$
|
10.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000,000
|
|
|
|
100.00
|
%
|
|
$
|
600,025,000
|
|
|
|
100.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Assumes the full forfeiture of 2,250,000 shares that are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment
option is exercised.
|
|
(2)
|
|
Assumes conversion of the shares of Class F common stock into shares of Class A common stock on a
one-for-one
basis. The dilution to public stockholders would increase to the extent that the anti-dilution provisions of the shares of Class F common stock result in the issuance of shares of
Class A common stock on a greater than
one-to-one
basis upon such conversion.
|
The pro forma net tangible book value per share after the
offering is calculated as follows:
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
Net tangible book value before this offering
|
|
$
|
(10,723
|
)
|
|
Proceeds from this offering and sale of the private placement warrants, net of expenses
|
|
|
601,000,000
|
|
|
Offering costs excluded from net tangible book value before this offering
|
|
|
0
|
|
|
Less: deferred underwriters’ commissions payable
|
|
|
(21,000,000
|
)
|
|
Less: amount of Class A common stock subject to redemption to maintain net tangible assets
of $5,000,001
|
|
|
574,989,267
|
|
|
|
|
|
|
|
|
|
|
$
|
5,000,010
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
Shares of Class F common stock outstanding prior to this offering
|
|
|
17,250,000
|
|
|
Shares of Class F common stock forfeited if
over-allotment
is not
exercised
|
|
|
(2,250,000
|
)
|
|
Shares of Class A common stock included in the units offered
|
|
|
60,000,000
|
|
|
Less: shares of Class A common stock subject to redemption to maintain net tangible assets of $5,000,001
|
|
|
(57,498,927)
|
|
|
|
|
|
|
|
|
|
|
|
17,501,073
|
|
|
|
|
|
|
|
68
CAPITALIZATION
The following table sets forth our capitalization at
February 23, 2017, and as adjusted to give effect to the sale of our 60,000,000 units in this offering for $600,000,000 (or $10.00 per unit) and the sale of 9,333,333 private placement warrants for approximately $14,000,000 (or $1.50 per
warrant) and the application of the estimated net proceeds derived from the sale of such securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
February 23, 2017
|
|
|
|
|
Actual
|
|
|
As Adjusted(1)
|
|
|
Deferred underwriting commissions
|
|
$
|
—
|
|
|
$
|
21,000,000
|
|
|
Notes payable(2)
|
|
|
300,000
|
|
|
|
—
|
|
|
Class A common stock, subject to redemption(3)
|
|
|
—
|
|
|
|
574,989,267
|
|
|
Stockholders’ equity (deficit):
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value, 1,000,000 shares authorized; no shares issued or outstanding (actual and as
adjusted)
|
|
|
—
|
|
|
|
—
|
|
|
Common stock
|
|
|
|
|
|
|
|
|
|
Class A common stock, $0.0001 par value, 200,000,000 shares authorized (actual and as adjusted); no shares issued or
outstanding (actual); 2,401,073 shares issued and outstanding (excluding 57,598,927 shares subject to redemption) (as adjusted)
|
|
|
—
|
|
|
|
240
|
|
|
Class F common stock, $0.0001 par value, 20,000,000 shares authorized (actual and as adjusted); 11,500,000 shares issued and
outstanding (actual); 15,000,000 shares issued and outstanding (as adjusted)(4)
|
|
|
1,150
|
|
|
|
1,500
|
|
|
Additional
paid-in
capital(5)
|
|
|
23,850
|
|
|
|
5,033,993
|
|
|
Accumulated deficit
|
|
|
(35,723
|
)
|
|
|
(35,723
|
)
|
|
Total stockholders’ equity (deficit)
|
|
|
(10,723
|
)
|
|
|
5,000,010
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capitalization
|
|
$
|
412,522
|
|
|
|
600,989,277
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Assumes the full forfeiture of 2,250,000 shares that are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment
option is exercised. The proceeds of the sale of such shares will not be deposited into the trust account, the shares will not be eligible for redemption from the trust account nor will they be eligible to vote upon the initial business combination.
|
|
(2)
|
|
Our sponsor has loaned us $300,000 under an unsecured promissory note to be used for a portion of the expenses related to the organization of our company and this
offering.
|
|
(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 as of two business days prior to the consummation of the initial business combination including interest earned on the funds held in the trust account and not
previously released to us to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes, subject to the limitations described herein whereby our net tangible assets will be maintained at a minimum of
$5,000,001 and any limitations (including, but not limited to, cash requirements) created by the terms of the proposed business combination.
|
|
(4)
|
|
Actual share amount is prior to (i) any stock dividend, including that, in April 2017, we effected a stock dividend with respect to our Class F common stock
of 5,750,000 shares thereof, resulting in our initial stockholders holding an aggregate of 17,250,000 founder shares, at $0.0001 par value per share, and (ii) forfeiture of founder shares by our sponsor; and as adjusted share amount assumes no
exercise of the underwriters’
over-allotment
option.
|
|
(5)
|
|
The “as adjusted” additional paid-in capital is equal to the “as adjusted” stockholder’s equity of $5,000,010 minus the par value of the Class
A and Class F common stock plus the accumulated deficit of ($35,723).
|
69
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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. We have not identified any business combination target and we have not, nor has anyone on our behalf,
initiated any substantive discussions, directly or indirectly, with respect to identifying any business combination target. We intend to consummate our initial business combination using cash from the proceeds of this offering and the private
placement of the private placement warrants, our capital stock, debt or a combination of cash, stock and debt.
The issuance of additional shares of our stock in a business combination:
|
|
•
|
|
may significantly dilute the equity interest of investors in this offering, which dilution would increase if the
anti-dilution
provisions in the Class F common stock resulted in the issuance of Class A shares on a greater than
one-to-one
basis upon conversion of the Class F common stock;
|
|
|
•
|
|
may subordinate the rights of holders of our common stock if preferred stock is issued with rights senior to those afforded our common stock;
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could cause a change of control if a substantial number of shares of our common stock is issued, which may affect, among other things, our ability to
use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
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may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain
control of us; and
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may adversely affect prevailing market prices for our Class A common stock and/or warrants.
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Similarly, if we issue debt securities, it could result in:
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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 security is payable on demand;
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our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while
the debt security 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;
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of
our strategy; and
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other purposes and other disadvantages compared to our competitors who have less debt.
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At February 23, 2017, we held cash of $325,000 and deferred offering costs of $87,522.
Further, we expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful.
Results of Operations and Known Trends or Future Events
We have neither engaged in any operations nor generated any
revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for this offering. Following this offering, we will not generate any operating revenues until after completion of our initial
business combination. We will generate
non-operating
income in the form of interest income on cash and funds invested in specified U.S. government treasury bills or in specified money market funds after this
offering. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements. After this offering, we expect to incur increased expenses as a
result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially after the closing of this offering.
Liquidity and Capital Resources
Our liquidity needs have been satisfied prior to completion
of this offering through receipt of $25,000 from the sale of the founder shares to our sponsor and $300,000 in loans from 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 $1,000,000 and underwriting commissions of $12,000,000 ($13,800,000 if the underwriters’
over-allotment
option is exercised in full) (excluding
deferred underwriting commissions of $21,000,000 (or up to $24,150,000 if the underwriters’
over-allotment
option is exercised in full)), and (ii) the sale of the private placement warrants for a
purchase price of approximately $14,000,000 (or approximately $15,800,000 if the underwriters’
over-allotment
option is exercised in full), will be $601,000,000 (or $691,000,000 if the underwriters’
over-allotment
option is exercised in full). Of this amount, $600,000,000 or $690,000,000 if the underwriters’ over-allotment option is exercised in full, including $21,000,000 (or up to $24,150,000 if the
underwriters’ over-allotment option is exercised in full) in deferred underwriting commissions) will be deposited into a
non-interest
bearing trust account. The funds in the trust account will be invested
only in specified U.S. government treasury bills or in specified money market funds. The remaining $1,000,000 will not be held in the trust account. In the event that our offering expenses exceed our estimate of $1,000,000, we may fund such excess
with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate
of $1,000,000 the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.
We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust
account (excluding deferred underwriting commissions) to complete our initial business combination. We may withdraw interest to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes. We estimate our
annual franchise tax obligations, based on the number of shares of our common stock authorized and outstanding after the completion of this offering, to be $180,000, which is the maximum amount of annual franchise taxes payable by us as a Delaware
corporation per annum. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. To the extent that our capital stock or debt is used, in whole or in part, as
consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our
growth strategies.
Prior to the completion of our
initial business combination, we will have available to us $1,000,000 of proceeds held outside the trust account. We will use these funds primarily to identify and evaluate target businesses, perform business due diligence on prospective target
businesses, travel to and from the offices, plants
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or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate
and complete a business combination and to pay taxes.
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 $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans 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.
We expect our primary liquidity requirements during that period to include approximately $170,000 for legal, accounting, due diligence, travel and other expenses associated with structuring, negotiating
and documenting successful business combinations; $150,000 for legal and accounting fees related to regulatory reporting requirements; $96,600 for NYSE and other regulatory fees; $480,000 for office space, administrative and support services;
$100,000 as a reserve for liquidation expenses and approximately $3,400 for general working capital that will be used for miscellaneous expenses (including franchise taxes).
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 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.
We do not believe we will need to raise additional funds
following this offering in order to meet the expenditures required for operating our business. However, if our estimates of the costs of identifying a target business, undertaking
in-depth
due diligence and
negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional
financing either to complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon completion of our initial business combination, in which case we may issue additional securities or
incur debt in connection with such business combination.
Controls and Procedures
We are not currently required to maintain an effective system of internal controls as defined by Section 404 of the
Sarbanes-Oxley
Act. We will be required to comply with the internal control requirements of the
Sarbanes-Oxley
Act for the fiscal year ending December 31, 2018. 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
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as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth
companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirement.
Prior to the closing of this offering, we have not completed an assessment, nor have our auditors tested, our systems of internal
controls. We expect to assess the internal controls of our target business or businesses prior to the completion of our initial business combination and, if necessary, to implement and test additional controls as we may determine are necessary in
order to state that we maintain an effective system of internal controls. A target business may not be in compliance with the provisions of the
Sarbanes-Oxley
Act regarding the adequacy of internal controls.
Many small and
mid-sized
target businesses we may consider for our initial business combination may have internal controls that need improvement in areas such as:
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staffing for financial, accounting and external reporting areas, including segregation of duties;
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reconciliation of accounts;
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proper recording of expenses and liabilities in the period to which they relate;
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evidence of internal review and approval of accounting transactions;
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documentation of processes, assumptions and conclusions underlying significant estimates; and
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documentation of accounting policies and procedures.
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Because it will take time, management involvement and perhaps
outside resources to determine what internal control improvements are necessary for us to meet regulatory requirements and market expectations for our operation of a target business, we may incur significant expenses in meeting our public reporting
responsibilities, particularly in the areas of designing, enhancing, or remediating internal and disclosure controls. Doing so effectively may also take longer than we expect, thus increasing our exposure to financial fraud or erroneous financing
reporting.
Once our management’s report on
internal controls is complete, we will retain our independent auditors to audit and render an opinion on such report when required by Section 404 of the Sarbanes-Oxley Act. The independent auditors may identify additional issues concerning a
target business’s internal controls while performing their audit of internal control over financial reporting.
Quantitative and Qualitative Disclosures about Market Risk
The net proceeds of this offering and the sale of the private placement warrants held in the trust account will be invested in U.S.
government treasury bills with a maturity of 180 days or less or in money market funds 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.
Related Party Transactions
In February 2017, our sponsor purchased 11,500,000 founder
shares for an aggregate purchase price of $25,000, or approximately $0.002 per share. The purchase price of the founder shares was determined by dividing the amount of cash contributed to the company by the number of founder shares issued. In April
2017, we effected a stock dividend with respect to our Class F common stock of 5,750,000 shares thereof, resulting in our initial stockholders holding an aggregate of 17,250,000 founder shares. In
2017, our sponsor transferred 40,000 founder shares to each of our independent director nominees at their original per
share purchase price. As such, our initial stockholders will collectively own 20% of our issued and outstanding shares after this offering (assuming they do not purchase any units in this offering). If we increase or decrease the size
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of the offering, we will effect a stock dividend or share contribution back to capital, as applicable, with respect to our Class F common stock immediately prior to the consummation of the
offering in such amount as to maintain the ownership of founder shares our initial stockholders at 20% of our issued and outstanding shares of our common stock upon the consummation of this offering. Our sponsor does not intend to purchase any units
in this offering.
We will enter into an
Administrative Services Agreement pursuant to which we will also pay an affiliate of our sponsor a total of $20,000 per month for office space, administrative and support services. Upon completion of our initial business combination or our
liquidation, we will cease paying these monthly fees.
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.
As of the date of this prospectus, our sponsor has loaned us an aggregate of $300,000 to be used for a portion of the expenses related to
the organization of our company and this offering. These loans are
non-interest
bearing, unsecured and are due at the earlier of August 31, 2017 or the closing of this offering. These loans will be repaid
upon the closing of this offering out of the $2,000,000 of offering proceeds not held in the trust account.
In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an
affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete 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 converted into warrants of the post-business combination entity, at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. 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 9,333,333 (or 10,533,333 if the underwriters’
over-allotment
option is exercised in full) private placement warrants at a price of $1.50 per warrant (approximately $14,000,000 in the aggregate or approximately $15,800,000 in the aggregate if the
underwriters’
over-allotment
option is exercised in full) in a private placement that will occur simultaneously with the closing of this offering. Each private placement warrant entitles the holder to
purchase one share of Class A common stock at $11.50 per share, subject to adjustment as provided herein. Our sponsor will be permitted to transfer the private placement warrants held by it to certain permitted transferees, including our
officers and directors and other persons or entities affiliated with or related to them, but the transferees receiving such securities will be subject to the same agreements with respect to such securities as our sponsor. Otherwise, these warrants
will not, subject to certain limited exceptions, be transferable or salable until 30 days after the completion of our initial business combination. The private placement warrants will not be redeemable by us so long as they are held by our
sponsor or its permitted transferees except for redemption by the Company for Class A common stock. The private placement warrants may also be exercised by the sponsor or its permitted transferees for cash or on a cashless basis. 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.
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Pursuant to a registration rights agreement we will enter into with our initial stockholders
and initial purchasers of the private placement warrants on or prior to the closing of this offering, we may be required to register certain securities for sale under the Securities Act. These holders, and holders of warrants issued upon conversion
of working capital loans, if any, are entitled under the registration rights agreement to make up to three demands that we register certain of our securities held by them for sale under the Securities Act and to have the securities covered thereby
registered for resale pursuant to Rule 415 under the Securities Act. In addition, these holders have the right to include their securities in other registration statements filed by us. However, the registration rights agreement provides that we
will not permit any registration statement filed under the Securities Act to become effective until the securities covered thereby are released from their
lock-up
restrictions, as described herein. We will
bear the costs and expenses of filing any such registration statements. See “Certain Relationships and Related Party Transactions.”
Off-Balance
Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results
As of February 23, 2017, 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.
JOBS Act
On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as
an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of
new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for
non-emerging
growth
companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the
benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company”, we choose to rely on such exemptions we may not be
required to, among other things, (i) provide an auditor’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 auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain
executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years
following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.
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PROPOSED BUSINESS
Overview
We are a newly organized blank check company incorporated on February 14, 2017 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 intend to focus our search for a target
business in energy or energy-related industries. Upon consummation of this offering, our units are expected to be listed on the NYSE. We have not identified any business combination target and we have not, nor has anyone on our behalf,
initiated any substantive discussions, directly or indirectly, with respect to identifying any business combination target.
We intend to capitalize on the ability of TPG and our management team to identify, acquire and operate a business in energy or energy
related industries that is not operating at its full potential and could benefit from a
hands-on
lead stockholder who can identify and implement improvements. Even good companies can often under-perform their
potential due to underinvestment, inefficient capital allocation, over-levered capital structures, excessive cost structures, incomplete management teams and/or business strategies that lack focus. Our management team has extensive experience in
identifying and executing such full potential acquisitions and has done so successfully across the upstream, midstream, services, refining and chemicals sectors. In addition, our management and TPG have significant
hands-on
experience working with private companies to prepare them to successfully execute an initial public offering and serving as active owners/directors by working closely with these companies across
various sectors to continue their transformations and help create value in the public markets.
We believe that our management team is well positioned to identify attractive risk-adjusted returns in the marketplace and that our contacts and transaction sources, ranging from industry executives,
private owners, private equity funds, and investment bankers in addition to the extensive global industry and geographical reach of our affiliates will enable us to pursue a broad range of opportunities. Our management believes that its ability to
identify and implement value creation initiatives has been an essential driver of past performance and will remain central to its differentiated acquisition strategy.
Our management team is led by Stephen Chazen, our President
and Chief Executive Officer, who has more than 35 years of experience in energy and energy related industries. TPG has known Mr. Chazen for more than 10 years. Mr. Chazen began his career at Occidental in 1994 and was named Chief Financial
Officer in 1999, a role in which he served until 2010. He was then named Chief Operating Officer in 2010 before being appointed Chief Executive Officer in May 2011. Mr. Chazen retired from Occidental in April 2016. Since his retirement from
Occidental, TPG has developed an active dialogue with Mr. Chazen regarding partnering to acquire and operate large scale energy and energy related assets.
TPG believes Mr. Chazen demonstrated an ability to consistently create value for Occidental stockholders through successful
deployment of growth capital as well as through acquisition and subsequent optimization of energy and energy related assets. Under Mr. Chazen’s leadership, Occidental became the fourth-largest U.S. oil and gas company, based on 2015
year-end
market capitalization. Occidental’s growth was driven in large part by its asset base in the Permian Basin, an area in which Occidental was the largest operator and producer of oil in 2015. During his
time at Occidental, Mr. Chazen oversaw nearly $40 billion of energy-related acquisitions and more than $20 billion of energy-related divestiture activity. From the time Mr. Chazen was appointed Chief Financial Officer until the time he retired as
Chief Executive Officer, Occidental returned more than $17 billion to Occidental shareholders in the form of dividends between 2000 and his retirement in April 2016, demonstrating his focus on shareholder value creation. Importantly,
Occidental’s corporate credit ratings improved during this same time period. Mr. Chazen has been recognized repeatedly by the industry for his performance. In 2016, Mr. Chazen received the American Petroleum Institute Gold Medal for
Distinguished Achievement. In addition, Mr. Chazen has been ranked on numerous occasions as a top oil and gas executive by Institutional Investor Magazine.
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Our management team’s objective is to generate attractive returns and create value for
our stockholders by applying our disciplined strategy of underwriting intrinsic worth and affecting changes after making an acquisition to unlock value. While our approach is value-oriented, and focusing on energy and energy related industries,
an area in which we have differentiated insights, our management team has also driven change through a comprehensive value creation plan framework. We favor opportunities with certain elements of downside protection, for example, opportunities where
we believe we can acquire and hedge assets with existing oil and gas production to reduce commodity risk, while improving the risk-reward by driving change and accelerating a target company’s growth initiatives. Our management team has
successfully applied this approach globally and has deployed capital successfully in a wide range of energy market and capital market cycles.
As a result of TPG’s significant ownership interest in our sponsor, TPGE is an affiliate of TPG. TPG is a leading global alternative
investment firm with over $74 billion of assets under management as of September 30, 2016. TPG was founded in 1992 by David Bonderman and James Coulter. In 2015, Jon Winkelried joined TPG as
Co-Chief
Executive Officer alongside Mr. Coulter
(Co-Chief
Executive Officer) and Mr. Bonderman (Chairman). TPG maintains offices in San Francisco, Fort Worth, Houston, London, New York, Hong Kong and other
major cities throughout the world. Mr. Bonderman will serve as a
non-executive
member of our board of directors following the completion of this offering.
TPG’s investment activities include discrete investment
platforms focused on a range of alternative investment products and a series of funds across the private equity spectrum, including (i) TPG Capital, TPG’s private equity business for equity investments over $100 million, which focuses
on global investments across all major industry sectors predominantly in North America and Europe; (ii) TPG Asia, TPG’s Asian-focused private equity business; (iii) TPG Growth, which invests in small- and middle-market growth equity
and corporate opportunities in all major industry sectors in North America and in other developed and emerging markets; (iv) TPG Biotechnology Partners, which invests in early- and late-stage venture capital opportunities in the biotechnology
and related life sciences industries; and (v) TPG ART, which invests in alternative and renewable technologies. Beyond its private equity platform, TPG has opportunistically established (vi) TPG Special Situations Partners, which is the
special situations and credit platform of TPG; (vii) TPG Real Estate, which is the real estate platform of TPG; (viii) TPG Public Equity Partners, which invests in the public equity market; and (ix) TPG Strategic Infrastructure, which
invests in large scale infrastructure opportunities in growth markets. TPG has over 1,000 employees and advisors, including 527 investment and operations professionals.
We believe that TPGE will benefit from TPG’s prior
experience in the public capital markets and with energy and energy related investing. In addition to successfully taking more than 50 of its portfolio companies public, TPG has experience with the sponsorship of other blank check companies and has
a dedicated effort, TPG Permanent Capital Solutions, to help companies access the public equity markets with access to TPG’s
hands-on
private equity skill set. TPG founded Pace-I in 2015, a blank check
company formed for substantially similar purposes as our company, with the vision of helping a promising company access and grow in the public markets.
Pace-I
completed its initial public offering in September
2015, in which it sold 45,000,000 units, each consisting of one Class A ordinary share of
Pace-I
and one warrant to purchase
one-third
of one Class A ordinary
share of
Pace-I,
for an offering price of $10.00 per unit, generating aggregate proceeds of $450,000,000. In December 2016,
Pace-I
entered into a definitive agreement to
acquire Playa.
Pace-I
contributed approximately $500 million to Playa (consisting of $450 million in proceeds from the initial public offering, plus approximately $50 million in proceeds from an
additional private placement). Playa is an owner, operator and developer of
all-inclusive
resorts in beachfront locations in Mexico and the Caribbean. Playa owns a portfolio consisting of 13 resorts located in
Mexico, the Dominican Republic, and Jamaica. On March 11, 2017, Pace-I consummated the business combination with Playa. Playa’s ordinary shares are traded on the NASDAQ capital market under the symbol “PLYA,” and its warrants are
traded under the symbol “PLYAW”.
TPG has historically considered energy to be one of the five core sectors for its private equity investing. Michael MacDougall,
who has helped lead the firm’s global energy investing effort since 2002, will be a member of our board of directors. TPG has successfully taken several of its energy and energy related portfolio
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companies public, including Kraton Performance Polymers and Northern Tier Energy. Additionally, TPG has successfully provided growth capital for publicly traded energy and energy related
companies, including Copano Energy and EnLink Midstream Partners. TPG also has substantial experience acquiring large scale energy and energy related divisions and assets from large publicly traded energy companies, including CenterPoint Energy,
Marathon Oil and Encana.
With respect to the
foregoing examples, past performance by TPG and our management team, including Mr. Chazen’s past performance, particularly at Occidental, is not a guarantee either (i) of success with respect to any business combination we may
consummate or (ii) that we will be able to locate a suitable candidate for our initial business combination. You should not rely on the historical record of TPG’s or our management team’s, including Mr. Chazen’s, performance as
indicative of our future performance. An investment in us is not an investment in TPG.
Certain of our officers and directors have fiduciary and contractual duties to TPG and to certain companies in which TPG has invested. As a result, certain of our officers and
directors will have a duty to offer acquisition opportunities to certain TPG funds before TPGE can pursue such opportunities. However, we do not expect these duties to present a significant conflict of interest with our search for an initial
business combination. We believe this conflict of interest will be naturally mitigated, to some extent, by the differing nature of the acquisition targets TPG typically considers most attractive for TPG funds and the types of acquisitions we expect
TPGE to find most attractive. TPG’s traditional private equity activities typically involve investing in private companies, and while TPG will often take companies public, it typically invests in those entities several years prior to an initial
public offering, not at the time of such offering. As a result, we may become aware of a potential transaction that is not a fit for the traditional private equity activities of TPG but that is an attractive opportunity for TPGE. In addition, our
officers and directors are not required to commit any specified amount of time to our affairs, and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential
business combinations and monitoring the related due diligence. Moreover, certain of our officers and directors have time and attention requirements for private investment funds of which affiliates of TPG are the investment managers.
In addition, TPG or its affiliates 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 (other than Mr. Chazen) 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 expect that any such other blank check company would be focused on the energy industry and,
as a result, we do not believe that any potential conflicts would materially affect our ability to complete our initial business combination. Mr. Chazen has agreed, pursuant to a letter agreement with us, not to participate in the formation of,
or become an officer or director of, another blank check company until we have entered into a definitive agreement regarding our initial business combination or we have failed to complete our initial business combination within 24 months after
the closing of this offering. Mr. Chazen has not been involved with any blank check companies in the past.
Business Strategy
Our acquisition and value creation strategy is to identify, acquire and, after our initial business combination, to build a company in energy or energy related industries in the United States, although we
may seek to complete a business combination in any industry or location. We intend to seek a company that complements the experience and expertise of Mr. Chazen and is a business our skills can help improve. Consistent with
Mr. Chazen’s prior experience at Occidental, 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 such a business over time
through a combination of organic capital projects and acquisitions and with a focus on consistently achieving attractive returns on capital. Importantly, we would look to achieve conservative balance sheet metrics over time given the likely
commodity exposure of the business.
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The energy markets globally, and in the United
States specifically, have faced an oversupplied market with respect to oil and gas for more than two and a half years, since the middle of 2014. This oversupply dynamic, until recently, led to the longest dislocation seen in
the price of oil in more than 20 years. Declines in oil and gas commodity prices disrupted access to capital in the public equity markets and negatively impacted valuations of many companies across the energy value chain. Our management
team and TPG have substantial experience investing and acquiring assets over multiple cycles in the energy markets.
Our selection process will leverage our team’s network of industry, private equity sponsor and lending community relationships as
well as relationships with management teams of public and private companies, investment bankers, restructuring advisers, attorneys and accountants, which we believe should provide us with a number of business combination opportunities. We intend to
deploy a
pro-active,
thematic sourcing strategy and to focus on companies where we believe the combination of our operating experience, relationships, capital and capital markets expertise can be catalysts to
transform companies and can help accelerate the target business’ growth and performance.
In addition, we intend to utilize the networks and industry experience of our management team and our board of directors in seeking an initial business combination. Over the course of their careers, the
members of our management team and board of directors have developed a broad network of contacts and corporate relationships that we believe will serve as a useful source of acquisition opportunities. This group has experience in:
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operating companies, setting and changing strategies, and identifying, mentoring and recruiting world-class talent;
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developing and growing companies, both organically and inorganically;
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sourcing, structuring, acquiring, and selling businesses;
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accessing the capital markets, including financing businesses and helping companies transition to public ownership;
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fostering relationships with sellers, capital providers and target management teams; and
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executing transactions in multiple geographies and under varying economic and financial market conditions.
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We plan to utilize the industry network and experience of
Mr. Chazen and TPG in seeking an initial business combination and employing our acquisition strategy. Over the course of his career, Mr. Chazen has developed deep, long-standing relationships in the energy sector. His
extensive experience in the acquisition and divestiture market has led to frequent interactions with both buyers and sellers of energy and energy related assets. In addition, we intend to leverage TPG’s considerable experience investing in
energy and energy related industries. We believe the relationships of Mr. Chazen and TPG in the energy and energy related industries have the potential to lead to the creation of, and proprietary access to, potential business combinations. We
anticipate that target business candidates may 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. Upon completion of this offering, members of our management team will communicate with their network of relationships to articulate our acquisition themes, including the parameters of our search for a target company, and
will begin the disciplined process of pursuing and reviewing promising leads.
Acquisition Criteria
Consistent with our strategy, we have identified the following general criteria and guidelines that 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 business that does not meet these criteria and guidelines. We intend to seek to acquire companies that we believe:
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can utilize the extensive networks we have built in the energy industry.
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have fundamentally sound assets that are underperforming their potential.
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are at an inflection point, such as those requiring additional management expertise or where we believe we can drive improved financial
performance and where an acquisition may help facilitate growth. We believe that we are well-positioned to evaluate and improve a company’s growth prospects and help them realize the opportunities to create stockholder value following the
consummation of a business combination.
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have significant embedded and/or underexploited expansion opportunities. One of the key elements of TPG’s typical value creation approach is
to acquire target companies to accelerate their growth. This can be accomplished through a combination of accelerating organic growth and finding attractive
add-on
acquisition targets. Our management team has
significant experience in identifying such targets and helping target management assess the strategic and financial fit.
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exhibit unrecognized value or other characteristics that we believe have been misevaluated by the marketplace based on our company specific
analysis and due diligence review. For a potential target company, this process will include, among other things, a review and analysis of the company’s capital structure, quality of earnings, potential for operational improvements, corporate
governance, customers, material contracts, and industry background and trends. We intend to leverage the operational experience and disciplined investment approach of our team and those of TPG to identify opportunities to unlock value that our
experience in complex situations allows us to pursue.
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will offer attractive risk-adjusted equity returns for our stockholders. We will seek to acquire a target on terms and in a manner that leverages
our experience in transformational investing. Financial returns will be evaluated based on (i) the potential for organic growth in cash flows, (ii) the ability to achieve cost savings, (iii) the ability to accelerate growth, including
through the opportunity for
follow-on
acquisitions and (iv) the prospects for creating value through other value creation initiatives. Potential upside from growth in the target business’
earnings and an improved capital structure will be weighed against any identified downside risks.
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will have leverage levels that we believe are appropriate for the public equity markets given the underlying commodity price exposure of the assets
resulting from the business combination.
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have been underinvested in by current owners due to, among other causes, liquidity limitations due to the past commodity price environment, the capital
intensity of other operations and balance sheet considerations.
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These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as
well as other considerations, factors and criteria that our management may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will
disclose that the target business does not meet the above criteria in our stockholder 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 will 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 which will be made available to us. We will also utilize our operational and capital planning experience.
We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or
directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors,
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will obtain an opinion from an independent investment banking firm that is a member of FINRA, or from an independent accounting firm, that our initial business combination is fair to our company
from a financial point of view.
Members of our
management team may directly or indirectly own our common stock and/or private placement warrants following this offering, and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate
business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such
officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.
Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations
to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable
for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity. We expect that if an
opportunity is presented to one of our officers or directors in his or her capacity as an officer or director of one of those other entities, such opportunity would be presented to such other entity and not to us. For more information on the
entities to which our officers and directors currently have fiduciary or contractual obligations, please refer to “Management—Conflicts of Interest.” We do not believe, however, that the fiduciary duties or contractual obligations of
our officers or directors will materially affect our ability to complete our initial business combination. 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.
Initial Business
Combination
The NYSE rules require that our
initial business combination must occur with one or more target businesses that together have fair market value equal to 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 amount of any deferred underwriting discount held in trust) at the time of the agreement to enter into the initial business combination. If our board of directors is not able to independently determine the fair market value of the
target business or businesses, 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. We do not intend to purchase
multiple businesses in unrelated industries in conjunction with our initial business combination.
We anticipate structuring our initial business combination so that the post transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests or assets of
the target business or businesses. We may, however, structure our initial business combination such that the post 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. 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 acquires an interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the “Investment Company Act.” Even if the post 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 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
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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 less than 100% of
the equity interests or assets of a target business or businesses are owned or acquired by the post transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net
assets test. If our initial business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as the initial
business combination for purposes of a tender offer or for seeking stockholder approval, as applicable.
Prior to the date of this prospectus, we will file a Registration Statement on Form
8-A
with the
SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our
reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
Sourcing of Potential Business Combination Targets
We believe our management team’s significant operating and transaction experience and relationships with companies will provide us
with a substantial number of potential business combination targets. Over the course of their careers, the members of our management team have developed a broad network of contacts and corporate relationships around the world. This network has grown
through the activities of our management team sourcing, acquiring, financing and selling businesses, our management team’s relationships with sellers, financing sources and target management teams and the experience of our management team in
executing transactions under varying economic and financial market conditions.
In addition, members of our management team have developed contacts from serving on the boards of directors of several companies, including Jonah Energy Holdings, LLC, Harvester Holdings, LLC and Valerus
Compression Services, L.P. (doing business as Axip Energy Services, L.P.).
While at TPG, this network provided our management team with a robust and consistent flow of acquisition opportunities which were proprietary or where a limited group of investors were invited to
participate in the sale process. We believe that the network of contacts and relationships of our management team will provide us with important sources of acquisition opportunities. In addition, we anticipate that target business candidates will be
brought to our attention from various unaffiliated sources, including investment market participants, private equity funds and large business enterprises seeking to divest
non-core
assets or divisions.
We are not prohibited from pursuing an initial
business combination with a company that is affiliated with our sponsor, officers or directors, or making the acquisition through a joint venture or other form of shared ownership with our sponsor, officers or directors. In the event we seek to
complete an initial business combination with a target that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm that is a member of
FINRA, or from an independent accounting firm, that 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 “Management—Conflicts of
Interest,” if any of our officers 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. All of our officers currently have certain relevant fiduciary duties or
contractual obligations that may take priority over their duties to us.
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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. In this situation, the owners of the target
business would exchange their shares of stock in the target business for shares of our stock or for a combination of shares of our stock and cash, allowing us to tailor the consideration to the specific needs of the sellers. Although there are
various costs and obligations associated with being a public company, we believe target businesses will find this method a more certain and cost effective method to becoming a public company than the typical initial public offering. In a typical
initial public offering, there are additional expenses incurred in marketing, road show and public reporting efforts that may not be present to the same extent in connection with a business combination with us.
Furthermore, once a proposed business combination is
completed, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could delay or prevent
the offering from occurring. Once public, we believe the target business would then have greater access to capital and an additional means of providing management incentives consistent with stockholders’ interests. It can offer further benefits
by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.
We are an “emerging growth company,” as defined in the JOBS Act. We will remain an emerging growth company until the earlier of
(1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.0 billion, 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 (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 $579,000,000 assuming no redemptions and after payment of
$21,000,000 of deferred underwriting fees (or $665,850,000 assuming no redemptions and after payment of up to $24,150,000 of deferred underwriting fees if the underwriters’ over-allotment option is exercised in full), we offer a target business
a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our
initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business
to fit its needs and desires. However, we have not taken any steps to secure third party financing and there can be no assurance it will be available to us.
Effecting our Initial Business Combination
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 of the private placement warrants, our capital stock, debt or a combination of these as the consideration to be paid in our
initial business combination. We may seek to complete our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent
in such companies and businesses.
If our initial
business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business
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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 currently do not have any specific business combination under consideration. Our officers and directors have neither individually identified or considered a target business for our initial business
combination nor have they had any discussions regarding possible target businesses amongst themselves or with our underwriters or other advisors. All of the members of our management team are employed by TPG. TPG is continuously made aware of
potential business opportunities, one or more of which we may desire to pursue for a business combination, but we have not (nor has anyone on our behalf) contacted any prospective target business or had any discussions, formal or otherwise, with
respect to a business combination transaction. We have not (nor have any of our agents or affiliates) been approached by any candidates (or representative of any candidates) with respect to a possible acquisition transaction with us and we will not
consider a business combination with any company that has already been identified by TPG as a suitable acquisition candidate for it. Additionally, we have not, nor has anyone on our behalf, taken any measure, directly or indirectly, to identify or
locate any suitable acquisition candidate for us, nor have we engaged or retained any agent or other representative to identify or locate any such acquisition candidate.
We may seek to raise additional funds through a private
offering of debt or equity securities in connection with the completion of our initial business combination, and we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the trust
account. 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 law, we would seek stockholder approval of such financing. There are no prohibitions on our ability to raise funds privately or through loans in connection with our initial business combination. At this time, we are not a party to any
arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities or otherwise.
Selection of a Target Business and Structuring of our Initial Business Combination
The NYSE rules require that our initial business combination must be with one or more target businesses that
together have fair market value equal to at least 80% of our net assets held in the trust account (net of amounts disbursed to management for working capital purposes and 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. The fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally accepted by
the financial community, such as discounted cash flow valuation or value of comparable businesses. If our board is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from
independent investment banking firm that is a member of FINRA, or from an independent accounting firm, with respect to the satisfaction of such criteria. We do not intend to purchase multiple businesses in unrelated industries in conjunction with
our initial business combination. 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 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 own or acquire 50% or more of the outstanding voting
securities of the target or otherwise acquire an interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets
of a target business or businesses, the portion of such business or businesses that are owned or acquired by the
post-transaction
company is what will be valued for purposes of the
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80% of net assets test. There is no basis for investors in this offering to evaluate the possible merits or risks of any target business with which we may ultimately complete our initial business
combination.
To the extent we effect our initial
business combination with a company or business that may be financially unstable or in its early stages of development or growth we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to
evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
In evaluating a prospective target business, we expect to conduct a thorough due diligence review, which will encompass, among other
things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial, operational, legal and other information which will be made available to us.
The time required to select and evaluate a target business
and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a
prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.
Lack of Business Diversification
For an indefinite period of time after the completion of our
initial business combination, the prospects for our success may depend entirely on the future performance of a single business. 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 initial business combination with only a single entity, our lack of diversification may:
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subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular
industry in which we operate after our initial business combination, and
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cause us to depend on the marketing and sale of a single product or limited number of products or services.
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Limited Ability to Evaluate the Target’s Management Team
Although we intend to closely scrutinize the
management of a prospective target business when evaluating the desirability of effecting our initial business combination with that business, our assessment of the target business’ 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. While it is possible that one or more of our directors will remain associated in some capacity with us following our initial business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to
our initial business combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations of the particular target business.
We cannot assure you that any of our key personnel will
remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination.
Following a business combination, we may seek to recruit
additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience
necessary to enhance the incumbent management.
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Stockholders May Not Have the Ability to Approve our Initial Business Combination
We may conduct redemptions without a stockholder vote
pursuant to the tender offer rules of the SEC 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.
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 Class A common stock that will be equal to or in excess of 20% of the number of shares of our Class A common stock 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 common stock to be issued, or if the number of shares of 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 and officers or (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 common stock will result in our undergoing a change of control.
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The decision as to whether we will seek stockholder approval
of a proposed business combination in those instances in which stockholder approval is not required by law will be made by us, solely in our discretion, and will be based on business and legal reasons, which include a variety of factors, including,
but not limited to:
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the timing of the transaction, including in the event we determine stockholder approval would require additional time and there is either not enough
time to seek stockholder approval or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company;
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the expected cost of holding a stockholder vote;
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the risk that the stockholders would fail to approve the proposed business combination;
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other time and budget constraints of the company; and
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additional legal complexities of a proposed business combination that would be time-consuming and burdensome to present to stockholders.
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Permitted Purchases of our Securities
In the event we seek stockholder approval of
our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares in
privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. There is no limit on the number of shares such persons may purchase. However, they have no current commitments,
plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase shares in such transactions. In the event our initial
stockholders, directors, officers, advisors or their affiliates determine to make any such purchases at the time of a stockholder vote relating to our initial business combination, such purchases could have the effect of influencing the vote
necessary to approve such transaction. 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. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to
exercise its redemption rights. Subsequent to the consummation of this offering, we will adopt an insider trading policy which will require insiders to: (i) refrain from purchasing shares during certain blackout periods and when they are in
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possession of any material
non-public
information and (ii) to clear all trades with a designated officer 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.
In the event that our sponsor, directors, officers, advisors
or 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. 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.
The purpose of such purchases would be to
(i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or (ii) to satisfy a closing condition in an agreement with a target that requires
us to have a minimum net worth or a certain amount of cash at the closing of our business combination, where it appears that such requirement would otherwise not be met. This may result in the completion of our business combination that may not
otherwise have been possible.
In addition, if
such purchases are made, the public “float” of our common stock may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of
our securities on a national securities exchange.
Our sponsor, officers, directors and/or their affiliates anticipate that they may identify the 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 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 the business combination. Our sponsor, officers, directors, advisors or their affiliates 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.
Redemption Rights for Public Stockholders upon Completion of
our Initial Business Combination
We will
provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial business combination at a
per-share
price,
payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination including interest earned on the funds held in the trust account and not
previously released to us to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes, divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in
the trust account is initially anticipated to be approximately $10.00 per public share. The
per-share
amount we will distribute to investors who properly redeem their shares will not
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be reduced by the deferred underwriting commissions we will pay to the underwriters. Our initial stockholders, officers and directors have entered into a letter agreement with us, pursuant to
which they have agreed to waive their redemption rights with respect to their founder shares and any public shares they may hold in connection with the completion of our initial business combination.
Manner of Conducting Redemptions
We will provide our public stockholders with the opportunity
to redeem all or a portion of their shares of Class A common stock upon the completion of our initial business combination either (i) in connection with a stockholder meeting called to approve the business combination or (ii) by means
of a tender offer. 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 and whether the terms of the transaction would require us to seek stockholder approval under the law or stock exchange listing requirement. 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 require stockholder
approval. We intend to conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by law or stock exchange listing requirements or we choose to seek stockholder approval for
business or other legal reasons.
If a stockholder
vote is not required 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:
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conduct the redemptions pursuant to
Rule 13e-4
and Regulation 14E of the Exchange Act, which regulate
issuer tender offers, and
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file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other
information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
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Upon the public announcement of our initial business
combination, we or our sponsor will terminate any plan established in accordance with
Rule 10b5-1
to purchase shares of our Class A common stock in the open market if we elect to redeem our public
shares through a tender offer, to comply with
Rule 14e-5
under the Exchange Act.
In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business
days, in accordance with
Rule 14e-1(a)
under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the
tender offer will be conditioned on public stockholders not tendering more than a specified number of public shares which are not purchased by our sponsor, which number will be based on the requirement that we may not redeem public shares in an
amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or
cash requirement which may be contained in the agreement relating to our initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial
business combination.
If, however, stockholder
approval of the transaction is required by law or stock exchange listing requirement, or we decide to obtain stockholder approval for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:
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conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation
of proxies, and not pursuant to the tender offer rules, and
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file proxy materials with the SEC.
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We expect that a final proxy statement would be mailed to public stockholders at least 10
days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a
proxy solicitation. Although we are not required to do so, we currently intend to comply with the substantive and procedural requirements of Regulation 14A in connection with any stockholder vote even if we are not able to maintain our NYSE listing
or Exchange Act registration.
In the event that
we seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public stockholders with the redemption rights described above upon completion of the initial business
combination.
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 a meeting. Our initial stockholders will count toward this quorum.
Pursuant to the terms of a letter agreement entered into with us, our initial stockholders, officers and directors have agreed (and their permitted transferees will agree) to vote any founder shares held by them and any public shares purchased
during or after this offering in favor of our initial business combination. We expect that at the time of any stockholder vote relating to our initial business combination, our initial stockholders and their permitted transferees will own at least
20% of our outstanding common stock entitled to vote thereon. These quorum and voting thresholds and the letter agreement may make it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem
their public shares irrespective of whether they vote for or against the proposed transaction. In addition, our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their
redemption rights with respect to their founder shares and public shares in connection with the completion of a business combination
Our amended and restated certificate of incorporation will provide that in no event will we redeem our public shares in an amount that
would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules). Redemptions of our public shares may also be subject to a higher net tangible asset test or cash requirement
pursuant to an agreement relating to our initial business combination. For example, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for
working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required
to pay for all 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, and all shares of Class A common stock submitted for redemption will be returned to the holders thereof.
Limitation on Redemption upon Completion of our Initial Business Combination if we Seek Stockholder
Approval
Notwithstanding the foregoing,
if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will
provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be
restricted from seeking redemption rights with respect to Excess Shares. We believe this restriction will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise
their redemption rights against a proposed business combination as a means to force us or our sponsor or its affiliates to purchase their shares at a significant premium to the
then-current
market price or on
other undesirable terms. Absent this provision, a
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public stockholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights if such holder’s shares are not purchased by us
or our sponsor or its affiliates at a premium to the
then-current
market price or on other undesirable terms. By limiting our stockholders’ ability to redeem no more than 15% of the shares sold in this
offering, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that
requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial
business combination. Our initial stockholders, officers and directors have, pursuant to a letter agreement entered into with us, waived their right to have any founder shares or public shares redeemed in connection with our initial business
combination. Unless any of our other affiliates acquires founder shares through a permitted transfer from an initial stockholder, and thereby becomes subject to the letter agreement, no such affiliate is subject to this waiver. However, to the
extent any such affiliate acquires public shares in this offering or thereafter through open market purchases, it would be a public stockholder and restricted from seeking redemption rights with respect to any Excess Shares.
Tendering Stock Certificates in Connection with a
Tender Offer or Redemption Rights
We may
require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in
the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the 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. The tender offer or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our
initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements. Accordingly, a public stockholder would have from the time we send out our tender offer materials until the close of the
tender offer period, or up to two 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. Pursuant to the tender offer rules,
the tender offer period will be not less than 20 business days and, in the case of a stockholder vote, a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft
proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Given the relatively short exercise period, it
is advisable for stockholders to use electronic delivery of their public shares.
There is a nominal cost associated with the
above-referenced
tendering process and the act of certificating the shares or delivering them through the DWAC System.
The transfer agent will typically charge the tendering broker $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
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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 initial business combination.
If our initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise
their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.
If our initial proposed business combination is
not completed, we may continue to try to complete a business combination with a different target until 24 months from the closing of this offering.
Redemption of Public Shares and Liquidation if no Initial Business Combination
Our sponsor, officers and directors have agreed that we will
have only 24 months from the closing of this offering to complete our initial business combination. If we are unable to complete our initial business combination within such
24-month
period, we will:
(i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a
per-share
price,
payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to fund our working capital requirements, subject to an annual
limit of $750,000, and/or to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as
stockholders (including the right to receive further liquidating distributions, if any), 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. There will be no redemption rights or liquidating
distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the
24-month
time period.
Our initial stockholders, officers and directors have entered
into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within 24 months from
the closing of this offering. However, if our initial stockholders acquire public shares after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our
initial business combination within the allotted
24-month
time period.
Our sponsor, officers and directors have agreed, pursuant to a written letter 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 do not complete our initial business combination within 24 months from the closing of this
offering, unless we provide our public stockholders with the opportunity to redeem their shares of 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 us to fund our working capital requirements, subject to an annual limit of $750,000, and/or to
pay our taxes, divided by the
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number of then outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject
to the SEC’s “penny stock” rules).
We expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be
funded from amounts remaining out of the $1,000,000 of proceeds held outside the trust account, although we cannot assure you that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover the costs and
expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the trust account not required to pay taxes, we may request the trustee to release to us an additional amount of up to $100,000 of
such accrued interest to pay those costs and expenses.
If we were to expend all of the net proceeds of this offering and the sale of the private placement warrants, other than the proceeds deposited in the trust account, and without taking into account
interest, if any, earned on the trust account, the
per-share
redemption amount received by stockholders upon our dissolution would be approximately $10.00. The proceeds deposited in the trust account could,
however, become subject to the claims of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure you that the actual
per-share
redemption amount received by
stockholders will not be substantially less than $10.00. Under Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made in full, as applicable, if
there are sufficient assets. These claims must be paid or provided for before we make any distribution of our remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient
to pay or provide for all creditors’ claims.
Although we will seek to have all vendors, service providers (other than our independent auditors), prospective target businesses or other
entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, there is no guarantee that they will
execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar
claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an
agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management
believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third
party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider
willing to execute a waiver.
In addition, there
is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason.
Our sponsor has agreed that it will be liable to us if and to the extent any claims by a vendor (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed
entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share 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 fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes, except as to
any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under
the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, then our
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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. None of our other officers will indemnify us for claims by third parties including,
without limitation, claims by vendors and prospective target businesses.
In the event that the proceeds in the trust account are reduced below (i) $10.00 per public share 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 fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our
taxes, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against
our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our
independent directors in exercising their business judgment may choose not to do so in any particular instance. Accordingly, we cannot assure you that due to claims of creditors the actual value of the
per-share
redemption price will not be substantially less than $10.00 per share.
We will seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring
to have all vendors, service providers (other than our independent auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to
monies held in the trust account. Our sponsor will also not be liable as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. We will have access to up to
$1,000,000 from the proceeds of this offering and the sale of the private placement warrants, with which to pay any such potential claims (including costs and expenses incurred in connection with 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 $1,000,000, we may fund such excess with funds from the funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust
account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $1,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding
amount.
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 24 months from the closing of this offering 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 24 months from the closing of this offering, 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 are unable to complete our business combination
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within 24 months from the closing of this offering, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten
business days thereafter, redeem the public shares, at a
per-share
price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the
trust account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish
public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), 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. Accordingly, it is
our intention to redeem our public shares as soon as reasonably possible following our 24th month 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 auditors), prospective target businesses or other entities with which we do business
execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account. 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) $10.00 per
public share 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 underwriters of this offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be
unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such
third-party
claims.
If we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with
priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return $10.00 per share to our public stockholders. Additionally, if we file a bankruptcy
petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential
transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover 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 in the event of the redemption of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or 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,
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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.
Comparison of Redemption or Purchase Prices in Connection with our Initial Business Combination and if we Fail to Complete our Initial Business Combination
The following table compares the redemptions and other
permitted purchases of public shares that may take place in connection with the completion of our initial business combination and if we are unable to complete our initial business combination within 24 months from the closing of this offering.
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Redemptions in
Connection with our
Initial Business
Combination
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Other Permitted Purchases
of Public Shares
by
our Affiliates
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Redemptions if we fail to
Complete an Initial
Business
Combination
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Calculation of redemption price
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Redemptions at the time of our initial business combination
may be made pursuant to a tender offer or in connection with a stockholder vote. The redemption price will be the same whether we conduct redemptions pursuant to a tender offer or in connection with a stockholder vote. In either case, our public
stockholders may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination (which is initially anticipated to be
$10.00 per public share), including interest earned on the funds held in the trust account and not previously released to us to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes, divided by the
number of then outstanding public shares, subject to the
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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 either prior to or following completion of our initial business combination. There is no limit
to the prices that our sponsor, directors, officers, advisors or their affiliates may pay in these transactions.
|
|
If we are unable to complete our initial business
combination within 24 months from the closing of this offering, we will redeem all public shares at a
per-share
price, payable in cash, equal to the aggregate amount, then on deposit in the trust account
(which is initially anticipated to be $10.00 per public share), including interest (less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public shares.
|
95
|
|
|
|
|
|
|
|
|
|
|
Redemptions in
Connection with our
Initial Business
Combination
|
|
Other Permitted Purchases
of Public Shares
by
our Affiliates
|
|
Redemptions if we fail to
Complete an Initial
Business
Combination
|
|
|
|
limitation that no redemptions will take place, if all of the redemptions would cause our net tangible assets to be less than $5,000,001 and any limitations (including but not
limited to cash requirements) agreed to in connection with the negotiation of terms of a proposed business combination.
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|
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|
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|
|
|
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Impact to remaining stockholders
|
|
The redemptions in connection with our initial business
combination will reduce the book value per share for our remaining stockholders, who will bear the burden of the deferred underwriting commissions and interest withdrawn in order to fund our working capital requirements, subject to an annual limit
of $750,000, and/or to pay our taxes (to the extent not paid from amounts accrued as interest on the funds held in the trust account).
|
|
If the permitted purchases described above are made, there
will be no impact to our remaining stockholders because the purchase price would not be paid by us.
|
|
The redemption of our public shares if we fail to complete
our initial business combination will reduce the book value per share for the shares held by our initial 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 underwriters
will not exercise their
over-allotment
option. None of the provisions of Rule 419 apply to our offering.
|
|
|
|
|
|
|
|
|
Terms of Our Offering
|
|
Terms Under a Rule 419
Offering
|
|
Escrow of offering proceeds
|
|
The rules of the NYSE provide that at least 90% of the gross proceeds from this offering and the private placement be deposited in a U.S.-
|
|
Approximately $510,300,000 of the offering proceeds, representing the gross proceeds of this offering less allowable underwriting
commissions,
|
96
|
|
|
|
|
|
|
|
|
Terms of Our Offering
|
|
Terms Under a Rule 419
Offering
|
|
|
|
based trust account. $600,000,000 of the net proceeds of this offering and the sale of the private placement warrants will be deposited into a U.S.-based trust account at J.P.
Morgan Chase Bank, N.A., with Continental Stock Transfer & Trust Company acting as trustee.
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expenses and company deductions under Rule 419, would be required to be deposited into either an escrow account with an insured depositary institution or in a separate bank account
established by a
broker-dealer
in which the
broker-dealer
acts as trustee for persons having the beneficial interests in the account.
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|
|
|
|
|
Investment of net proceeds
|
|
$600,000,000 of the net offering proceeds and the sale of the private placement warrants held in trust will be invested only in U.S. government treasury bills with a maturity of
180 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.
|
|
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
|
|
Interest on proceeds from the trust account to be paid to
stockholders is reduced by (i) any taxes paid or payable, (ii) amounts released to us to fund our working capital requirements, subject to an annual limit of $750,000, and (iii) in the event of our liquidation for failure to complete
our initial business combination within the allotted time, up to $100,000 of net interest that may be released to us should we have no or insufficient working capital to fund the costs and expenses of our dissolution and liquidation.
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|
Interest on funds in escrow account would be held for the
sole benefit of investors, unless and only after the funds held in escrow were released to us in connection with our completion of a business combination.
|
|
|
|
|
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Limitation on fair value or net assets of target business
|
|
The NYSE rules require that our initial business
combination must be with one or more target businesses that together have fair market value equal to at least 80% of our net assets in the trust account (net of amounts disbursed to management for working capital purposes and excluding the amount of
any deferred underwriting discount held in trust) at the time of our signing a definitive
|
|
The fair value or net assets of a target business must
represent at least 80% of the maximum offering proceeds.
|
97
|
|
|
|
|
|
|
|
|
Terms of Our Offering
|
|
Terms Under a Rule 419
Offering
|
|
|
|
agreement in connection with our initial business combination.
|
|
|
|
|
|
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Trading of securities issued
|
|
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
52
nd
day following the date of this prospectus unless
the Representative informs us of their decision to allow earlier separate trading, subject to our having filed the Current Report on
Form 8-K
described below and having issued a press release announcing
when such separate trading will begin. We will file the Current Report on
Form 8-K,
which will include an audited balance sheet reflecting our receipt of the gross proceeds at the closing of this offering
promptly after the closing of this offering, which is anticipated to take place three business days from the date of this prospectus. If the underwriters’
over-allotment
option is exercised following the
initial filing of such Current Report on
Form 8-K,
a second or amended Current Report on
Form 8-K
will be filed to provide updated financial information to
reflect the exercise of the underwriters’
over-allotment
option.
|
|
No trading of the units or the underlying common stock and warrants would be permitted until the completion of a business combination. During this period, the securities would be
held in the escrow or trust account.
|
|
|
|
|
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Exercise of the warrants
|
|
The warrants cannot be exercised until the later of 30 days after the completion of our initial business combination or 12 months from the closing of this
offering.
|
|
The warrants could be exercised prior to the completion of a business combination, but securities received and cash paid in connection with the exercise would be deposited in the
escrow or trust account.
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|
|
|
|
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Election to remain an investor
|
|
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
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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
|
98
|
|
|
|
|
|
|
|
|
Terms of Our Offering
|
|
Terms Under a Rule 419
Offering
|
|
|
|
previously released to us to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes, 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 pursuant to the tender offer rules of the SEC and file tender offer documents with the SEC which will contain substantially the same financial and other information about the initial business
combination and the redemption rights as is required under the SEC’s proxy rules. If, however, we hold a stockholder vote we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the
proxy rules and not pursuant to the tender offer rules. Pursuant to the tender offer rules, the tender offer period will be not less than 20 business days and, in the case of a stockholder vote, a final proxy statement would be mailed to public
stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct
redemptions in conjunction with a proxy solicitation. If we seek stockholder approval, we will complete our initial business combination only if 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
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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 45
th
business day, funds and interest or dividends, if any, held in the trust or escrow account are automatically returned to the stockholder. Unless a sufficient number of investors elect to remain
investors, all funds on deposit in the escrow account must be returned to all of the investors and none of the securities are issued.
|
99
|
|
|
|
|
|
|
|
|
Terms of Our Offering
|
|
Terms Under a Rule 419
Offering
|
|
|
|
or against the proposed transaction (subject to the Excess Shares limitation).
|
|
|
|
|
|
|
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Business combination deadline
|
|
If we are unable to complete an initial business combination within 24 months from the closing of this offering, we will (i) cease all operations except for the purpose of
winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the public shares, at a
per-share
price, payable in cash, equal to the aggregate amount
then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes (less
up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further
liquidating distributions, if any), 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.
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If an acquisition has not been completed within 18 months after the effective date of the company’s registration statement, funds held in the trust or escrow account are
returned to investors.
|
|
|
|
|
|
Release of funds
|
|
Except with respect to interest earned on the funds held in the trust account that may be released to us to fund our working capital requirements, subject to an annual limit of
$750,000, and/or to pay our taxes the proceeds from this offering and the sale of the private placement warrants held in the trust account will not be released from the trust account until the
|
|
The proceeds held in the escrow account are not released until the earlier of the completion of a business combination or the failure to effect a business combination within the
allotted time.
|
100
|
|
|
|
|
|
|
|
|
Terms of Our Offering
|
|
Terms Under a Rule 419
Offering
|
|
|
|
earliest of: (i) the completion of our initial business combination, (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to
amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this
offering and (iii) the redemption of all of our public shares if we are unable to complete our initial business combination within 24 months from the closing of this offering, subject to applicable law. The Company will instruct the Trustee to
pay amounts from the trust account directly to redeeming holders.
|
|
|
|
|
|
|
|
Limitation on redemption rights of stockholders holding more than 15% of the shares sold in this offering if we hold a
stockholder vote
|
|
If we seek stockholder approval of our initial business combination and we do
not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such
stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect Excess Shares (more than
an aggregate of 15% of the shares sold in this offering). 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.
|
|
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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101
|
|
|
|
|
|
|
|
|
Terms of Our Offering
|
|
Terms Under a Rule 419
Offering
|
|
|
|
|
|
Tendering stock certificates in connection with a tender offer or redemption rights
|
|
We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to
our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the 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. The tender offer or proxy materials, as applicable, that
we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements. Accordingly, a public stockholder would have from
the time we send out our tender offer materials until the close of the tender offer period, or up to two 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.
|
|
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.
|
Competition
In identifying, evaluating and selecting a target business
for our initial business combination, we may encounter intense competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, 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.
102
Conflicts of Interest
TPG manages several investment vehicles. Funds managed by
TPG or its affiliates may compete with us for acquisition opportunities in the same industries and sectors as we may target for our initial business combination. If these funds decide to pursue any such opportunity, we may be precluded from
procuring such opportunities. In addition, investment ideas generated within TPG, including by persons who may make decisions for the company, may be suitable for both us and for a current or future TPG fund, and may be directed to such investment
vehicle rather than to us, subject to applicable fiduciary duties. Neither TPG nor members of our management team who are also employed by TPG have any obligation to present us with any opportunity for a potential business combination of which they
become aware solely in their capacities as officers or managing directors of TPG. TPG and/or our management, in their capacities as officers or managing directors of TPG or in their other endeavors, may choose to present potential business
combinations to the related entities described above, current or future TPG investment vehicles, or third parties, before they present such opportunities to us.
In addition, TPG or its affiliates 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 (other than Mr. Chazen) 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 expect that any such other blank check company would be focused on the energy industry and, as a result, we do not believe that any 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 business combination opportunity to such entity. We expect that if an opportunity is presented to one of our officers or directors in his
or her capacity as an officer or director of one of those other entities, such opportunity would be presented to such other entity and not to us. For more information on the entities to which our officers and directors currently have fiduciary or
contractual obligations, please refer to “Management—Conflicts of Interest.” We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete
our initial business combination. 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.
Indemnity
Our sponsor has agreed that it will be liable to us if and to the extent any claims by a vendor (other than our
independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public
share 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 the value of the trust assets, in each case net of the interest which may be withdrawn to
fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any
claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our
sponsor will not be responsible to the extent of any liability for such third party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy their 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
103
to reserve for such eventuality. We believe the likelihood of our sponsor having to indemnify the trust account is limited because we will endeavor to have all vendors and prospective target
businesses as well as other entities execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account.
Facilities
We currently maintain our executive offices at 301 Commerce St., Suite 3300 Fort Worth, Texas 76102. The cost
for this space is included in the $20,000 per month fee that we will pay an affiliate of our sponsor for office space, administrative and support services. We consider our current office space adequate for our current operations.
Employees
We currently have three officers. Members of our management team are not obligated to devote any specific
number of hours to our matters but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time that members of our management will devote in any time
period will vary based on whether a target business has been selected for our initial business combination and the current stage of the business combination process.
Periodic Reporting and Financial Information
We will register our units, 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 auditors.
We will provide stockholders with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to stockholders to assist them
in assessing the target business. These financial statements may be required to be prepared in accordance with, or be reconciled to, U.S. GAAP, or IFRS, depending on the circumstances and the historical financial statements may be required to be
audited in accordance with 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. 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, 2018 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 company may not be in compliance with the provisions of the
Sarbanes-Oxley
Act regarding adequacy of their internal controls. The development
of the internal controls of any such entity to achieve compliance with the
Sarbanes-Oxley
Act may increase the time and costs necessary to complete any such acquisition.
Prior to the date of this prospectus, we will file a
Registration Statement on Form
8-A
with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under
the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
We are 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
104
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 $1.0 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock
that is held by
non-affiliates
exceeds $700 million as of the prior June 30th, 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. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.
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.
105
MANAGEMENT
Directors and Executive Officers
Upon completion of this offering, our officers and directors
will be as follows:
|
|
|
|
|
|
|
|
|
Name
|
|
Age
|
|
|
Title
|
|
Stephen Chazen
|
|
|
70
|
|
|
President, Chief Executive Officer and Chairman
|
|
Arcilia Acosta
|
|
|
51
|
|
|
Director
|
|
David Bonderman
|
|
|
74
|
|
|
Director
|
|
Edward Djerejian
|
|
|
78
|
|
|
Director
|
|
Chad Leat
|
|
|
61
|
|
|
Director
|
|
Michael MacDougall
|
|
|
46
|
|
|
Director
|
|
Dan F. Smith
|
|
|
70
|
|
|
Director
|
|
Martin Davidson
|
|
|
40
|
|
|
Chief Financial Officer
|
|
Eduardo Tamraz
|
|
|
33
|
|
|
Executive Vice President of Corporate Development, Secretary
|
Stephen Chazen
has served as our Chief Executive Officer and President since February 2017 and will serve as Chairman of our board of directors following the completion of this offering.
Mr. Chazen retired as Chief Executive Officer of Occidental in April 2016 and remains a member of the company’s board of directors. Mr. Chazen began his career at Occidental in 1994 as Executive Vice President—Corporate
Development. He was named Chief Financial Officer in 1999 and served as Chief Financial Officer until 2010. Mr. Chazen was appointed President of Occidental in 2007. He was then named Chief Operating Officer in 2010 before being appointed Chief
Executive Officer in May 2011. Mr. Chazen was elected to the Board of Directors in 2010. Before joining Occidental, Mr. Chazen was Managing Director in Corporate Finance and Mergers and Acquisitions at Merrill Lynch. He worked as Director
of Project Evaluation and Reservoir Engineering at Columbia Gas Development Corporation from 1977 to 1982. Mr. Chazen began his career at Northrop Corporation in 1973 as Laboratory Manager at the Johnson Space Center, where he worked until
1977. Mr. Chazen is a former Chairman of the American Petroleum Institute. He also serves on the Board of Advisors of Rice University’s Baker Institute for Public Policy and is a member of the Senior Cabinet of the President’s
Leadership Council at Houston Methodist Hospital. Mr. Chazen is a Director of Ecolab Inc. and The Williams Companies, Inc., and Chairman of the Board of the Catalina Island Conservancy. Mr. Chazen holds a Ph.D. in Geology from Michigan
State University, a master’s degree in Finance from the University of Houston and a bachelor’s degree in Geology from Rutgers College. Mr. Chazen is well-qualified to serve as a director because of his significant directorship
experience, as well as his substantial and broad experience in the energy sector, as an executive, advisor and director.
Arcilia Acosta
will serve as a director following the completion of this offering. Ms. Acosta is the President and Chief
Executive Officer of CARCON Industries & Construction, specializing in commercial, institutional and transportation construction, and is also the Chief Executive Officer and controlling principal of STL Engineers. Ms. Acosta serves on the
Board of Directors of Legacy Texas Financial Group, Inc., Energy Future Holdings Corp., the Texas Higher Education Coordinating Board, and the Dallas Citizens Council. Ms. Acosta previously served on the national advisory board for BBVA Compass
Bank and the Texas Tech National Alumni Association. Ms. Acosta received a Bachelor of Arts from Texas Tech University and Board Director Certification from Southern Methodist University Southwest School of Banking and is a Graduate of the Harvard
University Business School Corporate Governance Program. Ms. Acosta is well-qualified to serve as a director because of her broad range of experience and directorships.
David Bonderman
will serve as a director following the
completion of this offering. Mr. Bonderman is a founding partner of TPG, one of the world’s largest private equity investment firms. He was also a co-founder of both Hotwire.com and CoStar Group, Inc., a leading data company for commercial
real estate. From 1993 to 1996, Mr. Bonderman served as the chairman of Continental Airlines, Inc. in order to lead its emergence from
106
bankruptcy. In addition, he has also played a leading role in many of TPG’s turnaround investments including Ducati Motor Holdings, S.p.A., Armstrong World Industries, Inc., Burger King
Holdings, Inc. and Seagate Technology plc, among others. He is currently active in working with high-growth companies through his service on the boards of directors of Kite Pharma, Inc. and Uber Technologies, Inc.
Prior to forming TPG in 1992, Mr. Bonderman was chief
operating officer of the Robert M. Bass Group, Inc. (RMBG), now doing business as Keystone Group, L.P. in Fort Worth, Texas. Prior to joining RMBG in 1983, he was a partner in the law firm of Arnold & Porter in Washington, D.C., where he
specialized in corporate, securities, bankruptcy and antitrust litigation. From 1969 to 1970, he was a fellow in foreign and comparative law in conjunction with Harvard University and from 1968 to 1969, he was special assistant to the U.S. Attorney
General in the civil rights division. From 1967 to 1968, he was assistant professor at Tulane University School of Law in New Orleans, Louisiana. Mr. Bonderman graduated Magna Cum Laude from Harvard Law School where he was member of the Harvard
Law Review and a Sheldon Fellow. He is a graduate of the University of Washington in Seattle, Washington.
In the past five years, Mr. Bonderman also serves or has served on the board of directors of several public companies, including:
Armstrong World Industries, Inc.; Caesars Entertainment Corporation (formerly known as Harrah’s Entertainment, Inc.); China International Corporation Limited; CoStar Group, Inc. (formerly known as Realty Information Group); General Motors
Company; Kite Pharma, Inc.; Ryan Air Holdings, plc, of which he is Chairman; and VTB Group. Mr. Bonderman is well-qualified to serve as a director given his significant director experience and his previous role as the Chairman of Pace-I, a
blank check vehicle sponsored by TPG.
Edward
Djerejian
will serve as a director following the completion of this offering. Ambassador Djerejian served in the U.S. Foreign Service for eight presidents, from John F. Kennedy in 1962 to William J. Clinton in 1994. Prior to his
nomination by President Clinton as U.S. ambassador to Israel in which he served from 1993-1994, he was assistant secretary of state for Near Eastern affairs in both the George H.W. Bush and the Clinton administrations from 1991 to 1993. He was the
U.S. ambassador to the Syrian Arab Republic from 1988 to 1991. He also served as special assistant to President Ronald Reagan and deputy press secretary for foreign affairs in the White House from 1985 to 1986. After his retirement from government
service in 1994, he became, and currently serves as, the director of the James A. Baker III Institute for Public Policy at Rice University. He has been awarded the Presidential Distinguished Service Award, the Department of State’s
Distinguished Honor Award and numerous other honors, including the Ellis Island Medal of Honor and the Anti-Defamation League’s Moral Statesman Award. He is also a recipient of the Association of Rice Alumni’s Gold Medal. In 2011,
Ambassador Djerejian was elected a fellow of the American Academy of Arts and Sciences. He is also a member of the Board of Trustees of the Carnegie Corporation of New York. Ambassador Djerejian previously served as Chairman of the Board and a
director of Occidental until 2015, and as a director of Baker Hughes Incorporated and Global Industries, Ltd., where he was Chairman of the Governance Committee. He currently serves on the board of directors of The Mexico Fund, Inc. He holds a
Bachelor of Science and a Doctor of Humane Letters, honoris causa, from Georgetown University, as well as a Doctor of Laws, honoris causa, from Middlebury College. Ambassador Djerejian is well-qualified to serve as a director because of his
significant directorship experience.
Chad
Leat
will serve as a director following the completion of this offering. Mr. Leat is a retired Vice Chairman of Global Banking at Citigroup Inc., and has nearly thirty years of markets and banking experience on Wall Street. He is a leader
and innovator in corporate credit and M&A finance. Mr. Leat joined Salomon Brothers in 1997 as a partner in High Yield Capital Markets and then joined Citigroup in 1998 from where he retired in 2013 as Vice Chairman of Global Investment
Banking. Over the years he served on the firm’s Investment Banking Management Committee, the Fixed Income Management Committee and the Capital Markets Origination Committee. From 1998 until 2005 he served as the Global Head of Loans and
Leveraged Finance. He grew this business from a small second-tier position to one of the largest loan and high-yield businesses on Wall Street. During the financial crisis, Mr. Leat helped Citigroup work through many challenging risk,
regulatory and client issues.
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Mr. Leat began his career on Wall Street at The Chase Manhattan Corporation in their
Capital Markets Group in 1985 where he ultimately became the head of their highly successful Syndications, Structured Sales and Loan Trading businesses. This group was on the cutting edge of the fast-developing loan market and Mr. Leat was one
of a handful of market professionals associated with the development and creation of this now vibrant capital market.
Mr. Leat serves on the board of directors of Norwegian Cruise Lines Ltd and is the Chairman of the Audit Committee and also serves on the
Compensation Committee. He is Chairman of the board of directors of MidCap Financial, PLC, a middle-market direct commercial lending business and he serves on the Board of Directors of J. Crew Group, Inc. He has previously served as Chairman of
the board of directors of HealthEngine PLC, a healthcare technology company, a member of the board of directors of Global Indemnity PLC, a Cayman based provider of property and casualty insurance, Pace-I, a special purpose acquisition vehicle
associated with TPG where he was Chairman of the Audit Committee and BAWAG P.S.K., the third largest bank in Austria.
Mr. Leat is dedicated to many civic and philanthropic organizations. He is a member of the Economic Club of New York and has served
on the boards of several charitable organizations. Currently, he is a member of the Board of Directors of The Hampton Classic Horse Show and is a Trustee of the Parrish Museum of Art. Mr. Leat is a graduate of the University of Kansas, where he
received his Bachelors of Science degree. Mr. Leat is well-qualified to serve as a director because of his significant directorship experience and his previous role as a director of Pace-I.
Michael MacDougall
will serve as a director following
the completion of this offering.
Mr. MacDougall is a partner of TPG. Mr. MacDougall
co-heads
the firm’s global energy and natural resources private equity investing efforts. Prior to
joining TPG in 2002, Mr. MacDougall was a vice president in the Principal Investment Area of the Merchant Banking Division of Goldman, Sachs & Co., where he focused on private equity and mezzanine investments. He is a director of Amber
Holdings, Energy Future Holdings Corp., Harvester Holdings, LLC, Jonah Energy Holdings LLC, and is a director of the general partner of Valerus Compression Services, L.P. (doing business as Axip Energy Services, L.P.). He is also a member of the
board of directors of the Baylor College of Medicine Board of Trustees and The University of Texas Development Board. Over the last five years, Mr. MacDougall previously served on the board of directors for Copano Energy, L.L.C., Graphic
Packaging Holding Company and Northern Tier Energy GP LLC. Mr. MacDougall received his BBA, with highest honors, from The University of Texas at Austin and received his MBA, with distinction, from Harvard Business School. Mr. MacDougall is
well-qualified to serve as a director because of his significant directorship experience, his experience in the global energy and natural resources sector, his transactional experience with a number of different companies at TPG and his investment
banking experience at Goldman, Sachs & Co.
Dan F. Smith
will serve as a director following the completion of this offering. Mr. Smith is a retired Chief Executive Officer of
Lyondell Chemical Company, or “Lyondell,” and its wholly owned subsidiaries Millennium Chemicals Inc. and Equistar Chemicals, LP. Mr. Smith began his career as an engineer with Atlantic Richfield Company in 1968. He was elected President
of Lyondell in August 1994 and Chief Executive Officer in December 1996. Mr. Smith is a director of Orion Engineered Carbons, S.A., Kraton Corp., the general partner of Valerus Compression Services, L.P. (doing business as Axip Energy Services,
L.P.) and Nexeo Solutions, Inc. During the past five years, Mr. Smith served on the board of directors of Northern Tier Energy GP LLC and Cooper Industries plc. He also serves as a member of the College of Engineering Advisory Council at Lamar
University. Mr. Smith is a graduate of Lamar University with a B.S. degree in chemical engineering. Mr. Smith is well-qualified to serve as a director because of his significant directorship experience and broad experience in energy and
energy-related sectors.
Martin
Davidson
has been our Chief Financial Officer since February 2017. Mr. Davidson is a Managing Director and Chief Accounting Officer of TPG. Mr. Davidson is responsible for all financial operations and reporting related to TPG
Holdings, TPG’s parent company, accounting and operations for TPG’s private equity and real estate funds, as well as TPG’s firm-wide accounting policies. In addition, he has held the position of
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Chief Financial Officer and Financial Operations Principal of TPG’s broker/dealers and served on the board of multiple special purpose investment vehicles of TPG’s investment funds.
Prior to joining TPG in 2005, Mr. Davidson was an audit manager at KPMG where he primarily served clients in the financial services industry including private equity funds and hedge funds. Mr. Davidson received a BBA in accounting from
Texas Christian University and a Masters of Professional Accounting from The University of Texas at Austin. Mr. Davidson is a Certified Public Accountant.
Eduardo Tamraz
has been our Executive Vice President of Corporate Development and Secretary since February 2017. Mr. Tamraz is
a senior executive on the investment team for TPG Pace Group, TPG’s dedicated new initiative to provide permanent capital solutions for companies. Previously, he was a Vice President of TPG Capital in Europe from 2014 to early 2017. Since
joining TPG he has spent the majority of his time on Pace-I and Mr. Tamraz has been responsible for leading the evaluation of several opportunities and the execution of the Playa transaction. From 2008 until 2014, Mr. Tamraz was a senior
member of the private equity team at Eton Park, a global alternative investment firm. He previously worked at BC Partners and Merrill Lynch. Mr. Tamraz received an MA in economics from the University of Cambridge.
Number, Terms of Office and Election of Officers and Directors
Upon the effectiveness of the registration
statement of which this prospectus forms a part, we expect that our board of directors will consist of seven members. In connection with this offering, Karl Peterson will resign from our board of directors. Holders of our founder shares will have
the right to elect all of our directors prior to consummation of our initial business combination and holders of our public shares will not have the right to vote on the election of directors during such time. These provisions of our amended and
restated certificate of incorporation may only be amended if approved by holders of at least 90% of our outstanding common stock entitled to vote thereon. Each of our directors will hold office for a
two-year
term. Subject to any other special rights applicable to the stockholders, any vacancies on our board of directors may be filled by the affirmative vote of a majority of the directors present and voting at the meeting of our board or by a majority of
the holders of our founder shares.
Our officers
are elected by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our bylaws as it deems
appropriate. Our bylaws provide that our officers may consist of a Chairman, Chief Executive Officer, President, Chief Financial Officer, Vice Presidents, Secretary, Assistant Secretaries, Treasurer and such other offices as may be determined by the
board of directors.
Director Independence
The NYSE listing standards require that a majority of our
board of directors 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). Upon the effectiveness of the registration statement of which this prospectus forms a part, we expect to have four “independent directors” as defined in the NYSE listing standards and applicable SEC rules.
Our board of directors has determined that each of Ms. Acosta, Ambassador Djerejian and Messrs. Leat and Smith is independent under applicable SEC and NYSE rules. Our independent directors will have regularly scheduled meetings at which
only independent directors are present.
Executive 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
will pay an affiliate of our sponsor a total of $20,000 per month for office space, administrative and support services. Our sponsor, officers and directors, or any of their respective affiliates, will be reimbursed for any
out-of-pocket
expenses incurred in connection with activities on
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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.
After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting, management or other fees from the combined company. All of
these fees will be fully disclosed to stockholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed business combination. It is unlikely the amount
of such compensation will be known at the time such materials are distributed, because the directors of the
post-combination
business will be responsible for determining officer and director compensation. Any
compensation to be paid to our officers will be determined by a compensation committee constituted solely by independent directors.
We do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation
of our initial business combination, although it is possible that some or all of our officers and directors may negotiate employment or consulting arrangements to remain with us after the 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 effective date of the
registration statement of which this prospectus forms part, our board of directors will have three standing committees: an audit committee, a compensation committee and a nominating and corporate governance committee. Each committee will operate
under a charter that has been approved by our board and will have the composition and responsibilities described below. The charter of each committee will be available on our website.
Audit Committee
Upon the effectiveness of the registration statement of
which this prospectus forms a part, we will establish an audit committee of the board of directors. The members of our audit committee will be Mr. Leat, Ms. Acosta and Mr. Smith. Mr. Leat will serve as chair of the audit
committee.
Each member of the audit committee
meets the financial literacy requirements of the NYSE and our board of directors has determined that Mr. Leat qualifies as an “audit committee financial expert” as defined in applicable SEC rules.
The primary purposes of our audit committee are to assist the
board’s oversight of:
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audits of our financial statements;
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the integrity of our financial statements;
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our process relating to risk management and the conduct and systems of internal control over financial reporting and disclosure controls and
procedures;
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the qualifications, engagement, compensation, independence and performance of our independent auditor; and
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the performance of our internal audit function.
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The audit committee will be governed by a charter that
complies with the rules of the NYSE.
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Compensation Committee
Upon the effectiveness of the registration statement of
which this prospectus forms a part, we will establish a compensation committee of the board of directors. The members of our compensation committee will be Ms. Acosta, Ambassador Djerejian and Mr. Smith. Ms. Acosta will serve as
chair of the compensation committee.
The primary
purposes of our compensation committee are to assist the board in overseeing our management compensation policies and practices, including:
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determining and approving the compensation of our executive officers; and
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reviewing and approving incentive compensation and equity compensation policies and programs.
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The compensation committee will be governed by a charter that
complies with the rules of the NYSE.
Nominating and Corporate Governance Committee
Upon the effectiveness of the registration statement of
which this prospectus forms a part, we will establish a nominating and corporate governance committee. The members of our nominating and corporate governance will be Mr. Smith, Ambassador Djerejian and Mr. Leat. Mr. Smith 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:
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identifying, screening and reviewing individuals qualified to serve as directors and recommending to the board of directors candidates for nomination
for election at the annual meeting of stockholders or to fill vacancies on the board of directors;
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developing, recommending to the board of directors and overseeing implementation of our corporate governance guidelines; and
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coordinating and overseeing the annual self-evaluation of the board of directors, its committees, individual directors and management in the governance
of the company; and
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reviewing on a regular basis our overall corporate governance and recommending improvements as and when necessary.
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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 of directors candidates for nomination for election at the
annual meeting of the stockholders. Prior to our initial business combination, the board of directors will also consider director candidates recommended for nomination by holders of our founder shares during such times as they are seeking proposed
nominees to stand for election at an annual meeting of stockholders (or, if applicable, a special meeting of 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.
We have
not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the board of directors considers educational
background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders.
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Compensation Committee Interlocks and Insider Participation
None of our officers currently serves, and in the past year
has not served, (i) as a member of the compensation committee or board of directors of another entity, one of whose executive officers served on our compensation committee, or (ii) as a member of the compensation committee of another entity, one of
whose executive officers served on our board of directors.
Code of Business Conduct and Ethics
Prior to the effectiveness of the registration statement of which this prospectus is a part, we will have adopted a Code of Business
Conduct Ethics applicable to our directors, officers and employees. A copy of the Code of Business Conduct and Ethics will be available on our website. Any amendments to or waivers of certain provisions of our Code of Business Conduct and Ethics
will be disclosed on such website promptly following the date of such amendment or waiver.
Corporate Governance Guidelines
Our board of directors 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 of directors 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
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:
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the corporation could financially undertake the opportunity;
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the opportunity is within the corporation’s line of business; and
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it would not be fair to our company and its stockholders for the opportunity not to be brought to the attention of the corporation.
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Each of our officers and
directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity.
Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary
or contractual obligations to present such business combination opportunity to such entity. We do not believe, however, that the fiduciary duties or contractual obligations of our officers and directors will materially affect our ability to complete
our initial business combination.
Potential
investors should also be aware of the following other potential conflicts of interest:
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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.
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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. For a complete
description of our management’s other affiliations, see “—Directors and Executive Officers.”
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Our initial stockholders, officers and directors have agreed to waive their redemption rights with respect to our founder shares and public shares in
connection with the consummation of our initial business combination. Additionally, our initial stockholders, officers and directors have agreed to waive their redemption rights with respect to their founder shares if we fail to consummate our
initial business combination within 24 months after the closing of this offering. If we do not complete our initial business combination within such applicable time period, the proceeds of the sale of the private placement warrants held in the trust
account will be used to fund the redemption of our public shares, and the private placement warrants will expire worthless. With certain limited exceptions, the founder shares will not be transferable, assignable or salable by our initial
stockholders until the earlier of: (1) one year after the completion of our initial business combination and (2) the date on which we consummate a liquidation, merger, share exchange, reorganization, or other similar transaction after our
initial business combination, that results in all of our stockholders having the right to exchange their common stock for cash, securities or other property. Notwithstanding the foregoing, if 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 the founder shares will be released from the
lock-up.
With certain limited exceptions, the private placement warrants and the Class A common stock
underlying such warrants, will not be transferable, assignable or salable by our sponsor or its permitted transferees 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.
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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.
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The conflicts described above may not be resolved in our
favor.
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. Below is a table
summarizing the entities to which our executive officers and director currently have fiduciary duties or contractual obligations:
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Individual
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Entity
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Entity’s Business
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Affiliation
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Stephen Chazen
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Occidental
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Energy
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Director
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Ecolab Inc.
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Water, Hygiene, Energy
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Director
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The Williams Companies Inc.
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Energy
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Director
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Arcilia Acosta
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CARCON Industries & Construction
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Construction
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Officer
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STL Engineers
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Engineering and
Construction
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Officer and Controlling Principal
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LegacyTexas Financial Group, Inc.
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Financial
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Director
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Energy Future Holdings Corp.
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Energy
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Director
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Individual
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Entity
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Entity’s Business
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Affiliation
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David Bonderman
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TPG Global, LLC (and affiliated entities)
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Alternative Investment Manager
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Co-Founder
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RyanAir Holdings PLC
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Travel
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Director
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Energy Future Holdings Corp.
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Energy
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Director
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Caesars Entertainment Corporation
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Entertainment
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Director
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Kite Pharma, Inc.
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Biopharmaceuticals
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Director
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Uber Technologies Inc.
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Software
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Director
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China International Capital Corporation Limited
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Financial
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Director
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Cushman & Wakefield
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Real Estate
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Director
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Evolution Media Growth Partners
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Financial
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Director
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STX Filmworks, LLC
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Entertainment
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Director
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XOJET, Inc.
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Travel
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Director
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Edward Djerejian
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The Mexico Fund
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Financial
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Director
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Siluria Technologies
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Fuels and Chemicals
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Advisory Board
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Occidental
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Energy
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Consultant
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Chad Leat
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MidCap Financial, PLC
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Financial
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Director
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J. Crew Group Inc.
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Retail
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Director
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Norwegian Cruise Line Holdings Ltd.
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Travel
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Director
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Michael MacDougall
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TPG Global, LLC (and affiliated entities)
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Alternative Investment
Manager
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Partner
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Energy Future Holdings Corp.
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Energy
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Officer and/or Director
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Amber Holdings
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Energy
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Director
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Harvester Holdings, LLC
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Energy
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Director
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Jonah Energy Holdings LLC
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Energy
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Director
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Valerus Compression Services, L.P. (doing business as Axip Energy Services, L.P.)
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Energy
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General Partner and Director
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Dan F. Smith
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Orion Engineered Carbons, S.A.
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Carbon Black
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Director
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Kraton Corp.
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Minerals and Polymers
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Director
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Valerus Compression Services, L.P. (doing business as Axip Energy Services, L.P.)
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Energy
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Director
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Nexeo Solutions, Inc.
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Chemicals and Plastics
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Director
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Martin Davidson
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TPG Global, LLC (and affiliated entities)
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Alternative Investment Manager
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Partner and Chief Accounting Officer
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Eduardo Tamraz
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TPG Global, LLC (and affiliated entities)
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Alternative Investment Manager
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Vice President, Europe
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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 our sponsor, officers or
directors. In the event we seek to complete our initial business combination with such a
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company, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm that is a member of FINRA, or from an independent accounting firm, that
such an initial business combination is fair to our company from a financial point of view.
In the event that we submit our initial business combination to our public stockholders for a vote, our initial stockholders, officers and directors have agreed, pursuant to the terms of a letter
agreement entered into with us, to vote any founder shares held by them (and their permitted transferees will agree) and 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 will 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.
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.
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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:
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each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock;
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•
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each of our officers and directors that beneficially owns shares of our common stock; and
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•
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all our officers and directors as a group.
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Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all
shares of common stock beneficially owned by them. The following table does not reflect record or beneficial ownership of the private placement warrants as these warrants are not exercisable within 60 days of the date of this prospectus.
The below table assumes that the underwriters do
not exercise their over-allotment option, that our sponsor forfeits 2,250,000 founder shares, and that there are 75,000,000 shares of common stock issued and outstanding after this offering.
In February 2017, our sponsor purchased 11,500,000 founder shares for an aggregate purchase price of $25,000 or
approximately $0.002 per share. The purchase price of the founder shares was determined by dividing the amount of cash contributed to the company by the number of founder shares issued. In April 2017, we effected a stock dividend with respect to our
Class F common stock of 5,750,000 shares thereof, resulting in our initial stockholders holding an aggregate of 17,250,000 founder shares. In
, 2017, our sponsor transferred 40,000 founder shares to each of our independent director nominees at their original per share purchase price.
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Number
of Shares
Beneficially
Owned(2)
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Approximate Percentage of
Outstanding Common Stock
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Name and Address of Beneficial Owner(1)
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Before
Offering
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After
Offering(2)
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TPG Pace Energy Sponsor, LLC(3)
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17,090,000
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99.1
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%
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19.8
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%
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David Bonderman(3)
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17,090,000
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99.1
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%
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19.8
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%
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Arcilia Acosta
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40,000
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*
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*
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Edward Djerejian
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40,000
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*
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*
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Chad Leat
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40,000
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*
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*
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Dan F. Smith
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40,000
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*
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*
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Stephen Chazen
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—
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*
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*
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Michael MacDougall
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—
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*
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*
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Martin Davidson
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—
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*
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*
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Eduardo Tamraz
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—
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*
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*
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All officers and directors as a group (9 individuals)
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17,250,000
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100.0
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%
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20.0
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%
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(1)
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Unless otherwise noted, the business address of each of the following entities or individuals is 301 Commerce St., Suite 3300 Fort Worth, Texas 76102.
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(2)
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Interests shown consist solely of founders shares, classified as shares of Class F common stock. The founder shares will convert into shares of Class A common
stock at the time of our initial business combination, or earlier at the option of the holder, on a
one-for-one
basis, subject to adjustment, as described in the section
entitled “Description of Securities.”
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(3)
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Mr. Bonderman may be deemed to beneficially own shares held by our sponsor by virtue of his shared control over our sponsor. Mr. Bonderman disclaims beneficial
ownership of our common stock held by our sponsor.
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Immediately after this offering, our initial stockholders will beneficially own 20% of the
then issued and outstanding shares of common stock and will have the right to elect all of our directors prior to our initial business combination as a result of holding all of the founder shares. Holders of our public shares will not have the right
to elect any directors to our board of directors prior to our initial business combination. In addition, because of their ownership block, our initial stockholders may be able to effectively influence the outcome of all other matters requiring
approval by our stockholders, including amendments to our amended and restated certificate of incorporation and approval of significant corporate transactions.
Our sponsor has committed to purchase an aggregate of 9,333,333 (or 10,533,333 if the underwriters’ over-allotment option is
exercised in full) private placement warrants at a price of $1.50 per warrant (approximately $14,000,000 in the aggregate or approximately $15,800,000 in the aggregate if the underwriters’ over-allotment option is exercised in full) in a
private placement that will occur simultaneously with the closing of this offering. Each whole private placement warrant entitles the holder to purchase one share of our 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 pending our completion of our initial business combination. If we do not complete
our initial business combination within 24 months from the closing of this offering, the proceeds of the sale of the private placement warrants held in the trust account will be used to fund the redemption of our public shares, and the private
placement warrants will expire worthless. The private placement warrants are subject to the transfer restrictions described below. The private placement warrants will not be redeemable by us so long as they are held by our sponsor or its permitted
transferees except for redemption by the Company for Class A common stock. If the private placement warrants are held by holders other than our sponsor or its permitted transferees, the private placement warrants will be redeemable by us and
exercisable by the holders on the same basis as the warrants included in the units being sold in this offering. 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. See “Certain Relationships and Related Party Transactions” for additional information regarding our relationships
with our promoters
Transfers of Founder Shares and Private
Placement Warrants
The founder shares,
private placement warrants and any shares of Class A common stock issued upon conversion or exercise thereof are each subject to transfer restrictions pursuant to
lock-up
provisions in the letter
agreement with us to be entered into by our sponsor, officers and directors. Those
lock-up
provisions provide that such securities are not transferable, assignable or salable (i) in the case of the
founder shares, until the earlier of (A) one year after the completion of our initial business combination, or (B) subsequent to our initial business combination, if 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 (C) the date following the completion of our initial business combination on which we complete a liquidation, merger, share exchange, reorganization 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, and (ii) in the case of the private placement warrants and the respective Class A common stock underlying such warrants,
until 30 days after the completion of our initial business combination, except in each case (a) to our officers or directors, any affiliates or family members of any of our officers or directors, any members of our sponsor, or any
affiliates of our sponsor, (b) in the case of an individual, by gift to a member of the individual’s immediate family or to a trust, the beneficiary of which is a member of the individual’s immediate family, an affiliate of such
person or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual; (d) in the case of an individual, pursuant to a qualified domestic relations order;
(e) by private sales or transfers made in connection with the consummation of a business combination at prices no greater than the price at which the shares were originally purchased; (f) in the event of our liquidation prior to our
completion
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of our initial business combination; (g) by virtue of the laws of the state of Delaware or our sponsor’s limited liability company agreement upon dissolution of our sponsor; or
(h) in the event of our liquidation, merger, capital stock exchange, reorganization 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 subsequent to our completion of our initial business combination; provided, however, that in the case of clauses (a) through (e) these permitted transferees must enter into a written agreement agreeing to be bound by these
transfer restrictions.
Registration Rights
The holders of the founder shares, private placement
warrants and warrants that may be issued on conversion of working capital loans, if any, will have registration rights to require us to register a sale of any of our securities held by them (in the case of the founder shares, only after conversion
to our shares of Class A common stock) pursuant to a registration rights agreement to be signed prior to or on the effective date of this offering. These holders will be entitled to make up to three demands, excluding short form registration
demands, that we register such securities for sale under the Securities Act. In addition, these holders will have certain “piggy-back” registration rights to include such securities in other registration statements filed by us and rights
to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that we will not permit any registration statement filed under the Securities Act to become
effective until termination of the applicable
lock-up
period, which occurs (i) in the case of the founder shares, until the earlier of (A) one year after the completion of our initial business
combination, or (B) subsequent to our initial business combination, if the last sale price of the shares 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 (C) the date following the completion
of our initial business combination on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their Class A common stock
for cash, securities or other property, and (ii) in the case of the private placement warrants and the respective Class A common underlying such warrants, 30 days after the completion of our initial business combination. We will bear
the costs and expenses of filing any such registration statements.
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In February 2017, our sponsor purchased
11,500,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.002 per share. In April 2017, we effected a stock dividend with respect to our Class F common stock of 5,750,000 shares thereof, resulting in our initial
stockholders holding an aggregate of 17,250,000 founder shares. In 2017, our sponsor transferred 40,000 founder shares to each of our independent director nominees at their
original purchase price. As such, our initial stockholders will collectively own 20% of our issued and outstanding shares of common stock after this offering (assuming they do not purchase any units in this offering) and will have the right to elect
all of our directors prior to our initial business combination. If we increase or decrease the size of the offering, we will effect a stock dividend or share contribution back to capital, as applicable, with respect to our shares of Class F
common stock immediately prior to the consummation of the offering in such amount as to maintain the ownership of founder shares of our initial stockholders prior to this offering at 20% of our issued and outstanding shares of common stock upon the
consummation of this offering.
Our sponsor has
committed, pursuant to a written agreement, to purchase an aggregate of 9,333,333 (or 10,533,333 if the underwriters’
over-allotment
option is exercised in full) private placement warrants for a purchase
price of $1.50 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 approximately $14,000,000 and approximately
$15,800,000, depending on the number of private placement warrants purchased. Each private placement warrant entitles the holder to purchase one share of our Class A common stock at $11.50 per share, subject to adjustment as provided herein.
The private placement warrants (including the Class A common stock issuable upon exercise of the private placement warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by it until 30 days after the
completion of our initial business combination.
As more fully discussed in “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 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 will enter into an
Administrative Services Agreement with an affiliate of our sponsor, pursuant to which we will pay a total of $20,000 per month for office space, administrative and support services to such affiliate. Upon completion of our initial business
combination or our liquidation, we will cease paying these monthly fees. Accordingly, in the event the consummation of our initial business combination takes the maximum 24 months, an affiliate of our sponsor will be paid a total of $480,000
($20,000 per month) for office space, administrative and support services and will be entitled to be reimbursed for any
out-of-pocket
expenses.
Our sponsor, officers and directors, or 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.
As of
the date of this prospectus, our sponsor has loaned us $300,000 to be used for a portion of the expenses related to the organization of our company and this offering. These loans are
non-interest
bearing,
unsecured and are due at the earlier of August 31, 2017 or the closing of this offering. The loans will be repaid upon the closing of this offering out of the estimated $2,000,000 of offering proceeds not held in the trust account.
119
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 the initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such
repayment. Up to $1,500,000 of such loans may be converted into warrants of the post business combination entity at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to
the sponsor. 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.
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 have entered into a registration rights agreement with
respect to the founder shares, private placement warrants and warrants issued upon conversion of working capital loans (if any), which is described under the heading “Principal Stockholders—Registration Rights.”
Related Person Transaction 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
written policy relating to the approval of related person transactions. A “related person transaction” is a transaction or arrangement or series of transactions or arrangements in which we participate (whether or not we are a party) and a
related person has a direct or indirect material interest in such transaction. Our audit committee will review and approve or ratify all relationships and related person transactions between us and (i) our directors, director nominees or executive
officers, (ii) any 5% record or beneficial owner of our common stock or (iii) any immediate family member of any person specified in (i) and (ii). The audit committee will review all related person transactions and, where the audit committee
determines that such transactions are in our best interests, approve such transactions in advance of such transaction being given effect.
As set forth in the related person transaction policy, in the course of its review and approval or ratification of a related party
transaction, the audit committee will, in its judgment, consider in light of the relevant facts and circumstances whether the transaction is, or is not inconsistent with, our best interests, including consideration of various factors enumerated in
the policy.
Any member of the audit committee who
is a related person with respect to a transaction under review will not be permitted to participate in the discussions or approval or ratification of the transaction. Our policy also includes certain exceptions for transactions that need not be
reported and provides the audit committee with the discretion to pre-approve certain transactions.
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DESCRIPTION OF SECURITIES
Pursuant to our amended and restated certificate of
incorporation, our authorized capital stock consists of 200,000,000 shares of Class A common stock, $0.0001 par value, 20,000,000 shares of Class F common stock, $0.0001 par value, and 1,000,000 shares of undesignated preferred stock,
$0.0001 par value. The following description summarizes the material 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 Class A common stock and
one-third
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.
Warrants must be exercised for one whole share of Class A common stock. The common stock and warrants comprising the units will begin separate trading on the 52nd day following the closing of
this offering unless the Representatives inform us of their decision to allow earlier separate trading, subject to our having filed the Current Report on
Form 8-K
described below and having issued a press
release announcing when such separate trading will begin. Once the shares of 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.
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
which includes an audited balance sheet reflecting our receipt of the gross proceeds at the closing of this offering. We
will file the Current Report on
Form 8-K
promptly after the closing of this offering which will include this audited balance sheet, which is anticipated to take place three business days after the
date of this prospectus. If the underwriters’
over-allotment
option is exercised following the initial filing of such Current Report on
Form 8-K,
a second or
amended Current Report on
Form 8-K
will be filed to provide updated financial information to reflect the exercise of the underwriters’
over-allotment
option.
Common Stock
Upon the closing of this offering, 75,000,000 shares of our
common stock will be outstanding (assuming no exercise of the underwriters’
over-allotment
option and the corresponding forfeiture of 2,250,000 founder shares by our sponsor), including:
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60,000,000 shares of our Class A common stock underlying the units being offered in this offering; and
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15,000,000 shares of Class F common stock held by our initial stockholders.
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If we increase or decrease the size of the offering, we will
effect a stock dividend or share contribution back to capital, as applicable, with respect to our Class F common stock 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 our issued and outstanding shares of our common stock upon the consummation of this offering.
Common stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Holders of the
Class A common stock and holders of the Class F common stock will vote together as a single class on all matters submitted to a vote of our stockholders, except as required by law; provided, that holders of our Class F common stock
will have the right to elect all of our directors prior to our initial business combination and holders of our Class A common stock will not be entitled to vote on the election of directors
121
during such time. These provisions of our amended and restated certificate of incorporation may only be amended if approved by holders of at least 90% of our outstanding common stock entitled to
vote thereon. 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 (other than the election of directors), and the affirmative vote of a majority of our founder shares is required to approve the election of directors. Directors
are elected for a term of two years. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the founder shares voted for the election of directors can elect all of the directors.
Our stockholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor.
Because our amended and restated certificate of incorporation authorizes the issuance of up to 200,000,000 shares of 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 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 initial business combination.
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. In addition, as holders of shares of our Class A common stock, our public stockholders will not have the right to vote on the election of directors prior to completion
of our initial business combination. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination. 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 as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account and not previously released to us to fund our working capital requirements, subject to an
annual limit of $750,000, and/or to pay our taxes, divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be approximately $10.00 per public
share. The
per-share
amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. Our initial
stockholders, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and public shares in connection with the completion of our
initial 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, a 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 rules. If we seek stockholder approval,
122
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. Our
initial stockholders will count towards such quorum. However, the participation of our sponsor, officers, directors, advisors or their affiliates in
privately-negotiated
transactions (as described in this
prospectus), if any, could result in the approval of our initial business combination even if a majority of our public 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 initial business combination once a quorum is obtained. We intend to give approximately
30 days (but not less than 10 days nor more than 60 days) prior written notice of any such meeting, if required, at which a vote shall be taken to approve our initial business combination.
If we seek stockholder approval in connection with our
initial business combination, our initial stockholders, directors and officers have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, to vote any founder 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, we would need 22,500,001, or approximately 37.5%, of the 60,000,000
public shares sold in this offering to be voted in favor of a transaction (assuming all outstanding shares are voted and no exercise of the underwriters’ over-allotment option) in order to have an initial business combination approved.
Additionally, each public stockholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction. These quorum and voting thresholds and the letter agreement may make it more likely that we will
consummate our initial business combination.
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will
provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be
restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares of common stock sold in this offering, 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 initial 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 15% and, in order to dispose such shares would be required to sell their stock in open market transactions, potentially at a
loss.
Pursuant to our amended and restated
certificate of incorporation, if we are unable to complete our initial business combination within 24 months from the closing of this offering, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as
reasonably possible but no more than ten business days thereafter, subject to lawfully available funds therefor, redeem the public shares, at a
per-share
price, payable in cash, equal to the aggregate amount
then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes (less
up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further
liquidating distributions, if any), 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. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have
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agreed to waive their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within 24
months from the closing of this offering. However, if our initial stockholders acquire public shares after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to
complete our initial business combination within the prescribed time period.
In the event of a liquidation, dissolution or winding up of the company after a business combination, our 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 stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account, including interest earned on
the funds held in the trust account and not previously released to us to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes, upon the completion of our initial business combination, subject to the
limitations described herein.
Founder Shares
The founder shares are identical to the shares of
Class A common stock included in the units being sold in this offering, and holders of founder shares have the same stockholder rights as public stockholders, except that (i) holders of the founder shares have the right to vote on the
election of directors prior to our initial business combination, (ii) the founder shares are subject to certain transfer restrictions, as described in more detail below, and (iii) our initial stockholders, officers and directors have
entered into a letter agreement with us, pursuant to which they have agreed (A) to waive their redemption rights with respect to their founder shares and any public shares in connection with the completion of our initial business combination
and (B) to waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within 24 months from the closing of this offering, although they
will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within such time period, (iv) the founder shares are shares of our
Class F common stock that are automatically convertible into shares of our Class A common stock at the time of our initial business combination, or earlier at the option of the holder, on a
one-for-one
basis, subject to adjustment pursuant to certain
anti-dilution
rights, as described herein and (v) are subject to registration rights. If we submit our
initial business combination to our public stockholders for a vote, our initial stockholders, officers and directors have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, to vote
any founder shares held by them and any public shares purchased during or after this offering in favor of our initial business combination.
The shares of Class F common stock will automatically convert into shares of Class A common stock at 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 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 ratio at which shares of Class F common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of
Class F common stock agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class F common
stock will equal, in the aggregate, 20% of the sum of the total number of all shares of common stock outstanding upon completion of this 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. Holders of
founder shares may also elect to convert their shares of Class F common stock into an equal number of shares of Class A common stock, subject to adjustment as provided above, at any time.
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With certain limited exceptions, the founder shares are not transferable, assignable or
salable (except to our officers and directors and other persons or entities affiliated with our sponsor, each of whom will be subject to the same transfer restrictions) until the earlier of (A) one year after the completion of our initial
business combination, (B) subsequent to our initial business combination, if 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 (C) the date following the completion
of our initial business combination on which we complete a liquidation, merger, capital stock exchange, reorganization 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.
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 of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative,
participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. Our board of directors will be able to, without stockholder approval, issue preferred stock with
voting and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have
anti-takeover
effects. The ability of our board of directors to issue
preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of existing management. We have no preferred stock outstanding at the date hereof. Although we do not
currently intend to issue any shares of preferred stock, we cannot assure you that we will not do so in the future. No shares of preferred stock are being issued or registered in this offering.
Warrants
Public Stockholders’ Warrants
Each whole warrant entitles the registered holder to purchase one share of our Class A common stock at a
price of $11.50 per share, subject to adjustment as discussed below, at any time commencing on the later of 12 months from the closing of this offering or 30 days after the completion of our initial business combination. Warrants must be
exercised for a whole share. The warrants will expire five years after the completion of our initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
We will not be obligated to deliver any shares of
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 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 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 is
available. 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 Class A common stock underlying such unit.
We have agreed that as soon as practicable, but in no event later than fifteen (15) business days, after the closing of our initial business combination, we will use our best efforts to file with the
SEC a registration statement for the registration, under the Securities Act, of the shares of Class A common stock issuable upon
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exercise of the warrants. We will use our best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating
thereto, until the expiration of the warrants in accordance with the provisions of 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 public warrants who exercise their warrants to do so on a “cashless
basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but will use our best efforts to register or qualify the shares
under applicable blue sky laws to the extent an exemption is not available.
Redemption of warrants for cash
. Once the warrants become exercisable, we may redeem the warrants:
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in whole and not in part;
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•
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at a price of $0.01 per warrant;
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•
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upon not less than 30 days’ prior written notice of redemption (the
“30-day
redemption
period”) to each warrant holder; and
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•
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if, and only if, the reported 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 we send to the notice of redemption to the
warrant holders.
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If and when
the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Redemption of warrants for Class A common stock
. 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 warrant holder will be entitled to exercise his, her, or its warrant prior to the scheduled redemption date. However, the price of the Class A common stock may fall below the $18.00 redemption trigger
price as well as the $11.50 warrant exercise price after the redemption notice is issued.
Once the warrants and the private placement warrants become exercisable, we may redeem the outstanding warrants (including the private placement warrants):
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in whole and not in part
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at a price equal to a number of shares of Class A common stock to be determined by reference to the table below, based on the redemption date and
the “fair market value” of our Class A common stock (as defined below);
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upon a minimum of 30 days’ prior written notice of redemption; and
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if, and only if, the last sale price of our Class A common stock equals or exceeds $10.00 per share (as adjusted per stock splits, stock dividends,
reorganizations, recapitalizations and the like) on the trading day prior to the date on which we send the notice of redemption to the warrant holders.
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Redemption Date
(period to expiration of warrants)
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Fair Market Value of Class A Common Stock
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$10.00
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$11.00
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$12.00
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$13.00
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$14.00
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$15.00
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$16.00
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$17.00
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$18.00
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60 months
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57 months
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54 months
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51 months
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48 months
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45 months
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42 months
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39 months
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36 months
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33 months
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30 months
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27 months
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24 months
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21 months
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18 months
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15 months
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12 months
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9 months
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6 months
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3 months
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0 months
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The “fair market
value” of our Class A common stock shall mean the average reported last sale price of our Class A common stock for 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.
The exact fair market value
and redemption date may not be set forth in the table above, in which case, if the fair market value is between two values in the table or the redemption date is between two redemption dates in the table, the number of shares of Class A common
stock to be issued for each warrant redeemed will be determined by a straight-line interpolation between the number of shares set forth for the higher and lower fair market values and the earlier and later redemption dates, as applicable, based on a
365-day year.
No fractional shares of
Class A common stock will be issued upon redemption. If, upon redemption, a holder would be entitled to receive a fractional interest in a share, we will round down to the nearest whole number of the number of shares of Class A common
stock to be issued to the holder.
Redemption
procedures and cashless exercise
. If we call the warrants for redemption as described above, our management will have the option to require any holder that wishes to exercise his, her or its warrant 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. If our management takes advantage of this option, all holders of warrants would pay the exercise price by surrendering
their 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” shall mean the average reported last sale price of the Class A common stock for 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. If our management takes advantage of this option, the notice of redemption will contain the information necessary to
calculate the number of shares of Class A common stock to be received upon exercise of the warrants, including the “fair market value” in such case. Requiring a cashless exercise
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in this manner will reduce the number of shares to be issued and thereby lessen the dilutive effect of a warrant redemption. We believe this feature is an attractive option to us if we do not
need the cash from the exercise of the warrants after our initial business combination. If we call our warrants for redemption and our management does not take advantage of this option, our sponsor and its permitted transferees would still be
entitled to exercise their private placement warrants for cash or on a cashless basis using the same formula described above that other warrant holders would have been required to use had all warrant holders been required to exercise their warrants
on a cashless basis, as described in more detail below.
A holder of a warrant may notify us in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such warrant, to the extent that after giving
effect to such exercise, such person (together with such person’s affiliates), 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 Class A
common stock outstanding immediately after giving effect to such exercise.
If the number of outstanding shares of Class A common stock is increased by a stock dividend payable in shares of Class A common stock, or by a
split-up
of shares of 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 Class A common stock issuable on
exercise of each warrant will be increased in proportion to such increase in the outstanding shares of Class A common stock. A rights offering to holders of Class A common stock entitling holders to purchase shares of 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 Class A common stock equal to the product of (i) the number of shares of 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 Class A common stock) multiplied by (ii) one (1) minus the quotient of (x) the price per share of
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 Class A common stock, in determining the
price payable for 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 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 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 the holders of Class A common stock on
account of such shares of 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 Class A common stock in connection with a proposed initial business combination, (d) to satisfy the redemption rights of the holders of Class A common stock in connection with a stockholder vote to amend our
amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our Class A common stock if we do not complete our initial business combination within 24 months from the closing of this
offering, 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 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 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 Class A common stock issuable on exercise of each warrant will be decreased in proportion to such decrease in outstanding shares of Class A common stock.
Whenever the number of shares of 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
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immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of shares of 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 Class A common stock so purchasable immediately thereafter.
In case of any reclassification or reorganization of the
outstanding shares of Class A common stock (other than those described above or that solely affects the par value of such shares of 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 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 their warrants immediately prior to such event. However, if such holders were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such
consolidation or merger, then the kind and amount of securities, cash or other assets for which each warrant will become exercisable will be deemed to be the weighted average of the kind and amount received per share by such holders in such
consolidation or merger that affirmatively make such election, and if a tender, exchange or redemption offer has been made to and accepted by such holders (other than a tender, exchange or redemption offer made by the company in connection with
redemption rights held by stockholders of the company as provided for in the company’s amended and restated certificate of incorporation or bylaws or as a result of the redemption of Class A common stock by the company if a proposed
initial business combination is presented to the stockholders of the company for approval) under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of
Rule
13d-5(b)(1)
under the Exchange Act) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule
12b-2
under the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule
13d-3
under the Exchange Act) more than 50% of the
outstanding Class A common stock, the holder of a warrant will be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a stockholder if such warrant holder had
exercised the warrant prior to the expiration of such tender or exchange offer, accepted such offer and all of the Class A common stock held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustment
(from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in the warrant agreement. Additionally, if less than 70% of the consideration receivable by the holders of
Class A common stock in such a transaction is payable in the form of Class A common stock in the successor entity that is listed for trading on a national securities exchange or is quoted in an established
over-the-counter
market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the warrant properly exercises the warrant within thirty days following
public disclosure of such transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the per share consideration minus the
Black-Scholes
Warrant Value (as defined in
the warrant agreement) of the warrant.
The
warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. You should review a copy of the warrant agreement, which will be filed as an exhibit to the
registration statement of which this prospectus is a part, for a complete description of the terms and conditions applicable to the warrants. The warrant agreement provides that the terms of the warrants may be amended without the consent of any
holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of
public warrants.
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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 warrant holders do not have the rights or privileges of holders of Class A common stock and any voting rights until they exercise
their warrants and receive shares of Class A common stock. After the issuance of shares of Class A common stock upon exercise of the warrants, each holder will be entitled to one (1) vote for each share held of record on all matters
to be voted on by stockholders.
Private
Placement Warrants
The private placement
warrants (including the 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 the sponsor) and they will
not be redeemable by us so long as they are held by our sponsor or its permitted transferees except for redemption by the Company for Class A common stock, as described in the description of such redemption feature in “Warrants—Public
Stockholders’ Warrants—Redemption of warrants for Class A common stock.” 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.
If the private placement warrants are held by holders other than our sponsor or its permitted transferees, the private placement warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units
being sold in this offering.
If holders of the
private placement warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering his, her or its warrants for that number of shares of 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 prices of the warrants by (y) the fair market
value. The “fair market value” shall mean the average reported last sale price of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to
the warrant agent. The reason that we have agreed that these warrants will be exercisable on a cashless basis so long as they are held by our sponsor and its permitted transferees is because it is not known at this time whether they will be
affiliated with us following a business combination. If they remain affiliated with us, their ability to sell our securities in the open market will be significantly limited. We expect to have policies in place that prohibit insiders from selling
our securities except during specific periods of time. Even during such periods of time when insiders will be permitted to sell our securities, an insider cannot trade in our securities if he or she is in possession of material
non-public
information. Accordingly, unlike public stockholders who could exercise their warrants and sell the shares of Class A common stock issuable upon exercise of the warrants freely in the open market in
order to recoup the cost of such exercise, the insiders could be significantly restricted from selling such securities. As a result, we believe that allowing the holders to exercise such warrants on a cashless basis is appropriate.
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 condition 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 of directors at such time. In April 2017, we effected a stock dividend with respect to our Class F common stock of
5,750,000 shares thereof, resulting in our initial stockholders owning an aggregate of 17,250,000 founder shares. If we increase the size of the offering, in which case we will effect a stock dividend with respect to our shares of Class F
common stock immediately prior to the
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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 our issued and outstanding shares of our
common stock upon the consummation of this offering. 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 liabilities, including judgments, costs and reasonable counsel fees that may arise out of acts performed or omitted for its activities in that capacity, except for any liability due to any gross
negligence, willful misconduct or bad faith of the indemnified person or entity.
Our Amended and Restated Certificate of Incorporation
Our amended and restated certificate of incorporation will contain certain requirements and restrictions relating to this offering that
will apply to us until the completion of our initial business combination. These provisions cannot be amended without the approval of the holders of 65% of our common stock. Our initial stockholders, who will collectively beneficially own 20% of our
common stock upon the closing of this offering (assuming they do not purchase any units in this offering), 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 will provide, among other things, that:
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if we are unable to complete our initial business combination within 24 months from the closing of this offering, we will (i) cease all operations
except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter 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 us to fund
our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will
completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), 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;
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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, our directors or our
officers, we are not prohibited from doing so. In the event we enter into such a transaction, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm that is a member of FINRA, or from an
independent accounting firm that such a 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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our initial business combination must occur with one or more target businesses that together have fair market value equal to at least 80% of our net
assets held in the trust account (net of amounts disbursed to management for working capital purposes and excluding the amount of any deferred underwriting discount 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 do not complete our initial business combination within 24 months from the closing of this offering, we will provide our public stockholders with the opportunity to redeem all or a portion of
their shares of 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 us to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes, divided by the number of then outstanding public shares; and
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we will not effectuate our initial business combination with another blank check company or a similar company with nominal operations.
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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 will be subject to the provisions of Section 203 of the DGCL regulating corporate takeovers upon completion of this offering. This statute prevents certain Delaware corporations, under certain
circumstances, from engaging in a “business combination” with:
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a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”);
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an affiliate of an interested stockholder; or
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an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder.
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A “business
combination” includes a merger or sale of more than 10% of our assets. However, the above provisions of Section 203 do not apply if:
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our board of directors approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction;
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after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our
voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of common stock; or
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on or subsequent to the date of the transaction, the business combination is approved by our board of directors and authorized at a meeting of our
stockholders, and not by written consent, by an affirmative vote of at least
two-thirds
of the outstanding voting stock not owned by the interested stockholder.
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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 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.
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Special meeting of stockholders
Our bylaws provide that special meetings of our stockholders
may be called only by a majority vote of our board of directors, 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
preceding annual meeting of stockholders. Pursuant to
Rule 14a-8
of the Exchange Act, proposals seeking inclusion in our annual proxy statement must comply with the notice periods contained therein. Our
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.
Securities
Eligible for Future Sale
Immediately after
this offering we will have 75,000,000 (or 86,250,000 if the underwriters’
over-allotment
option is exercised in full) shares of common stock outstanding. Of these shares, the 60,000,000 shares of
Class A common stock (or 69,000,000 if the underwriters’
over-allotment
option is exercised in full) sold in this offering will be freely tradable without restriction or further registration under
the Securities Act, except for any shares purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act. All of the remaining 15,000,000 shares of Class F common stock (or 17,250,000 if the underwriters’
over-allotment
option is exercised in full) shares and all 9,333,333 (or 10,533,333 if the underwriters’
over-allotment
option is exercised in full) private placement
warrants are restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering, and the shares of Class F 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.”
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 Class A common stock then outstanding, which will equal 750,000 shares immediately after this offering (or
862,500 if the underwriters exercise their
over-allotment
option in full), on an as converted basis; or
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the average weekly reported trading volume of the Class A common stock during the four calendar weeks preceding the filing of a notice on
Form 144 with respect to the sale.
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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.
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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.
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As
a result, our initial stockholders will be able to sell their founder shares and our sponsor will be able to sell its 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 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 or on the effective date of this offering, requiring us to register such
securities for resale (in the case of the founder shares, only after conversion to our Class A common stock). The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such
securities. In addition, the holders have certain
“piggy-back”
registration rights with respect to registration statements filed subsequent to our completion of our initial business combination and
rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that we will not permit any registration statement filed under the Securities Act to
become effective until termination of the applicable
lock-up
period, which occurs (i) in the case of the founder shares, until the earlier of (A) one year after the completion of our initial business
combination or (B) subsequent to our initial business combination, if 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 (C) the date following the completion of our initial
business combination on which we complete a liquidation, merger, capital stock exchange, reorganization 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 and (ii) in the case of the private placement warrants and the respective Class A common stock underlying such warrants, 30 days after the completion of our initial business combination. We will bear the
expenses incurred in connection with the filing of any such registration statements.
Listing of Securities
We will apply to list our units, Class A common stock and warrants on the NYSE under the symbols “TPGEU,” “TPGE” and “TPGEW,” 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. We cannot guarantee that our securities will be approved for listing on the NYSE.
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UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of the 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
one-third
of one warrant components of the unit,
as the case may be. 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 applies only to securities that are held as a capital asset for U.S. federal income tax purposes and is applicable only to holders who purchased units in this offering.
This discussion does not describe all of the tax consequences
that may be relevant to you in light of your particular circumstances, including the alternative minimum tax, the Medicare tax on certain investment income and the different consequences that may apply if you are subject to special rules that apply
to certain types of investors, such as:
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financial institutions;
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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,” hedge, integrated transaction 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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partnerships or other
pass-through
entities for U.S. federal income tax purposes; and
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If you are a partnership for U.S. federal income tax
purposes, the U.S. federal income tax treatment of your partners will generally depend on the status of the partners and your activities.
This discussion is based on the Internal Revenue Code of 1986, as amended (the “Code”), and administrative pronouncements,
judicial decisions and final, temporary and proposed Treasury regulations as of the date hereof, 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).
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.
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, or 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).
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Depending on the date and size of our initial business combination, at least 60% of our
adjusted ordinary gross income may consist of PHC income as discussed above. In addition, depending on the concentration of our stock in the hands of individuals, including the members of our sponsor and certain
tax-exempt
organizations, pension funds and charitable trusts, more than 50% of our stock may be owned or deemed owned (pursuant to the constructive ownership rules) by 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 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 instruments similar to a unit for U.S.
federal income tax purposes and, therefore, that treatment is not entirely clear. The acquisition of a unit should be treated for U.S. federal income tax purposes as the acquisition of one share of our Class A common stock and
one-third
of one warrant to acquire one share of our Class A common stock. We intend to treat the acquisition of a unit in this manner and, by purchasing a unit, you will agree to adopt such treatment for 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 the
one-third
of
one warrant based on the relative fair market value of each at the time of issuance. The price allocated to each share of Class A common stock and the
one-third
of one warrant should be the
stockholder’s tax basis in such share or
one-third
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-third
of one warrant comprising the unit, and the amount realized on the disposition should be allocated between the Class A common stock and the
one-third
of one warrant based on their respective relative fair market values at the time of disposition. The separation of shares of Class A common stock and warrants comprising units should not be a taxable
event for U.S. federal income tax purposes.
The
foregoing treatment of the shares of Class A common stock and warrants and a holder’s purchase price allocation are not binding on the Internal Revenue Service (“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 is 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 for U.S. federal income tax purposes) organized in or under the laws of the United States, any
state thereof or the District of Columbia; or
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an estate or trust the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source.
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Taxation of
Distributions.
If we pay cash distributions 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
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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” below.
Dividends we pay to a U.S. holder that is a taxable corporation generally will qualify for the dividends received deduction if the
requisite holding period is satisfied. With certain exceptions (including, 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 generally will constitute “qualified dividends” 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 holding
period requirements with respect to the dividends received deduction or the preferential tax rate on qualified dividend income, as the case may be.
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 as described below, and 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.
Long-term
capital gains recognized by
non-corporate
U.S. holders will 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 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-third
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, the treatment of the
transaction for U.S. federal income tax purposes will depend on whether the redemption qualifies as sale of the Class A common stock under Section 302 of the Code. If the redemption qualifies as a sale of 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 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 a result of owning warrants) 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
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stock (rather than as a 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. 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 stock. The redemption of the Class A common stock will not be essentially equivalent to a dividend if a U.S. holder’s conversion 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 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.
Exercise or Lapse of a Warrant.
Except as discussed below with respect to the cashless exercise of a
warrant, a U.S. holder generally will not recognize taxable gain or loss the acquisition of 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 units that is allocated to the warrant, as described above
under “—General Treatment of Units”) and the exercise price. 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
possibly the date of exercise) of the warrants and 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 be
tax-free,
either because the exercise is not a gain realization event or because the exercise is
treated as a recapitalization for U.S. federal income tax purposes. In either
tax-free
situation, a U.S. holder’s basis in the Class A common stock received would equal the holder’s basis in the
warrant. If the cashless exercise were treated as not being a gain realization event, 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 possibly the
date of exercise) of the warrant. 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 warrant.
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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 would recognize gain or loss with respect to the portion of the exercised warrants treated as surrendered to pay the exercise price of the warrants (the “surrendered
warrants”). The U.S. holder would recognize capital gain or loss with respect to the surrendered warrants in an amount generally equal to the difference between (i) the fair market value of the Class A common stock that would have
been received with respect to the surrendered warrants in a regular exercise of warrants and (ii) the sum of the U.S. holder’s tax basis in the surrendered warrants and the aggregate cash exercise price of such warrants (if they had been
exercised in a regular exercise). In this case, a U.S. holder’s tax basis in the Class A common stock received would equal the U.S. holder’s tax basis in the warrants exercised plus (or minus) the gain (or loss) recognized with
respect to the surrendered warrants. A U.S. holder’s holding period for the Class A common stock would commence on the date following the date of exercise (or possibly the date of exercise) of the warrant.
Due to the absence of authority on the U.S. federal income
tax treatment of a cashless exercise, there can be no assurance which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. holders should consult their tax
advisors regarding the tax consequences of a cashless exercise.
Possible Constructive Distributions.
The terms of the warrants provide for an adjustment to the number of shares of common stock for which warrants may be exercised or to the
exercise price of the warrants 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 (e.g., through an increase in the number of shares of common stock that would be obtained upon exercise) as a result of a distribution of cash to the holders of shares of our common stock which is taxable to the U.S.
holders of such shares as described under “U.S. Holders—Taxation of Distributions” above. Such constructive distribution would be subject to tax as described under that section in the same manner as if the U.S. holders of the warrants
received a cash distribution from us equal to the fair market value of such increased interest. For certain information reporting purposes, we are required to determine the date and amount of any such constructive distributions. Recently 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.
Information Reporting and Backup
Withholding.
In general, information reporting requirements may apply to dividends paid to a U.S. holder and to the proceeds of the sale or other disposition of our units, shares of Class A 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).
Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against a U.S. holder’s U.S. federal income tax liability provided the required information is timely
furnished to the IRS.
Non-U.S.
Holders
This section applies to you if you are a
“Non-U.S.
holder.” A
Non-U.S.
holder is a beneficial owner of our units, shares of Class A common stock and warrants who or that is, for U.S. federal income tax purposes:
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a
non-resident
alien individual, other than certain former citizens and residents of the United States subject
to U.S. tax as expatriates;
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•
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a foreign corporation; or
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•
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a foreign estate or trust;
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but does not include an individual who is present in the United States for 183 days or more in the
taxable year of disposition. If you are such an individual, you should consult your tax advisor regarding the U.S. federal income tax consequences of the sale or other disposition of our units.
Taxation of Distributions.
In
general, any distributions (including constructive distributions) 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 (or are not attributable to a U.S. permanent establishment if an applicable treaty so provides), 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 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 will withhold 15% of any distribution that exceeds our current and accumulated earnings and profits.
The withholding tax 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. income tax as if the
Non-U.S.
holder were a U.S. resident, subject to an applicable income tax treaty providing otherwise. A
Non-U.S.
corporation receiving effectively connected dividends may also be subject to an additional “branch profits tax” imposed at a rate of 30% (or a lower treaty rate).
Exercise 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 or Lapse of a Warrant” above, although to the extent a cashless exercise results in a taxable
exchange, the consequences would be similar to those described below in
“Non-U.S.
Holders—Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants.”
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 24 months from the
closing of this offering, 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:
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the gain is effectively connected with the conduct of a trade or business by the
Non-U.S.
holder within the
United States (and is attributable to a U.S. permanent establishment if an applicable treaty so provides); or
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we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the shorter
of the
five-year
period ending on the date of disposition or the period that the
Non-U.S.
holder held our Class A common stock, and, in the case where shares of our
Class A common stock are regularly traded on an established securities market, the
Non-U.S.
holder has
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owned, directly or constructively, more than 5% of our Class A common stock at any time within the shorter of the
five-year
period preceding the
disposition or such
Non-U.S.
holder’s holding period for the shares of our Class A common stock. There can be no assurance that our Class A common stock will be treated as regularly traded on an
established securities market for this purpose.
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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 a foreign corporation may also be subject to an
additional “branch profits tax” at a 30% rate (or lower 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 “U.S. real property interests” equals or exceeds 50 percent 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” 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. 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. It is possible that because the applicable withholding agent
may not be able to determine the proper characterization of a redemption of a
Non-U.S.
holder’s Class A common stock, the withholding agent might treat the redemption as a distribution subject to
withholding tax.
Information Reporting and
Backup Withholding.
Information returns will be filed with the IRS in connection with payments of dividends and the proceeds from a sale or other disposition of our units, shares of Class A 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 will satisfy the certification requirements necessary to avoid the backup withholding as well. 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 or warrants, and, beginning in 2019, sales
or other disposition proceeds from our units, shares of Class A common stock and warrants 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 U.S. persons of interests in or accounts with those entities) have been satisfied, or an
exemption applies (typically certified as to by the delivery of a properly completed IRS
Form W-8BEN-E).
If FATCA withholding is imposed, a beneficial owner that is
not a foreign financial institution generally will be entitled to a refund of any amounts withheld by filing a U.S. federal income tax return (which may entail significant administrative burden). Foreign financial institutions located in
jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules. Prospective investors should consult their tax advisers regarding the effects of FATCA on their investment in our
securities.
141
UNDERWRITING
Subject to the terms and conditions of the underwriting
agreement, the underwriters named below, through their representatives, Deutsche Bank Securities Inc. and Goldman, Sachs & Co., have severally agreed to purchase from us on a firm commitment basis the following respective number of units at a
public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus:
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Underwriter
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Number of Units
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Deutsche Bank Securities Inc.
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Goldman, Sachs & Co.
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Total
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60,000,000
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The underwriting agreement
provides that the obligations of the underwriters to purchase the units included in this offering are subject to approval of legal matters by counsel and to other conditions. The underwriters are obligated to purchase all of the units (other than
those covered by the
over-allotment
option described below) if they purchase any of the units. The offering of the units by the underwriters is subject to receipt and acceptance and subject to the
underwriters’ right to reject any offer in whole or in part.
Units sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus. If all of the units are not sold at the initial
offering price, the underwriters may change the offering price and the other selling terms. The Representatives have advised us that the underwriters do not intend to make sales to discretionary accounts.
If the underwriters sell more units than the total number set
forth in the table above, we have granted to the underwriters an option, exercisable for 45 days from the date of this prospectus, to purchase up to 9,000,000 additional units at the public offering price less the underwriting discount. The
underwriters may exercise this option solely for the purpose of covering
over-allotments,
if any, in connection with this offering. To the extent the option is exercised, each underwriter must purchase a
number of additional units approximately proportionate to that underwriter’s initial purchase commitment. Any units issued or sold under the option will be issued and sold on the same terms and conditions as the other units that are the subject
of this offering.
We, our sponsor and our
officers and directors have agreed that, for a period of 180 days from the date of this prospectus, we and they will not, without the prior written consent of the Representatives, offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, any units, warrants, shares of common stock or any other securities convertible into, or exercisable, or exchangeable for, shares of common stock; provided, however, that we may (1) issue and sell the private placement
warrants, (2) issue and sell the additional units to cover our underwriters’ over-allotment option (if any), (3) register with the SEC pursuant to an agreement to be entered into concurrently with the issuance and sale of the securities in
this offering, the resale of the founder shares and the private placement warrants or the warrants and shares of common stock issuable upon exercise of the warrants and (4) issue securities in connection with a Business Combination. The
Representatives in their sole discretion may release any of the securities subject to these
lock-up
agreements at any time without notice.
Our initial stockholders have agreed not to transfer, assign
or sell any of their founder shares until the earlier to occur of: (A) one year after the completion of our initial business combination or (B) subsequent to our initial business combination, if 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 (C) the date following the completion of our initial business combination on which we complete a liquidation, merger, capital stock exchange, reorganization 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, (except with respect to
142
permitted transferees as described herein under “Principal Stockholders—Transfers of Founder Shares and Private Placement Warrants”). The private placement warrants (including the
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 the section of this prospectus entitled “Principal Stockholders—Transfers of Founder Shares and Private Placement Warrants”).
Prior to this offering, there has been no public market for
our securities. Consequently, the initial public offering price for the units was determined by negotiations between us and the Representatives.
The determination of our per unit offering price was more arbitrary than would typically be the case if we were an operating company.
Among the factors considered in determining 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.
We
expect our units to be listed on the NYSE under the symbol “TPGEU.” We expect that our Class A common stock and warrants will be listed under the symbols “TPGE” and “TPGEW,” respectively, once the Class A
common stock and warrants begin separate trading. The following table shows the underwriting discounts and commissions that we are to pay to the underwriters in connection with this offering. These amounts are shown assuming both no exercise and
full exercise of the underwriters’
over-allotment
option.
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Payable by TPG Pace Energy
Holdings Corp.
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No Exercise
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Full Exercise
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Per Unit(1)
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$
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0.55
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$
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0.55
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Total(1)
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$
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33,000,000
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$
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37,950,000
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(1)
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Includes $0.35 per unit, or $21,000,000 (or up to $24,150,000 if the
over-allotment
option is exercised in full) in the
aggregate, payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States as described herein.
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In addition, we have agreed to pay for the FINRA-related fees
and expenses of the underwriters’ legal counsel, not to exceed $15,000.
If we do not complete our initial business combination within 24 months from the closing of this offering, the trustee and the underwriters have agreed that (i) they will forfeit any rights or claims
to their deferred underwriting discounts and commissions, including any accrued interest thereon, then in the trust account, and (ii) that the deferred underwriters’ discounts and commissions will be distributed on a pro rata basis,
together with any interest earned on the funds held in the trust account and not previously released to us to fund our working capital requirements, subject to an annual limit of $750,000, and/or to pay our taxes, to the public stockholders.
In connection with the offering, the underwriters
may purchase and sell units in the open market. Purchases and sales in the open market may include short sales, purchases to cover short positions, which may include purchases pursuant to the
over-allotment
option and stabilizing purchases.
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Short sales involve secondary market sales by the underwriters of a greater number of units than they are required to purchase in the offering.
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“Covered” short sales are sales of units in an amount up to the number of units represented by the underwriters’
over-allotment
option.
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“Naked” short sales are sales of units in an amount in excess of the number of units represented by the underwriters’
over-allotment
option.
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Covering transactions involve purchases of units either pursuant to the
over-allotment
option or in the open
market after the distribution has been completed in order to cover short positions.
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To close a naked short position, the underwriters must purchase units in the open market after the distribution has been completed. A naked short
position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the units in the open market after pricing that could adversely affect investors who purchase in the offering.
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To close a covered short position, the underwriters must purchase units in the open market after the distribution has been completed or must exercise
the
over-allotment
option. In determining the source of shares to close the covered short position, the underwriters will consider, among other things, the price of units available for purchase in the open
market as compared to the price at which they may purchase units through the
over-allotment
option.
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Stabilizing transactions involve bids to purchase units so long as the stabilizing bids do not exceed a specified maximum.
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Purchases to cover short
positions and stabilizing purchases, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a decline in the market price of the units. They may also cause the price of the units to be
higher than the price that would otherwise exist in the open market in the absence of these transactions. The underwriters may conduct these transactions in the
over-the-counter
market or otherwise. If the underwriters commence any of these transactions, they may discontinue them at any time.
We estimate that our portion of the total expenses of this
offering payable by us will be $1,000,000, excluding underwriting discounts and commissions.
We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make because of
any of those liabilities.
We are not under any
contractual obligation to engage any of the underwriters to provide any services for us after this offering, and have no present intent to do so. However, any of the underwriters may introduce us to potential target businesses or assist us in
raising additional capital in the future. If any of the underwriters provide services to us after this offering, we may pay such underwriter fair and reasonable fees that would be determined at that time in an arm’s length negotiation; provided
that no agreement will be entered into with any of the underwriters and no fees for such services will be paid to any of the underwriters prior to the date that is 90 days from the date of this prospectus, unless FINRA determines that such
payment would not be deemed underwriters’ compensation in connection with this offering and we may pay the underwriters of this offering or any entity with which they are affiliated a finder’s fee or other compensation for services
rendered to us in connection with the completion of a business combination.
Some of the underwriters and their 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 including in connection with acting in an advisory capacity or as a potential financing source in conjunction with our potential acquisition of a company. They have received, or may in the future receive, customary fees and commissions
for these transactions.
In addition, in the
ordinary course of their business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities)
144
and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or
instruments of ours or our affiliates. The underwriters and their 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.
Notice to Prospective Investors in Australia
No placement document, prospectus, product disclosure statement or other disclosure document has been lodged with the Australian Securities and Investments Commission (“ASIC”), in relation to
the offering. This prospectus does not constitute a prospectus, product disclosure statement or other disclosure document under the Corporations Act 2001 (the “Corporations Act”), and does not purport to include the information required
for a prospectus, product disclosure statement or other disclosure document under the Corporations Act.
Any offer in Australia of the shares may only be made to persons (the “Exempt Investors”) who are “sophisticated
investors” (within the meaning of section 708(8) of the Corporations Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act) or otherwise pursuant to one or more exemptions contained in section
708 of the Corporations Act so that it is lawful to offer the shares without disclosure to investors under Chapter 6D of the Corporations Act.
The shares applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of 12 months after the
date of allotment under the offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the
offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring shares must observe such Australian
on-sale
restrictions.
This prospectus contains general information only and does
not take account of the investment objectives, financial situation or particular needs of any particular person. It does not contain any securities recommendations or financial product advice. Before making an investment decision, investors need to
consider whether the information in this prospectus is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice on those matters.
Notice to Prospective Investors in the Dubai International Financial
Centre
This prospectus relates to an Exempt
Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority (“DFSA” ).This prospectus is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must
not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this prospectus nor taken steps to verify the information set
forth herein and has no responsibility for the prospectus. The shares to which this prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the shares offered should conduct their own due
diligence on the shares. If you do not understand the contents of this prospectus you should consult an authorized financial advisor.
Notice to Prospective Investors in the European Economic Area
In relation to each member state of the European Economic
Area that has implemented the Prospectus Directive (each, a “relevant member state”), with effect from and including the date on which the Prospectus Directive is implemented in that relevant member state (the “relevant implementation
date”), an offer of units described in this prospectus may not be made to the public in that relevant member state prior to the publication of a prospectus in relation to the units that has been approved by the competent authority in that
relevant member
145
state or, where appropriate, approved in another relevant member state and notified to the competent authority in that relevant member state, all in accordance with the Prospectus Directive,
except that, with effect from and including the relevant implementation date, an offer of our units may be made to the public in that relevant member state at any time:
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to any legal entity which is a qualified investor as defined in the Prospectus Directive;
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•
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to fewer than 100, or, if the relevant member state has implemented the relevant provisions of the 2010 PD Amending Directive, 150 natural or legal
persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the relevant Dealer or Dealers nominated by the issuer for any such offer; or
natural or legal persons (other than qualified investors as defined below) subject to obtaining the prior consent of the underwriter for any such offer; or
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•
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in any other circumstances that do not require the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive.
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Each purchaser of units
described in this prospectus located within a relevant member state will be deemed to have represented, acknowledged and agreed that it is a “qualified investor” within the meaning of Article 2(1)(e) of the Prospectus Directive.
For the purpose of this provision, the expression
an “offer to the public” in any relevant member state means the communication in any form and by any means of sufficient information on the terms of the offer and the units to be offered so as to enable an investor to decide to purchase or
subscribe for the units, as the expression may be varied in that member state by any measure implementing the Prospectus Directive in that member state, and the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments
thereto, including the PD 2010 Amending Directive to the extent implemented by the relevant member state) and includes any relevant implementing measure in each relevant member state and the expression 2010 PD Amending Directive means Directive
2010/73/EU.
We have not authorized and do not
authorize the making of any offer of units through any financial intermediary on their behalf, other than offers made by the underwriters with a view to the final placement of the units as contemplated in this prospectus. Accordingly, no purchaser
of the units, other than the underwriters, is authorized to make any further offer of the units on behalf of us or the underwriters.
Notice to Prospective Investors in Switzerland
The shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or on any other
stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure
standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating
to the shares or the offering may be publicly distributed or otherwise made publicly available in Switzerland.
Neither this document nor any other offering or marketing material relating to the offering, the Company, the shares have been or will be
filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of shares will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA (FINMA), and the offer of shares
has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes (“CISA”). The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to
acquirers of shares.
146
Notice to Prospective Investors in the United Kingdom
This prospectus is only being distributed to, and is only
directed at, persons in the United Kingdom that are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive that are also (i) investment professionals falling within Article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (ii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order
(all such persons together being referred to as a “relevant person”). The units are only available to, and any invitation, offer or agreement to purchase or otherwise acquire such units will be engaged in only with, relevant persons. This
prospectus and its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other persons in the United Kingdom. Any person in the United Kingdom that is not a relevant
person should not act or rely on this document or any of its contents.
Notice to Prospective Investors in France
Neither this prospectus nor any other offering material relating to the units described in this prospectus has been submitted to the clearance procedures of the Autorité des Marchés
Financiers or by the competent authority of another member state of the European Economic Area and notified to the Autorité des Marchés Financiers. The units have not been offered or sold and will not be offered or sold, directly or
indirectly, to the public in France. Neither this prospectus nor any other offering material relating to the units has been or will be:
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released, issued, distributed or caused to be released, issued or distributed to the public in France; or
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•
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used in connection with any offer for subscription or sale of the units to the public in France.
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Such offers, sales and distributions will be made in France
only:
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•
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to qualified investors (investisseurs qualifiés) and/or to a restricted circle of investors (cercle restreint d’investisseurs), in each
case investing for their own account, all as defined in, and in accordance with,
Article L.411-2,
D.411-1,
D.411-2,
D.734-1,
D.744-1,
D.754-1
and
D.764-1
of the French Code monétaire et financier;
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•
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to investment services providers authorized to engage in portfolio management on behalf of third parties; or
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•
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in a transaction that, in accordance with
Article L.411-2-II-1°-or-2°-or
3° of the French Code monétaire et financier and
article 211-2
of the General Regulations (Règlement Général) of the Autorité des Marchés Financiers, does not constitute a public offer (appel public à
l’épargne).
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The
units may be resold directly or indirectly, only in compliance with
articles L.411-1,
L.411-2,
L.412-1
and
L.621-8
through
L.621-8-3
of the French Code monétaire et financier.
Notice to Prospective Investors in Hong Kong
The units may not be offered or sold in Hong Kong by means
of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of
the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance
(Cap. 32, Laws of Hong Kong) and no advertisement, invitation or document relating to the units may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at,
or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to units which are or are intended to be disposed of only to persons outside
Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.
147
Notice to Prospective Investors in Japan
The units have not been and will not be registered under the Financial Instruments and Exchange Law of Japan
(Law No. 25 of 1948, as amended) and, accordingly, will not be offered or sold, directly or indirectly, in Japan, or for the benefit of any Japanese Person or to others for
re-offering
or resale, directly
or indirectly, in Japan or to any Japanese Person, except in compliance with all applicable laws, regulations and ministerial guidelines promulgated by relevant Japanese governmental or regulatory authorities in effect at the relevant time. For the
purposes of this paragraph, “Japanese Person” shall mean any person resident in Japan, including any corporation or other entity organized under the laws of Japan
Notice to Prospective Investors in Singapore
This prospectus has not been registered as a prospectus with
the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the units may not be circulated or distributed, nor may the
units be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and
Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275 of
the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to compliance with conditions set forth in the SFA.
Where the units are subscribed or purchased under
Section 275 of the SFA by a relevant person which is shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within
six months after that corporation or that trust has acquired the shares pursuant to an offer made under Section 275 of the SFA except:
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to an institutional investor (for corporations, under Section 274 of the SFA) or to a relevant person defined in Section 275(2) of the SFA,
or to any person pursuant to an offer that is made on terms that such shares, debentures and units of shares and debentures of that corporation or such rights and interest in that trust are acquired at a consideration of not less than $200,000 (or
its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further for corporations, in accordance with the conditions specified in Section 275 of
the SFA;
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•
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where no consideration is or will be given for the transfer; or
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•
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where the transfer is by operation of law.
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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.
148
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:
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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,
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•
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the purchaser is a “permitted client” as defined in National
Instrument 31-103—Registration
Requirements, Exemptions and Ongoing Registrant Obligations,
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•
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where required by law, the purchaser is purchasing as principal and not as agent, and
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•
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the purchaser has reviewed the text above under Resale Restrictions.
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Conflicts of Interest
Canadian purchasers are hereby notified that the
underwriters are relying on the exemption set out in section 3A.3 or 3A.4, if applicable, of National
Instrument 33-105—Underwriting
Conflicts from having to provide certain conflict of
interest disclosure in this document.
Statutory Rights of Action
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if
the prospectus (including any amendment thereto) such as this document contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation
of the purchaser’s province or territory. The purchaser of these securities in Canada should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or
consult with a legal advisor.
Enforcement
of Legal Rights
All of our directors and
officers as well as the experts named herein may be located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All or a substantial portion of our
assets and the assets of those persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those
persons outside of Canada.
Taxation and
Eligibility for Investment
Canadian
purchasers of units should consult their own legal and tax advisors with respect to the tax consequences of an investment in the units in their particular circumstances and about the eligibility of the units for investment by the purchaser under
relevant Canadian legislation.
149
LEGAL MATTERS
Weil, Gotshal & Manges LLP, New York, New York,
has passed upon the validity of the securities offered hereby on behalf of us. Certain legal matters will be passed upon on behalf of the underwriters by Freshfields Bruckhaus Deringer US LLP.
EXPERTS
The financial statements of TPG Pace Energy Holdings Corp. as
of February 23, 2017 and for the period February 14, 2017 (inception) through February 23, 2017, 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.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on
Form S-1
under the Securities Act with
respect to the securities we are offering by this prospectus. This prospectus does not contain all of the information included in the registration statement. For further information about us and our securities, you should refer to the registration
statement and the exhibits and schedules filed with the registration statement. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are materially complete but may not include a
description of all aspects of such contracts, agreements or other documents, and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document.
Upon completion of this offering, we will be subject to the
information requirements of the Exchange Act and will file annual, quarterly and current event reports, proxy statements and other information with the SEC. You can read our SEC filings, including the registration statement, over the Internet at the
SEC’s website at www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facility at 100 F Street, N.E., Washington, D.C. 20549.
You may also obtain copies of the documents at prescribed
rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the
SEC at 1-800-SEC-0330
for further information on the operation of the public reference facilities.
150
TPG PACE ENERGY HOLDINGS CORP.
INDEX TO FINANCIAL STATEMENTS
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholder
TPG Pace Energy Holdings Corp.:
We have audited the accompanying balance sheet of TPG Pace Energy Holdings Corp. as of February 23, 2017, and the related statements of operations,
changes in stockholder’s deficit, and cash flows for the period from February 14, 2017 (inception) to February 23, 2017. These financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of TPG Pace Energy Holdings Corp. as of February 23, 2017, and the results of its operations and its cash flows for the period February 14, 2017 (inception) to February 23, 2017, in
conformity with U.S. generally accepted accounting principles.
/s/ KPMG LLP
Fort Worth, Texas
February 24, 2017, except for Note 1 and Note 6, which are as of April 17, 2017.
F-2
TPG PACE ENERGY HOLDINGS CORP.
BALANCE SHEET
February 23, 2017
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CURRENT ASSETS
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Cash
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$
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325,000
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Deferred offering costs associated with proposed offering
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87,522
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Total assets
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$
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412,522
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LIABILITIES AND STOCKHOLDER’S DEFICIT CURRENT LIABILITIES:
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Accrued expenses, formation and offering costs
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$
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123,245
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Note payable to Sponsor
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300,000
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Total current liabilities
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423,245
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Commitments and Contingencies
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STOCKHOLDER’S DEFICIT:
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Preferred stock, $0.0001 par value; 1,000,000 shares authorized, none issued or outstanding
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—
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Class A common stock, $0.0001 par value; 200,000,000 authorized, none issued or outstanding
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—
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Class F common stock, $0.0001 par value; 20,000,000 authorized, 11,500,000 issued and outstanding
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1,150
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Additional
paid-in
capital
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23,850
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Accumulated deficit
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(35,723
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)
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Total stockholder’s deficit
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(10,723
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)
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Total liabilities and stockholder’s deficit
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$
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412,522
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F-3
TPG PACE ENERGY HOLDINGS CORP.
STATEMENT OF OPERATIONS
For the Period from February 14, 2017 (inception) to February 23, 2017
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Revenues
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$
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—
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Professional fees
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35,723
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Net loss attributable to common stock
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$
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(35,723
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)
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Net loss per share of common stock:
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Basic and diluted
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$
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(0.02
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)
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Weighted average common stock outstanding:
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Basic and diluted
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2,300,000
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F-4
TPG PACE ENERGY HOLDINGS CORP.
STATEMENT OF CHANGES IN STOCKHOLDER’S DEFICIT
For the Period from February 14, 2017 (inception) to February 23, 2017
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Preferred stock
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Class A
common stock
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Class F common stock
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Additional
Paid-in
Capital
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Accumulated
Deficit
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Stockholder’s
Deficit
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Shares
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Amount
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Shares
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Amount
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Shares
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Amount
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Sale of Class F common stock to Sponsor on February 22, 2017 at $0.002 per share
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—
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$
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—
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—
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$
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—
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11,500,000
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$
|
1,150
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|
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$
|
23,850
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$
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—
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$
|
25,000
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|
Net loss attributable to common stock
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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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|
(35,723
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)
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|
(35,723
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)
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Balances, February 23, 2017
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|
|
—
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|
|
$
|
—
|
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|
|
—
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|
|
$
|
—
|
|
|
|
11,500,000
|
|
|
$
|
1,150
|
|
|
$
|
23,850
|
|
|
$
|
(35,723
|
)
|
|
$
|
(10,723
|
)
|
|
|
|
|
|
|
|
|
|
|
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|
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F-5
TPG PACE ENERGY HOLDINGS CORP.
STATEMENT OF CASH FLOWS
For the Period from February 14, 2017 (inception) to February 23, 2017
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Cash flows from operating activities:
|
|
|
|
|
|
Net loss attributable to common stock
|
|
$
|
(35,723
|
)
|
|
Changes in deferred offering costs associated with proposed offering
|
|
|
(87,522
|
)
|
|
Changes in accrued expenses, formation and offering costs
|
|
|
123,245
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
|
—
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
Proceeds from note payable—related party
|
|
|
300,000
|
|
|
Proceeds from sale of Class F common stock to Sponsor
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|
|
25,000
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities
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|
|
325,000
|
|
|
|
|
|
|
|
|
Increase in cash
|
|
|
325,000
|
|
|
Cash at beginning of period
|
|
|
—
|
|
|
|
|
|
|
|
|
Cash at end of period
|
|
$
|
325,000
|
|
|
|
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F-6
TPG Pace Energy Holdings Corp.
Notes to the Financial Statements
NOTE 1—DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Organization and General
TPG Pace Energy Holdings Corp. (the
“Company”) was incorporated in the state of Delaware on February 14, 2017. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses (the “Business Combination”). The Company intends to focus its search for a target business in energy or energy related industries, but may seek to complete a business combination with an operating
company in any industry or location in the United States. The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business
Startups Act of 2012 (the “JOBS Act”).
The Company was formed on February 14, 2017 and as of that date had not commenced operations. On February 22, 2017, the Company was
funded with $25,000 for which it issued Founder Shares (as defined below). All activity for the period from February 14, 2017 (inception) through February 23, 2017 relates to the Company’s formation and the proposed initial public
offering (“Proposed Offering”) described below. The Company will not generate operating revenues prior to the completion of the Business Combination and will generate
non-operating
income in the form
of interest income on permitted investments (as defined below) from the proceeds derived from the Proposed Offering. The Company has selected December 31st as its fiscal year end.
Sponsor
The Company’s sponsor is TPG Pace Energy Sponsor, LLC.,
a Delaware limited liability company (the “Sponsor”). On February 22, 2017, the Sponsor purchased an aggregate of 11,500,000 shares of the Company’s Class F common stock (“Founder Shares”) for an aggregate purchase
price of $25,000, or approximately $0.002 per share. Prior to the Sponsor’s initial investment in the Company of $25,000, the Company had no assets. The purchase price of the Founder Shares was determined by dividing the amount of cash
contributed to the Company by the number of Founder Shares issued by the Company.
Proposed Offering
The Company intends to finance a Business Combination with proceeds of $400,000,000 from the Proposed Offering of 40,000,000 units, consisting of one share of Class A common stock, $0.0001 par value,
of the Company (“Class A common stock”) and
one-third
of one warrant (a “Unit”), approximately $10,000,000 from the sale of 6,666,666 private placement warrants at $1.50 per warrant. Upon
the closing of the Proposed Offering and the sale of private placement warrants, the Company anticipates that approximately $400,000,000 (or $460,000,000 if the underwriter’s over-allotment option is exercised in full) will be held in a trust
account. The underwriter’s allotment includes 6,000,000 units consisting of 6,000,000 shares of Class A common stock and 2,000,000 warrants which may be issued upon exercise of a
45-day
option
granted to the underwriters to cover over-allotments, if any.
In April 2017, the Company increased the size of the Proposed Offering from $400,000,000 from the sale of 40,000,000 Units to $600,000,000 from the sale of 60,000,000 Units (or $690,000,000 from the sale
of 69,000,000 Units if the underwriter’s overallotment is exercised in full). The price and composition of the Company’s Units did not change.
In April 2017, the Company agreed to increase the issuance of private placement warrants from 6,666,666 to 9,333,333 (or 10,533,333 if the
underwriter’s overallotment is exercised in full.) The price and composition of
F-7
TPG Pace Energy Holdings Corp.
Notes to the Financial Statements
the private placement warrants did not change. Expected proceeds from the sale of private placement warrants increased from $10,000,000 to $14,000,000 (or $15,800,000 if the underwriter’s
overallotment is exercised in full). Additionally, the proposed warrant agreement will now provide that the Private Placement Warrants (as defined below) be redeemable by the Company for Class A common stock, in the same manner as warrants issued
under the Units, as described in and pursuant to the terms of the proposed warrant agreement, whether or not held by the Sponsor or its permitted transferees.
In April 2017, the Company agreed to effect a stock dividend prior to the closing of the Proposed Offering of approximately 0.5 shares of
Class F common stock for each share of Class F common stock, which will result in a total of 17,250,000 issued and outstanding Founder shares. The stock dividend also adjusted the Founder Shares subject to forfeiture from 1,500,000 to
2,250,000 such that the Founder Shares will represent 20.0% of the Company’s issued and outstanding common shares after the Proposed Offering. The stock dividend is being accounted for with a transfer from additional paid in capital to Class F
common stock as there is a legal requirement to maintain par value per share.
The Trust Account
Of the $410,000,000 in proceeds from the Proposed Offering and the proposed sale of the private placement warrants, $400,000,000 or $460,000,000 if the underwriters’ over-allotment option is
exercised in full ($10.00 per unit) will be deposited into a
non-interest
bearing U.S.-based trust account at J.P. Morgan Chase Bank, N.A., with Continental Stock Transfer & Trust Company acting as
trustee. The funds in the trust account will be invested only in U.S. government treasury bills with a maturity of 180 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 (collectively “permitted investments”).
Funds will remain in the trust account except for the withdrawal of interest to fund working capital requirements, subject to an annual
limit of $750,000, and/or pay taxes. The proceeds from the offering will not be released from the trust account until the earliest of (i) the completion of the Business Combination, (ii) the redemption of any public shares properly
submitted in connection with a stockholder vote to amend the amended and restated certificate of incorporation to modify the substance and timing of the Company’s obligation to redeem 100% of the public shares if the Company does not complete
the Business Combination within 24 months from the closing of the Proposed Offering, or (iii) the redemption of all of the Company’s public shares if it is unable to complete the Business Combination within 24 months from the closing of
the Proposed Offering, subject to applicable law. In addition, if the Company is unable to complete the Business Combination within 24 months from the closing of the Proposed Offering for any reason, compliance with Delaware law may require that the
Company submit a plan of dissolution to the then-existing stockholders for approval prior to the distribution of the proceeds held in the trust account.
The remaining proceeds outside the trust account may be used to pay business, legal and accounting due diligence on prospective
acquisitions, listing fees and continuing general and administrative expenses.
Business Combination
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Proposed Offering, although substantially all of the net proceeds of the Proposed
Offering are intended to be generally applied toward consummating a Business Combination with (or acquisition of) a target business. As used herein, the target business must be with one or more target businesses that together have a fair market
value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned on the trust account) at the time of the Company signing a definitive agreement.
F-8
TPG Pace Energy Holdings Corp.
Notes to the Financial Statements
After signing a definitive agreement for a Business Combination, the Company will
provide the public stockholders with the opportunity to redeem all or a portion of their public shares either (i) in connection with a stockholder meeting to approve the Business Combination or (ii) by means of a tender offer. Each public
stockholder may elect to redeem their shares irrespective of whether they vote for or against the Business Combination at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days
prior to the consummation of the Business Combination including interest earned on the funds held in the trust account and not previously released to the Company to fund its working capital requirements, subject to an annual limit of $750,000,
and/or to pay taxes, divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be approximately $10.00 per public share. The per share amount the
Company will distribute to investors who properly redeem their shares will not be reduced by any deferred underwriting commissions payable to underwriters. The decision as to whether the Company will seek stockholder approval of the Business
Combination or will allow stockholders to sell their shares in a tender offer will be made by the Company, solely in its 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 the Company to seek stockholder approval under the law or stock exchange listing requirements. If the Company seeks stockholder approval, it will complete its Business Combination only if a majority of the
outstanding shares voted are voted in favor of the Business Combination. However, in no event will the Company redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000,001, after payment of the deferred
underwriting commission. In such an instance, the Company would not proceed with the redemption of its public shares and the related Business Combination, and instead may search for an alternate Business Combination.
The Company has 24 months from the closing date of the
Proposed Offering to complete its Business Combination. If the Company does not complete a Business Combination within this period, it shall (i) cease all operations except for the purposes 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 in the trust account
and not previously released to the Company to fund its working capital requirements, subject to an annual limit of $750,000, and/or pay its taxes (less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding
public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation 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 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. The initial stockholders and the Company’s officers and directors have entered into a letter agreement with the Company, pursuant to which they have waived their rights to liquidating
distributions from the trust account with respect to their Founder Shares if the Company fails to complete the Business Combination within 24 months from the closing of the Proposed Offering. However, if the initial stockholders acquire public
shares after the Proposed Offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if the Company fails to complete the Business Combination within the allotted
24-month
time period.
The underwriters have agreed to waive their rights to any deferred underwriting commission held in the trust account in the event the Company does not complete the Business Combination and those amounts
will be included with the funds held in the trust account that will be available to fund the redemption of the Company’s public shares.
If the Company fails to complete the Business Combination, the redemption of the Company’s public shares will reduce the book value
of the shares held by the initial stockholders, who will be the only remaining stockholders after such redemptions.
F-9
TPG Pace Energy Holdings Corp.
Notes to the Financial Statements
If the Company holds a stockholder vote or there is a tender offer for shares in
connection with a Business Combination, a public stockholder will have the right to redeem its shares for an amount in cash equal to its pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the
consummation of the Business Combination, including interest earned on the funds held in the trust account and not previously released to the Company to fund its working capital requirements, subject to an annual limit of $750,000, and/or pay taxes.
As a result, such shares will be recorded at their redemption amount and classified as temporary equity upon the completion of the Proposed Offering, in accordance with ASC 480, “Distinguishing Liabilities from Equity.”
NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission ( the “SEC”),
and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the Company’s financial position at February 23, 2017 and the results of operations and
cash flows for the period presented.
Emerging Growth Company
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 Securities Exchange Act of 1934, as amended) are required to
comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to
non-emerging
growth companies but any such an election to opt out is irrevocable. 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.
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 cash equivalents as of February 23, 2017.
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 of $250,000. The Company has not experienced losses on these accounts and management believes
the Company is not exposed to significant risks on such accounts.
Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts
represented in the balance sheet due to their short-term nature.
F-10
TPG Pace Energy Holdings Corp.
Notes to the Financial Statements
Fair Value Measurement
ASC 820 establishes a fair value hierarchy that prioritizes
and ranks the level of observability of inputs used to measure investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment, characteristics specific to the investment, market conditions
and other factors. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I measurements) and the lowest priority to unobservable inputs (Level III measurements).
Investments with readily available quoted prices or for which
fair value can be measured from quoted prices in active markets will typically have a higher degree of input observability and a lesser degree of judgment applied in determining fair value.
The three levels of the fair value hierarchy under ASC 820 are as follows:
Level I—Quoted prices (unadjusted) in active markets for
identical investments at the measurement date are used.
Level II—Pricing inputs are other than quoted prices included within Level I that are observable for the investment, either directly or indirectly. Level II pricing inputs include quoted prices for
similar investments in active markets, quoted prices for identical or similar investments in markets that are not active, inputs other than quoted prices that are observable for the investment, and inputs that are derived principally from or
corroborated by observable market data by correlation or other means.
Level III—Pricing inputs are unobservable and include situations where there is little, if any, market activity for the investment. The inputs used in determination of fair value require significant
judgment and estimation.
In some cases, the
inputs used to measure fair value might fall within different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the investment is categorized in its entirety is determined based on the lowest level
input that is significant to the investment. Assessing the significance of a particular input to the valuation of an investment in its entirety requires judgment and considers factors specific to the investment. The categorization of an investment
within the hierarchy is based upon the pricing transparency of the investment and does not necessarily correspond to the perceived risk of that investment.
Net Loss per Share
Net loss per share is computed by dividing net loss applicable to ordinary stockholders by the weighted average number of shares
outstanding during the period, plus to the extent dilutive the incremental number of shares of shares to settle warrants, as calculated using the treasury stock method. At February 23, 2017, the Company did not have any dilutive securities or
other contracts that could, potentially, be exercised or converted into shares and then share in the earnings of the Company under the treasury stock method. As a result, diluted loss per share is the same as basic loss per share for the period.
Use of Estimates
The preparation of financial statements in conformity with
US 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 financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
F-11
TPG Pace Energy Holdings Corp.
Notes to the Financial Statements
Offering Costs
The Company complies with the requirements of the ASC
340-10-S99-1
and SEC Staff Accounting Bulletin Topic 5A “Expenses of Offering”. The Company incurred offering costs in connection with the Proposed Offering.
These costs, together with the underwriter discount, will be charged to additional
paid-in
capital upon completion of the Proposed Offering or to operations if the Proposed Offering is not completed.
Income Taxes
Under ASC 740, “Income Taxes,” deferred tax assets
and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement 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 of the enactment date. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. As of February 23, 2017 there was a
deferred tax asset of $12,503 offset by a valuation allowance of $12,503 as a result of the uncertainty of the realization of net operating loss or carry forward prior to expiration. The effective tax rate used to calculate the deferred tax asset
was 35%.
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. 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 at February 23, 2017. 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.
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.
NOTE 3—PROPOSED OFFERING
Pursuant to the initial public offering, the Company intends
to offer for sale up to 40,000,000 units at a price of $10.00 per unit. Each unit will consist of one share of Class A common stock of the Company at $0.0001 par value and
one-third
of one warrant
(“Unit”). Under the terms of a proposed warrant agreement, the Company has agreed to use its best efforts to file a new registration statement under the Securities Act following the completion of the Business Combination. Each whole
warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share. The warrants will become exercisable on the later of 30 days after the completion of the Business Combination and 12 months from the
closing of the Proposed Offering and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. Only whole warrants may be exercised and no fractional warrants will be issued upon separation of
the units and only whole warrants will trade. The Company will grant the underwriters a
45-day
option to purchase up to an additional 6,000,000 units to cover over-allotments, if any.
F-12
TPG Pace Energy Holdings Corp.
Notes to the Financial Statements
NOTE 4—RELATED PARTY TRANSACTIONS
Founder Shares
On February 22, 2017, the Sponsor purchased 11,500,000
Founder Shares for an aggregate purchase price of $25,000, or approximately $0.002 per share. The purchase price of the Founder Shares was determined by dividing the amount of cash contributed to the Company by the number of Founder Shares issued.
The number of Founder Shares issued was based on the expectation that the Founder Shares represent 20% of the Company’s issued and outstanding shares upon completion of the Proposed Offering. Should the Company increase or decrease 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 offering in such amount as to maintain the ownership of Founder Shares at 20% of the issued and
outstanding shares of common stock upon the consummation of the Proposed Offering. The Sponsor has agreed to forfeit up to 1,500,000 Founder Shares depending on the extent to which the underwriters’ over-allotment option is exercised.
The Founder Shares are identical to the Class A
common stock included in the Units being sold in the Proposed Offering except that:
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•
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only holders of the Founder Shares have the right to vote on the election of directors prior to the Business Combination;
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•
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the Founder Shares are subject to certain transfer restrictions, as described in more detail below;
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•
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the Sponsor and the Company’s officers and directors entered into a letter agreement with the Company, pursuant to which they have agreed
(i) to waive their redemption rights with respect to their Founder Shares and public shares in connection with the completion of the Business Combination and (ii) to waive their rights to liquidating distributions from the trust account
with respect to their Founder Shares if the Company fails to complete the Business Combination within 24 months from the Proposed Offering. If the Company submits the Business Combination to the public stockholders for a vote, the initial
stockholders have agreed, pursuant to such letter agreement, to vote their Founder Shares and any public shares purchased during or after the Proposed Offering in favor of the Business Combination; and
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•
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the Founder Shares are automatically convertible into Class A common stock at the time of the Business Combination, or earlier at the option of the
holder, on a
one-for-one
basis, subject to adjustment pursuant to certain anti-dilution rights.
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Additionally, the Sponsor and initial stockholders will agree
not to transfer, assign or sell any of its Founder Shares until the earlier to occur of (i) one year after the completion of the Business Combination or (ii) subsequent to the Business Combination, if 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 Business Combination or (iii) the date following the completion of the Business Combination on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar
transaction that results in all of the Company’s public stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property (the “Lock Up Period”).
Private Placement Warrants
The Sponsor will purchase from the Company an aggregate of
6,666,666 private placement warrants (or 7,466,666 if the underwriters’ overallotment option is exercised in full) at a price of $1.50 per warrant (approximately $10,000,000 in the aggregate or approximately $11,200,000 in the aggregate if the
underwriters’ over-allotment option is exercised in full), in a private placement that will occur simultaneously with the
F-13
TPG Pace Energy Holdings Corp.
Notes to the Financial Statements
completion of the Proposed Offering (the “Private Placement Warrants”). Each Private Placement Warrant entitles the holder to purchase one share of Class A common stock at $11.50 per
share, subject to adjustment. A portion of the purchase price of the Private Placement Warrants will be added to the proceeds from the Proposed Offering to be held in the trust account. The Private Placement Warrants will not be redeemable by the
Company so long as they are held by the Sponsor or its permitted transferees. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company
and exercisable by the holders on the same basis as the warrants included in the Units being sold in the Proposed Offering. The Sponsor, or its permitted transferees, will have the option to exercise the Private Placement Warrants on a cashless
basis. The Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of the Business Combination.
If the Company does not complete the Business Combination within 24 months from the closing of this offering, the proceeds from the sale
of the Private Placement Warrants will be used to fund the redemption of the Company’s public shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.
Registration Rights
Holders of the Founder Shares and Private Placement Warrants
will be entitled to registration rights pursuant to a registration rights agreement to be signed on or prior to the effective date of the Proposed Offering. The holders of these securities are entitled to make up to three demands that the Company
register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to other registration statements filed by the Company subsequent to its completion of the Business Combination and rights to
require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that that Company will not permit any registration statement filed under the Securities Act
to become effective until termination of the applicable Lock Up Period. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Indemnity
The Sponsor has agreed that it will be liable to the Company
if and to the extent any claims by a vendor (other than the Company’s independent auditors) for services rendered or products sold to the Company, or a prospective target business with which the Company discussed entering into a transaction
agreement, reduces the amount of funds in the trust account to below (i) $10.00 per public share 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
the value of the trust assets, in each case net of the interest which may be withdrawn to fund the Company’s working capital requirements, subject to an annual limit of $750,000, and/or to pay taxes, except as to any claims by a third party who
executed a waiver of any and all rights to seek access to the trust account and except as to any claims under the Company’s indemnity of the underwriters of the Proposed 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, the Sponsor will not be responsible to the extent of any liability for such third party claims. The Company has not independently
verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believes that the Sponsor’s only assets are securities of the Company and, therefore, the Sponsor may not be able to satisfy those obligations. The
Company has not asked the Sponsor to reserve for such eventuality as the Company believes the likelihood of the Sponsor having to indemnify the trust account is limited because the Company will endeavor to have all vendors and prospective target
businesses as well as other entities execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the trust account.
F-14
TPG Pace Energy Holdings Corp.
Notes to the Financial Statements
Related Party Note Payable
As of February 22, 2017, the Sponsor loaned $300,000 to the
Company under an unsecured promissory note (the “Note”), to be used for a portion of the expenses of this Proposed Offering. This loan is
non-interest
bearing and payable on the earlier of
August 31, 2017 or the closing of the Proposed Offering. Due to the short-term nature of the Note, the fair value approximates the carrying amount.
Administrative Service Agreement
The Company will enter into an agreement to pay $20,000 a month for office space, administrative and support services to an affiliate of
the Sponsor upon completion of the Proposed Offering, and will terminate the agreement upon the earlier of a Business Combination or the liquidation of the Company.
NOTE 5—STOCKHOLDER’S DEFICIT
Ordinary Stock
The Company is currently authorized to issue 20,000,000
Founder Shares and 200,000,000 shares of Class A common stock. At February 23, 2017, there were 11,500,000 Founder Shares issued and outstanding and no shares of Class A common stock issued or outstanding.
Preferred Stock
The Company is authorized to issue 1,000,000 preferred
shares. The Company’s board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions
thereof, applicable to the shares of each series. The board of directors will be able to, without 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. At February 23, 2017, there were no shares of preferred stock issued and outstanding.
Dividend Policy
The Company has not paid and does not intend to pay any cash dividends on its common stock prior to the completion of the Business
Combination. Additionally, the Company’s board of directors does not contemplate or anticipate declaring any stock dividends in the foreseeable future. However, should the Company increase the size of the offering, the Company will effect a
stock dividend with respect to the Founder Shares immediately prior to the consummation of the Proposed Offering in such amount as to maintain the ownership of the initial stockholders at 20% of issued and outstanding shares of the Company’s
common stock upon the consummation of the Proposed Offering.
NOTE 6—SUBSEQUENT EVENTS
Subsequent Events:
Except as discussed in Note 1, management has performed an evaluation of subsequent events through February 24, 2017, the date of
issuance of the financial statements, noting no items which require adjustment or disclosure.
F-15
$600,000,000
60,000,000 Units
TPG Pace Energy Holdings Corp.
PRELIMINARY PROSPECTUS
, 2017
Deutsche Bank Securities
Goldman, Sachs & Co.
Until , 2017 (25 days after the date of this prospectus), all
dealers that buy, sell or trade shares of our Class A common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting
as underwriters and with respect to their unsold allotments or subscriptions.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The estimated expenses payable by us in connection with the
offering described in this registration statement (other than the underwriting discount and commissions) will be as follows:
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Legal fees and expenses
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$
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400,000
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Accounting fees and expenses
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100,000
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SEC expenses
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79,914
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FINRA expenses
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104,000
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Travel and road show
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40,000
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NYSE listing and filing fees
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85,000
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Directors and officers insurance
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150,000
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Miscellaneous expenses
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41,086
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Total offering expenses
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$
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1,000,000
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Item 14. Indemnification of Directors
and Officers.
Our amended and restated
certificate of incorporation will provide that all of our directors, officers, employees and agents shall be entitled to be indemnified by us to the fullest extent permitted by Section 145 of the DGCL.
Section 145 of the DGCL concerning indemnification of
officers, directors, employees and agents is set forth below.
Section 145. Indemnification of officers, directors, employees and agents; insurance.
(a) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director,
officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably
believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful.
(b) A corporation shall have power to
indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is
or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the
II-1
defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and
except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the
Court of Chancery or such other court shall deem proper.
(c) To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in
subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection
therewith.
(d) Any
indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director,
officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is
a director or officer at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by
majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders.
(e) Expenses (including attorneys’
fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including
attorneys’ fees) incurred by former officers and directors or other employees and agents may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.
(f) The indemnification and advancement of expenses provided by, or granted pursuant to, the
other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office. A right to indemnification or to advancement of expenses arising under a provision of the certificate of
incorporation or a bylaw shall not be eliminated or impaired by an amendment to such provision after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for
which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred.
(g) A corporation shall have power to
purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have
the power to indemnify such person against such liability under this section.
(h) For purposes of this section, references to “the corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was serving at the request of such
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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 its counsel the matter has been settled by controlling precedent, submit to the court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
In accordance with Section 102(b)(7) of the DGCL, our amended and restated certificate of incorporation, will provide that no
director shall be personally liable to us or any of our stockholders for monetary damages resulting from breaches of their fiduciary duty as directors, except to the extent such limitation on or exemption from liability is not permitted under the
DGCL unless they violated their duty of loyalty to the Company 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 their actions as directors. The effect of this provision of our amended and restated certificate of incorporation is to eliminate our rights and those of our stockholders (through stockholders’ derivative
suits on our behalf) to recover monetary damages against a director for breach of the fiduciary duty of care as a director, including breaches resulting from negligent or grossly negligent behavior, except, as restricted by Section 102(b)(7) of
the DGCL. However, this provision does not limit or eliminate our rights or the rights of any stockholder to seek
non-monetary
relief, such as an injunction or rescission, in the event of a breach of a
director’s duty of care.
If the DGCL is
amended to authorize corporate action further eliminating or limiting the liability of directors, then, in accordance with our amended and restated certificate of incorporation, the liability of our directors to us or our stockholders will be
eliminated or limited to the fullest extent authorized by the DGCL, as so amended. Any repeal or amendment of provisions of our amended and restated certificate of incorporation limiting or eliminating the liability of directors, whether by our
stockholders or by changes in law, or the
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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, attorney’s fees, judgments,
fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred or suffered by any such person in connection with any such proceeding. Notwithstanding the foregoing, a person eligible for indemnification pursuant to our
amended and restated certificate of incorporation will be indemnified by us in connection with a proceeding initiated by such person only if such proceeding was authorized by our board of directors, except for proceedings to enforce rights to
indemnification.
The right to indemnification
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 indemnity to bring a suit in the event a claim for indemnification or advancement of expenses is not paid in full by us within a specified period of
time. Our bylaws also permit us to purchase and maintain insurance, at our expense, to protect us and/or any director, officer, employee or agent of our corporation or another entity, trust or other enterprise against any expense, liability or loss,
whether or not we would have the power to indemnify such person against such expense, liability or loss under the DGCL.
Any repeal or amendment of provisions of our bylaws affecting indemnification rights, whether by our board of directors, stockholders or
by changes in applicable law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by 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
II-4
not in any way diminish or adversely affect any right or protection existing thereunder with respect to any act or omission occurring prior to such repeal or amendment or adoption of such
inconsistent provision.
We will enter into
indemnity agreements with each of our officers and directors, a form of which is to be 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
underwriters and the underwriters have agreed to indemnify us against certain civil liabilities that may be incurred in connection with this offering, including certain liabilities under the Securities Act.
Item 15. Recent Sales of Unregistered Securities.
In February 2017, TPG Pace Energy Sponsor, LLC, our sponsor,
purchased an aggregate of 11,500,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.002 per share. Such securities were issued in connection with our organization pursuant to the exemption from registration contained
in Section 4(a)(2) of the Securities Act. Our sponsor is an accredited investor for purposes of Rule 501 of Regulation D.
In addition, our sponsor has committed to purchase from us an aggregate of 9,333,333 (or 10,533,333 if the underwriters’
over-allotment option is exercised in full) private placement warrants at $1.50 per warrant (for an aggregate purchase price of approximately $14,000,000 or approximately $15,800,000 in the aggregate if the underwriters’ over-allotment option
is exercised in full). This purchase will take place on a private placement basis simultaneously with the completion of our initial public offering. This issuance will be made pursuant to the exemption from registration contained in Section 4(a)(2)
of the Securities Act.
No underwriting discounts
or commissions were paid with respect to such sales.
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits. The list of exhibits following the signature page of this registration statement is incorporated herein by reference.
(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
Securities Act of 1933 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 Securities Act of 1933 and will be governed by the final
adjudication of such issue.
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(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 of 1933 shall be deemed to be part of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any
liability under the Securities Act of 1933, each
post-effective
amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) For the purpose of determining liability under the Securities Act of 1933 to any purchaser, if the registrant is
subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall
be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or
made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede
or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(4) For the purpose of determining liability
of a registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of an undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a
seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
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(i)
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Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
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(ii)
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Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by an undersigned registrant;
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(iii)
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The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by
or on behalf of the undersigned registrant; and
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(iv)
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Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
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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 San Francisco, State of California, on the 17th day of April, 2017.
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TPG PACE ENERGY HOLDINGS CORP.
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By:
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/s/ Martin Davidson
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Martin Davidson
Chief Financial Officer
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POWERS OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of
the undersigned constitutes and appoints each of Martin Davidson and Michael LaGatta, each acting alone, his true and lawful
attorneys-in-fact
and agents, with full
power of substitution and resubstitution, for such person and in his name, place and stead, in any and all capacities, to sign this Registration Statement on Form
S-1
(including all
pre-effective
and post-effective amendments and registration statements filed pursuant to Rule 462 under the Securities Act of 1933), and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact
and agents, each acting alone, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming that any such
attorney-in-fact
and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
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Name
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Position
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Date
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/s/ Stephen Chazen
Stephen Chazen
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President and Chief Executive Officer
(Principal Executive Officer)
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April 17, 2017
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/s/ Martin Davidson
Martin Davidson
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Chief Financial Officer
(Principal Financial and Accounting Officer)
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April 17, 2017
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/s/ Karl Peterson
Karl Peterson
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Director
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April 17, 2017
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EXHIBIT INDEX
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Exhibit No.
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Description
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1.1
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Form of Underwriting Agreement.
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3.1
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Certificate of Incorporation.
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3.2
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Form of Amended and Restated Certificate of Incorporation.
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3.3
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Bylaws.
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4.1
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Specimen Unit Certificate.
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4.2
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Specimen Class A Common Stock Certificate.
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4.3
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Specimen Warrant Certificate.
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4.4
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Form of Warrant Agreement between Continental Stock Transfer & Trust Company and the Registrant.
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5.1
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Opinion of Weil, Gotshal & Manges LLP.
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10.1
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Promissory Note, dated February 22, 2017, issued to TPG Pace Energy Sponsor, LLC.
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10.2
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Form of Letter Agreement among the Registrant and its officers and directors and TPG Pace Energy Sponsor, LLC.
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10.3
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Form of Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the Registrant.
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10.4
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Form of Registration Rights Agreement among the Registrant and certain security holders.
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10.5
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Securities Subscription Agreement, dated February 22, 2017, between the Registrant and TPG Pace Energy Sponsor, LLC.
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10.6
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Form of Private Placement Warrants Purchase Agreement between the Registrant and TPG Pace Energy Sponsor, LLC.
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10.7
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Form of Indemnity Agreement.
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10.8
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Form of Administrative Services Agreement, by and between the Registrant and TPG Global, LLC.
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23.1
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Consent of KPMG LLP.
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23.2
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Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5.1).
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24.1
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Power of Attorney (included on signature page of this Registration Statement).
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99.1
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Consent of Stephen Chazen.
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99.2
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Consent of Arcilia Acosta.
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99.3
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Consent of David Bonderman.
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99.4
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Consent of Edward Djerejian
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99.5
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Consent of Chad Leat.
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99.6
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Consent of Michael MacDougall.
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99.7
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Consent of Dan F. Smith.
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Exhibit 1.1
60,000,000 Units
TPG Pace Energy
Holdings Corp.
UNDERWRITING AGREEMENT
[●], 2017
Deutsche Bank Securities Inc.
60 Wall Street,
4th Floor
New York, New York 10005
Goldman, Sachs & Co.
200 West Street
New York, New York 10282
As Representatives of the several Underwriters
Ladies and
Gentlemen:
TPG Pace Energy Holdings Corp., a Delaware corporation (the “Company”), proposes to sell to you and, as applicable,
to the several underwriters named in
Schedule I
hereto (collectively, the “Underwriters”), for whom you (the “Representatives”) are acting as representatives, 60,000,000 units (the “Units”) of the Company (said
units to be issued and sold by the Company being hereinafter called the “Underwritten Securities”). The Company also proposes to grant to the Underwriters an option to purchase up to 9,000,000 additional units to cover over-allotments, if
any (the “Option Securities”; the Option Securities, together with the Underwritten Securities, being hereinafter called the “Securities”). To the extent there are no additional Underwriters listed on
Schedule I
other than
you, the term Representatives as used herein shall mean you, as Underwriters, and the term Underwriter shall mean either the singular or plural as the context requires. Certain capitalized terms used herein and not otherwise defined are defined in
Section 20 hereof.
Each Unit consists of one share of the Company’s Class A common stock, par value $0.0001 per share (the
“Common Stock”), and one-third of one warrant, where each whole warrant is exercisable to purchase one share of Common Stock (the “Warrant(s)”). The Common Stock and Warrants included in the Units will not trade separately until
the 52nd day following the date of the Prospectus (unless the Representatives inform the Company of their decision to allow earlier separate trading), subject to (a) the Company’s preparation of an audited balance sheet reflecting the
receipt by the Company of the proceeds of the Offering (as defined below), (b) the filing of such audited balance sheet with the Commission on a Form 8-K or similar form by the Company that includes such audited balance sheet, and (c) the
Company having issued a press release announcing when such separate trading will begin. Each whole Warrant entitles its holder, upon exercise, to purchase one share of Common Stock for $11.50 per share during the period commencing on the
later of thirty (30) days after the completion of an initial Business Combination (as defined below) or twelve (12) months from the date of the consummation of the Offering and
terminating on the five-year anniversary of the date of the completion of such initial Business Combination or earlier upon redemption or liquidation;
provided,
however, that pursuant to the Warrant Agreement (as defined below), a warrant may
not be exercised for a fractional share. As used herein, the term “Business Combination” (as described more fully in the Registration Statement) shall mean a merger, capital stock exchange, asset acquisition, stock purchase, reorganization
or similar business combination with one or more businesses.
The Company has entered into an Investment Management Trust Agreement,
effective as of [●], 2017, with Continental Stock Transfer & Trust Company (“CST”), as trustee, in substantially the form filed as Exhibit 10.3 to the Registration Statement (the “Trust Agreement”), pursuant to
which the proceeds from the sale of the Private Placement Warrants (as defined below) and certain 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 holders of the Underwritten Securities and the Option Securities, if and when issued.
The Company has entered into a Warrant
Agreement, effective as of [●], 2017, 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 (the “Warrant Agreement”),
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 February 22, 2017 (the “Founder’s Purchase
Agreement”), with TPG Pace Energy Sponsor, LLC, a Delaware limited liability company (the “Sponsor”), in substantially the form filed as Exhibit 10.5 to the Registration Statement, pursuant to which the Sponsor purchased an aggregate
of 11,500,000 shares of Class F common stock, par value $0.0001 per share, of the Company (including the shares of Common Stock issuable upon conversion thereof, the “Initial Founder Shares”), for an aggregate purchase price of $25,000. On
[●], 2017, the Company declared a dividend (the “Dividend”) of 5,750,000 shares of Class F common stock, par value $0.0001 per share, of the Company (including the shares of Common Stock issuable upon conversion thereof, the
“New Founder Shares” and, together with the Initial Founder Shares, the “Founder Shares”). The Founder Shares are substantially similar to the shares of Common Stock included in the Units except as described in the Prospectus.
The Sponsor has entered into a Securities Assignment Agreement, effective as of [●], 2017 (the “Securities Assignment
Agreement”), with each of the Company’s independent director nominees (each, a “Buyer”), pursuant to which the Sponsor assigned 40,000 of its Founder Shares to each Buyer (an aggregate of 160,000 Founder Shares) for an aggregate
purchase price of $347.84.
The Company has entered into a Private Placement Warrants Purchase Agreement, effective as of [●], 2017
(the “Warrant Subscription Agreement”), with the Sponsor, in substantially the form filed as Exhibit 10.6 to the Registration Statement, pursuant to which the Sponsor agreed to purchase an aggregate of 9,333,333 warrants (or up to
10,533,333 warrants if the over-allotment option is exercised in full), at a price of $1.50 per Private Placement Warrant, each entitling the
2
holder, upon exercise, to purchase one share of Common Stock (the “Private Placement Warrants”), for $11.50 per share. The Private Placement Warrants are substantially similar to the
Warrants included in the Units, except as described in the Prospectus.
The Company has entered into a Registration Rights Agreement,
dated as of [●], 2017, with the Sponsor and the other parties thereto, in substantially the form filed as Exhibit 10.4 to the Registration Statement (the “Registration Rights Agreement”), pursuant to which the Company has granted
certain registration rights in respect of the Private Placement Warrants and the shares of Common Stock underlying the Founder Shares, the shares of Common Stock underlying the Private Placement Warrants and certain warrants that may be issued upon
conversion of working capital loans (including the shares of Common Stock underlying such warrants) as described in the Prospectus.
The
Company has caused to be duly executed and delivered a letter agreement, dated [●], 2017, by and among the Sponsor and each of the Company’s officers, directors, and director nominees, in the form filed as Exhibit 10.2 to the Registration
Statement (the “Insider Letter”).
The Company has entered into an Administrative Services Agreement, dated as of [●],
2017, with an affiliate of the Sponsor, in substantially the form filed as Exhibit 10.8 to the Registration Statement (the “Administrative Services Agreement”), pursuant to which the Company will pay to such affiliate of the Sponsor an
aggregate monthly fee of $20,000 for certain office space, administrative and support services.
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1.
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REPRESENTATIONS AND WARRANTIES.
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The Company represents and warrants to, and agrees
with, each Underwriter as set forth below in this Section 1.
(a) The Company has prepared and filed with the Commission the
Registration Statement (file number 333-[●]) on Form S-1, including the related Preliminary Prospectus, for registration under the Act of the offering and sale of the Securities. Such Registration Statement, including any amendments thereto
filed prior to the Execution Time, has become effective. The Company has filed one or more amendments thereto, including the related Preliminary Prospectus, each of which has previously been furnished to you. The Company will file with the
Commission the Prospectus in accordance with Rule 424(b). As filed, such Prospectus shall contain all information required by the Act and, except to the extent the Representatives shall agree in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the Execution Time or, to the extent not completed at the Execution Time, shall contain only such specific additional information and other changes (beyond that contained in the latest Preliminary
Prospectus) as the Company has advised you, prior to the Execution Time, will be included or made therein. The Company has complied to the Commission’s satisfaction with all requests of the Commission for additional or supplemental information.
(b) On the Effective Date, the Registration Statement did, and when the Prospectus is first filed in accordance with Rule 424(b) and on
the Closing Date (as defined herein) and on any date on which Option Securities are purchased, if such date is not the Closing Date (a “settlement date”), the Prospectus (and any supplement thereto) will, comply in all material respects
with the
3
applicable requirements of the Act; on the Effective Date and at the Execution Time, the Registration Statement did not and will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; as of the Applicable Time and on the Closing Date and any
settlement date, any individual Written Testing-the-Waters Communication (as defined herein) did not conflict with the information contained in the Registration Statement or the Statutory Prospectus, complied in all material respects with the Act,
when considered together with the Statutory Prospectus, and did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading; and on the date of any filing pursuant to Rule 424(b) and on the Closing Date and any settlement date, the Prospectus (together with any supplement thereto) will not include
any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
provided, however,
that the Company
makes no representations or warranties as to the information contained in or omitted from the Registration Statement or the Prospectus (or any supplement thereto) in reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any Underwriter through the Representatives specifically for inclusion in the Registration Statement or the Prospectus (or any supplement thereto), it being understood and agreed that the only such information furnished by
any Underwriter consists of the information described as such in Section 8(b) hereof.
(c) The Statutory Prospectus, as of the
Applicable Time and on the Closing Date and any settlement date, did not and will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, however,
that the Company makes no representations or warranties as to the information contained in or omitted from the Statutory Prospectus in reliance upon and in
conformity with written information furnished to the Company by or on behalf of any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by or on behalf of any
Underwriter consists of the information described as such in Section 8(b) hereof.
(d) The Company has filed with the Commission a
Form 8-A (file number 001-[●]) providing for the registration under the Exchange Act of the Securities, which registration is currently effective on the date hereof. The Securities have been authorized for listing, subject to official notice
of issuance and evidence of satisfactory distribution, on the New York Stock Exchange, and the Company knows of no reason or set of facts that is likely to adversely affect such authorization.
(e) The Commission has not issued any order or, to the Company’s knowledge, threatened to issue any order preventing or suspending the
effectiveness of the Registration Statement or the use of any Preliminary Prospectus, the Prospectus or any part thereof, and has not instituted or, to the Company’s knowledge, threatened to institute any proceedings with respect to such an
order.
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(f)(i) At the time of filing the Registration Statement and (ii) as of the Execution Time
(with such date being used as the determination date for purposes of this clause (ii)), the Company was and is an Ineligible Issuer (as defined in Rule 405).
(g) The Company has not prepared or used a Free Writing Prospectus.
(h) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware
with full corporate power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as described in the Statutory Prospectus and the Prospectus and to enter into this Agreement, the Trust Agreement,
the Warrant Agreement, the Founder’s Purchase Agreement, the Warrant Subscription Agreement, the Registration Rights Agreement, the Insider Letter and the Administrative Services Agreement, to declare the Dividend, and to carry out the
transactions contemplated hereby and thereby, and is duly qualified to do business as a foreign corporation and is in good standing under the laws of each jurisdiction that requires such qualification.
(i) 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 Statutory Prospectus contains in all material respects the same description of the foregoing matters contained in the Prospectus); and the statements in the
Statutory Prospectus and the Prospectus under the headings “Principal Stockholders,” “Certain Relationships and Related Party Transactions,” and “Description of Securities” insofar as such statements summarize legal
matters, agreements, documents or proceedings discussed therein, are accurate and fair summaries of such legal matters, agreements, documents or proceedings. There are no business relationships or related party transactions involving the Company or
any other person required by the Act to be described in the Registration Statement or Prospectus that have not been described as required.
(j) The Company’s authorized equity capitalization is as set forth in the Statutory Prospectus and the Prospectus.
(k) All issued and outstanding shares of the Company have been duly and validly authorized and issued and are fully paid and nonassessable;
and none of such shares were issued in violation of the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company. The offers and sales of the outstanding shares of Common Stock and Warrants
were at all relevant times either registered under the Act, the applicable state securities and blue sky laws or, based in part on the representations and warranties of the purchasers of such shares of Common Stock and Warrants, exempt from such
registration requirements. The holders of outstanding shares of the Company are not entitled to preemptive or other rights to subscribe for the Securities arising by operation of law or under the Amended and Restated Certificate of Incorporation
(the “Amended and Restated Certificate of Incorporation”) or bylaws of the Company; and, except as set forth in the Statutory Prospectus and the Prospectus, no options, warrants or other rights to purchase, agreements or other obligations
to issue, or rights to convert any obligations into or exchange any securities for, shares or other ownership interests in the Company are outstanding.
5
(l) The Securities have been duly authorized and when executed by the Company and countersigned
and issued and delivered against payment by the underwriters pursuant to this Agreement, will be validly issued.
(m) The shares of Common
Stock included in the Units have been duly authorized and, when executed by the Company and countersigned, and issued and delivered against payment for the Securities by the Underwriters pursuant to this Agreement, will be validly issued, fully paid
and nonassessable.
(n) The Warrants included in the Units, when executed, authenticated, issued and delivered in the manner set forth in
the Warrant Agreement against payment for the Securities by the Underwriters pursuant to this Agreement, will be duly executed, authenticated, issued and delivered, and will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from time to time in effect and by equitable principles of
general applicability.
(o) The shares of Common Stock issuable upon exercise of the Warrants included in the Units and the Private
Placement Warrants have been duly authorized and reserved for issuance upon exercise thereof and, when executed by the Company and countersigned, and issued and delivered against payment therefor pursuant to the Warrants and the Private Placement
Warrants, as applicable, and the Warrant Agreement, will be validly issued, fully paid and nonassessable. The holders of such shares of Common Stock are not and will not be subject to personal liability by reason of being such holders; such shares
of Common Stock are not and will not be subject to any preemptive or other similar contractual rights granted by the Company; and all corporate action required to be taken for the authorization, issuance and sale of such shares of Common Stock
(other than such execution, countersignature and delivery at the time of issuance) has been duly and validly taken.
(p) Except as set
forth in the Statutory Prospectus and the Prospectus, no holders of any securities of the Company or any rights exercisable for or convertible or exchangeable into securities of the Company have the right to require the Company to register any such
securities of the Company under the Act or to include any such securities in a registration statement to be filed by the Company.
(q) No
securities of the Company have been sold by the Company or by or on behalf of, or for the benefit of, any person or persons controlling, controlled by, or under common control with the Company from its inception through and including the date
hereof, except as disclosed in the Registration Statement, the Statutory Prospectus and the Prospectus.
(r) Neither the Company nor any
of its affiliates has, prior to the date hereof, made any offer or sale of any securities that are required to be “integrated” pursuant to the Act with the offer and sale of the Underwritten Securities pursuant to the Registration
Statement.
(s) The shares of Class F common stock included in the Founder Shares are duly authorized, validly issued, fully paid and
nonassessable.
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(t) The Private Placement Warrants, when delivered upon the consummation of this Offering, will
be duly executed, authenticated and issued, and will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, or similar laws affecting creditors’ rights generally from time to time in effect and by equitable principles of general applicability.
(u) This Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from time to time in effect and by equitable
principles of general applicability.
(v) The Trust Agreement has been duly authorized, executed and delivered by the Company, and is a
valid and binding agreement of the Company, enforceable against the Company, in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from
time to time in effect and by equitable principles of general applicability.
(w) The Warrant Agreement has been duly authorized, executed
and delivered by the Company and is a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting
creditors’ rights generally from time to time in effect and by equitable principles of general applicability.
(x) The Founder’s
Purchase Agreement has been duly authorized, executed and delivered by the Company and the Sponsor, and is a valid and binding agreement of the Company and the Sponsor, enforceable against the Company and the Sponsor in accordance with its terms
except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from time to time in effect and by equitable principles of general applicability.
(y) The Warrant Subscription Agreement has been duly authorized, executed and delivered by the Company and the Sponsor, and is a valid and
binding agreement of the Company and the Sponsor, enforceable against the Company and the Sponsor in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors’
rights generally from time to time in effect and by equitable principles of general applicability.
(z) The Registration Rights Agreement
has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms except as the enforceability thereof may be limited by bankruptcy,
insolvency, or similar laws affecting creditors’ rights generally from time to time in effect and by equitable principles of general applicability.
(aa) The Insider Letter executed by the Company, the Sponsor and, to the Company’s knowledge each executive officer, director and
director nominee of the Company, has been duly
7
authorized, executed and delivered by the Company, the Sponsor and, to the Company’s knowledge, each such executive officer, director and director nominee, respectively, and is a valid and
binding agreement of the Company, the Sponsor and, to the Company’s knowledge, each such executive officer, director and director nominee, respectively, enforceable against the Company, the Sponsor and, to the Company’s knowledge, each
such executive officer, director and director nominee, respectively, in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from time to
time in effect and by equitable principles of general applicability.
(bb) The Administrative Services Agreement has been duly authorized,
executed and delivered by the Company and, assuming the due authorization, execution and delivery thereof by the affiliate of the Sponsor party thereto, is a valid and binding agreement of the Company, enforceable against the Company in accordance
with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from time to time in effect and by equitable principles of general applicability.
(cc) The Company is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as
described in the Statutory Prospectus and the Prospectus, will not be an “investment company” as defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”).
(dd) No consent, approval, authorization, filing with or order of any court or governmental agency or body is required in connection with the
transactions contemplated herein or in the Trust Agreement, the Warrant Agreement, the Founder’s Purchase Agreement, the Securities Assignment Agreement, the Warrant Subscription Agreement, the Registration Rights Agreement, the Insider Letter
or the Administrative Services Agreement, except for the registration under the Act and the Exchange Act of the Securities and such as may be required under state securities or blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner contemplated herein and in the Statutory Prospectus and the Prospectus.
(ee) The Company is not in violation or default of (i) any provision of its Amended and Restated Certificate of Incorporation or bylaws,
(ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which it is a party or bound or to which its property is subject, or
(iii) any (x) statute, law, rule, regulation, or (y) judgment, order or decree of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company; except in the
case of clauses (ii) and (iii) above for any such conflict, breach or violation that would not, individually or in the aggregate, be reasonably expected to have a material adverse effect on the financial condition, prospects, earnings,
business or properties of the Company, taken as a whole, whether or not arising from transactions in the ordinary course of business (a “Material Adverse Effect”).
(ff) Neither the issue and sale of the Securities nor the consummation of any other of the transactions herein contemplated nor the
fulfillment of the terms hereof or of the Trust Agreement, the Warrant Agreement, the Founder’s Purchase Agreement, the Securities Assignment Agreement, the Warrant Subscription Agreement, the Registration Rights
8
Agreement, the Insider Letter or the Administrative Services Agreement will conflict with, result in a breach or violation of, or imposition of any lien, charge or encumbrance upon any property
or assets of the Company pursuant to, (i) the Amended and Restated Certificate of Incorporation or bylaws of the Company, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the Company is a party or bound or to which the Company’s property is subject, or (iii) any statute, law, rule, or regulation, judgment, order or decree applicable to the
Company of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company or any of its respective properties.
(gg) No holders of securities of the Company have rights to the registration of such securities under the Registration Statement.
(hh) The historical financial statements, including the notes thereto and the supporting schedules, if any, of the Company included in the
Statutory Prospectus, the Prospectus and the Registration Statement present fairly the financial condition, results of operations and cash flows of the Company as of the dates and for the periods indicated, comply as to form with the applicable
accounting requirements of the Act and have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved (except as otherwise noted therein). The summary financial data set
forth under the caption “Summary Financial Data” in the Statutory Prospectus, Prospectus and Registration Statement fairly present, on the basis stated in the Statutory Prospectus, Prospectus and Registration Statement, the information
included therein. The Company is not party to any off-balance sheet transactions, arrangements, obligations (including contingent obligations), or other relationships with unconsolidated entities or other persons that may have a material current or
future effect on the Company’s financial condition, changes in financial condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses. The statistical, industry-related
and market-related data included in the Registration Statement, the Statutory Prospectus and the Prospectus are based on or derived from sources that the Company reasonably and in good faith believes are reliable and accurate, and such data agree
with the sources from which they are derived.
(ii) No action, suit or proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or the Sponsor, or the property of either of them is pending or, to the knowledge of the Company, threatened that (i) could reasonably be expected to have a material adverse effect on the
performance of this Agreement or the consummation of any of the transactions contemplated hereby by the Company or (ii) could reasonably be expected to have a Material Adverse Effect, except as set forth in or contemplated in the Statutory
Prospectus and the Prospectus (exclusive of any supplement thereto).
(jj) The Company owns or leases all such properties as are necessary
to the conduct of its operations as presently conducted.
(kk) KPMG LLP (“KPMG”), who have certified certain financial
statements of the Company and delivered their report with respect to the audited financial statements and schedules included in the Registration Statement, Statutory Prospectus and the Prospectus, is a
9
registered public accounting firm that is independent with respect to the Company within the meaning of the Act and the Exchange Act and the applicable published rules and regulations thereunder.
(ll) The Company maintains effective “disclosure controls and procedures” (as defined under Rule 13a-15(e) under the Exchange
Act to the extent required by such rule).
(mm) 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 to comply in all material respects with the applicable
provisions of the Sarbanes Oxley Act.
(nn) There is and has been no failure on the part of the Company or, to the knowledge of the
Company, any of the Company’s officers or directors, in their capacities as such, to comply with (as and when applicable), and immediately following the Effective Date the Company will be in compliance with, NYSE Listed Company Manual
Section 303A. Further, there is and has been no failure on the part of the Company or, to the knowledge of the Company, any of the Company’s officers or directors, in their capacities as such, to comply with (as and when applicable), and
immediately following the Effective Date the Company will be in compliance with, the phase-in requirements and all other provisions of the New York Stock Exchange corporate governance requirements set forth in the NYSE Listed Company Manual.
(oo) 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
Securities.
(pp) The Company has filed all tax returns (including U.S. federal, state and non-U.S.) that are required to be filed by it
or has requested extensions thereof (except in any case in which the failure so to file would not have a Material Adverse Effect) through the date hereof and has paid all taxes required to be paid by it and any other assessment, fine or penalty
levied against it, to the extent that any of the foregoing is due and payable, except for any such assessment, fine or penalty that is currently being contested in good faith and for which adequate reserves required by generally accepted accounting
principles have been created with respect thereto or as would not have a Material Adverse Effect, except as set forth in or contemplated in the Registration Statement, Statutory Prospectus and the Prospectus (exclusive of any supplement thereto).
(qq) The Company possesses all licenses, certificates, permits and other authorizations issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct its business, and the Company has not received any notice of proceedings relating to the revocation or modification of any such license, certificate, authorization or permit that, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect, except as set forth in or contemplated in the Statutory Prospectus and the Prospectus (exclusive of any supplement thereto).
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(rr) None of the Company, the Sponsor or, to the knowledge of the Company, any director, director
nominee, officer, agent, employee, affiliate or other person associated with or acting on behalf of the Company: (i) has used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political
activity: (ii) has made any direct or indirect unlawful contribution or payment to any official of, or candidate for, or any employee of, any federal, state or foreign office from corporate funds; (iii) has made any bribe, unlawful rebate,
payoff, influence payment, kickback or other unlawful payment; or (iv) is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the OECD Convention on Bribery of Foreign Public Officials
in International Business Transactions, the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (collectively, the “FCPA”) or any similar law or regulation to which the Company, any director,
director nominee, officer, agent, employee, affiliate or other person associated with or acting on behalf of the Company is subject. The Company, the Sponsor and, to the knowledge of the Company, its directors, director nominees, officers, agents,
employees and affiliates have each conducted the business of the Company and their own businesses on behalf of the Company in compliance with the FCPA and any applicable similar law or regulation and have instituted and maintain policies and
procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(ss) The
operations of the Company are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements, including those of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), the Currency and Foreign Transactions Reporting Act of 1970, as amended, the applicable money laundering statutes of jurisdictions
where the Company 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 “Money Laundering
Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company,
threatened.
(tt) None of the Company, the Sponsor or, to the knowledge of the Company, any director, director nominee, officer, agent or
affiliate of the Company is currently subject to any sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”) or any similar sanctions imposed by any other body, governmental or other, to
which any of such persons is subject (collectively, “other economic sanctions”); and the Company will not directly or indirectly use the proceeds of the Offering, or lend, contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any sanctions administered by OFAC or other economic sanctions.
(uu) Except as disclosed in the Registration Statement, the Statutory Prospectus and the Prospectus, the Company (i) does not have any
material lending or other relationship with any bank or lending affiliate of any of the Underwriters and (ii) does not intend to use any of the proceeds from the sale of the Securities hereunder to repay any outstanding debt owed to any
affiliate of any of the Underwriters.
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(vv) All information contained in the questionnaires (the “Questionnaires”) completed
by 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 and the Company has not become aware of any information that would cause the
information disclosed in the Questionnaires completed by the Sponsor or the Company’s officers, directors and director nominees to become inaccurate and incorrect.
(ww) Except as disclosed in the Registration Statement, the Statutory Prospectus and the Prospectus, prior to the date hereof, the Company has
not identified any acquisition target and has not, nor, to its knowledge, has anyone on its behalf, initiated contact with any prospective acquisition target or had any substantive discussions, formal or otherwise, with respect to a possible initial
Business Combination, or undertaken, or engaged or retained any agent or other representative to undertake, any research, diligence, evaluations or similar activities to identify, locate or contact any suitable acquisition candidate.
(xx) Except as described in the Registration Statement, the Statutory Prospectus and the Prospectus, there are no claims, payments,
arrangements, contracts, agreements or understandings relating to the payment of a brokerage commission or finder’s, consulting, origination or similar fee by the Company or the Sponsor with respect to the sale of the Securities hereunder or
any other arrangements, agreements or understandings of the Company, the Sponsor or any officer or director of the Company, or their respective affiliates, that may affect the Underwriters’ compensation, as determined by the Financial Industry
Regulatory Authority (“FINRA”).
(yy) Except as described in the Registration Statement, the Statutory Prospectus and the
Prospectus, the Company has not made any direct or indirect payments (in cash, securities or any other “item of value” as defined in Rule 5110(c)(3) 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 Effective
Date, other than payments to the Underwriters pursuant to this Agreement.
(zz) Except as described in the Registration Statement, the
Statutory Prospectus and the Prospectus, during the period beginning 180 days prior to the initial filing of the Registration Statement and ending on the Effective Date, no Member and/or any person associated or affiliated with a Member has provided
any investment banking, financial advisory and/or consulting services to the Company.
(aaa) Except as disclosed in the FINRA
Questionnaires provided to the Representatives, to the Company’s knowledge no officer, director, or beneficial owner of any class of the Company’s securities (whether debt or equity, registered or unregistered, regardless of the time
acquired or the source from which derived) (any such individual or entity, a “Company Affiliate”) is a Member or a person associated or affiliated with a Member.
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(bbb) Except as disclosed in the FINRA Questionnaires provided to the Representatives, to the
Company’s knowledge, no Company Affiliate is an owner of shares or other securities of any Member (other than securities purchased on the open market).
(ccc) No Company Affiliate has made a subordinated loan to any Member.
(ddd) Except as described in the Registration Statement, the Statutory Prospectus and the Prospectus, no proceeds from the sale of the
Underwritten Securities (excluding underwriting compensation as disclosed in the Registration Statement, Statutory Prospectus and the Prospectus) will be paid by the Company to any Member, or any persons associated or affiliated with a Member.
(eee) The Company has not issued any warrants or other securities, or granted any options, directly or indirectly to anyone who is a potential
underwriter in the Offering or a related person (as defined by FINRA rules) of such an underwriter within the 180-day period prior to the initial filing date of the Registration Statement.
(fff) No person to whom securities of the Company have been privately issued within the 180-day period prior to the initial filing date of the
Registration Statement has to the Company’s knowledge any relationship or affiliation or association with any Member.
(ggg) To the
Company’s knowledge, no Member intending to participate in the Offering has a conflict of interest with the Company. For this purpose, a “conflict of interest” means, if at the time of the Member’s participation in the Offering,
any of the following applies: (A) the securities are to be issued by the Member; (B) the Company controls, is controlled by or is under common control with the Member or the Member’s associated persons; (C) at least 5% of the net
offering proceeds, not including underwriting compensation, are intended to be: (i) used to reduce or retire the balance of a loan or credit facility extended by the Member, its affiliates and its associated persons, in the aggregate; or
(ii) otherwise directed to the Member, its affiliates and associated persons, in the aggregate; or (D) as a result of the Offering and any transactions contemplated at the time of the Offering: (i) the Member will be an affiliate of
the Company; (ii) the Member will become publicly owned; or (iii) the Company will become a Member or form a broker-dealer subsidiary.
(hhh) 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 Securities.
(iii) The Company does not own an interest in any corporation, partnership, limited liability company, joint venture, trust or other entity.
(jjj) No relationship, direct or indirect, exists between or among any of the Company or any affiliate of the Company, on the one hand,
and any director, director nominee, officer, stockholder, special advisor, customer or supplier of the Company or any affiliate of the Company, on the other hand, which is required by the Act or the Exchange Act to be described in the Registration
Statement, Statutory Prospectus or the Prospectus that is not described as required. There are no outstanding loans, advances (except normal advances for business
13
expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of any of the officers, directors or director nominees of the Company or any of
their respective family members, except as disclosed in the Registration Statement, Statutory Prospectus and the Prospectus. The Company has not extended or maintained credit, arranged for the extension of credit, or renewed an extension of credit,
in the form of a personal loan to or for any director or officer of the Company.
(kkk) The Company has not offered, or caused the
Underwriters to offer, the Underwritten Securities 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.
(lll) Upon delivery and payment for the Units on the Closing Date, the Company will not be subject to Rule 419 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.
(mmm) 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 Execution Time, the Company has been and is an “emerging growth company,” as defined in Section 2(a) of the Act (an “Emerging Growth Company”). “Testing-the-Waters Communication” means
any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Act.
(nnn) The Company
(i) has not alone engaged in any Testing-the-Waters Communication other than Testing-the-Waters Communications with the consent of the Representatives with entities that are qualified institutional buyers within the meaning of Rule 144A under
the Act or institutions that are accredited investors within the meaning of Rule 501 under the Act and (ii) has not authorized anyone other than the Representatives to engage in Testing-the-Waters Communications. The Company reconfirms that the
Representatives have been authorized to act on its behalf in undertaking Testing-the-Waters Communications. The Company has not distributed any Written Testing-the-Waters Communications other than those listed on
Schedule III
hereto.
“Written Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Act.
Any certificate signed by any officer of the Company and delivered to the Representatives or counsel for the Underwriters in connection with
the Offering shall be deemed a representation and warranty by the Company, as to matters covered thereby, to each Underwriter.
(a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company agrees to sell to each Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Company, at a purchase price of $9.800 per Unit, the amount of the
Underwritten Securities set forth opposite such Underwriter’s name in Schedule I hereto.
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(b) Subject to the terms and conditions and in reliance upon the representations and warranties
herein set forth, the Company hereby grants an option to the several Underwriters to purchase, severally and not jointly, up to 9,000,000 Option Securities at the same purchase price per Unit as the Underwriters shall pay for the Underwritten
Securities. Said option may be exercised only to cover over-allotments in the sale of the Underwritten Securities by the Underwriters. Said option may be exercised in whole or in part at any time on or before the 45th day after the date of the
Prospectus upon written notice by the Representatives to the Company setting forth the number of Option Securities as to which the several Underwriters are exercising the option and the settlement date. The number of Option Securities to be
purchased by each Underwriter shall be based upon the same percentage of the total number of the Option Securities to be purchased by the several Underwriters as such Underwriter is purchasing of the Underwritten Securities, subject to such
adjustments as the Representatives in their absolute discretion shall make to eliminate any fractional shares.
(c) In addition to the
discount from the public offering price represented by the purchase price set forth in the first sentence of Section 2(a) of this Agreement, the Company hereby agrees to pay to the Underwriters a deferred discount of $0.35 per Unit (including
both Underwritten Securities and Option Securities) purchased hereunder (the “Deferred Discount”). The Underwriters hereby agree that if no Business Combination is consummated within the time period provided in the Trust Agreement and the
funds held under the Trust Agreement are distributed to the holders of the Common Stock included in the Securities sold pursuant to this Agreement (the “Public Stockholders”), (i) the Underwriters will forfeit any rights or claims to
the Deferred Discount and (ii) the trustee under the Trust Agreement is authorized to distribute the Deferred Discount to the Public Stockholders on a pro rata basis.
Delivery of and payment for the Underwritten Securities and the
Option Securities (if the option provided for in Section 2 hereof shall have been exercised on or before the third Business Day prior to the Closing Date) shall be made at 9:00 a.m., New York City time, on [●], 2017, or at such time on
such later date not more than three Business Days after the foregoing date as the Representatives shall designate, which date and time may be postponed by agreement between the Representatives and the Company or as provided in Section 9 hereof
(such date and time of delivery and payment for the Securities being herein called the “Closing Date”). Delivery of the Securities shall be made to the Representatives for the respective accounts of the several Underwriters against payment
by the several Underwriters through the Representatives of the purchase price thereof by wire transfer payable in same-day funds to an account specified by the Company and to the Trust Account as described below in this Section 3. Delivery of
the Underwritten Securities and the Option Securities shall be made through the facilities of The Depository Trust Company (“DTC”) unless the Representatives shall otherwise instruct.
(a) Payment for the Underwritten Securities shall be made as follows: $588,000,000 of the net proceeds for the Underwritten Securities
(including $21,000,000 of Deferred Discount) shall be deposited in the Trust Account pursuant to the terms of the Trust Agreement along with
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such portion of the gross proceeds from the sale of the Private Placement Warrants (the “Private Placement Portion”) in order for the Trust Account to equal the product of the number of
Units sold and the Public Offering price per Unit as set forth on the cover of the Prospectus upon delivery to the Representatives of the Underwritten Securities through the facilities of DTC or, if the Representatives have otherwise instructed,
upon delivery to the Representatives of certificates (in form and substance satisfactory to the Representatives) representing the Underwritten Securities, in each case for the account of the Underwriters. The Underwritten Securities shall be
registered in such name or names and in such authorized denominations as the Representatives may request in writing at least two Business Days prior to the Closing Date. If delivery is not made through the facilities of DTC, the Company will permit
the Representatives to examine and package the Underwritten Securities for delivery, at least one Business Day prior to the Closing Date. The Company shall not be obligated to sell or deliver the Underwritten Securities except upon tender of payment
by the Representatives for all the Underwritten Securities. Payment by the Underwriters for the Underwritten Securities is contingent on the (i) payment by the Sponsor to the Company for the Private Placement Warrants and (ii) deposit of
the Private Placement Portion by or at the direction of the Company into the Trust Account, in each case at least one Business Day prior to the Closing Date.
(b) Payment for the Option Securities shall be made as follows: $9.80 per Option Security (including $0.35 per Option Security of Deferred
Discount) shall be deposited in the Trust Account pursuant to the terms of the Trust Agreement along with such portion of the gross proceeds from the sale of the Private Placement Warrants in order for the Trust Account to equal the product of the
number of Units sold and the Public Offering price per Unit as set forth on the cover of the Prospectus upon delivery to the Representatives of the Option Securities through the facilities of DTC or, if the Representatives have otherwise instructed,
upon delivery to the Representatives of certificates (in form and substance satisfactory to the Representatives) representing the Option Securities (or through the facilities of DTC) in each case for the account of the Underwriters. The Option
Securities shall be registered in such name or names and in such authorized denominations as the Representatives may request in writing at least two Business Days prior to the Closing Date. If delivery is not made through the facilities of DTC, the
Company will permit the Representatives to examine and package the Option Securities for delivery, at least one Business Day prior to the Closing Date. The Company shall not be obligated to sell or deliver the Option Securities except upon tender of
payment by the Representatives for all the Option Securities. Payment by the Underwriters for the Option Securities is contingent on the (i) payment by the Sponsor to the Company for the Private Placement Warrants and (ii) deposit of such
portion of the gross proceeds from the sale of the Private Placement Warrants in order for the Trust Account, together with the proceeds to be received pursuant to this clause (b), to equal the product of the number of Units sold and the Public
Offering price per Unit as set forth on the cover of the Prospectus by or at the direction of the Company into the Trust Account, in each case at least one Business Day prior to the applicable settlement date.
If the option provided for in Section 2 hereof is exercised after the third Business Day prior to the Closing Date, the Company will
deliver the Option Securities (at the expense of the Company) to the Representatives, at 60 Wall Street, 4th Floor, New York, New York 10005, on the date specified by the Representatives (which shall be at least three Business Days after exercise of
said option) for the respective accounts of the several Underwriters, against payment by the several
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Underwriters through the Representatives of the purchase price thereof to the Trust Account as described above in Section 3(b). If settlement for the Option Securities occurs after the
Closing Date, the Company will deliver to the Representatives on the settlement date for the Option Securities, and the obligation of the Underwriters to purchase the Option Securities shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates and letters delivered on the Closing Date pursuant to Section 6 hereof.
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4.
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OFFERING BY UNDERWRITERS.
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It is understood that the several Underwriters propose to
offer the Securities for sale to the public as set forth in the Prospectus (the “Offering”).
The Company agrees with the several Underwriters that:
(a) Prior to the termination of the Offering, the Company will not file any amendment of the Registration Statement or supplement to the
Prospectus or any Rule 462(b) Registration Statement unless the Company has furnished you a copy for your review prior to filing and will not file any such proposed amendment, supplement or Rule 462(b) Registration Statement to which you reasonably
object. The Company will cause the Prospectus, properly completed, and any supplement thereto to be filed in a form approved by the Representatives with the Commission pursuant to the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the Representatives of such timely filing. The Company will promptly advise the Representatives (i) when the Prospectus, and any supplement thereto, shall have been filed (if required) with
the Commission pursuant to Rule 424(b) or when any Rule 462(b) Registration Statement or any Written Testing-the-Waters Communication shall have been filed with the Commission, (ii) when, prior to termination of the Offering, any amendment to
the Registration Statement shall have been filed or become effective, (iii) of any request by the Commission or its staff for any amendment of the Registration Statement, any Rule 462(b) Registration Statement or any Written Testing-the-Waters
Communication or for any supplement to the Prospectus or for any additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any order preventing or suspending
the use of the Preliminary Prospectus, the Prospectus or any Written Testing-the-Waters Communication, or of the institution of any proceedings for that purpose or pursuant to Section 8A of the Act and (v) of the receipt by the Company of
any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the institution or threatening of any proceeding for such purpose. The Company will use its best efforts to prevent the issuance
of any such stop order or the occurrence of any such suspension or objection to the use of the Registration Statement and, upon such issuance, occurrence or notice of objection, to obtain as soon as possible the withdrawal of such stop order or
relief from such occurrence or objection, including, if necessary, by filing an amendment to the Registration Statement or a new registration statement and using its best efforts to have such amendment or new registration statement declared
effective as soon as practicable.
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(b) If, at any time prior to the filing of the Prospectus pursuant to Rule 424(b), any event or
development occurs as a result of which the Statutory Prospectus would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein in the light of the circumstances under which
they were made at such time not misleading, the Company will (i) notify promptly the Representatives so that any use of the Statutory Prospectus may cease until it is amended or supplemented; (ii) amend or supplement the Statutory
Prospectus to correct such statement or omission; and (iii) supply any amendment or supplement to you in such quantities as you may reasonably request.
(c) If, at any time when a prospectus relating to the Securities is required to be delivered under the Act (including in circumstances where
such requirement may be satisfied pursuant to Rule 172), any event or development occurs as a result of which the Prospectus as then supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements therein in the light of the circumstances under which they were made at such time not misleading, or if it shall be necessary to amend the Registration Statement or supplement the Prospectus to comply with the Act or the
rules thereunder, the Company promptly will (i) notify the Representatives of any such event; (ii) prepare and file with the Commission, subject to the second sentence of paragraph (a) of this Section 5, an amendment or
supplement that will correct such statement or omission or effect such compliance; and (iii) supply any supplemented Prospectus to you in such quantities as you may reasonably request.
(d) As soon as practicable, the Company will make generally available to its security holders and to the Representatives an earnings statement
or statements of the Company and its subsidiaries that will satisfy the provisions of Section 11(a) of the Act and Rule 158.
(e) The
Company will not make any offer relating to the Units that constitutes or would constitute a Free Writing Prospectus or a portion thereof required to be filed by the Company with the Commission or retained by the Company under Rule 433.
(f) The Company will furnish to the Representatives and counsel for the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a copy of the Registration Statement (without exhibits thereto) and, so long as delivery of a prospectus by an Underwriter or dealer may be required by the Act (including in
circumstances where such requirement may be satisfied pursuant to Rule 172), as many copies of each Preliminary Prospectus, the Prospectus and any supplement thereto as the Representatives may reasonably request. The Company will pay the expenses of
printing or other production of all documents relating to the Offering.
(g) The Company will arrange, if necessary, for the qualification
of the Securities for sale under the laws of such jurisdictions as the Representatives may designate and will maintain such qualifications in effect so long as required for the distribution of the Securities;
provided
that in no event shall
the Company be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action that would subject it to service of process in suits, other than those arising out of the offering or sale of the
Securities, in any jurisdiction where it is not now so subject.
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(h) The Company will not, without the prior written consent of the Representatives,
(x) offer, sell, contract to sell, pledge or otherwise dispose of (or enter into any transaction that is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition
due to cash settlement or otherwise) by the Company or any affiliate of the Company or any person in privity with the Company or any affiliate of the Company), directly or indirectly, including the filing (or participation in the filing) of a
registration statement with the Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act with respect to, any other
Units, shares of Common Stock, Warrants or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock or publicly announce an intention to effect any such transaction during the period commencing on the date hereof
and ending 180 days after the date of this Agreement;
provided, however,
that the Company may (1) issue and sell the Private Placement Warrants, (2) issue and sell the Option Securities on exercise of the option provided for in
Section 2 hereof, (3) register with the Commission pursuant to the Registration Rights Agreement, in accordance with the terms of the Registration Rights Agreement, the resale of the securities covered thereby, and (4) issue
securities in connection with a Business Combination, or (y) release the Sponsor or any officer, director or director nominee from the 180-day lock-up contained in the Insider Letter.
(i) The Company will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to
cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.
(j) The Company agrees to pay the costs and expenses relating to the following matters: (i) the preparation, printing or reproduction and
filing with the Commission of the Registration Statement (including financial statements and exhibits thereto), each Preliminary Prospectus, the Prospectus and each amendment or supplement to any of them; (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the Registration Statement, each Preliminary Prospectus, the Prospectus and all amendments or supplements to any of them, as may, in each
case, be reasonably requested for use in connection with the offering and sale of the Securities; (iii) the preparation, printing, authentication, issuance and delivery of certificates for the Securities, including any stamp or transfer taxes
in connection with the original issuance and sale of the Securities; (iv) the printing (or reproduction) and delivery of this Agreement and all other agreements or documents printed (or reproduced) and delivered in connection with the Offering;
(v) the registration of the Securities under the Exchange Act and the listing of the Securities on the New York Stock Exchange; (vi) the printing and delivery of a preliminary blue sky memorandum, any registration or qualification of the
Securities for offer and sale under the securities or blue sky laws of the several states, and any filings required to be made with FINRA (including filing fees and the reasonable and documented fees and expenses of counsel for the Underwriters
relating to such filings, memorandum, registration and qualification in an aggregate amount up to $15,000); (vii) the transportation and other expenses incurred by or on behalf of the Company (and not the Underwriters) in connection with
presentations to prospective purchasers of the Securities; (ix) the fees and expenses of the Company’s accountants and the fees and expenses of counsel for the Company; and (x) all other costs and expenses incident to the performance
by the Company of its obligations hereunder.
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(k) For a period commencing on the Effective Date and ending five (5) years from the date of
the consummation of the Business Combination or until such earlier time at which the Liquidation occurs, the Company will use its best efforts to maintain the registration of the Units, shares of Common Stock and Warrants under the provisions of the
Exchange Act, except after giving effect to a going private transaction after the completion of a Business Combination. The Company will not deregister the Units, shares of Common Stock or Warrants under the Exchange Act (except in connection with a
going private transaction after the completion of a Business Combination) without the prior written consent of the Representatives.
(l)
The Company shall, on the date hereof, retain its independent registered public accounting firm to audit the balance sheet of the Company as of the Closing Date (the “Audited Balance Sheet”) reflecting the receipt by the Company of the
proceeds of the Offering on the Closing Date. As soon as the Audited Balance Sheet becomes available, the Company shall promptly, but not later than four Business Days after the Closing Date, file a Current Report on Form 8-K with the Commission,
which 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 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 Securities and its receipt of the proceeds
therefrom.
(m) For a period commencing on the Effective Date and ending five (5) years from the date of the consummation of the
Business Combination or until such earlier time at which the Liquidation occurs or the shares of 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.
(n) For a period commencing on the Effective Date and ending
five (5) years from the date of the consummation of the Business Combination or until such earlier time at which the Liquidation occurs, the Company shall, to the extent such information or documents are not otherwise publicly available, upon
written request from the Representatives, furnish to the Representatives copies of such financial statements and other periodic and special reports as the Company from time to time furnishes generally to holders of any class of securities, and, to
the extent such information or documents are not otherwise publicly available, upon written request from the Representatives promptly furnish to the Representatives: (i) a copy of such registration statements, financial statements and periodic
and special reports as the Company shall be required to file with the Commission and from time to time furnishes generally to holders of any such class of its securities; and (ii) such additional documents and information with respect to the
Company and the affairs of any future subsidiaries of the Company as the Representatives may from time to time reasonably request, all subject to the execution of a satisfactory confidentiality agreement. Any registration statements, financial
statements, periodic and special reports or other additional documents referred to in the preceding sentence filed on the Commission’s EDGAR website will be considered furnished for the purposes of this section.
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(o) For a period commencing on the Effective Date and ending five (5) years from the date of
the consummation of the Business Combination or until such earlier time at which the Liquidation occurs or the shares of Common Stock and Warrants cease to be publicly traded, the Company shall retain a transfer and warrant agent.
(p) In no event will the amounts payable by the Company for office space, administrative and support services exceed $20,000 per month in the
aggregate until the earlier of the date of the consummation of the Business Combination or the Liquidation.
(q) The Company will not
consummate a Business Combination with any entity that is affiliated with the Sponsor or any of the Company’s officers or directors unless it obtains an opinion from an independent investment banking firm which is a member of FINRA, or from an
independent accounting firm, that such Business Combination is fair to the Company from a financial point of view. Other than as set forth in this subsection, the Company shall not pay the Sponsor or its affiliates or any of the Company’s
officers, directors or any of their respective affiliates any fees or compensation for services rendered to the Company prior to, or in connection with, the consummation of a Business Combination;
provided however,
that such officers,
directors and affiliates (i) may receive reimbursement for out-of-pocket expenses incurred by them in connection with activities on the Company’s behalf to the extent that such expenses do not exceed the amount of available proceeds not
deposited in the Trust Account; (ii) may be repaid loans as described in the Registration Statement; and (iii) may be paid $20,000 per month for office space, administrative and support services pursuant to the Administrative Services
Agreement between the Company and an affiliate of the Sponsor.
(r) The Company will apply the net proceeds from the Offering and the sale
of the Private Placement Warrants received by it in a manner consistent in all material respects with the applications described under the caption “Use of Proceeds” in the Statutory Prospectus and the Prospectus.
(s) For a period of 90 days following the Effective Date, in the event any person or entity (regardless of any FINRA affiliation or
association) is engaged to assist the Company in its search for a merger candidate or to provide any other merger and acquisition services, or has provided or will provide any investment banking, financial, advisory and/or consulting services to the
Company, the Company agrees that it shall promptly provide to FINRA (via a FINRA submission), the Representatives and their counsel a notification prior to entering into the agreement or transaction relating to a potential Business Combination:
(i) the identity of the person or entity providing any such services; (ii) complete details of all such services and copies of all agreements governing such services prior to entering into the agreement or transaction; and
(iii) justification as to why the value received by any person or entity for such services is not underwriting compensation for the Offering. The Company also agrees that proper disclosure of such arrangement or potential arrangement will be
made in the tender offer materials or proxy statement, as applicable, which the Company may file in connection with the Business Combination for purposes of offering redemption of shares held by its stockholders or for soliciting stockholder
approval, as applicable.
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(t) The Company shall advise FINRA, the Representatives and their counsel if it is aware that any
5% or greater stockholder of the Company becomes an affiliate or associated person of a Member participating in the distribution of the Securities.
(u) The Company shall cause the proceeds of the Offering and the sale of the Private Placement Warrants to be held in the Trust Account to be
invested only in United States government treasury bills with a maturity of 180 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 Statutory Prospectus and the Prospectus. The Company will otherwise conduct its business in a manner so that it will not become subject to the Investment Company Act. Furthermore, once the Company consummates a Business Combination, it will not
be required to register as an investment company under the Investment Company Act.
(v) During the period prior to the Company’s
initial Business Combination or Liquidation, the Company may instruct the trustee under the Trust Agreement to release interest from the Trust Account, the amounts necessary to fund the Company’s working capital requirements, subject to an
annual limit of $750,000, and/or to pay taxes. Otherwise, all funds held in the Trust Account (including any interest income earned on the amounts held in the Trust Account (net of taxes payable thereon)) will remain in the Trust Account until the
earlier of the consummation of the Company’s initial Business Combination or the Liquidation;
provided, however,
that in the event of the Liquidation, up to $100,000 of interest income may be released to the Company if the proceeds of
the Offering held outside of the Trust Account are not sufficient to cover the costs and expenses associated with implementing the Company’s plan of dissolution.
(w) 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 the conversion of the Founder Shares.
(x) Prior to the consummation of a Business Combination or the Liquidation, the Company shall not issue any shares of Common Stock, Warrants
or any options or other securities convertible into shares of Common Stock, or any preferred shares, in each case, that participate in any manner in the Trust Account or that vote as a class with the shares of Common Stock on a Business Combination.
(y) Prior to the consummation of a Business Combination or the Liquidation, the Company’s audit committee will review on a quarterly
basis all payments made to the Sponsor, to the Company’s officers or directors, or to the Company’s or any of such other persons’ respective affiliates.
(z) The Company agrees that it will use commercially reasonable efforts to prevent the Company from becoming subject to Rule 419 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.
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(aa) 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.
(bb) The Company will use commercially reasonable efforts to effect and, for a period commencing on the
Effective Date and ending five (5) years from the date of the consummation of the Business Combination or until such earlier time at which Liquidation occurs, maintain the listing of the Units, shares of Common Stock and Warrants on the New
York Stock Exchange (or another national securities exchange).
(cc) 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 NYSE Listed Company Manual.
(dd) The Company shall not take any action or omit to take any action that would cause the
Company to be in breach or violation of its Amended and Restated Certificate of Incorporation or bylaws.
(ee) The Company will seek to
have all vendors, service providers (other than independent accountants), prospective target businesses, lenders or other entities with which it does business enter into agreements waiving any right, title, interest or claim of any kind in or to any
monies held in the Trust Account for the benefit of the Public Stockholders. The Company may forego obtaining such waivers only if the Company shall have received the approval of its Chief Executive Officer.
(ff) The Company may consummate the initial Business Combination and conduct redemptions of shares of Common Stock 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 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 not previously released to fund the Company’s working capital requirements, subject to an annual limit of $750,000, and/or to pay taxes, divided by (B) the total number of shares of Common Stock sold as part of the Units in the
Offering (the “Public Stock”) then
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outstanding. If, however, a stockholder vote is required by 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 legal 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, the Sponsor, officers and directors have agreed to vote all of their Founder Shares and any other shares of Common Stock purchased during or after the Offering 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 holding shares of Common Stock the right to have its shares redeemed in conjunction with a proxy solicitation pursuant to the proxy
rules of the Commission at a per share redemption price (the “Redemption Price”) equal to (I) the aggregate amount then on deposit in the Trust Account as of two 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) any interest income earned on the funds held in the Trust Account not previously released to fund
the Company’s working capital requirements, subject to an annual limit of $750,000, and/or to pay taxes, divided by (II) the total number of Public Stock then outstanding. 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 of Common Stock voted by the stockholders at a duly held stockholders meeting 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 affirmatively requested such redemption. Only Public Stockholders holding shares of
Common Stock who properly exercise their redemption rights, in accordance with the applicable tender offer or proxy materials related to such Business Combination and the Amended and Restated Certificate of Incorporation and bylaws of the Company,
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 twenty-four (24) months from the closing of the Offering, the Company will (i) cease all operations except for the purpose of winding up,
(ii) as promptly as reasonably possible but not more than ten (10) business days thereafter, redeem 100% of the Public Stock, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account
(including interest not previously released to the Company to fund working capital requirements, subject to an annual limit of $750,000, and/or to pay taxes, and less up to $100,000 of interest to pay dissolution expenses), divided by the number of
then outstanding Public Stock, which redemption will completely extinguish 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 the requirements of other applicable law. Only Public Stockholders holding shares of Common Stock included in the Securities shall be entitled to receive such redemption amounts and the
Company shall pay no such redemption amounts or any distributions in liquidation with respect to any other shares of the Company. The Sponsor and the Company’s officers and directors have agreed that they will not propose any amendment to the
Amended and Restated
24
Certificate of Incorporation that would affect the substance or timing of the Company’s obligation to redeem 100% of the outstanding Public Stock if the Company has not consummated a
Business Combination within twenty-four (24) months from the closing of the Offering unless the Company offers to redeem the Public Stock in connection with such amendment, as described in the Statutory Prospectus and Prospectus.
(gg) In the event that the Company desires or is required by an applicable law or regulation to cause an announcement (“Business
Combination Announcement”) to be placed in
The Wall Street Journal, The New York Times
or any other news or media publication or outlet or to be made via a public filing with the Commission announcing the consummation of the Business
Combination that indicates that the Underwriters were the underwriters in the Offering, the Company shall supply the Representatives with a draft of the Business Combination Announcement and provide the Representatives with a reasonable advance
opportunity to comment thereon, subject to the agreement of the Underwriters to keep confidential such draft announcement in accordance with the Representatives’ standard policies regarding confidential information.
(hh) Upon the consummation of the initial Business Combination, the Company and the Representatives will jointly direct the Trustee to pay the
Representatives, on behalf of the Underwriters, the Deferred Discount out of the proceeds of the Offering held in the Trust Account. The Underwriters shall have no claim to payment of any interest earned on the portion of the proceeds held in the
Trust Account representing the Deferred Discount. If the Company fails to consummate its initial Business Combination within twenty-four (24) months from the closing of the Offering, the Deferred Discount will not be paid to the Representatives
and will, instead, be included in the Liquidation distribution of the proceeds held in the Trust Account made to the Public Stockholders. In connection with any such Liquidation, the Underwriters forfeit any rights or claims to the Deferred
Discount.
(ii) The Company will endeavor in good faith, in cooperation with the Representatives to qualify the Securities for offering
and sale under the securities laws of such jurisdictions as the Representatives may reasonably designate, provided that no such qualification shall be required in any jurisdiction where, as a result thereof, the Company would be subject to service
of general process or to taxation as a foreign corporation doing business in such jurisdiction. Until the earliest of (i) the date on which all Underwriters shall have ceased to engage in market-making activities in respect of the Securities,
(ii) the date on which the Securities are listed on the New York Stock Exchange (or any successor thereto), (iii) a going private transaction after the completion of a Business Combination, and (iv) the date of the liquidation of the
Company, in each jurisdiction where such qualification shall be effected, the Company will, unless the Representatives agree that such action is not at the time necessary or advisable, use all reasonable efforts to file and make such statements or
reports at such times as are or may be required to qualify the Securities for offering and sale under the securities laws of such jurisdiction.
(jj) 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
25
therein in light of the circumstances under which they were made at such time, not misleading, the Company will promptly (i) notify the Representatives so that use of the Written
Testing-the-Waters
Communication may cease until it is amended or supplemented; (ii) amend or supplement, at its own expense, such Written Testing-the-Waters Communication to eliminate or correct such untrue
statement or omission; and (iii) supply any amendment or supplement to the Representatives in such quantities as may be reasonably requested.
(kk) The Company will promptly notify the Representatives if the Company ceases to be an Emerging Growth Company at any time prior to the
later of (i) completion of the distribution of the Securities within the meaning of the Act and (ii) completion of the 180-day restricted period referred to in Section 5(h) hereof.
(ll) If the Representatives, in their sole discretion, agree to release or waive the transfer restrictions set forth in any Insider Letter for
an officer or director of the Company and provide the Company with notice of the impending release or waiver at least three business days before the effective date of the release or waiver, the Company agrees to announce the impending release or
waiver by a press release substantially in the form of Exhibit A hereto through a major news service at least two business days before the effective date of the release or waiver.
(mm) Upon the earlier to occur of the expiration or termination of the Underwriters’ over-allotment option, the Company shall cancel or
otherwise effect the forfeiture of Founder Shares from the Sponsor, in an aggregate amount equal to the number of Founder Shares determined by multiplying (a) 2,250,000 by (b) a fraction, (i) the numerator of which is 9,000,000 minus
the number of shares of Common Stock purchased by the Underwriters upon the exercise of their over-allotment option, and (ii) the denominator of which is 9,000,000. 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 the Founder Shares pursuant to this subsection.
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6.
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CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS.
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The obligations of the Underwriters
to purchase the Underwritten Securities and the Option Securities, as the case may be, shall be subject to the accuracy of the representations and warranties on the part of the Company contained herein as of the Execution Time, the Closing Date and
any settlement date pursuant to Section 3 hereof, to the accuracy of the statements of the Company made in any certificates pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) The Prospectus, and any supplement thereto, have been filed in the manner and within the time period required
by Rule 424(b); and no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use shall have been issued and no proceedings for that purpose shall have been instituted or threatened.
(b) The Company shall have requested and caused Weil, Gotshal & Manges LLP, counsel for the Company, to have furnished to the
Representatives its opinions dated the Closing Date or settlement date (as applicable) and addressed to the Representatives, in a form reasonably acceptable to the Representatives.
26
(c) The Representatives shall have received from Freshfields Bruckhaus Deringer US LLP, counsel
for the Underwriters, such opinion or opinions, dated the Closing Date or settlement date (as applicable) and addressed to the Representatives, with respect to the issuance and sale of the Securities, the Registration Statement, the Statutory
Prospectus, the Prospectus (together with any supplement thereto) and other related matters as the Representatives may reasonably require, and the Company shall have furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(d) The Company shall have furnished to the Representatives a certificate of the Company, signed
by the Chief Executive Officer and the principal financial or accounting officer of the Company, dated the Closing Date or settlement date (as applicable), to the effect that the signers of such certificate have carefully examined the Registration
Statement each Preliminary Prospectus, the Prospectus and any amendment or supplement thereto, and this Agreement and that:
(i) the
representations and warranties of the Company in this Agreement are true and correct on and as of the Closing Date or settlement date (as applicable) with the same effect as if made on the Closing Date or settlement date (as applicable) and the
Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date or settlement date (as applicable);
(ii) no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use has been issued and no
proceedings for that purpose have been instituted or, to the Company’s knowledge, threatened; and
(iii) since the date of the most
recent financial statements included in the Statutory Prospectus and the Prospectus (exclusive of any supplement thereto), there has been no Material Adverse Effect, except as set forth in or contemplated in the Statutory Prospectus and the
Prospectus (exclusive of any supplement thereto).
(e) The Company shall have requested and caused KPMG to have furnished to the
Representatives, at the Execution Time and at the Closing Date or settlement date (as applicable), letters, dated respectively as of the Execution Time and as of the Closing Date or settlement date (as applicable), in form and substance satisfactory
to the Representatives, confirming that they are a registered public accounting firm that is independent with respect to the Company within the meaning of the Act and the Exchange Act and the applicable rules and regulations adopted by the
Commission thereunder and that they have performed a review of the audited financial statements of the Company for the period from February 14, 2017 (date of inception) through [March 31, 2017],
provided
that the cutoff date shall not be
more than two business days prior to such Execution Time or Closing Date or settlement date, as applicable, and stating in effect that:
(i) in their opinion the audited financial statements and financial statement schedules included in the Registration Statement, the Statutory
Prospectus and the Prospectus
27
and reported on by them comply as to form in all material respects with the applicable accounting requirements of the Act and the related rules and regulations adopted by the Commission; and
(ii) they have performed certain other specified procedures as a result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial or statistical information derived from the general accounting records of the Company) set forth in the Registration Statement, the Statutory Prospectus and the Prospectus,
including the information set forth under the captions “Dilution” and “Capitalization” in the Statutory Prospectus and the Prospectus, agrees with the accounting records of the Company, excluding any questions of legal
interpretation.
References to the Prospectus in this paragraph (e) include any supplement thereto at the date of the letter.
(f) Subsequent to the Execution Time or, if earlier, the dates as of which information is given in the Registration Statement (exclusive of
any amendment thereof), the Statutory Prospectus and the Prospectus (exclusive of any supplement thereto), there shall not have been (i) any change or decrease specified in the letter or letters referred to in paragraph (e) of this
Section 6 or (ii) any change, or any development involving a prospective change, in or affecting the earnings, business, management, properties, assets, rights, operations, condition (financial or otherwise) or prospects of the Company,
whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Statutory Prospectus and the Prospectus (exclusive of any supplement thereto) the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the sole judgment of the Representatives, so material and adverse as to make it impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Registration
Statement (exclusive of any amendment thereof), the Statutory Prospectus and the Prospectus (exclusive of any supplement thereto).
(g)
Prior to the Closing Date or settlement date (as applicable), the Company shall have furnished to the Representatives such further information, certificates and documents as the Representatives may reasonably request.
(h) 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.
(i) The Securities shall be duly listed subject to notice of issuance on the New York Stock Exchange,
satisfactory evidence of which shall have been provided to the Representatives.
(j) On the Effective Date, the Company shall have
delivered to the Representatives executed copies of the Trust Agreement, Securities Assignment Agreement, the Warrant Agreement, the Founder’s Purchase Agreement, the Warrant Subscription Agreement, the Insider Letter, the Registration Rights
Agreement and the Administrative Services Agreement.
(k) On or prior to the Effective Date, the Company shall have declared the Dividend.
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(l) At least one Business Day prior to the Closing Date or settlement date (as applicable), the
Company shall have caused the purchase price for the Private Placement Warrants to be deposited into the Trust Account.
(m) No order
preventing or suspending the sale of the Units in any jurisdiction designated by the Representatives pursuant to Section 5(ii) hereof shall have been issued as of the Closing Date or settlement date (as applicable), and no proceedings for that
purpose shall have been instituted or shall have been threatened.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the Representatives and counsel for
the Underwriters, this Agreement and all obligations of the Underwriters hereunder may be canceled at, or at any time prior to, the Closing Date by the Representatives. Notice of such cancellation shall be given to the Company in writing or by
telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be delivered at the
office of Freshfields Bruckhaus Deringer US LLP, counsel for the Underwriters, at 601 Lexington Avenue, 31
st
Floor, New York, New York 10022, Attention: Paul D. Tropp, unless otherwise indicated
herein, on the Closing Date.
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7.
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REIMBURSEMENT OF UNDERWRITERS’ EXPENSES.
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If the sale of the Securities provided
for herein is not consummated because any condition to the obligations of the Underwriters set forth in Section 6 hereof is not satisfied, because of any termination pursuant to Section 10 hereof (other than clauses (ii), (iii) or
(vi) thereof) or because of any refusal, inability or failure on the part of the Company to perform any agreement herein or comply with any provision hereof other than by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters severally through the Representatives on demand for all reasonable out-of-pocket expenses (including reasonable fees and disbursements of counsel) that shall have been incurred by them in connection with the proposed
purchase and sale of the Securities.
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8.
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INDEMNIFICATION AND CONTRIBUTION.
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(a) The Company agrees to indemnify and hold harmless
each Underwriter, the directors, officers, employees and agents of each Underwriter, each person who controls any Underwriter within the meaning of either the Act or the Exchange Act and each affiliate of each Underwriter against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement for the registration of the Securities as originally
filed or in any amendment thereof, or in any Preliminary Prospectus, the Statutory Prospectus, the Prospectus, any “road show” as defined in Rule 433(h) or any Written Testing-the-Waters Communication or in any amendment thereof or
29
supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein
not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action;
provided, however,
that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Underwriter through the Representatives specifically for inclusion therein, it being understood and agreed that the
only such information furnished by any Underwriter consists of the information described in the last sentence of Section 8(b) hereof. This indemnity agreement will be in addition to any liability that the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and hold harmless the Company, each of its directors, each of its officers
who signs the Registration Statement, and each person who controls the Company within the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with reference to
written information relating to such Underwriter furnished to the Company by or on behalf of such Underwriter through the Representatives specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement
will be in addition to any liability that any Underwriter may otherwise have. The Company acknowledges that the statements set forth under the heading “Underwriting,” (x) the list of Underwriters and their respective roles and
participation in the sale of the Securities, (y) the sentence related to the Underwriters’ intention not to make sales to discretionary accounts, and (z) the paragraphs related to stabilization, syndicate covering transactions and
penalty bids, in the Preliminary Prospectus, the Statutory Prospectus and the Prospectus constitute the only information furnished in writing by or on behalf of the several Underwriters for inclusion in the documents referred to in the foregoing
indemnity.
(c) Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of material rights and
defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be
entitled to appoint counsel of the indemnifying party’s choice at the indemnifying party’s expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as set forth below); provided,
however,
that such counsel shall be satisfactory to the indemnified party.
Notwithstanding the indemnifying party’s election to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party
shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of
30
counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of,
any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, (iii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the
institution of such action or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld, delayed or conditioned), settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless (i) such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action, suit or proceeding and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement
at least 45 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.
(d) In the event that the indemnity provided in paragraph (a) or (b) of this Section 8 is unavailable to or insufficient to
hold harmless an indemnified party for any reason, the Company and the Underwriters severally agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with
investigating or defending the same) (collectively “Losses”) to which the Company and one or more of the Underwriters may be subject in such proportion as is appropriate to reflect the relative benefits received by the Company on the one
hand and by the Underwriters on the other from the Offering;
provided, however,
that in no case shall any Underwriter (except as may be provided in any agreement among underwriters relating to the Offering) be responsible for any amount in
excess of the underwriting discount or commission applicable to the Securities purchased by such Underwriter hereunder. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company and the Underwriters
severally shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and of the Underwriters on the other in connection with the statements or omissions
that resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to the total net proceeds from the Offering (before deducting expenses) received by it, and benefits
received by the Underwriters shall be deemed to be equal to the total underwriting discounts and commissions, in each case as set forth on the cover page of the Prospectus. Relative fault shall be determined by reference to, among other things,
whether any untrue or any alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to
31
information provided by the Company on the one hand or the Underwriters on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation that does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 8, each person who controls an Underwriter within the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of
an Underwriter shall have the same rights to contribution as such Underwriter, and each person who controls the Company within the meaning of either the Act or the Exchange Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (d).
(e) In any proceeding relating to the Registration Statement, the Preliminary Prospectus, the Statutory Prospectus, any Written
Testing-the-Waters Communication, the Prospectus or any supplement or amendment thereto, each party against whom contribution may be sought under this Section 8 hereby consents to the exclusive jurisdiction of (i) the federal courts of the
United States of America located in the City and County of New York, Borough of Manhattan and (ii) the courts of the State of New York located in the City and County of New York, Borough of Manhattan (collectively, the “Specified
Courts”), agrees that process issuing from such courts may be served upon it by any other contributing party and consents to the service of such process and agrees that any other contributing party may join it as an additional defendant in any
such proceeding in which such other contributing party is a party.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this Section 8 shall be paid by the indemnifying party to the indemnified party as such losses, claims, damages, liabilities or expenses are incurred. The indemnity and
contribution agreements contained in this Section 8 and the representations and warranties of the Company set forth in this Agreement shall remain operative and in full force and effect, regardless of (i) any investigation made by or on
behalf of any Underwriter, its directors or officers or any person controlling any Underwriter, the Company, its directors or officers or any persons controlling the Company, (ii) acceptance of any Securities and payment therefor hereunder, and
(iii) any termination of this Agreement. A successor to any Underwriter, its directors or officers or any person controlling any Underwriter, or to the Company, its directors or officers, or any person controlling the Company, shall be entitled
to the benefits of the indemnity, contribution and reimbursement agreements contained in this Section 8.
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9.
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DEFAULT BY AN UNDERWRITER.
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If any one or more Underwriters shall fail to purchase and
pay for any of the Securities agreed to be purchased by such Underwriter or Underwriters hereunder and such failure to purchase shall constitute a default in the performance of its or their obligations under this Agreement, the remaining
Underwriters shall be obligated severally to take up and pay for (in the respective
32
proportions that the amount of Securities set forth opposite their names in Schedule I hereto bears to the aggregate amount of Securities set forth opposite the names of all the remaining
Underwriters) the Securities that the defaulting Underwriter or Underwriters agreed but failed to purchase;
provided, however,
that in the event that the aggregate amount of Securities that the defaulting Underwriter or Underwriters agreed
but failed to purchase shall exceed 10% of the Underwritten Securities, the remaining Underwriters shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities. If within one Business Day after such
default relating to more than 10% of the Underwritten Securities the remaining Underwriters do not arrange for the purchase of such Underwritten Securities, then the Company shall be entitled to a further period of one Business Day within which to
procure another party or parties reasonably satisfactory to you to purchase said Underwritten Securities. In the event that neither the remaining Underwriters nor the Company purchase or arrange for the purchase of all of the Underwritten Securities
to which a default relates as provided in this Section 9, this Agreement will terminate without liability to any nondefaulting Underwriter or the Company. In the event of a default by any Underwriter as set forth in this Section 9, the
Closing Date shall be postponed for such period, not exceeding five Business Days, as the Representatives shall determine in order that the required changes in the Registration Statement and the Prospectus or in any other documents or arrangements
may be effected. Nothing contained in this Agreement shall relieve any defaulting Underwriter of its liability, if any, to the Company and any nondefaulting Underwriter for damages occasioned by its default hereunder.
This Agreement shall be subject to termination in the absolute discretion
of the Representatives, by notice given to the Company prior to delivery of and payment for the Securities, if at any time prior to such delivery and payment (i) trading in the Company’s Units, Common Stock or Warrants shall have been
suspended by the Commission, or trading in securities generally on the New York Stock Exchange or the Nasdaq Capital Market shall have been suspended or limited or minimum prices shall have been established on such exchange or trading market,
(ii) a banking moratorium shall have been declared either by Federal or New York State authorities, (iii) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war,
or other national or international calamity or crisis (including, without limitation, an act of terrorism) or change in economic or political conditions the effect of which on financial markets is such as to make it, in the sole judgment of the
Representatives, impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Statutory Prospectus or the Prospectus (exclusive of any supplement thereto), (iv) since the respective dates as of
which information is given in the Registration Statement, the Statutory Prospectus and the Prospectus, any material adverse change or any development involving a prospective material adverse change in or affecting the earnings, business, management,
properties, assets, rights, operations, condition (financial or otherwise) or prospects of the Company, whether or not arising in the ordinary course of business, (v) the enactment, publication, decree or other promulgation of any statute,
regulation, rule or order of any court or other governmental authority which in your opinion materially and adversely affects or may materially and adversely affect the business or operations of the Company, or (vi) the taking of any action by
any governmental body or agency in respect of its monetary or fiscal affairs which in your opinion has a material adverse effect on the securities markets in the United States.
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11.
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REPRESENTATIONS AND INDEMNITIES TO SURVIVE.
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The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any
Underwriter or the Company or any of the officers, directors, employees, agents or controlling persons referred to in Section 8 hereof, and will survive delivery of and payment for the Securities. The provisions of Sections 7 and 8 hereof shall
survive the termination or cancellation of this Agreement.
All communications hereunder will be in writing and effective only on receipt,
and, if sent to the Representatives, will be mailed, delivered or telefaxed to Deutsche Bank Securities Inc., 60 Wall Street, 2nd Floor, New York, New York 10005, Attention: Equity Capital Markets – Syndicate Desk, with a copy to Deutsche Bank
Securities Inc., 60 Wall Street, 36th Floor, New York, New York 10005, Attention: General Counsel, fax: (212) 797-4561; Goldman, Sachs & Co., Attn: Registration Department, 200 West Street, New York, NY 10282, email:
registration-syndops@ny.email.gs.com; or, if sent to the Company, will be mailed, delivered or telefaxed to TPG Pace Energy Holdings Corp., 301 Commerce St., Suite 3300, Fort Worth, TX 76102, Attention: General Counsel, with a copy to the
Company’s counsel at Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York, 10153, Attention: Alexander D. Lynch.
This Agreement will inure to the benefit of and be binding upon the parties
hereto and their respective successors and the officers, directors, employees, agents and controlling persons referred to in Section 8 hereof, and no other person will have any right or obligation hereunder.
The Company hereby acknowledges that (a) the purchase and sale
of the Securities pursuant to this Agreement is an arm’s-length commercial transaction between the Company, on the one hand, and the Underwriters and any affiliate through which any of them may be acting, on the other, (b) the Underwriters
are acting as principal and not as an agent or fiduciary of the Company and (c) the Company’s engagement of the Underwriters in connection with the Offering and the process leading up to the Offering is as independent contractors and not
in any other capacity. Furthermore, the Company agrees that it is solely responsible for making its own judgments in connection with the Offering (irrespective of whether any of the Underwriters has advised or is currently advising the Company on
related or other matters). The Company agrees that it will not claim that the Underwriters have rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Company, in connection with such transaction or
the process leading thereto.
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.
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This Agreement will be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be performed within the State of New York.
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17.
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WAIVER OF JURY TRIAL.
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The Company hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
This Agreement may be signed in one or more counterparts, each of which
shall constitute an original and all of which together shall constitute one and the same agreement.
The section headings used herein are for convenience only and shall not
affect the construction hereof
The terms that follow, when used in this Agreement, shall have the
meanings indicated.
“Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission
promulgated thereunder.
“Applicable Time” shall mean [●]:[p].m. (New York time) on the date of this Agreement.
“Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust
companies are authorized or obligated by law to close in New York City.
“Commission” shall mean the Securities and Exchange
Commission.
“Effective Date” shall mean each date and time that the Registration Statement, any post-effective amendment or
amendments thereto and any Rule 462(b) Registration Statement became or becomes effective.
“Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.
“Execution
Time” shall mean the date and time that this Agreement is executed and delivered by the parties hereto.
“Free Writing
Prospectus” shall mean a free writing prospectus, as defined in Rule 405.
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“Liquidation” shall mean the distributions of the Trust Account to the Public
Stockholders in connection with the redemption of Common Stock held by the Public Stockholders pursuant to the terms of the Amended and Restated Certificate of Incorporation and bylaws if the Company fails to consummate a Business Combination.
“Preliminary Prospectus” shall mean any preliminary prospectus referred to in paragraph 1(a) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits Rule 430A Information.
“Prospectus” shall mean the
prospectus relating to the Securities that is first filed pursuant to Rule 424(b) after the Execution Time.
“Registration
Statement” shall mean the registration statements referred to in paragraph 1(a) above, including exhibits and financial statements and any prospectus and prospectus supplement relating to the Securities that is filed with the Commission
pursuant to Rule 424(b) and deemed part of such registration statement pursuant to Rule 430A, as amended at the Execution Time and, in the event any post-effective amendment thereto or any Rule 462(b) Registration Statement becomes effective prior
to the Closing Date, shall also mean such registration statement as so amended or such Rule 462(b) Registration Statement, as the case may be.
“Rule 158”, “Rule 172”, “Rule 405”, “Rule 419”, “Rule 424(b)”, “Rule 430A”,
“Rule 433”, “Rule 433(h)”, and “Rule 462(b)” refer to such rules under the Act.
“Rule 430A
Information” shall mean information with respect to the Securities and the offering thereof permitted to be omitted from the Registration Statement when it becomes effective pursuant to Rule 430A.
“Rule 462(b) Registration Statement” shall mean a registration statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred to in Section 1(a) hereof.
“Statutory Prospectus”
shall mean (i) the Preliminary Prospectus dated [●], 2017, relating to the Securities and (ii) the Time of Delivery Information, if any, set forth on
Schedule II
hereto.
[remainder of page intentionally left blank]
36
If the foregoing is in accordance with your understanding of our agreement, please sign and
return to us the enclosed duplicate hereof, whereupon it will become a binding agreement among the Company and the several Underwriters in accordance with its terms.
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Very truly yours,
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TPG Pace Energy Holdings Corp.
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By:
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Name:
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Title:
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The foregoing Underwriting Agreement is hereby confirmed and accepted as of the date first above
written.
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Deutsche Bank Securities Inc.
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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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Goldman, Sachs & Co.
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By:
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Name:
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Title:
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[Signature Page to Underwriting Agreement]
SCHEDULE I
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Underwriters
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Number of Underwritten Securities to
be Purchased
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Deutsche Bank Securities Inc.
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[●]
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Goldman, Sachs & Co.
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[●]
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[●]
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[●]
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Total
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60,000,000
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SCHEDULE II
TIME OF DELIVERY INFORMATION
TPG Pace Energy Holdings Corp. priced 60,000,000 units at $10.00 per unit plus an additional 9,000,000 units if the underwriters exercise
their over-allotment option in full.
The units will be issued pursuant to an effective registration statement that has been previously
filed with the Securities and Exchange Commission.
This communication shall not constitute an offer to sell or the solicitation of any
offer to buy, nor shall there be any sale of the securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities law of any such state or
jurisdiction.
Copies of the prospectus related to this offering may be obtained from Deutsche Bank Securities Inc., Attn.: Prospectus
Group, 60 Wall Street, New York, NY 10005-2836, email:
prospectus.CPDG@db.com
, tel: (800) 503-4611 and Goldman, Sachs & Co., Attn: Prospectus Department, 200 West Street, New York, NY 10282, tel: (212) 902-1171, fax:
(212) 902-9316, e-mail:
prospectus-ny@ny.email.gs.com
.
SCHEDULE III
SCHEDULE OF WRITTEN TESTING-THE-WATERS COMMUNICATIONS
None.
EXHIBIT A
Form of Press Release
TPG Pace Energy Holdings
Corp.
[Date]
TPG Pace Energy Holdings
Corp. (the “Company”) announced today that Deutsche Bank Securities Inc. and Goldman, Sachs & Co., the book-running managers and the representatives of the underwriters in the Company’s recent public sale of Units, are
[waiving] [releasing] a lock-up restriction with respect to the Company’s [Common Stock] [Warrants] [Units] held by [certain officers or directors] [an officer or director] of the Company. The [waiver] [release] will take effect on [Date], and
the securities may be sold on or after such date.
This press release is not an offer for sale of the securities in the United States or
in any other jurisdiction where such offer is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended.
Exhibit 3.1
CERTIFICATE OF INCORPORATION
OF
TPG PACE ENERGY
HOLDINGS CORP.
ARTICLE I
NAME
The name of the
corporation is TPG Pace Energy Holdings Corp. (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 General Corporation Law of the State of Delaware, as amended from time to time (the “
DGCL
”).
ARTICLE III
REGISTERED
AGENT
The address of the Corporation’s registered office in the State of Delaware is 4001 Kennett Pike, Suite 302, in the City
of Wilmington, County of New Castle County, State of Delaware, 19807, and the name of the Corporation’s registered agent at such address is Maples Fiduciary Services (Delaware) Inc.
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 221,000,000, consisting of (a) 220,000,000 shares of common stock (the “
Common Stock
”), including two separate series of Common Stock
consisting of (i) 200,000,000 shares of Class A Common Stock (the “
Class
A Common Stock
”) and (ii) 20,000,000 shares of Class F Common Stock (the
“
Class
F Common Stock
”), and (b) 1,000,000 shares of preferred stock (the “
Preferred Stock
”).
Section 4.2
Preferred Stock
.
(a)
Designation.
The Preferred Stock may be issued in one or more series from time to time, with each such series
to consist of such number of shares and to have such voting powers, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or
restrictions thereof, as shall be stated in the resolution or resolutions providing for the issuance of such series adopted by the board of directors of the Corporation (the “
Board
”) 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 now or hereafter provided by law, to adopt any such resolution or
resolutions.
(b)
Authorized Shares.
The number of authorized shares of 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 of the outstanding shares of Common Stock, without a vote of the holders of the Preferred Stock, or any series thereof,
unless a vote of any such holders of Preferred Stock is required pursuant to another provision of this Certificate of Incorporation (the “
Certificate
”), including any Preferred Stock Designation.
Section 4.3
Common Stock
.
(a)
Voting.
(i) Except as otherwise required by law or this Certificate (including any Preferred Stock Designation),
the holders of the Common Stock shall exclusively possess all voting power with respect to the Corporation.
(ii) 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 the holders of the Common Stock are entitled to vote.
(iii) Except as otherwise required by law or this 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 F 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. Notwithstanding the foregoing, except as otherwise required by law or this Certificate (including a Preferred Stock Designation), holders of
shares of any series of Common Stock shall not be entitled to vote on any amendment to this 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, either separately or together with the holders of one or more other such series, to vote thereon pursuant
to this Certificate (including any Preferred Stock Designation).
(b)
Class F Common Stock.
(i) Shares of Class F Common Stock shall be convertible into shares of Class A Common Stock on
a
one-for-one
basis (the “
Initial Conversion Ratio
”) (A) at any time and from time to time at the option of the holder thereof and
(B) automatically upon the consummation of the Business Combination (as defined below).
(ii) Notwithstanding the Initial Conversion Ratio, 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 Corporation’s initial public offering of securities and related to the closing of the Business Combination, all issued and outstanding
shares of Class F Common Stock shall automatically convert into shares of Class A Common Stock at the time of the closing of the Corporation’s initial merger, capital stock exchange, asset acquisition, stock purchase, reorganization
or similar business combination with one or more businesses (the “
Business Combination
”) at a ratio for which:
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the numerator shall be equal to the sum of (A) 25% of all shares of Class A Common Stock issued or issuable (upon the conversion or exercise of any equity-linked securities or otherwise) by the Corporation, related
to or in connection with the consummation of the Business Combination (excluding any securities issued or issuable to any seller in the Business Combination) plus (B) the number of shares of Class F Common Stock issued and outstanding
prior to the closing of the Business Combination; and
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•
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the denominator shall be the number of shares of Class F Common Stock issued and outstanding prior to the closing of the Business Combination.
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Notwithstanding anything to the contrary contained herein, (i) the foregoing adjustment to the Initial Conversion Ratio
may be waived as to any particular issuance or deemed issuance of additional shares of Class A Common Stock or equity-linked securities by the written consent or agreement of holders of a majority of the shares of Class F Common Stock then
outstanding consenting or agreeing separately as a single class in the manner provided in
Section 4.3(b)(iii)
, and (ii) in no event shall the Class F Common Stock convert into Class A Common Stock at a ratio that is less than
one-for-one.
The foregoing 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 of the outstanding shares of Class A Common Stock into a greater or lesser number of shares occurring after the original filing of this Certificate without a proportionate and
corresponding subdivision, combination or similar reclassification or recapitalization of the outstanding shares of Class F Common Stock.
Each share of Class F Common Stock shall convert into its
pro rata
number of shares of Class A Common Stock
pursuant to this
Section 4.3(b)
. The
pro rata
share for each holder of Class F Common Stock will be determined as follows: Each share of Class F Common Stock shall convert into such number of shares of Class A Common
Stock as is equal to the product of 1 multiplied by a fraction, the numerator of which shall be the total number of shares of Class A Common Stock into which all of the issued and outstanding shares of Class F Common Stock shall be
converted pursuant to this
Section 4.3(b)
and the denominator of which shall be the total number of issued and outstanding shares of Class F Common Stock at the time of conversion.
(iii)
Voting.
For so long as any shares of Class F Common Stock shall remain outstanding,
the Corporation shall not, without the prior vote or written consent of the holders of a majority of the shares of Class F Common Stock then outstanding, voting separately as a single class, amend, alter or repeal any provision of this
Certificate, whether by merger, consolidation or otherwise, if such amendment, alteration or repeal would alter or change the powers, preferences or relative, participating, optional or other or special rights of the Class F Common Stock. Any
action required or permitted to be taken at any meeting of the holders of Class F 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 F 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 Class F Common Stock were
present and voted and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which minutes of
proceedings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. Prompt written notice of the taking of corporate action without a
meeting by less than unanimous written consent of the holders of Class F Common Stock shall, to the extent required by law, be given to those holders of Class F Common Stock who have not consented in
writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date that written consents
signed by a sufficient number of holders of Class F Common Stock to take the action were delivered to the Corporation.
(c)
Dividends.
Subject to the rights of the holders of Preferred Stock, the holders of shares of 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 subject to such rights of the holders of Preferred Stock.
(d)
Liquidation, Dissolution or Winding Up of the Corporation.
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, and subject to the rights of the holders of Preferred Stock in respect thereof, the holders of
shares of 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 Common Stock held by them, treating the Class F
Common Stock on an
as-converted
basis.
ARTICLE V
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 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 Certificate and any Bylaws adopted by the stockholders; provided, however, that no Bylaws 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
Election.
Unless and except to the extent that the Bylaws shall so require, the election of
directors need not be by written ballot.
ARTICLE VI
BYLAWS
In furtherance
and not in limitation of the powers conferred upon it by law, the Board shall have the power to adopt, amend, alter, change, add or repeal the Bylaws. The Bylaws also may be adopted, amended, altered or repealed by the stockholders.
ARTICLE VII
LIMITED
LIABILITY; INDEMNIFICATION
Section 7.1
Limitation of Director Liability
. A director of the
Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty by such director as a director, except for liability (i) for any breach of the director’s duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction
from which the director derived an improper personal benefit. If the DGCL is amended to
authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the DGCL, as so amended. Any repeal or modification of this
Section
7.1
by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation with
respect to events occurring prior to the time of such repeal or modification.
Section 7.2
Indemnification.
The Corporation, to the full extent permitted by Section 145 of the DGCL,
as amended from time to time, shall indemnify all persons whom it may indemnify pursuant thereto. Expenses (including attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative, or investigative action,
suit or proceeding for which such officer or director may be entitled to indemnification hereunder shall 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 he is not entitled to be indemnified by the Corporation as authorized hereby.
ARTICLE VIII
INSOLVENCY; SALE, LEASE OR EXCHANGE OF ASSETS
Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for this Corporation under Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under Section 279 of
Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority
in number representing three fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of
this Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or
class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation.
ARTICLE IX
AMENDMENT OF
CERTIFICATE OF INCORPORATION
The Corporation reserves the right to amend, alter, change, add or repeal any provision contained in
this Certificate (including any Preferred Stock Designation), in the manner now or hereafter prescribed by this Certificate and the DGCL; and except as set forth in
ARTICLE VII
, all rights, preferences and privileges herein conferred upon
stockholders, directors or any other persons by and pursuant to this Certificate in its present form or as hereafter amended are granted subject to the right reserved in this Article.
ARTICLE X
INCORPORATOR
The name and
mailing address of the sole incorporator of the Corporation are as follows:
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Name
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Address
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Michael LaGatta
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301 Commerce St., Suite 3300
Fort Worth, TX
76102
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[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned incorporator has executed this Certificate as of the date set
forth below.
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By:
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/s/ Michael LaGatta
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Name:
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Michael LaGatta
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Title:
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Sole Incorporator
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Date:
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February 14, 2017
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Exhibit 3.2
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
TPG PACE ENERGY
HOLDINGS CORP.
[●], 2017
TPG Pace Energy Holdings Corp., 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
“
TPG Pace Energy Holdings Corp.
”. The original certificate of incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on February 14, 2017 (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 228, 242 and 245 of the General Corporation Law of the State of Delaware, as amended from
time to time (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 TPG Pace Energy Holdings Corp. (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 4001 Kennett Pike, Suite 302, in the City
of Wilmington, County of New Castle, State of Delaware, 19807, and the name of the Corporation’s registered agent at such address is Maples Fiduciary Services (Delaware) Inc.
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 221,000,000 shares, consisting of (a) 220,000,000 shares of common stock (the “
Common Stock
”), including two separate series of Common Stock
consisting of (i) 200,000,000 shares of Class A Common Stock (the “
Class
A Common Stock
”), and (ii) 20,000,000 shares of Class F Common Stock
(the “
Class
F Common Stock
”), and (b) 1,000,000 shares of preferred stock, par value $0.0001 per share (the “
Preferred 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 for 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)
Voting.
(i) 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.
(ii) Except as otherwise required by law or this Amended and Restated Certificate (including any Preferred Stock
Designation), 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 the holders of the Common Stock are entitled to vote.
(iii) Except as otherwise required by law or this Amended and Restated Certificate (including as set forth in
Section
9.9
hereof and 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 F Common Stock, voting
together as a single class, shall
2
have the exclusive right to vote for the election of directors and on all other matters properly submitted to a vote of the stockholders. 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, 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.
(b)
Class F Common Stock.
(i) Shares of Class F Common Stock shall be convertible into shares of Class A Common Stock on a
one-for-one
basis (the “
Initial Conversion Ratio
”) (A) at any time and from time to time at the option of the holder thereof and (B) automatically
on the closing of the Business Combination.
(ii) Notwithstanding the Initial Conversion Ratio, in the case that
additional shares of Class A Common Stock, or Equity-linked Securities (as defined below), are issued or deemed issued in excess of the amounts sold in the Corporation’s initial public offering of securities (the
“
Offering
”) and related to the closing of the initial Business Combination, all issued and outstanding shares of Class F Common Stock shall automatically convert into shares of Class A Common Stock at the time of
the closing of the initial Business Combination at a ratio for which:
(A) the numerator shall be equal to the sum
of (A) 25% of all shares of Class A Common Stock issued or issuable (upon the conversion or exercise of any Equity-linked Securities or otherwise) by the Corporation, related to or in connection with the consummation of the initial Business
Combination (excluding any securities issued or issuable to any seller in the initial Business Combination) plus (B) the number of shares of Class F Common Stock issued and outstanding prior to the closing of the initial Business
Combination; and
(B) the denominator shall be the number of shares of Class F Common Stock issued and
outstanding prior to the closing of the initial Business Combination.
As used herein, the term “
Equity-linked
Securities
” means any securities of the Corporation which are convertible into or exchangeable or exercisable for Common Stock.
Notwithstanding anything to the contrary contained herein, (i) the foregoing adjustment to the Initial Conversion Ratio may be waived as
to any particular issuance or deemed issuance of additional shares of Class A Common Stock or Equity-linked Securities by the written consent or agreement of holders of a majority of the shares of Class F Common Stock then outstanding
consenting or agreeing separately as a single class in the manner provided in
Section 4.3(b)(iii)
, and (ii) in no event shall the Class F Common Stock convert into Class A Common Stock at a ratio that is less than
one-for-one.
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The foregoing 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 of the
outstanding shares of Class A Common Stock into a greater or lesser number of shares occurring after the original filing of this Amended and Restated Certificate without a proportionate and corresponding subdivision, combination or similar
reclassification or recapitalization of the outstanding shares of Class F Common Stock.
Each share of Class F Common Stock
shall convert into its
pro rata
number of shares of Class A Common Stock pursuant to this
Section 4.3(b)
. The
pro rata
share for each holder of Class F Common Stock will be determined as follows: Each share of
Class F Common Stock shall convert into such number of shares of Class A Common Stock as is equal to the product of one (1) multiplied by a fraction, the numerator of which shall be the total number of shares of Class A Common
Stock into which all of the issued and outstanding shares of Class F Common Stock shall be converted pursuant to this
Section 4.3(b)
and the denominator of which shall be the total number of issued and outstanding shares of Class F
Common Stock at the time of conversion.
(iii)
Voting.
Except as otherwise required by law or this Amended
and Restated Certificate (including any Preferred Stock Designation), for so long as any shares of Class F Common Stock shall remain outstanding, the Corporation shall not, without the prior vote or written consent of the holders of a majority
of the shares of Class F Common Stock then outstanding, voting separately as a single class, amend, alter or repeal any provision of this Amended and Restated Certificate, whether by merger, consolidation or otherwise, if such amendment,
alteration or repeal would alter or change the powers, preferences or relative, participating, optional or other or special rights of the Class F Common Stock. Any action required or permitted to be taken at any meeting of the holders of
Class F 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 F 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 Class F Common Stock were present and voted and shall be delivered to the Corporation by delivery to
its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which minutes of proceedings of stockholders are recorded. Delivery made to the
Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. Prompt written notice of the taking of corporate action without a meeting by less than unanimous written consent of the holders of
Class F Common Stock shall, to the extent required by law, be given to those holders of Class F Common Stock who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the
meeting if the record date for notice of such meeting had been the date that written consents signed by a sufficient number of holders of Class F Common Stock to take the action were delivered to the Corporation.
4
(c)
Dividends.
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 shares of 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.
(d)
Liquidation, Dissolution or Winding Up of the Corporation.
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 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 (on an as converted basis with respect to the Class F Common Stock) held by them.
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 of the Corporation (“
Bylaws
”), 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 adopted by the stockholders;
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 in the manner provided in the Bylaws.
(b) Subject to
Section
5.5
hereof, commencing at the first annual meeting of the
stockholders, and at each annual meeting of the stockholders thereafter, directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the second annual meeting of the stockholders after their
election.
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(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 director 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 and except as otherwise required by this Amended and Restated Certificate (including as set forth on
Section
9.9
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.
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.
6
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, 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 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.
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 for any liability (i) for any breach of the director’s duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the
director derived an improper personal benefit. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or
limited to the fullest extent permitted by the DGCL, as so amended.
Section 8.2 Any repeal or modification of
the foregoing paragraph shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification.
Section 8.3
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,
7
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
8.3
or otherwise. The rights to indemnification
and advancement of expenses conferred by this
Section
8.3
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
8.3(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
8.3
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
8.3
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
8.3
, 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
8.3
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.
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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 sixty-five percent (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 [●], 2017, as amended (the “
Registration Statement
”), shall be deposited in a trust account (the “
Trust
Account
”), established for the benefit of the Public Stockholders (as defined below) pursuant to a trust agreement described in the Registration Statement. Except for the withdrawal of interest to fund the Corporation’s working
capital requirements, subject to an annual limit of $750,000, and/or 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 to occur of (i) the completion of the initial Business Combination, (ii) the redemption of shares in connection with a vote seeking to amend any provisions of this Amended and Restated Certificate relating to stockholders’
rights or
pre-initial
Business Combination activity (as described in
Section
9.7
) if the Corporation does not complete the initial Business Combination within 24 months from the
closing of the Offering, or (iii) the redemption of 100% of the Offering Shares (as defined below) if the Corporation is unable to complete its initial Business Combination within 24 months from the closing of the Offering, subject to
applicable law. Holders of shares of the 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 TPG Pace Energy Sponsor, LLC (the “
Sponsor
”) or officers or directors of the Corporation, or affiliates of any of the foregoing) 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, out of funds legally available therefor, 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 to the extent that such redemption would result in the Corporation’s
failure to have net tangible assets (as
9
determined in accordance with Rule
3a51-1(g)(1)
under the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”) (or any
successor rule)) in excess of $5 million or any greater net tangible asset or cash requirement which may be contained in the agreement relating to the initial Business Combination (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 (or any successor rules or regulations) 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 (or any successor rule or regulation) (such rules and regulations hereinafter called the “
Tender Offer Rules
”) which it shall commence prior to
the consummation of the initial Business Combination and shall file tender offer documents with the SEC prior to the consummation of the initial Business Combination that contain substantially the same financial and other information about the
initial Business Combination and the Redemption Rights as is required under Regulation 14A under the Exchange Act (or any successor rule or regulation) (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 the Common Stock
payable to holders of the Offering Shares tendering their Offering Shares pursuant to such tender offer shall be equal to the quotient obtained by dividing: (i) the aggregate amount on deposit in the Trust Account as of two business days prior
to the consummation of the initial Business Combination, including interest not previously released to the Corporation to fund its working capital requirements, subject to an annual limit of $750,000, and/or to pay taxes, by (ii) the total
number of then outstanding Offering Shares. If the Corporation offers to redeem the Offering Shares in conjunction with a stockholder vote on the proposed initial Business Combination pursuant to a proxy solicitation, the Redemption Price per share
of the Common Stock payable to holders of the Offering Shares exercising their Redemption Rights shall be equal to the quotient obtained by dividing (a) the aggregate amount on deposit in the Trust Account as of two business days prior to the
consummation of the initial Business Combination, including interest not previously released to the Corporation to fund its working capital requirement, subject to an annual limit of $750,000, and/or to pay taxes, by (b) the total number of
then outstanding Offering Shares.
10
(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 15% of the Offering Shares.
(d) In the event that the Corporation has not consummated an initial Business Combination within 24 months from the
closing of the Offering, the Corporation shall (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter subject to lawfully available funds
therefor, redeem 100% of the Offering Shares in consideration of a
per-share
price, payable in cash, equal to the quotient obtained by dividing (A) the aggregate amount then on deposit in the Trust
Account, including interest not previously released to the Corporation to fund its working capital requirements, subject to an annual limit of $750,000, and/or pay taxes (less up to $100,000 of such net interest to pay dissolution expenses), by
(B) the total number of then outstanding Offering Shares, which redemption will completely extinguish rights of the Public Stockholders (including the right to receive further liquidating distributions, if any), 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.
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. In no other circumstances shall a Public Stockholder have any right or interest of any kind in or to distributions from the Trust Account, and no stockholder other than
a Public Stockholder shall have any interest in or to the Trust Account.
(b) Each Public Stockholder that does not
exercise its Redemption Rights shall retain its interest in the Corporation and shall be deemed to have given its consent to the release of the remaining funds in the Trust Account to the Corporation, and following payment to any Public Stockholders
exercising their Redemption Rights, the remaining funds in the Trust Account shall be released to the Corporation.
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(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
accounting firm or an independent investment banking firm that is a member of the Financial Industry Regulatory Authority that such Business Combination is fair to the Corporation from a financial point of view.
Section 9.6
No Transactions with Other Blank Check Companies
. The Corporation shall not enter into an
initial Business Combination 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)
to modify 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 within 24 months from the date of the
closing of the Offering, 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 not previously released to the Corporation to fund its working capital requirements, subject to an annual limit of $750,000, and/or to pay taxes, divided by the number of
then outstanding Offering Shares. The Corporation’s ability to provide such opportunity is subject to the Redemption Limitation.
Section 9.8
Minimum Value of Target
. The Corporation’s initial Business Combination must occur with
one or more target businesses that together have a fair market value of at least 80% of the assets held in the Trust Account (net of amounts disbursed to management for working capital purposes and excluding the amount of any deferred underwriting
discount held in the Trust Account) at the time of the agreement to enter into the initial Business Combination.
Section 9.9
Appointment and Removal of Directors
. Notwithstanding any other provision in this Amended and
Restated Certificate, prior to the closing of the initial Business Combination, the holders of Class F Common Stock shall have the exclusive right to elect and remove any director, and the holders of Class A Common Stock shall have no
right to vote on the election or removal of any director. This Section 9.9 may only be amended by a resolution passed by a majority of holders of at least ninety percent (90%) of the outstanding Common Stock entitled to vote thereon.
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ARTICLE X
CORPORATE OPPORTUNITY
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. In addition to the foregoing, the doctrine of corporate opportunity shall not apply
to any other corporate opportunity with respect to any of the directors or officers of the Corporation unless such corporate opportunity is offered to such person solely in his or her capacity as a director or officer of the Corporation and such
opportunity is one the Corporation is legally and contractually permitted to undertake and would otherwise be reasonable for the Corporation to pursue.
ARTICLE XI
AMENDMENT OF
AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION
The Corporation reserves the right at any time and from time to time to amend, alter, change 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 XI
;
provided
,
however
, that
Article IX
of this Amended and Restated Certificate may be amended
only as provided therein.
[Signature page follows]
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IN WITNESS WHEREOF, TPG Pace Energy Holdings Corp. 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.
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TPG PACE ENERGY HOLDINGS
CORP.
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[Signature Page to Amended and Restated Certificate of Incorporation]
Exhibit 3.3
BYLAWS
OF
TPG PACE ENERGY HOLDINGS CORP.
(THE “CORPORATION”)
ARTICLE I
OFFICES
Section
1.1.
Registered Office
. The registered office of the Corporation
within the State of Delaware shall be located at either (a) the principal place of business of the Corporation in the State of Delaware or (b) the office of the corporation or individual acting as the Corporation’s registered agent in
Delaware.
Section
1.2.
Additional Offices
. The Corporation may, in addition to
its registered office in the State of Delaware, have such other offices and places of business, both within and outside the State of Delaware, as the Board of Directors of the Corporation (the “
Board
”) may from time to time
determine or as the business and affairs of the Corporation may require.
ARTICLE II
STOCKHOLDERS MEETINGS
Section
2.1.
Annual Meetings
. The annual meeting of stockholders shall be held at such
place, either within or without the State of Delaware, and time and on such date as shall be determined by the Board and stated in the notice of the meeting, provided that the Board may in its sole discretion determine that the meeting shall not be
held at any place, but may instead be held solely by means of remote communication pursuant to
Section 9.5(a)
. At each annual meeting, the stockholders entitled to vote on such matters shall elect those directors of the Corporation to fill
any term of a directorship that expires on the date of such annual meeting and may transact any other business as may properly be brought before the meeting.
Section
2.2.
Special Meetings
. Subject to the rights of the holders of one or more
series of preferred stock of the Corporation (“
Preferred Stock
”) and to the requirement of applicable law, special meetings of stockholders, for any purpose or purposes, may be called only by the Chairman of the Board, Chief
Executive Officer, or the Board pursuant to a resolution adopted by a majority of the Whole Board, and may not be called by any other person. Special meetings of stockholders shall be held at such place, either within or without the State of
Delaware, and at such time and on such date as shall be determined by the Board and stated in the Corporation’s notice of the meeting, provided that the Board may in its sole discretion determine that the meeting shall not be held at any place,
but may instead be held solely by means of remote communication pursuant to
Section 9.5(a)
. For purposes of these Bylaws, the term “Whole Board” shall mean the total number of authorized directors whether or not there exist any
vacancies in previously authorized directorships.
Section
2.3.
Notices
. Notice of each
stockholders meeting stating the place, if any, date, and time of the meeting, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and the record date
for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting, shall be given in the manner permitted by
Section
9.3
to each stockholder entitled to vote thereat as of the record date for determining the stockholders entitled to notice of the meeting, by the Corporation not less than 10 nor more than 60 days before the date of
the meeting unless otherwise required by the General Corporation Law of the State of Delaware (the “
DGCL
”). If said notice is for a stockholders meeting other than an annual meeting, it shall in addition state the purpose or
purposes for which the meeting is called, and the business transacted at such meeting shall be limited to the matters so stated in the Corporation’s notice of meeting (or any supplement thereto). Any meeting of stockholders as to which notice
has been given may be postponed, and any meeting of stockholders as to which notice has been given may be cancelled, by the Board upon public announcement (as defined in
Section 2.7(c)
) given before the date previously scheduled for such
meeting.
Section
2.4.
Quorum
. Except as otherwise provided by applicable law, the
Corporation’s Certificate of Incorporation, as the same may be amended or restated from time to time (the “
Certificate of Incorporation
”) or these Bylaws, the presence, in person or by proxy, at a stockholders meeting of the
holders of shares of outstanding capital stock of the Corporation representing a majority of the voting power of all outstanding shares of capital stock of the Corporation entitled to vote at such meeting shall constitute a quorum for the
transaction of business at such meeting, except that when specified business is to be voted on by a class or series of stock voting as a class, the holders of shares representing a majority of the voting power of the outstanding shares of such class
or series shall constitute a quorum of such class or series for the transaction of such business. If a quorum shall not be present or represented by proxy at any meeting of the stockholders of the Corporation, the chairman of the meeting may adjourn
the meeting from time to time in the manner provided in
Section
2.6
until a quorum shall attend. The stockholders present at a duly convened meeting may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum. Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the voting power of the shares entitled to vote in the election of directors of such
other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation or any such other
corporation to vote shares held by it in a fiduciary capacity.
Section
2.5.
Voting of
Shares
.
(a)
Voting Lists
. The officer who has charge of the stock ledger of the Corporation shall
prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders of record entitled to vote at such meeting; provided, however, that if the record date for determining the stockholders entitled to vote is
less than 10 days before the meeting date, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date, arranged in alphabetical order and showing the address and the number of shares registered in the name
of each stockholder. Nothing contained in this
Section 2.5(a)
shall
2
require the Corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours for a period of at least 10 days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with
the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take
reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present. If a meeting of stockholders is to be held solely by means of remote communication as permitted by
Section 9.5(a)
, the list shall be open to the examination of any stockholder
during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of meeting. The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the list required by this
Section 2.5(a)
or to vote in person or by proxy at any meeting of stockholders.
(b)
Manner of Voting
. At any stockholders meeting, every stockholder entitled to vote may vote in person or by
proxy. If authorized by the Board, the voting by stockholders or proxy holders at any meeting conducted by remote communication may be effected by a ballot submitted by electronic transmission (as defined in
Section
9.3
),
provided that any such electronic transmission must either set forth or be submitted with information from which the Corporation can determine that the electronic transmission was authorized by the stockholder or proxy holder. The Board, in its
discretion, or the chairman of the meeting of stockholders, in such person’s discretion, may require that any votes cast at such meeting shall be cast by written ballot.
(c)
Proxies
. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to
corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer
period. Proxies need not be filed with the Secretary of the Corporation until the meeting is called to order, but shall be filed with the Secretary before being voted. Without limiting the manner in which a stockholder may authorize another person
or persons to act for such stockholder as proxy, either of the following shall constitute a valid means by which a stockholder may grant such authority.
(i) A stockholder may execute a writing authorizing another person or persons to act for such stockholder as proxy.
Execution may be accomplished by the stockholder or such stockholder’s authorized officer, director, employee or agent signing such writing or causing such person’s signature to be affixed to such writing by any reasonable means,
including, but not limited to, by facsimile signature.
(ii) A stockholder may authorize another person or persons
to act for such stockholder as proxy by transmitting or authorizing the transmission of an electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm,
3
proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that any such electronic transmission
must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder.
Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission authorizing another person or persons to act as proxy for
a stockholder may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used; provided that such copy, facsimile telecommunication or other
reproduction shall be a complete reproduction of the entire original writing or transmission.
(d)
Required
Vote
. Subject to the rights of the holders of one or more series of Preferred Stock, voting separately by class or series, to elect directors pursuant to the terms of one or more series of Preferred Stock, at all meetings of stockholders at
which a quorum is present, the election of directors shall be determined by a plurality of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon. All other matters presented to the
stockholders at a meeting at which a quorum is present shall be determined by the vote of a majority of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon, unless the matter is
one upon which, by applicable law, the Certificate of Incorporation, these Bylaws or applicable stock exchange rules, a different vote is required, in which case such provision shall govern and control the decision of such matter.
(e)
Inspectors of Election
. The Board may, and shall if required by law, in advance of any meeting of
stockholders, appoint one or more persons as inspectors of election, who may be employees of the Corporation or otherwise serve the Corporation in other capacities, to act at such meeting of stockholders or any adjournment thereof and to make a
written report thereof. The Board may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspectors of election or alternates are appointed by the Board, the chairman of the meeting shall appoint
one or more inspectors to act at the meeting. Each inspector, before discharging his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability.
The inspectors shall ascertain and report the number of outstanding shares and the voting power of each; determine the number of shares present in person or represented by proxy at the meeting and the validity of proxies and ballots; count all votes
and ballots and report the results; determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors; and certify their determination of the number of shares represented at the
meeting and their count of all votes and ballots. No person who is a candidate for an office at an election may serve as an inspector at such election. Each report of an inspector shall be in writing and signed by the inspector or by a majority of
them if there is more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors.
Section
2.6.
Adjournments
. Any meeting of stockholders, annual or special, may be
adjourned by the chairman of the meeting, from time to time, whether or not there is a quorum, to reconvene at the same or some other place. Notice need not be given of any such
4
adjourned meeting if the date, time, and place, if any, thereof, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and
vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting the stockholders, or the holders of any class or series of stock entitled to vote separately as a class, as the case may be, may
transact any business that might have been transacted at the original meeting. If the adjournment is for more than 30 days, notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the
adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Board shall fix a new record date for notice of such adjourned meeting in accordance with
Section
9.2
, and shall give
notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date fixed for notice of such adjourned meeting.
Section
2.7.
Advance Notice for Business
.
(a)
Annual Meetings of Stockholders
. No business may be transacted at an annual meeting of stockholders, other
than business that is either (i) specified in the Corporation’s notice of meeting (or any supplement thereto) given by or at the direction of the Board, (ii) otherwise properly brought before the annual meeting by or at the direction
of the Board or (iii) otherwise properly brought before the annual meeting by any stockholder of the Corporation (x) who is a stockholder of record entitled to vote at such annual meeting on the date of the giving of the notice provided
for in this
Section 2.7(a)
and on the record date for the determination of stockholders entitled to vote at such annual meeting and (y) who complies with the notice procedures set forth in this
Section 2.7(a)
. Notwithstanding
anything in this
Section 2.7(a)
to the contrary, only persons nominated for election as a director to fill any term of a directorship that expires on the date of the annual meeting pursuant to
Section
3.2
will be
considered for election at such meeting.
(i) In addition to any other applicable requirements, for business (other
than nominations) to be properly brought before an annual meeting by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary of the Corporation and such business must otherwise be a proper matter
for stockholder action. Subject to
Section 2.7(a)(iii)
, a stockholder’s notice to the Secretary with respect to such business, to be timely, must be received by the Secretary at the principal executive offices of the Corporation not
later than the close of business on the 90th day nor earlier than the close of business on the 120th day before the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual
meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120th day before the meeting and not later than the later
of (x) the close of business on the 90th day before the meeting or (y) the close of business on the 10th day following the day on which public announcement of the date of the annual meeting is first made by the Corporation. The public
announcement of an adjournment or postponement of an annual meeting shall not commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described in this
Section 2.7(a)
.
5
(ii) To be in proper written form, a stockholder’s notice to the
Secretary with respect to any business (other than nominations) must set forth as to each such matter such stockholder proposes to bring before the annual meeting (A) a brief description of the business desired to be brought before the annual
meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event such business includes a proposal to amend these Bylaws, the language of the proposed amendment) and the reasons for
conducting such business at the annual meeting, (B) the name and record address of such stockholder and the name and address of the beneficial owner, if any, on whose behalf the proposal is made, (C) the class or series and number of
shares of capital stock of the Corporation that are owned beneficially and of record by such stockholder and by the beneficial owner, if any, on whose behalf the proposal is made, (D) a description of all arrangements or understandings between
such stockholder and the beneficial owner, if any, on whose behalf the proposal is made and any other person or persons (including their names) in connection with the proposal of such business by such stockholder, (E) any material interest of
such stockholder and the beneficial owner, if any, on whose behalf the proposal is made in such business and (F) a representation that such stockholder (or a qualified representative of such stockholder) intends to appear in person or by proxy
at the annual meeting to bring such business before the meeting.
(iii) The foregoing notice requirements of this
Section 2.7(a)
shall be deemed satisfied by a stockholder as to any proposal (other than nominations) if the stockholder has notified the Corporation of such stockholder’s intention to present such proposal at an annual meeting in
compliance with Rule
14a-8
(or any successor thereof) of the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), and such stockholder has complied with the requirements of such
Rule for inclusion of such proposal in a proxy statement prepared by the Corporation to solicit proxies for such annual meeting. No business shall be conducted at the annual meeting of stockholders except business brought before the annual meeting
in accordance with the procedures set forth in this
Section 2.7(a)
, provided, however, that once business has been properly brought before the annual meeting in accordance with such procedures, nothing in this
Section 2.7(a)
shall be
deemed to preclude discussion by any stockholder of any such business. If the Board or the chairman of the annual meeting determines that any stockholder proposal was not made in accordance with the provisions of this
Section 2.7(a)
or that
the information provided in a stockholder’s notice does not satisfy the information requirements of this
Section 2.7(a)
, such proposal shall not be presented for action at the annual meeting. Notwithstanding the foregoing provisions of
this
Section 2.7(a)
, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual meeting of stockholders of the Corporation to present the proposed business, such proposed business shall not be
transacted, notwithstanding that proxies in respect of such matter may have been received by the Corporation.
(iv) In addition to the provisions of this
Section 2.7(a)
, a stockholder shall also comply with all applicable
requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in this
Section 2.7(a)
shall be deemed to affect any rights of stockholders to request inclusion of
proposals in the Corporation’s proxy statement pursuant to Rule
14a-8
under the Exchange Act.
(b)
Special Meetings of Stockholders
. Only such business shall be conducted at a special meeting of stockholders
as shall have been brought before the meeting pursuant to
6
the Corporation’s notice of meeting. Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected pursuant to the
Corporation’s notice of meeting only pursuant to
Section
3.2
.
(c)
Public
Announcement
. For purposes of these Bylaws, “
public announcement
” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly
filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act (or any successor thereto).
Section
2.8.
Conduct of Meetings
. The chairman of each annual and special meeting of
stockholders shall be the Chairman of the Board or, in the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) or, in the absence (or inability or refusal to act of
the Chief Executive Officer or if the Chief Executive Officer is not a director, the President (if he or she shall be a director) or, in the absence (or inability or refusal to act) of the President or if the President is not a director, such other
person as shall be appointed by the Board. The Board may adopt such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with these Bylaws or such rules and regulations
as adopted by the Board, the chairman of any meeting of stockholders shall have the right and authority to convene and to adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such
chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the chairman of the meeting, may include, without limitation, the following: (a) the
establishment of an agenda or order of business for the meeting; (b) rules and procedures for maintaining order at the meeting and the safety of those present; (c) limitations on attendance at or participation in the meeting to
stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the chairman of the meeting shall determine; (d) restrictions on entry to the meeting after the time fixed for the commencement
thereof; and (e) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance
with the rules of parliamentary procedure. The secretary of each annual and special meeting of stockholders shall be the Secretary or, in the absence (or inability or refusal to act) of the Secretary, an Assistant Secretary so appointed to act by
the chairman of the meeting. In the absence (or inability or refusal to act) of the Secretary and all Assistant Secretaries, the chairman of the meeting may appoint any person to act as secretary of the meeting.
Section
2.9.
Consents in Lieu of Meeting
. Unless otherwise provided by the Certificate
of Incorporation, until the corporation consummates an initial public offering (“
Offering
”), any action required to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special
meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock entitled to vote thereon 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 entitled to vote thereon were present and voted, and shall be delivered to the Corporation by delivery to its
registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having
7
custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail,
return receipt requested. A telegram, cablegram or other electronic transmission consenting to an action to be taken and transmitted by a stockholder or proxyholder or by a person or persons authorized to act for a stockholder or proxyholder, should
be deemed to be written, signed and dated for purposes of this Section 2.9 to the extent permitted by law. Any such consent shall be delivered in accordance with Section 228(d)(1) of the DGCL. Every written consent shall bear the date of
signature of each stockholder who signs the consent, and no written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent delivered in the manner required by this section and
the DGCL to the Corporation, written consents signed by a sufficient number of holders to take action are delivered to the Corporation by delivery to its registered office in Delaware, its principal place of business or an officer or agent of the
Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested.
ARTICLE III
DIRECTORS
Section
3.1.
Powers; Number
. The business and affairs of the Corporation
shall be managed by or under the direction of the Board, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these Bylaws required to be
exercised or done by the stockholders. Directors need not be stockholders or residents of the State of Delaware. Subject to the Certificate of Incorporation, the number of directors shall be fixed exclusively by resolution adopted by a majority of
the Whole Board.
Section
3.2.
Advance Notice for Nomination of Directors
.
(a) Only persons who are nominated in accordance with the following procedures shall be eligible for election as
directors of the Corporation, except as may be otherwise provided by the terms of one or more series of Preferred Stock with respect to the rights of holders of one or more series of Preferred Stock to elect directors. Nominations of persons for
election to the Board at any annual meeting of stockholders, or at any special meeting of stockholders called for the purpose of electing directors as set forth in the Corporation’s notice of such special meeting, may be made (i) by or at
the direction of the Board or (ii) by any stockholder of the Corporation (x) who is a stockholder of record entitled to vote in the election of directors on the date of the giving of the notice provided for in this
Section
3.2
and on the record date for the determination of stockholders entitled to vote at such meeting and (y) who complies with the notice procedures set forth in this
Section
3.2
.
(b) In addition to any other applicable requirements, for a nomination to be made by a stockholder, such stockholder
must have given timely notice thereof in proper written form to the Secretary of the Corporation. To be timely, a stockholder’s notice to the Secretary must be received by the Secretary at the principal executive offices of the Corporation
(i) in the case of an annual meeting, not later than the close of business on the 90th day nor earlier than the
8
close of business on the 120th day before the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is more
than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so received not earlier than the close of business on the 120th day before the meeting and not later than the later of (x) the
close of business on the 90th day before the meeting or (y) the close of business on the 10th day following the day on which public announcement of the date of the annual meeting was first made by the Corporation; and (ii) in the case of a
special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the 10th day following the day on which public announcement of the date of the special meeting is first made by the Corporation. In
no event shall the public announcement of an adjournment or postponement of an annual meeting or special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described in this
Section
3.2
.
(c) Notwithstanding anything in paragraph (b) to the contrary, in the
event that the number of directors to be elected to the Board at an annual meeting is greater than the number of directors whose terms expire on the date of the annual meeting and there is no public announcement by the Corporation naming all of the
nominees for the additional directors to be elected or specifying the size of the increased Board at least 10 days before the last day a stockholder may deliver a notice of nomination in accordance with Section 3.2(b), a stockholder’s notice
required by this
Section
3.2
shall also be considered timely, but only with respect to nominees for the additional directorships created by such increase that are to be filled by election at such annual meeting, if it shall
be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the date on which such public announcement was first made by the Corporation.
(d) To be in proper written form, a stockholder’s notice to the Secretary must set forth (i) as to each
person whom the stockholder proposes to nominate for election as a director (A) the name, age, business address and residence address of the person, (B) the principal occupation or employment of the person, (C) the class or series and
number of shares of capital stock of the Corporation, if any, that are owned beneficially or of record by the person, (D) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings
required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, without regard to the application of the Exchange Act to
either the nomination or the Corporation; and (ii) as to the stockholder giving the notice (A) the name and record address of such stockholder as they appear on the Corporation’s books and the name and address of the beneficial owner,
if any, on whose behalf the nomination is made, (B) the class or series and number of shares of capital stock of the Corporation that are owned beneficially and of record by such stockholder and the beneficial owner, if any, on whose behalf the
nomination is made, (C) a description of all arrangements or understandings relating to the nomination to be made by such stockholder among such stockholder, the beneficial owner, if any, on whose behalf the nomination is made, each proposed
nominee and any other person or persons (including their names), (D) a representation that such stockholder (or a qualified representative of such stockholder) intends to appear in person or by proxy at the meeting to nominate the persons named in
its notice and (E) any other information relating to such stockholder and the beneficial owner, if any, on whose behalf the nomination is made that would be required to be disclosed in
9
a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and
regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.
(e) If the Board or the chairman of the meeting of stockholders determines that any nomination was not made in
accordance with the provisions of this
Section
3.2
or that the information provided in a stockholder’s notice does not satisfy the information requirements of this
Section
3.2
, then such
nomination shall not be considered at the meeting in question. Notwithstanding the foregoing provisions of this
Section
3.2
, if the stockholder (or a qualified representative of the stockholder) does not appear at the
meeting of stockholders of the Corporation to present the nomination, such nomination shall be disregarded, notwithstanding that proxies in respect of such nomination may have been received by the Corporation.
(f) In addition to the provisions of this
Section
3.2
, a stockholder shall also comply with
all of the applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in this
Section 3.2
shall be deemed to affect any rights of the holders of Preferred Stock
to elect directors pursuant to the Certificate of Incorporation.
Section
3.3.
Compensation
. Unless otherwise restricted by the Certificate of
Incorporation or these Bylaws, the Board shall have the authority to fix the compensation of directors, including for service on a committee of the Board and may be paid either a fixed sum for attendance at each meeting of the Board or other
compensation as director. The directors may be reimbursed their expenses, if any, of attendance at each meeting of the Board. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation
therefor. Members of committees of the Board may be allowed like compensation and reimbursement of expenses for service on the committee.
ARTICLE IV
BOARD
MEETINGS
Section
4.1.
Annual Meetings
. The Board shall meet as soon as
practicable after the adjournment of each annual stockholders meeting at the place of the annual stockholders meeting unless the Board shall fix another time and place and give notice thereof in the manner required herein for special meetings of the
Board. No notice to the directors shall be necessary to legally convene this meeting, except as provided in this
Section
4.1
.
Section
4.2.
Regular Meetings
. Regularly scheduled, periodic meetings of the Board may
be held without notice at such times, dates and places (within or without the State of Delaware) as shall from time to time be determined by the Board.
Section
4.3.
Special Meetings
. Special meetings of the Board (a) may be called by
the Chairman of the Board or President and (b) shall be called by the Chairman of the Board, President or Secretary on the written request of at least a majority of directors then in office, or the sole director, as the case may be, and shall
be held at such time, date and place
10
(within or without the State of Delaware) as may be determined by the person calling the meeting or, if called upon the request of directors or the sole director, as specified in such written
request. Notice of each special meeting of the Board shall be given, as provided in
Section
9.3
, to each director (i) at least 24 hours before the meeting if such notice is oral notice given personally or by telephone
or written notice given by hand delivery or by means of a form of electronic transmission and delivery; (ii) at least two days before the meeting if such notice is sent by a nationally recognized overnight delivery service; and (iii) at
least five days before the meeting if such notice is sent through the United States mail. If the Secretary shall fail or refuse to give such notice, then the notice may be given by the officer who called the meeting or the directors who requested
the meeting. Any and all business that may be transacted at a regular meeting of the Board may be transacted at a special meeting. Except as may be otherwise expressly provided by applicable law, the Certificate of Incorporation, or these Bylaws,
neither the business to be transacted at, nor the purpose of, any special meeting need be specified in the notice or waiver of notice of such meeting. A special meeting may be held at any time without notice if all the directors are present or if
those not present waive notice of the meeting in accordance with
Section
9.4
.
Section
4.4.
Quorum; Required Vote
. A majority of the Whole Board shall constitute a
quorum for the transaction of business at any meeting of the Board, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board, except as may be otherwise specifically provided by
applicable law, the Certificate of Incorporation or these Bylaws. If a quorum shall not be present at any meeting, a majority of the directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting,
until a quorum is present.
Section
4.5.
Consent In Lieu of Meeting
. Unless
otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board or any committee thereof may be taken without a meeting if all members of the Board or committee, as
the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions (or paper reproductions thereof) are filed with the minutes of proceedings of the Board or committee.
Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
Section
4.6.
Organization
. The chairman of each meeting of the Board shall be the
Chairman of the Board or, in the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) or, in the absence (or inability or refusal to act) of the Chief Executive Officer
or if the Chief Executive Officer is not a director, the President (if he or she shall be a director) or in the absence (or inability or refusal to act) of the President or if the President is not a director, a chairman elected from the directors
present. The Secretary shall act as secretary of all meetings of the Board. In the absence (or inability or refusal to act) of the Secretary, an Assistant Secretary shall perform the duties of the Secretary at such meeting. In the absence (or
inability or refusal to act) of the Secretary and all Assistant Secretaries, the chairman of the meeting may appoint any person to act as secretary of the meeting.
11
ARTICLE V
COMMITTEES OF DIRECTORS
Section
5.1.
Establishment
. The Board may by resolution of the Board designate one or
more committees, each committee to consist of one or more of the directors of the Corporation. Each committee shall keep regular minutes of its meetings and report the same to the Board when required by the resolution designating such committee. The
Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve any such committee.
Section
5.2.
Available Powers
. Any committee established pursuant to
Section
5.1
hereof, to the extent permitted by applicable law and by resolution of the Board, shall have and may exercise all of the powers and authority of the Board in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all papers that may require it.
Section
5.3.
Alternate Members
. The Board may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in place of any such absent or disqualified member.
Section
5.4.
Procedures
. Unless the Board otherwise provides, the time, date, place,
if any, and notice of meetings of a committee shall be determined by such committee. At meetings of a committee, a majority of the number of members of the committee (but not including any alternate member, unless such alternate member has replaced
any absent or disqualified member at the time of, or in connection with, such meeting) shall constitute a quorum for the transaction of business. The act of a majority of the members present at any meeting at which a quorum is present shall be the
act of the committee, except as otherwise specifically provided by applicable law, the Certificate of Incorporation, these Bylaws or the Board. If a quorum is not present at a meeting of a committee, the members present may adjourn the meeting from
time to time, without notice other than an announcement at the meeting, until a quorum is present. Unless the Board otherwise provides and except as provided in these Bylaws, each committee designated by the Board may make, alter, amend and repeal
rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board is authorized to conduct its business pursuant to
Article IV
of these Bylaws.
ARTICLE VI
OFFICERS
Section
6.1.
Officers
. The officers of the Corporation elected by the Board
shall be a Chief Executive Officer, a Chief Financial Officer, a Secretary and such other officers (including without limitation, a Chairman, Presidents, Vice Presidents, Assistant Secretaries and
12
a Treasurer) as the Board from time to time may determine. Officers elected by the Board shall each have such powers and duties as generally pertain to their respective offices, subject to the
specific provisions of this
ARTICLE VI
. Such officers shall also have such powers and duties as from time to time may be conferred by the Board. The Chief Executive Officer or President may also appoint such other officers (including without
limitation one or more Vice Presidents and Controllers) as may be necessary or desirable for the conduct of the business of the Corporation. Such other officers shall have such powers and duties and shall hold their offices for such terms as may be
provided in these Bylaws or as may be prescribed by the Board or, if such officer has been appointed by the Chief Executive Officer or President, as may be prescribed by the appointing officer.
(a)
Chairman of the Board
. The Chairman of the Board shall preside when present at all meetings of the
stockholders and the Board. The Chairman of the Board shall have general supervision and control of the acquisition activities of the Corporation subject to the ultimate authority of the Board, and shall be responsible for the execution of the
policies of the Board with respect to such matters. In the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) shall preside when present at all meetings of the
stockholders and the Board. The powers and duties of the Chairman of the Board shall not include supervision or control of the preparation of the financial statements of the Company (other than through participation as a member of the Board). The
position of Chairman of the Board and Chief Executive Officer may be held by the same person.
(b)
Chief
Executive Officer
. The Chief Executive Officer shall be the chief executive officer of the Corporation, shall have general supervision of the affairs of the Corporation and general control of all of its business subject to the ultimate authority
of the Board, and shall be responsible for the execution of the policies of the Board with respect to such matters, except to the extent any such powers and duties have been prescribed to the Chairman of the Board pursuant to
Section 6.1(a)
above. In the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) shall preside when present at all meetings of the stockholders and the Board. The position of Chief
Executive Officer and President may be held by the same person.
(c)
President
. The President shall make
recommendations to the Chief Executive Officer on all operational matters that would normally be reserved for the final executive responsibility of the Chief Executive Officer. In the absence (or inability or refusal to act) of the Chairman of the
Board and Chief Executive Officer, the President (if he or she shall be a director) shall preside when present at all meetings of the stockholders and the Board. The President shall also perform such duties and have such powers as shall be
designated by the Board. The position of President and Chief Executive Officer may be held by the same person.
(d)
Vice Presidents
. In the absence (or inability or refusal to act) of the President, the Vice President (or in
the event there be more than one Vice President, the Vice Presidents in the order designated by the Board) shall perform the duties and have the powers of the President. Any one or more of the Vice Presidents may be given an additional designation
of rank or function.
13
(e)
Secretary
.
(i) The Secretary shall attend all meetings of the stockholders, the Board and (as required) committees of the Board and
shall record the proceedings of such meetings in books to be kept for that purpose. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board and shall perform such other duties as
may be prescribed by the Board, the Chairman of the Board, Chief Executive Officer or President. The Secretary shall have custody of the corporate seal of the Corporation and the Secretary, or any Assistant Secretary, shall have authority to affix
the same to any instrument requiring it, and when so affixed, it may be attested by his or her signature or by the signature of such Assistant Secretary. The Board may give general authority to any other officer to affix the seal of the Corporation
and to attest the affixing thereof by his or her signature.
(ii) The Secretary shall keep, or cause to be kept, at
the principal executive office of the Corporation or at the office of the Corporation’s transfer agent or registrar, if one has been appointed, a stock ledger, or duplicate stock ledger, showing the names of the stockholders and their
addresses, the number and classes of shares held by each and, with respect to certificated shares, the number and date of certificates issued for the same and the number and date of certificates cancelled.
(f)
Assistant Secretaries
. The Assistant Secretary or, if there be more than one, the Assistant Secretaries in
the order determined by the Board shall, in the absence (or inability or refusal to act) of the Secretary, perform the duties and have the powers of the Secretary.
(g)
Chief Financial Officer
. The Chief Financial Officer shall perform all duties commonly incident to that
office (including, without limitation, the care and custody of the funds and securities of the Corporation, which from time to time may come into the Chief Financial Officer’s hands and the deposit of the funds of the Corporation in such banks
or trust companies as the Board, the Chief Executive Officer or the President may authorize).
(h)
Treasurer
. The Treasurer shall, in the absence (or inability or refusal to act) of the Chief Financial
Officer, perform the duties and exercise the powers of the Chief Financial Officer.
Section
6.2.
Term of Office; Removal; Vacancies
. The elected officers of the
Corporation shall be appointed by the Board and shall hold office until their successors are duly elected and qualified or until their earlier death, resignation, retirement, disqualification, or removal from office. Any officer may be removed, with
or without cause, at any time by the Board. Any officer appointed by the Chief Executive Officer or President may also be removed, with or without cause, by the Chief Executive Officer or President, as the case may be, unless the Board otherwise
provides. Any vacancy occurring in any elected office of the Corporation may be filled by the Board. Any vacancy occurring in any office appointed by the Chief Executive Officer or President may be filled by the Chief Executive Officer, or
President, as the case may be, unless the Board then determines that such office shall thereupon be elected by the Board, in which case the Board shall elect such officer.
14
Section
6.3.
Other Officers.
The Board
may delegate the power to appoint such other officers and agents, and may also remove such officers and agents or delegate the power to remove same, as it shall from time to time deem necessary or desirable.
Section
6.4.
Multiple Officeholders; Stockholder and Director Officers
. Any number of
offices may be held by the same person unless the Certificate of Incorporation or these Bylaws otherwise provide. Officers need not be stockholders or residents of the State of Delaware.
ARTICLE VII
SHARES
Section
7.1.
Certificated and Uncertificated Shares
. The shares of the
Corporation may be certificated or uncertificated, subject to the sole discretion of the Board and the requirements of the DGCL.
Section
7.2.
Multiple Classes of Stock
. If the Corporation shall be authorized to
issue more than one class of stock or more than one series of any class, the Corporation shall (a) cause the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences and/or rights to be set forth in full or summarized on the face or back of any certificate that the Corporation issues to represent shares of such class or series of
stock or (b) in the case of uncertificated shares, within a reasonable time after the issuance or transfer of such shares, send to the registered owner thereof a written notice containing the information required to be set forth on certificates
as specified in clause (a) above; provided, however, that, except as otherwise provided by applicable law, in lieu of the foregoing requirements, there may be set forth on the face or back of such certificate or, in the case of uncertificated
shares, on such written notice a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or restrictions of such preferences or rights.
Section
7.3.
Signatures
. Each certificate representing capital stock of the
Corporation shall be signed by or in the name of the Corporation by any two of the Chairman of the Board, the Chief Executive Officer, the President, a Vice President, the Chief Financial Officer, the Treasurer, an Assistant Treasurer, the Secretary
or an Assistant Secretary of the Corporation or any other authorized officers of the Corporation. Any or all the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may be issued by the Corporation with the same effect as if such person were such
officer, transfer agent or registrar on the date of issue.
15
Section
7.4.
Consideration and Payment for
Shares
.
(a) Subject to applicable law and the Certificate of Incorporation, shares of stock may be issued for
such consideration, having in the case of shares with par value a value not less than the par value thereof, and to such persons, as determined from time to time by the Board. The consideration may consist of cash, any tangible or intangible
property or any benefit to the Corporation, or any combination thereof.
(b) Subject to applicable law and the
Certificate of Incorporation, shares may not be issued until the full amount of the consideration has been paid, unless upon the face or back of each certificate issued to represent any partly paid shares of capital stock or upon the books and
records of the Corporation in the case of partly paid uncertificated shares, there shall have been set forth the total amount of the consideration to be paid therefor and the amount paid thereon up to and including the time said certificate
representing certificated shares or said uncertificated shares are issued.
Section
7.5.
Lost, Destroyed or Wrongfully Taken Certificates
.
(a) If an owner of a certificate representing shares claims that such certificate has been lost, destroyed or wrongfully
taken, the Corporation shall issue a new certificate representing such shares or such shares in uncertificated form if the owner: (i) requests such a new certificate before the Corporation has notice that the certificate representing such
shares has been acquired by a protected purchaser; (ii) if requested by the Corporation, delivers to the Corporation a bond sufficient to indemnify the Corporation against any claim that may be made against the Corporation on account of the
alleged loss, wrongful taking or destruction of such certificate or the issuance of such new certificate or uncertificated shares; and (iii) satisfies other reasonable requirements imposed by the Corporation.
(b) If a certificate representing shares has been lost, apparently destroyed or wrongfully taken, and the owner fails
to notify the Corporation of that fact within a reasonable time after the owner has notice of such loss, apparent destruction or wrongful taking and the Corporation registers a transfer of such shares before receiving notification, the owner shall
be precluded from asserting against the Corporation any claim for registering such transfer or a claim to a new certificate representing such shares or such shares in uncertificated form.
Section
7.6.
Transfer of Stock
.
(a) If a certificate representing shares of the Corporation is presented to the Corporation with an endorsement
requesting the registration of transfer of such shares or an instruction is presented to the Corporation requesting the registration of transfer of uncertificated shares, the Corporation shall register the transfer as requested if:
(i) in the case of certificated shares, the certificate representing such shares has been surrendered;
(ii) (A) with respect to certificated shares, the endorsement is made by the person specified by the certificate as
entitled to such shares; (B) with respect to uncertificated shares, an instruction is made by the registered owner of such uncertificated shares; or (C) with respect to certificated shares or uncertificated shares, the endorsement or
instruction is made by any other appropriate person or by an agent who has actual authority to act on behalf of the appropriate person;
16
(iii) the Corporation has received a guarantee of signature of the person
signing such endorsement or instruction or such other reasonable assurance that the endorsement or instruction is genuine and authorized as the Corporation may request;
(iv) the transfer does not violate any restriction on transfer imposed by the Corporation that is enforceable in
accordance with
Section 7.8(a)
; and
(v) such other conditions for such transfer as shall be provided for
under applicable law have been satisfied.
(b) Whenever any transfer of shares shall be made for collateral
security and not absolutely, the Corporation shall so record such fact in the entry of transfer if, when the certificate for such shares is presented to the Corporation for transfer or, if such shares are uncertificated, when the instruction for
registration of transfer thereof is presented to the Corporation, both the transferor and transferee request the Corporation to do so.
Section
7.7.
Registered Stockholders
. Before due presentment for registration of
transfer of a certificate representing shares of the Corporation or of an instruction requesting registration of transfer of uncertificated shares, the Corporation may treat the registered owner as the person exclusively entitled to inspect for any
proper purpose the stock ledger and the other books and records of the Corporation, vote such shares, receive dividends or notifications with respect to such shares and otherwise exercise all the rights and powers of the owner of such shares, except
that a person who is the beneficial owner of such shares (if held in a voting trust or by a nominee on behalf of such person) may, upon providing documentary evidence of beneficial ownership of such shares and satisfying such other conditions as are
provided under applicable law, may also so inspect the books and records of the Corporation.
Section
7.8.
Effect of the Corporation’s Restriction on Transfer
.
(a) A written restriction on the transfer or registration of transfer of shares of the Corporation or on the amount of
shares of the Corporation that may be owned by any person or group of persons, if permitted by the DGCL and noted conspicuously on the certificate representing such shares or, in the case of uncertificated shares, contained in a notice sent by the
Corporation to the registered owner of such shares within a reasonable time after the issuance or transfer of such shares, may be enforced against the holder of such shares or any successor or transferee of the holder including an executor,
administrator, trustee, guardian or other fiduciary entrusted with like responsibility for the person or estate of the holder.
(b) A restriction imposed by the Corporation on the transfer or the registration of shares of the Corporation or on the
amount of shares of the Corporation that may be owned by any person or group of persons, even if otherwise lawful, is ineffective against a person without actual knowledge of such restriction unless: (i) the shares are certificated and such
restriction is noted conspicuously on the certificate; or (ii) the shares are uncertificated and such restriction was contained in a notice sent by the Corporation to the registered owner of such shares within a reasonable time after the
issuance or transfer of such shares.
17
Section
7.9.
Regulations
. The Board shall
have power and authority to make such additional rules and regulations, subject to any applicable requirement of law, as the Board may deem necessary and appropriate with respect to the issue, transfer or registration of transfer of shares of stock
or certificates representing shares. The Board may appoint one or more transfer agents or registrars and may require for the validity thereof that certificates representing shares bear the signature of any transfer agent or registrar so appointed.
ARTICLE VIII
INDEMNIFICATION
Section
8.1.
Right to Indemnification
. 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 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 (hereinafter 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 (hereinafter 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; provided, however, that, except as provided in
Section
8.3
with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify 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.
Section
8.2.
Right to Advancement of Expenses
. In addition to the right to
indemnification conferred in
Section
8.1
, an Indemnitee shall also have the right to be paid by the Corporation to the fullest extent not prohibited by applicable law the expenses (including, without limitation,
attorneys’ fees) incurred in defending or otherwise participating in any such proceeding in advance of its final disposition (hereinafter an “
advancement of expenses
”); provided, however, that, if the DGCL requires, an
advancement of expenses incurred by an Indemnitee in his or her capacity as a director or officer of the Corporation (and not in any other capacity in which service was or is rendered by such Indemnitee, including, without limitation, service to an
employee benefit plan) shall be made only upon the Corporation’s receipt of an undertaking (hereinafter an “
undertaking
”), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be
determined that such Indemnitee is not entitled to be indemnified under this
Article VIII
or otherwise.
Section
8.3.
Right of
Indemnitee
to Bring Suit
. If a claim under
Section
8.1
or
Section
8.2
is not paid in full by the Corporation within 60 days after a written claim therefor has been received by the Corporation, except in the case of a claim for an
advancement of expenses, in which case the applicable period shall be 20 days, the Indemnitee may at any time
18
thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the Indemnitee shall also be entitled to be paid the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification
hereunder (but not in a suit brought by an Indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (b) in any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the Corporation shall be entitled to recover such expenses upon a final judicial decision from which there is no further right to appeal (hereinafter a “
final adjudication
”) that, the Indemnitee has not met any
applicable standard for indemnification set forth in the DGCL. Neither the failure of the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) to have
made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by
the Corporation (including a determination by its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) that the Indemnitee has not met such applicable standard of conduct, shall
create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, shall be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to
indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this
ARTICLE VIII
or otherwise shall be on the Corporation.
Section
8.4.
Non-Exclusivity
of Rights
. The
rights provided to any Indemnitee pursuant to this
ARTICLE VIII
shall not be exclusive of any other right, which such Indemnitee may have or hereafter acquire under applicable law, the Certificate of Incorporation, these Bylaws, an agreement,
a vote of stockholders or disinterested directors, or otherwise.
Section
8.5.
Insurance
. The Corporation may secure insurance, at its expense, to
protect itself and/or any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the
power to indemnify such person against such expense, liability or loss under the DGCL.
Section
8.6.
Indemnification of Other Persons
. This
ARTICLE VIII
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. Without limiting the foregoing, the Corporation may, to the extent authorized
from time to time by the Board, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation and to any other person who 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 or other enterprise, including service with respect to an employee benefit plan, to the fullest extent of the provisions of this
ARTICLE VIII
with respect
to the indemnification and advancement of expenses of Indemnitees under this
ARTICLE VIII
.
19
Section
8.7.
Amendments
. Any repeal or
amendment of this
ARTICLE VIII
by the Board or the stockholders of the Corporation or by changes in applicable law, or the adoption of any other provision of these Bylaws inconsistent with this
ARTICLE VIII
, will, to the extent
permitted by applicable law, be prospective only (except to the extent such amendment or change in applicable law permits the Corporation to provide broader indemnification rights to Indemnitees on a retroactive basis than permitted prior thereto),
and will not in any way diminish or adversely affect any right or protection existing hereunder in respect of any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision; provided however, that
amendments or repeals of this
ARTICLE VIII
shall require the affirmative vote of the stockholders holding at least 65% of the voting power of all outstanding shares of capital stock of the Corporation.
Section
8.8.
Certain Definitions
. For purposes of this
ARTICLE VIII
,
(a) references to “other enterprise” shall include any employee benefit plan; (b) references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; (c) references
to “serving at the request of the Corporation” shall include any service that imposes duties on, or involves services by, a person with respect to any employee benefit plan, its participants, or beneficiaries; and (d) 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 interest of the
Corporation” for purposes of Section 145 of the DGCL.
Section
8.9.
Contract
Rights
. The rights provided to Indemnitees pursuant to this
ARTICLE VIII
shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be a director, officer, agent or employee and shall inure to the
benefit of the Indemnitee’s heirs, executors and administrators.
ARTICLE IX
MISCELLANEOUS
Section
9.1.
Place of Meetings
. If the place of any meeting of stockholders, the Board
or committee of the Board for which notice is required under these Bylaws is not designated in the notice of such meeting, such meeting shall be held at the principal business office of the Corporation; provided, however, if the Board has, in its
sole discretion, determined that a meeting shall not be held at any place, but instead shall be held by means of remote communication pursuant to
Section
9.5
hereof, then such meeting shall not be held at any place.
Section
9.2.
Fixing Record Dates
.
(a) In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or
any adjournment thereof, the Board may fix a record date, which shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall not be more than 60 nor less than 10 days before the
date of such meeting. If the Board so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such record date, that a later date on or
before the date of the meeting shall be the
20
date for making such determination. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of and to vote at a meeting of stockholders shall be
at the close of business on the business day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held. A determination of stockholders
of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting, and in such case shall also fix as the
record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance with the foregoing provisions of this
Section 9.2(a)
at the
adjourned meeting.
(b) In order that the Corporation may determine the stockholders entitled to receive payment of
any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix a record
date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining
stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.
Section
9.3.
Means of Giving Notice
.
(a)
Notice to Directors
. Whenever under applicable law, the Certificate of Incorporation or these Bylaws notice
is required to be given to any director, such notice shall be given either (i) in writing, given by hand delivery, or sent by mail, or by a nationally recognized delivery service, (ii) by means of facsimile telecommunication or other form
of electronic transmission, or (iii) by oral notice given personally or by telephone. A notice to a director will be deemed given as follows: (i) if given by hand delivery, orally, or by telephone, when actually received by the director,
(ii) if sent through the United States mail, when deposited in the United States mail, with postage and fees thereon prepaid, addressed to the director at the director’s address appearing on the records of the Corporation, (iii) if
sent for next day delivery by a nationally recognized overnight delivery service, when deposited with such service, with fees thereon prepaid, addressed to the director at the director’s address appearing on the records of the Corporation,
(iv) if sent by facsimile telecommunication, when sent to the facsimile transmission number for such director appearing on the records of the Corporation, (v) if sent by electronic mail, when sent to the electronic mail address for such
director appearing on the records of the Corporation, or (vi) if sent by any other form of electronic transmission, when sent to the address, location or number (as applicable) for such director appearing on the records of the Corporation.
(b)
Notice to Stockholders.
Whenever under applicable law, the Certificate of Incorporation or these Bylaws
notice is required to be given to any stockholder, such notice may be given (i) in writing and sent either by hand delivery, through the United States mail, or by a nationally recognized overnight delivery service for next day delivery, or
(ii) by means of a form of electronic transmission consented to by the stockholder, to the extent permitted by, and subject to the conditions set forth in Section 232 of the DGCL. A notice to a stockholder shall be deemed given as follows:
(i) if given by hand delivery, when actually received by the
21
stockholder, (ii) if sent through the United States mail, when deposited in the United States mail, with postage and fees thereon prepaid, addressed to the stockholder at the
stockholder’s address appearing on the stock ledger of the Corporation, (iii) if sent for next day delivery by a nationally recognized overnight delivery service, when deposited with such service, with fees thereon prepaid, addressed to
the stockholder at the stockholder’s address appearing on the stock ledger of the Corporation, and (iv) if given by a form of electronic transmission consented to by the stockholder to whom the notice is given and otherwise meeting the
requirements set forth above, (A) if by facsimile transmission, when directed to a number at which the stockholder has consented to receive notice, (B) if by electronic mail, when directed to an electronic mail address at which the
stockholder has consented to receive notice, (C) if by a posting on an electronic network together with separate notice to the stockholder of such specified posting, upon the later of (1) such posting and (2) the giving of such
separate notice, and (D) if by any other form of electronic transmission, when directed to the stockholder. A stockholder may revoke such stockholder’s consent to receiving notice by means of electronic communication by giving written
notice of such revocation to the Corporation. Any such consent shall be deemed revoked if (1) the Corporation is unable to deliver by electronic transmission two consecutive notices given by the Corporation in accordance with such consent and
(2) such inability becomes known to the Secretary or an Assistant Secretary or to the Corporation’s transfer agent, or other person responsible for the giving of notice; provided, however, the inadvertent failure to treat such inability as
a revocation shall not invalidate any meeting or other action.
(c)
Electronic Transmission
.
“
Electronic transmission
” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be
directly reproduced in paper form by such a recipient through an automated process, including but not limited to transmission by telex, facsimile telecommunication, electronic mail, telegram and cablegram.
(d)
Notice to Stockholders Sharing Same Address
. Without limiting the manner by which notice otherwise may be
given effectively by the Corporation to stockholders, any notice to stockholders given by the Corporation under any provision of the DGCL, the Certificate of Incorporation or these Bylaws shall be effective if given by a single written notice to
stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. A stockholder may revoke such stockholder’s consent by delivering written notice of such revocation to the Corporation. Any
stockholder who fails to object in writing to the Corporation within 60 days of having been given written notice by the Corporation of its intention to send such a single written notice shall be deemed to have consented to receiving such single
written notice.
(e)
Exceptions to Notice Requirements
. Whenever notice is required to be given, under the
DGCL, the Certificate of Incorporation or these Bylaws, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for
a license or permit to give such notice to such person. Any action or meeting that shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly
given. In the event that the action taken by the Corporation is such as to require the filing of a certificate with the Secretary of State of Delaware, the certificate shall state, if such is the fact and if notice is required, that notice was given
to all persons entitled to receive notice except such persons with whom communication is unlawful.
22
Whenever notice is required to be given by the Corporation, under any provision of the DGCL, the Certificate of
Incorporation or these Bylaws, to any stockholder to whom (1) notice of two consecutive annual meetings of stockholders and all notices of stockholder meetings or of the taking of action by written consent of stockholders without a meeting to
such stockholder during the period between such two consecutive annual meetings, or (2) all, and at least two payments (if sent by first-class mail) of dividends or interest on securities during a
12-month
period, have been mailed addressed to such stockholder at such stockholder’s address as shown on the records of the Corporation and have been returned undeliverable, the giving of such notice to
such stockholder shall not be required. Any action or meeting that shall be taken or held without notice to such stockholder shall have the same force and effect as if such notice had been duly given. If any such stockholder shall deliver to the
Corporation a written notice setting forth such stockholder’s then current address, the requirement that notice be given to such stockholder shall be reinstated. In the event that the action taken by the Corporation is such as to require the
filing of a certificate with the Secretary of State of Delaware, the certificate need not state that notice was not given to persons to whom notice was not required to be given pursuant to Section 230 (b) of the DGCL. The exception in
subsection (1) of the first sentence of this paragraph to the requirement that notice be given shall not be applicable to any notice returned as undeliverable if the notice was given by electronic transmission.
Section
9.4.
Waiver of Notice
. Whenever any notice is required to be given under
applicable law, the Certificate of Incorporation, or these Bylaws, a written waiver of such notice, signed by the person or persons entitled to said notice, or a waiver by electronic transmission by the person entitled to said notice, whether before
or after the time stated therein, shall be deemed equivalent to such required notice. All such waivers shall be kept with the books of the Corporation. Attendance at a meeting shall constitute a waiver of notice of such meeting, except where a
person attends for the express purpose of objecting to the transaction of any business on the ground that the meeting was not lawfully called or convened.
Section
9.5.
Meeting Attendance via Remote Communication Equipment
.
(a)
Stockholder Meetings
. If authorized by the Board in its sole discretion, and subject to such guidelines and
procedures as the Board may adopt, stockholders entitled to vote at such meeting and proxy holders not physically present at a meeting of stockholders may, by means of remote communication:
(i) participate in a meeting of stockholders; and
(ii) be deemed present in person and vote at a meeting of stockholders, whether such meeting is to be held at a
designated place or solely by means of remote communication, provided that (A) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication
is a stockholder or proxy holder, (B) the Corporation shall implement reasonable measures to provide such stockholders and proxy holders a reasonable opportunity to participate
23
in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and
(C) if any stockholder or proxy holder votes or takes other action at the meeting by means of remote communication, a record of such votes or other action shall be maintained by the Corporation.
(b)
Board Meetings
. Unless otherwise restricted by applicable law, the Certificate of Incorporation or these
Bylaws, members of the Board or any committee thereof may participate in a meeting of the Board or any committee thereof by means of conference telephone or other communications equipment by means of which all persons participating in the meeting
can hear each other. Such participation in a meeting shall constitute presence in person at the meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the
meeting was not lawfully called or convened.
Section
9.6.
Dividends
. The Board
may from time to time declare, and the Corporation may pay, dividends (payable in cash, property or shares of the Corporation’s capital stock) on the Corporation’s outstanding shares of capital stock, subject to applicable law and the
Certificate of Incorporation.
Section
9.7.
Reserves
. The Board may set apart out
of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve.
Section
9.8.
Contracts and Negotiable Instruments
. Except as otherwise provided by
applicable law, the Certificate of Incorporation or these Bylaws, any contract, bond, deed, lease, mortgage or other instrument may be executed and delivered in the name and on behalf of the Corporation by such officer or officers or other employee
or employees of the Corporation as the Board may from time to time authorize. Such authority may be general or confined to specific instances as the Board may determine. The Chairman of the Board, the Chief Executive Officer, the President, the
Chief Financial Officer, the Treasurer or any Vice President may execute and deliver any contract, bond, deed, lease, mortgage or other instrument in the name and on behalf of the Corporation. Subject to any restrictions imposed by the Board, the
Chairman of the Board Chief Executive Officer, President, the Chief Financial Officer, the Treasurer or any Vice President may delegate powers to execute and deliver any contract, bond, deed, lease, mortgage or other instrument in the name and on
behalf of the Corporation to other officers or employees of the Corporation under such person’s supervision and authority, it being understood, however, that any such delegation of power shall not relieve such officer of responsibility with
respect to the exercise of such delegated power.
Section
9.9.
Fiscal Year
. The
fiscal year of the Corporation shall be fixed by the Board.
Section
9.10.
Seal
.
The Board may adopt a corporate seal, which shall be in such form as the Board determines. The seal may be used by causing it or a facsimile thereof to be impressed, affixed or otherwise reproduced.
24
Section
9.11.
Books and Records
. The
books and records of the Corporation may be kept within or outside the State of Delaware at such place or places as may from time to time be designated by the Board.
Section
9.12.
Resignation
. Any director, committee member or officer may resign by
giving notice thereof in writing or by electronic transmission to the Chairman of the Board, the Chief Executive Officer, the President or the Secretary. The resignation shall take effect at the time it is delivered unless the resignation specifies
a later effective date or an effective date determined upon the happening of an event or events. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
Section
9.13.
Surety Bonds
. Such officers, employees and agents of the Corporation (if
any) as the Chairman of the Board, Chief Executive Officer, President or the Board may direct, from time to time, shall be bonded for the faithful performance of their duties and for the restoration to the Corporation, in case of their death,
resignation, retirement, disqualification or removal from office, of all books, papers, vouchers, money and other property of whatever kind in their possession or under their control belonging to the Corporation, in such amounts and by such surety
companies as the Chairman of the Board, Chief Executive Officer, President or the Board may determine. The premiums on such bonds shall be paid by the Corporation and the bonds so furnished shall be in the custody of the Secretary.
Section
9.14.
Securities of Other Corporations
. Powers of attorney, proxies, waivers
of notice of meeting, consents in writing and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the Chairman of the Board, Chief Executive Officer, President, or any
officers authorized by the Board. Any such officer, may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation
in which the Corporation may own securities, or to consent in writing, in the name of the Corporation as such holder, to any action by such corporation, and at any such meeting or with respect to any such consent shall possess and may exercise any
and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed. The Board may from time to time confer like powers upon any other person or persons.
Section
9.15.
Amendments
. The Board shall have the power 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 applicable law or the Certificate of Incorporation, the affirmative vote of the holders of at least a majority of the voting (except as otherwise
provided in
Section
8.7
) power of all 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.
Section
9.16.
Severability
. If any
provision or provisions of these Bylaws shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of these Bylaws shall not in any way be affected
25
or impaired thereby; and (b) to the fullest extent possible, the provisions of these Bylaws (including, without limitation, each such portion of these Bylaws containing any such provision
held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.
26
Exhibit 4.1
NUMBER UNITS
U-
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP
[●]
TPG PACE ENERGY HOLDINGS CORP.
UNITS CONSISTING OF ONE SHARE OF CLASS A COMMON STOCK AND
ONE-THIRD
OF ONE
WARRANT TO PURCHASE ONE SHARE OF CLASS A COMMON STOCK
THIS CERTIFIES THAT is the owner of
Units.
Each Unit
(“
Unit
”) consists of one (1) share of Class A common stock, par value $0.0001 per share (“
Common Stock
”), of TPG Pace Energy Holdings Corp, a Delaware corporation (the
“
Company
”), and
one-third
(1/3) of one warrant (each whole warrant, a “
Warrant
”). Each whole Warrant entitles the holder to purchase one (1) share (subject
to adjustment) of Common Stock for $11.50 per share (subject to adjustment). Each Warrant will become exercisable on the later of (i) thirty (30) days after the Company’s completion of a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or other similar business combination with one or more businesses (each a “
Business Combination
”), or (ii) twelve (12) months from the closing of the Company’s initial public offering,
and will expire unless exercised before 5:00 p.m., New York City Time, on the date that is five (5) years after the date on which the Company completes its initial Business Combination, or earlier upon redemption or liquidation (the
“
Expiration Date
”). The Common Stock and Warrants comprising the Units represented by this certificate are not transferable separately prior to , 2017,
unless Deutsche Bank Securities Inc. and Goldman, Sachs & Co. elect to allow earlier separate trading, subject to the Company’s filing of a Current Report on Form
8-K
with the Securities and
Exchange Commission containing an audited balance sheet reflecting the Company’s receipt of the gross proceeds of 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 , 2017, between the Company and Continental Stock Transfer & Trust Company, as Warrant Agent, and are subject to the terms and provisions
contained therein, all of which terms and provisions the holder of this certificate consents to by acceptance hereof. Copies of the Warrant Agreement are on file at the office of the Warrant Agent at 17 Battery Place, 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.
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Secretary
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Chief Executive Officer
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TPG Pace Energy Holdings Corp.
The Company will furnish without charge to each unitholder who so requests, a statement of the powers, designations, preferences and relative,
participating, optional or other special rights of each class of 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:
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TEN COM
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as tenants in common
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UNIF GIFT MIN ACT
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–
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Custodian
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TEN ENT
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–
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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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–
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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 sell, assign and transfer 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.
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Dated
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Notice:
The signature to
this assignment must correspond with the name as written upon the face of the certificate in every particular, without alteration or enlargement or any change whatever.
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Signature(s) Guaranteed:
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THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C.
RULE
17Ad-15
(OR ANY SUCCESSOR RULE).
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2
In each case, as more fully described in the Company’s final prospectus dated
, 2017, the holder(s) of this certificate shall be entitled to receive a
pro-rata
portion of certain funds held in the trust account
established in connection with the Company’s initial public offering only in the event that (i) the Company redeems the shares of Class A common stock sold in its initial public offering and liquidates because it does not consummate
an initial business combination by , 2019, (ii) the Company redeems the shares of Class A common stock sold in its initial public offering in connection with a stockholder
vote to amend the Company’s amended and restated certificate of incorporation to modify the substance or timing of the Company’s obligation to redeem 100% of the Class A common stock if it does not consummate an initial business
combination by , 2019, 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 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.
3
Exhibit 4.2
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NUMBER
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NUMBER
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C-
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SHARES
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SEE REVERSE FOR CERTAIN DEFINITIONS
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CUSIP [●]
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TPG PACE ENERGY HOLDINGS CORP.
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
TPG PACE ENERGY HOLDINGS CORP.
(THE “CORPORATION”)
transferable on the books of the Corporation in person or by duly authorized attorney upon surrender of this certificate properly endorsed.
The Corporation will be forced to redeem all of its shares of Class A common stock if it is unable to complete a business combination by
, 2019, all as more fully described in the Corporation’s final prospectus dated , 2017.
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.
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Secretary
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[Corporate Seal]
Delaware
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Chief Executive Officer
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TPG PACE ENERGY HOLDINGS CORP.
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:
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TEN COM
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–
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as tenants in common
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UNIF GIFT MIN ACT
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–
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Custodian
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TEN ENT
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–
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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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–
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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:
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
Signature(s) Guaranteed:
By
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE
17Ad-15
(OR ANY
SUCCESSOR RULE).
In each case, as more fully described in the Corporation’s final prospectus dated
, 2017, 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 Corporation redeems the shares of Class A common stock sold in its initial public offering and liquidates because it does not
consummate an initial business combination by , 2019, (ii) the Corporation redeems the shares of Class A common stock sold in its initial public offering in connection with
a stockholder vote to amend the Corporation’s amended and restated certificate of incorporation to modify 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 by , 2019, 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.
2
Exhibit 4.3
[FACE]
Number
Warrants
THIS WARRANT
SHALL BE VOID IF NOT EXERCISED PRIOR TO
THE EXPIRATION OF THE EXERCISE PERIOD PROVIDED FOR
IN THE WARRANT AGREEMENT DESCRIBED BELOW
TPG PACE ENERGY HOLDINGS CORP.
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 (“
Common Stock
”), of TPG Pace Energy Holdings Corp., a Delaware corporation (the “
Company
”). Each Warrant entitles the holder, upon
exercise during the period set forth in the Warrant Agreement referred to below, to receive from the Company that number of fully paid and nonassessable shares of Common Stock as set forth below, at the exercise price (the “
Exercise
Price
”) as determined pursuant to the Warrant Agreement, payable in lawful money (or through “
cashless exercise
” as provided for in the Warrant Agreement) of the United States of America upon surrender of this
Warrant Certificate and payment of the Exercise Price at the office or agency of the Warrant Agent referred to below, subject to the conditions set forth herein and in the Warrant Agreement. Defined terms used in this Warrant Certificate but not
defined herein shall have the meanings given to them in the Warrant Agreement.
Each Warrant is initially exercisable for one fully paid
and
non-assessable
share of Common Stock. The number of shares of 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 Exercise Price per share of Common Stock for any Warrant is equal to $11.50 per share. The Exercise 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 void.
Reference is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this place.
This Warrant Certificate shall not be valid unless
countersigned by the Warrant Agent, as such term is used in the Warrant Agreement.
This Warrant Certificate shall be governed by and
construed in accordance with the internal laws of the State of New York, without regard to conflicts of laws principles thereof.
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TPG PACE ENERGY HOLDINGS CORP.
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By:
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Name:
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Title:
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CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Warrant Agent
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By:
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Name:
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Title:
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[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 Common Stock
and are issued or to be issued pursuant to a Warrant Agreement dated as of [●], 2017 (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) of the
Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof upon written request to the Company. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.
Warrants may be exercised at any time during the Exercise Period set forth in the Warrant Agreement. The holder of Warrants evidenced by
this Warrant Certificate may exercise them by surrendering this Warrant Certificate, with the form of election to purchase set forth hereon properly completed and executed, together with payment of the Exercise Price as specified in the Warrant
Agreement (or through “cashless exercise” as provided for in the Warrant Agreement) at the principal corporate trust office of the Warrant Agent. In the event that upon any exercise of Warrants evidenced hereby the number of Warrants
exercised shall be less than the total number of Warrants evidenced hereby, there shall be issued to the holder hereof or his, her or its assignee, a new Warrant Certificate evidencing the number of Warrants not exercised.
Notwithstanding anything else in this Warrant Certificate or the Warrant Agreement, no Warrant may be exercised unless at the time of exercise
(i) a registration statement covering the shares of Common Stock to be issued upon exercise is effective under the Securities Act and (ii) a prospectus thereunder relating to the shares of Common Stock is current, except through
“cashless exercise” as provided for in the Warrant Agreement.
The Warrant Agreement provides that upon the occurrence of
certain events the number of shares of 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 Common Stock, the Company shall, upon exercise, round down to the nearest whole number of shares of 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 Common Stock and herewith tenders payment for such shares of Common Stock to the order of TPG Pace Energy Holdings Corp. (the
“
Company
”) in the amount of $ in accordance with the terms hereof. The undersigned requests that a certificate for such shares of Common Stock be registered in the name of
, whose address is
and that such shares of Common Stock be delivered to
whose address is
. If said number of shares of Common Stock is less than all of the shares of Common Stock purchasable hereunder, the undersigned
requests that a new Warrant Certificate representing the remaining balance of such shares of 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
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 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 a Private Placement Warrant that is to be exercised on a “cashless” basis pursuant to
subsection 3.3.1(c)
of the Warrant Agreement, the number of shares of Common Stock that this Warrant is exercisable for shall be determined in accordance with
subsection 3.3.1(c)
of the Warrant Agreement.
In the event that the Warrant is to be exercised on a “cashless” basis pursuant to
Section
7.4
of the
Warrant Agreement, the number of shares of 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 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 Common Stock. If said number of shares of Common Stock
is less than all of the shares of 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 be registered in the name
of , whose address is
, and that such Warrant Certificate be delivered to
, whose address is
.
[Signature Page
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(Tax Identification Number)
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Signature Guaranteed:
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE
17Ad-15).
Exhibit 4.4
TPG PACE ENERGY HOLDINGS CORP.
and
CONTINENTAL STOCK
TRANSFER & TRUST COMPANY
WARRANT AGREEMENT
Dated as of [●], 2017
THIS WARRANT AGREEMENT (this “
Agreement
”), dated as of [●], 2017, is by and between TPG Pace Energy Holdings
Corp., a Delaware corporation (the “
Company
”), and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (the “
Warrant Agent
”, also referred to herein as the
“
Transfer Agent
”).
WHEREAS, on [●], 2017, the Company entered into that certain Private Placement Warrants
Purchase Agreement (as may be amended and restated from time to time, the “
Private Placement Warrants Purchase Agreement
”), with TPG Pace Energy Sponsor, LLC, a Delaware limited liability company (the
“
Sponsor
”), pursuant to which the Sponsor will purchase an aggregate of up to 10,533,333 warrants (including up to 1,200,000 warrants subject to the Over-allotment Option (as defined below)) simultaneously with the closing of
the Offering (and the closing of the Over-allotment Option (as defined below), if applicable), bearing the legend set forth in
Exhibit B
hereto (the “
Private Placement Warrants
”) at a purchase price of $1.50 per
Private Placement Warrant; and
WHEREAS, in order to finance the Company’s transaction costs in connection with an intended Business
Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as the Company may require, of which up to $1,500,000 may be convertible into up to
an additional 1,000,000 Private Placement Warrants of the post Business Combination entity at a price of $1.50 per warrant; and
WHEREAS,
the Company is engaged in an initial public offering (the “
Offering
”) of units of the Company’s equity securities, each such unit comprised of one share of Common Stock (as defined below) and
one-third
of one Public Warrant (as defined below) (the “
Units
”) and, in connection therewith, has determined to issue and deliver up to 23,000,000 warrants (including up to 3,000,000
warrants subject to the Over-allotment Option) to public investors in the Offering (the “
Public Warrants
” and, together with the Private Placement Warrants, the “
Warrants
”). Each whole Warrant entitles
the holder thereof to purchase one share of Class A common stock of the Company, par value $0.0001 per share (“
Common Stock
”), for $11.50 per whole share, subject to adjustment as described herein; and
WHEREAS, the Company has filed with the Securities and Exchange Commission (the “
Commission
”) a registration statement
on Form
S-1,
No. 333-[●] (the “
Registration Statement
”), and prospectus (the “
Prospectus
”), for the registration, under the Securities Act of 1933, as
amended (the “
Securities Act
”), of the Units, the Public Warrants and the shares of Common Stock included in the Units; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with
the issuance, registration, transfer, exchange, redemption and exercise of the Warrants; and
WHEREAS, the Company desires to provide for
the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and
WHEREAS, all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and
countersigned by or on behalf of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
1.
Appointment of Warrant Agent
. The Company hereby appoints the Warrant Agent to act as agent for the
Company for the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this Agreement.
2.
Warrants
.
2.1
Form of Warrant.
Each Warrant shall be issued in registered form only.
2.2
Effect of Countersignature
. If a physical certificate is issued, unless and until countersigned by the
Warrant Agent pursuant to this Agreement, a Warrant shall be invalid and of no effect and may not be exercised by the holder thereof.
2.3
Registration
.
2.3.1
Warrant Register
. The Warrant Agent shall maintain books (the “
Warrant Register
”),
for the registration of original issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants in book-entry form, the Warrant Agent shall issue and register the Warrants in the names of the respective holders
thereof in such denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the Company. Ownership of beneficial interests in the Public Warrants shall be shown on, and the transfer of such ownership shall be
effected through, records maintained by institutions that have accounts with the Depository Trust Company (the “
Depositary
”) (such institution, with respect to a Warrant in its account, a
“
Participant
”).
If the Depositary subsequently ceases to make its book-entry settlement system available for the
Public Warrants, the Company may instruct the Warrant Agent regarding making other arrangements for book-entry settlement. In the event that the Public Warrants are not eligible for, or it is no longer necessary to have the Public Warrants available
in, book-entry form, the Warrant Agent shall provide written instructions to the Depositary to deliver to the Warrant Agent for cancellation each book-entry Public Warrant, and the Company shall instruct the Warrant Agent to deliver to the
Depositary definitive certificates in physical form evidencing such Warrants which shall be in the form annexed hereto as
Exhibit A
.
Physical certificates, if issued, shall be signed by, or bear the facsimile signature of, the Chairman of the Board, Chief Executive Officer,
Chief Financial Officer, Secretary or other principal officer of the Company. In the event the person whose facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant
before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance.
2.3.2
Registered Holder
. Prior to due presentment for registration of transfer of any Warrant, the Company and
the Warrant Agent may deem and treat the person in whose name such Warrant is registered in the Warrant Register (the “
Registered Holder
”) as the absolute owner of such Warrant and of each Warrant represented thereby
(notwithstanding any notation of ownership or other writing on any physical certificate made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.
2.4
Detachability of Warrants
. The 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 Deutsche Bank
Securities Inc. and Goldman, Sachs & Co., as
2
representatives 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 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 Units, each of which is comprised of one share of Common Stock and one-third of one Public Warrant. If, upon the detachment of Public Warrants from Units or otherwise, a holder of Warrants would be entitled to receive a fractional
Warrant, the Company shall round down to the nearest whole number the number of Warrants to be issued to such holder.
2.6
Private Placement Warrants
. The Private Placement Warrants shall be identical to the Public Warrants, except
that so long as they are held by the Sponsor or any of its Permitted Transferees (as defined below) the Private Placement Warrants: (i) may be exercised for cash or on a cashless basis, pursuant to
subsection 3.3.1(c)
hereof,
(ii) may not be transferred, assigned or sold until thirty (30) days after the completion by the Company of an initial Business Combination (as defined below), and (iii) shall not be redeemable by the Company except as set forth in
Section 6.2
;
provided
,
however
, that in the case of (ii), the Private Placement Warrants and any shares of Common Stock held by the Sponsor or any of its Permitted Transferees and issued upon exercise of the Private
Placement Warrants may be transferred by the holders thereof:
(a) to the Company’s officers or directors, any
affiliates or family members of any of the Company’s officers or directors, any members of the Sponsor, or any affiliates of the Sponsor,
(b) in the case of an individual, by gift to a member of one of the 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 an affiliate of such person, or to a charitable organization;
(c) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual;
(d) in the case of an individual, pursuant to a qualified domestic relations order;
(e) by private sales or by transfers made in connection with the consummation of the Company’s Business
Combination at prices no greater than the price at which the securities were originally purchased;
(f) in the
event of the Company’s liquidation prior to the Company’s completion of an initial Business Combination;
(g) by virtue of the laws of the State of Delaware or the Sponsor’s limited liability company agreement upon
dissolution of the Sponsor; and
(h) in the event of the Company’s completion of a liquidation, merger, stock
exchange, reorganization 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 subsequent to the completion of the
Company’s initial Business Combination;
provided
,
however
, that, in the case of clauses (a) through (e), these permitted transferees (the “
Permitted Transferees
”) must enter into a written agreement
with the Company agreeing to be bound by the transfer restrictions in this Agreement.
3
3.
Terms and Exercise of Warrants
.
3.1
Warrant Price
. Each Warrant shall, when countersigned by the Warrant Agent, entitle the Registered Holder
thereof, subject to the provisions of such Warrant and of this Agreement, to purchase from the Company the number of shares of 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 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 twenty (20) Business Days, provided, that the
Company shall provide at least twenty (20) days prior written notice of such reduction to Registered Holders of the Warrants and, provided further that any such reduction shall be identical among all of the Warrants.
3.2
Duration of Warrants
. A Warrant may be exercised only during the period (the “
Exercise
Period
”) commencing on the later of: (i) the date that is thirty (30) days after the first date on which the Company completes a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar
business combination, involving the Company and one or more businesses (a “
Business Combination
”), or (ii) the date that is twelve (12) months from the date of the closing of the Offering, and terminating at 5:00
p.m., New York City time on the earlier to occur of: (a) the date that is five (5) years after the date on which the Company completes its initial Business Combination, (b) the liquidation of the Company if the Company fails to
consummate a Business Combination, (c) other than with respect to the Private Placement Warrants, the Redemption Date (as defined below) as provided in
Section
6.3
hereof or (d) the Alternative Redemption Date (as
defined below) (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) or the Alternative Redemption Price (as defined below) (other than with respect to a Private Placement Warrant) in
the event of a redemption (as set forth in Section 6 hereof), each Warrant (other than a Private Placement Warrant in the event of a redemption) not exercised on or before the Expiration Date shall become void, and all rights thereunder and all
rights in respect thereof under this Agreement shall cease at 5:00 p.m. New York City time on the Expiration Date. The Company in its sole discretion may extend the duration of the Warrants by delaying the Expiration Date;
provided
, that the
Company shall provide at least twenty (20) days prior written notice of any such extension to Registered Holders of the Warrants and, provided further that any such extension shall be identical in duration among all the Warrants.
3.3
Exercise of Warrants
.
3.3.1
Payment
. Subject to the provisions of the Warrant and this Agreement, a Warrant, when countersigned by the
Warrant Agent, may be exercised by the Registered Holder thereof by surrendering it, at the office of the Warrant Agent, or at the office of its successor as Warrant Agent, together with (i) an election to purchase form, duly executed, electing
to exercise such Warrants and (ii) payment in full of the Warrant Price for each full 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 order of the Warrant Agent;
(b) in the event of a redemption pursuant to
Section
6
hereof in which the Company’s
board of directors (the “
Board
”) has elected to require all holders of the Warrants to exercise such Warrants on a “cashless basis,” by surrendering the Warrants for that number of 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
exercise price of the Warrants by (y) the Fair Market Value. Solely for purposes of this
subsection 3.3.1(b)
,
Section 6.2
and
Section
6.4
, the “Fair Market Value” shall mean the average
reported last sale price of the Common Stock for the ten (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 the Warrants, pursuant to
Section
6
hereof;
(c) with respect to any Private Placement Warrant, so long as such
Private Placement Warrant is held by the Sponsor or a Permitted Transferee, by surrendering the Warrants for that number of 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
4
subsection 3.3.1(c)
) over the exercise price of the Warrants by (y) the Fair Market Value. Solely for purposes of this
subsection 3.3.1(c)
, the “Fair Market
Value” shall mean the average reported last sale price of the Common Stock for the ten (10) trading days ending on the third trading day prior to the date on which notice of exercise of the Warrant is sent to the Warrant Agent; or
(d) 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 the clearance of the funds in payment of the Warrant Price (if payment is pursuant to
subsection 3.3.1(a)
), the Company shall issue to the Registered Holder of such Warrant a book-entry position or certificate, as applicable, for the
number of full shares of Common Stock to which he, she or it is entitled, registered in such name or names as may be directed by him, her or it, and if such Warrant shall not have been exercised in full, a new book-entry position or countersigned
Warrant, as applicable, for the number of shares of Common Stock as to which such Warrant shall not have been exercised. Notwithstanding the foregoing, the Company shall not be obligated to deliver any shares of Common Stock pursuant to the exercise
of a Warrant and shall have no obligation to settle such Warrant exercise unless a 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 under the securities laws of the state of residence of the Registered Holder of the Warrants. In the event that the
conditions in the two immediately preceding sentences are not satisfied with respect to a Warrant, the holder of such Warrant shall not be entitled to exercise such Warrant and such Warrant may have no value and expire worthless, in which case the
purchaser of a Unit containing such Public Warrants shall have paid the full purchase price for the Unit solely for the shares of Common Stock underlying such Unit. In no event will the Company be required to net cash settle any Warrant. The Company
may require holders of Public Warrants to settle the Warrant on a “cashless basis” pursuant to
Section
7.4
. If, by reason of any exercise of warrants on a “cashless basis”, the holder of any Warrant
would be entitled, upon the exercise of such Warrant, to receive a fractional interest in 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 nonassessable.
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 are open.
3.3.5
Maximum Percentage
. A holder
of a Warrant may notify the Company in writing in the event it elects to be subject to the provisions contained in this
subsection 3.3.5
;
however
, no holder of a Warrant shall be subject to this
subsection 3.3.5
unless he, she
or it makes such election. If the election is made by a holder, the Warrant Agent shall not effect the exercise of the holder’s Warrant, and such holder shall not have the right to exercise such Warrant, to the extent that after giving effect
to such exercise, such person (together with such person’s affiliates), to the Warrant Agent’s actual knowledge, would beneficially own in excess of 9.8% (the “
Maximum Percentage
”) of the 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 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 and (y) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by such person and its affiliates (including,
5
without limitation, any convertible notes or convertible preferred stock or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set
forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”). For purposes
of the Warrant, in determining the number of outstanding shares of Common Stock, the holder may rely on the number of 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 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 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 outstanding shares of Common Stock is increased by a stock dividend payable in shares of Common Stock, or by a
split-up
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 outstanding shares of Common Stock. A rights offering to holders of the Common Stock entitling holders to purchase shares of Common Stock at a price less than the “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 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 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) “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.
4.1.2
Extraordinary Dividends
. If the Company, at any time while the Warrants are outstanding and unexpired,
shall pay a dividend or make a distribution in cash, securities or other assets to the holders of 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 to modify 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 if the Company does not complete the Business Combination within the time period set forth in the Company’s amended and
restated certificate of incorporation, or (e) in connection with the redemption of the shares of Common Stock included in Units sold in the Offering 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
6
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).
4.2
Aggregation of Shares
. If after the date hereof, and subject to the provisions of
Section
4.6
hereof, the number of 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 or 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 outstanding
shares of Common Stock.
4.3
Adjustments in Exercise Price
. 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.
4.4
Replacement of Securities upon
Reorganization, etc
. In case of any reclassification or reorganization of the outstanding shares of Common Stock (other than a change under
Section
4.1.
or Section
4.2
hereof or that solely affects the par
value of such shares of Common Stock), or in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and that does not result in
any reclassification or reorganization of the outstanding shares of Common Stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of the Company as an entirety or substantially as an
entirety in connection with which the Company is dissolved, the holders of the Warrants shall thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and in lieu of the shares of
Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such
reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the Warrants would have received if such holder had exercised his, her or its Warrant(s) immediately prior to
such event (the “
Alternative Issuance
” );
provided
,
however
, that (i) if the holders of the 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, and (ii) if a tender, exchange or redemption offer shall have been made to and accepted by the holders
of the shares of Common Stock (other than a tender, exchange or redemption offer made by the Company in connection with redemption rights held by stockholders of the Company as provided for in the Company’s amended and restated certificate of
incorporation or as a result of the redemption of shares of Common Stock by the Company if a proposed initial Business Combination is presented to the stockholders of the Company for approval) under circumstances in which, upon completion of such
tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule
13d-5(b)(1)
under the Exchange Act) of which such maker is a part, and together with any affiliate or
associate of such maker (within the meaning of Rule
12b-2
under the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of
Rule
13d-3
under the Exchange Act) more than 50% of the outstanding shares of Common Stock, the holder of a Warrant shall be entitled to receive as the Alternative Issuance, the highest amount of cash,
securities or other property to which such holder would actually have been entitled as a stockholder if such Warrant holder had exercised the Warrant prior to the expiration of such tender or exchange offer, accepted such offer and all of the shares
of Common Stock held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustments (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided
for in this
Section
4
;
7
provided
,
further
, that if less than 70% of the consideration receivable by the holders of the Common Stock in the applicable event is payable in the form of capital stock or shares
in the successor entity that is listed for trading on a national securities exchange or is quoted in an established
over-the-counter
market, or is to be so listed for
trading or quoted immediately following such event, and if the Registered Holder properly exercises the Warrant within thirty (30) days following the public disclosure of the consummation of such applicable event by the Company pursuant to a
Current Report on Form
8-K
filed with the Commission, the Warrant Price shall be reduced by an amount (in dollars) equal to the difference of (i) the Warrant Price in effect prior to such reduction minus
(ii) (A) the Per Share Consideration (as defined below) (but in no event less than zero) minus (B) the Black-Scholes Warrant Value (as defined below). The “Black-Scholes Warrant Value” means the value of a Warrant immediately
prior to the consummation of the applicable event based on the Black-Scholes Warrant Model for a Capped American Call on Bloomberg Financial Markets (“Bloomberg”). For purposes of calculating such amount,
(1)
Section
6
of this Agreement 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 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 the Common Stock covered by subsection 4.1.1, then such
adjustment shall be made pursuant to
subsection 4.1.1
or
Sections 4.2
,
4.3
and this
Section
4.4
. The provisions of this
Section
4.4
shall similarly apply to successive
reclassifications, reorganizations, mergers or consolidations, sales or other transfers. In no event will the Warrant Price be reduced to less than the par value per share issuable upon exercise of such 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. 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
8
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, 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. The Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon
request.
5.2
Procedure for Surrender of Warrants
. Warrants may be surrendered to the Warrant Agent,
together with a written request for exchange or transfer, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the Registered Holder of the Warrants so surrendered, representing an equal aggregate
number of Warrants;
provided
,
however
, that in the event that a Warrant surrendered for transfer bears a restrictive legend (as in the case of the Private Placement Warrants), the Warrant Agent shall not cancel such Warrant and issue
new Warrants in exchange thereof until the Warrant Agent has received an opinion of counsel for the Company stating that such transfer may be made and indicating whether the new Warrants must also bear a restrictive legend.
5.3
Fractional Warrants
. The Warrant Agent shall not be required to effect any registration of transfer or
exchange which shall result in the issuance of a warrant certificate or book-entry position for a fraction of a warrant, except as a part of the Units.
5.4
Service Charges
. No service charge shall be made for any exchange or registration of transfer of Warrants.
5.5
Warrant Execution and Countersignature
. The Warrant Agent is hereby authorized to countersign and to
deliver, in accordance with the terms of this Agreement, the Warrants required to be issued pursuant to the provisions of this
Section
5
, and the Company, whenever required by the Warrant Agent, shall supply the Warrant
Agent with Warrants duly executed on behalf of the Company for such purpose.
5.6
Transfer of Warrants
.
Prior to the Detachment Date, the Public Warrants may be transferred or exchanged only together with the Unit in which such Warrant is included, and only for the purpose of effecting, or in conjunction with, a transfer or exchange of such Unit.
Furthermore, each transfer of a Unit on the register relating to such Units shall operate also to transfer the Warrants included in such Unit. Notwithstanding the foregoing, the provisions of this
Section
5.6
shall have no
effect on any transfer of Warrants on and after the Detachment Date.
6.
Redemption
.
6.1
Redemption of Warrants for Cash
. Subject to
Section
6.5
hereof, not less than all
of the outstanding Warrants may be redeemed, at the option of the Company, at any time while they are exercisable and prior to their expiration, at the office of the Warrant Agent, upon notice to the Registered Holders of the Warrants, as described
in
Section
6.3
below, at the price of $0.01 per Warrant (the “
Redemption Price
”), provided that the last sales price of the Common Stock reported 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 Business Day prior to the
date on which notice of the redemption is given and provided 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
6.3
below) or the Company has elected to require the exercise of the Warrants on a “cashless basis” pursuant
to
subsection 3.3.1
.
9
6.2
Redemption of Warrants for Common Stock
. Subject to Section 6.5
hereof, not less than all of the outstanding Warrants may be redeemed, at the option of the Company, at any time while they are exercisable and prior to their expiration, at the office of the Warrant Agent, upon notice to the Registered Holders of
the Warrants, as described in Section 6.3 below, at a price equal to a number of shares of Common Stock determined by reference to the table below, based on the redemption date (calculated for purposes of the table as the period to expiration of the
Warrants) and the “Fair Market Value” (as such term is defined in
subsection 3.3.1(b)
) (the “
Alternative Redemption Price
”), provided that the last sales price of the Common Stock reported has been at least
$10.00 per share (subject to adjustment in compliance with Section 4 hereof), on the trading day prior to the date on which notice of the redemption is given and provided that there is an effective registration statement covering the shares of
Common Stock issuable upon exercise of the Warrants, and a current prospectus relating thereto, available throughout the
30-day
Redemption Period (as defined in
Section
6.3
below) or
the Company has elected to require the exercise of the Warrants on a “cashless basis” pursuant to
subsection 3.3.1
.
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Fair Market Value of Common Stock ($)
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Redemption Date
(period to expiration of the Warrants)
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10
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11
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12
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13
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14
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15
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16
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17
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18
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60 months
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57 months
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54 months
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51 months
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48 months
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45 months
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42 months
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39 months
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36 months
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33 months
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30 months
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27 months
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24 months
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21 months
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18 months
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15 months
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12 months
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9 months
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6 months
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3 months
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The exact Fair Market Value and Redemption Date (as defined below) may not be set forth in the table above, in
which case, if the Fair Market Value is between two values in the table or the Redemption Date is between two redemption dates in the table, the number of shares of the Common Stock to be issued for each Warrant redeemed will be determined by a
straight-line interpolation between the number of shares set forth for the higher and lower Fair Market Values and the earlier and later redemption dates, as applicable, based on a 365-day year.
6.3
Date Fixed for, and Notice of, Redemption
. In the event that the Company elects to redeem all of the
Warrants, the Company shall fix a date for the redemption (the “
Redemption Date
”). In the event that the Company elects to redeem all of the Warrants pursuant to
Section 6.2
, the Company shall fix a date for redemption
(the “
Alternative Redemption Date
”). Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company not less than thirty (30) days prior to the Redemption Date (such
30-day
period, the “
Redemption Period
”) to the Registered Holders of the Public Warrants and the Private Placement Warrants (as applicable) 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.
6.4
Exercise After Notice of Redemption
. The Warrants may be exercised, for cash (or on a “cashless
basis” in accordance with
subsection 3.3.1(b)
of this Agreement) at any time after notice of redemption shall have been given by the Company pursuant to
Section
6.3
hereof and prior to the Redemption Date. In
the event that the Company determines to require all holders of Warrants to exercise their Warrants on a “cashless basis” pursuant to
subsection 3.3.1
, the notice of redemption shall contain the information necessary to calculate
the number of 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 or the Alternative Redemption Price, as applicable.
6.5
Exclusion of Private Placement Warrants
. The Company agrees that the redemption rights provided in
Section
6.1
shall not apply to the Private Placement Warrants if at the time of the redemption such Private Placement Warrants continue to be held by the Sponsor or its Permitted Transferees.
However
, once such
Private Placement Warrants are transferred (other than to Permitted Transferees under
Section
2.6
), the Company may redeem the Private Placement Warrants pursuant to
Section 6.1
, provided that the criteria for
redemption are met, including the opportunity of the holder of such Private Placement Warrants to exercise the Private Placement Warrants prior to redemption pursuant to
Section
6.4
. Private Placement Warrants that are
transferred to persons other than Permitted Transferees shall upon such transfer cease to be Private Placement Warrants and shall become Public Warrants under this Agreement. The Company agrees that the redemption rights provided in
Section 6.2
shall apply to the Private Placement Warrants.
7.
Other Provisions Relating to Rights
of Holders of Warrants
.
7.1
No Rights as Stockholders
. 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
. The Company agrees that as soon as practicable, but in no event later
than fifteen (15) Business Days after the closing of its initial Business Combination, it shall use its best efforts to file with the Commission a registration statement for the registration, under the Securities Act, of the shares of Common
Stock issuable upon exercise of the Warrants. The Company shall use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the
expiration of the Warrants in accordance with the provisions of this Agreement. If any such registration statement has not been declared effective by the 60th Business Day following the closing of the Business Combination, holders of the Warrants
shall have the right,
10
during the period beginning on the 61st Business Day after the closing of the Business Combination and ending upon such registration statement being declared effective by the Commission, and
during any other period when the Company shall fail to have maintained an effective registration statement covering the 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 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 exercise price of the Warrants by (y) the Fair Market Value. Solely for purposes of this
subsection 7.4.1
, “Fair
Market Value” shall mean the volume weighted average price of the shares of Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the date that notice of exercise is received by the Warrant
Agent from the holder of such Warrants or its securities broker or intermediary. The date that notice of “cashless exercise” is received by the Warrant Agent shall be conclusively determined by the Warrant Agent. In connection with the
“cashless exercise” of a Public Warrant, the Company shall, upon request, provide the Warrant Agent with an opinion of counsel for the Company (which shall be an outside law firm with securities law experience) stating that (i) the
exercise of the Warrants on a “cashless basis” in accordance with this
subsection 7.4.1
is not required to be registered under the Securities Act and (ii) the shares of Common Stock issued upon such exercise shall be freely
tradable under United States federal securities laws by anyone who is not an affiliate (as such term is defined in Rule 144 under the Securities Act) of the Company and, accordingly, shall not be required to bear a restrictive legend. Except as
provided in
subsection 7.4.2
, for the avoidance of any doubt, unless and until all of the Warrants have been exercised, the Company shall continue to be obligated to comply with its registration obligations under the first three sentences of
this
subsection 7.4.1
.
7.4.2
Cashless Exercise at Company’s Option
. If the 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, the Company may, at its option, (i) require
holders of Public Warrants who exercise Public Warrants to exercise such Public Warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act as described in
subsection 7.4.1
and (ii) in the event the
Company so elects, the Company shall (x) not be required to file or maintain in effect a registration statement for the registration, under the Securities Act, of the shares of Common Stock issuable upon exercise of the Warrants,
notwithstanding anything in this Agreement to the contrary, and (y) use its best efforts to register or qualify for sale the shares of Common Stock issuable upon exercise of the Public Warrant under the blue sky laws of the state of residence
in those states in which the Warrants were initially offered by the Company 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 Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for
the County of New York for the appointment of a successor Warrant Agent at the Company’s cost. Any successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation organized and existing under the laws of the
State of New York, in good standing and having its principal office in the Borough of Manhattan, City and State of New York, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or
state authority. After appointment, any successor Warrant Agent shall be vested with all
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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 corporation into which the Warrant Agent may be merged or
with which it may be consolidated or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Agreement without any further act.
8.3
Fees and Expenses of Warrant Agent
.
8.3.1
Remuneration
. The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such
Warrant Agent hereunder and shall, pursuant to its obligations under this Agreement, reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder.
8.3.2
Further Assurances
. The Company agrees to perform, execute, acknowledge, and deliver or cause to be
performed, executed, acknowledged, and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Agreement.
8.4
Liability of Warrant Agent
.
8.4.1
Reliance on Company Statement
. Whenever in the performance of its duties under this Agreement, the Warrant
Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a statement signed by the Chief Executive Officer, the Chief Financial Officer or the Chairman of the Board of the Company and delivered to the Warrant Agent. The Warrant Agent
may rely upon such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement.
8.4.2
Indemnity
. The Warrant Agent shall be liable hereunder only for its own gross negligence, willful
misconduct or bad faith. The Company agrees to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and reasonable counsel fees, for anything done or omitted by the Warrant Agent in the
execution of this Agreement, except as a result of the Warrant Agent’s gross negligence, willful misconduct or bad faith.
8.4.3
Exclusions
. The Warrant Agent shall have no responsibility with respect to the validity of this Agreement
or with respect to the validity or execution of any Warrant (except its countersignature thereof). The Warrant Agent shall not be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant.
The Warrant Agent shall not be responsible to make any adjustments required under the provisions of
Section
4
hereof or responsible for the manner, method, or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this
Agreement or any Warrant or as to whether any shares of Common Stock shall, when issued, be valid and fully paid and nonassessable.
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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:
TPG Pace Energy
Holdings Corp.
301 Commerce Street, Suite 3300
Fort Worth, Texas 76102
Attention: Office of the General Counsel
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
17 Battery Place
New York, NY
10004
Attention: Compliance Department
9.3
Applicable Law
. The validity, interpretation, and performance of this Agreement and of the Warrants shall be
governed in all respects by the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The Company hereby agrees that any action,
proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably
submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
9.4
Persons Having Rights under this Agreement
. Nothing in this Agreement shall be construed to confer upon, or
give to, any person or corporation other than the parties hereto and the Registered Holders of the Warrants any right, remedy, or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise, or agreement hereof.
All covenants, conditions, stipulations, promises, and agreements contained in this Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors and assigns and of the Registered Holders of the Warrants.
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9.5
Examination of the Warrant Agreement
. A copy of this Agreement
shall be available at all reasonable times at the office of the Warrant Agent in the Borough of Manhattan, City and State of New York, for inspection by the Registered Holder of any Warrant. The Warrant Agent may require any such holder to submit
such holder’s Warrant for inspection by the Warrant Agent.
9.6
Counterparts
. This Agreement may be
executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
9.7
Effect of Headings
. The section headings herein are for convenience only and are not part of this Agreement
and shall not affect the interpretation thereof.
9.8
Amendments
. This Agreement may be amended by the
parties hereto without the consent of any Registered Holder for the purpose of curing any ambiguity, or curing, correcting or supplementing any defective provision contained herein or adding or changing any other provisions with respect to matters
or questions arising under this Agreement as the parties may deem necessary or desirable and that the parties deem shall not adversely affect the interest of the Registered Holders. All other modifications or amendments, including any amendment to
increase the Warrant Price or shorten the Exercise Period and any amendment to the terms of only the Private Placement Warrants, shall require the vote or written consent of the Registered Holders of 50% of the then outstanding Public Warrants.
Notwithstanding the foregoing, the Company may lower the Warrant Price or extend the duration of the Exercise Period pursuant to
Sections 3.1
and
3.2
, respectively, without the consent of the Registered Holders.
9.9
Severability
. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term
or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall
be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
Exhibit A Form of Warrant Certificate
Exhibit B Legend —
Private Placement Warrants
14
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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TPG PACE ENERGY HOLDINGS CORP.
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By:
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Name:
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Title:
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CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Warrant Agent
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By:
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Name:
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Title:
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[
Signature Page to Warrant Agreement
]
EXHIBIT A
Form of Warrant Certificate
[FACE]
Number
Warrants
THIS WARRANT
SHALL BE VOID IF NOT EXERCISED PRIOR TO
THE EXPIRATION OF THE EXERCISE PERIOD PROVIDED FOR
IN THE WARRANT AGREEMENT DESCRIBED BELOW
TPG PACE ENERGY HOLDINGS CORP.
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 (“
Common Stock
”), of TPG Pace Energy
Holdings Corp., a Delaware corporation (the “
Company
”). Each Warrant entitles the holder, upon exercise during the period set forth in the Warrant Agreement referred to below, to receive from the Company that number of fully
paid and nonassessable shares of Common Stock as set forth below, at the exercise price (the “
Exercise Price
”) as determined pursuant to the Warrant Agreement, payable in lawful money (or through “
cashless
exercise
” as provided for in the Warrant Agreement) of the United States of America upon surrender of this Warrant Certificate and payment of the Exercise Price at the office or agency of the Warrant Agent referred to below, subject to
the conditions set forth herein and in the Warrant Agreement. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.
Each Warrant is initially exercisable for one fully paid and
non-assessable
share of Common Stock. The
number of shares of 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 Exercise Price per share of Common Stock for any Warrant is equal to $11.50 per share. The Exercise 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 void.
Reference is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this place.
This Warrant Certificate shall not be valid unless
countersigned by the Warrant Agent, as such term is used in the Warrant Agreement.
This Warrant Certificate shall be governed by and
construed in accordance with the internal laws of the State of New York, without regard to conflicts of laws principles thereof.
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TPG PACE ENERGY HOLDINGS CORP.
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By:
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Name:
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CONTINENTAL STOCK TRANSFER & TRUST COMPANY, 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 Common Stock and are issued or to be
issued pursuant to a Warrant Agreement dated as of [●], 2017 (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) of the Warrants. A
copy of the Warrant Agreement may be obtained by the holder hereof upon written request to the Company. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.
Warrants may be exercised at any time during the Exercise Period set forth in the Warrant Agreement. The holder of Warrants evidenced by this
Warrant Certificate may exercise them by surrendering this Warrant Certificate, with the form of election to purchase set forth hereon properly completed and executed, together with payment of the Exercise Price as specified in the Warrant Agreement
(or through “cashless exercise” as provided for in the Warrant Agreement) at the principal corporate trust office of the Warrant Agent. In the event that upon any exercise of Warrants evidenced hereby the number of Warrants exercised shall
be less than the total number of Warrants evidenced hereby, there shall be issued to the holder hereof or his, her or its assignee, a new Warrant Certificate evidencing the number of Warrants not exercised.
Notwithstanding anything else in this Warrant Certificate or the Warrant Agreement, no Warrant may be exercised unless at the time of exercise
(i) a registration statement covering the shares of Common Stock to be issued upon exercise is effective under the Securities Act and (ii) a prospectus thereunder relating to the shares of Common Stock is current, except through
“cashless exercise” as provided for in the Warrant Agreement.
The Warrant Agreement provides that upon the occurrence of
certain events the number of shares of 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 Common Stock, the Company shall, upon exercise, round down to the nearest whole number of shares of 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.
[Signature Page to Election of Purchase]
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 Common Stock and herewith tenders payment for such shares of Common Stock to the order of TPG Pace Energy Holdings Corp. (the “
Company
”) in the
amount of $ in accordance with the terms hereof. The undersigned requests that a certificate for such shares of Common Stock be registered in the name
of , whose address is and that such shares of Common Stock be delivered to
whose address is. If said number of shares of Common Stock is less than all of the shares of Common Stock purchasable hereunder, the undersigned requests that a new Warrant
Certificate representing the remaining balance of such shares of Common Stock be registered in the name of , whose address
is , and that such Warrant Certificate be delivered to , whose address
is .
In the event that the Warrant has been called for redemption
by the Company pursuant to
Section
6.1
or
Section 6.2
of the Warrant Agreement and the Company has required cashless exercise pursuant to
Section
6.4
of the Warrant Agreement, the number of
shares of Common Stock that this Warrant is exercisable for shall be determined in accordance with
subsection 3.3.1(b)
and
Section
6.4
of the Warrant Agreement.
In the event that the Warrant is a Private Placement Warrant that is to be exercised on a “cashless” basis pursuant to
subsection 3.3.1(c)
of the Warrant Agreement, the number of shares of Common Stock that this Warrant is exercisable for shall be determined in accordance with
subsection 3.3.1(c)
of the Warrant Agreement.
In the event that the Warrant is to be exercised on a “cashless” basis pursuant to
Section
7.4
of the
Warrant Agreement, the number of shares of 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 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 Common Stock. If said number of shares of Common Stock
is less than all of the shares of 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 be registered in the name
of , whose address is , and that such Warrant Certificate be delivered
to , whose address is .
[Signature Page Follows]
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Date: , 20
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(Signature)
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(Address)
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(Tax Identification Number)
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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).
[Signature Page to Election of Purchase]
EXHIBIT B
LEGEND
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. IN ADDITION, SUBJECT TO ANY ADDITIONAL LIMITATIONS ON TRANSFER DESCRIBED IN THE LETTER AGREEMENT BY AND AMONG TPG PACE ENERGY HOLDINGS CORP. (THE
“COMPANY”), TPG PACE ENERGY 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 5.1
767 Fifth Avenue
New York, NY 10153-0119
+1 212 310
8000 tel
+1 212 310 8007 fax
April 17,
2017
TPG Pace Energy Holdings Corp.
301 Commerce St.,
Suite 3300
Fort Worth, TX 76102
Ladies and Gentlemen:
We have acted as counsel to TPG Pace Energy Holdings Corp., a Delaware corporation (the “
Company
”), in connection with the preparation and
filing with the Securities and Exchange Commission of the Company’s Registration Statement on Form
S-1,
(as amended, the “
Registration Statement
”), under the Securities Act of 1933, as
amended (the “
Securities Act
”), relating to the registration of the offer and sale by the Company of (a) 60,000,000 units (the “
Firm Units
”) of the Company, each such unit consisting of one share of Class A
common stock of the Company, par value $0.0001 per share (“
Common Stock
”), and
one-third
of one warrant of the Company (each whole warrant, a “
Warrant
”); each whole Warrant
entitles the holder thereof to purchase one share of Common Stock as specified in the Registration Statement, (b) up to an additional 9,000,000 units that the underwriters will have a right to purchase from the Company to cover over-allotments
(the “
Option Units
” and, together with the Firm Units, the “
Units
”) and (c) all shares of Common Stock and all Warrants issued as part of the Units as specified in the Registration Statement.
In so acting, we have examined originals or copies (certified or otherwise identified to our satisfaction) of (i) the form of Amended and Restated
Certificate of Incorporation of the Company that is filed as Exhibit 3.2 to the Registration Statement; (ii) the Bylaws of the Company that are filed as Exhibit 3.3 to the Registration Statement; (iii) the Registration Statement;
(iv) the form of the underwriting agreement proposed to be entered into between the Company and the underwriters named therein (the “
Underwriting Agreement
”) that is filed as Exhibit 1.1 to the Registration Statement;
(v) the Specimen Unit Certificate that is filed as Exhibit 4.1 to the Registration Statement; (vi) the Specimen Class A Common Stock Certificate that is filed as Exhibit 4.2 to the Registration Statement; (vii) the Specimen
Warrant Certificate that is filed as Exhibit 4.3 to the Registration Statement; (viii) the form of warrant agreement proposed to be entered into by and between the Company and Continental Stock Transfer & Trust Company, as warrant
agent (the “
Warrant Agent
”) that is filed as Exhibit 4.4 to the Registration Statement; and (ix) such corporate records, agreements, documents and other instruments, and such certificates or comparable documents of public
officials and of officers and representatives of the Company, and have made such inquiries of such officers and representatives, as we have deemed relevant and necessary as a basis for the opinion hereinafter set forth.
In such examination, we have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submitted
to us as originals, the conformity to original
April 17, 2017
Page
2
documents of all documents submitted to us as certified, conformed or photostatic copies, and the authenticity of the originals of such latter documents. As to all questions of fact material to
this opinion that have not been independently established, we have relied upon certificates or comparable documents of officers and representatives of the Company. We have further assumed that each of the documents identified in clauses
(i) through (viii) of the preceding paragraph will be entered into, adopted or filed as appropriate.
Based on the foregoing, and subject to the
qualifications stated herein, we are of the opinion that:
1. The Units, when delivered to and paid for by the
underwriters in accordance with the terms of the Underwriting Agreement, and assuming the due authorization, execution and delivery thereof by Continental Stock Transfer & Trust Company, as transfer agent, will constitute the legal, valid
and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights
and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in
equity).
2. The Common Stock that are part of the Units, when the Units are delivered to and paid for by the
underwriters in accordance with the terms of the Underwriting Agreement, will be validly issued, fully paid and nonassessable.
3. The Warrants that are part of the Units, when the Units are delivered to and paid for by the underwriters in
accordance with the terms of the Underwriting Agreement, and assuming the due authorization, execution and delivery of such Warrants by the Warrant Agent, will constitute the legal, valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability,
to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).
The opinions expressed herein are limited to the laws of the State of New York and the corporate laws of the State of Delaware and we express no opinion as to
the effect on the matters covered by this letter of the laws of any other jurisdiction.
April 17, 2017
Page
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We hereby consent to the filing of this letter as an exhibit to the Registration Statement and to the
reference to our firm under the caption “Legal Matters” in the prospectus which is a part of the Registration Statement. In giving such consent we do not hereby admit that we are in the category of persons whose consent is required under
Section 7 of the Securities Act or the rules and regulations of the Securities and Exchange Commission promulgated thereunder.
Very truly yours,
/s/ Weil, Gotshal & Manges LLP
Exhibit 10.1
THIS PROMISSORY NOTE (“
NOTE
”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “
SECURITIES ACT
”).
THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF REGISTRATION OF THE RESALE THEREOF UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY IN FORM, SCOPE AND SUBSTANCE
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
PROMISSORY NOTE
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Principal Amount: $300,000
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Dated as of February 22, 2017
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TPG Pace Energy Holdings Corp., a Delaware corporation (the “
Maker
”), promises to pay to the order of TPG Pace Energy
Sponsor, LLC or its registered assigns or successors in interest (the “
Payee
”), or order, the principal sum of Three Hundred Thousand Dollars ($300,000) or such lesser amount as shall have been advanced by Payee to Maker and shall
remain unpaid under this Note on the Maturity Date (as defined below) in lawful money of the United States of America, on the terms and conditions described below. All payments on this Note shall be made by check or wire transfer of immediately
available funds or as otherwise determined by the Maker to such account as the Payee may from time to time designate by written notice in accordance with the provisions of this Note.
1.
Principal.
The entire unpaid principal balance of this Note shall be payable on the earlier of:
(i) August 31, 2017, or (ii) the date on which Maker consummates an initial public offering of its securities (such earlier date, the “
Maturity Date
”). The principal balance may be prepaid at any time. Under no
circumstances shall any individual, including but not limited to any officer, director, employee or shareholder of the Maker, be obligated personally for any obligations or liabilities of the Maker hereunder.
2.
Drawdown Requests.
Maker and Payee agree that Maker may request, from time to time, up to Three Hundred Thousand
Dollars ($300,000) in draw downs under this Note to be used for costs and expenses related to Maker’s formation and the proposed initial public offering of its securities (the “
IPO
”). Principal of this Note may be drawn down
from time to time prior to the Maturity Date upon written request from Maker to Payee (each, a “
Drawdown Request
”). Each Drawdown Request must state the amount to be drawn down, and must not be an amount less than Ten Thousand
Dollars ($10,000). Payee shall fund each Drawdown Request no later than three (3) business days after receipt of a Drawdown Request; provided, however, that the maximum amount of drawdowns outstanding under this Note at any time may not exceed
Three Hundred Thousand Dollars ($300,000). No fees, payments or other amounts shall be due to Payee in connection with, or as a result of, any Drawdown Request by Maker.
3.
Interest.
No interest shall accrue on the unpaid principal balance of this Note.
4.
Application of Payments.
All payments shall be applied first to payment in full of any costs incurred in the
collection of any sum due under this Note, including (without limitation) reasonable attorney’s fees, then to the payment in full of any late charges and finally to the reduction of the unpaid principal balance of this Note.
5.
Events of Default.
The following shall constitute an event of default (“
Event of Default
”):
(a)
Failure to Make Required Payments.
Failure by Maker to pay the principal amount due pursuant to this Note
within five (5) business days of the date specified above.
(b)
Voluntary Bankruptcy, Etc.
The commencement by Maker of a
voluntary case under any applicable bankruptcy, insolvency, reorganization, rehabilitation or other similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator
(or other similar official) of Maker or for any substantial part of its property, or the making by it of any assignment for the benefit of creditors, or the failure of Maker generally to pay its debts as such debts become due, or the taking of
corporate action by Maker in furtherance of any of the foregoing.
(c)
Involuntary Bankruptcy, Etc.
The
entry of a decree or order for relief by a court having jurisdiction in the premises in respect of Maker in an involuntary case under any applicable bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of Maker or for any substantial part of its property, or ordering the
winding-up
or liquidation of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 60 consecutive days.
6.
Remedies
.
(a) Upon the occurrence of an Event of Default specified in Section 5(a) hereof, Payee may, by written notice to Maker,
declare this Note to be due immediately and payable, whereupon the unpaid principal amount of this Note, and all other amounts payable thereunder, shall become immediately due and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived, anything contained herein or in the documents evidencing the same to the contrary notwithstanding.
(b) Upon the occurrence of an Event of Default specified in Sections 5(b) or 5(c), the unpaid principal balance of this
Note, and all other sums payable with regard to this Note, shall automatically and immediately become due and payable, in all cases without any action on the part of Payee.
7.
Waivers
. Maker and all endorsers and guarantors of, and sureties for, this Note waive presentment for payment, demand,
notice of dishonor, protest, and notice of protest with regard to the Note, all errors, defects and imperfections in any proceedings instituted by Payee under the terms of this Note, and all benefits that might accrue to Maker by virtue of any
present or future laws exempting any property, real or personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy or sale under execution, or providing for any stay of execution, exemption from civil
process, or extension of time for payment; and Maker agrees that any real estate that may be levied upon pursuant to a judgment obtained by virtue hereof, on any writ of execution issued hereon, may be sold upon any such writ in whole or in part in
any order desired by Payee.
8.
Unconditional Liability.
Maker hereby waives all notices in connection with the
delivery, acceptance, performance, default, or enforcement of the payment of this Note, and agrees that its liability shall be unconditional, without regard to the liability of any other party, and shall not be affected in any manner by any
indulgence, extension of time, renewal, waiver or modification granted or consented to by Payee, and consents to any and all extensions of time, renewals, waivers, or modifications that may be granted by Payee with respect to the payment or other
provisions of this Note, and agrees that additional makers, endorsers, guarantors, or sureties may become parties hereto without notice to Maker or affecting Maker’s liability hereunder.
9.
Notices.
All notices, statements or other documents which are required or contemplated by this Agreement shall be:
(i) in writing and delivered personally or sent by first class registered or certified mail, overnight courier service or facsimile or electronic transmission to the address designated in writing, (ii) by facsimile to the number most
recently provided to such party or such other address or fax number as may be designated in writing by such party and (iii) by electronic mail, to the electronic mail address
2
most recently provided to such party or such other electronic mail address as may be designated in writing by such party. Any notice or other communication so transmitted shall be deemed to have
been given on the day of delivery, if delivered personally, on the business day following receipt of written confirmation, if sent by facsimile or electronic transmission, one (1) business day after delivery to an overnight courier service or
five (5) days after mailing if sent by mail.
10.
Construction
. THIS
NOTE SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF TEXAS, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.
11.
Severability.
Any
provision contained in this Note which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
12.
Trust Waiver.
Notwithstanding anything herein to the contrary, the Payee hereby waives any and all right, title,
interest or claim of any kind
(“Claim”)
in or to any distribution of or from the trust account to be established in which the proceeds of the IPO
conducted by the Maker (including the deferred underwriters discounts and
commissions) and the proceeds of the sale of the warrants issued in a private placement to occur on or prior to the consummation of the IPO are to be deposited, as described in greater detail in the registration statement and prospectus to be filed
with the Securities and Exchange Commission in connection with the IPO, and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the trust account for any reason whatsoever.
13.
Amendment; Waiver.
Any amendment hereto or waiver of any provision hereof may be made with, and only with, the
written consent of the Maker and the Payee.
14.
Assignment.
No assignment or transfer of this Note or any rights or
obligations hereunder may be made by any party hereto (by operation of law or otherwise) without the prior written consent of the other party hereto and any attempted assignment without the required consent shall be void.
[Signature page follows]
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IN WITNESS WHEREOF,
Maker, intending to be legally bound hereby, has caused this Note to
be duly executed by the undersigned as of the day and year first above written.
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TPG PACE ENERGY HOLDINGS CORP.
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By:
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/s/ Martin Davidson
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Name:
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Martin Davidson
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Title:
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Chief Financial Officer
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Exhibit 10.2
[●], 2017
TPG Pace Energy Holdings Corp.
301 Commerce St., Suite 3300
Fort Worth, TX 76102
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Re:
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Initial Public Offering
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Gentlemen:
This letter (this “
Letter Agreement
”) is being delivered to you in accordance with the Underwriting Agreement (the
“
Underwriting Agreement
”) entered into or proposed to be entered into by and among TPG Pace Energy Holdings Corp., a Delaware corporation (the “
Company
”), and Deutsche Bank Securities Inc. and Goldman,
Sachs & Co., as representatives (the “
Representatives
”) of the several underwriters (each, an “
Underwriter
” and collectively, the “
Underwriters
”), relating to an
underwritten initial public offering (the “
Public Offering
”), of 69,000,000 of the Company’s units (including up to 9,000,000 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 “
Common Stock
”), and
one-third
of one
Warrant. Each whole Warrant (each, a “
Warrant
”) entitles the holder thereof to purchase one share of Common Stock at a price of $11.50 per share, subject to adjustment. The Units shall be sold in the Public Offering pursuant
to a registration statement on Form
S-1
and prospectus (the “
Prospectus
”) filed by the Company with the Securities and Exchange Commission (the “
Commission
”) and
the Company shall apply 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 Underwriters to enter into the Underwriting Agreement and to proceed with the Public Offering and for
other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, TPG Pace Energy Sponsor, LLC, a Delaware limited liability company (the “
Sponsor
”), and each of the undersigned individuals,
each of whom is a director or member of the Company’s 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 or he shall (i) vote any shares of Capital Stock owned by it or him in favor of any proposed Business Combination and (ii) not redeem any shares of Common Stock owned by it or him 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 24 months from the closing of the Public Offering, 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 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 (less up to $100,000
of interest to pay dissolution expenses), divided by the number of then outstanding Offering Shares, which redemption will completely extinguish all Public Stockholders’ rights as stockholders (including the
right to receive further liquidating 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 the requirements of other applicable law. The Sponsor and each Insider agrees
to not propose any amendment to the Company’s amended and restated certificate of incorporation 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 24 months from the closing of the Public Offering, 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 the Company to
fund its working capital requirements subject to an annual limit of $750,000, and/or to pay its taxes, divided by the number of then outstanding Offering Shares.
The Sponsor and each Insider acknowledges that it or he has no right, title, interest or claim of any kind in or to any monies held in the
Trust Account or any other asset of the Company as a result of any liquidation of the Company with respect to the Founder Shares held by it. The Sponsor and each Insider hereby further waives, with respect to any shares of Common Stock held by it or
him, if any, any redemption rights it or he may have in connection with the consummation of a Business Combination, including, without limitation, any such rights available in the context of a stockholder vote to approve such Business Combination or
in the context of a tender offer made by the Company to purchase shares of Common Stock (although the Sponsor and the Insiders shall be entitled to redemption and liquidation rights with respect to any Offering Shares it or they hold if the Company
fails to consummate a Business Combination within 24 months from the date of the closing of the Public Offering).
3. Notwithstanding the
provisions set forth in paragraphs 7(a) and (b) below, during the period commencing on the effective date of the Underwriting Agreement and ending 180 days after such date, the Sponsor and each Insider shall not, without the prior written
consent of the Representatives, (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 (the “
Exchange Act
”)
and the rules and regulations
of the Commission promulgated thereunder, with respect to any Units, shares of Common Stock, Warrants or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock owned by it or him, (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, Warrants or any securities convertible into, or exercisable, or exchangeable for, shares of
Common Stock owned by it,
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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, including the filing
of a registration statement, specified in clause (i) or (ii). Each of the Insiders and the Sponsor acknowledges and agrees that, prior to the effective date of any release or waiver, of the restrictions set forth in this paragraph 3 or
paragraph 7 below, the Company shall announce the impending release or waiver by press release through a major news service at least two business days before the effective date of the release or waiver. Any release or waiver granted shall only be
effective two business days after the publication date of such press release. The provisions of this paragraph will not apply if the release or waiver is effected solely to permit a transfer not for consideration and the transferee has agreed in
writing to be bound by the same terms described in this Letter Agreement to the extent and for the duration that such terms remain in effect at the time of the transfer.
4. In the event of the liquidation of the Trust Account, the Sponsor (which for purposes of clarification shall not extend to any other
stockholders, members or managers of the Sponsor) agrees to indemnify and hold harmless the Company against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all legal or other expenses
reasonably incurred in investigating, preparing or defending against any litigation, whether pending or threatened, or any claim whatsoever) to which the Company may become subject as a result of any claim by (i) any third party (other than the
Company’s independent accountants) for services rendered or products sold to the Company or (ii) a prospective target business with which the Company has discussed entering into a transaction agreement (a “
Target
”);
provided
,
however
, that such indemnification of the Company by the Sponsor shall apply only to the extent necessary to ensure that such claims by a third party for services rendered (other than the Company’s independent public
accountants) or products sold to the Company or a Target do not reduce the amount of funds in the Trust Account to below (i) $10.00 per share of the Offering Shares or (ii) such lesser amount per share of the Offering Shares held in the Trust
Account due to reductions in the value of the trust assets as of the date of the liquidation of the Trust Account, in each case, net of the amount of interest earned on the property in the Trust Account which may be withdrawn to fund the
Company’s working capital requirements subject to an annual limit of $750,000, and/or to pay taxes, except as to any claims by a third party (including a Target) who executed a waiver of any and all rights to seek access to the Trust Account
and except as to any claims under the Company’s indemnity of the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. In the event that any such executed waiver is deemed to be
unenforceable against such third party, the Sponsor shall not be responsible to the extent of any liability for such third party claims. The Sponsor shall have the right to defend against any such claim with counsel of its choice reasonably
satisfactory to the Company if, within 15 days following written receipt of notice of the claim to the Sponsor, the Sponsor notifies the Company in writing that it shall undertake such defense. For the avoidance of doubt, none of the Company’s
officers or directors will indemnify the Company for claims by third parties, including, without limitation, claims by vendors and prospective target businesses.
5. To the extent that the Underwriters do not exercise their over-allotment option to purchase up to an additional 9,000,000 Units within 45
days from the date of the Prospectus (and as further described in the Prospectus), the Sponsor agrees that it shall forfeit, at no cost, a number of Founder Shares in the aggregate equal to 2,250,000 multiplied by a fraction, (i) the numerator
of which is 9,000,000 minus the number of Units purchased by the Underwriters upon
3
the exercise of their over-allotment option, and (ii) the denominator of which is 9,000,000. The forfeiture will be adjusted to the extent that the over-allotment option is not exercised in
full by the Underwriters so that the Initial Stockholders will own an aggregate of 20.0% of the Company’s issued and outstanding shares of Capital Stock after the Public Offering. To the extent that the size of the Public Offering is increased
or decreased, the Company will effect a capitalization or stock repurchase or redemption or other appropriate mechanism, as applicable, immediately prior to the consummation of the Public Offering in such amount as to maintain the ownership of the
Capital Stock of the Initial Stockholders prior to the Public Offering at 20.0% of the Company’s issued and outstanding shares upon the consummation of the Public Offering. In connection with such increase or decrease in the size of the Public
Offering, then (A) the references to 9,000,000 in the numerator and denominator of the formula in the first sentence of this paragraph shall be changed to a number equal to 15% of the number of shares of Common Stock included in the Units
issued in the Public Offering and (B) the reference to 2,250,000 in the formula set forth in the immediately preceding sentence shall be adjusted to such number of Founder Shares that the Sponsor would have to return to the Company in order to
hold (with all of the Initial Stockholders) an aggregate of 20.0% of the Company’s issued and outstanding shares of Capital Stock after the Public Offering.
6. (a) Stephen Chazen hereby agrees not to participate in the formation of, or become an officer or director of, any
other blank check company until the Company has entered into a definitive agreement regarding its initial Business Combination. For the avoidance of doubt, Mr. Chazen is allowed to participate in the formation of, or become an officer or
director of, another blank check company after the Company has entered into a definitive agreement regarding its initial Business Combination.
(b) The Sponsor and each Insider hereby agrees and acknowledges that (i) the Underwriters and the Company would
be irreparably injured in the event of a breach by such Sponsor or Insider of its or his obligations under paragraphs 1, 2, 3, 4, 5, 6(a), 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 agrees that it or he shall not Transfer any Founder Shares (or shares of Common
Stock issuable upon conversion thereof) until the earlier of (i) one year after the completion of the Company’s initial Business Combination, (ii) subsequent to the initial Business Combination, if the last sale price of the 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 (iii) the date following the completion of the Company’s initial Business Combination on which the Company completes a liquidation, merger, capital stock exchange, reorganization 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 “
Founder Shares
Lock-up
Period
”).
(b) The Sponsor and each Insider agrees
that it or he shall not Transfer any Private Placement Warrants or shares of Common Stock issued or issuable upon the exercise of the Private Placement Warrants, until 30 days after the completion of a Business Combination (the “
Private
Placement Warrants
Lock-up
Period
”, together with the Founder Shares
Lock-up
Period, the “
Lock-up
Periods
”).
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(c) Notwithstanding the provisions set forth in paragraphs 7(a) and (b),
Transfers of the Founder Shares, Private Placement Warrants and shares of Common Stock issued or issuable upon the exercise or conversion of 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 members of the
Sponsor, or any affiliates of the Sponsor; (b) in the case of an individual, transfers by gift to a member of the individual’s immediate family, to a trust, the beneficiary of which is a member of the individual’s immediate family or
an affiliate of such person, or to a charitable organization; (c) in the case of an individual, 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 private sales or transfers made in connection with the consummation of a Business Combination at prices no greater than the price at which the securities were originally purchased;
(f) transfers in the event of the Company’s liquidation prior to the completion of an initial Business Combination; (g) transfers by virtue of the laws of the State of Delaware or the Sponsor’s limited liability company agreement
upon dissolution of the Sponsor; and (h) in the event of the Company’s liquidation, merger, capital stock exchange, reorganization 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 subsequent to the completion of the Company’s initial Business Combination; provided, however, that in the case of clauses (a) through (e), these permitted
transferees must enter into a written agreement agreeing to be bound by the restrictions herein.
8. The Sponsor and each Insider
represents and warrants that it or he has never been suspended or expelled from membership in any securities or commodities exchange or association or had a securities or commodities license or registration denied, suspended or revoked. Each
Insider’s biographical information furnished to the Company (including any such information included in the Prospectus) is true and accurate in all respects and does not omit any material information with respect to the undersigned’s
background. Each Insider’s questionnaire furnished to the Company is true and accurate in all respects. Each Insider represents and warrants that: it or he is not subject to or a respondent in any legal action for, any injunction,
cease-and-desist
order or order or stipulation to desist or refrain from any act or practice relating to the offering of securities in any jurisdiction; it or he has never
been convicted of, or pleaded guilty to, any crime (i) involving fraud, (ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining to any dealings in any securities and it or he is not
currently a defendant in any such criminal proceeding.
9. Except as disclosed in the Prospectus, neither the Sponsor nor any Insider nor
any affiliate of the Sponsor or any Insider, nor any director or officer of the Company, shall receive from the Company any finder’s fee, reimbursement, consulting fee, monies in respect of any repayment of a loan or other compensation prior
to, or in connection with any services rendered in order to effectuate the consummation of the Company’s initial Business Combination (regardless of the type of transaction that it is), other than the following, none of which will be made from
the proceeds held in the Trust Account prior to the completion of the initial Business
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Combination: repayment of a loan and advances of up to $300,000 made to the Company by the Sponsor to cover expenses related to the organization of the Company and the Public Offering; payment to
an affiliate of the Sponsor for office space, administrative and support services for a total of $20,000 per month; reimbursement for any
out-of-pocket
expenses related
to identifying, investigating 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 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 of the post Business Combination entity at a price of
$1.50 per warrant at the option of the lender. Such warrants would be identical to the Private Placement Warrants.
10. The Sponsor and
each Insider has full right and power, without violating any agreement to which it is bound (including, without limitation, any
non-competition
or
non-solicitation
agreement with any employer or former employer), to enter into this Letter Agreement and, as applicable, to serve as a director on the board of directors of the Company and hereby consents to being named in the Prospectus as a director of the
Company.
11. As used herein, (i) “
Business Combination
” shall mean a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or similar business combination, involving the Company and one or more businesses; (ii) “
Capital Stock
” shall mean, collectively, the Common Stock and the Founder Shares; (iii)
“
Founder Shares
” shall mean the 17,250,000 shares of Class F common stock, par value $0.0001 per share, (or 15,000,000 shares if the over-allotment option is not exercised by the Underwriters) initially held by the
sponsor (iv) “
Initial Stockholders
” shall mean the Sponsor and any other holder of Founder Shares; (v) “
Private Placement Warrants
” shall mean the Warrants to purchase up to 9,333,333
shares of
Common Stock of the Company (or 10,533,333 shares of Common Stock if the over-allotment option is exercised in full) that the Sponsor has agreed to purchase for an aggregate purchase price of approximately $14,000,000
in the aggregate (or
$15,800,000 if the over-allotment option is exercised in full), or $1.50 per Warrant, in a private placement that shall occur simultaneously with the consummation of the Public Offering; (vi) “
Public Stockholders
” shall mean
the holders of securities issued in the Public Offering; (vii) “
Trust Account
” shall mean the trust fund into which a portion of the net proceeds of the Public Offering and the sale of the Private Placement Warrants shall be
deposited; and (viii) “
Transfer
” shall mean the (a) sale of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly
or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act and the rules and regulations of the
Commission promulgated thereunder with respect to, any security, (b) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such
transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public announcement of any intention to effect any transaction specified in clause (a) or (b).
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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 party. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee. This Letter Agreement shall be
binding on the Sponsor and each Insider and 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
Periods or (ii) the liquidation of the Company;
provided
,
however
, that this Letter Agreement shall earlier terminate in the event that the Public Offering is not consummated and closed by August 31, 2017; 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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TPG PACE ENERGY SPONSOR, 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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David Bonderman
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By:
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Arcilia Acosta
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By:
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Edward Djerejian
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By:
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Chad Leat
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By:
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Michael MacDougall
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By:
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Dan Smith
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By:
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Karl Peterson
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By:
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Stephen Chazen
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By:
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Martin Davidson
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By:
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Eduardo Tamraz
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Acknowledged and Agreed:
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TPG PACE ENERGY HOLDINGS CORP.
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By:
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Name:
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Title:
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Exhibit 10.3
INVESTMENT MANAGEMENT TRUST AGREEMENT
This Investment Management Trust Agreement (this “
Agreement
”) is made effective as of [●], 2017, by and between
TPG Pace Energy Holdings Corp., a Delaware corporation (the “
Company
”), and Continental Stock Transfer & Trust Company, a New York corporation (the “
Trustee
”).
WHEREAS
, the Company’s registration statement on Form
S-1,
Registration Statement
No. 333-[●]
(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
one-third
of
one warrant, each whole warrant entitling the holder thereof to purchase one share of Common Stock (such initial public offering hereinafter referred to as the “
Offering
”), has been declared effective as of the date hereof by
the U.S. Securities and Exchange Commission; and
WHEREAS
, the Company has entered into an Underwriting Agreement (the
“
Underwriting Agreement
”) with Deutsche Bank Securities Inc. and Goldman, Sachs & Co., as representatives (the “
Representatives
”) of the several underwriters (the
“
Underwriters
”) named therein; and
WHEREAS
, as described in the Registration Statement, an aggregate of
$600,000,000 from the proceeds of the Offering and sale of the Private Placement Warrants (as defined in the Underwriting Agreement) (or $690,000,000 if the Underwriters’ over-allotment option is exercised in full) will be delivered to the
Trustee to be deposited and held in a segregated trust account located at all times in the United States (the “
Trust Account
”) for the benefit of the Company and the holders of the Common Stock included in the Units issued in
the Offering as hereinafter provided (the amount to be delivered to the Trustee (and any interest subsequently earned thereon) is referred to herein as the “
Property
,” the stockholders for whose benefit the Trustee shall hold
the Property will be referred to as the “
Public Stockholders
,” and the Public Stockholders and the Company will be referred to together as the “
Beneficiaries
”); and
WHEREAS
, pursuant to the Underwriting Agreement, a portion of the Property equal to $21,000,000, or $24,150,000 if the
Underwriters’ over-allotment option is exercised in full, is attributable to deferred underwriting discounts and commissions that may be payable by the Company to the Underwriters upon the consummation of the Business Combination (as defined
below) (the “
Deferred Discount
”); and
WHEREAS
, the Company and the Trustee desire to enter into this
Agreement to set forth the terms and conditions pursuant to which the Trustee shall hold the Property.
NOW THEREFORE, IT IS AGREED:
1.
Agreements and Covenants of Trustee
. The Trustee hereby agrees and covenants to:
(a) Hold the Property in trust for the Beneficiaries in accordance with the terms of this Agreement in the Trust
Account established by the Trustee at a branch office of J.P. Morgan Chase Bank, N.A. located in the United States
and at a brokerage institution selected by the Trustee that is reasonably satisfactory to the Company;
(b) Manage, supervise and administer the Trust Account subject to the
terms and conditions set forth herein;
(c) In a timely manner, upon the written instruction of the Company, invest
and reinvest the Property in United States government securities within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, having a maturity of 180 days or less, or in money market funds meeting the conditions of
paragraphs (d)(1), (d)(2), (d)(3) and (d)(4) of Rule
2a-7
promulgated under the Investment Company Act of 1940, as amended, which invest only in direct U.S. government treasury obligations, as determined by
the Company; the Trustee may not invest in any other securities or assets, it being understood that the Trust Account will earn no interest while account funds are uninvested awaiting the Company’s instructions hereunder;
(d) Collect and receive, when due, all interest or other income arising from the Property, which shall become part of
the “Property,” as such term is used herein;
(e) Promptly notify the Company and the Representatives of
all communications received by the Trustee with respect to any Property requiring action by the Company;
(f) Supply any necessary information or documents as may be requested by the Company (or its authorized agents) in
connection with the Company’s preparation of the tax returns relating to assets held in the Trust Account;
(g) Participate in any plan or proceeding for protecting or enforcing any right or interest arising from the Property
if, as and when instructed by the Company to do so;
(h) Render to the Company monthly written statements of the
activities of, and amounts in, the Trust Account reflecting all receipts and disbursements of the Trust Account;
(i) Commence liquidation of the Trust Account only after and promptly after (x) receipt of, and only in accordance
with, the terms of a letter from the Company (“
Termination Letter
”) in a form substantially similar to that attached hereto as either Exhibit A or Exhibit B signed on behalf of the Company by its Chief Executive Officer,
Chief Financial Officer or Chairman of the board of directors (the “
Board
”) or other authorized officer of the Company, and complete the liquidation of the Trust Account and distribute the Property in the Trust Account,
including interest earned on the funds held in the Trust Account and not previously released to the Company to fund its working capital requirements subject to an annual limit of $750,000, and/or to pay its taxes (less up to $100,000 of interest
that may be released to the Company to pay dissolution expenses), only as directed in the Termination Letter and the other documents referred to therein; or (y) upon the date which is 24 months after the closing of the Offering, if a
Termination Letter has not been received by the Trustee prior to such date, in which case the Trust Account shall be
2
liquidated in accordance with the procedures set forth in the Termination Letter attached as Exhibit B and the Property in the Trust Account, including interest earned on the funds held in the
Trust Account and not previously released to the Company to fund its working capital requirements subject to an annual limit of $750,000, and/or to pay its taxes (less up to $100,000 of interest that may be released to the Company to pay dissolution
expenses), shall be distributed to the Public Stockholders of record as of such date; provided, however, that in the event the Trustee receives a Termination Letter in a form substantially similar to Exhibit B hereto, or if the Trustee begins to
liquidate the Property because it has received no such Termination Letter by the date specified in clause (y) of this Section 1(i), the Trustee shall keep the Trust Account open until twelve (12) months following the date the Property has
been distributed to the Public Stockholders;
(j) Upon written request from the Company, which may be given from
time to time in a form substantially similar to that attached hereto as Exhibit C (a “
Tax Payment Withdrawal Instruction
”), withdraw from the Trust Account and distribute to the Company the amount of interest earned on the
Property requested by the Company to cover any tax obligation owed by the Company as a result of assets of the Company or interest or other income earned on the Property, which amount shall be delivered directly to the Company by electronic funds
transfer or other method of prompt payment, and the Company shall forward such payment to the relevant taxing authority;
provided
,
however
, that to the extent there is not sufficient cash in the Trust Account to pay such tax
obligation, the Trustee shall liquidate such assets held in the Trust Account as shall be designated by the Company in writing to make such distribution, so long as there is no reduction in the principal amount initially deposited in the Trust
Account;
provided
,
further
, that if the tax to be paid is a franchise tax, the written request by the Company to make such distribution shall be accompanied by a copy of the franchise tax bill for the Company and a written statement
from the principal financial officer of the Company setting forth the actual amount payable (it being acknowledged and agreed that any such amount in excess of interest income earned on the Property shall not be payable from the Trust Account). The
written request of the Company referenced above shall constitute presumptive evidence that the Company is entitled to said funds, and the Trustee shall have no responsibility to look beyond said request; and
(k) Upon written request from the Company, which may be given from time to time in a form substantially similar to that
attached hereto as
Exhibit D
(a “
Stockholder Redemption Withdrawal Instruction
”), the Trustee shall distribute on behalf of the Company the amount requested by the Company to be used to redeem shares of Common Stock
from Public Stockholders properly submitted in connection with a stockholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation to modify the substance or timing of the Company’s obligation to
redeem 100% of its public shares of Common Stock 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. The written request of the
Company referenced above shall constitute presumptive evidence that the Company is entitled to distribute said funds, and the Trustee shall have no responsibility to look beyond said request; and
(l) Not make any withdrawals or distributions from the Trust Account other than pursuant to Section 1(i), (j) or
(k) above.
3
2.
Agreements and Covenants of the Company
. The Company hereby
agrees and covenants to:
(a) Give all instructions to the Trustee hereunder in writing, signed by the
Company’s Chairman of the Board, Chief Executive Officer or Chief Financial Officer. In addition, except with respect to its duties under
Sections 1(i)
,
1(j)
and
1(k)
hereof, the Trustee shall be entitled to rely on, and
shall be protected in relying on, any verbal or telephonic advice or instruction which it, in good faith and with reasonable care, believes to be given by any one of the persons authorized above to give written instructions, provided that the
Company shall promptly confirm such instructions in writing;
(b) Subject to Section 4 hereof, hold the
Trustee harmless and indemnify the Trustee from and against any and all expenses, including reasonable counsel fees and disbursements, or losses suffered by the Trustee in connection with any action taken by it hereunder and in connection with any
action, suit or other proceeding brought against the Trustee involving any claim, or in connection with any claim or demand, which in any way arises out of or relates to this Agreement, the services of the Trustee hereunder, or the Property or any
interest earned on the Property, except for expenses and losses resulting from the Trustee’s gross negligence, fraud or willful misconduct. Promptly after the receipt by the Trustee of notice of demand or claim or the commencement of any
action, suit or proceeding, pursuant to which the Trustee intends to seek indemnification under this
Section 2(b)
, it shall notify the Company in writing of such claim (hereinafter referred to as the “
Indemnified
Claim
”). The Trustee shall have the right to conduct and manage the defense against such Indemnified Claim;
provided
that the Trustee shall obtain the consent of the Company with respect to the selection of counsel, which consent
shall not be unreasonably withheld. The Trustee may not agree to settle any Indemnified Claim without the prior written consent of the Company, which such consent shall not be unreasonably withheld. The Company may participate in such action with
its own counsel;
(c) Pay the Trustee the fees set forth on Schedule A hereto, including an
initial acceptance fee, annual administration fee, and transaction processing fee which fees shall be subject to modification by the parties from time to time. It is expressly understood that the Property shall not be used to pay such fees unless
and until it is distributed to the Company pursuant to
Sections 1(i)
through
1(j)
hereof. The Company shall pay the Trustee the initial acceptance fee and the first annual administration fee at the consummation of the Offering.
The Trustee shall refund to the Company the annual administration fee (on a pro rata basis) with respect to any period after the liquidation of the Trust Account. The Company shall not be responsible for any other fees or charges of the Trustee
except as set forth in this Section 2(c), Schedule A and as may be provided in
Section 2(b)
hereof;
(d) In
connection with any vote of the Company’s stockholders regarding a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving the Company and one or more businesses (a
“
Business Combination
”), provide to the Trustee an affidavit or certificate of the inspector of elections for the stockholder meeting verifying the vote of such stockholders regarding such Business Combination;
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(e) Provide the Representatives with a copy of any Termination Letter(s)
and/or any other correspondence that is sent to the Trustee with respect to any proposed withdrawal from the Trust Account promptly after it issues the same;
(f) 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; and
(g) Within four
(4) business days after the Underwriters exercise the over-allotment option (or any unexercised portion thereof) or such over-allotment expires, provide the Trustee with a notice in writing of the total amount of the Deferred Discount, which
shall in no event be less than $21,000,000.
3.
Limitations of Liability
. The Trustee shall have no
responsibility or liability to:
(a) Imply obligations, perform duties, inquire or otherwise be subject to the
provisions of any agreement or document other than this Agreement and that which is expressly set forth herein;
(b) Take any action with respect to the Property, other than as directed in Section 1 hereof, and the Trustee
shall have no liability to any party except for liability arising out of the Trustee’s gross negligence, fraud or willful misconduct;
(c) Institute any proceeding for the collection of any principal and income arising from, or institute, appear in or
defend any proceeding of any kind with respect to, any of the Property unless and until it shall have received instructions from the Company given as provided herein to do so and the Company shall have advanced or guaranteed to it funds sufficient
to pay any expenses incident thereto;
(d) Refund any depreciation in principal of any Property;
(e) Assume that the authority of any person designated by the Company to give instructions hereunder shall not be
continuing unless provided otherwise in such designation, or unless the Company shall have delivered a written revocation of such authority to the Trustee;
(f) The other parties hereto or to anyone else for any action taken or omitted by it, or any action suffered by it to
be taken or omitted, in good faith and in the Trustee’s best judgment, except for the Trustee’s gross negligence, fraud or willful misconduct. The Trustee may rely conclusively and shall be protected in acting upon any order, notice,
demand, certificate, opinion or advice of counsel (including counsel chosen by the Trustee, 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;
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(g) Verify the accuracy of the information contained in the Registration
Statement;
(h) Provide any assurance that any Business Combination entered into by the Company or any other action
taken by the Company is as contemplated by the Registration Statement;
(i) File information returns with respect
to the Trust Account with any local, state or federal taxing authority or provide periodic written statements to the Company documenting the taxes payable by the Company, if any, relating to any interest income earned on the Property;
(j) Prepare, execute and file tax reports, income or other tax returns and pay any taxes with respect to any income
generated by, and activities relating to, the Trust Account, regardless of whether such tax is payable by the Trust Account or the Company, including, but not limited to, franchise and income tax obligations, except pursuant to Section 1(j) hereof;
or
(k) Verify calculations, qualify or otherwise approve the Company’s written requests for distributions
pursuant to
Sections 1(i)
,
1(j)
and 1(k) hereof.
4.
Trust Account Waiver
. The Trustee has no
right of
set-off
or any right, title, interest or claim of any kind (“
Claim
”) to, or to any monies in, the Trust Account, and hereby irrevocably waives any Claim to, or to any monies
in, the Trust Account that it may have now or in the future. In the event the Trustee has any Claim against the Company under this Agreement, including, without limitation, under
Section 2(b)
or
Section 2(c)
hereof, the Trustee shall
pursue such Claim solely against the Company and its assets outside the Trust Account and not against the Property or any monies in the Trust Account.
5.
Termination
. This Agreement shall terminate as follows:
(a) If the Trustee gives written notice to the Company that it desires to resign under this Agreement, the Company
shall use its reasonable efforts to locate a successor trustee, pending which the Trustee shall continue to act in accordance with this Agreement. At such time that the Company notifies the Trustee that a successor trustee has been appointed and has
agreed to become subject to the terms of this Agreement, the Trustee shall transfer the management of the Trust Account to the successor trustee, including but not limited to the transfer of copies of the reports and statements relating to the Trust
Account, whereupon this Agreement shall terminate;
provided
,
however
, that in the event that the Company does not locate a successor trustee within ninety (90) days of receipt of the resignation notice from the Trustee, the
Trustee may submit an application to have the Property deposited with any court in the State of New York or with the United States District Court for the Southern District of New York and upon such deposit, the Trustee shall be immune from any
liability whatsoever; or
(b) At such time that the Trustee has completed the liquidation of the Trust Account and
its obligations in accordance with the provisions of Section 1(i) hereof and distributed the Property in accordance with the provisions of the Termination Letter, this Agreement shall terminate except with respect to Section 2(b).
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6.
Miscellaneous
.
(a) The Company and the Trustee each acknowledge that the Trustee will follow the security procedures set forth below
with respect to funds transferred from the Trust Account. The Company and the Trustee will each restrict access to confidential information relating to such security procedures to authorized persons. Each party must notify the other party
immediately if it has reason to believe unauthorized persons may have obtained access to such confidential information, or of any change in its authorized personnel. In executing funds transfers, the Trustee shall rely upon all information supplied
to it by the Company, including, account names, account numbers, and all other identifying information relating to a Beneficiary, Beneficiary’s bank or intermediary bank. Except for any liability arising out of the Trustee’s gross
negligence, fraud or willful misconduct, the Trustee shall not be liable for any loss, liability or expense resulting from any error in the information or transmission of the funds.
(b) This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New
York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. This Agreement may be executed in several original or facsimile counterparts, each one of which shall
constitute an original, and together shall constitute but one instrument.
(c) This Agreement contains the entire
agreement and understanding of the parties hereto with respect to the subject matter hereof. Except for
Sections 1(i)
and
1(k)
hereof (which sections may not be modified, amended or deleted without the affirmative vote of sixty five
percent (65%) or more of the then outstanding shares of Common Stock and Class F 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 otherwise indicated his election to redeem his shares of Common Stock in connection with a stockholder vote sought to amend this Agreement), this Agreement or any provision hereof may only be changed, amended or modified (other than to correct a
typographical error) by a writing signed by each of the parties hereto.
(d) The parties hereto consent to the
jurisdiction and venue of any state or federal court located in the City of New York, State of New York, for purposes of resolving any disputes hereunder. AS TO ANY CLAIM, CROSS-CLAIM OR COUNTERCLAIM IN ANY WAY RELATING TO THIS AGREEMENT, EACH PARTY
WAIVES THE RIGHT TO TRIAL BY JURY.
7
(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 transmission:
if to the Trustee, to:
Continental Stock Transfer & Trust Company
17 Battery Place
New York, New
York 10004
Attn: Steven G. Nelson and Sharmin Carter
Fax No.: (212)
509-5150
if to the Company, to:
TPG
Pace Energy Holdings Corp.
301 Commerce Street, Suite 3300
Fort Worth, TX 76102
Attn: Clive
D. Bode, Esq.
Fax No.: (512)
537-6601
in each case, with copies to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY
10153
Attn: Alexander D. Lynch, Esq.
Fax No.: (212)
310-8007
and
Deutsche Bank Securities
Inc.
60 Wall Street
New
York, NY 10005
Attn: Ravi Raghunathan
Fax No.: (646)
666-3375
and
Goldman, Sachs &
Co.
200 West Street
New
York, NY 10282
Attn.: Bennett Schachter
bennett.schachter@ny.ibd.email.gs.com
Tel: 1-201-385-5805
Fax:
1-917-977-3153
and
Freshfields Bruckhaus Deringer US LLP
601 Lexington Avenue
New York,
New York 10022
Attn: Paul D. Tropp, Esq.
Fax No.: (212)
277-4001
8
(f) This Agreement may not be assigned by the Trustee without the prior
consent of the Company.
(g) Each of the Company and the Trustee hereby represents that it has the full right and
power and has been duly authorized to enter into this Agreement and to perform its respective obligations as contemplated hereunder. The Trustee acknowledges and agrees that it shall not make any claims or proceed against the Trust Account,
including by way of
set-off,
and shall not be entitled to any funds in the Trust Account under any circumstance.
(h) This Agreement is the joint product of the Trustee and the Company and each provision hereof has been subject to
the mutual consultation, negotiation and agreement of such parties and shall not be construed for or against any party hereto.
(i) This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but
all such counterparts shall together constitute one and the same instrument. Delivery of a signed counterpart of this Agreement by facsimile or electronic transmission shall constitute valid and sufficient delivery thereof.
(j) Each of the Company and the Trustee hereby acknowledges and agrees that the Representatives, on behalf of the
Underwriters, are third party beneficiaries of this Agreement.
(k) Except as specified herein, no party to this
Agreement may assign its rights or delegate its obligations hereunder to any other person or entity.
[Signature Page Follows]
9
IN WITNESS WHEREOF
, the parties have duly executed this Investment Management Trust
Agreement as of the date first written above.
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Continental Stock Transfer & Trust Company, as Trustee
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By:
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Name:
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Title:
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TPG Pace Energy Holdings Corp.
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By:
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Name:
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Karl Peterson
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Title:
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Director
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[
Signature Page
to Investment Management Trust Agreement
]
SCHEDULE A
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Fee Item
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Time and method of payment
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Amount
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Initial acceptance fee
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Initial closing of Offering by wire transfer.
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$
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2,000.00
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Annual fee
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First year, initial closing of Offering by wire transfer, thereafter on the anniversary of the effective date of the Offering by wire transfer or check.
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$
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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 Company under Section 1
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$
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250.00
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Paying Agent services as required pursuant to Section 1(i)
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Billed to Company upon delivery of service pursuant to Section 1(i)
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Prevailing rates
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Sched. A-1
EXHIBIT A
[Letterhead of Company]
[Insert date]
Continental Stock
Transfer & Trust Company
17 Battery Place
New
York, New York 10004
Attn: Steven G. Nelson and Sharmin Carter
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Re:
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Trust Account No. [
] Termination Letter
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Gentlemen:
Pursuant to
Section 1(i)
of the Investment Management Trust Agreement between TPG Pace Energy Holdings Corp. (“
Company
”) and Continental Stock Transfer & Trust Company (the “
Trustee
”), dated as of [●], 2017 (the
“
Trust Agreement
”), this is to advise you that the Company has entered into an agreement with [ ] (the
“
Target Business
”) to consummate a business combination with Target Business (the “
Business Combination
”) on or about
[insert date]
. The Company shall notify you at least forty-eight
(48) 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 on
[insert date]
, and to transfer the proceeds to the above-referenced trust checking 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 Company and the Representatives (with respect to the Deferred Discount) shall direct on the Consummation Date. It is acknowledged and agreed that while the funds are on deposit in the trust
checking account at J.P. Morgan Chase Bank, N.A. awaiting distribution, neither the Company nor the Representatives will earn any interest or dividends.
On the Consummation Date (i) counsel for the Company shall deliver to you written notification that the Business Combination has been
consummated, or will be consummated substantially concurrently with your transfer of funds to the accounts as directed by the Company (the “
Notification
”) and (ii) the Company shall deliver to you (a) [an affidavit] [a
certificate] of the Chief Executive Officer, which verifies that the Business Combination has been approved by a vote of the Company’s stockholders, if a vote is held and (b) joint written instruction signed by the Company and the
Representatives with respect to the transfer of the funds held in the Trust Account, including express instruction to pay the Deferred Discount from the Trust Account directly to the account or accounts directed by the Representatives (the
“
Instruction Letter
”). You are hereby directed and authorized to transfer the funds held in the Trust Account immediately upon your receipt of the Notification and the Instruction Letter, in accordance with the terms of the
Instruction Letter. In the event that certain deposits held in the Trust Account may not be liquidated by the Consummation Date without penalty, you will notify the Company
A-1
in writing of the same and the Company shall direct you as to whether such funds should remain in the Trust Account and be distributed after the Consummation Date to the Company. Upon the
distribution of all the funds, net of any payments necessary for reasonable unreimbursed expenses related to liquidating the Trust Account, your obligations under the Trust Agreement shall be terminated.
In the event that the Business Combination is not consummated on the Consummation Date described in the notice thereof and we have not
notified you on or before the original Consummation Date of a new Consummation Date, then upon receipt by the Trustee of written instructions from the Company, the funds held in the Trust Account shall be reinvested as provided in Section 1(c)
of the Trust Agreement on the business day immediately following the Consummation Date as set forth in such written instruction as soon thereafter as possible.
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Very truly yours,
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TPG Pace Energy Holdings Corp.
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By:
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Name:
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Title:
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cc:
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Deutsche Bank Securities Inc.
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Goldman, Sachs & Co.
A-2
EXHIBIT B
[Letterhead of Company]
[Insert date]
Continental Stock
Transfer & Trust Company
17 Battery Place
New
York, New York 10004
Attn: Steven G. Nelson and Sharmin Carter
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Re:
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Trust Account No. [
] Termination Letter
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Gentlemen:
Pursuant to
Section 1(i)
of the Investment Management Trust Agreement between TPG Pace Energy Holdings Corp. (“
Company
”) and Continental Stock Transfer & Trust Company (the “
Trustee
”), dated as of
[●], 2017 (the “
Trust Agreement
”), this is to advise you that the Company has been unable to effect a business combination with a Target Business (“
Business Combination
”) within the time frame
specified in the Company’s Amended and Restated Certificate of Incorporation, as described in the Company’s Prospectus relating to the Offering. Capitalized terms used but not defined herein shall have the meanings set forth in the Trust
Agreement.
In accordance with the terms of the Trust Agreement, we hereby authorize you to liquidate all of the assets in the Trust
Account on 20 , and to transfer the total proceeds to the trust checking account at J.P. Morgan Chase Bank, N.A. to await distribution to the Public Stockholders. The Company has selected
as the record date for the purpose of determining the Public Stockholders entitled to receive their share of the liquidation
proceeds. You agree to be the Paying Agent of record and, in your separate capacity as Paying Agent, agree to distribute said funds directly to the Company’s Public Stockholders in accordance with the terms of the Trust Agreement and the
Amended and Restated Certificate of Incorporation of the Company. Upon the distribution of all the funds, your obligations under the Trust Agreement shall be terminated, except to the extent otherwise provided in Section 1(j) of the Trust
Agreement.
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Very truly yours,
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TPG Pace Energy Holdings Corp.
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By:
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Name:
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Title:
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cc:
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Deutsche Bank Securities Inc.
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Goldman, Sachs & Co.
B-1
EXHIBIT C
[Letterhead of Company]
[Insert date]
Continental Stock
Transfer & Trust Company
17 Battery Place
New
York, New York 10004
Attn: Steven G. Nelson and Sharmin Carter
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Re:
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Trust Account No. [
] Tax Payment Withdrawal Instruction
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Gentlemen:
Pursuant to
Section 1(j)
of
the Investment Management Trust Agreement between TPG Pace Energy Holdings Corp. (“
Company
”) and Continental Stock Transfer & Trust Company (the “
Trustee
”), dated as of [●], 2017 (the
“
Trust Agreement
”), the Company hereby requests that you deliver to the Company $ of the interest income earned on the Property as of the date hereof. Capitalized terms used but
not defined herein shall have the meanings set forth in the Trust Agreement.
The Company needs such funds to pay for the tax obligations
as set forth on the attached tax return or tax statement. In accordance with the terms of the Trust Agreement, you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to the
Company’s operating account at:
[WIRE INSTRUCTION INFORMATION]
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Very truly yours,
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TPG Pace Energy Holdings Corp.
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By:
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Name:
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Title:
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cc:
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Deutsche Bank Securities Inc.
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Goldman, Sachs & Co.
C-1
EXHIBIT D
[Letterhead of Company]
[Insert date]
Continental Stock
Transfer & Trust Company
17 Battery Place
New
York, New York 10004
Attn: Steven G. Nelson and Sharmin Carter
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Re:
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Trust Account No.
Stockholder Redemption Withdrawal
Instruction
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Gentlemen:
Pursuant to
Section 1(k)
of the Investment Management Trust Agreement between TPG Pace Energy Holdings Corp. (the
“
Company
”) and Continental Stock Transfer & Trust Company (the “
Trustee
”), dated as of , 2017 (the “
Trust
Agreement
”), the Company hereby requests 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 Company needs such
funds to pay its Public Stockholders who have properly elected to have their shares of Common Stock redeemed by the Company in connection with a stockholder vote to approve an amendment to the Company’s amended and restated certificate of
incorporation to modify the substance or timing of the Company’s obligation to redeem 100% of its public shares of Common Stock 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. As such, you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to the redeeming Public Stockholders in accordance
with your customary procedures.
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Very truly yours,
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TPG Pace Energy Holdings Corp.
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By:
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Name:
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Title:
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cc:
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Deutsche Bank Securities Inc.
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Goldman, Sachs & Co.
Exhibit 10.4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this “
Agreement
”), dated as of [●], 2017, is made and entered into by and
among TPG Pace Energy Holdings Corp., a Delaware corporation (the “
Company
”), TPG Pace Energy Sponsor, LLC, a Delaware limited liability company (the “
Sponsor
”) and the undersigned parties listed under
Holder on the signature page (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
of this Agreement, a
“
Holder
” and collectively the “
Holders
”).
RECITALS
WHEREAS
, the Company and the Sponsor have entered into that certain Securities Subscription Agreement, dated as of February 22,
2017, pursuant to which the Sponsor purchased an aggregate of 11,500,000 shares of the Company’s Class F common stock, par value $0.0001 per share (the “
Initial Founder Shares
”);
WHEREAS
, the Sponsor subsequently transferred an aggregate of 160,000 Founder Shares to the other Holders;
WHEREAS
, in [●] 2017, the Company declared a stock dividend with respect to the Class F common stock of 5,750,000 shares of Class
F common stock (together with the Initial Founder Shares, the “
Founder Shares
”);
WHEREAS
, the Founder
Shares are convertible into shares of the Company’s Class A common stock, par value $0.0001 per share (the “
Common Stock
”), on the terms and conditions provided in the Company’s amended and restated certificate
of incorporation;
WHEREAS
, on [●], 2017, the Company and the Sponsor entered into that certain Private Placement Warrants
Purchase Agreement, pursuant to which the Sponsor agreed to purchase an aggregate of 9,333,333 warrants (or up to 10,533,333 warrants if the over-allotment option in connection with the Company’s initial public offering is exercised in full)
(the “
Private Placement Warrants
”), in a private placement transaction occurring simultaneously 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:
“
Adverse Disclosure
” shall mean any public disclosure of material
non-public
information, which disclosure, in the good faith judgment of the Chief Executive Officer or the Chief Financial Officer of the Company, after consultation with counsel to the Company, (i) would be
required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading, (ii) would not be required to be made at such time if the Registration Statement were
not being filed, and (iii) the Company has a bona fide business purpose for not making such information public.
“
Agreement
” shall have the meaning given in the Preamble.
“
Board
” shall mean the Board of Directors of the Company.
“
Business Combination
” shall mean any merger, capital stock exchange, asset acquisition, stock purchase,
reorganization or other similar business combination with one or more businesses, involving the Company.
“
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.
“
Demand Registration
” shall have the meaning given in
subsection 2.1.1
.
“
Demanding Holder
” shall have the meaning given in
subsection 2.1.1
.
“
Exchange Act
” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.
“
Form
S-1
” shall have the meaning given in
subsection 2.1.1
.
“
Form
S-3
” shall have the meaning given in
subsection 2.3
.
“
Founder Shares
” shall have the meaning given in the Recitals hereto and shall be deemed to include the shares of
Common Stock issuable upon conversion thereof.
“
Founder Shares
Lock-up
Period
” shall mean, with respect to the Founder Shares, the period ending on the earlier of (A) one year after the completion of the Company’s initial Business Combination, or (B) subsequent to the Business Combination,
if the last sale price of the Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any
30-trading
day period commencing at least 150 days after the Company’s initial Business Combination or (C) the date following the completion of the Business Combination on which the Company completes
a liquidation, merger, stock exchange, reorganization 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.
2
“
Holders
” shall have the meaning given in the Preamble.
“Insider Letter”
shall mean that certain letter agreement, dated as of [●], 2017, by and among the Company, the
Sponsor and each of the Company’s officers, directors and director nominees.
“
Maximum Number of Securities
”
shall have the meaning given in
subsection 2.1.4
.
“
Misstatement
” shall mean an untrue statement of a
material fact or an omission to state a material fact required to be stated in a Registration Statement or Prospectus or necessary to make the statements in a Registration Statement or Prospectus in the light of the circumstances under which they
were made not misleading.
“
Permitted Transferees
” shall mean a person or entity to whom a Holder of Registrable
Securities is permitted to transfer such Registrable Securities prior to the expiration of the Founder Shares
Lock-up
Period or Private Placement
Lock-up
Period, as the
case may be, under the Insider Letter and any other applicable agreement between such Holder and the Company and to any transferee thereafter.
“
Piggyback Registration
” shall have the meaning given in
subsection 2.2.1
.
“
Private Placement
Lock-up
Period
” shall mean, with respect to Private
Placement Warrants that are held by the initial purchasers of such Private Placement Warrants or their Permitted Transferees, and any shares of Common Stock issued or issuable upon the exercise or conversion of the Private Placement Warrants and
that are held by the initial purchasers of the Private Placement Warrants or their Permitted Transferees, the period ending 30 days after the completion of the Company’s initial Business Combination.
“
Private Placement Warrants
” shall have the meaning given in the Recitals hereto.
“
Prospectus
” shall mean the prospectus included in any Registration Statement, as supplemented by any and all
prospectus supplements and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.
“
Registrable Security
” shall mean (a) the shares of Common Stock issued or issuable upon the conversion of any
Founder Shares, (b) the Private Placement Warrants (including any shares of Common Stock issued or issuable upon the exercise of any such Private Placement Warrants), (c) any outstanding shares of Common Stock 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, (d) 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, in the aggregate, made to the Company by a Holder, and (e) any other equity security of
the Company issued or issuable with respect to any such share of Common Stock by
3
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; (D) such securities
may be sold without registration pursuant to Rule 144 promulgated under the Securities Act (but with no volume or other restrictions or limitations); or (E) such securities have been sold to, or through, a broker, dealer or underwriter in a
public distribution or other public securities transaction.
“
Registration
” shall mean a registration effected by
preparing and filing a registration statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.
“
Registration Expenses
” shall mean the
out-of-pocket
expenses of a Registration, including, without limitation, the following:
(A) all registration and filing fees (including fees with respect to filings required to be made with
the Financial Industry Regulatory Authority, Inc.) and any securities exchange on which the 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
majority-in-interest
of the Demanding Holders initiating a Demand Registration to be registered for offer and sale in the
applicable Registration.
“
Registration Statement
” shall mean any registration statement that covers the
Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits
to and all material incorporated by reference in such registration statement.
4
“
Requesting Holder
” shall have the meaning given in
subsection
2.1.1
.
“
Securities Act
” shall mean the Securities Act of 1933, as amended from time to time.
“
Sponsor
” shall have the meaning given in the Recitals hereto.
“
Underwriter
” shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten
Offering and not as part of such dealer’s market-making activities.
“
Underwritten Registration
” or
“
Underwritten Offering
” shall mean a Registration in which securities of the Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public.
ARTICLE II
REGISTRATIONS
2.1
Demand Registration
.
2.1.1
Request for Registration
. Subject to the provisions of subsection 2.1.4 and Section 2.4 hereof, at any
time and from time to time on or after the date the Company consummates the Business Combination, the Holders of at least a majority in interest of the then outstanding number of Registrable Securities (the “
Demanding
Holders
”) may make a written demand for Registration under the Securities Act of all or part of their Registrable Securities, which written demand shall describe the amount and type of securities to be included in such Registration and
the intended method(s) of distribution thereof (such written demand a “
Demand Registration
”). The Company shall, within ten (10) days of the Company’s receipt of the Demand Registration, notify, in writing, all
other Holders of Registrable Securities of such demand, and each Holder of Registrable Securities who thereafter wishes to include all or a portion of such Holder’s Registrable Securities in a Registration pursuant to a Demand Registration
(each such Holder that includes all or a portion of such Holder’s Registrable Securities in such Registration, a “
Requesting Holder
”) shall so notify the Company, in writing, within five (5) days after the receipt
by the Holder of the notice from the Company. Upon receipt by the Company of any such written notification from a Requesting Holder(s) to the Company, such Requesting Holder(s) shall be entitled to have their Registrable Securities included in a
Registration pursuant to a Demand Registration and the Company shall effect, as soon thereafter as practicable, but not more than forty five (45) days immediately after the Company’s receipt of the Demand Registration, the Registration of
all Registrable Securities requested by the Demanding Holders and Requesting Holders pursuant to such Demand Registration. Under no circumstances shall the Company be obligated to effect more than an aggregate of three (3) Registrations
pursuant to a Demand Registration under this
subsection 2.1.1
with respect to any or all Registrable Securities;
provided
,
however
, that a Registration shall not be counted for such purposes unless a Form
S-1
or any similar long-form registration statement that may be available at such time (“
Form
S-1
”) has become effective and all of the Registrable
Securities requested by the Requesting Holders to be registered on behalf of the Requesting Holders in such Form
S-1
Registration have been sold, in accordance with
Section
3.1
of
this Agreement.
5
2.1.2
Effective Registration
. Notwithstanding the provisions of
subsection 2.1.1
above or any other part of this Agreement, a Registration pursuant to a Demand Registration shall not count as a Registration unless and until (i) the Registration Statement filed with the Commission with respect to a
Registration pursuant to a Demand Registration has been declared effective by the Commission and (ii) the Company has complied with all of its obligations under this Agreement with respect thereto;
provided
,
further
, that if,
after such Registration Statement has been declared effective, an offering of Registrable Securities in a Registration pursuant to a Demand Registration is subsequently interfered with by any stop order or injunction of the Commission, federal or
state court or any other governmental agency the Registration Statement with respect to such Registration shall be deemed not to have been declared effective, unless and until, (i) such stop order or injunction is removed, rescinded or
otherwise terminated, and (ii) a
majority-in-interest
of the Demanding Holders initiating such Demand Registration thereafter affirmatively elect to continue with
such Registration and accordingly notify the Company in writing, but in no event later than five (5) days, of such election;
provided
,
further
, that the Company shall not be obligated or required to file another Registration
Statement until the Registration Statement that has been previously filed with respect to a Registration pursuant to a Demand Registration becomes effective or is subsequently terminated.
2.1.3
Underwritten Offering
. Subject to the provisions of subsection 2.1.4 and Section 2.4 hereof, if a
majority-in-interest
of the Demanding Holders so advise the Company as part of their Demand Registration that the offering of the Registrable Securities pursuant to such
Demand Registration shall be in the form of an Underwritten Offering, then the right of such Demanding Holder or Requesting Holder (if any) to include its Registrable Securities in such Registration shall be conditioned upon such Holder’s
participation in such Underwritten Offering and the inclusion of such Holder’s Registrable Securities in such Underwritten Offering to the extent provided herein. All such Holders proposing to distribute their Registrable Securities through an
Underwritten Offering under this subsection 2.1.3 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the
majority-in-interest
of the Demanding Holders initiating the Demand Registration.
2.1.4
Reduction of Underwritten Offering
. If the managing Underwriter or Underwriters in an Underwritten
Registration pursuant to a Demand Registration, in good faith, advises the Company, the Demanding Holders and the Requesting Holders (if any) in writing that the dollar amount or number of Registrable Securities that the Demanding Holders and the
Requesting Holders (if any) desire to sell, taken together with all other Common Stock or other equity securities that the Company desires to sell and the Common Stock, if any, as to which a Registration has been requested pursuant to separate
written contractual piggy-back registration rights held by any other stockholders who desire to sell, exceeds the maximum dollar amount or maximum number of equity securities that can be sold in the Underwritten Offering without adversely affecting
the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable, the “
Maximum Number of
Securities
”), then the Company shall include in such Underwritten Offering, as follows: (i) first, the Registrable Securities of the Demanding Holders and the Requesting Holders (if any) (pro rata based on the respective number of
Registrable Securities that each Demanding Holder and Requesting Holder (if any) has requested be included in such Underwritten Registration and the aggregate number of Registrable Securities that the Demanding Holders and Requesting Holders have
requested be
6
included in such Underwritten Registration (such proportion is referred to herein as “
Pro Rata
”)) that can be sold without exceeding the Maximum Number of Securities;
(ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum
Number of Securities; and (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), Common Stock or other equity securities of other persons or entities that the Company
is obligated to register in a Registration pursuant to separate written contractual arrangements with such persons and that can be sold without exceeding the Maximum Number of Securities.
2.1.5
Demand Registration Withdrawal
. A
majority-in-interest
of the Demanding Holders initiating a Demand Registration or a
majority-in-interest
of the Requesting Holders (if any), pursuant to a Registration under
subsection 2.1.1
shall have the right to withdraw from a Registration
pursuant to such Demand Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of their intention to withdraw from such Registration prior to the effectiveness of the
Registration Statement filed with the Commission with respect to the Registration of their Registrable Securities pursuant to such Demand Registration. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for
the Registration Expenses incurred in connection with a Registration pursuant to a Demand Registration prior to its withdrawal under this
subsection 2.1.5
.
2.2
Piggyback Registration
.
2.2.1
Piggyback Rights
. If, at any time on or after the date the Company consummates a Business Combination, the
Company proposes to file a Registration Statement under the Securities Act with respect to an offering of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into equity securities, for its own
account or for the account of stockholders of the Company (or by the Company and by the stockholders of the Company including, without limitation, pursuant to Section 2.1 hereof), other than a Registration Statement (i) filed in connection
with any employee stock option or other benefit plan, (ii) for an exchange offer or offering of securities solely to the Company’s existing stockholders, (iii) for an offering of debt that is convertible into equity securities of the
Company or (iv) for a dividend reinvestment plan, then the Company shall give written notice of such proposed filing to all of the Holders of Registrable Securities as soon as practicable but not less than ten (10) days before the
anticipated filing date of such Registration Statement, which notice shall (A) describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter
or Underwriters, if any, in such offering, and (B) offer to all of the Holders of Registrable Securities the opportunity to register the sale of such number of Registrable Securities as such Holders may request in writing within five
(5) days after receipt of such written notice (such Registration a “
Piggyback Registration
”). The Company shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and shall
use its best efforts to cause the managing Underwriter or Underwriters of a proposed Underwritten Offering to permit the Registrable Securities requested by the Holders pursuant to this subsection 2.2.1 to be included in a Piggyback Registration on
the same terms and conditions as any similar securities of the Company included in such Registration and to permit the sale or other disposition of such
7
Registrable Securities in accordance with the intended method(s) of distribution thereof. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering
under this
subsection 2.2.1
shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the Company.
2.2.2
Reduction of Piggyback Registration
. If the managing Underwriter or Underwriters in an Underwritten
Registration that is to be a Piggyback Registration, in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration in writing that the dollar amount or number of shares of Common Stock that
the Company desires to sell, taken together with (i) shares of Common Stock, if any, as to which Registration has been demanded pursuant to separate written contractual arrangements with persons or entities other than the Holders of Registrable
Securities hereunder, (ii) the Registrable Securities as to which registration has been requested pursuant Section 2.2 hereof, and (iii) the shares of Common Stock, if any, as to which Registration has been requested pursuant to
separate written contractual piggy-back registration rights of other stockholders of the Company, exceeds the Maximum Number of Securities, then:
(a) If the Registration is undertaken for the Company’s account, the Company shall include in any
such Registration (A) first, Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities
has not been reached under the foregoing clause (A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to
subsection 2.2.1
hereof, Pro Rata, 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, if any, as to which Registration has been requested pursuant to
written contractual piggy-back registration rights of other stockholders of the Company, which can be sold without exceeding the Maximum Number of Securities;
(b) If the Registration is pursuant to a request by persons or entities other than the Holders of
Registrable Securities, then the Company shall include in any such Registration (A) first, Common Stock or other equity securities, if any, of such requesting persons or entities, other than the Holders of Registrable Securities, which can be
sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of Holders exercising their rights to
register their Registrable Securities pursuant to
subsection 2.2.1
, pro rata based on the number of Registrable Securities that each Holder has requested be included in such Underwritten Registration and the aggregate number of Registrable
Securities that the Holders have requested to be included in such Underwritten Registration, which can be sold without exceeding the Maximum Number of Securities; (C) third, to the extent that the Maximum Number of Securities has not been
reached under the foregoing clauses (A) and (B), Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the extent that the Maximum
Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), Common Stock or other equity securities for the account of
8
other persons or entities that the Company is obligated to register pursuant to separate written contractual arrangements with such persons or entities, which can be sold without exceeding the
Maximum Number of Securities.
2.2.3
Piggyback Registration Withdrawal
. Any Holder of Registrable Securities
shall have the right to withdraw from a Piggyback Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of his, her or its intention to withdraw from such Piggyback
Registration prior to the effectiveness of the Registration Statement filed with the Commission with respect to such Piggyback Registration. The Company (whether on its own good faith determination or as the result of a request for withdrawal by
persons pursuant to separate written contractual obligations) may withdraw a Registration Statement filed with the Commission in connection with a Piggyback Registration at any time prior to the effectiveness of such Registration Statement.
Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with the Piggyback Registration prior to its withdrawal under this
subsection 2.2.3
.
2.2.4
Unlimited Piggyback Registration Rights
. For purposes of clarity, any Registration effected pursuant to
Section
2.2
hereof shall not be counted as a Registration pursuant to a Demand Registration effected under
Section
2.1
hereof.
2.3
Registrations on Form
S-3
. The Holders of Registrable Securities may
at any time, and from time to time, request in writing that the Company, pursuant to Rule 415 under the Securities Act (or any successor rule promulgated thereafter by the Commission), register the resale of any or all of their Registrable
Securities on Form
S-3
or any similar short-form registration statement that may be available at such time (“
Form
S-3
”);
provided
,
however
, that the Company shall not be obligated to effect such request through an Underwritten Offering. Within five (5) days of the Company’s receipt of a written request from a Holder or Holders of Registrable Securities for a
Registration on Form
S-3,
the Company shall promptly give written notice of the proposed Registration on Form
S-3
to all other Holders of Registrable Securities, and
each Holder of Registrable Securities who thereafter wishes to include all or a portion of such Holder’s Registrable Securities in such Registration on Form
S-3
shall so notify the Company, in writing,
within ten (10) days after the receipt by the Holder of the notice from the Company. As soon as practicable thereafter, but not more than twelve (12) days after the Company’s initial receipt of such written request for a Registration
on Form
S-3,
the Company shall register all or such portion of such Holder’s Registrable Securities as are specified in such written request, together with all or such portion of Registrable Securities of
any other Holder or Holders joining in such request as are specified in the written notification given by such Holder or Holders;
provided
,
however
, that the Company shall not be obligated to effect any such Registration pursuant to
Section
2.3
hereof if (i) a Form
S-3
is not available for such offering; or (ii) the Holders of Registrable Securities, together with the Holders of any other equity
securities of the Company entitled to inclusion in such Registration, propose to sell the Registrable Securities and such other equity securities (if any) at any aggregate price to the public of less than $5,000,000.
2.4
Restrictions on Registration Rights
. If (A) during the period starting with the date sixty
(60) days prior to the Company’s good faith estimate of the date of the filing of, and ending
9
on a date one hundred and twenty (120) days after the effective date of, a Company initiated Registration and provided that the Company has delivered written notice to the Holders prior to
receipt of a Demand Registration pursuant to
subsection 2.1.1
and it continues to actively employ, in good faith, all reasonable efforts to cause the applicable Registration Statement to become effective; (B) the Holders have requested
an Underwritten Registration and the Company and the Holders are unable to obtain the commitment of underwriters to firmly underwrite the offer; or (C) in the good faith judgment of the Board such Registration would be seriously detrimental to
the Company and the Board concludes as a result that it is essential to defer the filing of such Registration Statement at such time, then in each case the Company shall furnish to such Holders a certificate signed by the Chairman of the Board
stating that in the good faith judgment of the Board it would be seriously detrimental to the Company for such Registration Statement to be filed in the near future and that it is therefore essential to defer the filing of such Registration
Statement. In such event, the Company shall have the right to defer such filing for a period of not more than thirty (30) days;
provided
,
however
, that the Company shall not defer its obligation in this manner more than once in
any
12-month
period. Notwithstanding anything to the contrary contained in this Agreement, no Registration shall be effected or permitted and no Registration Statement shall become effective, with respect to
any Registrable Securities held by any Holder, until after the expiration of the Founder Shares
Lock-Up
Period or the Private Placement
Lock-Up
Period, as the case may
be.
ARTICLE III
COMPANY PROCEDURES
3.1
General Procedures
. If at any time on or after the date the Company consummates a Business Combination the
Company is required to effect the Registration of Registrable Securities, the Company shall use its best efforts to effect such Registration to permit the sale of such Registrable Securities in accordance with the intended plan of distribution
thereof, and pursuant thereto the Company shall, as expeditiously as possible:
3.1.1 prepare and file with the
Commission as soon as practicable a Registration Statement with respect to such Registrable Securities and use its reasonable best efforts to cause such Registration Statement to become effective and remain effective until all Registrable Securities
covered by such Registration Statement have been sold;
3.1.2 prepare and file with the Commission such amendments
and post-effective amendments to the Registration Statement, and such supplements to the Prospectus, as may be requested by the Holders or any Underwriter of Registrable Securities or as may be required by the rules, regulations or instructions
applicable to the registration form used by the Company or by the Securities Act or rules and regulations thereunder to keep the Registration Statement effective until all Registrable Securities covered by such Registration Statement are sold in
accordance with the intended plan of distribution set forth in such Registration Statement or supplement to the Prospectus;
3.1.3 prior to filing a Registration Statement or prospectus, or any amendment or supplement thereto, furnish without
charge to the Underwriters, if any, and the Holders of Registrable Securities included in such Registration, and such Holders’ legal counsel, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such
10
Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration Statement (including each
preliminary Prospectus), and such other documents as the Underwriters and the Holders of Registrable Securities included in such Registration or the legal counsel for any such Holders may request in order to facilitate the disposition of the
Registrable Securities owned by such Holders;
3.1.4 prior to any public offering of Registrable Securities, use
its best efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement under such securities or “
blue sky
” laws of such jurisdictions in the United States as the Holders of
Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be
registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be necessary or advisable to enable the Holders of
Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions;
provided
,
however
, that the Company shall not be required to qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it is not then otherwise so subject;
3.1.5 cause all such Registrable Securities to be listed on each securities exchange or automated quotation system on
which similar securities issued by the Company are then listed;
3.1.6 provide a transfer agent or warrant agent,
as applicable, and registrar for all such Registrable Securities no later than the effective date of such Registration Statement;
3.1.7 advise each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge
thereof, of the issuance of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use its reasonable best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such stop order should be issued;
3.1.8 at least five
(5) days prior to the filing of any Registration Statement or Prospectus or any amendment or supplement to such Registration Statement or Prospectus furnish a copy thereof to each seller of such Registrable Securities or its counsel;
3.1.9 notify the Holders at any time when a Prospectus relating to such Registration Statement is required to be
delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes a Misstatement, and then to correct such Misstatement as set forth in
Section
3.4
hereof;
3.1.10 permit a representative of the Holders, the Underwriters, if
any, and any attorney or accountant retained by such Holders or Underwriter to participate, at each such
11
person’s own expense, in the preparation of the Registration Statement, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any
such representative, Underwriter, attorney or accountant in connection with the Registration;
provided
,
however
, that such representatives or Underwriters enter into a confidentiality agreement, in form and substance reasonably
satisfactory to the Company, prior to the release or disclosure of any such information;
3.1.11 obtain a
“cold comfort” letter from the Company’s independent registered public accountants in the event of an Underwritten Registration, in customary form and covering such matters of the type customarily covered by “cold comfort”
letters as the managing Underwriter may reasonably request, and reasonably satisfactory to a
majority-in-interest
of the participating Holders;
3.1.12 on the date the Registrable Securities are delivered for sale pursuant to such Registration, obtain an opinion,
dated such date, of counsel representing the Company for the purposes of such Registration, addressed to the Holders, the placement agent or sales agent, if any, and the Underwriters, if any, covering such legal matters with respect to the
Registration in respect of which such opinion is being given as the Holders, placement agent, sales agent, or Underwriter may reasonably request and as are customarily included in such opinions and negative assurance letters, and reasonably
satisfactory to a majority in interest of the participating Holders;
3.1.13 in the event of any Underwritten
Offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing Underwriter of such offering;
3.1.14 make available to its security holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve (12) months beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement which satisfies the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder;
3.1.15 if the Registration involves the Registration of Registrable Securities involving
gross proceeds in excess of $25,000,000, use its reasonable efforts to make available senior executives of the Company to participate in customary “road show” presentations that may be reasonably requested by the Underwriter in any
Underwritten Offering; and
3.1.16 otherwise, in good faith, cooperate reasonably with, and take such customary
actions as may reasonably be requested by the Holders, in connection with such Registration.
3.2
Registration
Expenses
. The Registration Expenses of all Registrations shall be borne by the Company. It is acknowledged by the Holders that the Holders shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as
Underwriters’ commissions and discounts, brokerage fees, Underwriter marketing costs and, other than as set forth in the definition of “
Registration Expenses,
” all reasonable fees and expenses of any legal counsel
representing the Holders.
12
3.3
Requirements for Participation in Underwritten Offerings
. No
person may participate in any Underwritten Offering for equity securities of the Company pursuant to a Registration initiated by the Company hereunder unless such person (i) agrees to sell such person’s securities on the basis provided in
any underwriting arrangements approved by the Company and (ii) completes and executes all customary questionnaires, powers of attorney, indemnities,
lock-up
agreements, underwriting agreements and other
customary documents as may be reasonably required under the terms of such underwriting arrangements.
3.4
Suspension of Sales; Adverse Disclosure
. Upon receipt of written notice from the Company that a Registration
Statement or Prospectus contains a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until it has received copies of a supplemented or amended Prospectus correcting the Misstatement (it being
understood that the Company hereby covenants to prepare and file such supplement or amendment as soon as practicable after the time of such notice), or until it is advised in writing by the Company that the use of the Prospectus may be resumed. If
the filing, initial effectiveness or continued use of a Registration Statement in respect of any Registration at any time would require the Company to make an Adverse Disclosure or would require the inclusion in such Registration Statement of
financial statements that are unavailable to the Company for reasons beyond the Company’s control, the Company may, upon giving prompt written notice of such action to the Holders, delay the filing or initial effectiveness of, or suspend use
of, such Registration Statement for the shortest period of time, but in no event more than thirty (30) days, determined in good faith by the Company to be necessary for such purpose. In the event the Company exercises its rights under the
preceding sentence, the Holders agree to suspend, immediately upon their receipt of the notice referred to above, their use of the Prospectus relating to any Registration in connection with any sale or offer to sell Registrable Securities. The
Company shall immediately notify the Holders of the expiration of any period during which it exercised its rights under this
Section
3.4
.
3.5
Reporting Obligations
. As long as any Holder shall own Registrable Securities, the Company, at all times
while it shall be a reporting company under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof
pursuant to Sections 13(a) or 15(d) of the Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings. The Company further covenants that it shall take such further action as any Holder may reasonably request,
all to the extent required from time to time to enable such Holder to sell shares of Common Stock held by such Holder without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the
Securities Act, 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.
13
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
4.1
Indemnification
.
4.1.1 The Company agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its
officers and directors and each person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses (including attorneys’ fees) caused by any untrue or alleged untrue
statement of material fact contained in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Company by such Holder expressly for use therein. The Company shall indemnify the Underwriters, their
officers and directors and each person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to the indemnification of the Holder.
4.1.2 In connection with any Registration Statement in which a Holder of Registrable Securities is participating, such
Holder shall furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus and, to the extent permitted by law, shall indemnify the
Company, its directors and officers and agents and each person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including without limitation reasonable attorneys’
fees) resulting from any untrue statement of material fact contained in the Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein
or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by such Holder expressly for use therein;
provided
,
however
, that the obligation to indemnify shall be several, not joint and several, among such Holders of Registrable Securities, and the liability of each such Holder of Registrable Securities shall be in proportion to and limited to the net
proceeds received by such Holder from the sale of Registrable Securities pursuant to such Registration Statement. The Holders of Registrable Securities shall indemnify the Underwriters, their officers, directors and each person who controls such
Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to indemnification of the Company.
4.1.3 Any person entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party
of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not materially prejudiced the
indemnifying party) and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the
defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its
14
consent (but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees
and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and
any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by
the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified
party of a release from all liability in respect to such claim or litigation.
4.1.4 The indemnification provided
for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and shall survive the transfer of
securities. The Company and each Holder of Registrable Securities participating in an offering also agrees to make such provisions as are reasonably requested by any indemnified party for contribution to such party in the event the Company’s or
such Holder’s indemnification is unavailable for any reason.
4.1.5 If the indemnification provided under
Section
4.1
hereof from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the
indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among
other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by, such indemnifying party
or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action;
provided
,
however
, that the liability of any
Holder under this
subsection 4.1.5
shall be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The amount paid or payable by a party as a result of the losses or other liabilities
referred to above shall be deemed to include, subject to the limitations set forth in
subsections 4.1.1
,
4.1.2
and
4.1.3
above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with
any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this
subsection 4.1.5
were determined by pro rata allocation or by any other method of allocation, which does not
take account of the equitable considerations referred to in this
subsection 4.1.5
. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this
subsection 4.1.5
from any person who was not guilty of such fraudulent misrepresentation.
15
ARTICLE V
MISCELLANEOUS
5.1
Notices
. Any notice or communication under this Agreement must be in writing and given by (i) deposit
in the United States mail, addressed to the party to be notified, postage prepaid and registered or certified with return receipt requested, (ii) delivery in person or by courier service providing evidence of delivery, or
(iii) transmission by hand delivery, electronic mail or facsimile. Each notice or communication that is mailed, delivered, or transmitted in the manner described above shall be deemed sufficiently given, served, sent, and received, in the case
of mailed notices, on the third business day following the date on which it is mailed and, in the case of notices delivered by courier service, hand delivery, electronic mail or facsimile, at such time as it is delivered to the addressee (with the
delivery receipt or the affidavit of messenger) or at such time as delivery is refused by the addressee upon presentation. Any notice or communication under this Agreement must be addressed, if to the Company, c/o TPG Pace Energy Holdings Corp., at
301 Commerce St., Suite 3300, Fort Worth, TX 76102 Attention: Office of the General Counsel and, if to any Holder, at such Holder’s address as found in the Company’s books and records. Any party may change its address for notice at any
time and from time to time by written notice to the other parties hereto, and such change of address shall become effective thirty (30) days after delivery of such notice as provided in this
Section
5.1
.
5.2
Assignment; No Third Party Beneficiaries
.
5.2.1 This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by
the Company in whole or in part.
5.2.2 Prior to the expiration of the Founder Shares
Lock-up
Period or the Private Placement
Lock-up
Period, as the case may be, no Holder may assign or delegate such Holder’s rights, duties or obligations under this
Agreement, in whole or in part, except in connection with a transfer of Registrable Securities by such Holder to a Permitted Transferee.
5.2.3 This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the
parties and its successors and the permitted assigns of the Holders; which shall include Permitted Transferees.
5.2.4 This Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as
expressly set forth in this Agreement and
Section
5.2
hereof.
5.2.5 No assignment by any
party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate the Company unless and until the Company shall have received (i) written notice of such assignment as provided in
Section
5.1
hereof and (ii) the written agreement of the assignee, in a form reasonably satisfactory to the Company, to be bound by the terms and provisions of this Agreement (which may be accomplished by an addendum
or certificate of joinder to this Agreement). Any transfer or assignment made other than as provided in this
Section
5.2
shall be null and void.
5.3
Counterparts
. This Agreement may be executed in multiple counterparts (including facsimile or PDF
counterparts), each of which shall be deemed an original, and all of which together shall constitute the same instrument, but only one of which need be produced.
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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 its capacity as a holder of 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 of
Registrable Securities, has any right to require the Company to register any securities of the Company for sale or to include such securities of the Company in any Registration filed by the Company for the sale of securities for its own account or
for the account of any other person. Further, the Company represents and warrants that this Agreement supersedes any other registration rights agreement or agreement with similar terms and conditions and in the event of a conflict between any such
agreement or agreements and this Agreement, the terms of this Agreement shall prevail.
5.7
Term
. This
Agreement shall terminate upon the earlier of (i) the tenth anniversary of the date of this Agreement or (ii) the date as of which (A) all of the Registrable Securities have been sold pursuant to a Registration Statement (but in no
event prior to the applicable period referred to in Section 4(a)(3) of the Securities Act and Rule 174 thereunder) or (B) the Holders of all Registrable Securities are permitted to sell the Registrable Securities under Rule 144 (or any similar
provision) under the Securities Act without limitation on the amount of securities sold or the manner of sale. The provisions of Section 3.5 and Article IV shall survive any termination.
[SIGNATURE PAGES FOLLOW]
17
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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TPG PACE ENERGY HOLDINGS CORP.
a Delaware corporation
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By:
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Name:
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Title:
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HOLDERS:
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TPG PACE ENERGY SPONSOR, LLC
a Delaware limited liability company
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By:
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Name:
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Title:
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[
Signature Page to
Registration Rights Agreement
]
Exhibit 10.5
TPG Pace Energy Holdings Corp.
c/o TPG Capital LP
301 Commerce
St., Suite 3300
Fort Worth, TX 76102
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TPG Pace Energy Sponsor, LLC
c/o TPG Capital LP
301 Commerce St., Suite 3300
Fort Worth, TX 76102
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February 22, 2017
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RE:
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Securities Subscription Agreement
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Ladies and Gentlemen:
TPG Pace Energy Holdings Corp., a Delaware corporation (the “
Company
”), is pleased to accept the offer TPG Pace Energy
Sponsor, LLC (the “
Subscriber
” or “
you
”) has made to purchase 11,500,000
shares of the Company’s Class F
common stock (the “
Shares
”), $0.0001 par value per share (the
“
Class
F Shares
”), up to 1,500,000 of which are subject to complete or partial forfeiture by you if the underwriters of the Company’s initial public offering (“
IPO
”) of units do not fully
exercise their over-allotment option (the “
Over-allotment Option
”). For the purposes of this Agreement, references to “
Common Stock
” are to, collectively, the Class F Shares and the Company’s Class A
common stock, $0.0001 par value per share (the “
Class
A Shares
”). Pursuant to the Company’s certificate of incorporation, as amended to the date hereof (the “
Charter
”), Class F Shares
will convert into Class A Shares on a
one-for-one
basis, subject to adjustment, upon the terms and conditions set forth in the Charter. Unless the context otherwise
requires, as used herein “Shares” shall be deemed to include any Class A Shares issued upon conversion of the Class F Shares comprising the Shares. The terms (this “
Agreement
”) on which the Company is willing to
sell the Shares to the Subscriber, and the Company and the Subscriber’s agreements regarding such Shares, are as follows:
1.
Purchase of Shares
.
For the sum of $25,000 (the “
Purchase Price
”), which the Company acknowledges receiving in cash, the Company hereby sells and
issues the Shares to the Subscriber, and the Subscriber hereby purchases the Shares 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 Shares (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 Shares to
the Subscriber, the Subscriber hereby represents and warrants to the Company and agrees with the Company as follows:
2.1.1
No Government Recommendation or Approval
. The Subscriber understands that no federal or
state agency has passed upon or made any recommendation or endorsement of the offering of the Shares.
2.1.2
No Conflicts
. The execution, delivery and
performance of this Agreement and the consummation by the Subscriber of the transactions contemplated hereby do not violate, conflict with or constitute a default under (i) the formation and governing documents of the Subscriber, (ii) any
agreement, indenture or instrument to which the Subscriber is a party or (iii) any law, statute, rule or regulation to which the Subscriber is subject, or any agreement, order, judgment or decree to which the Subscriber is subject.
2.1.3
Organization and Authority
. The Subscriber is a Cayman Islands exempted company, validly
existing and in good standing under the laws of the Cayman Islands and possesses all requisite power and authority necessary to carry out the transactions contemplated by this Agreement. Upon execution and delivery by you, this Agreement 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 Shares and (ii) able to bear the economic risk of its investment in the Shares for an indefinite period of time because the Shares have not been
registered under the Securities Act (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 Shares 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 Shares and to afford a complete loss of Subscriber’s investment in the Shares.
2.1.5
Access to Information; Independent Investigation
. Prior to the execution of this Agreement,
the Subscriber has had the opportunity to ask questions of and receive answers from representatives of the Company concerning an investment in the Company, as well as the finances, operations, business and prospects of the Company, and the
opportunity to obtain additional information to verify the accuracy of all information so obtained. In determining whether to make this investment, Subscriber has relied solely on Subscriber’s own knowledge and understanding of the Company and
its business based upon Subscriber’s own due diligence investigation and the information furnished pursuant to this paragraph. Subscriber understands that no person has been authorized to give any information or to make any representations
which were not furnished pursuant to this Section 2 and Subscriber has not relied on any other representations or information in making its investment decision, whether written or oral, relating to the Company, its operations and/or its
prospects.
2
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 Shares solely for investment
purposes, for the Subscriber’s own account and not for the account or benefit of any other person, and not with a view towards the distribution or dissemination thereof. The Subscriber did not decide to enter into this Agreement as a result of
any general solicitation or general advertising within the meaning of Rule 502 under the Securities Act.
2.1.8
Restrictions on Transfer; Shell Company
. Subscriber understands the Shares are being
offered in a transaction not involving a public offering within the meaning of the Securities Act. Subscriber understands the Shares will be “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act and
Subscriber understands that the certificates or book-entries representing the Shares will contain a legend in respect of such restrictions. If in the future the Subscriber decides to offer, resell, pledge or otherwise transfer the Shares, such
Shares may be offered, resold, pledged or otherwise transferred only pursuant to: (i) registration under the Securities Act, or (ii) an available exemption from registration. Subscriber agrees that if any transfer of its Shares or any
interest therein is proposed to be made, as a condition precedent to any such transfer, Subscriber may be required to deliver to the Company an opinion of counsel satisfactory to the Company. Absent registration or an exemption, the Subscriber
agrees not to resell the Shares. Subscriber further acknowledges that because the Company is a shell company, Rule 144 may not be available to the Subscriber for the resale of the Shares until one year following consummation of the initial business
combination of the Company, despite technical compliance with the requirements of Rule 144 and the release or waiver of any contractual transfer restrictions.
2.1.9
No Governmental Consents
. No governmental, administrative or other third party consents or
approvals are required, 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 Shares,
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 corporation 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.
3
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 Charter or bylaws 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 Shares
. Upon issuance in accordance with, and payment pursuant to, the terms
hereof and the Charter, the Shares will be duly and validly issued, fully paid and nonassessable. Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Charter the Subscriber will have or receive good title to the
Shares, free and clear of all liens, claims and encumbrances of any kind, other than (a) transfer restrictions hereunder and under the other agreements to which the Shares may be subject, (b) transfer restrictions under federal and state
securities laws, and (c) liens, claims or encumbrances imposed due to the actions of the Subscriber.
2.2.4
No Adverse Actions
. There are no actions, suits, investigations or proceedings pending,
threatened against or affecting the Company which: (i) seek to restrain, enjoin, prevent the consummation of or otherwise affect the transactions contemplated by this Agreement or (ii) question the validity or legality of any transactions
or seeks to recover damages or to obtain other relief in connection with any transactions.
2.2.5
Authorization
. The Class A Shares issuable upon conversion of the Class F Shares
have been duly authorized and reserved for issuance upon such conversion.
3.
Forfeiture of Shares
.
3.1
Partial or No Exercise of the Over-allotment Option
. In the event the Over-allotment Option granted to the
underwriters of the IPO is not exercised in full, the Subscriber acknowledges and agrees that it (and, if applicable, any transferee of Shares) shall forfeit any and all rights to such number of Shares (up to an aggregate of 1,500,000 Shares and pro
rata based upon the percentage of the Over-allotment Option exercised) such that immediately following such forfeiture, the Subscriber (and any such transferees) will own an aggregate number of Shares (not including Class A Shares issuable upon
exercise of any warrants or any securities purchased by Subscriber in the IPO or in the aftermarket) equal to 20% of the issued and outstanding Common Stock immediately following the IPO.
3.2
Termination of Rights as Stockholder
. If any of the Shares are forfeited in accordance with this
Section 3, then after such time the Subscriber (or successor in interest), shall no longer have any rights as a holder of such forfeited Shares, and the Company shall take such action as is appropriate to cancel such forfeited Shares.
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3.3
Share Certificates
. In the event an adjustment to the Original
Certificate, if any, is required pursuant to this Section 3, then the Subscriber shall return such Original Certificate to the Company or its designated agent as soon as practicable upon its receipt of notice from the Company advising
Subscriber of such adjustment, following which a new certificate (the “
New Certificate
”), if any, shall be issued in such amount representing the adjusted number of Shares held by the Subscriber. The New Certificate, if any, shall
be returned to the Subscriber as soon as practicable. Any such adjustment for any uncertificated securities held by the Subscriber shall be made in book-entry form.
4.
Waiver of Liquidation Distributions; Redemption Rights
. In connection with the Shares purchased pursuant to
this Agreement, the Subscriber hereby waives any and all right, title, interest or claim of any kind in or to any distributions by the Company from the trust account which will be established for the benefit of the Company’s public stockholders
and into which substantially all of the proceeds of the IPO will be deposited (the “
Trust Account
”), in the event of a liquidation of the Company upon the Company’s failure to timely complete an initial business combination.
For purposes of clarity, in the event the Subscriber purchases securities in the IPO or in the aftermarket, any Class A Shares so purchased shall be eligible to receive any liquidating distributions by the Company. However, in no event will the
Subscriber have the right to redeem any shares of Common Stock held by it into funds held in the Trust Account upon the successful completion of an initial business combination.
5.
Restrictions on Transfer
.
5.1
Securities Law Restrictions
. In addition to any restrictions to be contained in that certain letter agreement
(commonly known as an “
Insider Letter
”) to be dated on or prior to the closing of the IPO by and between Subscriber and the Company, Subscriber agrees not to sell, transfer, pledge, hypothecate or otherwise dispose of all or any
part of the Shares unless, prior thereto (a) a registration statement on the appropriate form under the Securities Act and applicable state securities laws with respect to the Shares proposed to be transferred shall then be effective or
(b) the Company has received an opinion from counsel reasonably satisfactory to the Company, that such registration is not required because such transaction is exempt from registration under the Securities Act and the rules promulgated by the
Securities and Exchange Commission thereunder and with all applicable state securities laws.
5.2
Lock-up
. Subscriber acknowledges that the Shares will be subject to
lock-up
provisions (the “
Lock-up
”) contained
in the Insider Letter.
5.3
Restrictive Legends
. All certificates representing the Shares 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.”
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“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCKUP AND MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED DURING THE TERM OF THE LOCKUP.”
5.4
Additional Shares or Substituted Securities
. In the event of the declaration of a share dividend, the
declaration of an extraordinary dividend payable in a form other than shares, a
spin-off,
a share split, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the
Company’s outstanding Common Stock without receipt of consideration, any new, substituted or additional securities or other property which are by reason of such transaction distributed with respect to any Shares subject to this Section 5
or into which such Shares thereby become convertible shall immediately be subject to this Section 5 and Section 3. Appropriate adjustments to reflect the distribution of such securities or property shall be made to the number and/or class
of Shares subject to this Section 5 and Section 3.
5.5
Registration Rights
. Subscriber
acknowledges that the Shares are being purchased pursuant to an exemption from the registration requirements of the Securities Act and will become freely tradable only after certain conditions are met or they are registered pursuant to a
registration rights agreement to be entered into with the Company prior to the closing of the IPO (the “Registration Rights Agreement”).
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, the Insider Letter and the Registration Rights
Agreement each, substantially in the form to be filed as an exhibit to the Registration Statement, 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
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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 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
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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.
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6.16
Mutual Drafting
. This Agreement is the joint product of the
Subscriber and the Company and each provision hereof has been subject to the mutual consultation, negotiation and agreement of such parties and shall not be construed for or against any party hereto.
7.
Voting and Tender of Shares
. Subscriber agrees to vote the Shares in favor of an initial business combination
that the Company negotiates and submits for approval to the Company’s stockholders and shall not seek redemption with respect to such Shares. Additionally, the Subscriber agrees not to tender any Shares in connection with a tender offer
presented to the Company’s stockholders in connection with an initial business combination negotiated by the Company.
8.
Indemnification
. Each party shall indemnify the other against any loss, cost or damages (including reasonable
attorney’s fees and expenses) incurred as a result of such party’s breach of any representation, warranty, covenant or agreement in this Agreement.
[Signature Page Follows]
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If the foregoing accurately sets forth our understanding and agreement, please sign the enclosed
copy of the Agreement and return it to us.
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Very truly yours,
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TPG PACE ENERGY HOLDINGS CORP.
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By:
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/s/ Martin Davidson
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Name:
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Martin Davidson
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Title:
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Chief Financial Officer
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Accepted and agreed this 22nd day of February, 2017
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TPG PACE ENERGY SPONSOR, LLC.
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By:
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/s/ Michael LaGatta
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Name:
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Michael LaGatta
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Title:
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Vice President
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[
Signature page to
Subscription Agreement
]
Exhibit 10.6
PRIVATE PLACEMENT WARRANTS PURCHASE AGREEMENT
THIS PRIVATE PLACEMENT WARRANTS PURCHASE AGREEMENT, effective as of [●], 2017 (as it may from time to time be amended, this
“
Agreement
”), is entered into by and between TPG Pace Energy Holdings Corp., a Delaware corporation (the “
Company
”), and TPG Pace Energy 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-third
of one warrant 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-[●]
(the “
Registration
Statement
”), under the Securities Act of 1933, as amended (the “
Securities Act
”);
Each whole warrant entitles
the holder to purchase one Share at an exercise price of $11.50 per Share; and
The Purchaser has agreed to purchase an aggregate of
9,333,333 warrants (or up to 10,533,333 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
Section 1.
Authorization, Purchase and Sale; Terms of the Private Placement Warrants.
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
.
(i) On the date of the consummation of the Public Offering or on such earlier time and date as may be
mutually agreed by the Purchaser and the Company (the “
Initial
Closing Date
”), the Company shall issue and sell to the Purchaser, and the Purchaser shall purchase from the Company, 9,333,333 Private Placement Warrants at a
price of $1.50 per warrant for an aggregate purchase price of $14,000,000 (the “
Purchase Price
”), which shall be paid by wire transfer of immediately available funds to 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 by wire transfer of immediately available funds to the Company, the Company, at its option, shall 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.
(ii) On 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 (the “
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 1,200,000 Private Placement Warrants at a price of $1.50 per
warrant for an aggregate purchase price of up to $1,800,000 (if the over-allotment option in connection with the Public Offering is exercised in full) (the “
Over-allotment Purchase Price
”), which shall be paid by wire transfer of
immediately available funds to the Company in accordance with the Company’s wiring instructions. On the Over-allotment Closing Date, upon the payment by the Purchaser of the Over-allotment Purchase Price by wire transfer of immediately
available funds to the Company, 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 Closing Date. This Agreement constitutes the valid and binding obligation of the Company, enforceable in accordance with its terms. Upon issuance in accordance with, and payment pursuant to, the terms of the Warrant Agreement and this Agreement,
the Private Placement Warrants will constitute valid and binding obligations of the Company, enforceable in accordance with their terms as of each Closing Date.
(ii) The execution and delivery by the Company of this Agreement and the Private Placement Warrants, the issuance and sale of the Private
Placement Warrants, the issuance of the Shares upon
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exercise of the Private Placement Warrants and the fulfillment, of and compliance with, the respective terms hereof and thereof by the Company, do not and will not as of the Closing Date
(a) conflict with or result in a breach of the terms, conditions or provisions of, (b) constitute a default under, (c) result in the creation of any lien, security interest, charge or encumbrance upon the Company’s 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 certificate of incorporation or bylaws of the Company (in effect on the date hereof or as may be amended prior to completion of the contemplated Public Offering), or any material law, statute, rule or regulation to which the Company
is subject, or any agreement, order, judgment or decree to which the Company is subject, except for any filings required after the date hereof under federal or state securities laws.
C.
Title to Securities
. Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, the
Shares issuable upon exercise of the Private Placement Warrants will be duly and validly issued, fully paid and nonassessable. Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, the Purchaser will
have good title to the Private Placement Warrants purchased by it and the Shares issuable upon exercise of such Private Placement Warrants, free and clear of all liens, claims and encumbrances of any kind, other than (i) transfer restrictions
hereunder and under the other agreements contemplated hereby, (ii) transfer restrictions under federal and state securities laws, and (iii) liens, claims or encumbrances imposed due to the actions of the Purchaser.
D.
Governmental Consents
. No permit, consent, approval or authorization of, or declaration to or filing with, any governmental
authority is required in connection with the execution, delivery and performance by the Company of this Agreement or the consummation by the Company of any other transactions contemplated hereby.
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 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 the 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.
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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 such Securities.
(iv)
The Purchaser did not decide to enter into this Agreement as a result of any general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act.
(v) The Purchaser has been furnished with all materials relating to the business, finances and operations of the Company and materials
relating to the offer and sale of the Securities which have been requested by the Purchaser. The Purchaser has been afforded the opportunity to ask questions of the executive officers and directors of the Company. The Purchaser understands that its
investment in the Securities involves a high degree of risk and it has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to the acquisition of the Securities.
(vi) The Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities by the Purchaser nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
(vii) The Purchaser understands that: (a) the Securities have not been and are not being registered under the Securities Act or any state
securities laws, and may not be offered for sale, sold, assigned or transferred unless (1) subsequently registered thereunder or (2) sold in reliance on an exemption therefrom; and (b) except as specifically set forth in the
Registration Rights Agreement, neither the Company nor any other person is under any obligation to register the Securities under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.
In this regard, the Purchaser understands that the SEC has taken the position that promoters or affiliates of a blank check company and their transferees, both before and after a Business Combination, are deemed to be “underwriters” under
the Securities Act when reselling the securities of a blank check company. Based on that position, Rule 144 adopted pursuant to the Securities Act would not be available for resale transactions of the Securities despite technical compliance with the
requirements of such Rule, and the Securities can be resold only through a registered offering or in reliance upon another exemption from the registration requirements of the Securities Act.
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(viii) The Purchaser has such knowledge and experience in financial and business matters,
knowledge of the high degree of risk associated with investments in the securities of companies in the development stage such as the Company, is capable of evaluating the merits and risks of an investment in the Securities and is able to bear the
economic risk of an investment in the Securities in the amount contemplated hereunder for an indefinite period of time. The Purchaser has adequate means of providing for its current financial needs and contingencies and will have no current or
anticipated future needs for liquidity which would be jeopardized by the investment in the Securities. The Purchaser can afford a complete loss of its investments in the Securities.
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 each 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.
Corporate Consents
. The
Company shall have obtained the consent of its Board of Directors authorizing the execution, delivery and performance of this Agreement and the Warrant Agreement and the issuance and sale of the Sponsor Warrants hereunder.
D.
No Injunction
. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby, which prohibits the consummation of any of the
transactions contemplated by this Agreement or the Warrant Agreement.
E.
Warrant Agreement
. The Company shall have entered into a
Warrant Agreement with a warrant agent on terms satisfactory to the 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.
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.
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D.
Warrant Agreement
. The Company shall have entered into a Warrant Agreement with a
warrant agent on terms satisfactory to the Company.
Section
6.
Termination.
This Agreement may be terminated at
any time after August 31, 2017 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.
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]
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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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TPG PACE ENERGY HOLDINGS CORP.
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By:
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Name:
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Title:
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PURCHASER:
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TPG PACE ENERGY SPONSOR, LLC
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By:
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Name:
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Title:
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[
Signature page to
Private Placement Warrants
Purchase Agreement
]
Exhibit 10.7
INDEMNITY AGREEMENT
THIS INDEMNITY
AGREEMENT
(this “
Agreement
”) is made as of [●], 2017.
Between:
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(1)
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TPG PACE ENERGY HOLDINGS CORP.
, a Delaware corporation (the “
Company
”); and
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(2)
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[●] (“
Indemnitee
”).
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Whereas:
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(A)
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Highly competent persons have become more reluctant to serve publicly-held corporations as directors, officers or in other capacities unless they are provided with adequate protection through insurance or adequate
indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of such corporations;
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(B)
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The board of directors of the Company (the “
Board
”) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole
expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among publicly traded 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, officers and other
persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or
business enterprise itself. The Amended and Restated Certificate of Incorporation (the “
Charter
”) and Bylaws (the “
Bylaws
”) of the Company require the 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, the 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;
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(C)
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The uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;
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(D)
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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;
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(E)
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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;
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(F)
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This Agreement is a supplement to and in furtherance of the Charter and the 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; and
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(G)
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Indemnitee may not be willing to serve as an officer or director, advisor or in another capacity without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve,
continue to serve and to take on additional service for or on behalf of the Company on the condition that Indemnitee be so indemnified;
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NOW, THEREFORE, in consideration of the premises and the covenants contained herein and subject to the provisions of the letter agreement dated as of
[●], 2017 between the Company and Indemnitee, the Company and Indemnitee do hereby covenant and agree as follows:
TERMS AND
CONDITIONS
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1
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SERVICES TO THE COMPANY
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Indemnitee will serve or continue to serve as an officer,
director, advisor, key employee or in any other capacity of the Company, as applicable, for so long as Indemnitee is duly elected, appointed or retained 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 an officer, director, advisor, key employee or in any other capacity of the Company, as provided in Section 17. This
Agreement, however, shall not impose any obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company beyond any period otherwise required by law or by other agreements or commitments of the parties, if any.
As used in this Agreement:
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2.1
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References to “
agent
” shall mean any person who is or was a director, officer or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company,
to include such person serving in such capacity as a director, officer, employee, advisor, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for
the convenience of, or to represent the interests of the Company or a subsidiary of the Company.
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2.2
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The terms “
Beneficial Owner
” and “
Beneficial Ownership
” shall have the meanings set forth in Rule
13d-3
promulgated under the Exchange Act (as
defined below) as in effect on the date hereof.
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2.3
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A “
Change in Control
” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:
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(a)
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Acquisition of Stock by Third Party
. Other than an affiliate of TPG Global, LLC, 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
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number of outstanding shares of securities entitled to vote generally in the election of directors, or (2) such acquisition was approved in advance by the Continuing Directors (as defined
below) and such acquisition would not constitute a Change in Control under part (c) of this definition;
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(b)
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Change in Board of Directors
. Individuals who, as of the date hereof, constitute the Board, and any new director whose election by the Board or nomination for election by the Company’s 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;
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(c)
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Corporate Transactions
. The effective date of a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination, involving the Company and one or more businesses
(a “
Business Combination
”), in each case, unless, following such Business Combination: (1) all or substantially all of the individuals and entities who were the Beneficial Owners of securities entitled to vote generally in the
election of directors immediately prior to such Business Combination beneficially own, directly or indirectly, more than 51% of the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of
directors resulting from such Business Combination (including, without limitation, a 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 an affiliate of
TPG Global, LLC, 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;
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(d)
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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 approval is not required, the decision by the Board to proceed with such a liquidation, sale, or disposition in one transaction or
a series of related transactions); or
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(e)
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Other Events
. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule
or form) promulgated under the Exchange Act (as defined below), whether or not the Company is then subject to such reporting requirement.
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2.4
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“
Corporate Status
” describes the status of a person who is or was a director, officer, trustee, general partner, manager, managing member, fiduciary, employee or agent of the Company or of any other
Enterprise (as defined below) which such person is or was serving at the request of the Company.
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2.5
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“
Delaware Court
” shall mean the Court of Chancery of the State of Delaware.
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2.6
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“
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.
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2.7
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“
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,
general partner, managing member, fiduciary, employee or agent.
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2.8
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“
Exchange Act
” shall mean the Securities Exchange Act of 1934, as amended.
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2.9
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“
Expenses
” shall include all direct and indirect costs, fees and expenses of any type or nature whatsoever, including, without limitation, all 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, supersedeas bond, or other appeal bond or its equivalent.
Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
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2.10
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“
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.
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2.11
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References to “
fines
” shall include any excise tax assessed on Indemnitee with respect to any employee benefit plan; 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.
|
4
|
2.12
|
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.
|
|
2.13
|
The term “
Proceeding
” shall include any threatened, pending or completed action, suit, arbitration, mediation, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or
any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative, or investigative or related nature,
in which Indemnitee was, is, will or might be involved as a party or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action (or failure to act) taken by 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.
|
|
2.14
|
The term “
Subsidiary,
” with respect to any Person, shall mean any corporation 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 his or her conduct was unlawful.
|
4
|
INDEMNITY IN PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY
|
To the fullest extent
permitted by applicable law, 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
5
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
|
|
7.1
|
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
|
6
|
|
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 7.1 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.
|
|
7.2
|
Notwithstanding any limitation in Sections 3, 4, 5 or 7.1, 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.
|
|
8
|
CONTRIBUTION IN THE EVENT OF JOINT LIABILITY
|
|
8.1
|
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.
|
|
8.2
|
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.
|
|
8.3
|
The Company hereby agrees to fully indemnify, hold harmless and exonerate Indemnitee from any claims for contribution which may be brought by officers, directors or employees of the Company other than Indemnitee who may
be jointly liable with Indemnitee.
|
Notwithstanding any provision in this Agreement except for Section 27,
the Company shall not be obligated under this Agreement to make any indemnification, advance expenses, hold harmless or exoneration payment in connection with any claim made against Indemnitee:
|
|
(a)
|
for which payment has actually been received by or on behalf of Indemnitee under any insurance policy or other indemnity or advancement provision, except with respect to any excess beyond the amount actually received
under any insurance policy, contract, agreement, other indemnity or advancement provision or otherwise;
|
|
|
(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 similar provisions of state
statutory law or common law; or
|
7
|
|
(c)
|
except as otherwise provided in Sections 14.5 and 14.6 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, advancement of expenses, hold harmless or exoneration payment, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
|
|
10
|
ADVANCES OF EXPENSES; DEFENSE OF CLAIM
|
|
10.1
|
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 advance to the extent that it is ultimately determined that Indemnitee is not entitled to be
indemnified by the Company under the provisions of this Agreement, the Charter, the Bylaws, applicable law or otherwise. This Section 10.1 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.
|
|
10.2
|
The Company will be entitled to participate in the Proceeding at its own expense.
|
|
10.3
|
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
|
|
11.1
|
Indemnitee agrees to notify promptly the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter 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.
|
|
11.2
|
Indemnitee may deliver to the Company a written application to indemnify, hold harmless or exonerate Indemnitee in accordance with this Agreement. Such application(s) may be delivered from time to time and at such
time(s) as Indemnitee deems appropriate in his or her sole discretion. Following such a written application for indemnification by Indemnitee, Indemnitee’s entitlement to indemnification shall be determined according to Section 12.1 of
this Agreement.
|
8
|
12
|
PROCEDURE UPON APPLICATION FOR INDEMNIFICATION
|
|
12.1
|
A determination, if required by applicable law, with respect to Indemnitee’s entitlement to indemnification shall be made in the specific case by one of the following methods, which shall be at the election of
Indemnitee: (i) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board; (ii) by a committee of such directors or, if such directors so direct, by Independent Counsel in a written opinion to the
Board, a copy of which shall be delivered to Indemnitee; or (iii) by vote of the stockholders. The Company promptly will advise Indemnitee in writing with respect to any determination that Indemnitee is or is not entitled to indemnification,
including a description of any reason or basis for which indemnification has been denied. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination.
Indemnitee shall reasonably cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance
request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including 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 indemnifies and agrees to hold Indemnitee harmless therefrom.
|
|
12.2
|
In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to
Section 12.1 hereof, the Independent Counsel shall be selected as provided in this Section 12.2. 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 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 11.2 hereof, no
Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Delaware Court for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection
of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Delaware Court, and the person with respect to whom all objections are so resolved or the person so appointed shall act as
|
9
|
|
Independent Counsel under Section 12.1 hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 14.1 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).
|
|
12.3
|
The Company agrees to pay the reasonable fees and expenses of Independent Counsel and to fully indemnify and hold harmless such Independent Counsel against any and all Expenses, claims, liabilities and damages arising
out of or relating to this Agreement or its engagement pursuant hereto.
|
|
13
|
PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS
|
|
13.1
|
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 11.2 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 its 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 its 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.
|
|
13.2
|
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.
|
|
13.3
|
The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly
provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his or her conduct was unlawful.
|
|
13.4
|
For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if
Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the directors, manager or officers of the Enterprise in the course of their duties,
or on the advice of legal
|
10
|
|
counsel for the Enterprise, its Board, any committee of the Board or any director, trustee, general partner, manager or managing member, or on information or records given or reports made to the
Enterprise, its Board, any committee of the Board or any director, trustee, general partner, manager or managing member, by an independent certified public accountant or by an appraiser or other expert selected by the Enterprise, its Board, any
committee of the Board or any director, trustee, general partner, manager or managing member. The provisions of this Section 13.4 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.
|
|
13.5
|
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
|
|
14.1
|
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 12.1 of this Agreement within thirty
(30) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Sections 5, 6, 7 or the last sentence of Section 12.1 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 within ten (10) days after receipt by the Company of a written request therefor, Indemnitee shall be entitled to an adjudication by the Delaware Court to such indemnification, hold harmless, exoneration, contribution or advancement
rights. Alternatively, Indemnitee, at 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.
|
|
14.2
|
In the event that a determination shall have been made pursuant to Section 12.1 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. In any judicial proceeding or arbitration commenced pursuant to
this Section 14, Indemnitee shall be presumed to be entitled to be indemnified, held harmless, exonerated to receive advances 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 advances of Expenses, as the case may be, and the Company may not refer to or introduce into evidence any determination pursuant to Section 12.1 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).
|
11
|
14.3
|
If a determination shall have been made pursuant to Section 12.1 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.
|
|
14.4
|
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.
|
|
14.5
|
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).
|
|
14.6
|
Interest shall be paid by the Company to Indemnitee at the legal rate under Delaware law for amounts which the Company indemnifies, holds harmless or exonerates, or advances, or is obliged to indemnify, hold harmless or
exonerate or advance for the period commencing with the date on which Indemnitee requests indemnification, to be held harmless, exonerated, contribution, reimbursement or advancement of any Expenses and ending with the date on which such payment is
made to Indemnitee by the Company.
|
Notwithstanding anything herein to the contrary 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
|
|
16.1
|
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
|
12
|
|
harmless or exoneration rights or advancement of Expenses than would be afforded currently under the Charter, the Bylaws or this Agreement, then this Agreement (without any further action by the
parties hereto) shall automatically be deemed to be amended to require that the Company indemnify Indemnitee to the fullest extent permitted by law. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and
every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
|
|
16.2
|
The DGCL, the Charter 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.
|
|
16.3
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To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, trustees, partners, managers, managing members, fiduciaries, employees, or agents of the
Company or of any other Enterprise which such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such
director, officer, trustee, partner, 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.
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16.4
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In the event of any payment under this Agreement, the Company, to the fullest extent permitted by law, shall be
subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the
Company to bring suit to enforce such rights. 16.5 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
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13
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Company’s satisfaction and performance of all its obligations under this Agreement, and (ii) the Company shall perform fully its obligations under this Agreement without regard to
whether Indemnitee holds, may pursue or has pursued any indemnification, advancement, hold harmless, exoneration, contribution or insurance coverage rights against any person or entity other than the Company.
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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, 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 he is acting in any such capacity at the time any liability or expense is incurred for which
indemnification or advancement can be provided under this Agreement.
If any provision or provisions of this Agreement shall be held to be invalid, illegal or
unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing
any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law;
(b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of
this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested thereby.
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19
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ENFORCEMENT AND BINDING EFFECT
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19.1
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The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director, officer or key employee of the
Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director, officer or key employee of the Company.
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19.2
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Without limiting any of the rights of Indemnitee under the Charter or the 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.
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19.3
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The indemnification, hold harmless, exoneration and advancement of expenses rights provided by or granted
pursuant to this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially
all of the business and/or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or a director, officer, trustee, general partner,
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14
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manager, managing member, fiduciary, employee or agent of any other Enterprise at the Company’s request, and shall inure to the benefit of Indemnitee and his or her spouse, assigns, heirs,
devisees, executors and administrators and other legal representatives.
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19.4
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The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the
Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had
taken place.
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19.5
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The Company and Indemnitee agree herein that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and difficult of proof, and further agree that such breach may cause
Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee may, to the fullest extent permitted by law, enforce this Agreement by seeking, among other things, injunctive relief and/or specific performance hereof, without any
necessity of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which 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 and the Company
hereby waives any such requirement of such a bond or undertaking to the fullest extent permitted by law.
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20
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MODIFICATION AND WAIVER
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No supplement, modification or amendment of this Agreement
shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a
continuing waiver.
All notices, requests, demands and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given (i) if delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail
with postage prepaid, on the third (3rd) business day after the date on which it is so mailed:
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(a)
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If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide in writing to the Company.
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(b)
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If to the Company, to:
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TPG Pace Energy Holdings Corp.
301 Commerce Street, Suite 3300
Forth Worth, TX 76102
Attn:
[●]
15
With a copy, which shall not constitute notice, to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY
10153
Attn: Alex Lynch, Esq.
or to any other address as may have been furnished to Indemnitee in writing by the Company.
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22
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APPLICABLE LAW AND CONSENT TO JURISDICTION
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This Agreement and the legal relations among
the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to
Section 14.1 of this Agreement, to the fullest extent permitted by law, the Company and Indemnitee hereby irrevocably and unconditionally: (a) agree that any action or proceeding arising out of or in connection with this Agreement shall be
brought only in the Delaware Court and not in any other state or federal court in the United States of America or any court in any other country; (b) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any
action or proceeding arising out of or in connection with this Agreement; (c) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court; and (d) waive, and agree not to plead or to make, any claim
that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum, or is subject (in whole or in part) to a jury trial. To the fullest extent permitted by law, the parties hereby agree that the
mailing of process and other papers in connection with any such action or proceeding in the manner provided by Section 21 or in such other manner as may be permitted by law, shall be valid and sufficient service thereof.
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23
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IDENTICAL COUNTERPARTS
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This Agreement may be executed in one or more counterparts, each
of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence
the existence of this Agreement.
Use of the masculine pronoun shall be deemed to include usage of the
feminine pronoun where appropriate. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
No legal action shall be brought and no cause of action shall be
asserted by or in the right of the Company against Indemnitee, Indemnitee’s spouse, heirs, executors or personal or legal representatives after the expiration of two years from the date of accrual of such cause of action, and any claim or cause
of action of the Company shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such
two-year
period; provided, however, that if any shorter period of
limitations is otherwise applicable to any such cause of action such shorter period shall govern.
16
If for the validation of any of the provisions in this Agreement any
act, resolution, approval or other procedure is required, the Company undertakes to cause such act, resolution, approval or other procedure to be affected or adopted in a manner that will enable the Company to fulfill its obligations under this
Agreement.
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27
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WAIVER OF CLAIMS TO TRUST ACCOUNT
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Indemnitee hereby agrees that it does not have any
right, title, interest or claim of any kind (each, a “
Claim
”) in or to any monies in the trust account established in connection with the Company’s initial public offering for the benefit of the Company and holders of
securities issued in such offering, and hereby waives any Claim it may have in the future as a result of, or arising out of, any services provided to the Company and will not seek recourse against such trust account for any reason whatsoever.
[SIGNATURE PAGE FOLLOWS]
17
IN WITNESS WHEREOF
, the parties hereto have caused this Indemnity Agreement to be signed as of the day and
year first above written.
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TPG PACE ENERGY HOLDINGS CORP.
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[Signature Page to Indemnity Agreement]
Exhibit 10.8
TPG Pace Energy Holdings Corp.
301 Commerce St.
Suite 3300
Fort Worth, TX 76102
[●],
2017
TPG Global, LLC
301 Commerce St.
Suite 3300
Fort Worth, TX 76102
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Re:
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Administrative Services Agreement
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Gentlemen:
This letter will confirm our agreement that, commencing on the date the securities of TPG Pace Energy Holdings Corp. (the
“
Company
”) 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 Securities and
Exchange Commission (the “
Registration Statement
”) and continuing until the earlier of the consummation by the Company of an initial business combination or the Company’s liquidation (in each case as described in the
Registration Statement) (such earlier date hereinafter referred to as the “
Termination Date
”), TPG Global, LLC (“
TPG
”), an affiliate of our sponsor, TPG Pace Energy Sponsor, LLC, shall make available to the Company,
at
301 Commerce St., Suite 3300, Fort Worth, TX 76102 (or any successor location), certain office space, administrative and support services as may be reasonably required by the Company. In exchange therefor, the Company shall pay TPG the sum
of $20,000 per month on the Listing Date and continuing monthly thereafter and will be entitled to be reimbursed for any
out-of-pocket
expenses until the Termination
Date.
TPG hereby irrevocably waives any and all right, title, interest, causes of action and claims of any kind (each, a
“
Claim
”) in or to, and any and all right to seek payment of any amounts due to it out of, the trust account established for the benefit of the public stockholders of the Company and into which substantially all of the proceeds of
the Company’s initial public offering will be deposited (the “
Trust Account
”), and hereby irrevocably waives any Claim it may have in the future as a result of, or arising out of, this agreement, which Claim would reduce,
encumber or otherwise adversely affect the Trust Account or any monies or other assets in the Trust Account, and further agrees not to seek recourse, reimbursement, payment or satisfaction of any Claim against the Trust Account or any monies or
other assets in the Trust Account for any reason whatsoever.
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 all 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 party. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest or
title to the purported assignee.
This letter agreement constitutes the entire relationship of the parties hereto, and any litigation
between the parties (whether grounded in contract, tort, statute, law or equity) shall be governed by, construed in accordance with, and interpreted pursuant to the laws of the State of New York, without giving effect to its choice of laws
principles.
This letter agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same letter agreement.
[Signature page follows]
2
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Very truly yours,
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TPG PACE ENERGY HOLDINGS CORP.
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By:
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Name:
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Martin Davidson
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Title:
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Chief Financial Officer
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AGREED TO AND ACCEPTED BY:
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TPG GLOBAL, LLC
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By:
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Name:
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Title:
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[Signature Page to
Administrative Services Agreement]
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
The Board of Directors
TPG Pace Energy Holdings Corp.:
We consent to the use of our report dated February 24, 2017, except for Note 1 and Note 6, which are as of April 17, 2017, on the financial
statements of TPG Pace Energy Holdings Corp. included herein and to the reference to our firm under the heading “Experts” in the prospectus.
(signed) KPMG LLP
Fort Worth, Texas
April 17, 2017
Exhibit 99.1
Consent to be Named as a Director Nominee
In connection with the filing by TPG Pace Energy Holdings Corp. of the Registration Statement on Form
S-1
with the
Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of TPG Pace
Energy Holdings Corp. in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.
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Dated: April 17, 2017
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/s/ Stephen Chazen
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Signature
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Exhibit 99.2
Consent to be Named as a Director Nominee
In connection with the filing by TPG Pace Energy Holdings Corp. of the Registration Statement on Form
S-1
with the
Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of TPG Pace
Energy Holdings Corp. in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.
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Dated: April 17, 2017
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/s/ Arcilia Acosta
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Signature
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Exhibit 99.3
Consent to be Named as a Director Nominee
In connection with the filing by TPG Pace Energy Holdings Corp. of the Registration Statement on Form
S-1
with the
Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of TPG Pace
Energy Holdings Corp. in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.
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Dated: April 17, 2017
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/s/ David Bonderman
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Signature
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Exhibit 99.4
Consent to be Named as a Director Nominee
In connection with the filing by TPG Pace Energy Holdings Corp. of the Registration Statement on Form
S-1
with the
Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of TPG Pace
Energy Holdings Corp. in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.
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Dated: April 17, 2017
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/s/ Edward Djerejian
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Signature
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Exhibit 99.5
Consent to be Named as a Director Nominee
In connection with the filing by TPG Pace Energy Holdings Corp. of the Registration Statement on Form
S-1
with the
Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of TPG Pace
Energy Holdings Corp. in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.
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Dated: April 17, 2017
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/s/ Chad Leat
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Signature
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Exhibit 99.6
Consent to be Named as a Director Nominee
In connection with the filing by TPG Pace Energy Holdings Corp. of the Registration Statement on Form
S-1
with the
Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of TPG Pace
Energy Holdings Corp. in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.
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Dated: April 17, 2017
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/s/ Michael MacDougall
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Signature
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Exhibit 99.7
Consent to be Named as a Director Nominee
In connection with the filing by TPG Pace Energy Holdings Corp. of the Registration Statement on Form
S-1
with the
Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of TPG Pace Energy
Holdings Corp. in the Registration Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.
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Dated: April 17, 2017
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/s/ Dan F. Smith
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Signature
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